Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 06, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Enphase Energy, Inc. | ||
Entity Central Index Key | 1,463,101 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 82,525,301 | ||
Entity Well-Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 56.1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 17,764 | $ 28,452 |
Accounts receivable, net of allowances of $2,921 and $1,808 at December 31, 2016 and 2015, respectively | 61,019 | 46,099 |
Inventory | 31,960 | 40,800 |
Prepaid expenses and other | 7,121 | 6,417 |
Total current assets | 117,864 | 121,768 |
Property and equipment, net | 31,440 | 32,118 |
Goodwill | 3,664 | 3,745 |
Intangibles, net | 945 | 2,220 |
Other assets | 9,663 | 5,677 |
Total assets | 163,576 | 165,528 |
Current liabilities: | ||
Accounts payable | 31,696 | 25,569 |
Accrued liabilities | 22,937 | 19,292 |
Deferred revenues | 6,411 | 3,915 |
Warranty obligations, current portion (includes $3,296 and $2,601 measured at fair value at December 31, 2016 and 2015, respectively) | 8,596 | 7,072 |
Revolving credit facility | 10,100 | 17,000 |
Current portion of term loan | 3,032 | 0 |
Total current liabilities | 82,772 | 72,848 |
Deferred revenues, non-current | 33,893 | 25,115 |
Warranty obligations, non-current (includes $7,036 and $3,581 measured at fair value at December 31, 2016 and 2015, respectively) | 22,818 | 23,475 |
Other non-current liabilities | 2,025 | 2,641 |
Term loan, less current portion | 20,768 | 0 |
Total liabilities | 162,276 | 124,079 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.00001 par value, 10,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock, $0.00001 par value, 100,000 shares authorized; 62,269 and 45,821 shares issued and outstanding at December 31, 2016 and 2015, respectively | 1 | 0 |
Additional paid-in capital | 252,126 | 224,732 |
Accumulated deficit | (250,535) | (183,073) |
Accumulated other comprehensive loss | (292) | (210) |
Total stockholders’ equity | 1,300 | 41,449 |
Total liabilities and stockholders’ equity | $ 163,576 | $ 165,528 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowances, accounts receivable | $ 2,921 | $ 1,808 |
Warrant obligations at fair value, current | 3,296 | 2,601 |
Warrant obligations at fair value, noncurrent | $ 7,036 | $ 3,581 |
Preferred stock, par value (usd per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized (shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (shares) | 62,269,000 | 45,821,000 |
Common stock, shares outstanding (shares) | 62,269,000 | 45,821,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Net revenues | $ 322,591 | $ 357,249 | $ 343,904 |
Cost of revenues | 264,583 | 249,032 | 230,861 |
Gross profit | 58,008 | 108,217 | 113,043 |
Operating expenses: | |||
Research and development | 50,703 | 50,819 | 45,386 |
Sales and marketing | 38,810 | 45,877 | 41,003 |
General and administrative | 27,418 | 30,830 | 31,083 |
Restructuring and other charges | 3,777 | 0 | 0 |
Total operating expenses | 120,708 | 127,526 | 117,472 |
Loss from operations | (62,700) | (19,309) | (4,429) |
Other income (expense), net: | |||
Interest expense | (2,773) | (501) | (1,863) |
Other expense | (514) | (893) | (994) |
Total other expense, net | (3,287) | (1,394) | (2,857) |
Loss before income taxes | (65,987) | (20,703) | (7,286) |
Provision for income taxes | (1,475) | (1,379) | (766) |
Net loss | $ (67,462) | $ (22,082) | $ (8,052) |
Net loss per share, basic and diluted (usd per share) | $ (1.34) | $ (0.49) | $ (0.19) |
Shares used in computing net loss per share, basic and diluted (shares) | 50,519 | 44,632 | 42,903 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (67,462) | $ (22,082) | $ (8,052) |
Other comprehensive loss: | |||
Foreign currency translation adjustments | (82) | (131) | (308) |
Other comprehensive loss: | (82) | (131) | (308) |
Comprehensive loss | $ (67,544) | $ (22,213) | $ (8,360) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
BALANCE, Beginning at Dec. 31, 2013 | $ 40,206 | $ 0 | $ 192,916 | $ (152,939) | $ 229 |
BALANCE, Beginning (shares) at Dec. 31, 2013 | 42,123 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock under employee stock plans | 5,366 | 5,366 | |||
Issuance of common stock under employee stock plans (shares) | 1,577 | ||||
Issuance of common stock upon cashless exercise of warrants | 0 | ||||
Issuance of common stock upon cashless exercise of warrants (shares) | 56 | ||||
Stock-based compensation | 9,740 | 9,740 | |||
Net loss | (8,052) | (8,052) | |||
Foreign currency translation adjustment | (308) | (308) | |||
BALANCE, Ending at Dec. 31, 2014 | 46,952 | $ 0 | 208,022 | (160,991) | (79) |
BALANCE, Ending (shares) at Dec. 31, 2014 | 43,756 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock under employee stock plans | 4,014 | 4,014 | |||
Issuance of common stock under employee stock plans (shares) | 2,065 | ||||
Stock-based compensation | 12,696 | 12,696 | |||
Net loss | (22,082) | (22,082) | |||
Foreign currency translation adjustment | (131) | (131) | |||
BALANCE, Ending at Dec. 31, 2015 | 41,449 | $ 0 | 224,732 | (183,073) | (210) |
BALANCE, Ending (shares) at Dec. 31, 2015 | 45,821 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock under employee stock plans | 1,145 | $ 1 | 1,144 | ||
Issuance of common stock under employee stock plans (shares) | 1,498 | ||||
Issuance of common stock, net of offering costs | 15,924 | 15,924 | |||
Issuance of common stock, net of offering costs (shares) | 14,950 | ||||
Stock-based compensation | 10,326 | 10,326 | |||
Net loss | (67,462) | (67,462) | |||
Foreign currency translation adjustment | (82) | (82) | |||
BALANCE, Ending at Dec. 31, 2016 | $ 1,300 | $ 1 | $ 252,126 | $ (250,535) | $ (292) |
BALANCE, Ending (shares) at Dec. 31, 2016 | 62,269 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities: | |||
Net loss | $ (67,462) | $ (22,082) | $ (8,052) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 10,638 | 10,539 | 8,259 |
Provision for doubtful accounts | 3,097 | 1,502 | 711 |
Asset impairment and restructuring | 3,190 | 522 | 249 |
Gain on business divestiture | (640) | 0 | 0 |
Amortization of debt issuance costs | 145 | 163 | 483 |
Stock-based compensation | 10,326 | 12,696 | 9,740 |
Revaluation of contingent consideration liability | 0 | (1,827) | 0 |
Deferred income tax (benefit) expense | 651 | 642 | (35) |
Changes in operating assets and liabilities (net of acquisition/divestiture): | |||
Accounts receivable | (18,017) | (2,482) | (13,746) |
Inventory | 8,840 | (19,210) | (5,010) |
Prepaid expenses and other assets | (4,759) | (5,281) | (2,512) |
Accounts payable, accrued and other liabilities | 8,897 | (2,620) | 25,325 |
Warranty obligations | 867 | (3,393) | 3,508 |
Deferred revenues | 11,274 | 9,671 | 5,302 |
Net cash (used in) provided by operating activities | (32,953) | (21,160) | 24,222 |
Investing activities: | |||
Purchases of property and equipment | (12,167) | (12,525) | (13,249) |
Purchases of intangible assets | (678) | (237) | (750) |
Business divestitures (acquisitions) | 1,050 | 0 | (2,235) |
Change in restricted cash | 0 | 300 | (300) |
Net cash used in investing activities | (11,795) | (12,462) | (16,534) |
Financing activities: | |||
Proceeds from public offering of common stock, net of offering costs | 16,142 | 0 | 0 |
Proceeds from term loan, net of issuance costs | 23,989 | 0 | 0 |
Proceeds from borrowings under revolving credit facility | 10,000 | 46,000 | 0 |
Payments under revolving credit facility | (16,900) | (29,150) | 0 |
Holdback payment related to prior acquisition | 0 | (300) | 0 |
Repayments of term loans | 0 | 0 | (8,708) |
Proceeds from issuance of common stock under employee stock plans | 1,144 | 4,014 | 5,366 |
Net cash provided by (used in) financing activities | 34,375 | 20,564 | (3,342) |
Effect of exchange rate changes on cash | (315) | (522) | (504) |
Net increase (decrease) in cash and cash equivalents | (10,688) | (13,580) | 3,842 |
Cash and cash equivalents — Beginning of year | 28,452 | 42,032 | 38,190 |
Cash and cash equivalents — End of year | 17,764 | 28,452 | 42,032 |
Supplemental cash flow disclosure: | |||
Cash paid for interest | 2,704 | 358 | 1,389 |
Cash paid for income taxes | 1,146 | 594 | 472 |
Noncash financing and investing activities: | |||
Offering and loan costs included in accrued liabilities | 518 | 0 | 0 |
Purchases of fixed and intangible assets included in accounts payable | $ 700 | $ 1,718 | $ 1,840 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Enphase Energy, Inc. and subsidiaries (the “Company”) delivers simple, innovative and reliable energy management solutions that advance the worldwide potential of renewable energy. Our semiconductor-based microinverter system converts direct current (DC) electricity to alternating current (AC) electricity at the individual solar module level, and brings a system-based, high technology approach to solar energy generation leveraging our design expertise across power electronics, semiconductors, networking, and cloud-based software technologies. Since inception, the Company has shipped more than 13 million microinverters, representing over 3 gigawatts of solar photovoltaic (PV) generating capacity, and more than 580,000 Enphase residential and commercial systems have been deployed in over 100 countries. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company has identified certain conditions, including recurring losses from operations and net cash used in operating activities due to the recent erosion of ASP and gross margin, its $17.8 million cash balance and working capital of $35.6 million at December 31, 2016, and uncertainty in the solar market in general, that have caused management to conclude there is substantial doubt about the Company’s ability to continue as a going concern. The Company has experienced declines in the average selling price (ASP) of its products that has been more rapid in the last eight quarters than what has been typical in the past. The decline in ASP is primarily the result of its decision to reduce product pricing in advance of anticipated product cost savings to grow market share. The decrease in ASP has resulted in lower net revenues, gross profit and gross margins and has negatively impacted the Company’s liquidity. The Company has taken actions and intends to take further actions to improve its liquidity, including raising funds in the capital markets. In 2016, the Company completed a public offering of its common stock. The Company sold approximately 15 million shares and realized net proceeds of approximately $16.2 million . In December of 2016, the Company entered into an At The Market Issuance Sales Agreement (ATM) under which it may sell shares of common stock up to a gross aggregate offering price of $17.0 million . The Company is not obligated to make any sales of the Shares under the Sales Agreement, and, as of December 31, 2016, had not sold any shares under the ATM. The Company will have realized the full gross proceeds of $17.0 million from common stock sold under the ATM at the time of this filing. In January 2017, the Company also completed a private placement of securities that resulted in gross proceeds of $10.0 million . In July 2016, the Company entered into a loan and security agreement (the “Term Loan Agreement”) with lenders that are affiliates of Tennenbaum Capital Partners, LLC (collectively “TCP”). Under the agreement, the lenders committed to advance a term loan in an aggregate principal amount of up to $25.0 million with a maturity date of July 1, 2020. The Company drew down the $25.0 million term loan commitment at closing. In February 2017, the Company amended its loan and security agreement with TCP to provide an additional $25 million in principal. The Company simultaneously terminated its revolving credit facility with Wells Fargo Bank, N.A., and the combined principal and interest balance of $10.3 million was fully repaid. The amended loan has the same July 1, 2020 maturity date as the original TCP loan, both of which are interest only until February 2018. See Notes 10, “Debt” and 18, “Subsequent Event” for further information. The Company launched its next generation microinverter, the Enphase Home Energy Solution with IQ, in March 2017. This product is a major milestone in the Company’s product cost reduction initiative. The Company also introduced its AC Battery storage system in Australia in the third quarter of 2016 and in the U.S. and Europe in the fourth quarter of 2016, and believes the solar power storage market has significant growth potential. The Company has also taken and is continuing to take restructuring actions to reduce its operating expenses, including reducing its global workforce, eliminating projects that do not have a near-term return on investment, and consolidating office space at its headquarters facility. The cumulative impact of these actions will be a decrease in annualized ongoing operating expenses of approximately $40 million as compared to pre-restructuring annualized operating expenses, and the full benefit of which is expected to be realized beginning in the second quarter of 2017. The Company intends to continue to streamline and optimize its operations to increase efficiency and further its efforts to achieve profitability. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ materially from management’s estimates using different assumptions or under different conditions. Revenue Recognition The Company generates revenue from sales of its microinverter systems, which include microinverter units and related accessories, an Envoy communications gateway, the cloud-based Enlighten monitoring service, and AC Battery storage solutions to distributors, large installers, OEMs and strategic partners. Enlighten service revenue represented less than 2% of the total revenues for all periods presented. Revenue from sales of the Company’s products is recognized when: (i) persuasive evidence of an arrangement exists; (ii) delivery of the products has occurred in accordance with the terms of the sales agreement and title and risk of loss have passed to the customer; (iii) the sale price is fixed or determinable; and (iv) collection is reasonably assured. Provisions for rebates, sales incentives, and discounts to customers are accounted for as reductions in revenue in the same period the related sales are recorded. Sales of an Envoy communications gateway include the Enlighten cloud-based monitoring service. The allocation of revenue between the two deliverables is based on the Company’s best estimate of selling price determined by considering multiple factors including internal costs, gross margin and historical pricing practices. After allocating the overall consideration from such sale to each deliverable using a best estimate of the selling price (i) revenue from the sale of Envoy devices is recognized upon shipment, assuming all other revenue recognition criteria have been met and (ii) revenue from the cloud-based monitoring service is recognized ratably over the estimated economic life of the related Envoy devices of 10 years. Deferred revenues consist of payments received from customers in advance of revenue recognition for the Company’s products and services as described above. As of December 31, 2016 and 2015 , deferred revenues consist primarily of Enlighten service revenue. Cost of Revenues The Company includes the following in cost of revenues: product costs, warranty, manufacturing personnel and logistics costs, freight costs, inventory write-downs, hosting services costs related to the Company’s Enlighten service offering, and depreciation and amortization of manufacturing test equipment. Cash and Cash Equivalents The Company considers all highly liquid investments, such as certificates of deposit and money market instruments with maturities of three months or less at the time of acquisition to be cash equivalents. For all periods