Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 10, 2015 | Jun. 30, 2014 |
Document and Entity Information | |||
Entity Registrant Name | Control4 Corp | ||
Entity Central Index Key | 1259515 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $307.10 | ||
Entity Common Stock, Shares Outstanding | 24,308,287 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $29,187 | $84,546 |
Restricted cash | 311 | |
Short-term investments | 53,523 | |
Accounts receivable, net | 20,155 | 15,064 |
Inventories | 14,212 | 15,312 |
Prepaid expenses and other current assets | 2,075 | 1,773 |
Total current assets | 119,463 | 116,695 |
Property and equipment, net | 5,089 | 3,943 |
Long-term investments | 14,509 | |
Intangible assets, net | 1,409 | 928 |
Goodwill | 231 | |
Other assets | 1,329 | 1,120 |
Total assets | 142,030 | 122,686 |
Current liabilities: | ||
Accounts payable | 15,016 | 13,314 |
Accrued liabilities | 4,750 | 6,821 |
Deferred revenue | 843 | 644 |
Current portion of notes payable | 915 | 1,138 |
Total current liabilities | 21,524 | 21,917 |
Notes payable | 913 | 1,828 |
Other long-term liabilities | 1,291 | 467 |
Total liabilities | 23,728 | 24,212 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value; 500,000,000 shares authorized; 22,785,104 and 24,305,381 shares issued and outstanding at December 31, 2013 and December 31, 2014, respectively | 2 | 2 |
Additional paid-in capital | 212,388 | 200,545 |
Accumulated deficit | -93,928 | -102,084 |
Accumulated other comprehensive income (loss) | -160 | 11 |
Total stockholders' equity | 118,302 | 98,474 |
Total liabilities and stockholders' equity | $142,030 | $122,686 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 24,305,381 | 22,785,104 |
Common stock, shares outstanding | 24,305,381 | 22,785,104 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Revenue | $148,800 | $128,511 | $109,512 |
Cost of revenue | 72,443 | 64,234 | 57,225 |
Cost of revenue - inventory purchase commitment | -380 | 1,840 | |
Gross margin | 76,357 | 64,657 | 50,447 |
Operating expenses: | |||
Research and development | 27,365 | 24,979 | 20,310 |
Sales and marketing | 25,887 | 21,975 | 20,182 |
General and administrative | 14,195 | 12,329 | 10,150 |
Litigation settlement | 47 | 440 | 2,869 |
Total operating expenses | 67,494 | 59,723 | 53,511 |
Income (loss) from operations | 8,863 | 4,934 | -3,064 |
Other income (expense): | |||
Interest income | 239 | 16 | 13 |
Interest expense | -177 | -470 | -277 |
Other income (expense) | -358 | -729 | -254 |
Total other income (expense) | -296 | -1,183 | -518 |
Income (loss) before income taxes | 8,567 | 3,751 | -3,582 |
Income tax expense | 411 | 248 | 141 |
Net income (loss) | $8,156 | $3,503 | ($3,723) |
Net income (loss) per common share: | |||
Basic (in dollars per share) | $0.34 | $0.33 | ($1.58) |
Diluted (in dollars per share) | $0.32 | $0.16 | ($1.58) |
Weighted-average number of shares: | |||
Basic (in shares) | 23,685 | 10,609 | 2,360 |
Diluted (in shares) | 25,646 | 22,263 | 2,360 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Net income (loss) | $8,156 | $3,503 | ($3,723) |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | -124 | 15 | -28 |
Net unrealized losses on available-for-sale investments | -47 | ||
Total other comprehensive income (loss) | -171 | 15 | -28 |
Comprehensive income (loss) | $7,985 | $3,518 | ($3,751) |
CONSOLIDATED_STATEMENTS_OF_RED
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (USD $) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income | Total |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2011 | $9,334 | ($101,864) | $24 | ($92,506) | |
Balance (in shares) at Dec. 31, 2011 | 2,245,521 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | -3,723 | -3,723 | |||
Other comprehensive income (loss) | -28 | -28 | |||
Stock-based compensation | 2,869 | 2,869 | |||
Issuance of common stock upon exercise of stock options | 785 | 785 | |||
Issuance of common stock upon exercise of stock options (in shares) | 245,349 | ||||
Balance at Dec. 31, 2012 | 12,988 | -105,587 | -4 | -92,603 | |
Balance (in shares) at Dec. 31, 2012 | 2,490,870 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 3,503 | 3,503 | |||
Other comprehensive income (loss) | 15 | 15 | |||
Stock-based compensation | 3,760 | 3,760 | |||
Issuance of common stock options in connection with a business acquisition | 174 | 174 | |||
Conversion of redeemable convertible preferred stock into common stock | 2 | 116,311 | 116,313 | ||
Conversion of redeemable convertible preferred stock into common stock (in shares) | 15,293,960 | ||||
Issuance of common stock, net of issuance costs | 65,556 | 65,556 | |||
Issuance of common stock, net of issuance costs (in shares) | 4,600,000 | ||||
Issuance of common stock upon net exercise of common stock warrants (in shares) | 293,232 | ||||
Reclassification of redeemable convertible preferred stock warrant liability upon conversion to preferred stock | 1,310 | 1,310 | |||
Issuance of common stock upon exercise of stock options | 446 | 446 | |||
Issuance of common stock upon exercise of stock options (in shares) | 107,042 | ||||
Balance at Dec. 31, 2013 | 2 | 200,545 | -102,084 | 11 | 98,474 |
Balance (in shares) at Dec. 31, 2013 | 22,785,104 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 8,156 | 8,156 | |||
Other comprehensive income (loss) | -171 | -171 | |||
Excess tax benefit from exercise of options for common stock | 91 | 91 | |||
Stock-based compensation | 5,341 | 5,341 | |||
Issuance of common stock upon net exercise of common stock warrants (in shares) | 7,763 | ||||
Issuance of common stock upon exercise of stock options | 6,411 | 6,411 | |||
Issuance of common stock upon exercise of stock options (in shares) | 1,512,514 | ||||
Balance at Dec. 31, 2014 | $2 | $212,388 | ($93,928) | ($160) | $118,302 |
Balance (in shares) at Dec. 31, 2014 | 24,305,381 |
CONSOLIDATED_STATEMENTS_OF_RED1
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Temporary Equity) (USD $) | Redeemable Convertible Preferred Stock | Total |
In Thousands, except Share data, unless otherwise specified | ||
Balance at Dec. 31, 2012 | $116,313 | |
Balance (in shares) at Dec. 31, 2012 | 15,293,960 | |
Increase (Decrease) in Stockholders' Equity | ||
Conversion of redeemable convertible preferred stock into common stock | ($116,313) | $116,313 |
Conversion of redeemable convertible preferred stock into common stock (in shares) | -15,293,960 | |
Balance at Dec. 31, 2013 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating activities | |||
Net income (loss) | $8,156 | $3,503 | ($3,723) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation expense | 2,547 | 2,201 | 1,714 |
Amortization of intangible assets | 491 | 319 | 271 |
Provision for doubtful accounts | 229 | 159 | 184 |
Loss (gain) on inventory purchase commitment | -380 | 1,840 | |
Loss on disposal of property and equipment | 107 | ||
Stock-based compensation | 5,341 | 3,760 | 2,869 |
Excess tax benefit from exercise of options for common stock | -91 | ||
Warrant liability expense | 709 | 254 | |
Changes in assets and liabilities: | |||
Accounts receivable | -5,331 | -2,104 | -2,600 |
Inventories | 1,025 | -2,723 | -4,858 |
Restricted cash | -330 | ||
Prepaid expenses and other current assets | -323 | 111 | -352 |
Other assets | -209 | -233 | -823 |
Accounts payable | 1,698 | -1,221 | 4,622 |
Accrued liabilities | -2,110 | 620 | 2,117 |
Deferred revenue | 199 | 102 | -10 |
Other long-term liabilities | -44 | -1,155 | -621 |
Net cash provided by operating activities | 11,248 | 3,668 | 991 |
Investing activities | |||
Purchases of available-for-sale investments | -89,844 | ||
Proceeds from sales of available-for-sale investments | 2,850 | ||
Proceeds from maturities of available-for-sale investments | 18,915 | ||
Purchases of property and equipment | -2,710 | -3,470 | -2,360 |
Business acquisitions, net of cash acquired | -1,116 | -147 | |
Net cash used in investing activities | -71,905 | -3,617 | -2,360 |
Financing activities | |||
Proceeds from issuance of common stock, net of issuance costs | 65,556 | ||
Proceeds from exercise of options for common stock | 6,411 | 446 | 785 |
Excess tax benefit from exercise of options for common stock | 91 | ||
Proceeds from notes payable | 1,145 | 1,876 | |
Repayment of notes payable | -1,138 | -1,338 | -1,037 |
Net cash provided by financing activities | 5,364 | 65,809 | 1,624 |
Effect of exchange rate changes on cash and cash equivalents | -66 | -9 | -28 |
Net increase (decrease) in cash and cash equivalents | -55,359 | 65,851 | 227 |
Cash and cash equivalents at beginning of period | 84,546 | 18,695 | 18,468 |
Cash and cash equivalents at end of period | 29,187 | 84,546 | 18,695 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 188 | 461 | 278 |
Cash paid for taxes | 246 | 153 | 26 |
Supplemental schedule of non-cash investing and financing activities | |||
Options for common stock granted in connection with a business acquisition | 174 | ||
Elimination of liability upon net exercise of warrants to purchase preferred stock | 1,310 | ||
Conversion of redeemable convertible preferred stock to common stock | 116,313 | ||
Landlord paid tenant improvements | 739 | ||
Purchases of property and equipment financed by accounts payable | 257 | ||
Net unrealized losses on available-for-sale investments | ($47) |
Description_of_Business_and_Su
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Description of Business and Summary of Significant Accounting Policies | |||||||||||
Description of Business and Summary of Significant Accounting Policies | |||||||||||
1. Description of Business and Summary of Significant Accounting Policies | |||||||||||
Control4 Corporation (“Control4” or the “Company”) is a leading provider of automation and control solutions for the connected home. The Company unlocks the potential of connected devices, making entertainment systems easier to use, homes more comfortable, appliances more energy efficient, and families more secure. The Company was incorporated in the state of Delaware on March 27, 2003. | |||||||||||
Reclassifications | |||||||||||
Certain prior-year amounts have been reclassified in order to conform to the current-year presentation. A reclassification was made from general and administrative expenses to other income (expense) related to foreign currency transaction gains (losses). As a result, income from operations is impacted by $0 and $34,000 for the years ended December 31, 2012 and 2013, respectively, but this reclassification did not impact previously reported net income, or related per share amounts. In addition, a reclassification was made related to international hospitality revenue previously disclosed as United States hospitality revenue. The reclassification did not materially impact previous disclosures related to geographic information. Furthermore, this reclassification had no effect on previously reported amounts related to total revenue, income from continuing operations, net income or related per share amounts, and does not impact previous disclosures regarding concentrations of revenue. | |||||||||||
Basis of Presentation | |||||||||||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in the consolidated financial statements. | |||||||||||
Segment Reporting | |||||||||||
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, the Chief Executive Officer, in making decisions regarding resource allocation and accessing performance. To date, the Company has viewed its operations and manages its business as one operating segment. | |||||||||||
Concentrations of Risk | |||||||||||
The Company’s accounts receivable are derived from revenue earned from its worldwide network of independent dealers and distributors. The Company’s sales to dealers and distributors located outside the United States are generally denominated in United States dollars, except for sales to dealers and distributors located in the United Kingdom and the European Union, which are generally denominated in pounds sterling and the euro, respectively. There were no individual account balances greater than 10% of total accounts receivable at December 31, 2013 and December 31, 2014. | |||||||||||
No dealer or distributor accounted for more than 10% of total revenue for the years ended December 31, 2012, 2013 and 2014. | |||||||||||
The Company relies on a limited number of suppliers for its contract manufacturing. A significant disruption in the operations of these manufacturers would impact the production of the Company’s products for a substantial period of time, which could have a material adverse effect on the Company’s business, financial condition and results of operations. | |||||||||||
Geographic Information | |||||||||||
The Company’s revenue includes amounts earned through sales to dealers and distributors located outside of the United States. With the exception of Canada, no single foreign country accounted for more than 10% of total revenue for the years ended December 31, 2012, 2013 and 2014. The following table sets forth revenue from the U.S., Canadian and all other international dealers and distributors combined (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Revenue-United States | $ | 69,957 | $ | 84,474 | $ | 98,276 | |||||
Revenue-Canada | 12,453 | 15,014 | 15,320 | ||||||||
Revenue-all other international sources | 27,102 | 29,023 | 35,204 | ||||||||
Total revenue | $ | 109,512 | $ | 128,511 | $ | 148,800 | |||||
International revenue (excluding Canada) as a percent of total revenue | 25 | % | 23 | % | 24 | % | |||||
Use of Accounting Estimates | |||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates including those related to revenue recognition, sales returns, provisions for doubtful accounts, product warranty, inventory obsolescence, litigation, determination of fair value of stock options, deferred tax asset valuation allowances and income taxes. Actual results may differ from those estimates. | |||||||||||
Product Warranty | |||||||||||
The Company provides its customers a limited product warranty of two years, which requires the Company, at its option, to repair or replace defective products during the warranty period at no cost to the customer or refund the purchase price. The Company estimates the costs that may be incurred to replace, repair or issue a refund for defective products and records a reserve at the time revenue is recognized. Factors that affect the Company’s warranty liability include the number of installed systems, the Company’s historical experience and management’s judgment regarding anticipated rates of product warranty returns, net of refurbished products. The Company assesses the adequacy of its recorded warranty liability each period and makes adjustments to the liability as necessary. Warranty costs accrued includes amounts accrued for products at the time of shipment, adjustments for changes in estimated costs for warranties on products shipped in the period, and changes in estimated costs for warranties on products shipped in prior periods. It is not practicable for the Company to determine the amounts applicable to each of these components. | |||||||||||
The following table presents the changes in the product warranty liability (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Balance at the beginning of the period | $ | 1,030 | $ | 1,155 | $ | 1,213 | |||||
Warranty costs accrued | 1,050 | 1,025 | 1,145 | ||||||||
Warranty claims | (925 | ) | (967 | ) | (1,167 | ) | |||||
Balance at the end of the period | $ | 1,155 | $ | 1,213 | $ | 1,191 | |||||
Net Income (Loss) Per Share | |||||||||||
Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the period that have a dilutive effect on net income per share. Potentially dilutive common shares result from the assumed exercise of outstanding stock options and the assumed conversion of outstanding convertible preferred stock and warrants using the if-converted method. In a net loss position, diluted net loss per share is computed using only the weighted-average number of common shares outstanding during the period, as any additional common shares would be anti-dilutive. | |||||||||||
The following table presents the reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Numerator: | |||||||||||
Net income (loss) | $ | (3,723 | ) | $ | 3,503 | $ | 8,156 | ||||
Denominator: | |||||||||||
Weighted average common stock outstanding for basic net income (loss) per common share | 2,360 | 10,609 | 23,685 | ||||||||
Effect of dilutive securities—stock options, convertible preferred stock, and warrants to purchase common stock and preferred stock | — | 11,654 | 1,961 | ||||||||
Weighted average common shares and dilutive securities outstanding | 2,360 | 22,263 | 25,646 | ||||||||
The following weighted-average common stock equivalents were anti-dilutive and therefore were excluded from the calculation of diluted net income (loss) per share (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Convertible preferred stock | 15,294 | — | — | ||||||||
Options to purchase common stock | 4,317 | 356 | 1,041 | ||||||||
Warrants to purchase common stock | 541 | 1 | — | ||||||||
Warrants to purchase preferred stock | 194 | — | — | ||||||||
Total | 20,346 | 357 | 1,041 | ||||||||
Revenue Recognition | |||||||||||
The Company sells its products through a network of independent dealers, regional and national retailers and distributors. These dealers, retailers and distributors generally sell the Company’s products to the end consumer as part of a bundled sale, which typically includes other third-party products and related services, project design and installation services and on-going support. | |||||||||||
