Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 22, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-35061 | |
Entity Registrant Name | NeoPhotonics Corp | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-3253730 | |
Entity Address, Address Line One | 3081 Zanker Road | |
Entity Address, City or Town | San Jose | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95134 | |
City Area Code | 408 | |
Local Phone Number | 232-9200 | |
Title of 12(b) Security | Common Stock, $0.0025 par value | |
Trading Symbol | NPTN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 53,473,745 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001227025 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 79,044 | $ 77,833 |
Short-term investments | 27,677 | 27,675 |
Restricted cash | 87 | 87 |
Accounts receivable, net | 63,838 | 55,324 |
Inventories | 59,737 | 52,896 |
Prepaid expenses and other current assets | 20,022 | 16,246 |
Total current assets | 250,405 | 230,061 |
Property, plant and equipment, net | 53,058 | 54,190 |
Operating lease right-of-use assets | 12,694 | 13,201 |
Purchased intangible assets, net | 839 | 844 |
Goodwill | 1,115 | 1,115 |
Other long-term assets | 6,123 | 6,156 |
Total assets | 324,234 | 305,567 |
Current liabilities: | ||
Accounts payable | 61,499 | 58,125 |
Short-term borrowing, net | 0 | 14,914 |
Current portion of long-term debt | 2,722 | 2,928 |
Accrued and other current liabilities | 33,348 | 30,008 |
Total current liabilities | 97,569 | 105,975 |
Long-term debt, net of current portion | 24,880 | 25,753 |
Related party long-term debt | 29,977 | 0 |
Operating lease liabilities, noncurrent | 12,814 | 13,441 |
Other noncurrent liabilities | 7,483 | 7,437 |
Total liabilities | 172,723 | 152,606 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0025 par value, 10,000 shares authorized, no shares issued or outstanding | 0 | 0 |
Common stock, $0.0025 par value, 100,000 shares authorized; at March 31, 2022, 53,210 shares issued and outstanding; at December 31, 2021, 53,113 shares issued and outstanding | 133 | 133 |
Additional paid-in capital | 612,946 | 610,085 |
Accumulated other comprehensive income | 1,368 | 2,376 |
Accumulated deficit | (462,936) | (459,633) |
Total stockholders’ equity | 151,511 | 152,961 |
Total liabilities and stockholders’ equity | $ 324,234 | $ 305,567 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0025 | $ 0.0025 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0025 | $ 0.0025 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 53,210,000 | 53,113,000 |
Common stock, shares outstanding (in shares) | 53,210,000 | 53,113,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 89,268 | $ 60,926 |
Cost of goods sold | 61,979 | 47,587 |
Gross profit | 27,289 | 13,339 |
Operating expenses: | ||
Research and development | 15,098 | 13,098 |
Sales and marketing | 3,686 | 3,865 |
General and administrative | 9,794 | 7,294 |
Acquisition and asset sale related costs | 905 | 163 |
Asset impairment charges | 413 | 0 |
Facility shut down related costs | 300 | 0 |
Litigation settlements | 49 | 0 |
Gain on asset sale | (114) | 0 |
Total operating expenses | 30,131 | 24,420 |
Loss from operations | (2,842) | (11,081) |
Interest income | 71 | 105 |
Interest expense | (355) | (227) |
Other income, net | 395 | 1,143 |
Total interest and other income, net | 111 | 1,021 |
Loss before income taxes | (2,731) | (10,060) |
Income tax provision | (572) | (632) |
Net loss | $ (3,303) | $ (10,692) |
Basic net loss per share (USD per share) | $ (0.06) | $ (0.21) |
Diluted net loss per share (USD per share) | $ (0.06) | $ (0.21) |
Weighted average shares used to compute basic net loss per share (in shares) | 53,146 | 50,717 |
Weighted average shares used to compute diluted net loss per share (in shares) | 53,146 | 50,717 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (3,303) | $ (10,692) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments, net of zero tax | (1,008) | (2,343) |
Total other comprehensive loss | (1,008) | (2,343) |
Comprehensive loss | $ (4,311) | $ (13,035) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Foreign currency translation adjustments, tax | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit |
Beginning balance (in shares) at Dec. 31, 2020 | 50,457 | ||||
Beginning balance at Dec. 31, 2020 | $ 180,407 | $ 126 | $ 597,460 | $ 1,735 | $ (418,914) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive loss | (13,035) | (2,343) | (10,692) | ||
Issuance of common stock upon exercise of stock options (in shares) | 199 | ||||
Issuance of common stock upon exercise of stock options | 1,109 | 1,109 | |||
Issuance of common stock for vested restricted stock units (in shares) | 503 | ||||
Issuance of common stock for vested restricted stock units | 0 | $ 2 | (2) | ||
Tax withholding related to vesting of restricted stock units (in shares) | (150) | ||||
Tax withholding related to vesting of restricted stock units | (1,835) | $ 0 | (1,835) | ||
Stock-based compensation costs | 3,012 | 3,012 | |||
Ending Balance (in shares) at Mar. 31, 2021 | 51,009 | ||||
Ending balance at Mar. 31, 2021 | 169,658 | $ 128 | 599,744 | (608) | (429,606) |
Beginning balance (in shares) at Dec. 31, 2021 | 53,113 | ||||
Beginning balance at Dec. 31, 2021 | 152,961 | $ 133 | 610,085 | 2,376 | (459,633) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive loss | (4,311) | (1,008) | (3,303) | ||
Issuance of common stock upon exercise of stock options (in shares) | 74 | ||||
Issuance of common stock upon exercise of stock options | 366 | 366 | |||
Issuance of common stock for vested restricted stock units (in shares) | 26 | ||||
Issuance of common stock for vested restricted stock units | 0 | $ 0 | 0 | ||
Tax withholding related to vesting of restricted stock units (in shares) | (3) | ||||
Tax withholding related to vesting of restricted stock units | (47) | (47) | |||
Stock-based compensation costs | 2,542 | 2,542 | |||
Ending Balance (in shares) at Mar. 31, 2022 | 53,210 | ||||
Ending balance at Mar. 31, 2022 | $ 151,511 | $ 133 | $ 612,946 | $ 1,368 | $ (462,936) |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (3,303) | $ (10,692) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 4,062 | 6,381 |
Stock-based compensation expense | 2,615 | 3,277 |
Deferred taxes | 356 | 344 |
Others | 169 | 108 |
Gain on sale of assets and other write-offs | (116) | (17) |
Write-down of inventories | 2,659 | 2,267 |
Amortization of operating lease right-of-use assets | 512 | 508 |
Foreign currency remeasurement | (416) | (968) |
Change in operating assets and liabilities: | ||
Accounts receivable | (8,515) | 5,255 |
Inventories | (10,046) | (2,260) |
Prepaid expenses and other assets | (4,407) | 3,441 |
Accounts payable | 2,771 | (5,526) |
Accrued and other liabilities | 2,220 | (11,062) |
Net cash used in operating activities | (11,439) | (8,944) |
Cash flows from investing activities | ||
Purchase of property, plant and equipment | (2,043) | (1,908) |
Proceeds from sale of property, plant and equipment and other assets | 197 | 358 |
Purchase of marketable securities | (17,002) | (13,503) |
Proceeds from sale of marketable securities | 17,000 | 13,501 |
Net cash used in investing activities | (1,848) | (1,552) |
Cash flows from financing activities | ||
Proceeds from exercise of stock options and issuance of stock under ESPP | 351 | 1,548 |
Tax withholding on restricted stock units | (48) | (1,835) |
Proceeds from related party term loan, net of debt issuance costs | 29,941 | 0 |
Repayment of bank loans | (15,635) | (794) |
Repayment of finance lease liabilities | (25) | (24) |
Net cash provided by (used in) financing activities | 14,584 | (1,105) |
Effect of exchange rates on cash, cash equivalents and restricted cash | (86) | (449) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 1,211 | (12,050) |
Cash, cash equivalents and restricted cash at the beginning of the period | 77,920 | 95,606 |
Cash, cash equivalents and restricted cash at the end of the period | 79,131 | 83,556 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Unpaid property, plant and equipment in accounts payable | $ 2,564 | $ 862 |
The Company, basis of presentat
The Company, basis of presentation and significant accounting policies | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company, basis of presentation and significant accounting policies | The Company, 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 March 31, 2022 and for the three months ended March 31, 2022 and 2021, 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. These condensed consolidated financial statements do not include all disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) and 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, 2021. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results expected for the entire fiscal year. All intercompany accounts and transactions have been eliminated. Proposed Merger with Lumentum Holdings Inc. On November 3, 2021, we entered into an Agreement and Plan of Merger with Lumentum Holdings Inc., a Delaware corporation (“Lumentum”) and Neptune Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Lumentum (“Merger Sub”), (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, we will be acquired by Lumentum through a merger of Merger Sub with and into us (the “Merger”), with NeoPhotonics Corporation surviving the Merger as a wholly owned subsidiary of Lumentum. Consummation of the Merger is subject to customary closing conditions, including (1) the absence of certain legal impediments, the expiration or termination of the required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), and (2) approval by the holders of a majority of the outstanding shares of our common stock. The waiting period under the HSR Act expired as of January 21, 2022 and the required approval from our stockholders was obtained on February 1, 2022. The remaining requirements for closure of the Merger are (3) customary closing conditions set forth in the Merger Agreement and (4) approval from the State Administration for Market Regulation of the People’s Republic of China ("SAMR"). The Merger is expected to close in the second half of calendar year 2022, as previously announced. 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; successful and timely completion of product design efforts; the ability of the Company to sell its new products into new market segments; trade restrictions by the United States against the Company's customers in China, as well as potential retaliatory trade actions taken by China; the loss of any of its larger customers; restrictions on the Company's ability to sell to foreign customers due to additional U.S. or new China trade laws, regulations and requirements; disruptions of the supply chain of components needed for its products; 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; and new product design introductions by competitors. The inputs into the Company’s judgments and estimates consider the economic implications of the Covid-19 pandemic as the Company knows them, on its critical and significant accounting estimates. The extent to which the Covid-19 pandemic may impact its business will depend on future developments, which are highly uncertain, such as the duration of the outbreak, travel restrictions, governmental mandates issued to mitigate the spread of the disease, business closures, economic disruptions, and the effectiveness of actions taken to contain and treat the virus. Accordingly, future adverse developments with respect to the Covid-19 pandemic may have a negative impact on its sales, supply chain and results of operations. The inputs into the Company's judgments and estimates also consider the Department of Commerce Entities List restrictions on Huawei Technologies effective September 2020 for the Company and loss of business from Huawei Technologies. Concentration In the three months ended March 31, 2022, two customers were each greater than 10% of the Company’s total revenue, representing 59% of total revenue, and the Company's top five customers represented approximately 79% of the Company’s total revenue. In the three months ended March 31, 2021, four customers each were greater than 10% of revenue, representing 74% of total revenue, and our top five customers during this period represented 80% of total revenue. As of March 31, 2022, three customers accounted for a total of 65% of the Company’s total accounts receivable. As of December 31, 2021, three customers accounted for a total of 35% 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 and recoverability of long-lived assets; valuation allowances for deferred tax assets; valuation of excess and obsolete inventories; warranty reserves; and recognition of stock-based compensation, among others. Actual results could differ from these estimates. Long-lived Assets The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss would be recognized when the sum of the future net cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. The estimated future cash flows are based upon, among other things, assumptions about expected future operating performance and may differ from actual cash flows. Due to the additional restrictions imposed by the U.S. Bureau of Industry and Security ("BIS"), an agency of the U.S. Department of Commerce, which became effective in September 2020, and the expected loss of business from Huawei, the Company performed a recoverability test in the fourth quarter of 2021 and determined there was no impairment of long-lived assets. Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, other current liabilities and operating lease liabilities on the Company's condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, current portion of long-term debt and long-term debt, net of current portion on the condensed consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company's leases do not provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on observed market data and other information available at the lease commencement date. The operating lease ROU assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company does not record leases on the condensed consolidated balance sheet with a term of one year or less. The Company does not separate lease and non-lease components but rather account for each separate component as a single lease component for all underlying classes of assets. Variable lease payments are expensed as incurred and are not included within the operating lease ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance and utilities. Lease expense for minimum operating lease payments is recognized on a straight-line basis over the lease term. Accounting Pronouncements Recently Adopted In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance became effective for fiscal years beginning after December 15, 2020. The Company adopted this ASU in the first quarter of 2021 and the adoption of this standard did not have a material impact on the Company's consolidated financial statements. Recent Accounting Pronouncements Not Yet Effective 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 and requires an entity to recognize 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. In November 2019, the FASB issued ASU 2019-10, according to which, the new standard is effective for smaller reporting companies (“SRC”) as defined by the SEC, for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. The Company is in the process of evaluating the impact and timing of the adoption on its consolidated financial statements and related disclosures. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Product revenue The Company develops, manufactures and sells lasers and other high-speed optoelectronic products that transmit, receive, modify and switch high-speed digital optical signals for communications networks. Revenue is derived primarily from the sale of optoelectronic laser, component and module hardware products. The Company sells its products worldwide, primarily to leading network equipment manufacturers. Revenue recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company generally bears all costs, risk of loss or damage and retains title to the goods up to the point of transfer of control of promised products to customer. Revenue related to the sale of consignment inventories at customer vendor managed locations is not recognized until the products are pulled from consignment inventories by customers. In instances where acceptance of the product or solutions is specified by the customer, revenue is deferred until such required acceptance criteria have been met. Shipping and handling costs are included in the cost of goods sold. The Company presents revenue net of sales taxes and any similar assessments. The Company’s performance obligations relate to contracts with a duration of less than one year. The Company elected to apply the practical expedient provided in Accounting Standard Codification Topic 606, “Revenue from Contracts with Customers” and, therefore, is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. Nature of products Revenue from the sale of hardware products is recognized upon transfer of control to the customer. The performance obligation for the sale of hardware products is satisfied at a point in time. The Company has aligned its products in two groups - High Speed Products and Network Products and Solutions. The following presents revenue by product group (in thousands): Three Months Ended 2022 2021 High Speed Products $ 83,582 $ 57,273 Network Products and Solutions 5,686 3,653 Total revenue $ 89,268 $ 60,926 The following table presents the Company's revenue information by geographical region. Revenue is classified based on the ship to location requested by the customer. Such classification recognizes that for many customers, including those in North America or in Europe, designated shipping points are often in China or elsewhere in Asia (in thousands): Three Months Ended 2022 2021 China $ 20,028 $ 15,244 Americas 13,695 5,191 Rest of world 55,545 40,491 Total revenue $ 89,268 $ 60,926 Deferred revenue The Company records deferred revenue when cash payments are received or due in advance of the Company's performance. The deferred revenue balances were immaterial as of March 31, 2022 and December 31, 2021. Contract assets Contract assets are rights to consideration in exchange for goods or services that the Company has transferred to a customer when such right is conditional on something other than the passage of time. Contract assets exclude any amounts presented as an accounts receivable. There were no contract assets balances as of March 31, 2022 and December 31, 2021. Refund liabilities The Company recognizes a refund liability if the Company receives consideration from a customer and expects to refund some or all of that consideration to the customer. The refund liabilities as of March 31, 2022 and December 31, 2021 were immaterial. |
Net loss per share
Net loss per share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net loss per share | Net loss per share The following table sets forth the computation of the basic and diluted net loss per share for the periods indicated (in thousands, except per share amounts): Three Months Ended 2022 2021 Numerator: Net loss $ (3,303) $ (10,692) Denominator: Weighted average shares used to compute per share amount: Basic 53,146 50,717 Diluted 53,146 50,717 Basic net loss per share $ (0.06) $ (0.21) Diluted net loss per share $ (0.06) $ (0.21) The Company has excluded the impact of the following outstanding employee stock options and restricted stock units as well as the shares that were expected to be issued under its employee stock purchase plan from the computation of diluted net loss per share, as their effect would have been antidilutive (in thousands): Three Months Ended 2022 2021 Employee stock options 1,205 1,897 Restricted stock units 3,340 3,365 Market-based restricted stock units 134 305 Performance-based restricted stock units 240 90 Employee stock purchase plan — 344 4,919 6,001 |
Cash, cash equivalents, short-t
Cash, cash equivalents, short-term investments, and restricted cash | 3 Months Ended |
Mar. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Cash, cash equivalents, short-term investments, and restricted cash | Cash, cash equivalents, short-term investments and restricted cash The following table summarizes the Company’s cash, cash equivalents and restricted cash (in thousands): March 31, 2022 December 31, 2021 Cash and cash equivalents $ 79,044 $ 77,833 Restricted cash 87 87 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 79,131 $ 77,920 As a result of sanctions imposed by the U.S. Treasury on the country of Russia's financial institutions in February 2022, the total cash balance held in our Russian subsidiary NeoPhotonics Technics LLC, of $0.3 million, was written off to Asset impairment charges during the three months ended March 31, 2022. The following table summarizes the Company’s unrealized gains and losses related to its short-term investments in marketable securities designated as available-for-sale (in thousands): As of March 31, 2022 As of December 31, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Marketable securities: Money market funds $ 27,677 $ — $ — $ 27,677 $ 27,675 $ — $ — $ 27,675 Reported as: Short-term investments $ 27,677 $ 27,675 As of March 31, 2022 and December 31, 2021, maturities of marketable securities were less than one year. There were no realized gains and losses on the sale of marketable securities during the three months ended March 31, 2022 and 2021. The Company did not recognize any impairment losses on its marketable securities during the three months ended March 31, 2022 or 2021. As of March 31, 2022, 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 | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value disclosures | 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 March 31, 2022 As of December 31, 2021 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Short-term investments: Money market funds $ 27,677 $ — $ — $ 27,677 $ 27,675 $ — $ — $ 27,675 Other long-term assets: Mutual funds held in Rabbi Trust $ 807 $ — $ — $ 807 $ 894 $ — $ — $ 894 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 March 31, 2022. 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 March 31, 2022 and December 31, 2021. There were no liabilities that are measured at fair value on a recurring basis as of March 31, 2022. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis As of March 31, 2022 and December 31, 2021 the Company had no assets or liabilities required to be measured at fair value on a nonrecurring basis. Assets and Liabilities Not Measured at Fair Value |
Balance sheet components
Balance sheet components | 3 Months Ended |
Mar. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance sheet components | Balance sheet components Accounts receivable, net Accounts receivable, net, consists of the following (in thousands): March 31, 2022 December 31, 2021 Accounts receivable $ 63,838 $ 55,324 Allowance for doubtful accounts — — $ 63,838 $ 55,324 Inventories Inventories consist of the following (in thousands): March 31, 2022 December 31, 2021 Raw materials $ 37,453 $ 32,809 Work in process 17,675 14,851 Finished goods (1) 4,609 5,236 $ 59,737 $ 52,896 ________________________________________________________ (1) Finished goods inventory at customer vendor managed inventory locations was $1.8 million and $1.8 million as of March 31, 2022 and December 31, 2021, respectively. Prepaid expenses and other current assets Prepaid expenses and other current assets consist of the following (in thousands): March 31, 2022 December 31, 2021 Prepaid taxes and taxes receivable $ 7,330 $ 5,825 Receivables due from suppliers 8,556 6,728 Deposits and other prepaid expenses 3,167 2,682 Other receivable 969 1,011 $ 20,022 $ 16,246 Purchased intangible assets, net Purchased intangible assets, net, consist of the following (in thousands): March 31, 2022 December 31, 2021 Gross Accumulated Net Gross Accumulated Net Technology and patents $ 37,850 $ (37,850) $ — $ 37,814 $ (37,814) $ — Customer relationships 15,502 (15,502) — 15,535 (15,535) — Leasehold interest 1,342 (503) 839 1,339 (495) 844 $ 54,694 $ (53,855) $ 839 $ 54,688 $ (53,844) $ 844 For the three months ended March 31, 2022 and 2021, amortization expense relating to technology and patents is included within cost of goods sold and totaled $0.0 million and $0.2 million in each period, respectively. The estimated future amortization expense of purchased intangible assets as of March 31, 2022, was as follows (in thousands): 2022 (remaining nine months) $ 23 2023 30 2024 30 2025 30 2026 30 Thereafter 696 $ 839 Accrued and other current liabilities Accrued and other current liabilities consist of the following (in thousands): March 31, 2022 December 31, 2021 Employee-related $ 16,413 $ 14,956 Transition services agreement payable (refer to Note 11) — 823 Operating lease liabilities, current 2,443 2,356 Income and other taxes payable 2,814 2,703 Accrued warranty 966 977 Other accrued expenses 10,712 8,193 $ 33,348 $ 30,008 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 2022 2021 Beginning balance $ 977 $ 1,111 Warranty accruals 64 61 Settlements (75) (76) Ending balance $ 966 $ 1,096 Other noncurrent liabilities Other noncurrent liabilities consist of the following (in thousands): March 31, 2022 December 31, 2021 Pension and other employee-related $ 3,049 $ 3,266 Asset retirement obligations 3,524 3,508 Government grant 695 369 Other 215 294 $ 7,483 $ 7,437 |