presented, its cash balances consist of amounts held in non-interest-bearing deposits and money market accounts. Fair Value of Financial Instruments The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the short maturity of those instruments. Foreign Currency Forward Contracts The Company operates and conducts business in foreign countries where its foreign entities use the local currency as their respective functional currency. As a result, the Company is exposed to movements in foreign currency exchange rates. The Company utilizes foreign currency forward contracts to reduce the impact of foreign currency fluctuations related to anticipated cash receipts from expected future revenues denominated in Euros and British Pounds as well as from intercompany transaction gains or losses. The foreign currency forward contracts are accounted for as derivatives whereby the fair value of the contracts is reported as other current assets or current liabilities in the accompanying consolidated balance sheets, and gains and losses resulting from changes in the fair value are reported in other income (expense), net, in the accompanying consolidated statements of operations. Allowances for Doubtful Accounts The Company maintains allowances for doubtful accounts for uncollectible accounts receivable. Management estimates anticipated losses from doubtful accounts based on days past due, collection history and the financial health of customers. The allowance for doubtful accounts was $2.9 million and $1.8 million at December 31, 2016 and 2015 , respectively. The following table sets forth activities in the allowance for doubtful accounts for the periods indicated: December 31, 2016 2015 2014 Balance, at beginning of year $ 1,808 $ 569 $ 2,000 Net charges to expenses 3,097 1,502 711 Write-offs, net of recoveries (1,984 ) (263 ) (2,142 ) Balance, at end of year $ 2,921 $ 1,808 $ 569 Inventory Inventory is valued at the lower of cost or market. Market is current replacement cost (by purchase or by reproduction, dependent on the type of inventory). In cases where market exceeds net realizable value (i.e., estimated selling price less reasonably predictable costs of completion and disposal), inventories are stated at net realizable value. Market is not considered to be less than net realizable value reduced by an allowance for an approximately normal profit margin. The Company determines cost on a first-in first-out basis. Management assesses the valuation on a quarterly basis and writes down the value for any excess and obsolete inventory based upon expected demand, anticipated sales price, effect of new product introductions, product obsolescence, customer concentrations, product merchantability and other factors. Inventory write-downs are equal to the difference between the cost of inventories and market. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Cost includes amounts paid to acquire or construct the asset as well as any expenditure that substantially adds to the value of or significantly extends the useful life of an existing asset. Repair and maintenance costs are expensed as incurred. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets, which range from three to ten years. Leasehold improvements are amortized over the shorter of the lease term or expected useful life of the improvements. Capitalized Software Costs Internally used software, whether purchased or developed, is capitalized and amortized on a straight-line basis over its estimated useful life. Costs associated with internally developed software are expensed until the point at which the project has reached the development stage. Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they provide additional functionality. Software maintenance and training costs are expensed in the period in which they are incurred. The capitalization of software requires judgment in determining when a project has reached the development stage and the period over which the Company expects to benefit from the use of that software. Long-Lived Assets Property, plant and equipment, including capitalized software costs, are recorded at cost. Property, plant and equipment amounts are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. The Company recorded asset impairment charges for specific assets that were no longer in use of approximately 2.6 million and 0.5 million for the years ended December 31, 2016 and 2015, respectively. The fair value of the remaining assets is in excess of the carrying value. Goodwill Goodwill results from the purchase consideration paid in excess of the fair value of the net assets recorded in connection with a business acquisition. Goodwill is not amortized, but is assessed for potential impairment at least annually during the fourth quarter of each fiscal year or between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Goodwill is tested at the reporting unit level, which the Company has determined to be the same as the entity as a whole (entity level). Once goodwill has been assigned to a reporting unit, it is no longer associated with a particular acquisition; therefore, all of the activities within a reporting unit, whether acquired or organically grown, are available to support the goodwill value. Based on management’s goodwill impairment tests, there was no impairment of goodwill in any of the years presented. Intangible Assets Intangible assets include patents, customer relationships and other purchased intangible assets. Intangible assets with finite lives are amortized on a straight-line basis, with estimated useful lives ranging from 3 to 5 years. Indefinite-lived intangible assets are tested for impairment annually and are also tested for impairment between annual tests if an event occurs or circumstances change that would indicate that the carrying amount may be impaired. Intangible assets with finite lives are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows used in determining the fair value of the asset. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. There was no impairment of intangible assets in any of the years presented. Warranty Obligations Microinverters Sold Through December 31, 2013 The Company’s warranty accrual provides for the replacement of microinverter units that fail during the product’s warranty term ( 15 years for first and second generation microinverters and up to 25 years for third and fourth generation microinverters). On a quarterly basis, the Company employs a consistent, systematic and rational methodology to assess the adequacy of its warranty liability. This assessment includes updating all key estimates and assumptions for each generation of product, based on historical results, trends and the most current data available as of the filing date. The key estimates and assumptions used in the warranty liability are thoroughly reviewed by management on a quarterly basis. The key estimates used by the Company to estimate its warranty liability are: (1) the number of units expected to fail over time (i.e. failure rate); (2) the number of failed units expected to result in warranty claims over time (i.e. claim rate); and (3) the per unit cost of replacement units, including outbound shipping and limited labor costs, expected to be incurred to replace failed units over time (i.e. replacement cost). Estimated Failure Rates— The Company’s Quality and Reliability department has primary responsibility to determine the estimated failure rates for each generation of microinverter. To establish initial failure rate estimates for each generation of microinverter, the Company’s quality engineers use a combination of industry standard MTBF (Mean Time Between Failure) estimates for individual components contained in its microinverters, third party data collected on similar equipment deployed in outdoor environments similar to those in which the Company’s microinverters are installed, and rigorous long term reliability and accelerated life cycle testing which simulates the service life of the microinverter in a short period of time. As units are deployed into operating environments, the Company continues to monitor product performance via its Enlighten monitoring platform. It typically takes three to nine months between the date of sale and date of end-user installation. Consequently, the Company’s ability to monitor actual failures of units sold similarly lags by three to nine months. When a microinverter fails and is returned, the Company performs diagnostic root cause failure analysis to understand and isolate the underlying mechanism(s) causing the failure. The Company then uses the results of this analysis (combined with the actual, cumulative performance data collected on those units prior to failure via Enlighten) to draw conclusions with respect to how or if the identified failure mechanism(s) will impact the remaining units deployed in the installed base. Estimated Claim Rates— Warranty claim rate estimates are based upon assumptions with respect to expected customer behavior over the warranty period. As the vast majority of the Company’s microinverters have been sold to end users for residential applications, the Company believes that warranty claim rates will be affected by changes over time in residential home ownership because the Company expects that subsequent homeowners are less likely to file claims than the homeowners who originally purchase the microinverters. Estimated Replacement Costs— three factors are considered in the Company’s analysis of estimated replacement cost: (1) the estimated cost of replacement microinverters; (2) the estimated cost to ship replacement microinverters to end users; and (3) the estimated labor reimbursement expected to be paid to third party installers performing replacement services for the end user. Because the Company’s warranty provides for the replacement of defective microinverters over long periods of time (between 15 and 25 years, depending on the generation of product purchased), the estimated per unit cost of current and future product generations is considered in the estimated replacement cost. Estimated costs to ship replacement units are based on observable, market-based shipping costs paid by the Company to third party freight carriers. The Company has a separate program that allows third-party installers to claim fixed-dollar reimbursements for labor costs they incur to replace failed microinverter units for a limited time from the date of original installation. Included in the Company’s estimated replacement cost is an analysis of the number of fixed-dollar labor reimbursements expected to be claimed by third party installers over the limited offering period. If actual failure rates, claim rates, or replacement costs differ from the Company’s estimates in future periods, changes to these estimates may be required, resulting in increases or decreases in the Company’s warranty obligations. Such increases or decreases could be material. Fair Value Option for Microinverters Sold Since January 1, 2014 The Company’s warranty obligations related to microinverters sold since January 1, 2014 provide the Company the right, but not the requirement, to assign its warranty obligations to a third-party. Under Accounting Standards Codification (“ASC”) 825—Financial Instruments, (“fair value option”), an entity may choose to elect the fair value option for such warranties at the time it first recognizes the eligible item. The Company made an irrevocable election to account for all eligible warranty obligations associated with microinverters sold since January 1, 2014 at fair value. This election was made to reflect the underlying economics of the time value of money for an obligation that will be settled over an extended period of up to 25 years . The Company estimates the fair value of warranty obligations by calculating the warranty obligations in the same manner as for sales prior to January 1, 2014 and applying an expected present value technique to that result. The expected present value technique, an income approach, converts future amounts into a single current discounted amount. In addition to the key estimates of failure rates, claim rates and replacement costs, the Company used certain inputs that are unobservable and significant to the overall fair value measurement. Such additional assumptions included compensation comprised of a profit element and risk premium required of a market participant to assume the obligation and a discount rate based on the Company’s credit-adjusted risk-free rate. See Note 8 , (“Fair Value Measurements”) for additional information. Warranty obligations initially recorded at fair value at the time of sale will be subsequently re-measured to fair value at each reporting date. In addition, the fair value of the liability will be accreted over the corresponding term of the warranty of up to 25 years using the interest method. Warranty for Other Products The Company offers a 5 year warranty for its Envoy communications gateway and a 10 year warranty on its AC Battery storage solution. The warranties provide the Company with the right, but not the obligation, to assign its warranty obligations to a third-party. As such, warranties for Envoy and AC Battery storage solution products are accounted for under the fair value method of accounting. Research and Development Costs The Company expenses research and development costs as incurred. Research and development costs totaled $50.7 million , $50.8 million and $45.4 million in 2016 , 2015 and 2014 , respectively. Stock-Based Compensation Share-based payments are required to be recognized in the Company’s consolidated statements of operations based on their fair values and the estimated number of shares expected to vest. The Company measures stock-based compensation expense for all share-based payment awards, including stock options made to employees and directors, based on the estimated fair values on the date of the grant. The fair value of stock options granted is estimated using the Black-Scholes option valuation model. The fair value of restricted stock units granted is determined based on the price of the Company’s common stock on the date of grant. Stock-based compensation, net of estimated forfeitures, is recognized on a straight-line basis over the requisite service period, which is typically four years. Comprehensive Loss Comprehensive loss consists of two components, net loss and other comprehensive income (loss). Other comprehensive income (loss) refers to gains and losses that are recorded as an element of stockholders’ equity but are excluded from net income. The Company’s other comprehensive income (loss) consists of foreign currency translation adjustments for all periods presented. Income Taxes The Company records income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected tax consequences of temporary differences between the tax bases of assets and liabilities for financial reporting purposes and amounts recognized for income tax purposes. In estimating future tax consequences, generally all expected future events other than enactments or changes in the tax law or rates are considered. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. The Company operates in various tax jurisdictions and is subject to audit by various tax authorities. The Company follows accounting for uncertainty in income taxes which requires that the tax effects of a position be recognized only if it is “more likely than not” to be sustained based solely on its technical merits as of the reporting date. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. Recently Adopted Accounting Pronouncements In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes,” to simplify the presentation of deferred income taxes. The amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this update apply to all entities that present a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The Company adopted ASU 2015-17 during the fourth quarter of 2015 and applied it retrospectively to all periods presented. The adoption of this update did not have a material impact on the consolidated balance sheets for all periods presented and had no impact on the results of operations. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern.” The update provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The Company adopted ASU 2014-15 during the fourth quarter of 2016. Recent Accounting Pronouncements Not Yet Effective In May 2014, the FASB issued ASU 2014-09 (Topic 606), “Revenue from Contracts with Customers,” which will replace most existing revenue recognition guidance under U.S. GAAP. The updated standard’s core principle is that revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The standard generally requires an entity to identify performance obligations in its contracts, estimate the amount of variable consideration to be received in the transaction price, allocate the transaction price to each separate performance obligation, and recognize revenue as obligations are satisfied. In addition, the updated standard requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In 2015, the FASB issued guidance to defer the effective date to fiscal years beginning after December 15, 2017 with early adoption for fiscal years beginning December 15, 2016. The guidance permits the use of either a retrospective or cumulative effect transition method. The Company has not yet selected a transition method and is currently evaluating the impact of adoption on the consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” which requires most entities to measure most inventories at the lower of cost or net realizable value ("NRV"). This simplifies the evaluation from the current method of lower of cost or market, where market is based on one of three measures (i.e. replacement cost, net realizable value, or net realizable value less a normal profit margin). ASU 2015-11 does not apply to inventories measured under the last-in, first-out method or the retail inventory method, and defines NRV as the “estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted for any interim and annual financial statements that have not yet been issued. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Changes to the current guidance include the accounting for equity investments, the presentation and disclosure requirements for financial instruments, and the assessment of valuation allowance on deferred tax assets related to available-for-sale securities. In addition, ASU 2016-01 establishes an incremental recognition and disclosure requirement related to the presentation of fair value changes of financial liabilities for which the fair value option has been elected. Under this guidance, an entity would be required to separately present in other comprehensive income the portion of the total fair value change attributable to instrument-specific credit risk as opposed to reflecting the entire amount in earnings. ASU 2016-01 is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In February 2016, the FASB issued Accounting Standards Codification (“ASC”) 842 (“ASC 842”), “Leases” which replaces the existing guidance in ASC 840, Leases. ASC 842 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. ASC 842 requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use (ROU) asset and a corresponding lease liability. For finance leases the lessee would recognize interest expense and amortization of the ROU asset and for operating leases the lessee would recognize a straight-line total lease expense. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which will simplify the income tax consequences, accounting for forfeitures and classification on the Statements of Consolidated Cash Flows. ASU 2016-09 is effective for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The provisions of this update simplify the subsequent measurement of goodwill by eliminating Step 2 from the quantitative analysis. For public entities, this guidance is effective for years beginning after December 15, 2019, including interim periods within those years. Early adoption is permitted after January 1, 2017. The adoption of this ASU is not expected to have an impact on the Company’s consolidated financial statements, and it plans early adoption of the standard beginning with the 2017 goodwill impairment testing. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Inventory as of December 31, 2016 and 2015 , consists of the following (in thousands): December 31, 2016 2015 Raw materials $ 5,095 $ 2,202 Finished goods 26,865 38,598 Total inventory $ 31,960 $ 40,800 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET As of December 31, 2016 and 2015 , property and equipment consists of the following (in thousands): Estimated Useful December 31, 2016 2015 Equipment and machinery 7-10 $ 38,486 $ 34,694 Furniture and fixtures 5–7 2,635 3,556 Computer equipment 3–5 2,913 2,699 Capitalized software costs 3–5 11,324 11,041 Leasehold improvements 4–10 9,477 8,643 Construction in process 6,275 2,994 Total 71,110 63,627 Less accumulated depreciation and amortization (39,670 ) (31,509 ) Property and equipment, net $ 31,440 $ 32,118 Depreciation expense for property and equipment was $9.9 million , $10.0 million and $8.1 million , in 2016, 2015 and 2014, respectively. As of December 31, 2016 and 2015 , unamortized capitalized software costs were $1.9 million and $3.3 million , respectively. |
ACQUISITION AND DIVESTURE, GOOD
ACQUISITION AND DIVESTURE, GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
ACQUISITION AND DIVESTURE, GOODWILL AND INTANGIBLE ASSETS | ACQUISITION AND DIVESTITURE, GOODWILL AND INTANGIBLE ASSETS In 2014, the Company acquired certain assets of a business that provided solar panel maintenance services to operating PV systems for an aggregate consideration of $4.8 million consisting of $2.5 million in cash and additional contingent consideration with a fair value of $2.3 million . As a result of this transaction, the Company recorded $3.7 million of goodwill, $0.9 million of customer relationships and $0.2 million in tangible assets. The goodwill was assigned to the Company’s single reporting unit, which the Company has determined to be the same as the entity as a whole. This acquisition was not material to the Company’s financial position or results of operations. The fair value of the contingent consideration liability was adjusted at each reporting period during the two -year earn-out period, and the change in fair value was included in total operating expenses on the consolidated statements of operations. As a result of expected earn-out targets not being met, the Company recorded an adjustment in 2015 that reduced the value of the contingent consideration liability by $1.8 million . The remaining amount was settled in 2016. Payments made under this contingent consideration arrangement were negligible. As part of its efforts to align resources with the Company’s long-term competitive growth strategies and market opportunities, the Company divested this business during the fourth quarter of 2016. The Company recorded a $0.6 million net gain from this divestiture in restructuring and other charges on the consolidated statements of operations. Goodwill and Intangible Assets December 31, 2016 December 31, 2015 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Goodwill $ 3,664 $ — $ 3,664 $ 3,745 $ — $ 3,745 Other indefinite-lived intangibles $ 286 $ — $ 286 $ 286 $ — $ 286 Intangibles assets with finite lives: Customer relationships — — — 900 (180 ) 720 Patents and licensed technology 1,665 (1,006 ) 659 1,665 (451 ) 1,214 Total purchased intangibles $ 1,951 $ (1,006 ) $ 945 $ 2,851 $ (631 ) $ 2,220 In July 2014, the Company purchased certain patents related to system interconnection and photovoltaic AC module construction. The patents are being amortized over their legal life of 3 years . The customer relationships resulted from the acquisition described above, which has been subsequently divested in the fourth quarter of 2016. In October 2015, the Company licensed certain technology related to ASIC development for a 3 -year term. The aggregate amortization expense for intangibles assets was $0.7 million , $0.5 million and $0.1 million for the years ended December 31, 2016 , 2015 and 2014, respectively. As of December 31, 2016 , estimated future amortization expense related to finite-lived intangible assets was as follows: Year (In thousands) 2017 $ 430 2018 229 Total $ 659 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES As of December 31, 2016 and 2015 accrued liabilities consists of the following (in thousands): December 31, 2016 2015 Salaries, commissions, incentive compensation and benefits $ 4,227 $ 5,402 Customer rebates and sales incentives 11,786 8,274 Freight 2,321 3,063 Other 4,603 2,553 Total $ 22,937 $ 19,292 |
WARRANTY OBLIGATIONS
WARRANTY OBLIGATIONS | 12 Months Ended |
Dec. 31, 2016 | |
Product Warranties Disclosures [Abstract] | |
WARRANTY OBLIGATIONS | WARRANTY OBLIGATIONS The Company’s warranty activities during 2016 , 2015 and 2014 were as follows (in thousands): December 31, 2016 2015 2014 Balance, at beginning of year $ 30,547 33,940 $ 30,432 Accruals for warranties issued during the year 4,130 4,383 4,309 Changes in estimates 2,562 31 8,391 Settlements (8,523 ) (7,269 ) (8,793 ) Increase due to accretion expense 1,772 1,001 195 Fair value adjustments 926 (1,539 ) (594 ) Balance, at end of year 31,414 30,547 33,940 Less current portion (8,596 ) (7,072 ) (7,607 ) Long-term portion $ 22,818 $ 23,475 $ 26,333 The Company sold approximately 1.0 million first and second generation microinverters from 2008 through mid-2012. The Company has sold approximately 3.9 million third generation microinverters since mid-2012 through mid-2015. In 2016 the Company primarily sold its fourth generation microinverters, which were introduced in mid-2013 and are still being sold. Cumulative sales of the fourth generation microinverter total 8.1 million through 2016. Changes in Estimates On a quarterly basis, the Company uses the best and most complete underlying information available, following a consistent, systematic and rational methodology to determine its warranty obligations. The Company considers all available evidence to assess the reasonableness of all key assumptions underlying its estimated warranty obligations for each generation of microinverter. The changes in estimates discussed below resulted from consideration of new or additional information becoming available and subsequent developments. Changes in estimates included in the table above were comprised of the following: 2016 In 2016, primarily in the fourth quarter, the Company recorded the impact of product-cost reduction initiatives for its sixth generation microinverters, which are backwards compatible with previous microinverter generations and will be used to fulfill future warranty obligations for all microinverter generations in the field. This resulted in a $2.1 million decrease to warranty expense related to estimated future replacement costs. This decrease was offset by an increase to warranty expense of $1.5 million for an increase in labor reimbursement costs expected to be paid to third party installers performing replacement services for its second generation product. In addition, the Company recorded additional warranty expense of $3.0 million based on continuing analysis of field performance data and diagnostic root-cause failure analysis primarily relating to its second generation product. 2015 In 2015, primarily in the fourth quarter, the Company implemented product-cost reduction initiatives for its fourth generation microinverters, which are backwards compatible with prior microinverter generations and are used to fulfill warranty obligations for all microinverter generations in the field. This resulted in a $1.5 million decrease to warranty expense related to estimated future replacement costs. This decrease was offset by an increase to warranty expense of $0.7 million for an increase in labor reimbursement costs expected to be paid to third party installers performing replacement services for its second generation product. In addition, the Company recorded additional warranty expense of $0.8 million based on continuing analysis of field performance data and diagnostic root-cause failure analysis performed on returned units of its second generation product. 2014 In 2014, primarily in the second and fourth quarters, the Company experienced actual failures of its second generation microinverters that exceeded its then current failure rate estimate. Based on continuing analysis of field performance data and diagnostic root-cause failure analysis performed on returned units, the Company concluded that it was necessary to increase the estimated failure rates for its second generation product and recorded additional warranty expense $8.6 million in 2014. In addition, net changes in estimates related to replacement costs reduced warranty expense for all product generations by $0.2 million and were comprised of increased estimates of certain labor reimbursement costs expected to be paid to third party installers performing replacement services for its second generation product of $1.3 million , offset by a $1.5 million decrease to estimated costs of replacement microinverter units for all product generations. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: • Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of such assets or liabilities do not entail a significant degree of judgment. • Level 2—Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. • Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The following table presents the Company’s assets and liabilities that were measured at fair value on a recurring basis and its categorization within the fair value hierarchy at December 31, 2016 and 2015 (in thousands): December 31, Fair Value Hierarchy 2016 2015 Assets: Foreign currency forward contracts Level 2 $ — $ 86 Liabilities: Foreign currency forward contracts Level 2 $ — $ 9 Warranty obligations Level 3 10,332 6,182 Contingent consideration Level 3 — 473 Foreign Currency Forward Contracts The Company utilizes foreign currency forward contracts from time to time to reduce the impact of foreign currency fluctuations arising from both sales and purchases denominated in Euros and the British Pound Sterling. As of December 31, 2016 and 2015 , the aggregate gross notional amounts of outstanding foreign currency forward contracts, all with maturities of less than one year, were $0.0 million and $2.4 million . The Company recorded $0.1 million , $0.3 million and $0.3 million of net gains in 2016, 2015, and 2014, respectively, related to foreign currency forward contracts. Fair Value Option for Warranty Obligations Related to Microinverters Sold Since January 1, 2014 The Company estimates the fair value of warranty obligations by calculating the warranty obligations in the same manner as for sales prior to January 1, 2014 and applying an expected present value technique to that result. The expected present value technique, an income approach, converts future amounts into a single current discounted amount. In addition to the key estimates of failure rates, claim rates and replacement costs, the Company used certain Level 3 inputs which are unobservable and significant to the overall fair value measurement. Such additional assumptions included a discount rate based on the Company’s credit-adjusted risk-free rate and compensation comprised of a profit element and risk premium required of a market participant to assume the obligation. The following table provides a reconciliation of the beginning and ending balances of warranty obligations measured at fair value for the periods indicated (in thousands): Balance—December 31, 2013 $ — Accruals for warranties issued during period 3,989 Changes in estimates 26 Settlements (54 ) Increase due to accretion expense 195 Fair value adjustments (594 ) Balance—December 31, 2014 $ 3,562 Accruals for warranties issued during period 4,140 Changes in estimates (755 ) Settlements (227 ) Increase due to accretion expense 1,001 Fair value adjustments (1,539 ) Balance—December 31, 2015 $ 6,182 Accruals for warranties issued during period 4,091 Changes in estimates (1,616 ) Settlements (1,023 ) Increase due to accretion expense 1,772 Fair value adjustments 926 Balance—December 31, 2016 $ 10,332 Quantitative and Qualitative Information about Level 3 Fair Value Measurements As of December 31, 2016 , the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 are as follows: Item Measured at Fair Value Valuation Technique Description of Significant Unobservable Input Percent Used (Weighted-Average) Warranty obligations for microinverters sold since January 1, 2014 Discounted cash flows Profit element and risk premium 17% Credit-adjusted risk-free rate 19% As of December 31, 2015, the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 are as follows: Item Measured at Fair Value Valuation Technique Description of Significant Unobservable Input Percent Used (Weighted-Average) Warranty obligations for microinverters sold since January 1, 2014 Discounted cash flows Profit element and risk premium 17% Credit-adjusted risk-free rate 25% Contingent consideration Probability-weighted discounted cash flows Risk-adjusted discount rate 17% Sensitivity of Level 3 Inputs Warranty Obligations Each of the significant unobservable inputs is independent of the other. The profit element and risk premium are estimated based on requirements of a third-party participant willing to assume the Company’s warranty obligations. The credit-adjusted risk-free rate is determined by reference to the Company’s own credit standing at the fair value measurement date. Increasing (decreasing) the profit element and risk premium input by 100 basis points would not have a material impact on the fair value measurement of the liability. Increasing (decreasing) the discount rate by 100 basis points would result in a ( $370,000 ) $402,000 (decrease) increase, respectively, to the fair value measurement of the liability. |