The Company records estimated reductions to revenue for dealer, retailer and distributor incentives, primarily comprised of volume rebates, at the time of the initial sale. The estimated reductions to revenue for rebates are based on the sales terms and the Company’s historical experience and trend analysis. The most common incentive relates to amounts paid or credited to dealers and distributors for achieving defined volume levels or growth objectives. | |||||||||||
The Company’s products include embedded software that is essential to the functionality of the hardware. Accordingly, the hardware and embedded software are accounted for as a single deliverable. In 2013, the Company began bundling Control4 App software licenses with its new controllers. These software licenses do not include acceptance provisions, rights to updates (e.g., when-and-if-available enhancements or upgrades to the functionality of the software) or post-contract customer support such as technical support. When a software license and controller are sold together, a multiple element arrangement exists and revenue is allocated to each deliverable based on relative selling prices. Typically, delivery of both the product and the software license occurs at the same time. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is reasonably assured. Product or licensed software is considered delivered once it has been shipped and title and risk of loss have been transferred. For most of the Company’s product sales, these criteria are met at the time the product is shipped. | |||||||||||
Software license revenue represents fees earned from activating applications which allow end consumers to manage and control their automation systems using tablets, smartphones and other third-party devices. Software products such as Composer Home and Media Editions are sold on a limited basis and do not constitute a significant portion of revenue. The Company’s perpetual software licenses do not include acceptance provisions, rights to updates or upgrades or post-contract customer support such as technical support; the Company generally recognizes revenue at the time the software license is provided. | |||||||||||
The Company offers a subscription service that allows consumers to control and monitor their homes remotely and allows the Company’s dealers to perform remote diagnostic services. Subscription revenue is deferred at the time of payment and recognized on a straight-line basis over the period the service is provided. Total revenue for subscription services represents less than 10% of total revenue for all periods presented. | |||||||||||
The Company recognizes revenue net of cost of revenue for third-party products sold through the Company’s online ordering system. While the Company assumes credit risk on sales to its dealers and distributors for third-party products, the Company does not determine the product selling price, does not retain associated inventory risks and is not the primary obligor to the end consumer. | |||||||||||
The Company’s agreements with dealers and distributors generally do not include rights of return or acceptance provisions. Even though contractual agreements do not provide return privileges, there are circumstances in which the Company will accept returns. In addition, agreements with certain retail distributors contain price protection and limited rights of return. The Company maintains a reserve for such returns based on the Company’s historical return experience. | |||||||||||
Shipping charges billed to dealers and distributors are included in revenue and related shipping costs are included in cost of revenue. | |||||||||||
Cost of Revenue | |||||||||||
Cost of revenue includes the following: the cost of inventory sold during the period, inventory write-down costs, payroll, purchasing costs, royalty obligations, shipping expenses to dealers and distributors and warehousing costs, which include inbound freight costs from manufacturers, rent and payroll and benefit costs. | |||||||||||
Cash and Cash Equivalents | |||||||||||
The Company considers all highly liquid short-term investments with original maturities of three months or less at the time of purchase to be cash equivalents. Cash equivalents consist primarily of money market funds. | |||||||||||
Restricted Cash | |||||||||||
Restricted cash as of December 31, 2014, is composed of a guarantee made by our subsidiary in the United Kingdom to HM Revenue & Customs related to a customs duty deferment account. | |||||||||||
Allowance for Doubtful Accounts | |||||||||||
The Company extends credit to the majority of its dealers and distributors, which consist primarily of small, local businesses. Issuance of credit is based on ongoing credit evaluations by the Company of dealers’ and distributors’ financial condition and generally requires no collateral. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts to reserve for potential uncollectible receivables. The allowance is based upon the creditworthiness of the Company’s dealers and distributors, the dealers’ and distributors’ historical payment experience, the age of the receivables and current market and economic conditions. Provisions for potentially uncollectible accounts are recorded in sales and marketing expenses. The Company writes off accounts receivable balances to the allowance for doubtful accounts when it becomes likely that they will not be collected. | |||||||||||
The following table presents the changes in the allowance for doubtful accounts (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Balance at beginning of period | $ | 651 | $ | 643 | $ | 605 | |||||
Provision | 184 | 159 | 229 | ||||||||
Deductions | (192 | ) | (197 | ) | (129 | ) | |||||
Balance at end of period | $ | 643 | $ | 605 | $ | 705 | |||||
Inventories | |||||||||||
Inventories consist of hardware and related component parts and are stated at the lower of cost or market using the first-in, first-out method. The Company periodically assesses the recoverability of its inventory and reduces the carrying value of the inventory when items are determined to be obsolete, defective or in excess of forecasted sales requirements. Inventory write-downs for excess, defective and obsolete inventory are recorded as a cost of revenue and totaled $1.5 million, $2.3 million, and $1.7 million for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||||
In December 2012, the Company finalized termination of a sales contract and, as a result of the contract termination, recorded a $1.8 million expense associated with an anticipated loss on firm purchase commitments for components that would have been required to meet the Company’s obligations under the terminated contract. The $1.8 million charge has been recorded as Cost of Revenue—Inventory Purchase Commitment in the accompanying consolidated statement of operations during the year ended December 31, 2012. | |||||||||||
In 2013, the Company recorded a gain related to inventory purchase commitments of approximately $0.4 million, as the proceeds from liquidating the underlying inventory and the Company’s ability to consume common components exceeded original estimates. | |||||||||||
Property and Equipment | |||||||||||
Property and equipment are recorded at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the following estimated useful lives: | |||||||||||
Furniture and fixtures | 2 - 5 years | ||||||||||
Manufacturing tooling and test equipment | 2 - 3 years | ||||||||||
Lab and warehouse equipment | 2 - 4 years | ||||||||||
Computer equipment and software | 3 - 4 years | ||||||||||
Marketing equipment | 2 - 3 years | ||||||||||
Maintenance and repairs that do not extend the life of or improve the asset are expensed in the year incurred. Leasehold improvements are depreciated over the estimated useful life (usually 3-8 years) or the life of the associated lease, whichever is less. During the year ended December 31, 2014, the Company recorded approximately $0.7 million of leasehold improvement assets that were paid by the landlord, with a corresponding long-term liability as the tenant improvement allowance was determined to be an incentive for renewing the lease. | |||||||||||
Intangible Assets | |||||||||||
Intangible assets primarily consist of acquired technology. The Company amortizes, to cost of revenue, definite-lived intangible assets on a straight-line basis over the life of the technology. | |||||||||||
Impairment of Long-Lived Assets | |||||||||||
The carrying value of long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. | |||||||||||
Foreign Currency Translation | |||||||||||
The functional currency of the Company’s subsidiaries in the United Kingdom, China, Hong Kong and India are the Pound Sterling, the Chinese Yuan, the Hong Kong Dollar and the Indian Rupee, respectively. The subsidiary’s assets and liabilities have been translated to U.S. dollars using the exchange rates in effect at the balance sheet dates. Statements of operations amounts have been translated using the average exchange rate for each year. Resulting gains or losses from translating foreign currency financial statements are recorded as other comprehensive income (loss). Foreign currency transaction gains (losses) resulting from exchange rate fluctuations on transactions denominated in a currency other than the local currency are included in other income (expense) and have not been material for the years ended December 31, 2012, 2013 or 2014. | |||||||||||
Stock-Based Compensation | |||||||||||
The Company recognizes compensation expense for all stock-based awards issued to employees and directors based on estimated grant date fair values. The Company selected the Black-Scholes option-pricing model to determine the estimated fair value at the date of grant for stock options. The Company elected to amortize compensation expense using the straight-line attribution method, under which stock-based compensation expense is recognized on a straight-line basis over the period the employee performs the related services, generally the vesting period of four years, net of estimated forfeitures. The Company has estimated forfeiture rates based on its historical experience and will update the rates, as necessary, in subsequent periods if actual forfeitures differ from initial estimates. | |||||||||||
The Black-Scholes option-pricing model requires management assumptions regarding various factors that require extensive use of accounting judgment and financial estimates. The Company estimates the expected term for options using the simplified method, which utilizes the weighted average expected life of each tranche of the stock option, determined based on the sum of each tranche’s vesting period plus one-half of the period from the vesting date of each tranche to the stock option’s expiration, because the Company’s options are considered “plain vanilla.” The Company computed the expected volatility using multiple peer companies for a period approximating the expected term. The risk-free interest rate was determined using the implied yield on U.S. Treasury issues with a remaining term within the expected life of the award. | |||||||||||
The Company accounts for stock-based instruments and awards issued to non-employees at fair value using the Black-Scholes option-pricing model. Management believes that the fair value of the stock-based awards is more reliably measured than the fair value of the services received. The fair value of each non-employee award is re-measured each period until a commitment date is reached, which is generally the vesting date. | |||||||||||
Income Taxes | |||||||||||
The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to the differences between the financial statement carrying value of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the fiscal year in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | |||||||||||
The Company operates in various tax jurisdictions and is subject to audit by various tax authorities. The Company provides for tax contingencies whenever it is deemed probable that a tax asset has been impaired or a tax liability has been incurred for events such as tax claims or changes in tax laws. Tax contingencies are based upon their technical merits, relative tax law and the specific facts and circumstances as of each reporting period. Changes in facts and circumstances could result in material changes to the amounts recorded for such tax contingencies. | |||||||||||
The Company recognizes uncertain income tax positions taken on income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. | |||||||||||
The Company’s policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of its income tax provision. During the years ended December 31, 2012, 2013 and 2014, we did not record any material interest income, interest expense or penalties related to uncertain tax positions or the settlement of audits for prior periods. | |||||||||||
Presentation of Certain Taxes | |||||||||||
The Company collects various taxes from dealers and distributors and remits these amounts to the applicable taxing authorities. The Company’s accounting policy is to exclude these taxes from revenue and cost of revenue. | |||||||||||
Research and Development | |||||||||||
Research and development expenses consist primarily of personnel costs, including incentive compensation, depreciation associated with research and development equipment, contract labor and consulting services, facilities- related costs, and travel-related costs. Research and development costs are expensed as incurred. | |||||||||||
Recent Accounting Pronouncements | |||||||||||
In July 2013, the FASB issued ASU 2013-11, ‘‘Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.’’ The amended guidance requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The guidance was effective for the Company beginning January 1, 2014. The adoption of this guidance did not have an impact on the Company’s results of operations, financial position, or cash flows as it relates only to financial statement presentation. | |||||||||||
In May 2014, the FASB issued ASU 2004-09, “Revenue from Contracts with Customers (Topic 606),” which amends the guidance in ASC 605, “Revenue Recognition.” The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is still evaluating the impact of adopting this guidance as well as whether the Company will apply the amendments retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of applying this update at the date of initial application. | |||||||||||
In August 2014, the FASB issued ASU 2014-15, ‘‘Presentation of Financial Statements — Going Concern (Subtopic 205-40).’’ The amended guidance requires an entity to prepare financial statements under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting, if liquidation of the entity becomes imminent. The guidance is effective for the annual period ending on December 31, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of this guidance will not have an impact on the Company’s results of operations, financial position, or cash flows. | |||||||||||
Balance_Sheet_Components
Balance Sheet Components | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Balance Sheet Components | ||||||||
Balance Sheet Components | ||||||||
2. Balance Sheet Components | ||||||||
Inventories consisted of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2013 | 2014 | |||||||
Finished goods | $ | 14,061 | $ | 13,324 | ||||
Component parts | 1,251 | 888 | ||||||
$ | 15,312 | $ | 14,212 | |||||
Property and equipment, net consisted of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2013 | 2014 | |||||||
Computer equipment and software | $ | 4,152 | $ | 4,390 | ||||
Manufacturing tooling and test equipment | 2,652 | 2,777 | ||||||
Furniture and fixtures | 2,046 | 2,298 | ||||||
Lab and warehouse equipment | 2,374 | 2,652 | ||||||
Marketing equipment | 604 | 662 | ||||||
Leasehold improvements | 1,450 | 2,357 | ||||||
13,278 | 15,136 | |||||||
Less: accumulated depreciation | (9,335 | ) | (10,047 | ) | ||||
$ | 3,943 | $ | 5,089 | |||||
Other assets consisted of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2013 | 2014 | |||||||
Prepaid licensing | $ | 716 | $ | 632 | ||||
Deposits | 404 | 697 | ||||||
$ | 1,120 | $ | 1,329 | |||||
Accrued liabilities consisted of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2013 | 2014 | |||||||
Sales returns and warranty accruals | $ | 2,137 | $ | 2,019 | ||||
Compensation accruals | 3,233 | 1,614 | ||||||
Other accrued liabilities | 544 | 1,097 | ||||||
Current portion of settlement obligations | 907 | 20 | ||||||
$ | 6,821 | $ | 4,750 | |||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||
3. Fair Value Measurements | |||||||||||||||||||||||
Assets Measured and Recorded at Fair Value on a Recurring Basis | |||||||||||||||||||||||
The Company’s financial assets that are measured at fair value on a recurring basis consist of money market funds and available-for-sale investments. The following three levels of inputs are used to measure the fair value of financial instruments: | |||||||||||||||||||||||
Level 1: Quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||||||||
Level 2: Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||||||||||||||||
Level 3: Unobservable inputs are used when little or no market data is available. | |||||||||||||||||||||||
The fair values for substantially all of the Company’s financial assets are based on quoted prices in active markets or observable inputs. For Level 2 securities, the Company uses a third-party pricing service which provides documentation on an ongoing basis that includes, among other things, pricing information with respect to reference data, methodology, inputs summarized by asset class, pricing application and corroborative information. | |||||||||||||||||||||||
