Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 28, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Control4 Corp | |
Entity Central Index Key | 1,259,515 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 24,341,207 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 28,215 | $ 34,813 |
Restricted cash | 252 | 247 |
Short-term investments | 23,988 | 22,970 |
Accounts receivable, net | 22,978 | 24,727 |
Inventories | 28,413 | 26,231 |
Prepaid expenses and other current assets | 3,433 | 3,662 |
Total current assets | 107,279 | 112,650 |
Property and equipment, net | 6,924 | 6,463 |
Long-term investments | 3,104 | 4,008 |
Intangible assets, net | 28,325 | 23,120 |
Goodwill | 22,192 | 16,809 |
Other assets | 2,462 | 2,008 |
Total assets | 170,286 | 165,058 |
Current liabilities: | ||
Accounts payable | 18,317 | 17,010 |
Accrued liabilities | 7,277 | 8,912 |
Current portion of deferred revenue | 1,604 | 1,553 |
Total current liabilities | 27,198 | 27,475 |
Other long-term liabilities | 2,147 | 701 |
Total liabilities | 29,345 | 28,176 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity: | ||
Common stock, $0.0001 par value; 500,000,000 shares authorized; 24,339,298 and 23,729,780 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 2 | 2 |
Additional paid-in capital | 223,474 | 220,370 |
Accumulated deficit | (82,116) | (82,626) |
Accumulated other comprehensive loss | (419) | (864) |
Total stockholders' equity | 140,941 | 136,882 |
Total liabilities and stockholders' equity | $ 170,286 | $ 165,058 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 24,339,298 | 23,729,780 |
Common stock, shares outstanding | 24,339,298 | 23,729,780 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenue | $ 50,235 | $ 43,035 |
Cost of revenue | 25,059 | 22,549 |
Gross margin | 25,176 | 20,486 |
Operating expenses: | ||
Research and development | 9,844 | 8,479 |
Sales and marketing | 11,447 | 10,135 |
General and administrative | 5,717 | 4,813 |
Litigation settlement | 400 | |
Total operating expenses | 27,008 | 23,827 |
Income (loss) from operations | (1,832) | (3,341) |
Other income (expense), net: | ||
Interest, net | 38 | 5 |
Other income (expense), net | (144) | (95) |
Total other income (expense), net | (106) | (90) |
Income (loss) before income taxes | (1,938) | (3,431) |
Income tax benefit | (2,781) | (10,070) |
Net income | $ 843 | $ 6,639 |
Net income per common share: | ||
Basic (in dollars per share) | $ 0.04 | $ 0.28 |
Diluted (in dollars per share) | $ 0.03 | $ 0.28 |
Weighted-average number of shares: | ||
Basic (in shares) | 24,005 | 23,335 |
Diluted (in shares) | 25,657 | 23,986 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net income | $ 843 | $ 6,639 |
Other comprehensive loss: | ||
Foreign currency translation adjustment, net of tax | 449 | 391 |
Net unrealized gains (losses) on available-for-sale investments, net of tax | (4) | 74 |
Total other comprehensive income | 445 | 465 |
Comprehensive income | $ 1,288 | $ 7,104 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Operating activities | ||
Net income | $ 843 | $ 6,639 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation expense | 929 | 767 |
Amortization of intangible assets | 1,230 | 934 |
Provision for doubtful accounts | 137 | 119 |
Investment premium amortization | 130 | |
Stock-based compensation | 3,254 | 1,823 |
Tax benefit from business acquisition | (2,415) | (9,824) |
Changes in assets and liabilities: | ||
Accounts receivable | 2,199 | 1,576 |
Inventories | (928) | (6,497) |
Restricted cash | (2) | |
Prepaid expenses and other current assets | 345 | (1,175) |
Other assets | (380) | (137) |
Accounts payable | (136) | 2,383 |
Accrued liabilities | (2,662) | (523) |
Deferred revenue | 49 | 202 |
Other long-term liabilities | 5 | (18) |
Net cash provided by (used in) operating activities | 2,468 | (3,601) |
Investing activities | ||
Purchases of available-for-sale investments | (14,678) | |
Proceeds from maturities of available-for-sale investments | 14,560 | 20,362 |
Purchases of property and equipment | (922) | (432) |
Business acquisitions, net of cash acquired | (7,917) | (32,155) |
Net cash used in investing activities | (8,957) | (12,225) |
Financing activities | ||
Proceeds from exercise of options for common stock | 3,535 | 116 |
Payments for taxes related to net share settlement of equity awards | (2,067) | |
Repurchase of common stock | (1,821) | (1,737) |
Repayment of notes payable | (194) | |
Proceeds from revolving credit facility | 5,000 | |
Payment of debt issuance costs | (89) | |
Net cash (used in) provided by financing activities | (353) | 3,096 |
Effect of exchange rate changes on cash and cash equivalents | 244 | 204 |
Net change in cash and cash equivalents | (6,598) | (12,526) |
Cash and cash equivalents at beginning of period | 34,813 | 29,530 |
Cash and cash equivalents at end of period | 28,215 | 17,004 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 34 | 30 |
Cash paid for taxes | 12 | 190 |
Supplemental schedule of non-cash investing and financing activities | ||
Business acquisitions holdback liability | 1,438 | |
Purchases of property and equipment financed by accounts payable | 93 | |
Net unrealized losses on available-for-sale investments | $ (4) | $ 74 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
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 smart home and business solutions that are designed to personalize and enhance how consumers engage with an ever-changing connected world. Our entertainment, smart lighting, comfort and convenience, safety and security, and networking solutions unlock the potential of connected devices, making entertainment systems easier to use and more accessible, homes and businesses more comfortable and energy efficient, and individuals more secure . The Company was incorporated in the state of Delaware on March 27, 2003. Unaudited Interim Financial Statements The accompanying condensed consolidated balance sheets, condensed consolidated statements of operations, condensed consolidated statements of comprehensive income, and condensed consolidated statements of cash flows are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (‘‘GAAP’’) on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, considered necessary to present fairly the Company’s financial position, results of operations and cash flows. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017, or any other future interim or annual period. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 15, 2017. The December 31, 2016 consolidated balance sheet included herein was derived from the audited financial statements as of that date. Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in the unaudited condensed 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 assessing 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 U.S. dollars, except for sales to dealers and distributors located in the United Kingdom, Canada, Australia, and the European Union, which are generally denominated in pounds sterling, Canadian dollars, Australian dollars, and euros, respectively. There were no individual account balances greater than 10% of total accounts receivable as of March 31, 2017 and December 31, 2016. No dealer or distributor accounted for more than 10% of total revenue for the three months ended March 31, 2017 and 2016. While the Company partners with many manufacturers, in many cases one manufacturer is our sole source for a particular product or product family. A significant disruption in the operations of one 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. There was no single foreign country that accounted for more than 10% of total revenue for the three months ended March 31, 2017 and 2016. The following table sets forth revenue from U.S., Canadian and all other international dealers and distributors combined (in thousands): Three Months Ended March 31, 2017 2016 Revenue-United States $ 35,186 $ 31,375 Revenue-Canada 4,249 2,945 Revenue-all other international sources 10,800 8,715 Total revenue $ 50,235 $ 43,035 International revenue (excluding Canada) as a percent of total revenue % % 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. Limited Product Warranties The Company provides its customers a limited product warranty of two, three, or ten years depending on product type and brand. The limited product warranties require 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 cost of the products sold, 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 include 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 for the three months ended March 31, 2017 (in thousands): Warranty Liability Balance at December 31, 2016 $ 1,945 Warranty costs accrued 620 Warranty claims (618) Balance at March 31, 2017 $ 1,947 Net Income Per Share Basic net income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income 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 settlement of restricted stock units. The following table presents the reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share (in thousands): Three Months Ended March 31, 2017 2016 Numerator: Net income $ 843 $ 6,639 Denominator: Weighted average common stock outstanding for basic net income per common share 24,005 23,335 Effect of dilutive securities—stock options and restricted stock units 1,652 651 Weighted average common shares and dilutive securities outstanding 25,657 23,986 Potentially dilutive securities, including common equivalent shares, in which the assumed proceeds exceed the average market price of common stock for the applicable period, were not included in the calculation of diluted net income per share as their impact would be anti-dilutive. The following weighted-average common stock equivalents were anti-dilutive and therefore were excluded from the calculation of diluted net income per share (in thousands): Three Months Ended March 31, 2017 2016 Options to purchase common stock 1,523 2,695 Restricted stock units 3 68 Total 1,526 2,763 Recent Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04, “ Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment”. The amendments in this update simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. This update is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 31, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing after January 1, 2017. The Company notes that this guidance applies to its reporting requirements and will implement the new guidance accordingly in performing goodwill impairment testing; however, the Company does not believe this update will have a material impact on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “ Business Combinations (Topic 805): Clarifying the Definition of a Business, ” which revises the definition of a business. This update is effective for annual periods beginning after December 15, 2017, including interim periods within those years. Early adoption is permitted. The Company notes that this guidance will impact its acquisitions beginning January 1, 2018. In November 2016, the FASB issued ASU 2016-18, “ Statement of Cash Flows (Topic 230): Restricted Cash ,” which provides amendments to current guidance to address the classifications and presentation of changes in restricted cash in the statement of cash flows. The effective date for the standard is for fiscal years beginning after December 15, 2017. Early adoption is permitted. Upon the adoption of this standard, the Company will combine restricted cash with unrestricted cash and cash and cash equivalents in the statement of cash flows. In October 2016, the FASB issued ASU 2016-16, “ Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory .” The amendments in this update will require recognition of current and deferred income taxes resulting from an intra-entity transfer of an asset other than inventory when the transfer occurs. This update is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance. In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ,” which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. This standard is effective for fiscal periods beginning after December 15, 2017, including interim periods within those years. Early adoption is permitted and the guidance must be applied using a retrospective transition method. The Company is currently evaluating the impact of adopting this guidance. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326)” which introduces new guidance for the accounting for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. For trade receivables, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The guidance is effective for fiscal years beginning after December 31, 2019, including interim periods within those years. Early application of the guidance is permitted for all entities for fiscal years beginning after December 15, 2018, including the interim periods within those fiscal years. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluating the impact of this update on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . ” The amendments in this update simplify several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted the new guidance on January 1, 2017. The primary impact of adoption was the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital. Adoption of the new standard resulted in the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital of $3.8 million for the three months ended March 31, 2017. However, as the Company has a full valuation allowance against its domestic net deferred tax asset, a corresponding adjustment was recorded to increase the valuation allowance by $3.8 million. As of December 31, 2016, the Company had $20.6 million and $17.6 million of gross federal and state net operating losses (“NOLs”) attributable to excess windfall benefits from share-based compensation. As a result of the adoption of this new standard, on January 1, 2017, the Company increased its net deferred tax asset for NOL carryforwards, with an offsetting cumulative effect of adoption adjustment to accumulated deficit, in the amount of $7.7 million. A corresponding adjustment was recorded to increase the valuation allowance by $7.7 million with an offsetting adjustment to accumulated deficit, resulting in no net impact to the financial statements. In addition, the Company has elected to apply the presentation requirements for cash flows related to excess tax benefits retrospectively which had no impact on the statement of cash flows for the three months ended March 31, 2016. Further, under the provisions of ASU 2016-09, the Company has elected to recognize forfeitures as they occur to determine the amount of compensation cost to be recognized in each period. This resulted in an increase of $0.3 million to accumulated deficit with a corresponding increase to additional paid-in capital on January 1, 2017. The amendment related to the accounting for minimum statutory withholding requirements had no impact on retained earnings as of January 1, 2017. In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842 ) ,” which supersedes the guidance in ASC 840, “Leases .” The purpose of the new standard is to improve transparency and comparability related to the accounting and reporting of leasing arrangements. The guidance will require balance sheet recognition for assets and liabilities associated with rights and obligations created by leases with terms greater than twelve months. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. Modified retrospective application is required. Early adoption is permitted. The Company is evaluating the impact of adopting this guidance. In May 2014, the FASB issued ASU 2014-09, “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. In August 2015, the FASB issued ASU 2015-14, deferring the effective date of this standard for one year, and is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The deferred standard allows early adoption of the standard on the original effective date which would be effective for annual reporting periods beginning after December 15, 2016. The Company does not plan to early adopt, and accordingly, will adopt the new standard effective January 1, 2018. The Company is currently evaluating the impact of the new standard on the sale of the Company’s products to dealers, retailers and distributors and has defined what constitutes a contract for these revenue streams. The Company has identified its performance obligations for these revenue streams and is currently evaluating which of these performance obligations are material within the context of the contract. Depending on the results of this analysis, there could be changes to the timing of recognition of revenue and expenses. The Company is still in the initial stages of assessing the impact of this ASU as it relates to other ancillary revenue streams such as software license, services, and third-party products sold through our online dealer portal. In addition, the Company is still evaluating the adoption method it will elect upon implementation. The final determination of the adoption method will depend on a number of factors including the significance of the new standard on the Company’s financial results. The Company is also in the process of implementing appropriate changes to its business processes, systems and controls to support recognition and disclosures under the new standard. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2017 | |
Balance Sheet Components | |
Balance Sheet Components | 2. Balance Sheet Components Inventories consisted of the following (in thousands): March 31, December 31, 2017 2016 Finished goods $ 25,347 $ 24,138 Component parts 2,805 1,880 Work-in-process 261 213 $ 28,413 $ 26,231 Property and equipment, net consisted of the following (in thousands): March 31, December 31, 2017 2016 Computer equipment and software $ 4,295 $ 3,855 Manufacturing tooling and test equipment 4,597 4,216 Lab and warehouse equipment 3,786 3,649 Leasehold improvements 3,599 3,438 Furniture and fixtures 3,462 3,254 Other 762 753 20,501 19,165 Less: accumulated depreciation (13,577) (12,702) $ 6,924 $ 6,463 Accrued liabilities consisted of the following (in thousands): March 31, December 31, 2017 2016 Sales returns and current portion of warranty accruals $ 3,082 $ 2,892 Compensation accruals 2,957 4,445 Other accrued liabilities 1,238 1,575 $ 7,277 $ 8,912 |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Financial Instruments | |
Financial Instruments | 3. Financial Instruments Fair Value Measurements 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; and 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. Cash, Cash Equivalents and Marketable Securities The Company determines realized gains or losses on the sale of marketable securities on a specific identification method. During the three months ended March 31, 2017 and 2016, 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 March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 Cash and Adjusted Unrealized Unrealized Cash Short-term Long-term Cost Gains Losses Fair Value Equivalents Investments Investments Cash $ 18,044 $ — $ — $ 18,044 $ 18,044 $ — $ — Level 1: Money market funds 10,171 — — 10,171 10,171 — — U.S. government notes 5,104 — (7) 5,097 — 3,994 1,103 Subtotal 15,275 — (7) 15,268 10,171 3,994 1,103 Level 2: Asset-backed securities 2,003 — (2) 2,001 — — 2,001 Corporate bonds 9,541 1 (11) 9,531 — 9,531 — Commercial paper 10,463 — — 10,463 — 10,463 — Subtotal 22,007 1 (13) 21,995 — 19,994 2,001 Total $ 55,326 $ 1 $ (20) $ 55,307 $ 28,215 $ 23,988 $ 3,104 December 31, 2016 Cash and Adjusted Unrealized Unrealized Cash Short-term Long-term Cost Gains Losses Fair Value Equivalents Investments Investments Cash $ 24,708 $ — $ — $ 24,708 $ 24,708 $ — $ — Level 1: Money market funds 10,105 — — 10,105 10,105 — — U.S. government notes 2,001 — (1) 2,000 — 2,000 — Subtotal 12,106 — (1) 12,105 10,105 2,000 — Level 2: Asset-backed securities 4,008 — — 4,008 — — 4,008 Corporate bonds 13,902 — (14) 13,888 — 13,888 — Commercial paper 7,082 — — 7,082 — 7,082 — Subtotal 24,992 — (14) 24,978 — 20,970 4,008 Total $ 61,806 $ — $ (15) $ 61,791 $ 34,813 $ 22,970 $ 4,008 As of March 31, 2017, 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. During the three months ended March 31, 2017 and 2016, the Company did not recognize any significant impairment charges. 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. Fair Value of Other Financial Instruments The carrying amounts reported in the accompanying condensed 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. Derivative Financial Instruments The Company has foreign currency exposure related to the operations in the United Kingdom, Canada, Australia, as well as other foreign locations. The Company has entered into forward contracts to help offset the exposure to movements in foreign currency exchange rates in relation to certain U.S. dollar denominated balance sheet accounts of its subsidiaries in the United Kingdom and Australia. The foreign currency derivatives are not designated as accounting hedges. The Company recognizes these derivative instruments as either assets or liabilities in the accompanying Condensed Consolidated Balance Sheets at fair value. The Company records changes in the fair value (i.e. gains or losses) of these derivative instruments in the accompanying Condensed Consolidated Statements of Operations as Other income (expense), net. The Company settles its foreign exchange contracts on the last day of every month and enters into a new forward contract for the next month. As a result, there are no assets or liabilities recorded in the accompanying Condensed Consolidated Balance Sheets related to derivative instruments as of March 31, 2017. The following table shows the pre-tax losses of the Company’s derivative instruments not designated as hedging instruments (in thousands): Three Months Ended March 31, Income Statement Location 2017 2016 Foreign exchange forward contracts Other income (expense), net $ (527) $ (317) |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2017 | |