Restructuring Charges
Restructuring Charges | 3 Months Ended |
Mar. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges A summary of the current period activity in accrued restructuring costs is as follows (in thousands): Employee Severance Other Total Restructuring obligations December 31, 2021 $ 302 $ — $ 302 Recoveries (18) — (18) Cash payments (284) — (284) Restructuring obligations March 31, 2022 $ — $ — $ — For the three months ended March 31, 2022, the restructuring recoveries were included within cost of goods sold. In a second phase of restructuring actions taken in 2020, related to reducing operating expenses and manufacturing costs while maintaining the Company's focus on its core capabilities, in December 2021 the Company exercised its early exit right to terminate the facility lease in Fremont, California. The remaining lease commitment will end in April 2022. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt The table below summarizes the carrying amounts and weighted average interest rates of the Company’s debt (in thousands, except percentages): March 31, 2022 December 31, 2021 Carrying Interest Carrying Interest Short-term borrowing: Note payable to Shanghai Pudong Development Bank $ — — % $ 15,000 0.60 % Unaccreted discount and issuance costs — (86) Short-term borrowing, net $ — $ 14,914 Long-term debt, current and noncurrent: Related party term loan with Lumentum Holdings Inc. $ 30,000 3.50 % $ — — % Borrowing under Wells Fargo Credit Facility 20,436 2.57 % 20,338 1.94 % Mitsubishi Bank loans 4,283 1.06%-1.46% 5,000 1.06%-1.46% Mitsubishi Bank and Yamanashi Chuo Bank loan 2,990 1.07 % 3,429 1.06 % Finance lease liability 69 94 Total long-term debt 57,778 28,861 Unaccreted discount and issuance costs (199) (180) Total long-term debt, net of unaccreted discount and issuance costs $ 57,579 $ 28,681 Reported as: Current portion of long-term debt $ 2,722 $ 2,928 Long-term debt, net of current portion 24,880 25,753 Related party long-term debt 29,977 — Total long-term debt, net of unaccreted discount and issuance costs $ 57,579 $ 28,681 Notes payable and short-term borrowing In June 2021, NeoPhotonics (China) Co., Ltd., ("NeoPhotonics China"), a subsidiary of the Company, entered into a credit line agreement with Shanghai Pudong Development Bank Shenzhen Branch (“SPDB”) providing for a line of credit to NeoPhotonics China in an amount of RMB 120,000,000 (approximately $18.9 million) for short-term loans at varying interest rates. The line of credit facility expired on February 23, 2022. In June 2021, NeoPhotonics Dongguan Co., Ltd (“NeoPhotonics Dongguan”), also a subsidiary of the Company, entered into a credit line agreement with SPDB providing for a line of credit to NeoPhotonics Dongguan in an amount of RMB 30,000,000 (approximately $4.7 million) for short-term loans at varying interest rates. As of March 31, 2022, there was not an amount outstanding under this credit facility. The line of credit facility expired on February 23, 2022. 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 As of March 31, 2022 and December 31, 2021, there was $0 and $15 million outstanding under the NeoPhotonics China credit facility, respectively. The note payable bore interest at 3.0% (2.4% of which was charged to NeoPhotonics China as a loan fee and paid in the fourth quarter of 2021) and was repaid in March 2022. There was no amount outstanding under the NeoPhotonics Dongguan line of credit as of March 31, 2022 and December 31, 2021. As of March 31, 2022 and December 31, 2021, there were no bank acceptance drafts issued in connection under the NeoPhotonics China and the NeoPhotonics Dongguan credit facility. There were no compensating balances relating to these credit facilities as of March 31, 2022 and December 31, 2021, respectively. Compensating balances are classified as restricted cash on the Company’s condensed consolidated balance sheets. Credit facilities In June 2021, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”) with Wells Fargo Bank, National Association ("Wells Fargo"), as administrative agent for a lender group. The A&R Credit Agreement amends and restates in full that certain Credit Agreement dated as of September 8, 2017 (as amended, the "Former Credit Agreement"), by and among the Company and Wells Fargo. The A&R Credit Agreement provides for continuation of the $50 million revolving credit facility (the "Credit Facility"). The A&R Credit Facility provides for borrowings equal to the lower of (a) a maximum revolver amount of $50.0 million, or (b) an amount up to 80% - 90% of eligible accounts receivable plus 100% of qualified cash balances up to $15.0 million, less certain discretionary adjustments ("Borrowing Base"). The maximum revolver amount may be increased by up to $25.0 million, subject to certain conditions. The A&R Credit Facility matures on June 30, 2026 and borrowings bear interest, at the Company's option, at an interest rate of either (a) the LIBOR rate, plus an applicable margin ranging from 1.50% to 1.75% per annum, based upon the average excess availability (as defined in the Credit Facility), or (b) the prime lending rate, plus an applicable margin ranging from 0.50% to 0.75% per annum, based upon the average excess availability. The Company is also required to pay a commitment fee equal to 0.25% of the unused portion of the Credit Facility, monthly, in arrears. The A&R Credit Facility requires a mandatory prepayment of the borrowings to the extent the outstanding balance is greater than the lesser of (a) the most recently calculated Borrowing Base, or (b) the maximum revolver amount. The Company was required to maintain a combination of certain defined cash balances and unused borrowing capacity under the A&R Credit Facility of at least $20.0 million, of which at least $5.0 million shall include unused borrowing capacity. As a result of the delayed draw term loan with Lumentum, the defined cash balances and unused borrowing capacity under the A&R Credit Facility has changed to $30.0 million, of which at least $6.25 million shall include unused borrowing capacity. The Agreement also restricts the Company's ability to dispose of assets, to permit change in control, merge or consolidate, make acquisitions, incur indebtedness, grant liens, make investments and make certain restricted payments. Borrowings under the Credit Facility are collateralized by substantially all of the Company's assets. The Company was in compliance with the covenants of the A&R Credit Facility as of March 31, 2022 and December 31, 2021. As of March 31, 2022, the outstanding balance under the A&R Credit Facility was $20.4 million and the weighted average rate under the LIBOR option was 2.57%. The remaining borrowing capacity as of March 31, 2022 was $19.0 million. During the three months ended March 31, 2022, $0.1 million of accrued interest was included as a component of the principal amount of the Wells Fargo Credit Facility. On November 3, 2021, the Company entered into the Merger Agreement, with Lumentum Holdings Inc. (“Lumentum”) and Neptune Merger Sub, Inc., a wholly owned subsidiary of Lumentum. In connection with the Merger with Lumentum "Related Party", a subordinated unsecured delayed draw term loan facility was agreed to on January 14, 2022. Lumentum will provide up to $50 million in interim debt financing to the Company, which would provide financing that may be necessary to operate the Company's business during the pendency of the Merger on terms that are, taken as a whole, likely better than those that could otherwise be obtained from an unrelated third party. As of March 31, 2022, the Company had drawn $30 million from the facility. The loan has a two-year term and bears interest at the prime rate. The Lumentum credit facility is subordinated to the Existing Wells Fargo Facility in right of payment and otherwise pursuant to a subordination agreement entered into between Wells, the Company and Lumentum. The Lumentum credit facility shall be available to the Company commencing on the closing date of the Lumentum credit facility ("Credit Facility Closing Date") or such later date as agreed to by Lumentum and the Company until the earlier of (a) the date the Merger Agreement is terminated for any reason without the closing of the Merger or (b) the Closing Date. The Lumentum credit Facility has a financial covenant whereby the Company agrees that, until the termination of all of the commitments and the payment in full of the obligations, the Company will not permit liquidity to be less than (i) $20.0 million at all times prior to the Initial Advance, or (ii) $30.0 million at all times after the Initial Advance a change from the $20.0 million stated in the A&R Credit Facility. The minimum unused borrowing capacity was increased from $5.0 million as stated in the A&R Credit Facility to $6.25 million. The Company was in compliance with all covenants as of March 31, 2022. The Company is subject to a number of affirmative and restrictive covenants pursuant to the credit agreement, including minimum liquidity, compliance with applicable laws and regulations, payment of taxes, maintenance of insurance, business combinations, occurrence of additional indebtedness, prepayments of other indebtedness and transactions with affiliates, among other covenants. As part of the Credit Facility, there are certain clauses where if triggered, the loan would become payable immediately. The Loan Agreement states that the loan, together with all accrued and unpaid interest thereon, shall become due and payable upon the trigger of the following contingencies: (a) if the Merger Agreement is terminated by either Lumentum or the Company, the Parent Termination Fee as defined in the Merger Agreement ($55.1 million) is payable on the date of the termination of the Merger Agreement (the "Merger Termination Date"), (b) if the Merger Agreement is terminated by Lumentum and a new buyer assumes all the rights and obligations of Lumentum, the date that is two years after the Credit Facility Closing Date, (c) if the Merger Agreement is terminated by the Company and the new buyer does not assume all the rights and obligations of Lumentum, the Merger Termination Date, (d) if the Merger Agreement is terminated and no Parent Termination Fee is payable, the date that is two years after the Credit Facility Closing Date. Mitsubishi Bank loans On February 25, 2015, the Company entered into certain loan agreements and related agreements with MUFG Bank, Ltd. (the “Mitsubishi Bank”) that provided for (i) a term loan in the aggregate principal amount of 500.0 million JPY ($4.4 million) (the “Term Loan A”) and (ii) a term loan in the aggregate principal amount of one billion JPY (approximately $8.2 million) (the “Term Loan B” and together with the Term Loan A, the “2015 Mitsubishi Bank Loans”). The 2015 Mitsubishi Bank Loans are secured by a mortgage on certain real property and buildings owned by the Company’s Japanese subsidiary. Interest on the 2015 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 required 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 8.3 million JPY (approximately $0.1 million) until the maturity date of February 25, 2025, with a lump sum payment of the balance of 8.4 million JPY (approximately $0.1 million) 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 40.5 million JPY (approximately $0.4 million). The Term Loan A of 500.0 million JPY (approximately $4.4 million) was repaid to the Mitsubishi Bank in January 2018. The 2015 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 2015 Mitsubishi Bank Loans contain financial covenants relating to minimum net assets, maximum ordinary loss and a coverage ratio covenant. The Company was in compliance with the related covenants as of March 31, 2022 and December 31, 2021. Outstanding principal balance for the Mitsubishi Term Loans was 291.7 million JPY (approximately $2.4 million) as of March 31, 2022. In March 2017, the Company entered into a loan agreement and related agreements with the Mitsubishi Bank for a term loan of 690.0 million JPY (approximately $5.7 million) (the “2017 Mitsubishi Bank Loan”) to acquire manufacturing equipment for its Japanese