RESTRUCTURING AND OTHER
RESTRUCTURING AND OTHER | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND OTHER | RESTRUCTURING AND OTHER The Company took actions in 2016 to reduce its operating loss including the reduction of its global workforce by approximately 11% , elimination of certain non-core projects, divestiture of its service business and consolidation of office space in its corporate headquarters. The following table presents the details of the Company’s restructuring charges for the periods indicated (in thousands): Years Ended December 31, 2016 2015 2014 Employee severance and benefit arrangements $ 1,263 $ — $ — Asset impairments 2,575 — — Lease loss and other 579 — — Gain on business divestiture (640 ) — — Total restructuring and other $ 3,777 $ — $ — The following table provides information regarding changes in the Company’s accrued restructuring balance for the periods indicated (in thousands): Employee Severance and Benefits Asset Impairments Lease Loss and Other Total Balance at beginning of period as of December 31, 2015 $ — $ — $ — $ — Charges 1,263 2,575 579 4,417 Cash payments (1,065 ) — (95 ) (1,160 ) Non-cash settlement — (2,575 ) — (2,575 ) Balance at end of period as of December 31, 2016 $ 198 $ — $ 484 $ 682 The following table provides information regarding the computation of the Company’s gain on business divestiture included in restructuring and other (in thousands): Business Divestiture Consideration $ 1,375 Identifiable assets (979 ) Contingent Consideration 244 Gain on business divestiture $ 640 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Revolving Credit Facility The Company maintained a $50.0 million revolving credit facility with Wells Fargo Bank, N.A. (“Wells Fargo”) that was entered into on November 7, 2012, as first amended on February 14, 2014. On December 18, 2015, the Company entered into an amended and restated revolving credit agreement (the “Revolver”) which extended the maturity date from November 7, 2016 to November 7, 2019 and added an uncommitted accordion feature that could increase the size of the facility by $25.0 million , subject to certain approvals and meeting certain criteria. Availability under the Revolver was subject to a borrowing base calculation that limits availability to a percentage of eligible domestic accounts receivable plus a percentage of the value of eligible domestic inventory, less certain reserves. Borrowings under the Revolver were charged interest in cash at an annual rate equal to, at the Company’s option, either LIBOR or a “base rate” that is comprised of, among other things, the prime rate, plus a margin that is between 1.0% and 3.75% depending on the currency borrowed and the specific term of repayment. The Revolver required the Company to pay a commitment fee between 0.25% and 0.375% based on the average daily unused portion of the revolving credit commitment. The Revolver was secured by a pledge of substantially all assets of the Company other than intellectual property and contains customary affirmative and negative covenants (including restrictions on the Company’s ability to make dividend payments) and events of default. In addition, the Revolver required the Company to maintain at least $15.0 million of liquidity at all times, of which at least $12.5 million had to be undrawn availability. As of December 31, 2016 , the Company was in compliance with such covenants under the Revolver. As of December 31, 2016 , the amount outstanding under the Revolver was $10.1 million leaving an unused borrowing capacity of $12.9 million . The weighted-average interest rate related to these borrowings was 5.3% . $17.0 million was outstanding under the Revolver at December 31, 2015 . Term Loan In July 2016, the Company entered into a Term Loan Agreement with lenders that are affiliates of Tennenbaum Capital Partners, LLC. Under the agreement, the lenders committed to advance a term loan in an aggregate principal amount of up to $25.0 million with a maturity date of July 1, 2020. The Company borrowed the entire $25.0 million of term loan commitments on the loan closing date. Monthly payments due through June 30, 2017 are interest only, followed by consecutive equal monthly payments of principal plus accrued interest beginning on July 1, 2017 and continuing through the maturity date. The term loan provides for an interest rate per annum equal to the higher of (i) 10.25% or (ii) LIBOR plus 9.5625% , subject to a 1.0% reduction if we achieve minimum levels of Revenue and EBITDA (each as defined in the Term Loan Agreement) for the twelve-consecutive month period ending June 30, 2017 as set forth in the Term Loan Agreement. In addition, the Company paid a commitment fee of 3.3% of the loan amount upon closing and a closing fee of 10.0% of the loan amount is payable in four equal installments at each anniversary of the closing date. The Company may elect to prepay the loan by incurring a prepayment fee between 1% and 3% of the principal amount of the term loan depending on the timing and circumstances of prepayment. The term loan is secured by a second-priority security interest on substantially all the Company’s assets except intellectual property. The Term Loan Agreement does not contain any financial covenants, but is subject to customary affirmative and negative covenants including restrictions on creation of liens, dispositions of assets, dividends, mergers, or changing the nature of the Company’s business; in each case, subject to certain customary exceptions. In addition, the Term Loan Agreement contains certain customary events of default including, but not limited to, failure to pay interest, principal and fees or other amounts when due, material breach of any representation or warranty, covenant defaults, cross defaults to other material indebtedness, events of bankruptcy and the occurrence of a material adverse change (as defined in the agreement) to the Company’s business. The Term Loan Agreement offers TCP typical rights and remedies in any event of default, including the ability to declare all amounts outstanding immediately due and payable. The Company does not expect the lender to declare default under any event, including the material adverse change clause. Long-term debt was comprised of the following at December 31, 2016 and 2015 (in thousands): December 31, December 31, Term loan $ 25,000 $ — Less unamortized discount and issuance costs (1,200 ) — Carrying amount of debt 23,800 — Less current portion (3,032 ) — Long-term debt $ 20,768 $ — As of December 31, 2016 , the amount of scheduled principal payments due on the term loan is as follows (in thousands): Year Amounts 2017 $ 3,032 2018 7,824 2019 8,665 2020 5,479 Total $ 25,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating Leases —The Company leases office facilities under noncancelable operating leases that expire on various dates through 2022. The terms of the lease agreements generally provide for rental payments on a graduated basis, and certain leases require the Company to pay its portion of executory costs such as taxes, insurance, and operating expenses. The Company recognizes rent expense on a straight-line basis over the lease term. Rent expense for 2016 , 2015 and 2014 was $3.8 million , $3.2 million and $2.6 million , respectively. The Company’s minimum lease payments under noncancelable operating leases, exclusive of executory costs, as of December 31, 2016 are as follows (in thousands): 2017 $ 2,778 2018 2,770 2019 2,812 2020 2,653 2021 2,677 Thereafter 2,291 Total minimum lease payments $ 15,981 Purchase Obligations —The Company has contractual obligations related to component inventory that its primary contract manufacturer procures on our behalf in accordance with its production forecast and a take-or-pay supply agreement for the purchase of silicone encapsulates that expires on December 31, 2018. As of December 31, 2016 , these purchase obligations totaled approximately $16.9 million . Contingencies —From time to time, the Company may be involved in litigation relating to claims arising out of its operations. The Company is not currently involved in any material legal proceedings. The Company may, however, be involved in material legal proceedings in the future. Such matters are subject to uncertainty and there can be no assurance that such legal proceedings will not have a material adverse effect on its business, results of operations, financial position or cash flows. |
SALE OF COMMON STOCK
SALE OF COMMON STOCK | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
SALE OF COMMON STOCK | SALE OF COMMON STOCK On September 28, 2016, the Company completed a public offering of 13,000,000 shares of its common stock at a price to the public of $1.20 per share. Net proceeds realized were approximately $14.0 million after deducting underwriting fees and estimated offering costs. The Company intends to use the net proceeds for working capital and general corporate purposes. On October 11, 2016, the underwriter for the offering exercised in full an over-allotment option to purchase an additional 1,950,000 shares of the Company’s common stock, which generated additional net proceeds of approximately $2.2 million . In December of 2016, the Company entered into an At Market Issuance Sales Agreement (ATM) under which it may sell shares of its common stock up to a gross aggregate offering price of up to $17.0 million . The Company is not obligated to make any sales of the shares under the Sales Agreement. As of December 31, 2016, the Company had not sold any shares under the ATM. The Company will have realized the full gross proceeds of $17.0 million from common stock sold under the ATM at the time of this filing. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Description of Equity Incentive Plans 2006 Plan Under the Company’s 2006 Equity Incentive Plan (the “2006 Plan”), equity awards granted generally vest over a four -year period from the date of grant with a contractual term of up to 10 years . As of December 31, 2016 , there were 3.0 million shares of options outstanding under the 2006 Plan. No further stock options or other stock awards may be granted under the 2006 Plan. 2011 Plan Under the 2011 Equity Incentive Plan (the “2011 Plan”), the Company could initially issue up to 2,643,171 shares of its common stock pursuant to stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, and other forms of equity compensation, or collectively, stock awards, all of which may be granted to employees, including officers, and to non-employee directors and consultants. Options granted under the 2011 Plan before August 1, 2012 generally expire 10 years after the grant date and options granted thereafter generally expire 7 years after the grant date. Equity awards granted under the 2011 Plan generally vest over a four -year period from the date of grant based on continued employment. The number of shares of the Company’s common stock authorized for issuance under the 2011 Plan will automatically increase, on each January 1 by 4.5% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, or such lesser number of shares of common stock as determined by the board of directors. As of December 31, 2016 , 2,239,444 shares remained available for issuance pursuant to future grants under the 2011 Plan. On January 1, 2017, the shares available for issuance under the 2011 Plan automatically increased by 2,802,124 shares. 