Acquisitions | |
Acquisitions | 4. Acquisitions Acquisition of Triad Holdings, Inc. On February 27, 2017, the Company entered into a definitive agreement to acquire Triad Holdings, Inc., (“Triad Holdings”), along with its wholly owned subsidiary Triad Speakers, Inc. (“Triad Speakers” and together with Triad Holdings “Triad”) through the purchase of all the outstanding shares of common stock of Triad for a purchase price of $9.6 million (the “Triad Purchase Agreement”), which included cash acquired of $0.2 million. In accordance with the purchase agreement, $1.4 million of the purchase price will be held for up to 18 months from the acquisition date, to cover any of the sellers’ post-closing obligations, including without limitation any indemnification obligations that may arise. The Company has classified this $1.4 million holdback in other long-term liabilities. Total consideration transferred for the Triad acquisition 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. Management estimated the fair values of tangible and intangible assets and liabilities in accordance with the applicable accounting guidance for business combinations. The preliminary amount of consideration transferred is subject to potential adjustments in the event that the preliminary estimates of working capital accounts, inventory, warranty reserves, sales return liability, or intangible assets are adjusted pending final valuation, and due to tax-related matters that could have a material impact on the condensed consolidated financial statements. The Company expects the allocation of the consideration transferred to be final within the measurement period (up to one year from the acquisition date). The following reflects the Company’s preliminary allocation of consideration transferred for the Triad acquisition (in thousands): Triad Acquisition Cash $ 231 Accounts receivable 516 Inventory 1,078 Other assets acquired 429 Intangible assets 6,271 Goodwill 5,209 Total assets acquired 13,734 Accounts payable 912 Deferred tax liability 2,415 Warranty liability 237 Other liabilities assumed 584 Total net assets acquired $ 9,586 Identifiable Intangible Assets The Company acquired intangible assets that consisted of customer relationships, trademarks/trade names, and developed technology, which had estimated fair values of $2.5 million, $2.4 million, and $1.4 million, respectively. The intangible assets were measured at fair value reflecting the highest and best use of nonfinancial assets in combination with other assets and liabilities. The customer relationships and trademarks/trade names were valued using an income approach that discounts expected future cash flows to present value. The estimated net cash flows were discounted using discount rates between 15% and 16%, based on the estimated internal rate of return for the acquisition and represent the rates that market participants might use to value the intangible assets based on the risk profile of the asset. The projected cash flows were determined using key assumptions such as: estimates of revenues and operating profits; capital expense investments; royalty rates; and tax savings. The acquired technology was valued using a cost savings approach that calculates the asset’s reproduction cost by estimating all the costs associated with creating the technology. The Company will amortize the intangible assets on a straight-line basis over their estimated useful lives of 10 years for the customer relationships, 12 years for the trademark/trade name, and 12 years for the developed technology. The amortization of these intangible assets is not deductible for income tax purposes. Goodwill Goodwill of $5.2 million represents the excess of consideration transferred over the fair value of assets acquired and liabilities assumed and is attributable to Triad’s assembled workforce, synergies and the projected profits from new products and dealers. This goodwill is not deductible for income tax purposes. The Company determined the Triad acquisition was not a significant acquisition under Rule 3-05 of Regulation S‑X. Australia Expansion On April 1, 2016, the Company began working directly with home automation integrators in Australia to better serve and support customers in that country. As part of the shift from its distribution model in Australia, Control4 Corporation, through its wholly owned subsidiary, Control4 Australia Holdings Pty., Ltd, acquired customer lists and inventory from the Company’s Australian distributor for $0.7 million. The Company determined this acquisition was not a significant acquisition under Rule 3-05 of Regulation S-X. Acquisition of Pakedge Device and Software Inc. On January 29, 2016, the Company entered into a definitive agreement to acquire Pakedge Device and Software Inc. (“Pakedge”) through the purchase of all of the outstanding shares of common stock of Pakedge for a price of $33.0 million, which included cash acquired of $0.8 million. In accordance with the purchase agreement, $5.0 million was deposited in escrow, and will be held for up to 18 months from the acquisition date, to cover any of the sellers’ post-closing obligations, including without limitation any indemnification obligations that may arise. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets Goodwill Changes in the carrying amount of goodwill consisted of the following (in thousands): Amount Balance at December 31, 2016 $ 16,809 Current period acquisitions 5,209 Foreign currency translation adjustment 174 Balance at March 31, 2017 $ 22,192 Goodwill represents the excess of consideration transferred over the fair value of assets acquired and liabilities assumed. Amortizable Intangible Assets The Company’s intangible assets and related accumulated amortization consisted of the following as of March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 Gross Carrying Accumulated Amount Amortization Net Developed technology $ 18,179 $ (6,517) $ 11,662 Customer relationships 11,712 (1,481) 10,231 Trademark/trade name 6,776 (445) 6,331 Non-competition agreements 295 (194) 101 Total intangible assets $ 36,962 $ (8,637) $ 28,325 December 31, 2016 Gross Carrying Accumulated Amount Amortization Net Developed technology $ 16,618 $ (5,738) $ 10,880 Customer relationships 9,196 (1,160) 8,036 Trademark/trade name 4,410 (337) 4,073 Non-competition agreements 295 (164) 131 Total intangible assets $ 30,519 $ (7,399) $ 23,120 The weighted average amortization period for acquired technology, customer relationships, trademarks/trade names and non-competition agreements is 5.5 years, 8.3 years, 12.0 years, and 2.0 years, respectively; and 7.5 years for all amortizable intangible assets in total. The Company recorded amortization expense during the respective periods for these intangible assets as follows (in thousands): Three Months Ended March 31, 2017 2016 Cost of revenue $ 774 $ 649 Research and development 48 40 Sales and marketing 408 245 Total amortization of intangible assets $ 1,230 $ 934 Amortization of finite lived intangible assets as of March 31, 2017 for the next five years is as follows (in thousands): Amount 2017 $ 3,957 2018 5,117 2019 4,936 2020 4,051 2021 2,196 Thereafter 8,068 $ 28,325 |
Long-Term Obligations
Long-Term Obligations | 3 Months Ended |
Mar. 31, 2017 | |
Long-Term Obligations | |
Long-Term Obligations | 6. Long-Term Obligations Loan and Security Agreement On January 29, 2016, Control4 entered into the Second Loan Modification Agreement (the “2016 Loan Amendment”) with Silicon Valley Bank, a California corporation (“SVB”), which amends the Amended and Restated Loan and Security Agreement dated as of June 17, 2013, between Control4 and SVB (the “2013 Loan Agreement”). In the 2016 Loan Amendment, Control4 established a revolving credit facility of $30.0 million under the terms of the 2013 Loan Agreement (the “New Credit Facility”). All borrowings under the New Credit Facility are collateralized by the general assets of the Company. Amounts borrowed under the New Credit Facility are due and payable in full on the maturity date, which is January 28, 2018. Advances made pursuant to the New Credit Facility are, at Control4’s option, either: (i) Prime Rate Advances, which bear interest at the Prime Rate plus a Prime Rate Margin of either 0% or 0.25%, depending on Control4’s leverage ratio for the subject quarter, or (ii) LIBOR Rate Advances, which bear interest at the LIBOR Rate plus a LIBOR Rate Margin of either 2.50% or 2.75%, depending on Control4’s leverage ratio for the subject quarter. Control4 is assessed an unused facility fee of 0.25% in any quarter where the advances are less than $15.0 million. As of March 31, 2017, Control4 had no outstanding borrowings under the revolving credit facility. The 2016 Loan Amendment contains various restrictive and financial covenants, and the Company was in compliance with each of these covenants as of March 31, 2017. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Taxes | |