subsidiary. This loan is secured by the manufacturing equipment owned by the Company's subsidiary in Japan. Interest on the 2017 Mitsubishi Bank Loan is based on the annual rate of the monthly TIBOR rate plus 1.00%. The 2017 Mitsubishi Bank Loan matures on March 29, 2024 and requires monthly interest and principal payments over 72 months commencing in April 2018. The loan contains customary covenants relating to minimum net assets, maximum ordinary loss and a coverage ratio covenant. The Company was in compliance with these covenants as of March 31, 2022 and December 31, 2021. The loan was available from March 31, 2017 to March 30, 2018 and 690.0 million JPY (approximately $5.7 million) under this loan was fully drawn in March 2017. Outstanding principal balance for the 2017 Mitsubishi Bank Loan was approximately 230.0 million JPY (approximately $1.9 million) as of March 31, 2022. Mitsubishi Bank and Yamanashi Chuo Bank loan In January 2018, the Company entered into a term loan agreement with Mitsubishi Bank and The Yamanashi Chuo Bank, Ltd. for a term loan in the aggregate principal amount of 850.0 million JPY (approximately $7.0 million) (the “Term Loan C”). The purpose of the Term Loan C is to obtain machinery for the core parts of the manufacturing line and payments for related expenses by the Company's subsidiary in Japan. The Term Loan C requires no additional security. The Term Loan C was available from January 29, 2018 to January 29, 2025. The full amount of the Term Loan C was drawn in January 2018. Interest on the Term Loan C is based upon the annual rate of the three months TIBOR rate plus 1.00%. The Term Loan C requires quarterly interest payments, along with the principal payments, over 82 months commencing in April 2018. The Term Loan C loan agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Japanese Subsidiary, including, among other things, restrictions on cessation in business, management, mergers or acquisitions. The Term Loan C loan agreement contains financial covenants relating to minimum net assets and maximum ordinary loss. The Company was in compliance with these covenants as of March 31, 2022 and December 31, 2021. Outstanding principal balance for the Mitsubishi Bank and Yamanashi Chuo Bank Loan was approximately 364.3 million JPY (approximately $3.0 million) as of March 31, 2022. As of March 31, 2022, maturities of long-term borrowings are as follows (in thousands): 2022 (remaining nine months) $ 2,140 2023 2,762 2024 32,054 2025 386 2026 20,436 $ 57,778 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company has operating leases for offices, research and development facilities and manufacturing facilities. Leases have remaining terms of two years to six years, some of which include options to extend the leases and some of which may include options to terminate the leases within one year. As of March 31, 2022 and December 31, 2021, an asset recorded in property, plant and equipment under a finance lease was immaterial. The components of lease expense were as follows (in thousands): Three Months Ended 2022 2021 Operating lease cost $ 759 $ 774 Variable and short-term lease cost 677 629 Total lease cost $ 1,436 $ 1,403 Other information related to leases was as follows (in thousands, except lease term and discount rate): Three Months Ended 2022 2021 Supplemental cash flow information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 827 $ 878 Weighted average remaining lease term Operating leases 5.2 years 6.2 years Weighted average discount rate Operating leases 6.3 % 6.5 % Future minimum lease payments under non-cancelable leases as of March 31, 2022 were as follows (in thousands): Operating Leases 2022 (remaining nine months) $ 2,492 2023 3,378 2024 3,352 2025 3,429 2026 3,282 Thereafter 2,128 Total future minimum lease payments 18,061 Less imputed interest (2,804) Total $ 15,257 As of March 31, 2022 and December 31, 2021, the future minimum lease payments are captured in the Company's Consolidated Balance Sheets as follows: Operating leases: March 31, 2022 December 31, 2021 Accrued and other current liabilities $ 2,443 $ 2,356 Operating lease liabilities, noncurrent 12,814 13,441 Total $ 15,257 $ 15,797 |
Japan pension plan
Japan pension plan | 3 Months Ended |
Mar. 31, 2022 | |
Retirement Benefits [Abstract] | |
Japan pension plan | Japan pension plan The pension liability related to the Company’s Retirement Allowance Plan (“RAP”) in Japan as of March 31, 2022 was $2.6 million, of which $0.3 million was recorded in accrued and other current liabilities and the remainder in other noncurrent liabilities on the Company’s condensed consolidated balance sheet. The pension liability related to RAP in Japan as of December 31, 2021 was $2.7 million, of which $0.3 million, was recorded in accrued and other current liabilities and the remainder in other noncurrent liabilities on the Company’s condensed consolidated balance sheet. Net periodic pension cost associated with this plan was immaterial in the three months ended March 31, 2022 and 2021. |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | 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), except for the matter discussed in the following paragraph, 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. Finisar Litigation In January 2010, Finisar Corporation (acquired by II-VI, Inc. in September 2019) ("Finisar"), filed a complaint in the U.S. District Court for the Northern District of California, 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 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 estimate a range of possible loss. APAT Litigation and Settlement Starting in April 2018, APAT OE and NeoPhotonics (China) Co., Ltd. and NeoPhotonics Dongguan Co. Ltd. (collectively "NeoChina", which are both wholly-owned subsidiaries of the Company) and NeoPhotonics Corporation was involved in a series of litigations and arbitrations which arose out of the 2017 sale by NeoChina of certain low speed transceiver assets to APAT. On October 27, 2020, the parties entered into a settlement agreement to settle all claims and release all property preservation orders. In exchange for a full release of all claims by all parties, terms of the settlement agreement include the following: i) APAT OE to pay NeoChina the arbitration awards in the amount of RMB 52,014,519 (approximately $7.6 million) plus interest of RMB 6,122,150 (approximately $0.9 million) for a total amount of RMB 58,136,669 (approximately $8.5 million) and ii) NeoPhotonics Corporation to pay APAT Hong Kong, a wholly-owned subsidiary of APAT OE, $10,031,515 plus $500,000 in interest for a total payment $10,531,515 for amounts that were paid by customers to NeoPhotonics Corporation for sales of products made by APAT OE after the close of the asset purchase agreement. In accordance with the settlement agreement, all payments between the parties have been made, with the final payment made in the first quarter of 2022. The settlement award of RMB 58,136,669 (approximately $8.5 million) payable by APAT OE to the Company represents repayment of the net receivables owed to the Company at the settlement date and partial recovery of previously recognized losses incurred by the Company of approximately $3.0 million primarily related to a litigation settlement loss with a vendor for committed purchases of certain production materials for which the liabilities were assumed by APAT OE in the Asset Purchase Agreement entered into with the Company in December 2016 and the legal fees incurred for the lawsuits with APAT OE during 2018, 2019 and 2020. At March 31, 2022 and December 31,2021, the amount payable by the Company to APAT OE under the settlement agreement was $0 and approximately $0.8 million, respectively, and is included in Accrued and other current liabilities in the caption "Transition services agreement payable" (See Note 6). APAT OE has repaid the full amount of the Transition Services Agreement Receivable owed to the Company and there is currently no balance remaining as of March 31, 2022 (See Note 6). Indemnifications In the normal course of business, the Company enters into agreements that contain a variety of representations and warranties and provides 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. |
Stockholders' equity
Stockholders' equity | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ equity | Stockholders’ equity Common Stock As of March 31, 2022, the Company had reserved 6,256,346 common stock for issuance under its equity incentive plans. Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss), net of related taxes, were as follows (in thousands): Foreign Currency Translation Adjustments Defined Benefit Pension Plan Adjustment Total Accumulated Other Comprehensive Income (Loss) Balances as of December 31, 2021 $ 2,603 $ (227) $ 2,376 Other comprehensive loss, net of taxes of zero (1,008) — (1,008) Balances at March 31, 2022 $ 1,595 $ (227) $ 1,368 No material amounts were reclassified out of accumulated other comprehensive loss during the three months ended March 31, 2022 and 2021 for realized gains or losses on available-for-sale securities. Accumulated Deficit Approximately $10.5 million of the Company’s retained earnings within its total accumulated deficit as of December 31, 2021 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. |
Restricted net assets
Restricted net assets | 3 Months Ended |
Mar. 31, 2022 | |
Restricted Net Assets [Abstract] | |
Restricted net assets | Restricted net assets The Company’s consolidated subsidiaries operating in China and Japan are restricted from transferring funds or assets to its parent company in the form of cash dividends, loans or advances. As of March 31, 2022 and December 31, 2021, the Company's consolidated subsidiaries had $11.4 million and $11.4 million, respectively, of restricted net assets. This compares to the Company's consolidated net assets of $151.5 million and $153.0 million as of March 31, 2022 and December 31, 2021, respectively, which consisted of (in thousands): March 31, 2022 December 31, 2021 Cash restricted in China due to unpaid employee benefits and unfulfilled government grants $ 49 $ 49 China earnings restricted to fund statutory common reserves in China 10,493 10,463 Loan agreements in Japan requiring local subsidiaries to maintain minimum net asset levels 820 869 Total restricted net assets in the Company's consolidated subsidiaries $ 11,362 $ 11,381 |
Stock-based compensation
Stock-based compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based compensation | Stock-based compensation The following table summarizes the stock-based compensation expense recognized in the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended 2022 2021 Cost of goods sold $ 525 $ 548 Research and development 774 862 Sales and marketing 385 554 General and administrative 931 1,313 $ 2,615 $ 3,277 As of March 31, 2022 and December 31, 2021, stock-based compensation capitalized in inventories totaled $0.3 million and $0.4 million, respectively. Determining Fair Value The Company estimated the fair value of certain stock-based awards using a Black-Scholes-Merton valuation model. Stock Options and Restricted Stock Units (RSUs) The following table summarizes the Company’s stock option and RSU activity, excluding market and performance-based RSUs, during the three months ended March 31, 2022: Stock Options Restricted Stock Units Number of Number of Balance as of December 31, 2021 1,279,222 3,387,315 Granted — 18,551 Exercised/Converted (74,271) (26,365) Cancelled/Forfeited — (39,612) Balances at March 31, 2022 1,204,951 3,339,889 At March 31, 2022, the Company had $0.1 million of unrecognized stock-based compensation expense for stock options, net of estimated forfeitures. At March 31, 2022, the Company had $18.0 million of unrecognized stock-based compensation expense for RSUs, excluding market and performance-based RSUs, net of estimated forfeitures. Market-based Restricted Stock Units As of March 31, 2022, the Company has granted 705,000 shares of market-based RSUs and 133,875 shares remain outstanding to certain employees. These RSUs vest if the 30-day weighted average closing price of the Company's common stock is equal to or greater than certain price targets per share and the recipients remain in continuous service with the Company through such service period. A total of 437,125 market-based RSUs have vested and 134,000 market-based RSUs have been cancelled/forfeited through March 31, 2022. As of March 31, 2022, the Company had $0.1 million of unrecognized stock-based compensation expense for these