2011 Employee Stock Purchase Plan The 2011 Employee Stock Purchase Plan (“ESPP”) became effective immediately upon the execution and delivery of the underwriting agreement for the Company’s IPO on March 29, 2012. The ESPP authorized the issuance of 669,603 shares of the Company’s common stock pursuant to purchase rights granted to employees. The number of shares of common stock reserved for issuance will automatically increase, on each January 1, by a lesser of (i) 330,396 shares of the Company’s common stock or or (ii) 1.0% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, as determined by the Company’s board of directors. The ESPP is implemented by concurrent offering periods and each offering period may contain up to four interim purchase periods. In general, offering periods consists of the 24 months periods commencing on each May 15 and November 15 of a calendar year. Generally, all full time employees, including executive officers, are eligible to participate in the ESPP. The ESPP permits eligible employees to purchase the Company’s common stock through payroll deductions, which may not exceed 15% of the employee’s total compensation subject to certain limits. Stock may be purchased under the plan at a price equal to 85% of the fair market value of the Company’s stock on either the date of purchase or the first day of an offering period, whichever is lower. A two year look-back feature in the Company’s ESPP causes an offering period to reset if the fair value of the Company’s common stock on a purchase date is less than that on the initial offering date for that offering period. The reset feature, when triggered, will be accounted for as a modification to the original offering, resulting in additional expense to be recognized over the 24 -month period of the new offering. During any calendar year, participants may not purchase shares of common stock having a value greater than $25,000 , based on the fair market value per share of the common stock at the beginning of an offering period. As of December 31, 2016 , there were 37,821 shares remained available for future issuance under the 2011 ESPP. On January 1, 2017, the shares available for issuance under the 2011 ESPP automatically increased by 330,996 shares. Valuation of Equity Awards Stock Options The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: • Expected term— The expected term of the option awards represents the period of time between the grant date of the option awards and the date the option awards are either exercised, converted or canceled, including an estimate for those option awards still outstanding. The Company used the simplified method, as permitted by the SEC for companies with a limited history of stock option exercise activity, to determine the expected term for its option grants. • Expected volatility— The expected volatility was calculated based on the Company’s historical stock prices, supplemented as necessary with historical volatility of the common stock of several peer companies with characteristics similar to those of the Company. • Risk-free interest rate— The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant and with a maturity that approximated the Company’s expected term. • Dividend yield— The dividend yield was based on the Company’s dividend history and the anticipated dividend payout over its expected term. A summary of the weighted-average assumptions used to estimate the fair values of the stock options granted during the periods presented is as follows: Years Ended December 31, 2016 2015 2014 Expected term (in years) 4.5 4.5 4.5 Expected volatility 80.0 % 72.5 % 67.7 % Annual risk-free rate of return 1.1 % 1.4 % 1.4 % Dividend yield — % — % — % Weighted-average fair value on grant date $ 1.29 $ 4.68 $ 5.64 Restricted Stock Units The fair value of restricted stock units granted is determined based on the price of the Company’s common stock on the date of grant. Stock-Based Compensation Expense The Compensation cost for all stock-based awards expected to vest is measured at fair value on the date of grant and recognized ratably over the requisite service period. The following table summarizes the components of total stock-based compensation expense included in the consolidated statements of operations for the periods presented (in thousands): Years Ended December 31, 2016 2015 2014 Cost of revenues $ 1,188 $ 1,217 $ 816 Research and development 3,879 4,559 3,127 Sales and marketing 2,144 3,162 2,487 General and administrative 3,115 3,758 3,310 Total stock-based compensation expense $ 10,326 $ 12,696 $ 9,740 A summary of stock-based compensation expense associated with each type of award for the periods presented is as follows (in thousands): Years Ended December 31, 2016 2015 2014 Stock options and restricted stock units $ 8,384 $ 10,685 $ 8,845 ESPP 1,942 2,011 895 Total stock-based compensation expense $ 10,326 $ 12,696 $ 9,740 As of December 31, 2016 , there was approximately $16.2 million of total unrecognized compensation cost related to unvested equity awards, net of expected forfeitures, which is expected to be recognized over a weighted-average period of 2.6 years . No income tax benefit has been recognized relating to stock-based compensation expense and no tax benefits have been realized from exercised stock options. Equity Awards Activity Stock Options A summary of the Company’s stock option activity for the periods presented is as follows (in thousands, except per share data): Shares Weighted- Options outstanding — December 31, 2013 8,509 $ 3.94 Granted 1,311 10.36 Exercised (886 ) 4.33 Canceled (302 ) 7.58 Options outstanding — December 31, 2014 8,632 4.75 Granted 1,289 8.20 Exercised (1,079 ) 1.40 Canceled (672 ) 9.31 Options outstanding — December 31, 2015 8,170 5.36 Granted 2,440 2.12 Exercised (375 ) 0.39 Canceled (1,505 ) 6.01 Options outstanding — December 31, 2016 8,730 4.55 The following table summarizes information about stock options outstanding at December 31, 2016 : Options Outstanding Options Exercisable Range of Exercise Prices Number of Weighted- Weighted- Number of Weighted- $0.27 —– $1.63 2,594 3.2 $ 1.00 2,521 $ 1.00 $1.67 —– $2.14 1,839 5.8 2.08 358 2.09 $2.19 —– $7.16 1,765 3.8 5.23 1,412 5.41 $7.30 —– $9.69 1,797 4.0 8.34 1,517 8.28 $10.27 —– $16.01 735 4.5 12.40 481 12.27 Total 8,730 6,289 The intrinsic value of options exercised in 2016 , 2015 and 2014 was $0.7 million , $4.9 million and $5.2 million , respectively. As of December 31, 2016 , there were 8.6 million options outstanding that were vested and expected to vest. Such options have a weighted-average exercise price of $4.57 and a weighted-average remaining contractual term of 4.1 years . As of December 31, 2016 , the aggregate intrinsic value was $0.9 million for the 6.3 million exercisable shares. The intrinsic value is based on the Company’s common stock fair value of $1.01 per share as of December 31, 2016 . Restricted Stock Units A summary of restricted stock unit activity for the periods presented is as follows: (in thousands, except per share data): Restricted Stock Units Weighted Average Outstanding at December 31, 2013 418 $ 6.31 Granted 1,250 8.68 Vested (281 ) 7.38 Canceled (42 ) 7.56 Outstanding at December 31, 2014 1,345 8.25 Granted 683 11.22 Vested (488 ) 8.58 Canceled (227 ) 10.32 Outstanding at December 31, 2015 1,313 9.31 Granted 54 1.99 Vested (464 ) 9.06 Canceled (297 ) 8.32 Outstanding at December 31, 2016 606 9.33 The intrinsic value of restricted stock units vested during 2016 , 2015 and 2014 was $0.9 million , $4.2 million and $3.2 million , respectively. As of December 31, 2016 , the restricted stock units outstanding had a weighted average remaining contractual term of 1.7 years with an intrinsic value of $0.6 million . ESPP A summary of ESPP activity for the years presented is as follows: (in thousands, except per share data): Years Ended December 31, 2016 2015 2014 Proceeds from common stock issued under ESPP $ 999 $ 2,497 $ 1,531 Shares of common stock issued 659 499 410 Weighted-average price per share $ 1.52 $ 5.00 $ 3.73 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The domestic and foreign components of loss before provision for income taxes consisted of the following (in thousands): Years Ended December 31, 2016 2015 2014 United States $ (67,631 ) $ (22,120 ) $ (8,732 ) Foreign 1,644 1,417 1,446 Total $ (65,987 ) $ (20,703 ) $ (7,286 ) The provision for income taxes for the years presented is as follows (in thousands): Years Ended December 31, 2016 2015 2014 Current: Federal $ — $ — $ — State 36 44 85 Foreign 785 693 716 821 737 801 Deferred: Federal 594 652 — State 59 41 — Foreign 1 (51 ) (35 ) 654 642 (35 ) Provision for income taxes $ 1,475 $ 1,379 $ 766 A reconciliation of the provision for income taxes and the amount computed by applying the statutory federal income tax rate of 34% to loss before income taxes for the years presented is as follows (in thousands): Years Ended December 31, 2016 2015 2014 Income tax benefit at statutory federal rate $ (22,435 ) $ (7,039 ) $ (2,477 ) State taxes, net of federal benefit 63 56 (4,576 ) Change in valuation allowance 21,370 7,812 16,646 Foreign tax rate and tax law differential 27 (29 ) (43 ) Tax credits (1,179 ) (1,553 ) (5,619 ) Stock-based compensation 1,775 1,932 957 Other permanent items 776 61 231 Other nondeductible/nontaxable items 920 (72 ) (4,586 ) Uncertain tax positions 158 211 233 Provision for income taxes $ 1,475 $ 1,379 $ 766 A summary of significant components of the Company’s deferred tax assets and liabilities as of December 31, 2016 and 2015 is as follows (in thousands): December 31, 2016 2015 Deferred tax assets: Allowances and reserves $ 16,032 $ 14,639 Net operating loss and tax credit carryforwards 67,875 46,812 Stock-based compensation 3,033 3,055 Deferred revenue 8,289 5,966 Fixed assets and intangibles 7,661 6,830 Other 2,857 3,327 Subtotal 105,747 80,629 Less valuation allowance (104,554 ) (80,529 ) Total deferred tax assets, net of valuation allowance 1,193 100 Deferred tax liabilities: Goodwill (1,346 ) (693 ) Unremitted foreign earnings (748 ) — Total deferred tax liabilities (2,094 ) (693 ) Net deferred tax asset/(liability) $ (901 ) $ (593 ) Accounting for income taxes requires that companies assess whether valuation allowances should be established against their deferred tax assets based on consideration of all available evidence, both positive and negative, using a “more likely than not” standard. This assessment considers, among other matters, the nature, frequency and amount of recent losses, the duration of statutory carryforward periods, and tax planning strategies. In making such judgments, significant weight is given to evidence that can be objectively verified. Due to the history of losses the Company has generated in the United States since inception, the Company believes that it is more-likely-than-not that all of its U.S. and state deferred tax assets will not be realized as of December 31, 2016 . Therefore, the Company has recorded a full valuation allowance on its U.S. and state deferred tax assets at December 31, 2016. Should the Company determine that it would be able to realize its deferred tax assets in the foreseeable future, an adjustment to the deferred tax assets may cause a material increase to income in the period such determination is made. Significant management judgment is required in determining the period in which the reversal of a valuation allowance should occur. During 2016, the Company re-evaluated its overall business strategy and determined that it no longer intends to permanently reinvest the earnings of the foreign subsidiaries abroad. The Company recorded a deferred tax liability related to the U.S. federal and state income taxes and foreign withholding taxes of $0.7 million related to remaining unremitted foreign earnings. The Company has net operating loss carryforwards for federal and California income tax purposes of approximately $130.9 million and $70.9 million , respectively, as of December 31, 2016 . The federal and state net operating loss carryforwards, if not utilized, will expire beginning in 2028. Utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization. The Company has completed a study to assess whether an ownership change has occurred or whether there have been multiple ownership changes since the Company became a loss corporation under the Code. However, the Company does not anticipate these limitations will significantly impact its ability to utilize the net operating losses and tax credit carryforwards. The Company has approximately $10.9 million of federal research credit and $11.3 million of state research credit carryforwards. The federal credits begin to expire in 2026 and the state credits can be carried forward indefinitely. As a result of certain realization requirements under income tax accounting for stock-based compensation, the table of deferred tax assets and liabilities shown above does not include certain deferred tax assets as of December 31, 2016 and 2015 that arose directly from tax deductions related to equity compensation greater than compensation recognized for financial reporting. Equity will be increased by $2.3 million if and when such deferred tax assets are ultimately realized. The accounting for uncertain tax positions prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company is required to recognize in the financial statements the impact of a tax position, if that position is more-likely-than-not of being sustained on audit, based on the technical merits of the position. The Company recorded a net charge for unrecognized tax benefits in 2016 of $0.5 million . The Company does not have any tax positions for which it is reasonably possible the total amount of gross unrecognized tax benefits will increase or decrease over the next year. The unrecognized tax benefits may increase or change during the next year for items that arise in the ordinary course of business. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. A tabular reconciliation of the total amounts of unrecognized tax benefits for the years presented is as follows (in thousands): Year Ended December 31, 2016 2015 2014 Unrecognized tax benefits—at beginning of year $ 5,482 $ 4,426 $ 376 Increases in balances related to tax positions taken in prior years — 14 1,895 Increases in balances related to tax positions taken in current year 571 1,053 2,155 Lapses in statutes of limitations (37 ) (11 ) — Unrecognized tax benefits—at end of year $ 6,016 $ 5,482 $ 4,426 The Company’s tax returns continue to remain subject to examination by U.S. federal authorities for the years 2006 through 2016 and by California state authorities for the years 2006 through 2016 due to the use of net operating losses generated in tax years prior to the statutory three-year limit. |
CONCENTRATION OF CREDIT RISK AN
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | 12 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS | CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS The Company is potentially subject to financial instrument concentration of credit risk through its cash and cash equivalents and accounts receivable. The Company places its cash and cash equivalents with high quality institutions and performs periodic evaluations of their relative credit standing. Accounts receivable can be potentially exposed to a concentration of credit risk with its major customers. As of December 31, 2016 , amounts due from one customer represented 25% of the total accounts receivable balance. As of December 31, 2015 , amounts due from one customer represented 15% of the total accounts receivable balance. In 2016 , one customer accounted for approximately 18% of total net revenues. In 2015, two customers accounted for approximately 17% and 12% of total net revenues. In 2014, two customers accounted for approximately 24% and 16% of total net revenues. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET LOSS PER SHARE Basic net loss per share is calculated by dividing net loss by the weighted average number of shares outstanding for the period. Diluted net loss per share is calculated by dividing net loss by the weighted average number of common shares and potential dilutive common share equivalents outstanding during the period if the effect is dilutive. The Company’s potentially dilutive common shares include outstanding stock options and warrants and non-vested restricted stock units. The following table presents the potential common shares outstanding that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive (in thousands): Years Ended December 31, 2016 2015 2014 Stock options to purchase common stock 8,981 8,646 8,502 Unvested restricted stock units 906 1,506 1,258 Warrants to purchase common stock — 111 195 Total 9,887 10,263 9,955 |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHIC INFORMATION The Company’s chief operating decision maker is the Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis. The Company has one business activity, which entails the design, development, manufacture and sale of microinverter systems for the solar photovoltaic industry. There are no segment managers who are held accountable for operations, operating results or plans for levels or components below the consolidated unit level. Accordingly, management has determined that the Company has a single operating and reportable segment. The following tables present net revenues (based on the destination of shipments) and long-lived assets by geographic region as of and for the periods presented (in thousands): Net Revenues Years Ended December 31, 2016 2015 2014 United States $ 259,080 $ 303,195 $ 294,549 International 63,511 54,054 49,355 Total $ 322,591 $ 357,249 $ 343,904 Long-Lived Assets As of December 31, 2016 2015 2014 United States $ 22,634 $ 21,913 $ 20,037 China 5,727 7,950 9,585 Other 3,079 2,255 1,202 Total $ 31,440 $ 32,118 $ 30,824 |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | QUARTERLY FINANCIAL INFORMATION (UNAUDITED) The following tables show a summary of the Company’s quarterly financial information for each of the four quarters of 2016 and 2015 (in thousands, except per share data): Year Ended December 31, 2016 March 31 June 30 September 30 December 31 Net revenues $ 64,121 $ 79,185 $ 88,684 $ 90,601 Cost of revenues 52,361 65,049 72,805 74,367 Gross