Income Taxes | 7. Income Taxes In order to determine the quarterly provision for income taxes, the Company considers the estimated annual effective tax rate, which is based on expected annual taxable income and statutory tax rates in the various jurisdictions in which the Company operates. Certain significant or unusual items are separately recognized in the quarter during which they occur and can be a source of variability in the effective tax rates from quarter to quarter. Income tax benefit was $2.8 million for the three months ended March 31, 2017 compared to an income tax benefit of $10.1 million for the three months ended March 31, 2016, or approximately 143% and 294% of income before income taxes, respectively. The effective tax rate for the three months ended March 31, 2017 differs from the U.S. federal statutory rate of 34% primarily due to the domestic valuation allowance offsetting most of the statutory rate, offset by the partial reversal of the Company’s valuation allowance due to the deferred tax liability that was recorded as part of the Triad acquisition, primarily due the differences between the book and tax basis of the acquired intangible assets. The rate is further increased by foreign income taxes, state income taxes or taxes in states for which net operating loss carryforwards are not available, the U.S. federal alternative minimum tax and the impact of incentive stock options as well as other permanent differences. As of December 31, 2016, the Company’s NOL carryforward amounts for U.S. federal income and state tax purposes were $59.5 million and $61.0 million, respectively. The NOL carryforwards will expire between 2017 and 2034. In addition to the NOL carryforwards, as of December 31, 2016, the Company had U.S. federal and state research and development credit carryforwards of $7.1 million and $2.8 million, respectively, which will expire between 2017 and 2034. Significant judgment is required in determining the Company’s provision for income taxes, recording valuation allowances against deferred tax assets and evaluating the Company’s uncertain tax positions. In evaluating the ability to recover its deferred tax assets, in full or in part, the Company considers all available positive and negative evidence, including past operating results, 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, the Company has a full valuation allowance against domestic deferred tax assets. To the extent that the Company generates positive income and expects, with reasonable certainty, to continue to generate positive domestic income, the Company may release the valuation allowance in a future period. This release would result in the recognition of certain deferred tax assets, resulting in a decrease to income tax expense for the period such release is made. In addition, the 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 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, Australia, China, Germany, India and Serbia. We are subject to federal income tax as well as income tax of multiple state and foreign jurisdictions. We are no longer subject to income tax examinations for the following jurisdictions and years: federal, for years before 2013; state and local, for years before 2012; or foreign; for years before 2010. However, federal net operating loss and credit carryforwards from all years are subject to examination and adjustments for at least three years following the year in which the attributes are used. |
Equity Compensation
Equity Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Equity Compensation | |
Equity Compensation | 8. 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, restricted stock units and restricted stock awards. 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 after 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 5% of the outstanding number of shares of the Company’s Common Stock as of the preceding December 31. On January 1, 2017, the number of reserved shares was increased by 1,186,489 in accordance with the provisions of the 2013 Plan. A summary of stock option activity for the three months ended March 31, 2017 is presented below: Weighted Average Shares Subject Weighted Remaining to Options Average Contractual Outstanding Exercise Price Life (Years) Balance at December 31, 2016 3,776,405 11.55 Exercised (441,176) 8.01 Expired (36,828) 16.66 Forfeited (15,973) 16.70 Balance at March 31, 2017 3,282,428 11.94 Exercisable options at March 31, 2017 2,678,355 11.30 5.4 Vested and expected to vest at March 31, 2017 3,282,428 11.94 5.8 The following table summarizes information about stock options outstanding and exercisable at March 31, 2017: Options Outstanding Options Exercisable Weighted- Weighted- Weighted Average Average Average Number of Remaining Number of Remaining Exercise Underlying Contractual Underlying Contractual Range of Exercise Prices Price Shares Life (in years) Shares Life (in years) $ - 5.92 964,352 4.0 964,352 4.0 $ - 8.57 627,739 5.9 529,726 5.4 $ - 13.88 1,036,951 6.9 670,482 6.6 $ - 20.98 653,386 6.7 513,795 6.7 3,282,428 2,678,355 For the stock option awards vested during the three months ended March 31, 2017, the total fair value was $1.1 million. The following table summarizes the aggregate intrinsic-value of options exercised, exercisable and vested and expected to vest (in thousands): For the Three Months Ended and as of March 31, 2017 2016 Options Exercised $ 3,119 $ 76 Options Exercisable 14,761 4,698 Options Vested and Expected to Vest 16,121 4,715 The Company did not award stock options during the three months ended March 31, 2017 and 2016. Restricted stock units A summary of restricted stock unit activity for the three months ended March 31, 2017 is presented below: Number of Weighted Average Shares Grant Date Fair Value Non-vested balance at December 31, 2016 1,396,387 7.60 Awarded 734,780 10.69 Vested (404,412) 7.33 Forfeited (47,817) 8.59 Non-vested balance at March 31, 2017 1,678,938 8.98 During the three months ended March 31, 2017, 404,412 restricted stock units vested of which 141,450 shares were withheld for tax purposes resulting in the issuance of 262,962 shares of common stock. Company Matching Contribution to our 401(k) Plan The Company offers a 401(k) Plan and in November of 2016, our Board of Directors authorized a matching contribution by the Company starting in 2017. Matching contributions are as follows: the Company will match 100% of the first 1% of salary contributed by a participant, and 50% of the next 5% of salary contributed by a participant, for a maximum matching contribution of 3.5% of the salary of a participant up to the limit on contributions imposed by the IRS . Currently, the Company funds its match in contribution with shares of Control4’s common stock. During the three months ended March 31, 2017, the Company contributed 24,386 shares of stock to employees under this plan and recorded $0.4 million of expenses associated with this contribution. Stock-based compensation expense Total stock-based compensation expense has been classified as follows in the accompanying Condensed Consolidated Statements of Operations (in thousands): Three Months Ended March 31, 2017 2016 Cost of revenue $ 58 $ 43 Research and development 1,129 814 Sales and marketing 1,064 509 General and administrative 1,003 457 Total stock-based compensation expense $ 3,254 $ 1,823 At March 31, 2017, there was $5.2 million of total unrecognized compensation cost related to non-vested stock option awards that will be recognized over a weighted-average period of 1.5 years. At March 31, 2017, there was $12.7 million of total unrecognized compensation cost related to non-vested restricted stock units that will be recognized over a weighted-average period of 2.3 years. |
Share Repurchases
Share Repurchases | 3 Months Ended |
Mar. 31, 2017 | |
Share Repurchases | |
Share Repurchases | 9. Share Repurchases In May 2015, the Company’s Board of Directors authorized the repurchase of up to $20.0 million in Control4 common stock from time to time on the open market. In February 2017, the Board of Directors authorized an extension to this repurchase program to May 31, 2018, unless terminated earlier. During the three months ended March 31, 2017, the Company repurchased 119,007 shares for $1.8 million. As of March 31, 2017, the Company has $5.9 million remaining to repurchase shares of common stock under this share repurchase program. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10. Commitments and Contingencies Operating Leases The Company leases office and warehouse space under operating leases that expire between 2017 and 2021. 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 $0.7 million and $0.6 million for the three months ended March 31, 2017 and 2016, 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 March 31, 2017 (in thousands): 2017 $ 2,542 2018 2,240 2019 623 2020 192 2021 29 $ 5,626 The Company vacated one of the Pakedge facilities during 2016 which resulted in a loss of $0.4 million recorded to general and administrative expenses. The Company is in the process of marketing the space, but additional losses will be incurred if the Company is unable to sublease this facility or renegotiate the terms of the lease. Purchase Commitments The Company had non-cancellable purchase commitments for the purchase of inventory, which extend through November 2017 totaling approximately $42.9 million at March 31, 2017. 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 directors’ and officers’ 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 has no liabilities recorded for these agreements as of March 31, 2017, as there were no outstanding claims. Legal Matters From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings, that if determined adversely to us, we believe would individually or in the aggregate have a material adverse effect on our business, results of operations, financial condition or cash flows. |
Description of Business and S17
Description of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Description of Business and Summary of Significant Accounting Policies | |
Unaudited Interim Financial Statements | Unaudited Interim Financial Statements The accompanying condensed consolidated balance sheets, condensed consolidated statements of operations, condensed consolidated statements of comprehensive income, and condensed consolidated statements of cash flows are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (‘‘GAAP’’) on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, considered necessary to present fairly the Company’s financial position, results of operations and cash flows. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017, or any other future interim or annual period. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 15, 2017. The December 31, 2016 consolidated balance sheet included herein was derived from the audited financial statements as of that date. |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in the unaudited condensed 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 assessing 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 U.S. dollars, except for sales to dealers and distributors located in the United Kingdom, Canada, Australia, and the European Union, which are generally denominated in pounds sterling, Canadian dollars, Australian dollars, and euros, respectively. There were no individual account balances greater than 10% of total accounts receivable as of March 31, 2017 and December 31, 2016. No dealer or distributor accounted for more than 10% of total revenue for the three months ended March 31, 2017 and 2016. While the Company partners with many manufacturers, in many cases one manufacturer is our sole source for a particular product or product family. A significant disruption in the operations of one 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. There was no single foreign country that accounted for more than 10% of total revenue for the three months ended March 31, 2017 and 2016. The following table sets forth revenue from U.S., Canadian and all other international dealers and distributors combined (in thousands): Three Months Ended March 31, 2017 2016 Revenue-United States $ 35,186 $ 31,375 Revenue-Canada 4,249 2,945 Revenue-all other international sources 10,800 8,715 Total revenue $ 50,235 $ 43,035 International revenue (excluding Canada) as a percent of total revenue % % |
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. |