RSUs, net of estimated forfeitures. The fair value of market-based RSUs was measured on the grant date using Monte Carlo simulation model with the following assumptions: Assumptions Weighted-average volatility 66% Risk-free interest rate 2.79% Expected dividends —% Performance-based Restricted Stock Units In April 2020, the Company granted 90,400 shares of performance-based RSUs to certain employees. These RSUs will vest upon certification by the Board of Directors or the Compensation Committee that the Company has achieved at least $425 million in revenue over four consecutive fiscal quarters and the recipients remain in continuous service with the Company through such service period. None of these performance-based RSUs were vested through March 31, 2022. In July 2021, the Company granted 165,000 shares of performance-based RSUs to certain employees. These RSUs will vest upon certification by the Board of Directors or the Compensation Committee that the Company has achieved at least $100 million in revenue from Data Center Customers as measured over four consecutive quarters and the recipients remain in continuous service with the Company through such service period. None of such performance-based RSUs were vested through March 31, 2022, and 14,950 of these performance-based RSUs have been cancelled/forfeited through March 31, 2022. Stock Appreciation Units (SAUs) SAUs are liability classified share-based awards. Outstanding SAUs are re-measured each reporting period at fair value until settlement. The Company did not grant any SAUs during the three months ended March 31, 2022 or 2021. As of March 31, 2022 and December 31, 2021, there were 25,000 and 25,000 SAUs outstanding, respectively, and related SAU liabilities were $0.3 million and $0.3 million, respectively. Employee Stock Purchase Plan (ESPP) As a condition of the Merger Agreement with Lumentum, effective November 16, 2021, the ESPP program was terminated by the Company and therefore there is no unrecognized compensation expense for employee stock purchase rights for any periods after that date. 2020 Equity Incentive Plan On June 1, 2021, at the 2021 Annual Meeting of Stockholders of NeoPhotonics Corporation, the Company's stockholders approved NeoPhotonics Corporation 2020 Equity Incentive Plan as amended and restated (the “Amended 2020 Plan”) to increase the number of shares available for the grant of stock options, restricted stock unit awards, and other awards by 900,000 shares. The Amended 2020 Plan became effective immediately upon stockholder approval at the Annual Meeting. After taking this amendment into account, the aggregate number of shares of common stock reserved for issuance under the Amended 2020 Plan will not exceed the sum of (i) 2,821,414 shares and (ii) certain shares subject to outstanding awards granted under the Company’s 2010 Equity Incentive Plan or 2011 Inducement Award Plan that may become available for issuance under the Amended 2020 Plan, as such shares become available from time to time. |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The income tax provision in the periods presented is as follows (in thousands): Three Months Ended 2022 2021 Income tax provision $ (572) $ (632) The Company’s income tax provision in the three months ended March 31, 2022 and 2021 was primarily related to income taxes on earnings from its foreign tax jurisdictions. 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. Due to historical 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 March 31, 2022, 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, 2021. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On March 23, 2022, NeoPhotonics and BluGlass Inc. entered into an Asset Purchase Agreement and Subscription Agreement whereby NeoPhotonics would sell its equipment and other assets at the Company’s facility in Fremont, California, in exchange for cash consideration and publicly traded shares of BluGlass Limited (BLG.AX). Subject to the terms and conditions of the Asset Purchase Agreement and Subscription Agreement, BluGlass agreed to issue, and NeoPhotonics agreed to subscribe for paid ordinary shares with a total value of $0.5 million in BluGlass. In addition, the cash consideration for $2.0 million is to be provided to the Company. The transaction was expected to close on March 31, 2022, but it closed on April 1, 2022. The cash consideration plus the sales and use taxes were scheduled to be transferred to NeoPhotonics on March 31, 2022. However, the Company did not receive the total cash consideration until April 1, 2022. As part of the purchase, BluGlass deposited the public shares to the Company’s account on March 31, 2022. As of April 1, 2022, all closing conditions of the transaction had been met. |
The Company, basis of present_2
The Company, basis of presentation and significant accounting policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The condensed consolidated financial statements of NeoPhotonics Corporation (“NeoPhotonics” or the “Company”) as of March 31, 2022 and for the three months ended March 31, 2022 and 2021, 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. These condensed consolidated financial statements do not include all disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) and 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, 2021. The results of operations for the three months ended March 31, 2022 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 | 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; successful and timely completion of product design efforts; the ability of the Company to sell its new products into new market segments; trade restrictions by the United States against the Company's customers in China, as well |
Concentration | Concentration In the three months ended March 31, 2022, two customers were each greater than 10% of the Company’s total revenue, representing 59% of total revenue, and the Company's top five customers represented approximately 79% of the Company’s total revenue. In the three months ended March 31, 2021, four customers each were greater than 10% of revenue, representing 74% of total revenue, and our top five customers during this period represented 80% of total revenue. As of March 31, 2022, three customers accounted for a total of 65% of the Company’s total accounts receivable. As of December 31, 2021, three customers accounted for a total of 35% 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 and recoverability of long-lived assets; valuation allowances for deferred tax assets; valuation of excess and obsolete inventories; warranty reserves; and recognition of stock-based compensation, among others. Actual results could differ from these estimates. |
Long-lived Assets | Long-lived AssetsThe Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss would be recognized when the sum of the future net cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. The estimated future cash flows are based upon, among other things, assumptions about expected future operating performance and may differ from actual cash flows. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, other current liabilities and operating lease liabilities on the Company's condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, current portion of long-term debt and long-term debt, net of current portion on the condensed consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company's leases do not provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on observed market data and other information available at the lease commencement date. The operating lease ROU assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company does not record leases on the condensed consolidated balance sheet with a term of one year or less. The Company does not separate lease and non-lease components but rather account for each separate component as a single lease component for all underlying classes of assets. Variable lease payments are expensed as incurred and are not included within the operating lease ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance and utilities. Lease expense for minimum operating lease payments is recognized on a straight-line basis over the lease term. |
Accounting Pronouncements Recently Adopted/Recent Accounting Pronouncements Not Yet Effective | Accounting Pronouncements Recently Adopted In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes. This guidance became effective for fiscal years beginning after December 15, 2020. The Company adopted this ASU in the first quarter of 2021 and the adoption of this standard did not have a material impact on the Company's consolidated financial statements. Recent Accounting Pronouncements Not Yet Effective 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 and requires an entity to recognize 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. In November 2019, the FASB issued ASU 2019-10, according to which, the new standard is effective for smaller reporting companies (“SRC”) as defined by the SEC, for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. The Company is in the process of evaluating the impact and timing of the adoption on its consolidated financial statements and related disclosures. |
Revenue | Product revenue The Company develops, manufactures and sells lasers and other high-speed optoelectronic products that transmit, receive, modify and switch high-speed digital optical signals for communications networks. Revenue is derived primarily from the sale of optoelectronic laser, component and module hardware products. The Company sells its products worldwide, primarily to leading network equipment manufacturers. Revenue recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company generally bears all costs, risk of loss or damage and retains title to the goods up to the point of transfer of control of promised products to customer. Revenue related to the sale of consignment inventories at customer vendor managed locations is not recognized until the products are pulled from consignment inventories by customers. In instances where acceptance of the product or solutions is specified by the customer, revenue is deferred until such required acceptance criteria have been met. Shipping and handling costs are included in the cost of goods sold. The Company presents revenue net of sales taxes and any similar assessments. The Company’s performance obligations relate to contracts with a duration of less than one year. The Company elected to apply the practical expedient provided in Accounting Standard Codification Topic 606, “Revenue from Contracts with Customers” and, therefore, is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. Nature of products |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Product Group and Geographical Region | The following presents revenue by product group (in thousands): Three Months Ended 2022 2021 High Speed Products $ 83,582 $ 57,273 Network Products and Solutions 5,686 3,653 Total revenue $ 89,268 $ 60,926 The following table presents the Company's revenue information by geographical region. Revenue is classified based on the ship to location requested by the customer. Such classification recognizes that for many customers, including those in North America or in Europe, designated shipping points are often in China or elsewhere in Asia (in thousands): Three Months Ended 2022 2021 China $ 20,028 $ 15,244 Americas 13,695 5,191 Rest of world 55,545 40,491 Total revenue $ 89,268 $ 60,926 |
Net loss per share (Tables)
Net loss per share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Income per Share | The following table sets forth the computation of the basic and diluted net loss per share for the periods indicated (in thousands, except per share amounts): Three Months Ended 2022 2021 Numerator: Net loss $ (3,303) $ (10,692) Denominator: Weighted average shares used to compute per share amount: Basic 53,146 50,717 Diluted 53,146 50,717 Basic net loss per share $ (0.06) $ (0.21) Diluted net loss per share $ (0.06) $ (0.21) |
Schedule of 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 outstanding employee stock options and restricted stock units as well as the shares that were expected to be issued under its employee stock purchase plan from the computation of diluted net loss per share, as their effect would have been antidilutive (in thousands): Three Months Ended 2022 2021 Employee stock options 1,205 1,897 Restricted stock units 3,340 3,365 Market-based restricted stock units 134 305 Performance-based restricted stock units 240 90 Employee stock purchase plan — 344 4,919 6,001 |