profit 11,760 14,136 15,879 16,234 Operating expenses: Research and development 13,066 13,091 13,169 11,378 Sales and marketing 10,215 9,987 11,016 7,592 General and administrative 7,567 6,846 6,708 6,296 Restructuring charges — — 2,717 1,060 Total operating expenses 30,848 29,924 33,610 26,326 Loss from operations (19,088 ) (15,788 ) (17,731 ) (10,092 ) Other income (expense), net 529 (591 ) (881 ) (2,345 ) Loss before income taxes (18,559 ) (16,379 ) (18,612 ) (12,437 ) Provision for income taxes (236 ) (344 ) (144 ) (751 ) Net loss $ (18,795 ) $ (16,723 ) $ (18,756 ) $ (13,188 ) Net loss per share, basic and diluted $ (0.41 ) $ (0.36 ) $ (0.40 ) $ (0.21 ) Year Ended December 31, 2015 March 31 June 30 September 30 December 31 Net revenues $ 86,653 $ 102,093 $ 102,874 $ 65,629 Cost of revenues 58,629 69,066 71,408 49,929 Gross profit 28,024 33,027 31,466 15,700 Operating expenses: Research and development 13,430 12,786 12,059 12,544 Sales and marketing 11,937 12,508 10,510 10,922 General and administrative 8,205 8,102 7,118 7,405 Total operating expenses 33,572 33,396 29,687 30,871 Loss from operations (5,548 ) (369 ) 1,779 (15,171 ) Other income (expense), net (605 ) (8 ) (844 ) 63 Loss before income taxes (6,153 ) (377 ) 935 (15,108 ) Provision for income taxes (167 ) (226 ) (311 ) (675 ) Net income (loss) $ (6,320 ) $ (603 ) $ 624 $ (15,783 ) Net income (loss) per share, basic $ (0.14 ) $ (0.01 ) $ 0.01 $ (0.35 ) Net income (loss) per share, diluted $ (0.14 ) $ (0.01 ) $ 0.01 $ (0.35 ) |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT In July 2016, the Company entered into a Term Loan Agreement (the “Original Term Loan”) with lenders that are affiliates of Tennenbaum Capital Partners, LLC. (the “Lenders”). Under the agreement, the Lenders committed to advance a term loan in an aggregate principal amount of up to $25.0 million with a maturity date of July 1, 2020. The Company borrowed the entire $25.0 million of term loan commitments on the loan closing date. Monthly payments due through June 30, 2017 are interest only, followed by consecutive equal monthly payments of principal plus accrued interest beginning on July 1, 2017 and continuing through the maturity date. The term loan provides for an interest rate per annum equal to the higher of (i) 10.25% or (ii) LIBOR plus 9.5625% , subject to a 1.0% reduction if the Company achieves minimum levels of Revenue and EBITDA (each as defined in the Term Loan Agreement) for the twelve-consecutive month period ending June 30, 2017 as set forth in the Term Loan Agreement. In addition, the Company paid a commitment fee of 3.3% of the loan amount upon closing and a closing fee of 10.0% of the loan amount is payable in four equal installments at each anniversary of the closing date. The Company may elect to prepay the loan by incurring a prepayment fee between 1% and 3% of the principal amount of the term loan depending on the timing and circumstances of prepayment. In February 2017, the Company entered into an Amended and Restated Loan and Security Agreement that amended and restated the Original Term Loan. The Loan Agreement provides for a $25.0 million secured term loan to the Company (the “New Term Loan”), which is in addition to the $25.0 million secured term loan borrowed by the Company under the Original Term Loan (together with the “New Term Loan” the “Term Loans”). The New Term Loan has the same July 1, 2020 maturity date that was applicable to the Original Term Loan. The New Term Loan was fully drawn at closing, with approximately $10.3 million of the proceeds used to repay existing amounts due under the Company’s Revolver with Wells Fargo. Upon the repayment of loans under the Wells Fargo Revolver, the Wells Fargo Revolving Credit Agreement was terminated. The Company expects to use the remainder of the proceeds from the New Term Loan for general corporate purposes. Monthly payments under the Term Loans through February 28, 2018 are interest only, followed by consecutive equal monthly payments of principal plus accrued interest beginning on March 1, 2018 and continuing through the maturity date; provided, however, that the Company may extend the interest only period on a month to month basis up to February 28, 2019 if no Event of Default (as defined in the Loan Agreement) has occurred and is continuing and the Company has Consolidated Operating Income (as defined in the Loan Agreement) for the calendar year 2017 and each month thereafter on a trailing twelve consecutive month basis of at least $15.0 million (collectively, the “Accommodation Conditions”). The Term Loans provide for an interest rate per annum equal to the greater of (i) 10.3125% and (ii) LIBOR plus 9.25% , subject to a 1.0% reduction if and for so long as the Accommodation Conditions have been met. In addition, the Company paid a commitment fee of 3.0% of the New Term Loan amount upon closing and a closing fee of 4.0% of the New Term Loan amount, which is payable with the closing fee under the Original Term Loan in four equal installments at each anniversary of the closing date of the Original Loan Agreement. The Company may elect to prepay the Term Loans by incurring a prepayment fee between 1% and 3% of the principal amount of the Term Loans depending on the timing and circumstances of prepayment. The Term Loans are secured by a first-priority security interest on substantially all assets of the Company; provided, however that the security interest in the Company’s intellectual property may be released if the Company satisfies certain requirements. The Company’s obligations under the Term Loans are not guaranteed by any of the Company’s existing subsidiaries, nor have any existing subsidiaries of the Company pledged any of their assets to secure the Term Loans. The Loan Agreement requires that (i) at all times from the closing date to and including March 31, 2018, the Company, and any future guarantors, have Unrestricted Cash (as defined in the Loan Agreement) of at least $10.0 million ; (ii) at all times from the closing date to and including March 31, 2018, that the aggregate amount of Consolidated Unrestricted Cash, plus the value of Consolidated Receivables, plus the value of Consolidated Inventory (each as defined in the Loan Agreement) divided by the outstanding principal amount of Term Loans, shall equal or exceed 1.5 ; and (iii) at all times from April 1, 2018 and thereafter, that the aggregate amount of Consolidated Unrestricted Cash, plus the value of Consolidated Receivables, plus the value of Consolidated Inventory divided by the outstanding principal amount of Term Loans, shall equal or exceed 1.75 . In addition, the Loan Agreement is subject to customary affirmative and negative covenants including restrictions on creation of liens, dispositions of assets, mergers, changing the nature of its business and dividends and other distributions, in each case subject to certain exceptions. The Loan Agreement also contains certain customary events of default including, but are not limited to, failure to pay interest, principal and fees or other amounts when due, material breach of any representation or warranty, covenant defaults, cross defaults to other material indebtedness, the occurrence of a “material adverse change” and certain events of bankruptcy or insolvency. In connection with the New Term Loan, the Company issued to the Lenders warrants to purchase an aggregate 1,220,000 shares of the Company’s Common Stock at an exercise price of $1.05 per share. The warrants have a term of seven years and contain a “cashless exercise” feature that allows the holder to exercise the warrant without a cash payment upon the terms set forth therein. |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ materially from management’s estimates using different assumptions or under different conditions. |
Revenue Recognition | Revenue Recognition The Company generates revenue from sales of its microinverter systems, which include microinverter units and related accessories, an Envoy communications gateway, the cloud-based Enlighten monitoring service, and AC Battery storage solutions to distributors, large installers, OEMs and strategic partners. Enlighten service revenue represented less than 2% of the total revenues for all periods presented. Revenue from sales of the Company’s products is recognized when: (i) persuasive evidence of an arrangement exists; (ii) delivery of the products has occurred in accordance with the terms of the sales agreement and title and risk of loss have passed to the customer; (iii) the sale price is fixed or determinable; and (iv) collection is reasonably assured. Provisions for rebates, sales incentives, and discounts to customers are accounted for as reductions in revenue in the same period the related sales are recorded. Sales of an Envoy communications gateway include the Enlighten cloud-based monitoring service. The allocation of revenue between the two deliverables is based on the Company’s best estimate of selling price determined by considering multiple factors including internal costs, gross margin and historical pricing practices. After allocating the overall consideration from such sale to each deliverable using a best estimate of the selling price (i) revenue from the sale of Envoy devices is recognized upon shipment, assuming all other revenue recognition criteria have been met and (ii) revenue from the cloud-based monitoring service is recognized ratably over the estimated economic life of the related Envoy devices of 10 years. Deferred revenues consist of payments received from customers in advance of revenue recognition for the Company’s products and services as described above. |
Cost of Revenues | Cost of Revenues The Company includes the following in cost of revenues: product costs, warranty, manufacturing personnel and logistics costs, freight costs, inventory write-downs, hosting services costs related to the Company’s Enlighten service offering, and depreciation and amortization of manufacturing test equipment. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments, such as certificates of deposit and money market instruments with maturities of three months or less at the time of acquisition to be cash equivalents. For all periods presented, its cash balances consist of amounts held in non-interest-bearing deposits and money market accounts. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the short maturity of those instruments. |
Foreign Currency Forward Contracts | Foreign Currency Forward Contracts The Company operates and conducts business in foreign countries where its foreign entities use the local currency as their respective functional currency. As a result, the Company is exposed to movements in foreign currency exchange rates. The Company utilizes foreign currency forward contracts to reduce the impact of foreign currency fluctuations related to anticipated cash receipts from expected future revenues denominated in Euros and British Pounds as well as from intercompany transaction gains or losses. The foreign currency forward contracts are accounted for as derivatives whereby the fair value of the contracts is reported as other current assets or current liabilities in the accompanying consolidated balance sheets, and gains and losses resulting from changes in the fair value are reported in other income (expense), net, in the accompanying consolidated statements of operations. |
Allowances for Doubtful Accounts | Allowances for Doubtful Accounts The Company maintains allowances for doubtful accounts for uncollectible accounts receivable. Management estimates anticipated losses from doubtful accounts based on days past due, collection history and the financial health of customers. |
Inventory | Inventory Inventory is valued at the lower of cost or market. Market is current replacement cost (by purchase or by reproduction, dependent on the type of inventory). In cases where market exceeds net realizable value (i.e., estimated selling price less reasonably predictable costs of completion and disposal), inventories are stated at net realizable value. Market is not considered to be less than net realizable value reduced by an allowance for an approximately normal profit margin. The Company determines cost on a first-in first-out basis. Management assesses the valuation on a quarterly basis and writes down the value for any excess and obsolete inventory based upon expected demand, anticipated sales price, effect of new product introductions, product obsolescence, customer concentrations, product merchantability and other factors. Inventory write-downs are equal to the difference between the cost of inventories and market. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Cost includes amounts paid to acquire or construct the asset as well as any expenditure that substantially adds to the value of or significantly extends the useful life of an existing asset. Repair and maintenance costs are expensed as incurred. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets, which range from three to ten years. Leasehold improvements are amortized over the shorter of the lease term or expected useful life of the improvements. |
Capitalized Software Costs | Capitalized Software Costs Internally used software, whether purchased or developed, is capitalized and amortized on a straight-line basis over its estimated useful life. Costs associated with internally developed software are expensed until the point at which the project has reached the development stage. Subsequent additions, modifications or upgrades to internal-use software are capitalized only to the extent that they provide additional functionality. Software maintenance and training costs are expensed in the period in which they are incurred. The capitalization of software requires judgment in determining when a project has reached the development stage and the period over which the Company expects to benefit from the use of that software. |
Long-Lived Assets | Long-Lived Assets Property, plant and equipment, including capitalized software costs, are recorded at cost. Property, plant and equipment amounts are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. |
Goodwill and Intangible Assets | Goodwill Goodwill results from the purchase consideration paid in excess of the fair value of the net assets recorded in connection with a business acquisition. Goodwill is not amortized, but is assessed for potential impairment at least annually during the fourth quarter of each fiscal year or between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Goodwill is tested at the reporting unit level, which the Company has determined to be the same as the entity as a whole (entity level). Once goodwill has been assigned to a reporting unit, it is no longer associated with a particular acquisition; therefore, all of the activities within a reporting unit, whether acquired or organically grown, are available to support the goodwill value. Based on management’s goodwill impairment tests, there was no impairment of goodwill in any of the years presented. Intangible Assets Intangible assets include patents, customer relationships and other purchased intangible assets. Intangible assets with finite lives are amortized on a straight-line basis, with estimated useful lives ranging from 3 to 5 years. Indefinite-lived intangible assets are tested for impairment annually and are also tested for impairment between annual tests if an event occurs or circumstances change that would indicate that the carrying amount may be impaired. Intangible assets with finite lives are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows used in determining the fair value of the asset. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. There was no impairment of intangible assets in any of the years presented. |