Limited Product Warranties | Limited Product Warranties The Company provides its customers a limited product warranty of two, three, or ten years depending on product type and brand. The limited product warranties require 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 cost of the products sold, 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 include 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 for the three months ended March 31, 2017 (in thousands): Warranty Liability Balance at December 31, 2016 $ 1,945 Warranty costs accrued 620 Warranty claims (618) Balance at March 31, 2017 $ 1,947 |
Net Income Per Share | Net Income Per Share Basic net income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income 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 settlement of restricted stock units. The following table presents the reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share (in thousands): Three Months Ended March 31, 2017 2016 Numerator: Net income $ 843 $ 6,639 Denominator: Weighted average common stock outstanding for basic net income per common share 24,005 23,335 Effect of dilutive securities—stock options and restricted stock units 1,652 651 Weighted average common shares and dilutive securities outstanding 25,657 23,986 Potentially dilutive securities, including common equivalent shares, in which the assumed proceeds exceed the average market price of common stock for the applicable period, were not included in the calculation of diluted net income per share as their impact would be anti-dilutive. The following weighted-average common stock equivalents were anti-dilutive and therefore were excluded from the calculation of diluted net income per share (in thousands): Three Months Ended March 31, 2017 2016 Options to purchase common stock 1,523 2,695 Restricted stock units 3 68 Total 1,526 2,763 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04, “ Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment”. The amendments in this update simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. This update is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 31, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing after January 1, 2017. The Company notes that this guidance applies to its reporting requirements and will implement the new guidance accordingly in performing goodwill impairment testing; however, the Company does not believe this update will have a material impact on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “ Business Combinations (Topic 805): Clarifying the Definition of a Business, ” which revises the definition of a business. This update is effective for annual periods beginning after December 15, 2017, including interim periods within those years. Early adoption is permitted. The Company notes that this guidance will impact its acquisitions beginning January 1, 2018. In November 2016, the FASB issued ASU 2016-18, “ Statement of Cash Flows (Topic 230): Restricted Cash ,” which provides amendments to current guidance to address the classifications and presentation of changes in restricted cash in the statement of cash flows. The effective date for the standard is for fiscal years beginning after December 15, 2017. Early adoption is permitted. Upon the adoption of this standard, the Company will combine restricted cash with unrestricted cash and cash and cash equivalents in the statement of cash flows. In October 2016, the FASB issued ASU 2016-16, “ Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory .” The amendments in this update will require recognition of current and deferred income taxes resulting from an intra-entity transfer of an asset other than inventory when the transfer occurs. This update is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance. In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ,” which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. This standard is effective for fiscal periods beginning after December 15, 2017, including interim periods within those years. Early adoption is permitted and the guidance must be applied using a retrospective transition method. The Company is currently evaluating the impact of adopting this guidance. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326)” which introduces new guidance for the accounting for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. For trade receivables, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The guidance is effective for fiscal years beginning after December 31, 2019, including interim periods within those years. Early application of the guidance is permitted for all entities for fiscal years beginning after December 15, 2018, including the interim periods within those fiscal years. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluating the impact of this update on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . ” The amendments in this update simplify several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company adopted the new guidance on January 1, 2017. The primary impact of adoption was the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital. Adoption of the new standard resulted in the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital of $3.8 million for the three months ended March 31, 2017. However, as the Company has a full valuation allowance against its domestic net deferred tax asset, a corresponding adjustment was recorded to increase the valuation allowance by $3.8 million. As of December 31, 2016, the Company had $20.6 million and $17.6 million of gross federal and state net operating losses (“NOLs”) attributable to excess windfall benefits from share-based compensation. As a result of the adoption of this new standard, on January 1, 2017, the Company increased its net deferred tax asset for NOL carryforwards, with an offsetting cumulative effect of adoption adjustment to accumulated deficit, in the amount of $7.7 million. A corresponding adjustment was recorded to increase the valuation allowance by $7.7 million with an offsetting adjustment to accumulated deficit, resulting in no net impact to the financial statements. In addition, the Company has elected to apply the presentation requirements for cash flows related to excess tax benefits retrospectively which had no impact on the statement of cash flows for the three months ended March 31, 2016. Further, under the provisions of ASU 2016-09, the Company has elected to recognize forfeitures as they occur to determine the amount of compensation cost to be recognized in each period. This resulted in an increase of $0.3 million to accumulated deficit with a corresponding increase to additional paid-in capital on January 1, 2017. The amendment related to the accounting for minimum statutory withholding requirements had no impact on retained earnings as of January 1, 2017. In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842 ) ,” which supersedes the guidance in ASC 840, “Leases .” The purpose of the new standard is to improve transparency and comparability related to the accounting and reporting of leasing arrangements. The guidance will require balance sheet recognition for assets and liabilities associated with rights and obligations created by leases with terms greater than twelve months. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. Modified retrospective application is required. Early adoption is permitted. The Company is evaluating the impact of adopting this guidance. In May 2014, the FASB issued ASU 2014-09, “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. In August 2015, the FASB issued ASU 2015-14, deferring the effective date of this standard for one year, and is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The deferred standard allows early adoption of the standard on the original effective date which would be effective for annual reporting periods beginning after December 15, 2016. The Company does not plan to early adopt, and accordingly, will adopt the new standard effective January 1, 2018. The Company is currently evaluating the impact of the new standard on the sale of the Company’s products to dealers, retailers and distributors and has defined what constitutes a contract for these revenue streams. The Company has identified its performance obligations for these revenue streams and is currently evaluating which of these performance obligations are material within the context of the contract. Depending on the results of this analysis, there could be changes to the timing of recognition of revenue and expenses. The Company is still in the initial stages of assessing the impact of this ASU as it relates to other ancillary revenue streams such as software license, services, and third-party products sold through our online dealer portal. In addition, the Company is still evaluating the adoption method it will elect upon implementation. The final determination of the adoption method will depend on a number of factors including the significance of the new standard on the Company’s financial results. The Company is also in the process of implementing appropriate changes to its business processes, systems and controls to support recognition and disclosures under the new standard. |
Description of Business and S18
Description of Business and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 U.S., Canadian and all other international dealers and distributors combined (in thousands): Three Months Ended March 31, 2017 2016 Revenue-United States $ 35,186 $ 31,375 Revenue-Canada 4,249 2,945 Revenue-all other international sources 10,800 8,715 Total revenue $ 50,235 $ 43,035 International revenue (excluding Canada) as a percent of total revenue % % |
Schedule of changes in the product warranty liability | The following table presents the changes in the product warranty liability for the three months ended March 31, 2017 (in thousands): Warranty Liability Balance at December 31, 2016 $ 1,945 Warranty costs accrued 620 Warranty claims (618) Balance at March 31, 2017 $ 1,947 |
Schedule of reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share | The following table presents the reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share (in thousands): Three Months Ended March 31, 2017 2016 Numerator: Net income $ 843 $ 6,639 Denominator: Weighted average common stock outstanding for basic net income per common share 24,005 23,335 Effect of dilutive securities—stock options and restricted stock units 1,652 651 Weighted average common shares and dilutive securities outstanding 25,657 23,986 |
Schedule of anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share | The following weighted-average common stock equivalents were anti-dilutive and therefore were excluded from the calculation of diluted net income per share (in thousands): Three Months Ended March 31, 2017 2016 Options to purchase common stock 1,523 2,695 Restricted stock units 3 68 Total 1,526 2,763 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Balance Sheet Components | |