Cash, cash equivalents, short_2
Cash, cash equivalents, short-term investments, and restricted cash (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table summarizes the Company’s cash, cash equivalents and restricted cash (in thousands): March 31, 2022 December 31, 2021 Cash and cash equivalents $ 79,044 $ 77,833 Restricted cash 87 87 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 79,131 $ 77,920 |
Schedule of Restricted Cash | The following table summarizes the Company’s cash, cash equivalents and restricted cash (in thousands): March 31, 2022 December 31, 2021 Cash and cash equivalents $ 79,044 $ 77,833 Restricted cash 87 87 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 79,131 $ 77,920 March 31, 2022 December 31, 2021 Cash restricted in China due to unpaid employee benefits and unfulfilled government grants $ 49 $ 49 China earnings restricted to fund statutory common reserves in China 10,493 10,463 Loan agreements in Japan requiring local subsidiaries to maintain minimum net asset levels 820 869 Total restricted net assets in the Company's consolidated subsidiaries $ 11,362 $ 11,381 |
Schedule 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 short-term investments in marketable securities designated as available-for-sale (in thousands): As of March 31, 2022 As of December 31, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Marketable securities: Money market funds $ 27,677 $ — $ — $ 27,677 $ 27,675 $ — $ — $ 27,675 Reported as: Short-term investments $ 27,677 $ 27,675 |
Fair value disclosures (Tables)
Fair value disclosures (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of 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 March 31, 2022 As of December 31, 2021 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Short-term investments: Money market funds $ 27,677 $ — $ — $ 27,677 $ 27,675 $ — $ — $ 27,675 Other long-term assets: Mutual funds held in Rabbi Trust $ 807 $ — $ — $ 807 $ 894 $ — $ — $ 894 |
Balance sheet components (Table
Balance sheet components (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of accounts receivable, net | Accounts receivable, net, consists of the following (in thousands): March 31, 2022 December 31, 2021 Accounts receivable $ 63,838 $ 55,324 Allowance for doubtful accounts — — $ 63,838 $ 55,324 |
Schedule of inventories, net | Inventories consist of the following (in thousands): March 31, 2022 December 31, 2021 Raw materials $ 37,453 $ 32,809 Work in process 17,675 14,851 Finished goods (1) 4,609 5,236 $ 59,737 $ 52,896 ________________________________________________________ (1) Finished goods inventory at customer vendor managed inventory locations was $1.8 million and $1.8 million as of March 31, 2022 and December 31, 2021, respectively. |
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consist of the following (in thousands): March 31, 2022 December 31, 2021 Prepaid taxes and taxes receivable $ 7,330 $ 5,825 Receivables due from suppliers 8,556 6,728 Deposits and other prepaid expenses 3,167 2,682 Other receivable 969 1,011 $ 20,022 $ 16,246 |
Schedule of purchased intangible assets | Purchased intangible assets, net, consist of the following (in thousands): March 31, 2022 December 31, 2021 Gross Accumulated Net Gross Accumulated Net Technology and patents $ 37,850 $ (37,850) $ — $ 37,814 $ (37,814) $ — Customer relationships 15,502 (15,502) — 15,535 (15,535) — Leasehold interest 1,342 (503) 839 1,339 (495) 844 $ 54,694 $ (53,855) $ 839 $ 54,688 $ (53,844) $ 844 |
Schedule of estimated future amortization expense of purchased intangible assets | The estimated future amortization expense of purchased intangible assets as of March 31, 2022, was as follows (in thousands): 2022 (remaining nine months) $ 23 2023 30 2024 30 2025 30 2026 30 Thereafter 696 $ 839 |
Schedule of accrued and other current liabilities | Accrued and other current liabilities consist of the following (in thousands): March 31, 2022 December 31, 2021 Employee-related $ 16,413 $ 14,956 Transition services agreement payable (refer to Note 11) — 823 Operating lease liabilities, current 2,443 2,356 Income and other taxes payable 2,814 2,703 Accrued warranty 966 977 Other accrued expenses 10,712 8,193 $ 33,348 $ 30,008 |
Schedule of 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 2022 2021 Beginning balance $ 977 $ 1,111 Warranty accruals 64 61 Settlements (75) (76) Ending balance $ 966 $ 1,096 |
Schedule of other noncurrent liabilities | Other noncurrent liabilities consist of the following (in thousands): March 31, 2022 December 31, 2021 Pension and other employee-related $ 3,049 $ 3,266 Asset retirement obligations 3,524 3,508 Government grant 695 369 Other 215 294 $ 7,483 $ 7,437 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve Costs | A summary of the current period activity in accrued restructuring costs is as follows (in thousands): Employee Severance Other Total Restructuring obligations December 31, 2021 $ 302 $ — $ 302 Recoveries (18) — (18) Cash payments (284) — (284) Restructuring obligations March 31, 2022 $ — $ — $ — |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Amounts and Weighted Average Interest Rate | The table below summarizes the carrying amounts and weighted average interest rates of the Company’s debt (in thousands, except percentages): March 31, 2022 December 31, 2021 Carrying Interest Carrying Interest Short-term borrowing: Note payable to Shanghai Pudong Development Bank $ — — % $ 15,000 0.60 % Unaccreted discount and issuance costs — (86) Short-term borrowing, net $ — $ 14,914 Long-term debt, current and noncurrent: Related party term loan with Lumentum Holdings Inc. $ 30,000 3.50 % $ — — % Borrowing under Wells Fargo Credit Facility 20,436 2.57 % 20,338 1.94 % Mitsubishi Bank loans 4,283 1.06%-1.46% 5,000 1.06%-1.46% Mitsubishi Bank and Yamanashi Chuo Bank loan 2,990 1.07 % 3,429 1.06 % Finance lease liability 69 94 Total long-term debt 57,778 28,861 Unaccreted discount and issuance costs (199) (180) Total long-term debt, net of unaccreted discount and issuance costs $ 57,579 $ 28,681 Reported as: Current portion of long-term debt $ 2,722 $ 2,928 Long-term debt, net of current portion 24,880 25,753 Related party long-term debt 29,977 — Total long-term debt, net of unaccreted discount and issuance costs $ 57,579 $ 28,681 |
Schedule of Maturities of Notes Payable and Long-term Borrowings | As of March 31, 2022, maturities of long-term borrowings are as follows (in thousands): 2022 (remaining nine months) $ 2,140 2023 2,762 2024 32,054 2025 386 2026 20,436 $ 57,778 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense were as follows (in thousands): Three Months Ended 2022 2021 Operating lease cost $ 759 $ 774 Variable and short-term lease cost 677 629 Total lease cost $ 1,436 $ 1,403 Other information related to leases was as follows (in thousands, except lease term and discount rate): Three Months Ended 2022 2021 Supplemental cash flow information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 827 $ 878 Weighted average remaining lease term Operating leases 5.2 years 6.2 years Weighted average discount rate Operating leases 6.3 % 6.5 % |
Schedule Of Future Minimum Lease Payments Under Non-Cancellable Leases | Future minimum lease payments under non-cancelable leases as of March 31, 2022 were as follows (in thousands): Operating Leases 2022 (remaining nine months) $ 2,492 2023 3,378 2024 3,352 2025 3,429 2026 3,282 Thereafter 2,128 Total future minimum lease payments 18,061 Less imputed interest (2,804) Total $ 15,257 |
Schedule Of Operating Leases | As of March 31, 2022 and December 31, 2021, the future minimum lease payments are captured in the Company's Consolidated Balance Sheets as follows: Operating leases: March 31, 2022 December 31, 2021 Accrued and other current liabilities $ 2,443 $ 2,356 Operating lease liabilities, noncurrent 12,814 13,441 Total $ 15,257 $ 15,797 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss), Net of Related Taxes | The components of accumulated other comprehensive income (loss), net of related taxes, were as follows (in thousands): Foreign Currency Translation Adjustments Defined Benefit Pension Plan Adjustment Total Accumulated Other Comprehensive Income (Loss) Balances as of December 31, 2021 $ 2,603 $ (227) $ 2,376 Other comprehensive loss, net of taxes of zero (1,008) — (1,008) Balances at March 31, 2022 $ 1,595 $ (227) $ 1,368 |
Restricted net assets (Tables)
Restricted net assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Restricted Net Assets [Abstract] | |
Schedule of Restricted Cash | The following table summarizes the Company’s cash, cash equivalents and restricted cash (in thousands): March 31, 2022 December 31, 2021 Cash and cash equivalents $ 79,044 $ 77,833 Restricted cash 87 87 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 79,131 $ 77,920 March 31, 2022 December 31, 2021 Cash restricted in China due to unpaid employee benefits and unfulfilled government grants $ 49 $ 49 China earnings restricted to fund statutory common reserves in China 10,493 10,463 Loan agreements in Japan requiring local subsidiaries to maintain minimum net asset levels 820 869 Total restricted net assets in the Company's consolidated subsidiaries $ 11,362 $ 11,381 |
Stock-based compensation (Table
Stock-based compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Based Compensation Expense | The following table summarizes the stock-based compensation expense recognized in the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended 2022 2021 Cost of goods sold $ 525 $ 548 Research and development 774 862 Sales and marketing 385 554 General and administrative 931 1,313 $ 2,615 $ 3,277 |
Schedule of Stock Option and Restricted Stock Unit Activity | The following table summarizes the Company’s stock option and RSU activity, excluding market and performance-based RSUs, during the three months ended March 31, 2022: Stock Options Restricted Stock Units Number of Number of Balance as of December 31, 2021 1,279,222 3,387,315 Granted — 18,551 Exercised/Converted (74,271) (26,365) Cancelled/Forfeited — (39,612) Balances at March 31, 2022 1,204,951 3,339,889 |
Schedule of Estimated Fair Value of Certain Stock-Based Awards using Black-Scholes-Merton Valuation Model | The fair value of market-based RSUs was measured on the grant date using Monte Carlo simulation model with the following assumptions: Assumptions Weighted-average volatility 66% Risk-free interest rate 2.79% Expected dividends —% |
Income taxes (Tables)
Income taxes (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision | The income tax provision in the periods presented is as follows (in thousands): Three Months Ended 2022 2021 Income tax provision $ (572) $ (632) |
The Company, basis of present_3
The Company, basis of presentation and significant accounting policies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | |
Concentration Risk [Line Items] | ||||
Asset impairment charges | $ 0 | |||
Customer concentration | Total revenue | Three customers | ||||
Concentration Risk [Line Items] | ||||
Percentage of concentration of credit risk | 59.00% | |||
Customer concentration | Total revenue | Top five customers | ||||
Concentration Risk [Line Items] | ||||
Percentage of concentration of credit risk | 79.00% | 80.00% | ||
Customer concentration | Total revenue | Four customers | ||||
Concentration Risk [Line Items] | ||||
Percentage of concentration of credit risk | 74.00% | |||
Customer concentration | Accounts receivable | Three customers | ||||
Concentration Risk [Line Items] | ||||
Percentage of concentration of credit risk | 65.00% | 35.00% |
Revenue - Revenue by Product Gr
Revenue - Revenue by Product Group (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 89,268 | $ 60,926 |
High Speed Products | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 83,582 | 57,273 |
Network Products and Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 5,686 | $ 3,653 |
Revenue - Revenue from External
Revenue - Revenue from External Customers by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 89,268 | $ 60,926 |
China | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 20,028 | 15,244 |
Americas | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 13,695 | 5,191 |
Rest of world | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 55,545 | $ 40,491 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Contract asset balance | $ 0 | $ 0 |
Net loss per share - Computatio
Net loss 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 | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net loss | $ (3,303) | $ (10,692) |