Warranty Obligations | Warranty Obligations Microinverters Sold Through December 31, 2013 The Company’s warranty accrual provides for the replacement of microinverter units that fail during the product’s warranty term ( 15 years for first and second generation microinverters and up to 25 years for third and fourth generation microinverters). On a quarterly basis, the Company employs a consistent, systematic and rational methodology to assess the adequacy of its warranty liability. This assessment includes updating all key estimates and assumptions for each generation of product, based on historical results, trends and the most current data available as of the filing date. The key estimates and assumptions used in the warranty liability are thoroughly reviewed by management on a quarterly basis. The key estimates used by the Company to estimate its warranty liability are: (1) the number of units expected to fail over time (i.e. failure rate); (2) the number of failed units expected to result in warranty claims over time (i.e. claim rate); and (3) the per unit cost of replacement units, including outbound shipping and limited labor costs, expected to be incurred to replace failed units over time (i.e. replacement cost). Estimated Failure Rates— The Company’s Quality and Reliability department has primary responsibility to determine the estimated failure rates for each generation of microinverter. To establish initial failure rate estimates for each generation of microinverter, the Company’s quality engineers use a combination of industry standard MTBF (Mean Time Between Failure) estimates for individual components contained in its microinverters, third party data collected on similar equipment deployed in outdoor environments similar to those in which the Company’s microinverters are installed, and rigorous long term reliability and accelerated life cycle testing which simulates the service life of the microinverter in a short period of time. As units are deployed into operating environments, the Company continues to monitor product performance via its Enlighten monitoring platform. It typically takes three to nine months between the date of sale and date of end-user installation. Consequently, the Company’s ability to monitor actual failures of units sold similarly lags by three to nine months. When a microinverter fails and is returned, the Company performs diagnostic root cause failure analysis to understand and isolate the underlying mechanism(s) causing the failure. The Company then uses the results of this analysis (combined with the actual, cumulative performance data collected on those units prior to failure via Enlighten) to draw conclusions with respect to how or if the identified failure mechanism(s) will impact the remaining units deployed in the installed base. Estimated Claim Rates— Warranty claim rate estimates are based upon assumptions with respect to expected customer behavior over the warranty period. As the vast majority of the Company’s microinverters have been sold to end users for residential applications, the Company believes that warranty claim rates will be affected by changes over time in residential home ownership because the Company expects that subsequent homeowners are less likely to file claims than the homeowners who originally purchase the microinverters. Estimated Replacement Costs— three factors are considered in the Company’s analysis of estimated replacement cost: (1) the estimated cost of replacement microinverters; (2) the estimated cost to ship replacement microinverters to end users; and (3) the estimated labor reimbursement expected to be paid to third party installers performing replacement services for the end user. Because the Company’s warranty provides for the replacement of defective microinverters over long periods of time (between 15 and 25 years, depending on the generation of product purchased), the estimated per unit cost of current and future product generations is considered in the estimated replacement cost. Estimated costs to ship replacement units are based on observable, market-based shipping costs paid by the Company to third party freight carriers. The Company has a separate program that allows third-party installers to claim fixed-dollar reimbursements for labor costs they incur to replace failed microinverter units for a limited time from the date of original installation. Included in the Company’s estimated replacement cost is an analysis of the number of fixed-dollar labor reimbursements expected to be claimed by third party installers over the limited offering period. If actual failure rates, claim rates, or replacement costs differ from the Company’s estimates in future periods, changes to these estimates may be required, resulting in increases or decreases in the Company’s warranty obligations. Such increases or decreases could be material. Fair Value Option for Microinverters Sold Since January 1, 2014 The Company’s warranty obligations related to microinverters sold since January 1, 2014 provide the Company the right, but not the requirement, to assign its warranty obligations to a third-party. Under Accounting Standards Codification (“ASC”) 825—Financial Instruments, (“fair value option”), an entity may choose to elect the fair value option for such warranties at the time it first recognizes the eligible item. The Company made an irrevocable election to account for all eligible warranty obligations associated with microinverters sold since January 1, 2014 at fair value. This election was made to reflect the underlying economics of the time value of money for an obligation that will be settled over an extended period of up to 25 years . The Company estimates the fair value of warranty obligations by calculating the warranty obligations in the same manner as for sales prior to January 1, 2014 and applying an expected present value technique to that result. The expected present value technique, an income approach, converts future amounts into a single current discounted amount. In addition to the key estimates of failure rates, claim rates and replacement costs, the Company used certain inputs that are unobservable and significant to the overall fair value measurement. Such additional assumptions included compensation comprised of a profit element and risk premium required of a market participant to assume the obligation and a discount rate based on the Company’s credit-adjusted risk-free rate. See Note 8 , (“Fair Value Measurements”) for additional information. Warranty obligations initially recorded at fair value at the time of sale will be subsequently re-measured to fair value at each reporting date. In addition, the fair value of the liability will be accreted over the corresponding term of the warranty of up to 25 years using the interest method. Warranty for Other Products The Company offers a 5 year warranty for its Envoy communications gateway and a 10 year warranty on its AC Battery storage solution. The warranties provide the Company with the right, but not the obligation, to assign its warranty obligations to a third-party. As such, warranties for Envoy and AC Battery storage solution products are accounted for under the fair value method of accounting. |
Research and Development Costs | Research and Development Costs The Company expenses research and development costs as incurred. |
Stock-Based Compensation | Stock-Based Compensation Share-based payments are required to be recognized in the Company’s consolidated statements of operations based on their fair values and the estimated number of shares expected to vest. The Company measures stock-based compensation expense for all share-based payment awards, including stock options made to employees and directors, based on the estimated fair values on the date of the grant. The fair value of stock options granted is estimated using the Black-Scholes option valuation model. The fair value of restricted stock units granted is determined based on the price of the Company’s common stock on the date of grant. Stock-based compensation, net of estimated forfeitures, is recognized on a straight-line basis over the requisite service period, which is typically four years. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss consists of two components, net loss and other comprehensive income (loss). Other comprehensive income (loss) refers to gains and losses that are recorded as an element of stockholders’ equity but are excluded from net income. The Company’s other comprehensive income (loss) consists of foreign currency translation adjustments for all periods presented. |
Income Taxes | Income Taxes The Company records income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected tax consequences of temporary differences between the tax bases of assets and liabilities for financial reporting purposes and amounts recognized for income tax purposes. In estimating future tax consequences, generally all expected future events other than enactments or changes in the tax law or rates are considered. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. The Company operates in various tax jurisdictions and is subject to audit by various tax authorities. The Company follows accounting for uncertainty in income taxes which requires that the tax effects of a position be recognized only if it is “more likely than not” to be sustained based solely on its technical merits as of the reporting date. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. |
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Effective | Recently Adopted Accounting Pronouncements In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes,” to simplify the presentation of deferred income taxes. The amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this update apply to all entities that present a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The Company adopted ASU 2015-17 during the fourth quarter of 2015 and applied it retrospectively to all periods presented. The adoption of this update did not have a material impact on the consolidated balance sheets for all periods presented and had no impact on the results of operations. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern.” The update provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The Company adopted ASU 2014-15 during the fourth quarter of 2016. Recent Accounting Pronouncements Not Yet Effective In May 2014, the FASB issued ASU 2014-09 (Topic 606), “Revenue from Contracts with Customers,” which will replace most existing revenue recognition guidance under U.S. GAAP. The updated standard’s core principle is that revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The standard generally requires an entity to identify performance obligations in its contracts, estimate the amount of variable consideration to be received in the transaction price, allocate the transaction price to each separate performance obligation, and recognize revenue as obligations are satisfied. In addition, the updated standard requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In 2015, the FASB issued guidance to defer the effective date to fiscal years beginning after December 15, 2017 with early adoption for fiscal years beginning December 15, 2016. The guidance permits the use of either a retrospective or cumulative effect transition method. The Company has not yet selected a transition method and is currently evaluating the impact of adoption on the consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” which requires most entities to measure most inventories at the lower of cost or net realizable value ("NRV"). This simplifies the evaluation from the current method of lower of cost or market, where market is based on one of three measures (i.e. replacement cost, net realizable value, or net realizable value less a normal profit margin). ASU 2015-11 does not apply to inventories measured under the last-in, first-out method or the retail inventory method, and defines NRV as the “estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted for any interim and annual financial statements that have not yet been issued. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which amends certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Changes to the current guidance include the accounting for equity investments, the presentation and disclosure requirements for financial instruments, and the assessment of valuation allowance on deferred tax assets related to available-for-sale securities. In addition, ASU 2016-01 establishes an incremental recognition and disclosure requirement related to the presentation of fair value changes of financial liabilities for which the fair value option has been elected. Under this guidance, an entity would be required to separately present in other comprehensive income the portion of the total fair value change attributable to instrument-specific credit risk as opposed to reflecting the entire amount in earnings. ASU 2016-01 is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In February 2016, the FASB issued Accounting Standards Codification (“ASC”) 842 (“ASC 842”), “Leases” which replaces the existing guidance in ASC 840, Leases. ASC 842 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. ASC 842 requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use (ROU) asset and a corresponding lease liability. For finance leases the lessee would recognize interest expense and amortization of the ROU asset and for operating leases the lessee would recognize a straight-line total lease expense. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which will simplify the income tax consequences, accounting for forfeitures and classification on the Statements of Consolidated Cash Flows. ASU 2016-09 is effective for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The provisions of this update simplify the subsequent measurement of goodwill by eliminating Step 2 from the quantitative analysis. For public entities, this guidance is effective for years beginning after December 15, 2019, including interim periods within those years. Early adoption is permitted after January 1, 2017. The adoption of this ASU is not expected to have an impact on the Company’s consolidated financial statements, and it plans early adoption of the standard beginning with the 2017 goodwill impairment testing. |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Activity in Allowance for Doubtful Accounts | The following table sets forth activities in the allowance for doubtful accounts for the periods indicated: December 31, 2016 2015 2014 Balance, at beginning of year $ 1,808 $ 569 $ 2,000 Net charges to expenses 3,097 1,502 711 Write-offs, net of recoveries (1,984 ) (263 ) (2,142 ) Balance, at end of year $ 2,921 $ 1,808 $ 569 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Summary of Inventory | Inventory as of December 31, 2016 and 2015 , consists of the following (in thousands): December 31, 2016 2015 Raw materials $ 5,095 $ 2,202 Finished goods 26,865 38,598 Total inventory $ 31,960 $ 40,800 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | As of December 31, 2016 and 2015 , property and equipment consists of the following (in thousands): Estimated Useful December 31, 2016 2015 Equipment and machinery 7-10 $ 38,486 $ 34,694 Furniture and fixtures 5–7 2,635 3,556 Computer equipment 3–5 2,913 2,699 Capitalized software costs 3–5 11,324 11,041 Leasehold improvements 4–10 9,477 8,643 Construction in process 6,275 2,994 Total 71,110 63,627 Less accumulated depreciation and amortization (39,670 ) (31,509 ) Property and equipment, net $ 31,440 $ 32,118 |
ACQUISITION AND DIVESTURE, GO31
ACQUISITION AND DIVESTURE, GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Summary of Goodwill and Purchased Intangible Assets | December 31, 2016 December 31, 2015 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Goodwill $ 3,664 $ — $ 3,664 $ 3,745 $ — $ 3,745 Other indefinite-lived intangibles $ 286 $ — $ 286 $ 286 $ — $ 286 Intangibles assets with finite lives: Customer relationships — — — 900 (180 ) 720 Patents and licensed technology 1,665 (1,006 ) 659 1,665 (451 ) 1,214 Total purchased intangibles $ 1,951 $ (1,006 ) $ 945 $ 2,851 $ (631 ) $ 2,220 |