Schedule of inventories | Inventories consisted of the following (in thousands): March 31, December 31, 2017 2016 Finished goods $ 25,347 $ 24,138 Component parts 2,805 1,880 Work-in-process 261 213 $ 28,413 $ 26,231 |
Schedule of property and equipment, net | Property and equipment, net consisted of the following (in thousands): March 31, December 31, 2017 2016 Computer equipment and software $ 4,295 $ 3,855 Manufacturing tooling and test equipment 4,597 4,216 Lab and warehouse equipment 3,786 3,649 Leasehold improvements 3,599 3,438 Furniture and fixtures 3,462 3,254 Other 762 753 20,501 19,165 Less: accumulated depreciation (13,577) (12,702) $ 6,924 $ 6,463 |
Schedule of accrued liabilities | Accrued liabilities consisted of the following (in thousands): March 31, December 31, 2017 2016 Sales returns and current portion of warranty accruals $ 3,082 $ 2,892 Compensation accruals 2,957 4,445 Other accrued liabilities 1,238 1,575 $ 7,277 $ 8,912 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Financial Instruments | |
Schedule of 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 | 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 March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 Cash and Adjusted Unrealized Unrealized Cash Short-term Long-term Cost Gains Losses Fair Value Equivalents Investments Investments Cash $ 18,044 $ — $ — $ 18,044 $ 18,044 $ — $ — Level 1: Money market funds 10,171 — — 10,171 10,171 — — U.S. government notes 5,104 — (7) 5,097 — 3,994 1,103 Subtotal 15,275 — (7) 15,268 10,171 3,994 1,103 Level 2: Asset-backed securities 2,003 — (2) 2,001 — — 2,001 Corporate bonds 9,541 1 (11) 9,531 — 9,531 — Commercial paper 10,463 — — 10,463 — 10,463 — Subtotal 22,007 1 (13) 21,995 — 19,994 2,001 Total $ 55,326 $ 1 $ (20) $ 55,307 $ 28,215 $ 23,988 $ 3,104 December 31, 2016 Cash and Adjusted Unrealized Unrealized Cash Short-term Long-term Cost Gains Losses Fair Value Equivalents Investments Investments Cash $ 24,708 $ — $ — $ 24,708 $ 24,708 $ — $ — Level 1: Money market funds 10,105 — — 10,105 10,105 — — U.S. government notes 2,001 — (1) 2,000 — 2,000 — Subtotal 12,106 — (1) 12,105 10,105 2,000 — Level 2: Asset-backed securities 4,008 — — 4,008 — — 4,008 Corporate bonds 13,902 — (14) 13,888 — 13,888 — Commercial paper 7,082 — — 7,082 — 7,082 — Subtotal 24,992 — (14) 24,978 — 20,970 4,008 Total $ 61,806 $ — $ (15) $ 61,791 $ 34,813 $ 22,970 $ 4,008 |
Schedule of pre-tax losses not designated as hedging instruments | The following table shows the pre-tax losses of the Company’s derivative instruments not designated as hedging instruments (in thousands): Three Months Ended March 31, Income Statement Location 2017 2016 Foreign exchange forward contracts Other income (expense), net $ (527) $ (317) |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Acquisitions | |
Schedule of preliminary allocation of consideration transferred | The following reflects the Company’s preliminary allocation of consideration transferred for the Triad acquisition (in thousands): Triad Acquisition Cash $ 231 Accounts receivable 516 Inventory 1,078 Other assets acquired 429 Intangible assets 6,271 Goodwill 5,209 Total assets acquired 13,734 Accounts payable 912 Deferred tax liability 2,415 Warranty liability 237 Other liabilities assumed 584 Total net assets acquired $ 9,586 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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, 2016 $ 16,809 Current period acquisitions 5,209 Foreign currency translation adjustment 174 Balance at March 31, 2017 $ 22,192 |
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 March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 Gross Carrying Accumulated Amount Amortization Net Developed technology $ 18,179 $ (6,517) $ 11,662 Customer relationships 11,712 (1,481) 10,231 Trademark/trade name 6,776 (445) 6,331 Non-competition agreements 295 (194) 101 Total intangible assets $ 36,962 $ (8,637) $ 28,325 December 31, 2016 Gross Carrying Accumulated Amount Amortization Net Developed technology $ 16,618 $ (5,738) $ 10,880 Customer relationships 9,196 (1,160) 8,036 Trademark/trade name 4,410 (337) 4,073 Non-competition agreements 295 (164) 131 Total intangible assets $ 30,519 $ (7,399) $ 23,120 |
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): Three Months Ended March 31, 2017 2016 Cost of revenue $ 774 $ 649 Research and development 48 40 Sales and marketing 408 245 Total amortization of intangible assets $ 1,230 $ 934 |
Schedule of amortization of finite lived intangible assets | Amortization of finite lived intangible assets as of March 31, 2017 for the next five years is as follows (in thousands): Amount 2017 $ 3,957 2018 5,117 2019 4,936 2020 4,051 2021 2,196 Thereafter 8,068 $ 28,325 |
Equity Compensation (Tables)
Equity Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity Compensation | |
Summary of stock option activity | Weighted Average Shares Subject Weighted Remaining to Options Average Contractual Outstanding Exercise Price Life (Years) Balance at December 31, 2016 3,776,405 11.55 Exercised (441,176) 8.01 Expired (36,828) 16.66 Forfeited (15,973) 16.70 Balance at March 31, 2017 3,282,428 11.94 Exercisable options at March 31, 2017 2,678,355 11.30 5.4 Vested and expected to vest at March 31, 2017 3,282,428 11.94 5.8 |
Summary of stock options outstanding and exercisable | Weighted Average Shares Subject Weighted Remaining to Options Average Contractual Outstanding Exercise Price Life (Years) Balance at December 31, 2016 3,776,405 11.55 Exercised (441,176) 8.01 Expired (36,828) 16.66 Forfeited (15,973) 16.70 Balance at March 31, 2017 3,282,428 11.94 Exercisable options at March 31, 2017 2,678,355 11.30 5.4 Vested and expected to vest at March 31, 2017 3,282,428 11.94 5.8 The following table summarizes information about stock options outstanding and exercisable at March 31, 2017: Options Outstanding Options Exercisable Weighted- Weighted- Weighted Average Average Average Number of Remaining Number of Remaining Exercise Underlying Contractual Underlying Contractual Range of Exercise Prices Price Shares Life (in years) Shares Life (in years) $ - 5.92 964,352 4.0 964,352 4.0 $ - 8.57 627,739 5.9 529,726 5.4 $ - 13.88 1,036,951 6.9 670,482 6.6 $ - 20.98 653,386 6.7 513,795 6.7 3,282,428 2,678,355 |
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, exercisable and vested and expected to vest (in thousands): For the Three Months Ended and as of March 31, 2017 2016 Options Exercised $ 3,119 $ 76 Options Exercisable 14,761 4,698 Options Vested and Expected to Vest 16,121 4,715 |
Summary of restricted stock unit activity | Number of Weighted Average Shares Grant Date Fair Value Non-vested balance at December 31, 2016 1,396,387 7.60 Awarded 734,780 10.69 Vested (404,412) 7.33 Forfeited (47,817) 8.59 Non-vested balance at March 31, 2017 1,678,938 8.98 |
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 Condensed Consolidated Statements of Operations (in thousands): Three Months Ended March 31, 2017 2016 Cost of revenue $ 58 $ 43 Research and development 1,129 814 Sales and marketing 1,064 509 General and administrative 1,003 457 Total stock-based compensation expense $ 3,254 $ 1,823 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 (in thousands): 2017 $ 2,542 2018 2,240 2019 623 2020 192 2021 29 $ 5,626 |
Description of Business and S25
Description of Business and Summary of Significant Accounting Policies (Concentration) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($)item | Mar. 31, 2016USD ($) | |
Revenue from U.S., Canadian and all other international dealers and distributors combined | ||
Total revenue | $ 50,235 | $ 43,035 |
International revenue (excluding Canada) as a percent of total revenue | 21.00% | 20.00% |
Segment Reporting | ||
Number of operating segments | item | 1 | |
United States | ||
Revenue from U.S., Canadian and all other international dealers and distributors combined | ||
Total revenue | $ 35,186 | $ 31,375 |
Canada | ||
Revenue from U.S., Canadian and all other international dealers and distributors combined | ||
Total revenue | 4,249 | 2,945 |
All other international sources | ||
Revenue from U.S., Canadian and all other international dealers and distributors combined | ||
Total revenue | $ 10,800 | $ 8,715 |
Description of Business and S26
Description of Business and Summary of Significant Accounting Policies (Warranties) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Changes in the product warranty liability | |
Balance at the beginning of the period | $ 1,945 |
Warranty costs accrued | 620 |
Warranty claims | (618) |
Balance at the end of the period | $ 1,947 |
Alternate | |
Product Warranty | |
Product warranty period | 3 years |
Minimum | |
Product Warranty | |
Product warranty period | 2 years |
Maximum | |
Product Warranty | |
Product warranty period | 10 years |
Description of Business and S27
Description of Business and Summary of Significant Accounting Policies (EPS) (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator: | ||
Net income | $ 843 | $ 6,639 |
Denominator: | ||
Weighted average common stock outstanding for basic net income per common share (in shares) | 24,005 | 23,335 |
Effect of dilutive securities—stock options and restricted stock units (in shares) | 1,652 | 651 |
Weighted average common shares and dilutive securities outstanding (in shares) | 25,657 | 23,986 |
Description of Business and S28
Description of Business and Summary of Significant Accounting Policies (AntiDilutive) (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share | ||
Total (in shares) | 1,526 | 2,763 |
Options | Common Stock | ||
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share | ||
Total (in shares) | 1,523 | 2,695 |
Restricted stock units | ||
Anti-dilutive weighted-average common stock equivalents excluded from the calculation of diluted net income per share | ||
Total (in shares) | 3 | 68 |
Description of Business and S29
Description of Business and Summary of Significant Accounting Policies (Recent Accounting Pronouncements) (Details) - USD ($) $ in Millions | Jan. 01, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Accounting Standards Update 2016-09 | Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Recognition of excess tax benefits | $ 3.8 | ||
Increase in net valuation allowance | $ 3.8 | ||
Accumulated Deficit | Accounting Standards Update 2016-09 | Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
New accounting pronouncement, cumulative effect of change, accumulated deficit increase (decrease) | $ 0.3 | ||
State | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Unrecorded tax benefits for stock-based compensation | $ 17.6 | ||
Domestic | Accounting Standards Update 2016-09 | Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred tax assets, operating loss carryforwards | 7.7 | ||