The Company determines realized gains or losses on the sale of marketable securities on a specific identification method. During the year ended December 31, 2014, the Company did not record significant realized gains or losses on the sales of available-for-sale investments. The following tables show the Company’s cash and available-for-sale investments’ adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short- or long-term investments as of December 31, 2013 and December 31, 2014 (in thousands): | |||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||
Adjusted | Unrealized | Unrealized | Fair Value | Cash and | Short-term | Long-term | |||||||||||||||||
Cost | Gains | Losses | Cash | Investments | Investments | ||||||||||||||||||
Equivalents | |||||||||||||||||||||||
Cash | $ | 5,533 | $ | — | $ | — | $ | 5,533 | $ | 5,533 | $ | — | $ | — | |||||||||
Level 1: | |||||||||||||||||||||||
Money market funds | 79,013 | — | — | 79,013 | 79,013 | — | — | ||||||||||||||||
Subtotal | 79,013 | — | — | 79,013 | 79,013 | — | — | ||||||||||||||||
Total | $ | 84,546 | $ | — | $ | — | $ | 84,546 | $ | 84,546 | $ | — | $ | — | |||||||||
December 31, 2014 | |||||||||||||||||||||||
Adjusted | Unrealized | Unrealized | Fair Value | Cash and | Short-term | Long-term | |||||||||||||||||
Cost | Gains | Losses | Cash | Investments | Investments | ||||||||||||||||||
Equivalents | |||||||||||||||||||||||
Cash | $ | 13,077 | $ | — | $ | — | $ | 13,077 | $ | 13,077 | $ | — | $ | — | |||||||||
Level 1: | |||||||||||||||||||||||
Money market funds | 16,110 | — | — | 16,110 | 16,110 | — | — | ||||||||||||||||
Subtotal | 16,110 | — | — | 16,110 | 16,110 | — | — | ||||||||||||||||
Level 2: | |||||||||||||||||||||||
Asset-backed securities | 4,458 | — | (3 | ) | 4,455 | — | — | 4,455 | |||||||||||||||
Corporate bonds | 54,321 | 2 | (46 | ) | 54,277 | — | 46,726 | 7,551 | |||||||||||||||
Commercial paper | 6,797 | — | — | 6,797 | — | 6,797 | — | ||||||||||||||||
U.S. agency securities | 2,503 | — | — | 2,503 | — | — | 2,503 | ||||||||||||||||
Subtotal | 68,079 | 2 | (49 | ) | 68,032 | — | 53,523 | 14,509 | |||||||||||||||
Total | $ | 97,266 | $ | 2 | $ | (49 | ) | $ | 97,219 | $ | 29,187 | $ | 53,523 | $ | 14,509 | ||||||||
As of December 31, 2014, the Company considers the declines in market value of its investment portfolio to be temporary in nature and does not consider any of its investments other-than-temporarily impaired. The Company typically invests in highly-rated securities, and its investment policy generally limits the amount of credit exposure to any one issuer. The policy requires investments generally to be investment grade, with the primary objective of minimizing the potential risk of principal loss. Fair values were determined for each individual security in the investment portfolio. The maturities of the Company’s long-term investments range from one to two years. When evaluating an investment for other-than-temporary impairment the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates, and the Company’s intent to sell, as well as the fact it is not more likely than not that the Company will be required to sell the investment before recovery of the investment’s cost basis, which may be maturity. During the year ended December 31, 2014, the Company did not recognize any significant impairment charges. | |||||||||||||||||||||||
Fair Value of Other Financial Instruments | |||||||||||||||||||||||
The carrying amounts reported in the accompanying consolidated financial statements for cash and cash equivalents, restricted cash, accounts payable and accrued liabilities approximate their fair value because of the short term nature of the accounts. The fair value of the notes payable approximates its carrying value based on the variable nature of interest rates and current market rates available to the Company (see Note 4). As a result, the balance of the notes payable is categorized within the Level 2 fair value hierarchy. | |||||||||||||||||||||||
LongTerm_Obligations
Long-Term Obligations | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Long-Term Obligations | |||||
Long-Term Obligations | |||||
4. Long-Term Obligations | |||||
Loan and Security Agreement | |||||
In June 2013, the Company entered into an Amended and Restated Loan and Security Agreement with Silicon Valley Bank (the “SVB Agreement”), which consists of a revolving credit facility of $13.0 million (subject to certain borrowing base restrictions) and term borrowings to fund purchases of property and equipment. All borrowings under the SVB Agreement are collateralized by the general assets of the Company. The revolving credit facility has a variable rate of interest of prime (as published in the Wall Street Journal) or LIBOR plus 2.50%, as selected by the Company. The rate was 3.25% at December 31, 2014. In addition, the Company pays an annual commitment fee of $20,000 and a quarterly unused line fee of 0.375% based on the difference between the borrowing commitment of $13.0 million and the then-current balance. In addition, the SVB Agreement provided for term borrowings to fund purchases of property and equipment through May 2014. Term borrowings are payable in 42 equal monthly payments of principal plus interest and bear interest at prime plus 0.50%, which was 3.75% at December 31, 2014. | |||||
Borrowing under the revolving credit facility is subject to certain collateral restrictions relating primarily to the Company’s accounts receivable and inventory levels. As of December 31, 2014, the total borrowing capacity was approximately $13.0 million, and no borrowings were outstanding. The revolving credit facility has a maturity date of May 29, 2015. | |||||
The SVB Agreement contains various restrictive and financial covenants and the Company was in compliance with each of these covenants as of December 31, 2014. | |||||
Future principal payments on outstanding term borrowings as of December 31, 2014 are as follows (in thousands): | |||||
2015 | $ | 915 | |||
2016 | 727 | ||||
2017 | 186 | ||||
$ | 1,828 | ||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Income Taxes | |||||||||||
5. Income Taxes | |||||||||||
The domestic and foreign components of net income (loss) before income tax expense consists of the following for the periods shown below (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Income (loss) before income taxes: | |||||||||||
Domestic | $ | (4,055 | ) | $ | 3,633 | $ | 7,464 | ||||
Foreign | 473 | 118 | 1,103 | ||||||||
Total income (loss) before income taxes | $ | (3,582 | ) | $ | 3,751 | $ | 8,567 | ||||
The provision for income taxes consisted of the following components (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Current: | |||||||||||
Domestic | |||||||||||
Federal | $ | 15 | $ | 64 | $ | 76 | |||||
State | 57 | 53 | 52 | ||||||||
Foreign | 69 | 147 | 288 | ||||||||
Total current tax expense | 141 | 264 | 416 | ||||||||
Deferred: | |||||||||||
Domestic | |||||||||||
Federal | (710 | ) | 1,572 | 1,761 | |||||||
State | (65 | ) | 44 | 30 | |||||||
Foreign | 88 | (16 | ) | (5 | ) | ||||||
Valuation allowance | 687 | (1,616 | ) | (1,791 | ) | ||||||
Total deferred tax benefit | — | (16 | ) | (5 | ) | ||||||
Total income tax expense | $ | 141 | $ | 248 | $ | 411 | |||||
A reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate follows: | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Federal income tax rate | (34.0 | )% | 34 | % | 34 | % | |||||
State taxes, net of federal benefit | 1.1 | 1.1 | 0.4 | ||||||||
Stock-based compensation | 15 | 22.7 | (2.1 | ) | |||||||
Stock warrant | — | 6.4 | — | ||||||||
Research and development credits | — | (18.3 | ) | (8.1 | ) | ||||||
Change in valuation allowance | 17.3 | (42.0 | ) | (20.6 | ) | ||||||
Other, net | 4.5 | 2.7 | 1.2 | ||||||||
Effective income tax rate | 3.9 | % | 6.6 | % | 4.8 | % | |||||
Deferred tax assets and (liabilities) are comprised of the following (in thousands): | |||||||||||
December 31, | |||||||||||
2013 | 2014 | ||||||||||
Deferred Tax Assets: | |||||||||||
Reserves and accruals | $ | 2,146 | $ | 1,449 | |||||||
Inventories | 1,059 | 1,063 | |||||||||
Net operating loss carryforwards | 27,865 | 25,007 | |||||||||
Property, plant and equipment | 1,327 | 1,831 | |||||||||
Stock-based compensation | 1,233 | 1,540 | |||||||||
Research and development credit carryforwards | 4,091 | 5,243 | |||||||||
Other | 163 | — | |||||||||
Total deferred tax assets | 37,884 | 36,133 | |||||||||
Valuation allowance | (37,842 | ) | (36,050 | ) | |||||||
Total deferred tax assets | $ | 42 | $ | 83 | |||||||
Deferred Tax Liabilities: | |||||||||||
Undistributed earnings of foreign subsidiaries | $ | (15 | ) | $ | (56 | ) | |||||
Intangible assets | — | (116 | ) | ||||||||
Property and equipment | (11 | ) | (16 | ) | |||||||
Total deferred tax liabilities | $ | (26 | ) | $ | (188 | ) | |||||
Net deferred tax asset (liability) | $ | 16 | $ | (105 | ) | ||||||
At December 31, 2013 and 2014, the Company had a full valuation allowance against the deferred tax assets of its domestic operations as it believes it is more likely than not that these benefits will not be realized. Significant judgment is required in determining our provision for income taxes, recording valuation allowances against deferred tax assets and evaluating our uncertain tax positions. In evaluating our ability to recover our deferred tax assets, in full or in part, we consider all available positive and negative evidence, including our past operating results, our forecast of future market growth, forecasted earnings, future taxable income and prudent and feasible tax planning strategies. Due to historical net losses incurred and the uncertainty of realizing the deferred tax assets, for all the periods presented, we have a full valuation allowance against our deferred tax assets. To the extent that we generate positive income and expect, with reasonable certainty, to continue to generate positive domestic income we may release all or a portion of our valuation allowance in a future period. This release would result in the recognition of certain deferred tax assets, a decrease to income tax expense for the period such release is made. In addition, our effective tax rate in subsequent periods would increase, and more closely approximate the federal statutory rate of 34%, after giving consideration to state income taxes, foreign income taxes and the effect of exercising incentive stock options. The net valuation allowance decreased by approximately $1.6 million and $1.8 million during the years ended December 31, 2013 and 2014, respectively. | |||||||||||
Net operating loss and tax credit carryforwards as of December 31, 2014 are as follows (in thousands): | |||||||||||
Amount | Expiration Years | ||||||||||
Net operating losses, federal | $ | 85,577 | 2024 – 2034 | ||||||||
Net operating losses, state | 86,064 | 2018 – 2032 | |||||||||
Tax credit carryforwards, federal | 3,789 | 2023 – 2034 | |||||||||
Tax credit carryforwards, state | 2,799 | 2018 – 2029 | |||||||||
Net operating losses, foreign | 20 | None | |||||||||
Approximately $18.4 million of the net operating losses reported above represents unrecorded tax benefits for stock-based compensation, which will be recorded in additional paid in capital when realized. Utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended (the “IRC”), and similar state provisions. The Company recently performed a detailed analysis under Section 382 of the IRC to determine whether any ownership changes had occurred. The effect of an ownership change would be the potential imposition of annual limitations on the use of net operating loss carryforwards attributable to periods before the change. The detailed analysis confirmed that Section 382 ownership changes occurred on July 29, 2003 and March 27, 2007, but the Company concluded that the ownership changes do not result in any limitations regarding the utilization of net operating loss carryforwards. | |||||||||||
The following is a reconciliation of the changes in the gross balance of unrecognized tax benefits, excluding interest and penalties (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Balance at the beginning of the period | $ | 2,318 | $ | 2,318 | $ | 2,943 | |||||
Current year additions | — | 625 | 640 | ||||||||
Balance at the end of the period | $ | 2,318 | $ | 2,943 | $ | 3,583 | |||||
The Company does not believe there will be any material changes in its unrecognized tax benefits over the next 12 months. As of December 31, 2014, the amount of unrecognized tax benefits that would, if recognized, impact the Company’s effective income tax rate is approximately $3.6 million. | |||||||||||
The Company files income tax returns in the United States, including various state and local jurisdictions. The Company’s subsidiaries file income tax returns in the United Kingdom, Hong Kong, China and India. The Company is subject to examination in the United States, the United Kingdom, Hong Kong, China, and India as well as various state jurisdictions. As of December 31, 2014, the Company was not under examination by any tax authorities. Tax years beginning in 2011 are subject to examination by tax authorities in the United States, although net operating loss and credit carryforwards from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used. Tax years beginning in 2012 are subject to examination by the taxing authorities in Hong Kong. Tax years beginning in 2013 are subject to examination by the taxing authorities in the United Kingdom, China, and India. | |||||||||||
At December 31, 2014, the Company had undistributed foreign earnings of $1.5 million, which the Company intends to permanently reinvest in the foreign subsidiary. Unrecognized deferred tax liabilities of $0.3 million from temporary differences related to the investment in this foreign subsidiary would have been taxable if the Company repatriated the foreign earnings. The Company anticipates that future overseas earnings will also be reinvested indefinitely. In accordance with the indefinite reversal criteria, the foreign currency gains recorded in other comprehensive income related to foreign currency translation have not been tax effected. | |||||||||||
Equity_Compensation
Equity Compensation | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity Compensation | |||||||||||||
Equity Compensation | |||||||||||||
6. Equity Compensation | |||||||||||||
Stock Options | |||||||||||||
In 2003, the Board of Directors adopted the 2003 Equity Incentive Plan (the “2003 Plan”), which provided for the granting of nonqualified and incentive stock options, stock appreciation rights, stock awards and restricted stock. Under the 2003 Plan, the Company was able to grant nonqualified and incentive stock options to directors, employees and non-employees providing services to the Company. On June 11, 2013, the Company’s Board of Directors adopted the 2013 Stock Option and Incentive Plan (the “2013 Plan”), which was subsequently approved by the Company’s stockholders. The 2013 Plan became effective as of the closing of the Company’s initial public offering. To the extent that any awards outstanding under the 2003 Plan are forfeited or lapse unexercised subsequent to August 1, 2013, the shares of common stock subject to such awards will become available for issuance under the 2013 Plan. The 2013 Plan provides for annual increases in the number of reserved shares of up to 5% of the outstanding number of shares of the Company’s Common Stock as of the preceding December 31. On January 1, 2015, the number of reserved shares was increased by 1,215,269 shares in accordance with the provisions of the 2013 Plan. | |||||||||||||
A summary of stock option activity for the years ended December 31, 2012, 2013 and 2014 is presented below: | |||||||||||||
Shares Subject | Weighted | Weighted | Weighted | ||||||||||
to Options | Average | Average | Average | ||||||||||
Outstanding | Grant Date | Exercise Price | Remaining | ||||||||||
Fair Value | Contractual | ||||||||||||
Life (Years) | |||||||||||||
Balance at December 31, 2012 | 4,649,238 | $ | 5.56 | ||||||||||
Granted | 480,698 | $ | 10.08 | 13.2 | |||||||||
Exercised | (107,042 | ) | 4.17 | ||||||||||
Expired | (27,772 | ) | 5.79 | ||||||||||
Forfeited | (89,908 | ) | 7.14 | ||||||||||
Balance at December 31, 2013 | 4,905,214 | 6.31 | |||||||||||
Granted | 1,592,268 | 9.99 | 18 | ||||||||||
Exercised | (1,512,514 | ) | 4.24 | ||||||||||
Expired | (136 | ) | 7.4 | ||||||||||
Forfeited | (133,611 | ) | 13.77 | ||||||||||
Balance at December 31, 2014 | 4,851,221 | 10.57 | |||||||||||
Exercisable options at December 31, 2013 | 3,285,695 | 4.88 | 4.9 | ||||||||||
Vested and expected to vest at December 31, 2013 | 4,544,942 | 6.15 | 5.9 | ||||||||||
Exercisable options at December 31, 2014 | 2,494,711 | 6.33 | 5.6 | ||||||||||
Vested and expected to vest at December 31, 2014 | 4,615,485 | 10.3 | 7 | ||||||||||
The following table summarizes information about stock options outstanding and exercisable at December 31, 2014: | |||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||
Range of Exercise Prices | Weighted | Number of | Weighted- | Number of | Weighted- | ||||||||
Average | Underlying | Average | Underlying | Average | |||||||||
Exercise | Shares | Remaining | Shares | Remaining | |||||||||
Price | Contractual | Contractual | |||||||||||
Life (in | Life (in | ||||||||||||
years) | years) | ||||||||||||
$0.78 - 1.72 | $ | 1.10 | 37,399 | 0.8 | 37,399 | 0.8 | |||||||
1.97 - 3.38 | 2.57 | 248,746 | 1.9 | 248,746 | 1.9 | ||||||||
3.58 - 6.14 | 5.64 | 1,570,282 | 5.7 | 1,416,661 | 5.6 | ||||||||
6.34 - 9.94 | 8.27 | 1,007,227 | 7.2 | 627,128 | 7.1 | ||||||||
11.28 - 16.97 | 13.94 | 1,180,368 | 9.0 | 143,901 | 6.3 | ||||||||