Weighted average shares used to compute per share amount: | ||
Weighted average shares used to compute per share amount, basic (in shares) | 53,146 | 50,717 |
Weighted average shares used to compute per share amount, diluted (in shares) | 53,146 | 50,717 |
Basic net loss per share (USD per share) | $ (0.06) | $ (0.21) |
Diluted net loss per share (USD per share) | $ (0.06) | $ (0.21) |
Net loss per share - Potentiall
Net loss 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 | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||
Securities excluded from computation of diluted net loss per share (in shares) | 4,919 | 6,001 |
Employee stock options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||
Securities excluded from computation of diluted net loss per share (in shares) | 1,205 | 1,897 |
Restricted Stock Units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||
Securities excluded from computation of diluted net loss per share (in shares) | 3,340 | 3,365 |
Market-based restricted stock units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||
Securities excluded from computation of diluted net loss per share (in shares) | 134 | 305 |
Performance-based restricted stock units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||
Securities excluded from computation of diluted net loss per share (in shares) | 240 | 90 |
Employee stock purchase plan | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||
Securities excluded from computation of diluted net loss per share (in shares) | 0 | 344 |
Cash, cash equivalents, short_3
Cash, cash equivalents, short-term investments and restricted cash - Short-term Investments and Restricted Cash and Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 79,044 | $ 77,833 | ||
Restricted cash | 87 | 87 | ||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | 79,131 | $ 83,556 | $ 77,920 | $ 95,606 |
Asset impairment charges | 413 | $ 0 | ||
Subsidiaries | NeoPhotonics Technics, LLC | ||||
Cash and Cash Equivalents [Line Items] | ||||
Asset impairment charges | $ 300 |
Cash, cash equivalents, short_4
Cash, cash equivalents, short-term investments and restricted cash - Summary of Unrealized Gains and Losses (Details) | 3 Months Ended | ||
Mar. 31, 2022USD ($)investment | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Debt Securities, Available-for-sale [Line Items] | |||
Realized gains and losses on the sale of marketable securities | $ 0 | $ 0 | |
Impairment losses on its marketable securities | $ 0 | $ 0 | |
Marketable securities in an unrealized loss position in excess of 12 months | investment | 0 | ||
Short-term investments | |||
Debt Securities, Available-for-sale [Line Items] | |||
Fair Value | $ 27,677,000 | $ 27,675,000 | |
Money market funds | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 27,677,000 | 27,675,000 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Loss | 0 | 0 | |
Fair Value | $ 27,677,000 | $ 27,675,000 |
Fair value disclosures - Assets
Fair value disclosures - Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | $ 27,677,000 | $ 27,675,000 |
Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of liabilities | 0 | |
Recurring | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 27,677,000 | 27,675,000 |
Recurring | Mutual funds held in Rabbi Trust | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 807,000 | 894,000 |
Recurring | Level 1 | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 27,677,000 | 27,675,000 |
Recurring | Level 1 | Mutual funds held in Rabbi Trust | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 807,000 | 894,000 |
Recurring | Level 2 | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Recurring | Level 2 | Mutual funds held in Rabbi Trust | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Recurring | Level 3 | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Recurring | Level 3 | Mutual funds held in Rabbi Trust | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value | 0 | 0 |
Nonrecurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of liabilities | 0 | 0 |
Fair value of assets | $ 0 | $ 0 |
Balance sheet components - Acco
Balance sheet components - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Accounts receivable | $ 63,838 | $ 55,324 |
Allowance for doubtful accounts | 0 | 0 |
Account and trade note receivables, net | $ 63,838 | $ 55,324 |
Balance sheet components - Inve
Balance sheet components - Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 37,453 | $ 32,809 |
Work in process | 17,675 | 14,851 |
Finished goods | 4,609 | 5,236 |
Inventories | 59,737 | 52,896 |
Finished goods, at vendor managed inventory locations | $ 1,800 | $ 1,800 |
Balance sheet components - Prep
Balance sheet components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Prepaid taxes and taxes receivable | $ 7,330 | $ 5,825 |
Receivables due from suppliers | 8,556 | 6,728 |
Deposits and other prepaid expenses | 3,167 | 2,682 |
Other receivable | 969 | 1,011 |
Prepaid expenses and other current assets | $ 20,022 | $ 16,246 |
Balance sheet components - Purc
Balance sheet components - Purchased Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Assets | $ 54,694 | $ 54,688 | |
Accumulated Amortization | (53,855) | (53,844) | |
Net Assets | 839 | 844 | |
Technology and patents | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Assets | 37,850 | 37,814 | |
Accumulated Amortization | (37,850) | (37,814) | |
Net Assets | 0 | 0 | |
Amortization of intangible assets | 0 | $ 200 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Assets | 15,502 | 15,535 | |
Accumulated Amortization | (15,502) | (15,535) | |
Net Assets | 0 | 0 | |
Leasehold interest | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Assets | 1,342 | 1,339 | |
Accumulated Amortization | (503) | (495) | |
Net Assets | $ 839 | $ 844 |
Balance sheet components - Esti
Balance sheet components - Estimated Future Amortization Expense of Purchased Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal Year | $ 23 | |
2023 | 30 | |
2024 | 30 | |
2025 | 30 | |
2026 | 30 | |
Thereafter | 696 | |
Net Assets | $ 839 | $ 844 |
Balance sheet components - Accr
Balance sheet components - Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Employee-related | $ 16,413 | $ 14,956 |
Transition services agreement payable | 0 | 823 |
Operating lease liabilities, current | 2,443 | 2,356 |
Income and other taxes payable | 2,814 | 2,703 |
Accrued warranty | 966 | 977 |
Other accrued expenses | 10,712 | 8,193 |
Accrued and other current liabilities | $ 33,348 | $ 30,008 |
Balance sheet components - Warr
Balance sheet components - Warranty Accrual (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||
Beginning balance | $ 977 | $ 1,111 |
Warranty accruals | 64 | 61 |
Settlements | (75) | (76) |
Ending balance | $ 966 | $ 1,096 |
Balance sheet components - Othe
Balance sheet components - Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Pension and other employee-related | $ 3,049 | $ 3,266 |
Asset retirement obligations | 3,524 | 3,508 |
Government grant | 695 | 369 |
Other | 215 | 294 |
Other noncurrent liabilities | $ 7,483 | $ 7,437 |
Restructuring Charges - Summary
Restructuring Charges - Summary of Current Period Accrued Restructuring Costs (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Restructuring Reserve [Roll Forward] | |
Restructuring obligations, beginning balance | $ 302 |
Recoveries | (18) |
Cash payments | (284) |
Restructuring obligations, ending balance | 0 |
Employee Severance | |
Restructuring Reserve [Roll Forward] | |
Restructuring obligations, beginning balance | 302 |
Recoveries | (18) |
Cash payments | (284) |
Restructuring obligations, ending balance | 0 |
Other | |
Restructuring Reserve [Roll Forward] | |
Restructuring obligations, beginning balance | 0 |
Recoveries | 0 |
Cash payments | 0 |
Restructuring obligations, ending balance | $ 0 |
Debt - Components of Debt Oblig
Debt - Components of Debt Obligations and Weighted Average Interest Rate (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Unaccreted discount and issuance costs | $ (199) | $ (180) |
Short-term debt | 0 | 14,914 |
Finance lease liability | 69 | 94 |
Total long-term debt | 57,778 | 28,861 |
Current portion of long-term debt | 2,722 | 2,928 |
Long-term debt, net of current portion | 24,880 | 25,753 |
Related party long-term debt | 29,977 | 0 |
Total long-term debt, net of unaccreted discount and issuance costs | 57,579 | 28,681 |
Line of credit | Note payable to Shanghai Pudong Development Bank | ||
Debt Instrument [Line Items] | ||
Total short-term debt | 0 | 15,000 |
Unaccreted discount and issuance costs | 0 | (86) |
Short-term debt | $ 0 | $ 14,914 |
Weighted average interest rate | 0.00% | 0.60% |
Line of credit | Related party term loan with Lumentum Holdings Inc. | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 3.50% | 0.00% |
Long-term debt, gross | $ 30,000 | $ 0 |
Line of credit | Borrowing under Wells Fargo Credit Facility | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 2.57% | 1.94% |
Long-term debt, gross | $ 20,436 | $ 20,338 |
Notes payable to banks | Mitsubishi Bank loans | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 4,283 | $ 5,000 |
Notes payable to banks | Mitsubishi Bank loans | Minimum | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.06% | 1.06% |
Notes payable to banks | Mitsubishi Bank loans | Maximum | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.46% | 1.46% |
Notes payable to banks | Mitsubishi Bank and Yamanashi Chuo Bank loan | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.07% | 1.06% |
Long-term debt, gross | $ 2,990 | $ 3,429 |
Debt - Notes Payable and Short-
Debt - Notes Payable and Short-term Borrowing (Details) | 3 Months Ended | |||
Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) | Jun. 30, 2021CNY (¥) | Jun. 30, 2021USD ($) | |
Notes payable | China | Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt term | 3 months | |||
Notes payable | China | Maximum | ||||
Debt Instrument [Line Items] | ||||
Debt term | 6 months | |||
Bankers acceptance | ||||
Debt Instrument [Line Items] | ||||
Compensating balances | $ 0 | $ 0 | ||
Credit Line Agreement | Notes payable | China | Subsidiaries | NeoPhotonics (China) Co., Ltd. | ||||
Debt Instrument [Line Items] | ||||
Line of credit, maximum amount | ¥ 120,000,000 | $ 18,900,000 | ||
Outstanding balance of line of credit facilities | $ 0 | 15,000,000 | ||
Interest rate | 3.00% | |||
Loan fees | 2.40% | |||
Credit Line Agreement | Notes payable | China | Subsidiaries | NeoPhotonics Dongguan Co., Ltd | ||||
Debt Instrument [Line Items] | ||||
Line of credit, maximum amount | ¥ 30,000,000 | $ 4,700,000 | ||
Outstanding balance of line of credit facilities | $ 0 | $ 0 |
Debt - Credit Facilities (Detai
Debt - Credit Facilities (Details) - USD ($) | Jan. 14, 2022 | Jun. 30, 2021 | Mar. 31, 2022 | Dec. 31, 2021 |
Line of credit | A&R Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Maximum revolver amount | $ 50,000,000 | |||
Line of credit | Borrowing under Wells Fargo Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum revolver amount | $ 50,000,000 | |||
Outstanding balance of line of credit facilities | $ 20,400,000 | |||
Cash balance for borrowing | 100.00% | |||
Cash balance max borrowing (up to) | $ 15,000,000 | |||
Maximum revolver increase | $ 25,000,000 | |||
Commitment fee percent | 0.25% | |||
Maximum indebtedness under debt covenant | $ 30,000,000 | $ 20,000,000 | ||
Unused borrowing capacity | 6,250,000 | $ 5,000,000 | ||
Weighted average interest rate | 2.57% | 1.94% | ||
Unused part of credit facility | $ 19,000,000 | |||
Accrued interest included in balance | $ 100,000 | |||
Line of credit | Borrowing under Wells Fargo Credit Facility | LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Weighted average interest rate | 2.57% | |||
Line of credit | Borrowing under Wells Fargo Credit Facility | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Revolver accounts receivable (up to) | 80.00% | |||
Line of credit | Borrowing under Wells Fargo Credit Facility | Minimum | LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate | 1.50% | |||
Line of credit | Borrowing under Wells Fargo Credit Facility | Minimum | Prime rate | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate | 0.50% | |||
Line of credit | Borrowing under Wells Fargo Credit Facility | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Revolver accounts receivable (up to) | 90.00% | |||
Line of credit | Borrowing under Wells Fargo Credit Facility | Maximum | LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate | 1.75% | |||