Domestic | Accounting Standards Update 2016-09 | Valuation allowance, operating loss carryforwards | Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Increase in net valuation allowance | 7.7 | ||
Domestic | Accumulated Deficit | Accounting Standards Update 2016-09 | Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
New accounting pronouncement, cumulative effect of change, accumulated deficit increase (decrease) | (7.7) | ||
Domestic | Accumulated Deficit | Accounting Standards Update 2016-09 | Valuation allowance, operating loss carryforwards | Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
New accounting pronouncement, cumulative effect of change, accumulated deficit increase (decrease) | $ 7.7 | ||
Federal | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Unrecorded tax benefits for stock-based compensation | $ 20.6 |
Balance Sheet Components (Inven
Balance Sheet Components (Inventories, Property and Equipment) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Inventories | ||
Finished goods | $ 25,347 | $ 24,138 |
Component parts | 2,805 | 1,880 |
Work-in-process | 261 | 213 |
Total inventories | 28,413 | 26,231 |
Property and equipment, net | ||
Property and equipment, gross | 20,501 | 19,165 |
Less: accumulated depreciation | (13,577) | (12,702) |
Property and equipment, net | 6,924 | 6,463 |
Computer equipment and software | ||
Property and equipment, net | ||
Property and equipment, gross | 4,295 | 3,855 |
Manufacturing tooling and test equipment | ||
Property and equipment, net | ||
Property and equipment, gross | 4,597 | 4,216 |
Lab and warehouse equipment | ||
Property and equipment, net | ||
Property and equipment, gross | 3,786 | 3,649 |
Leasehold improvements | ||
Property and equipment, net | ||
Property and equipment, gross | 3,599 | 3,438 |
Furniture and fixtures | ||
Property and equipment, net | ||
Property and equipment, gross | 3,462 | 3,254 |
Other | ||
Property and equipment, net | ||
Property and equipment, gross | $ 762 | $ 753 |
Balance Sheet Components (Other
Balance Sheet Components (Other assets and Accrued liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Accrued liabilities | ||
Sales returns and current portion of warranty accruals | $ 3,082 | $ 2,892 |
Compensation accruals | 2,957 | 4,445 |
Other accrued liabilities | 1,238 | 1,575 |
Total accrued liabilities | $ 7,277 | $ 8,912 |
Financial Instruments (Details)
Financial Instruments (Details) - Measured on a recurring basis - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value Measurements | ||
Adjusted Cost, assets | $ 55,326 | $ 61,806 |
Unrealized Gains, available-for-sale securities | 1 | |
Unrealized Losses, available-for-sale securities | (20) | (15) |
Fair Value, assets | 55,307 | 61,791 |
Cash and Cash Equivalents | ||
Fair Value Measurements | ||
Fair Value, available-for-sale investments | 28,215 | 34,813 |
Short-term investments | ||
Fair Value Measurements | ||
Fair Value, available-for-sale investments | 23,988 | 22,970 |
Long-term investments | ||
Fair Value Measurements | ||
Fair Value, available-for-sale investments | 3,104 | 4,008 |
Cash | ||
Fair Value Measurements | ||
Fair value, cash and cash equivalents | 18,044 | 24,708 |
Cash | Cash and Cash Equivalents | ||
Fair Value Measurements | ||
Fair value, cash and cash equivalents | 18,044 | 24,708 |
Level 1 | ||
Fair Value Measurements | ||
Adjusted Cost, assets | 15,275 | 12,106 |
Unrealized Losses, available-for-sale securities | (7) | (1) |
Fair Value, assets | 15,268 | 12,105 |
Level 1 | Cash and Cash Equivalents | ||
Fair Value Measurements | ||
Fair Value, available-for-sale investments | 10,171 | 10,105 |
Level 1 | Short-term investments | ||
Fair Value Measurements | ||
Fair Value, available-for-sale investments | 3,994 | 2,000 |
Level 1 | Long-term investments | ||
Fair Value Measurements | ||
Fair Value, available-for-sale investments | 1,103 | |
Level 1 | Money market funds | ||
Fair Value Measurements | ||
Fair value, cash and cash equivalents | 10,171 | 10,105 |
Level 1 | Money market funds | Cash and Cash Equivalents | ||
Fair Value Measurements | ||
Fair value, cash and cash equivalents | 10,171 | 10,105 |
Level 1 | U.S. government notes | ||
Fair Value Measurements | ||
Adjusted Cost, available-for-sale securities | 5,104 | 2,001 |
Unrealized Losses, available-for-sale securities | (7) | (1) |
Fair Value, available-for-sale investments | 5,097 | 2,000 |
Level 1 | U.S. government notes | Short-term investments | ||
Fair Value Measurements | ||
Fair Value, available-for-sale investments | 3,994 | 2 |
Level 1 | U.S. government notes | Long-term investments | ||
Fair Value Measurements | ||
Fair Value, available-for-sale investments | 1,103 | |
Level 2 | Available-for-sale investments | ||
Fair Value Measurements | ||
Adjusted Cost, available-for-sale securities | 22,007 | 24,992 |
Unrealized Gains, available-for-sale securities | 1 | |
Unrealized Losses, available-for-sale securities | (13) | (14) |
Fair Value, available-for-sale investments | 21,995 | 24,978 |
Level 2 | Available-for-sale investments | Short-term investments | ||
Fair Value Measurements | ||
Fair Value, available-for-sale investments | 19,994 | 20,970 |
Level 2 | Available-for-sale investments | Long-term investments | ||
Fair Value Measurements | ||
Fair Value, available-for-sale investments | 2,001 | 4,008 |
Level 2 | Asset-backed securities | ||
Fair Value Measurements | ||
Adjusted Cost, available-for-sale securities | 2,003 | 4,008 |
Unrealized Losses, available-for-sale securities | (2) | |
Fair Value, available-for-sale investments | 2,001 | 4,008 |
Level 2 | Asset-backed securities | Long-term investments | ||
Fair Value Measurements | ||
Fair Value, available-for-sale investments | 2,001 | 4,008 |
Level 2 | Corporate bonds | ||
Fair Value Measurements | ||
Adjusted Cost, available-for-sale securities | 9,541 | 13,902 |
Unrealized Gains, available-for-sale securities | 1 | |
Unrealized Losses, available-for-sale securities | (11) | (14) |
Fair Value, available-for-sale investments | 9,531 | 13,888 |
Level 2 | Corporate bonds | Short-term investments | ||
Fair Value Measurements | ||
Fair Value, available-for-sale investments | 9,531 | 13,888 |
Level 2 | Commercial paper | ||
Fair Value Measurements | ||
Adjusted Cost, available-for-sale securities | 10,463 | 7,082 |
Fair Value, available-for-sale investments | 10,463 | 7,082 |
Level 2 | Commercial paper | Short-term investments | ||
Fair Value Measurements | ||
Fair Value, available-for-sale investments | $ 10,463 | $ 7,082 |
Financial Instruments (Investme
Financial Instruments (Investment and Derivative Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Foreign exchange contracts | ||
Fair Value Measurements | ||
Assets related to derivative instruments | $ 0 | |
Liabilities related to derivative instruments | 0 | |
Foreign exchange contracts | Other income (expense), net | Not designated as hedging instrument | ||
Fair Value Measurements | ||
Foreign exchange forward contracts | $ (527) | $ (317) |
Minimum | ||
Fair Value Measurements | ||
Maturity period of long-term investments | 1 year | |
Maximum | ||
Fair Value Measurements | ||
Maturity period of long-term investments | 2 years |
Acquisitions (Triad Holdings, I
Acquisitions (Triad Holdings, Inc.) (Details) - USD ($) $ in Thousands | Feb. 27, 2017 | Mar. 31, 2017 |
Business Acquisition [Line Items] | ||
Business acquisitions holdback liability | $ 1,438 | |
Triad Holdings, Inc. | ||
Business Acquisition [Line Items] | ||
Purchase price to acquire common stock | $ 9,600 | |
Cash acquired in acquisition | $ 231 | |
Purchase agreement, portion of purchase price held, period from acquisition date (in months) | 18 months |
Acquisition (Allocation) (Detai
Acquisition (Allocation) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Feb. 27, 2017 | Dec. 31, 2016 |
Preliminary allocation of consideration | |||
Goodwill | $ 22,192 | $ 16,809 | |
Triad Holdings, Inc. | |||
Preliminary allocation of consideration | |||
Cash | $ 231 | ||
Accounts receivable | 516 | ||
Inventory | 1,078 | ||
Other assets acquired | 429 | ||
Intangible assets | 6,271 | ||
Goodwill | 5,209 | ||
Total assets acquired | 13,734 | ||
Accounts payable | 912 | ||
Deferred tax liability | 2,415 | ||
Warranty liability | 237 | ||
Other liabilities assumed | 584 | ||
Total net assets acquired | $ 9,586 |
Acquisitions (Identifiable Inta
Acquisitions (Identifiable Intangible Assets) (Details) - USD ($) $ in Thousands | Feb. 27, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Goodwill | |||
Goodwill | $ 22,192 | $ 16,809 | |
Triad Holdings, Inc. | |||
Goodwill | |||
Goodwill | $ 5,209 | ||
Triad Holdings, Inc. | Minimum | |||
Identifiable Intangible Assets | |||
Discount rate used | 15.00% | ||
Triad Holdings, Inc. | Maximum | |||
Identifiable Intangible Assets | |||
Discount rate used | 16.00% | ||
Triad Holdings, Inc. | Customer relationships | |||
Identifiable Intangible Assets | |||
Acquired intangible assets | $ 2,500 | ||
Weighted average amortization period | 10 years | ||
Triad Holdings, Inc. | Trademark/trade name | |||
Identifiable Intangible Assets | |||
Acquired intangible assets | $ 2,400 | ||
Weighted average amortization period | 12 years | ||
Triad Holdings, Inc. | Developed technology | |||
Identifiable Intangible Assets | |||
Acquired intangible assets | $ 1,400 | ||
Weighted average amortization period | 12 years |
Acquisitions (Australia Expansi
Acquisitions (Australia Expansion) (Details) $ in Millions | Apr. 01, 2016USD ($) |
Australia Expansion | |
Purchase Agreement | |
Total consideration transferred | $ 0.7 |
Acquisitions (Pakedge Device an
Acquisitions (Pakedge Device and Software Inc.) (Details) - Pakedge Device And Software Inc. $ in Millions | Jan. 29, 2016USD ($) |
Purchase Agreement | |
Purchase price per purchase agreement | $ 33 |
Cash acquired in acquisition | 0.8 |
Escrow deposit | $ 5 |
Period of escrow deposit | 18 months |
Goodwill and Intangible Asset39
Goodwill and Intangible Assets (Goodwill) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Business Combination - Goodwill | |
Balance at beginning of the period | $ 16,809 |
Current period acquisitions | 5,209 |
Foreign currency translation adjustment | 174 |
Balance at end of the period | $ 22,192 |
Goodwill and Intangible Asset40
Goodwill and Intangible Assets (Intangible assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Intangible assets | ||
Gross Carrying Amount | $ 36,962 | $ 30,519 |
Accumulated Amortization | (8,637) | (7,399) |
Intangible assets, net | $ 28,325 | 23,120 |
Weighted average amortization period | 7 years 6 months | |
Developed technology | ||
Intangible assets | ||
Gross Carrying Amount | $ 18,179 | 16,618 |
Accumulated Amortization | (6,517) | (5,738) |
Intangible assets, net | $ 11,662 | 10,880 |
Weighted average amortization period | 5 years 6 months | |