17.66 - 22.92 | 21.00 | 807,199 | 9.1 | 20,876 | 8.1 | ||||||||
4,851,221 | 2,494,711 | ||||||||||||
For the stock option awards vested during the three and twelve months ended December 31, 2014, the total fair value was $0.8 million and $4.0 million, respectively. The following table summarizes the aggregate intrinsic-value of options exercised, outstanding and exercisable (in thousands): | |||||||||||||
For the Years Ended and as of | |||||||||||||
December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Options Exercised | $ | 1,310 | $ | 1,315 | $ | 22,668 | |||||||
Options Exercisable | 16,800 | 42,116 | 22,718 | ||||||||||
Options Vested and Expected to Vest | 25,773 | 55,099 | 27,663 | ||||||||||
The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: | |||||||||||||
Years Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Expected volatility | 59 - 63% | 56 - 59% | 49 - 60% | ||||||||||
Expected dividends | 0% | 0% | 0% | ||||||||||
Expected terms (in years) | 5.0 - 6.1 | 3.3 - 7.2 | 1.0 - 6.1 | ||||||||||
Risk-free rate | 0.7 - 1.0% | 0.8 - 1.7% | 0.3 - 2.0% | ||||||||||
Total stock-based compensation expense has been classified as follows in the accompanying statements of operations (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Cost of revenue | $ | 78 | $ | 63 | $ | 105 | |||||||
Research and development | 704 | 1,414 | 2,235 | ||||||||||
Sales and marketing | 580 | 743 | 1,110 | ||||||||||
General and administrative | 1,507 | 1,540 | 1,891 | ||||||||||
Total stock-based compensation expense | $ | 2,869 | $ | 3,760 | $ | 5,341 | |||||||
At December 31, 2014, there was $18.6 million of total unrecognized compensation cost related to non-vested stock option awards that will be recognized over a weighted-average period of 3.1 years. | |||||||||||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Related Party Transactions | |||||||||||
Related Party Transactions | |||||||||||
7. Related Party Transactions | |||||||||||
The Company has entered into sales agreements with companies affiliated with certain of its investors. The following table sets forth revenue from product sales to these companies (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Company 1 | $ | 2,142 | $ | 2,889 | $ | 4,108 | |||||
Company 2 | 1,290 | 950 | 682 | ||||||||
Company 3 | 791 | 426 | 19 | ||||||||
Company 4 | 1,807 | 129 | — | ||||||||
$ | 6,030 | $ | 4,394 | $ | 4.809 | ||||||
As of December 31, 2013 and 2014, the Company had accounts receivable from these companies totaling $0.6 million and $1.5 million, respectively. Purchase and payment terms with these related parties are consistent with other non-affiliated companies. | |||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies | |||||
Commitments and Contingencies | |||||
8. Commitments and Contingencies | |||||
Operating Leases | |||||
The Company leases office and warehouse space under operating leases that expire between 2015 and 2018. The terms of the leases include periods of free rent, options for the Company to extend the leases (three to five years) and increasing rental rates over time. The Company recognizes rental expense under these operating leases on a straight line basis over the lives of the leases and has accrued for rental expense recorded but not paid. | |||||
Rental expense was approximately $1.1 million, $1.4 million and $1.8 million for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||
Future minimum rental payments required under non-cancelable operating leases with initial or remaining terms in excess of one year consist of the following as of December 31, 2014 (in thousands): | |||||
2015 | $ | 1,971 | |||
2016 | 1,887 | ||||
2017 | 1,655 | ||||
2018 | 873 | ||||
$ | 6,386 | ||||
Purchase Commitments | |||||
The Company had non-cancellable purchase commitments for the purchase of inventory, which extend through July 2015 totaling approximately $27.8 million at December 31, 2014. | |||||
Indemnification | |||||
The Company has agreed to indemnify its officers and directors for certain events or occurrences, while the officer or director is or was serving at the Company’s request in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company has a director and officer insurance policy that provides corporate reimbursement coverage that limits its exposure and enables it to recover a portion of any future amounts paid. The Company is unable to reasonably estimate the maximum amount that could be payable under these arrangements since these obligations are not capped but are conditional to the unique facts and circumstances involved. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2014. | |||||
Employment Agreements | |||||
The Company has signed employment agreements with certain executive officers who are entitled to receive certain benefits if their employment is terminated by the Company, including severance payments, accelerated vesting of stock options and continuation of certain insurance benefits. | |||||
Legal Matters | |||||
On August 12, 2014 and September 16, 2014, respectively, the Company received letters from Nokia Corporation alleging that the Company manufactures or supplies products that practice IEEE 802.11 Standards related to wireless technology, and that Nokia is the owner of a portfolio of patents essential to that standard. The Company is conducting an investigation of the claims made by Nokia regarding its patent portfolio. Nokia has not initiated litigation against the Company, but the Company believes that Nokia may do so. The Company intends to defend itself vigorously with respect to this and any other claims or litigation. Since no complaint has been filed and the outcome of any potential legal proceedings related to these claims is uncertain at this time, we cannot estimate the amount of liability, if any, that could result from an adverse resolution of this matter. | |||||
The Company establishes reserves for specific liabilities in connection with legal actions that it deems to be probable and estimable. In management’s opinion, the Company is not currently involved in any legal proceedings other than specifically identified above, that individually or in the aggregate, could have a material effect on the Company’s financial condition, operations, or cash flows. Currently, a range of loss associated with any individual material legal proceeding cannot be reasonably estimated. | |||||
Acquisition
Acquisition | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Acquisition | ||||||||
Acquisition | ||||||||
9. Acquisition | ||||||||
On September 10, 2014, Control4 Corporation (“Control4”), through its wholly owned subsidiary, Control4 EMEA, LTD (“Control4 EMEA”), completed the acquisition of Extra Vegetables Limited, a company incorporated in England and Wales (“Extra Vegetables”), pursuant to a Stock Purchase Agreement dated August 28, 2014, by and among Control4 EMEA and all of the shareholders of Extra Vegetables (the “Purchase Agreement”). Extra Vegetables developed integration modules and third-party device drivers for Control4 and other third-party home automation systems. | ||||||||
Pursuant to the terms of the Purchase Agreement, Control4 EMEA purchased all of the issued and outstanding shares of Extra Vegetables from its shareholders (each a “Selling Shareholder,” and together, the “Selling Shareholders”) and Extra Vegetables became a wholly owned subsidiary of Control4 EMEA. Each Selling Shareholder also agreed to become an employee of Control4 EMEA or Control4. The total consideration transferred was $0.9 million in cash, which included a base purchase price of $0.7 million and $0.2 million as payment for Extra Vegetables’ net working capital. | ||||||||
Total consideration transferred was allocated to tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values at the acquisition date as set forth below. While, from the acquisition date, the Extra Vegetables products will be provided without charge of a separate fee, the Company believes that the acquisition of Extra Vegetables will strengthen the Company’s interoperability development efforts for the connected home, accelerate the development and time-to-market for essential third-party device drivers, offer more comprehensive technical support, deliver better functionality, and provide more integration opportunities, while eliminating complexity for the Company’s dealers and distributors managing multiple vendors, licensing, and permission models. Management estimated the fair values of tangible and intangible asset and liabilities in accordance with the applicable accounting guidance for business combinations. | ||||||||
The Company’s allocation of consideration transferred for Extra Vegetables is as follows (in thousands): | ||||||||
Estimated Fair Value | ||||||||
Cash | $ | 265 | ||||||
Other assets acquired | 125 | |||||||
Intangible assets | 596 | |||||||
Goodwill | 211 | |||||||
Total assets acquired | 1,197 | |||||||
Taxes payable | 175 | |||||||
Deferred income tax liability | 132 | |||||||
Other liabilities assumed | 8 | |||||||
Total net assets acquired | $ | 882 | ||||||
Identifiable Intangible Assets | ||||||||
The Company acquired intangible assets that consisted of developed technology and non-compete agreements, which had estimated fair values of $574,000 and $22,000, respectively. The assets were measured at fair value reflecting the highest and best use of nonfinancial assets in combination with other assets and liabilities using an income approach that discounts expected future cash flows to present value. The estimated net cash flows were discounted using a discount rate of 22%, which is based on the estimated internal rate of return for the acquisition and represents the rate that market participants might use to value the intangible assets. The projected cash flows were determined using key assumptions such as: estimates of revenues and operating profits; the time and resources needed to recreate integration modules and drivers; the life of the product; and associated risks related to viability and product alternatives. The Company will amortize the intangible assets on a straight-line basis over their estimated useful lives of four years for developed technology and two years for non-competition agreements. These intangible assets are not deductible for income tax purposes. | ||||||||
Goodwill | ||||||||
Goodwill of $211,000 represents the excess of consideration transferred over the fair value of assets acquired and liabilities assumed and is attributable to Extra Vegetables’ assembled workforce as well as the benefits expected from combining the Company’s research and engineering operations with Extra Vegetables’. This goodwill is not deductible for income tax purposes. | ||||||||
Other | ||||||||
From the date of acquisition through December 31, 2014, the Company recorded revenue and net income associated with Extra Vegetables of approximately $17,500 and $21,900, respectively. Additionally, the Company incurred approximately $80,000 in total acquisition-related costs accounted for in general and administrative expenses. | ||||||||
Pro Forma Information | ||||||||
The unaudited pro forma information presented below includes the effects of the Extra Vegetables acquisition as if it had been consummated as of January 1, 2013, with adjustments to give effect to pro forma events that are directly attributable to the acquisition, including adjustments related to the amortization of acquired intangible assets. The unaudited pro forma information does not reflect any operating efficiency or potential cost savings, which may result from the consolidation of Extra Vegetables. Accordingly, the unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of what the actual results of the combined company would have been if the acquisition had occurred at the beginning of the period presented, nor is it indicative of the future results of operations. In fact, the Company plans to provide the Extra Vegetables products in Control4’s driver database and make them freely available to Control4 dealers through the Company’s installation software; therefore, the Company will not generate any direct, stand-alone product revenue from the Extra Vegetables technology in future periods. | ||||||||
Years Ended | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
(in thousands) | ||||||||
Revenue | $ | 129,794 | $ | 149,898 | ||||
Income from operations | 5,753 | 9,576 | ||||||
Net income | $ | 4,128 | $ | 8,724 | ||||
Net income per share, basic | $ | 0.39 | $ | 0.37 | ||||
Net income per share, diluted | $ | 0.19 | $ | 0.34 | ||||
Goodwill_and_Intangible_assets
Goodwill and Intangible assets | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Goodwill and Intangible Assets | |||||||||||
Goodwill and Intangible Assets | |||||||||||
10. Goodwill and Intangible Assets | |||||||||||
Goodwill | |||||||||||
Changes in the carrying amount of goodwill consisted of the following (in thousands): | |||||||||||
Amount | |||||||||||
Balance at December 31, 2013 | $ | — | |||||||||
Current period acquisitions | 231 | ||||||||||
Balance at December 31, 2014 | $ | 231 | |||||||||
For a discussion of the significant changes in goodwill, see Note 9. The Company’s goodwill is not deductible for income tax purposes. | |||||||||||
Intangible assets | |||||||||||
The Company’s intangible assets and related accumulated amortization consisted of the following as of December 31, 2013 and December 31, 2014 (in thousands): | |||||||||||
December 31, 2013 | |||||||||||
Gross Carrying | Accumulated | Net | |||||||||
Amount | Amortization | ||||||||||
Developed technology | $ | 1,647 | $ | (742 | ) | $ | 905 | ||||
Non-competition agreements | 31 | (8 | ) | 23 | |||||||
Total intangible assets | $ | 1,678 | $ | (750 | ) | $ | 928 | ||||
December 31, 2014 | |||||||||||
Gross Carrying | Accumulated | Net | |||||||||
Amount | Amortization | ||||||||||
Developed technology | $ | 2,597 | $ | (1,214 | ) | $ | 1,383 | ||||
Non-competition agreements | 53 | (27 | ) | 26 | |||||||
Total intangible assets | $ | 2,650 | $ | (1,241 | ) | $ | 1,409 | ||||
For a discussion of the significant changes in intangible assets, see Note 9. The weighted average amortization period is 4.4 years for developed technology, 2.0 years for non-competition agreements, and 4.3 years in total. | |||||||||||
The Company recorded amortization expense during the respective periods for these intangible assets as follows: (in thousands): | |||||||||||
Years Ended | |||||||||||
December 31, | |||||||||||
2013 | 2014 | ||||||||||
Amortization of intangible assets | $ | 319 | $ | 491 | |||||||
Amortization of finite lived intangible assets as of December 31, 2014 is as follows for the next four years (in thousands): | |||||||||||
Amount | |||||||||||
2015 | $ | 612 | |||||||||
2016 | 418 | ||||||||||
2017 | 237 | ||||||||||
2018 | 142 | ||||||||||
$ | 1,409 | ||||||||||
Subsequent_Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Event | |
Subsequent Event | |
11. Subsequent Event | |
On January 30, 2015, Control4 Corporation (“Control4”), through its wholly owned subsidiary, Control4 Australia Holdings Pty., Ltd (“Control4 Australia”), completed the acquisition of Nexus Technologies Pty., Ltd. (“Nexus”), an Australia-based provider of audio/video distribution products (under the brand of “Leaf”), pursuant to a Share Sale Agreement dated January 30, 2015, by and among Control4 Australia and all of the shareholders of Nexus. Control4 had previously sold select Leaf products to its North American dealer network. Through this acquisition, Control4 is now in a better position to offer the complete array of Leaf products to Control4 distribution partners throughout the world, gain market share in the growing A/V category, and leverage Leaf’s valuable engineering expertise to develop new and innovative A/V entertainment solutions. | |
Pursuant to the terms of the Share Sale Agreement, Control4 Australia purchased all of the issued and outstanding shares of Nexus from its shareholders and Nexus became a wholly owned subsidiary of Control4 Australia. The total consideration transferred was $9.0 million in cash, subject to final adjustment for certain working capital calculations. In addition, the Company paid a commission of $0.5 million to an agent. The Company determined the Nexus acquisition to be an immaterial transaction under Rule 3-05 of Regulation S-X. | |
The Company is in the process of determining the fair values of the net assets acquired and will include Nexus’ results of operations in its financial statements with effect from the purchase date. Due to the timing of the acquisition, it is not currently practicable to include any preliminary disclosures of estimated fair values or pro forma information. | |
Description_of_Business_and_Su1
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Description of Business and Summary of Significant Accounting Policies | |||||||||||
Reclassifications | Reclassifications | ||||||||||
Certain prior-year amounts have been reclassified in order to conform to the current-year presentation. A reclassification was made from general and administrative expenses to other income (expense) related to foreign currency transaction gains (losses). As a result, income from operations is impacted by $0 and $34,000 for the years ended December 31, 2012 and 2013, respectively, but this reclassification did not impact previously reported net income, or related per share amounts. In addition, a reclassification was made related to international hospitality revenue previously disclosed as United States hospitality revenue. The reclassification did not materially impact previous disclosures related to geographic information. Furthermore, this reclassification had no effect on previously reported amounts related to total revenue, income from continuing operations, net income or related per share amounts, and does not impact previous disclosures regarding concentrations of revenue. | |||||||||||