Line of credit | Borrowing under Wells Fargo Credit Facility | Maximum | Prime rate | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate | 0.75% | |||
Line of credit | Lumentum subordinated unsecured delayed draw term loan facility | ||||
Line of Credit Facility [Line Items] | ||||
Unused borrowing capacity | 6,250,000 | |||
Subordinated Debt | Lumentum subordinated unsecured delayed draw term loan facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum revolver amount | $ 50,000,000 | |||
Debt term | 2 years | |||
Draw on facility | $ 30,000,000 | |||
Liquidity prior to initial advances | 20,000,000 | |||
Liquidity after initial advances | 30,000,000 | |||
Subordinated Debt | Lumentum subordinated unsecured delayed draw term loan facility | Merger Agreement is terminated | ||||
Line of Credit Facility [Line Items] | ||||
Merger termination fee | $ 55,100,000 | |||
Subordinated Debt | Lumentum subordinated unsecured delayed draw term loan facility | Merger Agreement is terminated by Lumentum and New Buyer assumes all rights and obligations | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Expiration Period | 2 years | |||
Subordinated Debt | Lumentum subordinated unsecured delayed draw term loan facility | Merger Agreement is terminated and no Parent Termination Fee is payable | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Expiration Period | 2 years |
Debt - Mitsubishi Bank Loans (D
Debt - Mitsubishi Bank Loans (Details) - Mitsubishi Bank - Notes payable to banks $ in Millions | Feb. 25, 2015JPY (¥) | Feb. 25, 2015USD ($) | Jan. 31, 2018JPY (¥) | Jan. 31, 2018USD ($) | Mar. 31, 2017JPY (¥) | Mar. 31, 2022JPY (¥) | Mar. 31, 2022USD ($) | Mar. 31, 2017USD ($) | Feb. 25, 2015USD ($) |
Mitsubishi Bank loans | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issuance costs | ¥ 40,500,000 | $ 0.4 | |||||||
Mitsubishi Bank loans | TIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate | 1.40% | 1.40% | |||||||
Mitsubishi Bank Term Loan A | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, aggregate principal amount | ¥ 500,000,000 | 4.4 | |||||||
Repayments of lines of credit | ¥ 500,000,000 | $ 4.4 | |||||||
Mitsubishi Bank Term Loan B | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, aggregate principal amount | 1,000,000,000 | $ 8.2 | |||||||
Debt, periodic principal payments | 8,300,000 | $ 0.1 | |||||||
Debt, lump sum payment on the maturity date | ¥ 8,400,000 | $ 0.1 | |||||||
Mitsubishi Bank Term Loan B | TIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate | 1.40% | 1.40% | |||||||
2015 Mitsubishi Bank Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | ¥ 291,700,000 | $ 2.4 | |||||||
2017 Mitsubishi Bank Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, aggregate principal amount | ¥ 690,000,000 | $ 5.7 | |||||||
Long-term debt | ¥ 230,000,000 | $ 1.9 | |||||||
Debt term | 72 months | ||||||||
Line of credit facility, outstanding | ¥ 690,000,000 | $ 5.7 | |||||||
2017 Mitsubishi Bank Loan | TIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate | 1.00% |
Debt - Mitsubishi Bank and Yama
Debt - Mitsubishi Bank and Yamanashi Chuo Bank Loans (Details) - Mitsubishi Bank and The Yamanashi Chuo Bank, Ltd. - Term Loan C $ in Millions | 1 Months Ended | |||
Jan. 31, 2018USD ($) | Mar. 31, 2022USD ($) | Mar. 31, 2022JPY (¥) | Jan. 31, 2018JPY (¥) | |
Debt Instrument [Line Items] | ||||
Line of credit, maximum amount | $ 7 | ¥ 850,000,000 | ||
Debt term | 82 months | |||
Long-term debt | $ 3 | ¥ 364,300,000 | ||
TIBOR | ||||
Debt Instrument [Line Items] | ||||
Variable rate | 1.00% |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Notes Payable and Long-term Borrowings (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Debt Disclosure [Abstract] | |
2022 (remaining nine months) | $ 2,140 |
2023 | 2,762 |
2024 | 32,054 |
2025 | 386 |
2026 | 20,436 |
Total long-term debt, current and non-current | $ 57,778 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Lessee, Lease, Description [Line Items] | |
Termination period | 1 year |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 2 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 6 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Operating lease cost | $ 759 | $ 774 |
Variable and short-term lease cost | 677 | 629 |
Total lease cost | $ 1,436 | $ 1,403 |
Leases - Cash Flows (Details)
Leases - Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 827 | $ 878 |
Weighted average remaining lease term | ||
Weighted average remaining lease term, operating leases | 5 years 2 months 12 days | 6 years 2 months 12 days |
Weighted average discount rate | ||
Weighted average discount rate, operating leases | 6.30% | 6.50% |
Leases - Leases, Liability, Mat
Leases - Leases, Liability, Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2022 (remaining nine months) | $ 2,492 | |
2023 | 3,378 | |
2024 | 3,352 | |
2025 | 3,429 | |
2026 | 3,282 | |
Thereafter | 2,128 | |
Total future minimum lease payments | 18,061 | |
Less imputed interest | (2,804) | |
Total | $ 15,257 | $ 15,797 |
Leases - Balance Sheet Informat
Leases - Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued and other current liabilities | Accrued and other current liabilities |
Accrued and other current liabilities | $ 2,443 | $ 2,356 |
Operating lease liabilities, noncurrent | 12,814 | 13,441 |
Total | $ 15,257 | $ 15,797 |
Japan pension plan (Details)
Japan pension plan (Details) - Japan - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Defined Benefit Plan Disclosure [Line Items] | ||
Pension liability | $ 2.6 | $ 2.7 |
Pension liability included in accrued and other current liabilities | $ 0.3 | $ 0.3 |
Commitments and contingencies (
Commitments and contingencies (Details) | Oct. 27, 2020USD ($) | Oct. 27, 2020CNY (¥) | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) |
Commitments And Contingencies Disclosure [Line Items] | |||||
Litigation settlements | $ (49,000) | $ 0 | |||
APAT OE arbitration | APAT OE | |||||
Commitments And Contingencies Disclosure [Line Items] | |||||
Paid by other party | $ 8,500,000 | ¥ 58,136,669 | |||
Litigation settlements | (3,000,000) | ||||
Payable due to litigation settlement | 0 | $ 800,000 | |||
Receivable due from litigation settlement | $ 0 | ||||
APAT OE arbitration | APAT OE | NeoChina | |||||
Commitments And Contingencies Disclosure [Line Items] | |||||
Paid by other party | 7,600,000 | 52,014,519 | |||
Interest | 900,000 | 6,122,150 | |||
Litigation settlements | 8,500,000 | ¥ 58,136,669 | |||
APAT OE arbitration | APAT HK | |||||
Commitments And Contingencies Disclosure [Line Items] | |||||
Litigation settlements | (10,531,515) | ||||
Damages awarded | 10,031,515 | ||||
Interest payment | $ 500,000 |
Stockholders' equity - Narrativ
Stockholders' equity - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Mar. 31, 2022 | |
Class of Stock [Line Items] | ||
Accumulated deficit subject to restriction | $ 10.5 | |
Accumulated profits (at least) | 10.00% | |
Employee stock options | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 6,256,346 |
Stockholders' equity - Schedule
Stockholders' equity - Schedule of Accumulated Other Comprehensive Income (Loss), Net of Related Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 152,961,000 | $ 180,407,000 |
Other comprehensive loss, net of taxes of zero | (1,008,000) | (2,343,000) |
Ending balance | 151,511,000 | 169,658,000 |
Other comprehensive loss, tax | 0 | |
Foreign Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 2,603,000 | |
Other comprehensive loss, net of taxes of zero | (1,008,000) | |
Ending balance | 1,595,000 | |
Defined Benefit Pension Plan Adjustment | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (227,000) | |
Other comprehensive loss, net of taxes of zero | 0 | |
Ending balance | (227,000) | |
Total Accumulated Other Comprehensive Income (Loss) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 2,376,000 | 1,735,000 |
Ending balance | $ 1,368,000 | $ (608,000) |
Restricted net assets (Details)
Restricted net assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Total restricted net assets in the Company's consolidated subsidiaries | $ 11,362 | $ 11,381 | ||
Stockholders' equity | 151,511 | 152,961 | $ 169,658 | $ 180,407 |
Cash restricted in China due to unpaid employee benefits and unfulfilled government grants | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Total restricted net assets in the Company's consolidated subsidiaries | 49 | 49 | ||
China earnings restricted to fund statutory common reserves in China | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Total restricted net assets in the Company's consolidated subsidiaries | 10,493 | 10,463 | ||
Loan agreements in Japan requiring local subsidiaries to maintain minimum net asset levels | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Total restricted net assets in the Company's consolidated subsidiaries | $ 820 | $ 869 |
Stock-based compensation - Summ
Stock-based compensation - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | $ 2,615 | $ 3,277 |
Cost of goods sold | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 525 | 548 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 774 | 862 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 385 | 554 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | $ 931 | $ 1,313 |
Stock-based compensation - Narr
Stock-based compensation - Narrative (Details) - USD ($) | Jun. 01, 2021 | Jul. 31, 2021 | Apr. 30, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Amended 2020 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares authorized (in shares) | 900,000 | |||||
Shares available under the 2020 plan (in shares) | 2,821,414 | |||||
Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized stock-based compensation expense | $ 100,000 | |||||
RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized stock-based compensation expense | $ 18,000,000 | |||||
Shares vested (in shares) | 26,365 | |||||
Shares canceled/forfeited (in shares) | 39,612 | |||||
Awards granted in the period (in shares) | 18,551 | |||||
Shares outstanding (in shares) | 3,339,889 | 3,387,315 | ||||
Market-based RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Aggregate grants awarded (in shares) | 705,000 | |||||
Shares outstanding (in shares) | 133,875 | |||||
Weighted average closing price vesting trigger | 30 days | |||||
Shares vested (in shares) | 437,125 | |||||
Shares canceled/forfeited (in shares) | 134,000 | |||||
Unrecognized share based compensation | $ 100,000 | |||||
Performance-based RSUs | April 2020 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares vested (in shares) | 0 | |||||
Shares canceled/forfeited (in shares) | 14,950 | |||||
Awards granted in the period (in shares) | 90,400 | |||||
Revenue over four fiscal quarters (at least) | $ 425,000,000 | |||||
Performance-based RSUs | July 2021 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares vested (in shares) | 0 | |||||
Awards granted in the period (in shares) | 165,000 | |||||
Revenue over four fiscal quarters (at least) | $ 100,000,000 | |||||
SAUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Awards granted in the period (in shares) | 0 | 0 | ||||
Shares outstanding (in shares) | 25,000 | 25,000 | ||||
SAU-related liabilities | $ 300,000 | $ 300,000 | ||||
Inventories | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation capitalized | $ 300,000 | $ 400,000 |
Stock-based compensation - Stoc
Stock-based compensation - Stock Options and RSUs (Details) | 3 Months Ended |
Mar. 31, 2022shares | |
Stock Options | |
Number of Shares | |
Beginning Balance (in shares) | 1,279,222 |
Granted (in shares) | 0 |
Exercised/Converted (in shares) | (74,271) |
Cancelled/Forfeited (in shares) | 0 |
Ending Balance (in shares) | 1,204,951 |
Restricted Stock Units | |
Number of Units | |
Beginning Balance (in shares) | 3,387,315 |
Granted (in shares) | 18,551 |
Exercised/Converted (in shares) | (26,365) |
Cancelled/Forfeited (in shares) | (39,612) |
Ending Balance (in shares) | 3,339,889 |
Stock-based compensation - Valu
Stock-based compensation - Valuation Assumptions of Stock-based Awards (Details) - Market-based RSUs | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average volatility | 66.00% |
Risk-free interest rate | 2.79% |
Expected dividends | 0.00% |
Income taxes - Provision for In
Income taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision | $ (572) | $ (632) |
Subsequent Events (Details)
Subsequent Events (Details) - BluGlass Inc. $ in Millions | Mar. 23, 2022USD ($) |
Asset Acquisition [Line Items] | |
Paid ordinary shares subscription | $ 0.5 |
Cash consideration | $ 2 |