Customer relationships | ||
Intangible assets | ||
Gross Carrying Amount | $ 11,712 | 9,196 |
Accumulated Amortization | (1,481) | (1,160) |
Intangible assets, net | $ 10,231 | 8,036 |
Weighted average amortization period | 8 years 3 months 18 days | |
Trademark/trade name | ||
Intangible assets | ||
Gross Carrying Amount | $ 6,776 | 4,410 |
Accumulated Amortization | (445) | (337) |
Intangible assets, net | $ 6,331 | 4,073 |
Weighted average amortization period | 12 years | |
Non-competition agreements | ||
Intangible assets | ||
Gross Carrying Amount | $ 295 | 295 |
Accumulated Amortization | (194) | (164) |
Intangible assets, net | $ 101 | $ 131 |
Weighted average amortization period | 2 years |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets (Amortization expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Amortization expense | ||
Amortization of intangible assets | $ 1,230 | $ 934 |
Cost of revenue | ||
Amortization expense | ||
Amortization of intangible assets | 774 | 649 |
Research and development | ||
Amortization expense | ||
Amortization of intangible assets | 48 | 40 |
Sales and marketing | ||
Amortization expense | ||
Amortization of intangible assets | $ 408 | $ 245 |
Goodwill and Intangible Asset42
Goodwill and Intangible Assets (Amortization) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Amortization of finite-lived intangible assets | ||
2,017 | $ 3,957 | |
2,018 | 5,117 | |
2,029 | 4,936 | |
2,020 | 4,051 | |
2,021 | 2,196 | |
Thereafter | 8,068 | |
Intangible assets, net | $ 28,325 | $ 23,120 |
Long-Term Obligations (Details)
Long-Term Obligations (Details) - Revolving credit facility $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Long-Term Obligations | |
Outstanding borrowings | $ 0 |
Commitment fee for quarterly unused capacity (as a percent) | 0.25% |
Unused line of credit fee threshold | $ 15 |
Prime Rate | |
Long-Term Obligations | |
Variable interest rate basis | Prime Rate |
LIBOR | |
Long-Term Obligations | |
Variable interest rate basis | LIBOR |
2016 Loan Agreement | |
Long-Term Obligations | |
Maximum borrowing capacity | $ 30 |
Minimum | Prime Rate | |
Long-Term Obligations | |
Basis spread on variable rate (as a percent) | 0.00% |
Minimum | LIBOR | |
Long-Term Obligations | |
Basis spread on variable rate (as a percent) | 2.50% |
Maximum | Prime Rate | |
Long-Term Obligations | |
Basis spread on variable rate (as a percent) | 0.25% |
Maximum | LIBOR | |
Long-Term Obligations | |
Basis spread on variable rate (as a percent) | 2.75% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Income tax benefit | $ 2,781 | $ 10,070 | |
Effective income tax rate (as a percent) | 143.00% | 294.00% | |
U.S. federal statutory rate (as a percent) | 34.00% | ||
State | |||
Net operating losses | $ 61,000 | ||
Tax credit carryforwards | 2,800 | ||
Federal | |||
Net operating losses | 59,500 | ||
Tax credit carryforwards | $ 7,100 |
Equity Compensation (Activity)
Equity Compensation (Activity) (Details) - Stock options - $ / shares | Jan. 01, 2017 | Mar. 31, 2017 | Jun. 11, 2013 |
Shares Subject to Options Outstanding | |||
Balance at the beginning of the period (in shares) | 3,776,405 | 3,776,405 | |
Exercised (in shares) | (441,176) | ||
Expired (in shares) | (36,828) | ||
Forfeited (in shares) | (15,973) | ||
Balance at the end of the period (in shares) | 3,282,428 | ||
Exercisable options (in shares) | 2,678,355 | ||
Vested and expected to vest at the end of the period (in shares) | 3,282,428 | ||
Weighted Average Exercise Price | |||
Balance at the beginning of the period (in dollars per share) | $ 11.55 | $ 11.55 | |
Exercised (in dollars per share) | 8.01 | ||
Expired (in dollars per share) | 16.66 | ||
Forfeited (in dollars per share) | 16.70 | ||
Balance at the end of the period (in dollars per share) | 11.94 | ||
Exercisable options at the end of the period (in dollars per share) | 11.30 | ||
Vested and expected to vest (in dollars per share) | $ 11.94 | ||
Weighted-Average Remaining Contractual Life | |||
Exercisable options | 5 years 4 months 24 days | ||
Vested and expected to vest | 5 years 9 months 18 days | ||
2013 Plan | |||
Stock options | |||
Potential 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 | 1,186,489 |
Equity Compensation (Range) (De
Equity Compensation (Range) (Details) | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Options Outstanding | |
Number of Underlying Shares | shares | 3,282,428 |
Options Exercisable | |
Number of Underlying Shares | shares | 2,678,355 |
3.38-6.14 | |
Equity compensation | |
Range of Exercise Price, low end of range (in dollars per share) | $ 3.38 |
Range of Exercise Price, high end of range (in dollars per share) | 6.14 |
Options Outstanding | |
Weighted Average Exercise Price (in dollars per share) | $ 5.92 |
Number of Underlying Shares | shares | 964,352 |
Weighted-Average Remaining Contractual Life | 4 years |
Options Exercisable | |
Number of Underlying Shares | shares | 964,352 |
Weighted-Average Remaining Contractual Life | 4 years |
6.34-9.93 | |
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) | 9.93 |
Options Outstanding | |
Weighted Average Exercise Price (in dollars per share) | $ 8.57 |
Number of Underlying Shares | shares | 627,739 |
Weighted-Average Remaining Contractual Life | 5 years 10 months 24 days |
Options Exercisable | |
Number of Underlying Shares | shares | 529,726 |
Weighted-Average Remaining Contractual Life | 5 years 4 months 24 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) | $ 13.88 |
Number of Underlying Shares | shares | 1,036,951 |
Weighted-Average Remaining Contractual Life | 6 years 10 months 24 days |
Options Exercisable | |
Number of Underlying Shares | shares | 670,482 |
Weighted-Average Remaining Contractual Life | 6 years 7 months 6 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) | $ 20.98 |
Number of Underlying Shares | shares | 653,386 |
Weighted-Average Remaining Contractual Life | 6 years 8 months 12 days |
Options Exercisable | |
Number of Underlying Shares | shares | 513,795 |
Weighted-Average Remaining Contractual Life | 6 years 8 months 12 days |
Equity Compensation (Fair Value
Equity Compensation (Fair Value) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock options | ||
Total fair value for the awards vested during the period | $ 1,100 | |
Stock options | ||
Intrinsic-value | ||
Options Exercised | 3,119 | $ 76 |
Options Exercisable | 14,761 | 4,698 |
Options Vested and Expected to Vest | $ 16,121 | $ 4,715 |
Equity Compensation (Restricted
Equity Compensation (Restricted Stock Units) (Details) - Restricted stock units | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Restricted stock units | |
Non-vested balance at beginning of period (in shares) | 1,396,387 |
Awarded | 734,780 |
Vested | (404,412) |
Forfeited | (47,817) |
Non-vested balance at end of period (in shares) | 1,678,938 |
Weighted Average Grant Date Fair Value | |
Non-vested balance at beginning of period (in dollars per share) | $ / shares | $ 7.60 |
Awarded (in dollars per share) | $ / shares | 10.69 |
Vested (in dollars per share) | $ / shares | 7.33 |
Forfeited (in dollars per share) | $ / shares | 8.59 |
Non-vested balance at end of period (in dollars per share) | $ / shares | $ 8.98 |
Shares withheld for tax purposes (in shares) | 141,450 |
Issuance of shares net of shares withheld (in shares) | 262,962 |
Equity Compensation (401(k) Pla
Equity Compensation (401(k) Plan) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($)shares | |
Defined Contribution Plan Disclosure [Line Items] | |
Maximum amount of employees' gross pay the employee may contribute (as a percent) | 3.50% |
Shares contributed (in shares) | shares | 24,386 |
Expenses associated with contribution | $ | $ 0.4 |
First 1% of employees' salary | |
Defined Contribution Plan Disclosure [Line Items] | |
Employer matching contribution (as a percent) | 100.00% |
Employees' gross pay for which the employer contributes a matching contribution (as a percent) | 1.00% |
Second 5% of employees' salary | |
Defined Contribution Plan Disclosure [Line Items] | |
Employer matching contribution (as a percent) | 50.00% |
Employees' gross pay for which the employer contributes a matching contribution (as a percent) | 5.00% |
Equity Compensation (Expense) (
Equity Compensation (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock options | ||
Total stock-based compensation expense | ||
Total stock-based compensation expense | $ 3,254 | $ 1,823 |
Total unrecognized compensation cost related to non-vested stock option awards | $ 5,200 | |
Weighted-average period over which unrecognized compensation cost will be recognized | 1 year 6 months | |
Stock options | Cost of revenue | ||
Total stock-based compensation expense | ||
Total stock-based compensation expense | $ 58 | 43 |
Stock options | Research and development | ||
Total stock-based compensation expense | ||
Total stock-based compensation expense | 1,129 | 814 |
Stock options | Sales and marketing | ||
Total stock-based compensation expense | ||
Total stock-based compensation expense | 1,064 | 509 |
Stock options | General and administrative | ||
Total stock-based compensation expense | ||
Total stock-based compensation expense | 1,003 | $ 457 |
Restricted stock units | ||
Total stock-based compensation expense | ||
Total unrecognized compensation cost related to non-vested restricted stock units | $ 12,700 | |
Weighted-average period over which unrecognized compensation cost will be recognized | 2 years 3 months 18 days |
Share Repurchases (Details)
Share Repurchases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | May 31, 2015 | |
Equity, Class of Treasury Stock [Line Items] | |||
Common stock authorized for repurchase | $ 5,900 | ||
Number of common stock repurchased (in shares) | 119,007 | ||
Value of common stock repurchased | $ 1,821 | $ 1,737 | |
Maximum | |||
Equity, Class of Treasury Stock [Line Items] | |||
Common stock authorized for repurchase | $ 20,000 |
Commitments and Contingencies52
Commitments and Contingencies (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017USD ($)claim | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Operating Leases | |||
Rental expense | $ 700,000 | $ 600,000 | |
Future minimum rental payments | |||
2,017 | 2,542,000 | ||
2,018 | 2,240,000 | ||
2,019 | 623,000 | ||
2,020 | 192,000 | ||
2,021 | 29,000 | ||
Total | 5,626,000 | ||
Purchase Commitments | |||
Non-cancellable purchase commitments | 42,900,000 | ||
Indemnification agreements | |||
Indemnification | |||
Accrued liability | $ 0 | ||
Number of outstanding claims | claim | 0 | ||
Minimum | |||
Operating Leases | |||
Extension term of leases | P3Y | ||
Maximum | |||
Operating Leases | |||
Extension term of leases | P5Y | ||
Pakedge Device And Software Inc. | General and administrative | |||
Future minimum rental payments | |||
Expense due to loss on vacated facility | $ 400,000 |