Basis of Presentation | Basis of Presentation | ||||||||||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in the consolidated financial statements. | |||||||||||
Segment Reporting | Segment Reporting | ||||||||||
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, the Chief Executive Officer, in making decisions regarding resource allocation and accessing performance. To date, the Company has viewed its operations and manages its business as one operating segment. | |||||||||||
Concentrations of Risk | Concentrations of Risk | ||||||||||
The Company’s accounts receivable are derived from revenue earned from its worldwide network of independent dealers and distributors. The Company’s sales to dealers and distributors located outside the United States are generally denominated in United States dollars, except for sales to dealers and distributors located in the United Kingdom and the European Union, which are generally denominated in pounds sterling and the euro, respectively. There were no individual account balances greater than 10% of total accounts receivable at December 31, 2013 and December 31, 2014. | |||||||||||
No dealer or distributor accounted for more than 10% of total revenue for the years ended December 31, 2012, 2013 and 2014. | |||||||||||
The Company relies on a limited number of suppliers for its contract manufacturing. A significant disruption in the operations of these manufacturers would impact the production of the Company’s products for a substantial period of time, which could have a material adverse effect on the Company’s business, financial condition and results of operations. | |||||||||||
Geographic Information | Geographic Information | ||||||||||
The Company’s revenue includes amounts earned through sales to dealers and distributors located outside of the United States. With the exception of Canada, no single foreign country accounted for more than 10% of total revenue for the years ended December 31, 2012, 2013 and 2014. The following table sets forth revenue from the U.S., Canadian and all other international dealers and distributors combined (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Revenue-United States | $ | 69,957 | $ | 84,474 | $ | 98,276 | |||||
Revenue-Canada | 12,453 | 15,014 | 15,320 | ||||||||
Revenue-all other international sources | 27,102 | 29,023 | 35,204 | ||||||||
Total revenue | $ | 109,512 | $ | 128,511 | $ | 148,800 | |||||
International revenue (excluding Canada) as a percent of total revenue | 25 | % | 23 | % | 24 | % | |||||
Use of Accounting Estimates | Use of Accounting Estimates | ||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates including those related to revenue recognition, sales returns, provisions for doubtful accounts, product warranty, inventory obsolescence, litigation, determination of fair value of stock options, deferred tax asset valuation allowances and income taxes. Actual results may differ from those estimates. | |||||||||||
Product Warranty | Product Warranty | ||||||||||
The Company provides its customers a limited product warranty of two years, which requires the Company, at its option, to repair or replace defective products during the warranty period at no cost to the customer or refund the purchase price. The Company estimates the costs that may be incurred to replace, repair or issue a refund for defective products and records a reserve at the time revenue is recognized. Factors that affect the Company’s warranty liability include the number of installed systems, the Company’s historical experience and management’s judgment regarding anticipated rates of product warranty returns, net of refurbished products. The Company assesses the adequacy of its recorded warranty liability each period and makes adjustments to the liability as necessary. Warranty costs accrued includes amounts accrued for products at the time of shipment, adjustments for changes in estimated costs for warranties on products shipped in the period, and changes in estimated costs for warranties on products shipped in prior periods. It is not practicable for the Company to determine the amounts applicable to each of these components. | |||||||||||
The following table presents the changes in the product warranty liability (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Balance at the beginning of the period | $ | 1,030 | $ | 1,155 | $ | 1,213 | |||||
Warranty costs accrued | 1,050 | 1,025 | 1,145 | ||||||||
Warranty claims | (925 | ) | (967 | ) | (1,167 | ) | |||||
Balance at the end of the period | $ | 1,155 | $ | 1,213 | $ | 1,191 | |||||
Net Income (Loss) Per Share | Net Income (Loss) Per Share | ||||||||||
Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the period that have a dilutive effect on net income per share. Potentially dilutive common shares result from the assumed exercise of outstanding stock options and the assumed conversion of outstanding convertible preferred stock and warrants using the if-converted method. In a net loss position, diluted net loss per share is computed using only the weighted-average number of common shares outstanding during the period, as any additional common shares would be anti-dilutive. | |||||||||||
The following table presents the reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Numerator: | |||||||||||
Net income (loss) | $ | (3,723 | ) | $ | 3,503 | $ | 8,156 | ||||
Denominator: | |||||||||||
Weighted average common stock outstanding for basic net income (loss) per common share | 2,360 | 10,609 | 23,685 | ||||||||
Effect of dilutive securities—stock options, convertible preferred stock, and warrants to purchase common stock and preferred stock | — | 11,654 | 1,961 | ||||||||
Weighted average common shares and dilutive securities outstanding | 2,360 | 22,263 | 25,646 | ||||||||
The following weighted-average common stock equivalents were anti-dilutive and therefore were excluded from the calculation of diluted net income (loss) per share (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Convertible preferred stock | 15,294 | — | — | ||||||||
Options to purchase common stock | 4,317 | 356 | 1,041 | ||||||||
Warrants to purchase common stock | 541 | 1 | — | ||||||||
Warrants to purchase preferred stock | 194 | — | — | ||||||||
Total | 20,346 | 357 | 1,041 | ||||||||
Revenue Recognition | Revenue Recognition | ||||||||||
The Company sells its products through a network of independent dealers, regional and national retailers and distributors. These dealers, retailers and distributors generally sell the Company’s products to the end consumer as part of a bundled sale, which typically includes other third-party products and related services, project design and installation services and on-going support. | |||||||||||
The Company records estimated reductions to revenue for dealer, retailer and distributor incentives, primarily comprised of volume rebates, at the time of the initial sale. The estimated reductions to revenue for rebates are based on the sales terms and the Company’s historical experience and trend analysis. The most common incentive relates to amounts paid or credited to dealers and distributors for achieving defined volume levels or growth objectives. | |||||||||||
The Company’s products include embedded software that is essential to the functionality of the hardware. Accordingly, the hardware and embedded software are accounted for as a single deliverable. In 2013, the Company began bundling Control4 App software licenses with its new controllers. These software licenses do not include acceptance provisions, rights to updates (e.g., when-and-if-available enhancements or upgrades to the functionality of the software) or post-contract customer support such as technical support. When a software license and controller are sold together, a multiple element arrangement exists and revenue is allocated to each deliverable based on relative selling prices. Typically, delivery of both the product and the software license occurs at the same time. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is reasonably assured. Product or licensed software is considered delivered once it has been shipped and title and risk of loss have been transferred. For most of the Company’s product sales, these criteria are met at the time the product is shipped. | |||||||||||
Software license revenue represents fees earned from activating applications which allow end consumers to manage and control their automation systems using tablets, smartphones and other third-party devices. Software products such as Composer Home and Media Editions are sold on a limited basis and do not constitute a significant portion of revenue. The Company’s perpetual software licenses do not include acceptance provisions, rights to updates or upgrades or post-contract customer support such as technical support; the Company generally recognizes revenue at the time the software license is provided. | |||||||||||
The Company offers a subscription service that allows consumers to control and monitor their homes remotely and allows the Company’s dealers to perform remote diagnostic services. Subscription revenue is deferred at the time of payment and recognized on a straight-line basis over the period the service is provided. Total revenue for subscription services represents less than 10% of total revenue for all periods presented. | |||||||||||
The Company recognizes revenue net of cost of revenue for third-party products sold through the Company’s online ordering system. While the Company assumes credit risk on sales to its dealers and distributors for third-party products, the Company does not determine the product selling price, does not retain associated inventory risks and is not the primary obligor to the end consumer. | |||||||||||
The Company’s agreements with dealers and distributors generally do not include rights of return or acceptance provisions. Even though contractual agreements do not provide return privileges, there are circumstances in which the Company will accept returns. In addition, agreements with certain retail distributors contain price protection and limited rights of return. The Company maintains a reserve for such returns based on the Company’s historical return experience. | |||||||||||
Shipping charges billed to dealers and distributors are included in revenue and related shipping costs are included in cost of revenue. | |||||||||||
Cost of Revenue | Cost of Revenue | ||||||||||
Cost of revenue includes the following: the cost of inventory sold during the period, inventory write-down costs, payroll, purchasing costs, royalty obligations, shipping expenses to dealers and distributors and warehousing costs, which include inbound freight costs from manufacturers, rent and payroll and benefit costs. | |||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||
The Company considers all highly liquid short-term investments with original maturities of three months or less at the time of purchase to be cash equivalents. Cash equivalents consist primarily of money market funds. | |||||||||||
Restricted Cash | Restricted Cash | ||||||||||
Restricted cash as of December 31, 2014, is composed of a guarantee made by our subsidiary in the United Kingdom to HM Revenue & Customs related to a customs duty deferment account. | |||||||||||
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts | ||||||||||
The Company extends credit to the majority of its dealers and distributors, which consist primarily of small, local businesses. Issuance of credit is based on ongoing credit evaluations by the Company of dealers’ and distributors’ financial condition and generally requires no collateral. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts to reserve for potential uncollectible receivables. The allowance is based upon the creditworthiness of the Company’s dealers and distributors, the dealers’ and distributors’ historical payment experience, the age of the receivables and current market and economic conditions. Provisions for potentially uncollectible accounts are recorded in sales and marketing expenses. The Company writes off accounts receivable balances to the allowance for doubtful accounts when it becomes likely that they will not be collected. | |||||||||||
The following table presents the changes in the allowance for doubtful accounts (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Balance at beginning of period | $ | 651 | $ | 643 | $ | 605 | |||||
Provision | 184 | 159 | 229 | ||||||||
Deductions | (192 | ) | (197 | ) | (129 | ) | |||||
Balance at end of period | $ | 643 | $ | 605 | $ | 705 | |||||
Inventories | Inventories | ||||||||||
Inventories consist of hardware and related component parts and are stated at the lower of cost or market using the first-in, first-out method. The Company periodically assesses the recoverability of its inventory and reduces the carrying value of the inventory when items are determined to be obsolete, defective or in excess of forecasted sales requirements. Inventory write-downs for excess, defective and obsolete inventory are recorded as a cost of revenue and totaled $1.5 million, $2.3 million, and $1.7 million for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||||
In December 2012, the Company finalized termination of a sales contract and, as a result of the contract termination, recorded a $1.8 million expense associated with an anticipated loss on firm purchase commitments for components that would have been required to meet the Company’s obligations under the terminated contract. The $1.8 million charge has been recorded as Cost of Revenue—Inventory Purchase Commitment in the accompanying consolidated statement of operations during the year ended December 31, 2012. | |||||||||||
In 2013, the Company recorded a gain related to inventory purchase commitments of approximately $0.4 million, as the proceeds from liquidating the underlying inventory and the Company’s ability to consume common components exceeded original estimates. | |||||||||||
Property and Equipment | Property and Equipment | ||||||||||
Property and equipment are recorded at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the following estimated useful lives: | |||||||||||
Furniture and fixtures | 2 - 5 years | ||||||||||
Manufacturing tooling and test equipment | 2 - 3 years | ||||||||||
Lab and warehouse equipment | 2 - 4 years | ||||||||||
Computer equipment and software | 3 - 4 years | ||||||||||
Marketing equipment | 2 - 3 years | ||||||||||
Maintenance and repairs that do not extend the life of or improve the asset are expensed in the year incurred. Leasehold improvements are depreciated over the estimated useful life (usually 3-8 years) or the life of the associated lease, whichever is less. During the year ended December 31, 2014, the Company recorded approximately $0.7 million of leasehold improvement assets that were paid by the landlord, with a corresponding long-term liability as the tenant improvement allowance was determined to be an incentive for renewing the lease. | |||||||||||
Intangible Assets | Intangible Assets | ||||||||||
Intangible assets primarily consist of acquired technology. The Company amortizes, to cost of revenue, definite-lived intangible assets on a straight-line basis over the life of the technology. | |||||||||||
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | ||||||||||
The carrying value of long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. | |||||||||||
Foreign Currency Translation | Foreign Currency Translation | ||||||||||
The functional currency of the Company’s subsidiaries in the United Kingdom, China, Hong Kong and India are the Pound Sterling, the Chinese Yuan, the Hong Kong Dollar and the Indian Rupee, respectively. The subsidiary’s assets and liabilities have been translated to U.S. dollars using the exchange rates in effect at the balance sheet dates. Statements of operations amounts have been translated using the average exchange rate for each year. Resulting gains or losses from translating foreign currency financial statements are recorded as other comprehensive income (loss). Foreign currency transaction gains (losses) resulting from exchange rate fluctuations on transactions denominated in a currency other than the local currency are included in other income (expense) and have not been material for the years ended December 31, 2012, 2013 or 2014. | |||||||||||
Stock-Based Compensation | Stock-Based Compensation | ||||||||||
The Company recognizes compensation expense for all stock-based awards issued to employees and directors based on estimated grant date fair values. The Company selected the Black-Scholes option-pricing model to determine the estimated fair value at the date of grant for stock options. The Company elected to amortize compensation expense using the straight-line attribution method, under which stock-based compensation expense is recognized on a straight-line basis over the period the employee performs the related services, generally the vesting period of four years, net of estimated forfeitures. The Company has estimated forfeiture rates based on its historical experience and will update the rates, as necessary, in subsequent periods if actual forfeitures differ from initial estimates. | |||||||||||
The Black-Scholes option-pricing model requires management assumptions regarding various factors that require extensive use of accounting judgment and financial estimates. The Company estimates the expected term for options using the simplified method, which utilizes the weighted average expected life of each tranche of the stock option, determined based on the sum of each tranche’s vesting period plus one-half of the period from the vesting date of each tranche to the stock option’s expiration, because the Company’s options are considered “plain vanilla.” The Company computed the expected volatility using multiple peer companies for a period approximating the expected term. The risk-free interest rate was determined using the implied yield on U.S. Treasury issues with a remaining term within the expected life of the award. | |||||||||||
The Company accounts for stock-based instruments and awards issued to non-employees at fair value using the Black-Scholes option-pricing model. Management believes that the fair value of the stock-based awards is more reliably measured than the fair value of the services received. The fair value of each non-employee award is re-measured each period until a commitment date is reached, which is generally the vesting date. | |||||||||||
Income Taxes | Income Taxes | ||||||||||
The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to the differences between the financial statement carrying value of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the fiscal year in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | |||||||||||
The Company operates in various tax jurisdictions and is subject to audit by various tax authorities. The Company provides for tax contingencies whenever it is deemed probable that a tax asset has been impaired or a tax liability has been incurred for events such as tax claims or changes in tax laws. Tax contingencies are based upon their technical merits, relative tax law and the specific facts and circumstances as of each reporting period. Changes in facts and circumstances could result in material changes to the amounts recorded for such tax contingencies. | |||||||||||
The Company recognizes uncertain income tax positions taken on income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. | |||||||||||
The Company’s policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of its income tax provision. During the years ended December 31, 2012, 2013 and 2014, we did not record any material interest income, interest expense or penalties related to uncertain tax positions or the settlement of audits for prior periods. | |||||||||||
Presentation of Certain Taxes | Presentation of Certain Taxes | ||||||||||
The Company collects various taxes from dealers and distributors and remits these amounts to the applicable taxing authorities. The Company’s accounting policy is to exclude these taxes from revenue and cost of revenue. | |||||||||||
Research and Development | Research and Development | ||||||||||
Research and development expenses consist primarily of personnel costs, including incentive compensation, depreciation associated with research and development equipment, contract labor and consulting services, facilities- related costs, and travel-related costs. Research and development costs are expensed as incurred. | |||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||||
In July 2013, the FASB issued ASU 2013-11, ‘‘Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.’’ The amended guidance requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The guidance was effective for the Company beginning January 1, 2014. The adoption of this guidance did not have an impact on the Company’s results of operations, financial position, or cash flows as it relates only to financial statement presentation. | |||||||||||
In May 2014, the FASB issued ASU 2004-09, “Revenue from Contracts with Customers (Topic 606),” which amends the guidance in ASC 605, “Revenue Recognition.” The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is still evaluating the impact of adopting this guidance as well as whether the Company will apply the amendments retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of applying this update at the date of initial application. | |||||||||||
In August 2014, the FASB issued ASU 2014-15, ‘‘Presentation of Financial Statements — Going Concern (Subtopic 205-40).’’ The amended guidance requires an entity to prepare financial statements under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting, if liquidation of the entity becomes imminent. The guidance is effective for the annual period ending on December 31, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of this guidance will not have an impact on the Company’s results of operations, financial position, or cash flows. | |||||||||||
Description_of_Business_and_Su2
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Description of Business and Summary of Significant Accounting Policies | |||||||||||
Schedule of revenue from United States, Canada and all other international dealers and distributors combined | The following table sets forth revenue from the U.S., Canadian and all other international dealers and distributors combined (in thousands): | ||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Revenue-United States | $ | 69,957 | $ | 84,474 | $ | 98,276 | |||||
Revenue-Canada | 12,453 | 15,014 | 15,320 | ||||||||
Revenue-all other international sources | 27,102 | 29,023 | 35,204 | ||||||||
Total revenue | $ | 109,512 | $ | 128,511 | $ | 148,800 | |||||
International revenue (excluding Canada) as a percent of total revenue | 25 | % | 23 | % | 24 | % | |||||
Schedule of changes in the product warranty liability | The following table presents the changes in the product warranty liability (in thousands): | ||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Balance at the beginning of the period | $ | 1,030 | $ | 1,155 | $ | 1,213 | |||||
Warranty costs accrued | 1,050 | 1,025 | 1,145 | ||||||||
Warranty claims | (925 | ) | (967 | ) | (1,167 | ) | |||||
Balance at the end of the period | $ | 1,155 | $ | 1,213 | $ | 1,191 | |||||
Schedule of reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share | |||||||||||
The following table presents the reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share (in thousands): | |||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Numerator: | |||||||||||
Net income (loss) | $ | (3,723 | ) | $ | 3,503 | $ | 8,156 | ||||
Denominator: | |||||||||||
Weighted average common stock outstanding for basic net income (loss) per common share | 2,360 | 10,609 | 23,685 | ||||||||
Effect of dilutive securities—stock options, convertible preferred stock, and warrants to purchase common stock and preferred stock | — | 11,654 | 1,961 | ||||||||
Weighted average common shares and dilutive securities outstanding | 2,360 | 22,263 | 25,646 | ||||||||
Schedule of anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income (loss) per share | The following weighted-average common stock equivalents were anti-dilutive and therefore were excluded from the calculation of diluted net income (loss) per share (in thousands): | ||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Convertible preferred stock | 15,294 | — | — | ||||||||
Options to purchase common stock | 4,317 | 356 | 1,041 | ||||||||
Warrants to purchase common stock | 541 | 1 | — | ||||||||
Warrants to purchase preferred stock | 194 | — | — | ||||||||
Total | 20,346 | 357 | 1,041 | ||||||||
Schedule of changes in the allowance for doubtful accounts | The following table presents the changes in the allowance for doubtful accounts (in thousands): | ||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Balance at beginning of period | $ | 651 | $ | 643 | $ | 605 | |||||
Provision | 184 | 159 | 229 | ||||||||
Deductions | (192 | ) | (197 | ) | (129 | ) | |||||
Balance at end of period | $ | 643 | $ | 605 | $ | 705 | |||||
Schedule of estimated useful lives of property and equipment | |||||||||||
Furniture and fixtures | 2 - 5 years | ||||||||||
Manufacturing tooling and test equipment | 2 - 3 years | ||||||||||
Lab and warehouse equipment | 2 - 4 years | ||||||||||
Computer equipment and software | 3 - 4 years | ||||||||||
Marketing equipment | 2 - 3 years | ||||||||||
Balance_Sheet_Components_Table
Balance Sheet Components (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Balance Sheet Components | ||||||||
Schedule of inventories | Inventories consisted of the following (in thousands): | |||||||
December 31, | December 31, | |||||||
2013 | 2014 | |||||||
Finished goods | $ | 14,061 | $ | 13,324 | ||||
Component parts | 1,251 | 888 | ||||||
$ | 15,312 | $ | 14,212 | |||||
Schedule of property and equipment, net | Property and equipment, net consisted of the following (in thousands): | |||||||
December 31, | December 31, | |||||||
2013 | 2014 | |||||||
Computer equipment and software | $ | 4,152 | $ | 4,390 | ||||
Manufacturing tooling and test equipment | 2,652 | 2,777 | ||||||
Furniture and fixtures | 2,046 | 2,298 | ||||||
Lab and warehouse equipment | 2,374 | 2,652 | ||||||
Marketing equipment | 604 | 662 | ||||||
Leasehold improvements | 1,450 | 2,357 | ||||||
13,278 | 15,136 | |||||||
Less: accumulated depreciation | (9,335 | ) | (10,047 | ) | ||||
$ | 3,943 | $ | 5,089 | |||||
Schedule of other assets | Other assets consisted of the following (in thousands): | |||||||
December 31, | December 31, | |||||||
2013 | 2014 | |||||||
Prepaid licensing | $ | 716 | $ | 632 | ||||
Deposits | 404 | 697 | ||||||
$ | 1,120 | $ | 1,329 | |||||
Schedule of accrued liabilities | Accrued liabilities consisted of the following (in thousands): | |||||||
December 31, | December 31, | |||||||
2013 | 2014 | |||||||
Sales returns and warranty accruals | $ | 2,137 | $ | 2,019 | ||||
Compensation accruals | 3,233 | 1,614 | ||||||
Other accrued liabilities | 544 | 1,097 | ||||||
Current portion of settlement obligations | 907 | 20 | ||||||
$ | 6,821 | $ | 4,750 | |||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||
Schedule of fair value of financial instruments measured on a recurring basis | December 31, 2013 | ||||||||||||||||||||||
Adjusted | Unrealized | Unrealized | Fair Value | Cash and | Short-term | Long-term | |||||||||||||||||
Cost | Gains | Losses | Cash | Investments | Investments | ||||||||||||||||||
Equivalents | |||||||||||||||||||||||
Cash | $ | 5,533 | $ | — | $ | — | $ | 5,533 | $ | 5,533 | $ | — | $ | — | |||||||||
Level 1: | |||||||||||||||||||||||
Money market funds | 79,013 | — | — | 79,013 | 79,013 | — | — | ||||||||||||||||
Subtotal | 79,013 | — | — | 79,013 | 79,013 | — | — | ||||||||||||||||
Total | $ | 84,546 | $ | — | $ | — | $ | 84,546 | $ | 84,546 | $ | — | $ | — | |||||||||
December 31, 2014 | |||||||||||||||||||||||
Adjusted | Unrealized | Unrealized | Fair Value | Cash and | Short-term | Long-term | |||||||||||||||||
Cost | Gains | Losses | Cash | Investments | Investments | ||||||||||||||||||
Equivalents | |||||||||||||||||||||||
Cash | $ | 13,077 | $ | — | $ | — | $ | 13,077 | $ | 13,077 | $ | — | $ | — | |||||||||
Level 1: | |||||||||||||||||||||||
Money market funds | 16,110 | — | — | 16,110 | 16,110 | — | — | ||||||||||||||||
Subtotal | 16,110 | — | — | 16,110 | 16,110 | — | — | ||||||||||||||||
Level 2: | |||||||||||||||||||||||
Asset-backed securities | 4,458 | — | (3 | ) | 4,455 | — | — | 4,455 | |||||||||||||||
Corporate bonds | 54,321 | 2 | (46 | ) | 54,277 | — | 46,726 | 7,551 | |||||||||||||||
Commercial paper | 6,797 | — | — | 6,797 | — | 6,797 | — | ||||||||||||||||
U.S. agency securities | 2,503 | — | — | 2,503 | — | — | 2,503 | ||||||||||||||||
Subtotal | 68,079 | 2 | (49 | ) | 68,032 | — | 53,523 | 14,509 | |||||||||||||||
Total | $ | 97,266 | $ | 2 | $ | (49 | ) | $ | 97,219 | $ | 29,187 | $ | 53,523 | $ | 14,509 | ||||||||
LongTerm_Obligations_Tables
Long-Term Obligations (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Long-Term Obligations | |||||
Schedule of future principal payments on outstanding term borrowings | Future principal payments on outstanding term borrowings as of December 31, 2014 are as follows (in thousands): | ||||
2015 | $ | 915 | |||
2016 | 727 | ||||
2017 | 186 | ||||
$ | 1,828 | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Schedule of domestic and foreign components of net income (loss) before income tax expense | The domestic and foreign components of net income (loss) before income tax expense consists of the following for the periods shown below (in thousands): | ||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Income (loss) before income taxes: | |||||||||||
Domestic | $ | (4,055 | ) | $ | 3,633 | $ | 7,464 | ||||
Foreign | 473 | 118 | 1,103 | ||||||||
Total income (loss) before income taxes | $ | (3,582 | ) | $ | 3,751 | $ | 8,567 | ||||
Schedule of components of provision for income taxes | The provision for income taxes consisted of the following components (in thousands): | ||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Current: | |||||||||||
Domestic | |||||||||||
Federal | $ | 15 | $ | 64 | $ | 76 | |||||
State | 57 | 53 | 52 | ||||||||
Foreign | 69 | 147 | 288 | ||||||||
Total current tax expense | 141 | 264 | 416 | ||||||||
Deferred: | |||||||||||
Domestic | |||||||||||
Federal | (710 | ) | 1,572 | 1,761 | |||||||
State | (65 | ) | 44 | 30 | |||||||
Foreign | 88 | (16 | ) | (5 | ) | ||||||
Valuation allowance | 687 | (1,616 | ) | (1,791 | ) | ||||||
Total deferred tax benefit | — | (16 | ) | (5 | ) | ||||||
Total income tax expense | $ | 141 | $ | 248 | $ | 411 | |||||
Schedule of reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate | A reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate follows: | ||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Federal income tax rate | (34.0 | )% | 34 | % | 34 | % | |||||
State taxes, net of federal benefit | 1.1 | 1.1 | 0.4 | ||||||||
Stock-based compensation | 15 | 22.7 | (2.1 | ) | |||||||
Stock warrant | — | 6.4 | — | ||||||||
Research and development credits | — | (18.3 | ) | (8.1 | ) | ||||||
Change in valuation allowance | 17.3 | (42.0 | ) | (20.6 | ) | ||||||
Other, net | 4.5 | 2.7 | 1.2 | ||||||||
Effective income tax rate | 3.9 | % | 6.6 | % | 4.8 | % | |||||
Schedule of deferred tax assets and (liabilities) | Deferred tax assets and (liabilities) are comprised of the following (in thousands): | ||||||||||
December 31, | |||||||||||
2013 | 2014 | ||||||||||
Deferred Tax Assets: | |||||||||||
Reserves and accruals | $ | 2,146 | $ | 1,449 | |||||||
Inventories | 1,059 | 1,063 | |||||||||
Net operating loss carryforwards | 27,865 | 25,007 | |||||||||
Property, plant and equipment | 1,327 | 1,831 | |||||||||
Stock-based compensation | 1,233 | 1,540 | |||||||||
Research and development credit carryforwards | 4,091 | 5,243 | |||||||||
Other | 163 | — | |||||||||
Total deferred tax assets | 37,884 | 36,133 | |||||||||
Valuation allowance | (37,842 | ) | (36,050 | ) | |||||||
Total deferred tax assets | $ | 42 | $ | 83 | |||||||
Deferred Tax Liabilities: | |||||||||||
Undistributed earnings of foreign subsidiaries | $ | (15 | ) | $ | (56 | ) | |||||
Intangible assets | — | (116 | ) | ||||||||
Property and equipment | (11 | ) | (16 | ) | |||||||
Total deferred tax liabilities | $ | (26 | ) | $ | (188 | ) | |||||
Net deferred tax asset (liability) | $ | 16 | $ | (105 | ) | ||||||
Schedule of net operating loss and tax credit carryforwards | Net operating loss and tax credit carryforwards as of December 31, 2014 are as follows (in thousands): | ||||||||||
Amount | Expiration Years | ||||||||||
Net operating losses, federal | $ | 85,577 | 2024 – 2034 | ||||||||
Net operating losses, state | 86,064 | 2018 – 2032 | |||||||||
Tax credit carryforwards, federal | 3,789 | 2023 – 2034 | |||||||||
Tax credit carryforwards, state | 2,799 | 2018 – 2029 | |||||||||
Net operating losses, foreign | 20 | None | |||||||||
Schedule of reconciliation of the changes in the gross balance of unrecognized tax benefits, excluding interest and penalties | The following is a reconciliation of the changes in the gross balance of unrecognized tax benefits, excluding interest and penalties (in thousands): | ||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Balance at the beginning of the period | $ | 2,318 | $ | 2,318 | $ | 2,943 | |||||
Current year additions | — | 625 | 640 | ||||||||
Balance at the end of the period | $ | 2,318 | $ | 2,943 | $ | 3,583 | |||||
Equity_Compensation_Tables
Equity Compensation (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity Compensation | |||||||||||||
Summary of stock option activity | Shares Subject | Weighted | Weighted | Weighted | |||||||||
to Options | Average | Average | Average | ||||||||||
Outstanding | Grant Date | Exercise Price | Remaining | ||||||||||
Fair Value | Contractual | ||||||||||||
Life (Years) | |||||||||||||
Balance at December 31, 2012 | 4,649,238 | $ | 5.56 | ||||||||||
Granted | 480,698 | $ | 10.08 | 13.2 | |||||||||
Exercised | (107,042 | ) | 4.17 | ||||||||||
Expired | (27,772 | ) | 5.79 | ||||||||||
Forfeited | (89,908 | ) | 7.14 | ||||||||||
Balance at December 31, 2013 | 4,905,214 | 6.31 | |||||||||||
Granted | 1,592,268 | 9.99 | 18 | ||||||||||
Exercised | (1,512,514 | ) | 4.24 | ||||||||||
Expired | (136 | ) | 7.4 | ||||||||||
Forfeited | (133,611 | ) | 13.77 | ||||||||||
Balance at December 31, 2014 | 4,851,221 | 10.57 | |||||||||||
Exercisable options at December 31, 2013 | 3,285,695 | 4.88 | 4.9 | ||||||||||
Vested and expected to vest at December 31, 2013 | 4,544,942 | 6.15 | 5.9 | ||||||||||
Exercisable options at December 31, 2014 | 2,494,711 | 6.33 | 5.6 | ||||||||||
Vested and expected to vest at December 31, 2014 | 4,615,485 | 10.3 | 7 | ||||||||||
Summary of stock options outstanding and exercisable | The following table summarizes information about stock options outstanding and exercisable at December 31, 2014: | ||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||
Range of Exercise Prices | Weighted | Number of | Weighted- | Number of | Weighted- | ||||||||
Average | Underlying | Average | Underlying | Average | |||||||||
Exercise | Shares | Remaining | Shares | Remaining | |||||||||
Price | Contractual | Contractual | |||||||||||
Life (in | Life (in | ||||||||||||
years) | years) | ||||||||||||
$0.78 - 1.72 | $ | 1.10 | 37,399 | 0.8 | 37,399 | 0.8 | |||||||
1.97 - 3.38 | 2.57 | 248,746 | 1.9 | 248,746 | 1.9 | ||||||||
3.58 - 6.14 | 5.64 | 1,570,282 | 5.7 | 1,416,661 | 5.6 | ||||||||
6.34 - 9.94 | 8.27 | 1,007,227 | 7.2 | 627,128 | 7.1 | ||||||||
11.28 - 16.97 | 13.94 | 1,180,368 | 9.0 | 143,901 | 6.3 | ||||||||
17.66 - 22.92 | 21.00 | 807,199 | 9.1 | 20,876 | 8.1 | ||||||||
4,851,221 | 2,494,711 | ||||||||||||
Summary of aggregate intrinsic-value of options exercised, exercisable, and vested and expected to vest | The following table summarizes the aggregate intrinsic-value of options exercised, outstanding and exercisable (in thousands): | ||||||||||||
For the Years Ended and as of | |||||||||||||
December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Options Exercised | $ | 1,310 | $ | 1,315 | $ | 22,668 | |||||||
Options Exercisable | 16,800 | 42,116 | 22,718 | ||||||||||
Options Vested and Expected to Vest | 25,773 | 55,099 | 27,663 | ||||||||||
Schedule of assumptions used to estimate fair value of option awards | |||||||||||||
Years Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Expected volatility | 59 - 63% | 56 - 59% | 49 - 60% | ||||||||||
Expected dividends | 0% | 0% | 0% | ||||||||||
Expected terms (in years) | 5.0 - 6.1 | 3.3 - 7.2 | 1.0 - 6.1 | ||||||||||
Risk-free rate | 0.7 - 1.0% | 0.8 - 1.7% | 0.3 - 2.0% | ||||||||||
Schedule of total stock-based compensation expense classified in statements of operations | Total stock-based compensation expense has been classified as follows in the accompanying statements of operations (in thousands): | ||||||||||||
Years Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Cost of revenue | $ | 78 | $ | 63 | $ | 105 | |||||||
Research and development | 704 | 1,414 | 2,235 | ||||||||||
Sales and marketing | 580 | 743 | 1,110 | ||||||||||
General and administrative | 1,507 | 1,540 | 1,891 | ||||||||||
Total stock-based compensation expense | $ | 2,869 | $ | 3,760 | $ | 5,341 | |||||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Related Party Transactions | |||||||||||
Schedule of revenue from product sales to companies affiliated with investors | The Company has entered into sales agreements with companies affiliated with certain of its investors. The following table sets forth revenue from product sales to these companies (in thousands): | ||||||||||
Years Ended December 31, | |||||||||||
2012 | 2013 | 2014 | |||||||||
Company 1 | $ | 2,142 | $ | 2,889 | $ | 4,108 | |||||
Company 2 | 1,290 | 950 | 682 | ||||||||
Company 3 | 791 | 426 | 19 | ||||||||
Company 4 | 1,807 | 129 | — | ||||||||
$ | 6,030 | $ | 4,394 | $ | 4.809 | ||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies | |||||
Schedule of future minimum rental payments required under non-cancelable operating leases | Future minimum rental payments required under non-cancelable operating leases with initial or remaining terms in excess of one year consist of the following as of December 31, 2014 (in thousands): | ||||
2015 | $ | 1,971 | |||
2016 | 1,887 | ||||
2017 | 1,655 | ||||
2018 | 873 | ||||
$ | 6,386 | ||||
Acquisition_Tables
Acquisition (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Acquisition | ||||||||
Schedule of preliminary allocation of consideration transferred | The Company’s allocation of consideration transferred for Extra Vegetables is as follows (in thousands): | |||||||
Estimated Fair Value | ||||||||
Cash | $ | 265 | ||||||
Other assets acquired | 125 | |||||||
Intangible assets | 596 | |||||||
Goodwill | 211 | |||||||
Total assets acquired | 1,197 | |||||||
Taxes payable | 175 | |||||||
Deferred income tax liability | 132 | |||||||
Other liabilities assumed | 8 | |||||||
Total net assets acquired | $ | 882 | ||||||
Pro Forma Information | ||||||||
Years Ended | ||||||||
December 31, | ||||||||
2013 | 2014 | |||||||
(in thousands) | ||||||||
Revenue | $ | 129,794 | $ | 149,898 | ||||
Income from operations | 5,753 | 9,576 | ||||||
Net income | $ | 4,128 | $ | 8,724 | ||||
Net income per share, basic | $ | 0.39 | $ | 0.37 | ||||
Net income per share, diluted | $ | 0.19 | $ | 0.34 | ||||
Goodwill_and_Intangible_assets1
Goodwill and Intangible assets (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Goodwill and Intangible Assets | |||||||||||
Schedule of changes in carrying amount of goodwill | Changes in the carrying amount of goodwill consisted of the following (in thousands): | ||||||||||
Amount | |||||||||||
Balance at December 31, 2013 | $ | — | |||||||||
Current period acquisitions | 231 | ||||||||||
Balance at December 31, 2014 | $ | 231 | |||||||||
Schedule of company's intangible assets and related accumulated amortization | The Company’s intangible assets and related accumulated amortization consisted of the following as of December 31, 2013 and December 31, 2014 (in thousands): | ||||||||||
December 31, 2013 | |||||||||||
Gross Carrying | Accumulated | Net | |||||||||
Amount | Amortization | ||||||||||
Developed technology | $ | 1,647 | $ | (742 | ) | $ | 905 | ||||
Non-competition agreements | 31 | (8 | ) | 23 | |||||||
Total intangible assets | $ | 1,678 | $ | (750 | ) | $ | 928 | ||||
December 31, 2014 | |||||||||||
Gross Carrying | Accumulated | Net | |||||||||
Amount | Amortization | ||||||||||
Developed technology | $ | 2,597 | $ | (1,214 | ) | $ | 1,383 | ||||
Non-competition agreements | 53 | (27 | ) | 26 | |||||||
Total intangible assets | $ | 2,650 | $ | (1,241 | ) | $ | 1,409 | ||||
Schedule of amortization expense during the respective periods | The Company recorded amortization expense during the respective periods for these intangible assets as follows: (in thousands): | ||||||||||
Years Ended | |||||||||||
December 31, | |||||||||||
2013 | 2014 | ||||||||||
Amortization of intangible assets | $ | 319 | $ | 491 | |||||||
Schedule of amortization of finite-lived intangible assets | Amortization of finite lived intangible assets as of December 31, 2014 is as follows for the next four years (in thousands): | ||||||||||
Amount | |||||||||||
2015 | $ | 612 | |||||||||
2016 | 418 | ||||||||||
2017 | 237 | ||||||||||
2018 | 142 | ||||||||||
$ | 1,409 | ||||||||||
Description_of_Business_and_Su3
Description of Business and Summary of Significant Accounting Policies (Details 1) (Operating income (loss), USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Operating income (loss) | ||
Prior Period Reclassifications [Line Items] | ||
Prior Period Reclassification Adjustment | $34,000 | $0 |
Description_of_Business_and_Su4
Description of Business and Summary of Significant Accounting Policies (Details 2) | 12 Months Ended |
Dec. 31, 2014 | |
item | |
Segment Reporting | |
Number of operating segments | 1 |
Description_of_Business_and_Su5
Description of Business and Summary of Significant Accounting Policies (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue from U.S., Canadian and all other international dealers and distributors combined | |||
Total revenue | $148,800 | $128,511 | $109,512 |
International revenue (excluding Canada) as a percent of total revenue | 24.00% | 23.00% | 25.00% |
United States | |||
Revenue from U.S., Canadian and all other international dealers and distributors combined | |||
Total revenue | 98,276 | 84,474 | 69,957 |
Canada | |||
Revenue from U.S., Canadian and all other international dealers and distributors combined | |||
Total revenue | 15,320 | 15,014 | 12,453 |
All other international sources | |||
Revenue from U.S., Canadian and all other international dealers and distributors combined | |||
Total revenue | $35,204 | $29,023 | $27,102 |
Description_of_Business_and_Su6
Description of Business and Summary of Significant Accounting Policies (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Product Warranty | |||
Product warranty period | 2 years | ||
Changes in the product warranty liability | |||
Balance at beginning of period | $1,213 | $1,155 | $1,030 |
Warranty costs accrued | 1,145 | 1,025 | 1,050 |
Warranty claims | -1,167 | -967 | -925 |
Balance at end of period | $1,191 | $1,213 | $1,155 |
Description_of_Business_and_Su7
Description of Business and Summary of Significant Accounting Policies (Details 5) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator: | |||
Net income (loss) | $8,156 | $3,503 | ($3,723) |
Denominator: | |||
Weighted average common stock outstanding for basic net income per common share (in shares) | 23,685 | 10,609 | 2,360 |
Effect of dilutive securities-stock options, convertible preferred stock, and warrants to purchase common stock and preferred stock (in shares) | 1,961 | 11,654 | |
Weighted average common shares and dilutive securities outstanding | 25,646 | 22,263 | 2,360 |
Description_of_Business_and_Su8
Description of Business and Summary of Significant Accounting Policies (Details 6) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share | |||
Total (in shares) | 1,041 | 357 | 20,346 |
Convertible preferred stock | |||
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share | |||
Total (in shares) | 15,294 | ||
Options to purchase common stock | |||
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share | |||
Total (in shares) | 1,041 | 356 | 4,317 |
Warrants to purchase common stock | |||
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share | |||
Total (in shares) | 1 | 541 | |
Warrants to purchase preferred stock | |||
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share | |||
Total (in shares) | 194 |
Description_of_Business_and_Su9
Description of Business and Summary of Significant Accounting Policies (Details 7) (USD $) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Changes in the allowance for doubtful accounts | ||||
Allowance for Doubtful Accounts Receivable, Beginning Balance | $605,000 | $643,000 | $651,000 | |
Provision | 229,000 | 159,000 | 184,000 | |
Deductions | -129,000 | -197,000 | -192,000 | |
Allowance for Doubtful Accounts Receivable, Ending Balance | 643,000 | 705,000 | 605,000 | 643,000 |
Inventories | ||||
Inventory write-downs | 1,700,000 | 2,300,000 | 1,500,000 | |
Loss (gain) on inventory purchase commitment | $1,800,000 | ($380,000) | $1,840,000 |
Recovered_Sheet1
Description of Business and Summary of Significant Accounting Policies (Details 8) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Property and equipment | |
Leasehold improvement assets paid by landlord | 0.7 |
Furniture and fixtures | Minimum | |
Property and equipment | |
Estimated useful lives | 2 years |
Furniture and fixtures | Maximum | |
Property and equipment | |
Estimated useful lives | 5 years |
Manufacturing tooling and test equipment | Minimum | |
Property and equipment | |
Estimated useful lives | 2 years |
Manufacturing tooling and test equipment | Maximum | |
Property and equipment | |
Estimated useful lives | 3 years |
Lab and warehouse equipment | Minimum | |
Property and equipment | |
Estimated useful lives | 2 years |
Lab and warehouse equipment | Maximum | |
Property and equipment | |
Estimated useful lives | 4 years |
Computer equipment and software | Minimum | |
Property and equipment | |
Estimated useful lives | 3 years |
Computer equipment and software | Maximum | |
Property and equipment | |
Estimated useful lives | 4 years |
Marketing equipment | Minimum | |
Property and equipment | |
Estimated useful lives | 2 years |
Marketing equipment | Maximum | |
Property and equipment | |
Estimated useful lives | 3 years |
Leasehold improvements | Minimum | |
Property and equipment | |
Estimated useful lives | 3 years |
Leasehold improvements | Maximum | |
Property and equipment | |
Estimated useful lives | 8 years |
Recovered_Sheet2
Description of Business and Summary of Significant Accounting Policies (Details 9) | 12 Months Ended |
Dec. 31, 2014 | |
Stock-Based Compensation | |
Vesting period | 4 years |
Percentage of period from the vesting date added for determination of weighted average expected life | 50.00% |
Balance_Sheet_Components_Detai
Balance Sheet Components (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventories | ||
Finished goods | $13,324 | $14,061 |
Component parts | 888 | 1,251 |
Total inventories | 14,212 | 15,312 |
Property and equipment, net | ||
Property and equipment, gross | 15,136 | 13,278 |
Less: accumulated depreciation | -10,047 | -9,335 |
Property and equipment, net | 5,089 | 3,943 |
Computer equipment and software | ||
Property and equipment, net | ||
Property and equipment, gross | 4,390 | 4,152 |
Manufacturing tooling and test equipment | ||
Property and equipment, net | ||
Property and equipment, gross | 2,777 | 2,652 |
Furniture and fixtures | ||
Property and equipment, net | ||
Property and equipment, gross | 2,298 | 2,046 |
Lab and warehouse equipment | ||
Property and equipment, net | ||
Property and equipment, gross | 2,652 | 2,374 |
Marketing equipment | ||
Property and equipment, net | ||
Property and equipment, gross | 662 | 604 |
Leasehold improvements | ||
Property and equipment, net | ||
Property and equipment, gross | $2,357 | $1,450 |
Balance_Sheet_Components_Detai1
Balance Sheet Components (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other assets | ||
Prepaid licensing | $632 | $716 |
Deposits | 697 | 404 |
Other assets total | 1,329 | 1,120 |
Accrued liabilities | ||
Sales returns and warranty accruals | 2,019 | 2,137 |
Compensation accruals | 1,614 | 3,233 |
Other accrued liabilities | 1,097 | 544 |
Current portion of settlement obligations | 20 | 907 |
Total accrued liabilities | $4,750 | $6,821 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Minimum | ||
Fair Value Measurements | ||
Maturity period of long-term investments | 1 year | |
Maximum | ||
Fair Value Measurements | ||
Maturity period of long-term investments | 2 years | |
Measured on a recurring basis | ||
Fair Value Measurements | ||
Assets, Adjusted Cost | 97,266 | $84,546 |
Assets, Unrealized Gains | 2 | |
Assets, Unrealized Losses | -49 | |
Assets, Fair Value | 97,219 | 84,546 |
Measured on a recurring basis | Cash and Cash Equivalents | ||
Fair Value Measurements | ||
Assets, Fair Value | 29,187 | 84,546 |
Measured on a recurring basis | Short-term investments | ||
Fair Value Measurements | ||
Assets, Fair Value | 53,523 | |
Measured on a recurring basis | Long-term investments | ||
Fair Value Measurements | ||
Assets, Fair Value | 14,509 | |
Measured on a recurring basis | Cash | ||
Fair Value Measurements | ||
Assets, Adjusted Cost | 13,077 | 5,533 |
Assets, Fair Value | 13,077 | 5,533 |
Measured on a recurring basis | Cash | Cash and Cash Equivalents | ||
Fair Value Measurements | ||
Assets, Fair Value | 13,077 | 5,533 |
Measured on a recurring basis | Level 1 | ||
Fair Value Measurements | ||
Assets, Adjusted Cost | 16,110 | 79,013 |
Assets, Fair Value | 16,110 | 79,013 |
Measured on a recurring basis | Level 1 | Cash and Cash Equivalents | ||
Fair Value Measurements | ||
Assets, Fair Value | 16,110 | 79,013 |
Measured on a recurring basis | Level 1 | Money market funds | ||
Fair Value Measurements | ||
Assets, Adjusted Cost | 16,110 | 79,013 |
Assets, Fair Value | 16,110 | 79,013 |
Measured on a recurring basis | Level 1 | Money market funds | Cash and Cash Equivalents | ||
Fair Value Measurements | ||
Assets, Fair Value | 16,110 | 79,013 |
Measured on a recurring basis | Level 2 | ||
Fair Value Measurements | ||
Adjusted cost, Available-for-sale investments | 68,079 | |
Unrealized Gains, available-for-sale investments | 2 | |
Unrealized Losses, available-for-sale investments | -49 | |
Fair value, Available-for-sale investments | 68,032 | |
Measured on a recurring basis | Level 2 | Short-term investments | ||
Fair Value Measurements | ||
Fair value, Available-for-sale investments | 53,523 | |
Measured on a recurring basis | Level 2 | Long-term investments | ||
Fair Value Measurements | ||
Fair value, Available-for-sale investments | 14,509 | |
Measured on a recurring basis | Level 2 | Asset-backed securities | ||
Fair Value Measurements | ||
Adjusted cost, Available-for-sale investments | 4,458 | |
Unrealized Losses, available-for-sale investments | -3 | |
Fair value, Available-for-sale investments | 4,455 | |
Measured on a recurring basis | Level 2 | Asset-backed securities | Long-term investments | ||
Fair Value Measurements | ||
Fair value, Available-for-sale investments | 4,455 | |
Measured on a recurring basis | Level 2 | Corporate bonds | ||
Fair Value Measurements | ||
Adjusted cost, Available-for-sale investments | 54,321 | |
Unrealized Gains, available-for-sale investments | 2 | |
Unrealized Losses, available-for-sale investments | -46 | |
Fair value, Available-for-sale investments | 54,277 | |
Measured on a recurring basis | Level 2 | Corporate bonds | Short-term investments | ||
Fair Value Measurements | ||
Fair value, Available-for-sale investments | 46,726 | |
Measured on a recurring basis | Level 2 | Corporate bonds | Long-term investments | ||
Fair Value Measurements | ||
Fair value, Available-for-sale investments | 7,551 | |
Measured on a recurring basis | Level 2 | Commercial paper | ||
Fair Value Measurements | ||
Adjusted cost, Available-for-sale investments | 6,797 | |
Fair value, Available-for-sale investments | 6,797 | |
Measured on a recurring basis | Level 2 | Commercial paper | Short-term investments | ||
Fair Value Measurements | ||
Fair value, Available-for-sale investments | 6,797 | |
Measured on a recurring basis | Level 2 | U.S. agency securities | ||
Fair Value Measurements | ||
Adjusted cost, Available-for-sale investments | 2,503 | |
Fair value, Available-for-sale investments | 2,503 | |
Measured on a recurring basis | Level 2 | U.S. agency securities | Long-term investments | ||
Fair Value Measurements | ||
Fair value, Available-for-sale investments | 2,503 |
LongTerm_Obligations_Details
Long-Term Obligations (Details) (USD $) | 1 Months Ended | |
Jun. 30, 2013 | Dec. 31, 2014 | |
Future principal payments | ||
2015 | $915,000 | |
2016 | 727,000 | |
2017 | 186,000 | |
Total | 1,828,000 | |
Revolving credit facility | ||
Long-Term Obligations | ||
Maximum borrowing capacity | 13,000,000 | |
Interest rate at the end of period (as a percent) | 3.25% | |
Annual commitment fee | 20,000 | |
Commitment fee for quarterly unused capacity (as a percent) | 0.38% | |
Current borrowing capacity | 13,000,000 | |
Borrowings outstanding | $0 | |
Revolving credit facility | LIBOR | ||
Long-Term Obligations | ||
Variable interest rate basis | LIBOR | |
Basis spread on variable rate (as a percent) | 2.50% | |
Revolving credit facility | Prime rate | ||
Long-Term Obligations | ||
Variable interest rate basis | prime | |
Term borrowings | ||
Long-Term Obligations | ||
Interest rate at the end of period (as a percent) | 3.75% | |
Number of equal monthly payments of principal plus interest | 42 | |
Term borrowings | Prime rate | ||
Long-Term Obligations | ||
Variable interest rate basis | prime | |
Basis spread on variable rate (as a percent) | 0.50% |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income (loss) before income taxes: | |||
Domestic | $7,464,000 | $3,633,000 | ($4,055,000) |
Foreign | 1,103,000 | 118,000 | 473,000 |
Income (loss) before income taxes | 8,567,000 | 3,751,000 | -3,582,000 |
Domestic | |||
Federal | 76,000 | 64,000 | 15,000 |
State | 52,000 | 53,000 | 57,000 |
Foreign | 288,000 | 147,000 | 69,000 |
Total current tax expense | 416,000 | 264,000 | 141,000 |
Domestic | |||
Federal | 1,761,000 | 1,572,000 | -710,000 |
State | 30,000 | 44,000 | -65,000 |
Foreign | -5,000 | -16,000 | 88,000 |
Valuation allowance | -1,791,000 | -1,616,000 | 687,000 |
Total deferred tax benefit | -5,000 | -16,000 | |
Total income tax expense | 411,000 | 248,000 | 141,000 |
Reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate | |||
U.S. federal statutory rate (as a percent) | 34.00% | 34.00% | -34.00% |
State taxes, net of federal benefit (as a percent) | 0.40% | 1.10% | 1.10% |
Stock-based compensation (as a percent) | -2.10% | 22.70% | 15.00% |
Stock warrant (as a percent) | 6.40% | ||
Research and development credits (as a percent) | -8.10% | -18.30% | |
Change in valuation allowance (as a percent) | -20.60% | -42.00% | 17.30% |
Other, net (as a percent) | 1.20% | 2.70% | 4.50% |
Effective income tax rate (as a percent) | 4.80% | 6.60% | 3.90% |
Deferred Tax Assets: | |||
Reserves and accruals | 1,449,000 | 2,146,000 | |
Inventories | 1,063,000 | 1,059,000 | |
Net operating loss carryforwards | 25,007,000 | 27,865,000 | |
Property, plant and equipment | 1,831,000 | 1,327,000 | |
Stock-based compensation | 1,540,000 | 1,233,000 | |
Research and development credit carryforwards | 5,243,000 | 4,091,000 | |
Other | 163,000 | ||
Total deferred tax assets | 36,133,000 | 37,884,000 | |
Valuation allowance | -36,050,000 | -37,842,000 | |
Total deferred tax assets, net | 83,000 | 42,000 | |
Deferred Tax Liabilities: | |||
Undistributed earnings of foreign subsidiaries | -56,000 | -15,000 | |
Intangible Assets | -116,000 | ||
Property and equipment | -16,000 | -11,000 | |
Total deferred tax liabilities | -188,000 | -26,000 | |
Net deferred tax asset (liability) | -105,000 | 16,000 | |
Increase (decrease) in net valuation allowance | ($1,800,000) | ($1,600,000) |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2011 | |
Net operating loss and tax credit carryforwards | |||
Unrecorded tax benefits for stock-based compensation | $18,400,000 | ||
Reconciliation of the changes in the gross balance of unrecognized tax benefits, excluding interest and penalties | |||
Balance at the beginning of the period | 2,943,000 | 2,318,000 | 2,318,000 |
Current year additions | 640,000 | 625,000 | |
Balance at the end of the period | 3,583,000 | 2,943,000 | 2,318,000 |
Unrecognized tax benefits that would, if recognized, impact the Company's effective income tax rate | 3,600,000 | ||
Minimum period for which net operating loss and credit carryforwards are subject to examinations and adjustments | 3 years | ||
Undistributed foreign earning | 1,500,000 | ||
Unrecognized deferred tax liabilities from temporary differences related to the investment in foreign subsidiary that would have been taxable if the Company repatriated the foreign earnings | 300,000 | ||
Federal | |||
Net operating loss and tax credit carryforwards | |||
Net operating losses | 85,577,000 | ||
Tax credit carryforwards | 3,789,000 | ||
State | |||
Net operating loss and tax credit carryforwards | |||
Net operating losses | 86,064,000 | ||
Tax credit carryforwards | 2,799,000 | ||
Foreign | |||
Net operating loss and tax credit carryforwards | |||
Net operating losses | $20,000 |
Equity_Compensation_Details
Equity Compensation (Details) (Stock options, USD $) | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Jan. 01, 2015 | Aug. 07, 2013 | |
Shares Subject to Options Outstanding | ||||
Balance at the beginning of the period (in shares) | 4,905,214 | 4,649,238 | ||
Granted (in shares) | 1,592,268 | 480,698 | ||
Exercised (in shares) | -1,512,514 | -107,042 | ||
Expired (in shares) | -136 | -27,772 | ||
Forfeited (in shares) | -133,611 | -89,908 | ||
Balance at the end of the period (in shares) | 4,851,221 | 4,905,214 | ||
Exercisable options (in shares) | 2,494,711 | 3,285,695 | ||
Vested and expected to vest at the end of the period (in shares) | 4,615,485 | 4,544,942 | ||
Weighted Average Grant Date Fair Value | ||||
Granted (in dollars per share) | $9.99 | $10.08 | ||
Weighted Average Exercise Price | ||||
Balance at the beginning of the period (in dollars per share) | $6.31 | $5.56 | ||
Granted (in dollars per share) | $18 | $13.20 | ||
Exercised (in dollars per share) | $4.24 | $4.17 | ||
Expired (in dollars per share) | $7.40 | $5.79 | ||
Forfeited (in dollars per share) | $13.77 | $7.14 | ||
Balance at the end of the period (in dollars per share) | $10.57 | $6.31 | ||
Exercisable options at the end of the period (in dollars per share) | $6.33 | $4.88 | ||
Vested and expected to vest (in dollars per share) | $10.30 | $6.15 | ||
Weighted-Average Remaining Contractual Life | ||||
Exercisable options | 5 years 7 months 6 days | 4 years 10 months 24 days | ||
Vested and expected to vest | 7 years | 5 years 10 months 24 days | ||
2013 Plan | ||||
Stock options | ||||
Annual increase in shares authorized for issuance as a percentage of shares outstanding as of the preceding December 31 | 5.00% | |||
Increase in number of shares authorized for issuance | 1,215,269 |
Equity_Compensation_Details_2
Equity Compensation (Details 2) (Stock options, USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Options Outstanding | |
Number of Underlying Shares | 4,851,221 |
Options Exercisable | |
Number of Underlying Shares | 2,494,711 |
0.78-1.72 | |
Equity compensation | |
Range of Exercise Price, low end of range (in dollars per share) | $0.78 |
Range of Exercise Price, high end of range (in dollars per share) | $1.72 |
Options Outstanding | |
Weighted Average Exercise Price (in dollars per share) | $1.10 |
Number of Underlying Shares | 37,399 |
Weighted-Average Remaining Contractual Life | 9 months 18 days |
Options Exercisable | |
Number of Underlying Shares | 37,399 |
Weighted-Average Remaining Contractual Life | 9 months 18 days |
1.97-3.38 | |
Equity compensation | |
Range of Exercise Price, low end of range (in dollars per share) | $1.97 |
Range of Exercise Price, high end of range (in dollars per share) | $3.38 |
Options Outstanding | |
Weighted Average Exercise Price (in dollars per share) | $2.57 |
Number of Underlying Shares | 248,746 |
Weighted-Average Remaining Contractual Life | 1 year 10 months 24 days |
Options Exercisable | |
Number of Underlying Shares | 248,746 |
Weighted-Average Remaining Contractual Life | 1 year 10 months 24 days |
3.58-6.14 | |
Equity compensation | |
Range of Exercise Price, low end of range (in dollars per share) | $3.58 |
Range of Exercise Price, high end of range (in dollars per share) | $6.14 |
Options Outstanding | |
Weighted Average Exercise Price (in dollars per share) | $5.64 |
Number of Underlying Shares | 1,570,282 |
Weighted-Average Remaining Contractual Life | 5 years 8 months 12 days |
Options Exercisable | |
Number of Underlying Shares | 1,416,661 |
Weighted-Average Remaining Contractual Life | 5 years 7 months 6 days |
6.34-9.94 | |
Equity compensation | |
Range of Exercise Price, low end of range (in dollars per share) | $6.34 |
Range of Exercise Price, high end of range (in dollars per share) | $9.94 |
Options Outstanding | |
Weighted Average Exercise Price (in dollars per share) | $8.27 |
Number of Underlying Shares | 1,007,227 |
Weighted-Average Remaining Contractual Life | 7 years 2 months 12 days |
Options Exercisable | |
Number of Underlying Shares | 627,128 |
Weighted-Average Remaining Contractual Life | 7 years 1 month 6 days |
11.28-16.97 | |
Equity compensation | |
Range of Exercise Price, low end of range (in dollars per share) | $11.28 |
Range of Exercise Price, high end of range (in dollars per share) | $16.97 |
Options Outstanding | |
Weighted Average Exercise Price (in dollars per share) | $13.94 |
Number of Underlying Shares | 1,180,368 |
Weighted-Average Remaining Contractual Life | 9 years |
Options Exercisable | |
Number of Underlying Shares | 143,901 |
Weighted-Average Remaining Contractual Life | 6 years 3 months 18 days |
17.66-22.92 | |
Equity compensation | |
Range of Exercise Price, low end of range (in dollars per share) | $17.66 |
Range of Exercise Price, high end of range (in dollars per share) | $22.92 |
Options Outstanding | |
Weighted Average Exercise Price (in dollars per share) | $21 |
Number of Underlying Shares | 807,199 |
Weighted-Average Remaining Contractual Life | 9 years 1 month 6 days |
Options Exercisable | |
Number of Underlying Shares | 20,876 |
Weighted-Average Remaining Contractual Life | 8 years 1 month 6 days |
Equity_Compensation_Details_3
Equity Compensation (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stock options | ||||
Total fair value for the awards vested during the period | $800,000 | $4,000,000 | ||
Stock options | ||||
Intrinsic-value | ||||
Options Exercised | 22,668,000 | 1,315,000 | 1,310,000 | |
Options Exercisable | 22,718,000 | 22,718,000 | 42,116,000 | 16,800,000 |
Options Vested and Expected to Vest | $27,663,000 | $27,663,000 | $55,099,000 | $25,773,000 |
Assumptions used to estimate fair value of stock options | ||||
Expected volatility, minimum (as a percent) | 49.00% | 56.00% | 59.00% | |
Expected volatility, maximum (as a percent) | 60.00% | 59.00% | 63.00% | |
Expected dividends (as a percent) | 0.00% | 0.00% | 0.00% | |
Risk-free rate, minimum (as a percent) | 0.30% | 0.80% | 0.70% | |
Risk-free rate, maximum (as a percent) | 2.00% | 1.70% | 1.00% | |
Stock options | Minimum | ||||
Assumptions used to estimate fair value of stock options | ||||
Expected term | 1 year | 3 years 3 months 18 days | 5 years | |
Stock options | Maximum | ||||
Assumptions used to estimate fair value of stock options | ||||
Expected term | 6 years 1 month 6 days | 7 years 2 months 12 days | 6 years 1 month 6 days |
Equity_Compensation_Details_4
Equity Compensation (Details 4) (Stock options, USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Total stock-based compensation expense | |||
Total stock-based compensation expense | $5,341,000 | $3,760,000 | $2,869,000 |
Total unrecognized compensation cost related to non-vested stock option awards | 18,600,000 | ||
Weighted-average period over which unrecognized compensation cost will be recognized | 3 years 1 month 6 days | ||
Cost of revenue | |||
Total stock-based compensation expense | |||
Total stock-based compensation expense | 105,000 | 63,000 | 78,000 |
Research and development | |||
Total stock-based compensation expense | |||
Total stock-based compensation expense | 2,235,000 | 1,414,000 | 704,000 |
Sales and marketing | |||
Total stock-based compensation expense | |||
Total stock-based compensation expense | 1,110,000 | 743,000 | 580,000 |
General and administrative | |||
Total stock-based compensation expense | |||
Total stock-based compensation expense | $1,891,000 | $1,540,000 | $1,507,000 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Related Party Transactions | |||
Revenue from product sales | $4,809,000 | $4,394,000 | $6,030,000 |
Accounts receivable | 1,500,000 | 600,000 | |
Investors | Company 1 | |||
Related Party Transactions | |||
Revenue from product sales | 4,108,000 | 2,889,000 | 2,142,000 |
Investors | Company 2 | |||
Related Party Transactions | |||
Revenue from product sales | 682,000 | 950,000 | 1,290,000 |
Investors | Company 3 | |||
Related Party Transactions | |||
Revenue from product sales | 19,000 | 426,000 | 791,000 |
Investors | Company 4 | |||
Related Party Transactions | |||
Revenue from product sales | $129,000 | $1,807,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Operating Leases | |||
Rental expense | $1,800,000 | $1,400,000 | $1,100,000 |
Future minimum rental payments | |||
2015 | 1,971,000 | ||
2016 | 1,887,000 | ||
2017 | 1,655,000 | ||
2018 | 873,000 | ||
Total | 6,386,000 | ||
Purchase Commitments | |||
Non-cancellable purchase commitments | $27,800,000 | ||
Minimum | |||
Operating Leases | |||
Extension term of leases | 3 years | ||
Maximum | |||
Operating Leases | |||
Extension term of leases | 5 years |
Acquisition_Details
Acquisition (Details) (USD $) | 0 Months Ended | 4 Months Ended | 12 Months Ended | ||
Sep. 10, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 10, 2014 | |
Preliminary allocation of consideration | |||||
Goodwill | $231,000 | $231,000 | |||
Estimated life of intangible assets | 4 years 3 months 18 days | ||||
Developed technology | |||||
Preliminary allocation of consideration | |||||
Estimated life of intangible assets | 4 years 4 months 24 days | ||||
Non-competition agreement | |||||
Preliminary allocation of consideration | |||||
Estimated life of intangible assets | 2 years | ||||
Extra Vegetables Limited | |||||
Acquisition | |||||
Total Consideration | 900,000 | ||||
Base purchase price | 700,000 | ||||
Net working capital | 200,000 | ||||
Preliminary allocation of consideration | |||||
Cash | 265,000 | 265,000 | |||
Other assets acquired | 125,000 | 125,000 | |||
Intangible assets | 596,000 | 596,000 | |||
Goodwill | 211,000 | 211,000 | |||
Total assets acquired | 1,197,000 | 1,197,000 | |||
Taxes payable | 175,000 | 175,000 | |||
Deferred income tax liability | 132,000 | 132,000 | |||
Other liabilities assumed | 8,000 | 8,000 | |||
Total net assets acquired | 882,000 | 882,000 | |||
Business Combination - Revenues and other information | |||||
Revenue associated with Extra Vegetables | 17,500 | ||||
Net Income associated with Extra Vegetables | 21,900 | ||||
Acquisition related costs associated with Extra Vegetables | 80,000 | ||||
Proforma information | |||||
Revenue | 149,898,000 | 129,794,000 | |||
Income from operations | 9,576,000 | 5,753,000 | |||
Net income | 8,724,000 | 4,128,000 | |||
Net income per share, basic | $0.37 | $0.39 | |||
Net income per share, diluted | $0.34 | $0.19 | |||
Extra Vegetables Limited | Income Approach Valuation Technique | |||||
Preliminary allocation of consideration | |||||
Discount rate used | 22.00% | ||||
Extra Vegetables Limited | Developed technology | |||||
Preliminary allocation of consideration | |||||
Intangible assets | 574,000,000 | 574,000,000 | |||
Estimated life of intangible assets | 4 years | ||||
Extra Vegetables Limited | Non-competition agreement | |||||
Preliminary allocation of consideration | |||||
Intangible assets | $22,000,000 | $22,000,000 | |||
Estimated life of intangible assets | 2 years |
Goodwill_and_Intangible_assets2
Goodwill and Intangible assets (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Business Combination - goodwill | |||
Current period acquisitions | $231 | ||
Balance at end of the period | 231 | ||
Intangible assets | |||
Gross Carrying Amount | 2,650 | 1,678 | |
Accumulated Amortization | -1,241 | -750 | |
Intangible assets, net | 1,409 | 928 | |
Weighted average amortization period | 4 years 3 months 18 days | ||
Amortization expense | |||
Amortization of intangible assets | 491 | 319 | 271 |
Amortization of finite-lived intangible assets | |||
2015 | 612 | ||
2016 | 418 | ||
2017 | 237 | ||
2018 | 142 | ||
Intangible assets, net | 1,409 | 928 | |
Developed technology | |||
Intangible assets | |||
Gross Carrying Amount | 2,597 | 1,647 | |
Accumulated Amortization | -1,214 | -742 | |
Intangible assets, net | 1,383 | 905 | |
Weighted average amortization period | 4 years 4 months 24 days | ||
Amortization of finite-lived intangible assets | |||
Intangible assets, net | 1,383 | 905 | |
Non-competition agreement | |||
Intangible assets | |||
Gross Carrying Amount | 53 | 31 | |
Accumulated Amortization | -27 | -8 | |
Intangible assets, net | 26 | 23 | |
Weighted average amortization period | 2 years | ||
Amortization of finite-lived intangible assets | |||
Intangible assets, net | $26 | $23 |
Subsequent_Event_Details
Subsequent Event (Details) (Subsequent event, Nexus, USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Subsequent event | Nexus | |
Subsequent event | |
Total consideration transferred in cash | $9 |
Commission paid to agent | $0.50 |
Uncategorized_Items
Uncategorized Items | ||
[us-gaap_TemporaryEquityCarryingAmountAttributableToParent] | 116,313,000 | |
[us-gaap_TemporaryEquitySharesIssued] | 15,293,960 |