Schedule of Estimated Future Amortization Expense Related to Finite-lived Intangible Assets | As of December 31, 2016 , estimated future amortization expense related to finite-lived intangible assets was as follows: Year (In thousands) 2017 $ 430 2018 229 Total $ 659 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | As of December 31, 2016 and 2015 accrued liabilities consists of the following (in thousands): December 31, 2016 2015 Salaries, commissions, incentive compensation and benefits $ 4,227 $ 5,402 Customer rebates and sales incentives 11,786 8,274 Freight 2,321 3,063 Other 4,603 2,553 Total $ 22,937 $ 19,292 |
WARRANTY OBLIGATIONS (Tables)
WARRANTY OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Product Warranties Disclosures [Abstract] | |
Summary of Warranty Activity | The Company’s warranty activities during 2016 , 2015 and 2014 were as follows (in thousands): December 31, 2016 2015 2014 Balance, at beginning of year $ 30,547 33,940 $ 30,432 Accruals for warranties issued during the year 4,130 4,383 4,309 Changes in estimates 2,562 31 8,391 Settlements (8,523 ) (7,269 ) (8,793 ) Increase due to accretion expense 1,772 1,001 195 Fair value adjustments 926 (1,539 ) (594 ) Balance, at end of year 31,414 30,547 33,940 Less current portion (8,596 ) (7,072 ) (7,607 ) Long-term portion $ 22,818 $ 23,475 $ 26,333 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis | The following table presents the Company’s assets and liabilities that were measured at fair value on a recurring basis and its categorization within the fair value hierarchy at December 31, 2016 and 2015 (in thousands): December 31, Fair Value Hierarchy 2016 2015 Assets: Foreign currency forward contracts Level 2 $ — $ 86 Liabilities: Foreign currency forward contracts Level 2 $ — $ 9 Warranty obligations Level 3 10,332 6,182 Contingent consideration Level 3 — 473 |
Summary of Significant Unobservable Inputs used in the Fair Value Measurements of the Company's Liabilities Designated as Level 3 | As of December 31, 2016 , the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 are as follows: Item Measured at Fair Value Valuation Technique Description of Significant Unobservable Input Percent Used (Weighted-Average) Warranty obligations for microinverters sold since January 1, 2014 Discounted cash flows Profit element and risk premium 17% Credit-adjusted risk-free rate 19% As of December 31, 2015, the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 are as follows: Item Measured at Fair Value Valuation Technique Description of Significant Unobservable Input Percent Used (Weighted-Average) Warranty obligations for microinverters sold since January 1, 2014 Discounted cash flows Profit element and risk premium 17% Credit-adjusted risk-free rate 25% Contingent consideration Probability-weighted discounted cash flows Risk-adjusted discount rate 17% |
Warranty obligations | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Reconciliation of Beginning and Ending Balances of Warranty Obligations/Contingent Consideration Measured at Fair Value | The following table provides a reconciliation of the beginning and ending balances of warranty obligations measured at fair value for the periods indicated (in thousands): Balance—December 31, 2013 $ — Accruals for warranties issued during period 3,989 Changes in estimates 26 Settlements (54 ) Increase due to accretion expense 195 Fair value adjustments (594 ) Balance—December 31, 2014 $ 3,562 Accruals for warranties issued during period 4,140 Changes in estimates (755 ) Settlements (227 ) Increase due to accretion expense 1,001 Fair value adjustments (1,539 ) Balance—December 31, 2015 $ 6,182 Accruals for warranties issued during period 4,091 Changes in estimates (1,616 ) Settlements (1,023 ) Increase due to accretion expense 1,772 Fair value adjustments 926 Balance—December 31, 2016 $ 10,332 |
RESTRUCTURING AND OTHER (Tables
RESTRUCTURING AND OTHER (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following table provides information regarding the computation of the Company’s gain on business divestiture included in restructuring and other (in thousands): Business Divestiture Consideration $ 1,375 Identifiable assets (979 ) Contingent Consideration 244 Gain on business divestiture $ 640 The following table presents the details of the Company’s restructuring charges for the periods indicated (in thousands): Years Ended December 31, 2016 2015 2014 Employee severance and benefit arrangements $ 1,263 $ — $ — Asset impairments 2,575 — — Lease loss and other 579 — — Gain on business divestiture (640 ) — — Total restructuring and other $ 3,777 $ — $ — |
Schedule of Restructuring Reserve by Type of Cost | The following table provides information regarding changes in the Company’s accrued restructuring balance for the periods indicated (in thousands): Employee Severance and Benefits Asset Impairments Lease Loss and Other Total Balance at beginning of period as of December 31, 2015 $ — $ — $ — $ — Charges 1,263 2,575 579 4,417 Cash payments (1,065 ) — (95 ) (1,160 ) Non-cash settlement — (2,575 ) — (2,575 ) Balance at end of period as of December 31, 2016 $ 198 $ — $ 484 $ 682 |
DEBT - (Tables)
DEBT - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt was comprised of the following at December 31, 2016 and 2015 (in thousands): December 31, December 31, Term loan $ 25,000 $ — Less unamortized discount and issuance costs (1,200 ) — Carrying amount of debt 23,800 — Less current portion (3,032 ) — Long-term debt $ 20,768 $ — |
Schedule of Maturities of Long-term Debt | As of December 31, 2016 , the amount of scheduled principal payments due on the term loan is as follows (in thousands): Year Amounts 2017 $ 3,032 2018 7,824 2019 8,665 2020 5,479 Total $ 25,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Minimum Lease Payments Under Noncancelable Operating Leases | The Company’s minimum lease payments under noncancelable operating leases, exclusive of executory costs, as of December 31, 2016 are as follows (in thousands): 2017 $ 2,778 2018 2,770 2019 2,812 2020 2,653 2021 2,677 Thereafter 2,291 Total minimum lease payments $ 15,981 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Weighted Average Assumptions used to Estimate Fair Value of Stock Options Granted | A summary of the weighted-average assumptions used to estimate the fair values of the stock options granted during the periods presented is as follows: Years Ended December 31, 2016 2015 2014 Expected term (in years) 4.5 4.5 4.5 Expected volatility 80.0 % 72.5 % 67.7 % Annual risk-free rate of return 1.1 % 1.4 % 1.4 % Dividend yield — % — % — % Weighted-average fair value on grant date $ 1.29 $ 4.68 $ 5.64 |
Summary of Total Stock Based Compensation Expense Components | The following table summarizes the components of total stock-based compensation expense included in the consolidated statements of operations for the periods presented (in thousands): Years Ended December 31, 2016 2015 2014 Cost of revenues $ 1,188 $ 1,217 $ 816 Research and development 3,879 4,559 3,127 Sales and marketing 2,144 3,162 2,487 General and administrative 3,115 3,758 3,310 Total stock-based compensation expense $ 10,326 $ 12,696 $ 9,740 |
Summary of Stock Based Compensation Expense Associated with Each Type of Award | A summary of stock-based compensation expense associated with each type of award for the periods presented is as follows (in thousands): Years Ended December 31, 2016 2015 2014 Stock options and restricted stock units $ 8,384 $ 10,685 $ 8,845 ESPP 1,942 2,011 895 Total stock-based compensation expense $ 10,326 $ 12,696 $ 9,740 |
Summary of Stock Option Activity | A summary of the Company’s stock option activity for the periods presented is as follows (in thousands, except per share data): Shares Weighted- Options outstanding — December 31, 2013 8,509 $ 3.94 Granted 1,311 10.36 Exercised (886 ) 4.33 Canceled (302 ) 7.58 Options outstanding — December 31, 2014 8,632 4.75 Granted 1,289 8.20 Exercised (1,079 ) 1.40 Canceled (672 ) 9.31 Options outstanding — December 31, 2015 8,170 5.36 Granted 2,440 2.12 Exercised (375 ) 0.39 Canceled (1,505 ) 6.01 Options outstanding — December 31, 2016 8,730 4.55 |
Summary of Stock Options Outstanding | The following table summarizes information about stock options outstanding at December 31, 2016 : Options Outstanding Options Exercisable Range of Exercise Prices Number of Weighted- Weighted- Number of Weighted- $0.27 —– $1.63 2,594 3.2 $ 1.00 2,521 $ 1.00 $1.67 —– $2.14 1,839 5.8 2.08 358 2.09 $2.19 —– $7.16 1,765 3.8 5.23 1,412 5.41 $7.30 —– $9.69 1,797 4.0 8.34 1,517 8.28 $10.27 —– $16.01 735 4.5 12.40 481 12.27 Total 8,730 6,289 |
Summary of Restricted Stock Unit Activity | A summary of restricted stock unit activity for the periods presented is as follows: (in thousands, except per share data): Restricted Stock Units Weighted Average Outstanding at December 31, 2013 418 $ 6.31 Granted 1,250 8.68 Vested (281 ) 7.38 Canceled (42 ) 7.56 Outstanding at December 31, 2014 1,345 8.25 Granted 683 11.22 Vested (488 ) 8.58 Canceled (227 ) 10.32 Outstanding at December 31, 2015 1,313 9.31 Granted 54 1.99 Vested (464 ) 9.06 Canceled (297 ) 8.32 Outstanding at December 31, 2016 606 9.33 |
Summary of ESPP Activity | A summary of ESPP activity for the years presented is as follows: (in thousands, except per share data): Years Ended December 31, 2016 2015 2014 Proceeds from common stock issued under ESPP $ 999 $ 2,497 $ 1,531 Shares of common stock issued 659 499 410 Weighted-average price per share $ 1.52 $ 5.00 $ 3.73 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Domestic and Foreign Components of Loss before Provision for Income Taxes | The domestic and foreign components of loss before provision for income taxes consisted of the following (in thousands): Years Ended December 31, 2016 2015 2014 United States $ (67,631 ) $ (22,120 ) $ (8,732 ) Foreign 1,644 1,417 1,446 Total $ (65,987 ) $ (20,703 ) $ (7,286 ) |
Schedule of Provision for Income Taxes | The provision for income taxes for the years presented is as follows (in thousands): Years Ended December 31, 2016 2015 2014 Current: Federal $ — $ — $ — State 36 44 85 Foreign 785 693 716 821 737 801 Deferred: Federal 594 652 — State 59 41 — Foreign 1 (51 ) (35 ) 654 642 (35 ) Provision for income taxes $ 1,475 $ 1,379 $ 766 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the provision for income taxes and the amount computed by applying the statutory federal income tax rate of 34% to loss before income taxes for the years presented is as follows (in thousands): Years Ended December 31, 2016 2015 2014 Income tax benefit at statutory federal rate $ (22,435 ) $ (7,039 ) $ (2,477 ) State taxes, net of federal benefit 63 56 (4,576 ) Change in valuation allowance 21,370 7,812 16,646 Foreign tax rate and tax law differential 27 (29 ) (43 ) Tax credits (1,179 ) (1,553 ) (5,619 ) Stock-based compensation 1,775 1,932 957 Other permanent items 776 61 231 Other nondeductible/nontaxable items 920 (72 ) (4,586 ) Uncertain tax positions 158 211 233 Provision for income taxes $ 1,475 $ 1,379 $ 766 |
Schedule of Deferred Tax Assets and Liabilities | A summary of significant components of the Company’s deferred tax assets and liabilities as of December 31, 2016 and 2015 is as follows (in thousands): December 31, 2016 2015 Deferred tax assets: Allowances and reserves $ 16,032 $ 14,639 Net operating loss and tax credit carryforwards 67,875 46,812 Stock-based compensation 3,033 3,055 Deferred revenue 8,289 5,966 Fixed assets and intangibles 7,661 6,830 Other 2,857 3,327 Subtotal 105,747 80,629 Less valuation allowance (104,554 ) (80,529 ) Total deferred tax assets, net of valuation allowance 1,193 100 Deferred tax liabilities: Goodwill (1,346 ) (693 ) Unremitted foreign earnings (748 ) — Total deferred tax liabilities (2,094 ) (693 ) Net deferred tax asset/(liability) $ (901 ) $ (593 ) |
Schedule of Reconciliation of Total Amounts of Unrecognized Tax Benefits | A tabular reconciliation of the total amounts of unrecognized tax benefits for the years presented is as follows (in thousands): Year Ended December 31, 2016 2015 2014 Unrecognized tax benefits—at beginning of year $ 5,482 $ 4,426 $ 376 Increases in balances related to tax positions taken in prior years — 14 1,895 Increases in balances related to tax positions taken in current year 571 1,053 2,155 Lapses in statutes of limitations (37 ) (11 ) — Unrecognized tax benefits—at end of year $ 6,016 $ 5,482 $ 4,426 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Potential Common Shares Outstanding Excluded from the Computation of Diluted Net Loss Per Share Attributable to Common Stockholders | The following table presents the potential common shares outstanding that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive (in thousands): Years Ended December 31, 2016 2015 2014 Stock options to purchase common stock 8,981 8,646 8,502 Unvested restricted stock units 906 1,506 1,258 Warrants to purchase common stock — 111 195 Total 9,887 10,263 9,955 |
SEGMENT AND GEOGRAPHIC INFORM41
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Summary of Net Revenues and Long-Lived Assets by Geographic Region | The following tables present net revenues (based on the destination of shipments) and long-lived assets by geographic region as of and for the periods presented (in thousands): Net Revenues Years Ended December 31, 2016 2015 2014 United States $ 259,080 $ 303,195 $ 294,549 International 63,511 54,054 49,355 Total $ 322,591 $ 357,249 $ 343,904 Long-Lived Assets As of December 31, 2016 2015 2014 United States $ 22,634 $ 21,913 $ 20,037 China 5,727 7,950 9,585 Other 3,079 2,255 1,202 Total $ 31,440 $ 32,118 $ 30,824 |
QUARTERLY FINANCIAL INFORMATI42
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following tables show a summary of the Company’s quarterly financial information for each of the four quarters of 2016 and 2015 (in thousands, except per share data): Year Ended December 31, 2016 March 31 June 30 September 30 December 31 Net revenues $ 64,121 $ 79,185 $ 88,684 $ 90,601 Cost of revenues 52,361 65,049 72,805 74,367 Gross profit 11,760 14,136 15,879 16,234 Operating expenses: Research and development 13,066 13,091 13,169 11,378 Sales and marketing 10,215 9,987 11,016 7,592 General and administrative 7,567 6,846 6,708 6,296 Restructuring charges — — 2,717 1,060 Total operating expenses 30,848 29,924 33,610 26,326 Loss from operations (19,088 ) (15,788 ) (17,731 ) (10,092 ) Other income (expense), net 529 (591 ) (881 ) (2,345 ) Loss before income taxes (18,559 ) (16,379 ) (18,612 ) (12,437 ) Provision for income taxes (236 ) (344 ) (144 ) (751 ) Net loss $ (18,795 ) $ (16,723 ) $ (18,756 ) $ (13,188 ) Net loss per share, basic and diluted $ (0.41 ) $ (0.36 ) $ (0.40 ) $ (0.21 ) Year Ended December 31, 2015 March 31 June 30 September 30 December 31 Net revenues $ 86,653 $ 102,093 $ 102,874 $ 65,629 Cost of revenues 58,629 69,066 71,408 49,929 Gross profit 28,024 33,027 31,466 15,700 Operating expenses: Research and development 13,430 12,786 12,059 12,544 Sales and marketing 11,937 12,508 10,510 10,922 General and administrative 8,205 8,102 7,118 7,405 Total operating expenses 33,572 33,396 29,687 30,871 Loss from operations (5,548 ) (369 ) 1,779 (15,171 ) Other income (expense), net (605 ) (8 ) (844 ) 63 Loss before income taxes (6,153 ) (377 ) 935 (15,108 ) Provision for income taxes (167 ) (226 ) (311 ) (675 ) Net income (loss) $ (6,320 ) $ (603 ) $ 624 $ (15,783 ) Net income (loss) per share, basic $ (0.14 ) $ (0.01 ) $ 0.01 $ (0.35 ) Net income (loss) per share, diluted $ (0.14 ) $ (0.01 ) $ 0.01 $ (0.35 ) |
DESCRIPTION OF BUSINESS - Narra
DESCRIPTION OF BUSINESS - Narrative (Details) system in Thousands, microinverter in Millions, watt in Billions | Dec. 31, 2016systemwattmicroinverter | Mar. 31, 2016country |
Microinverter | ||
Product Information [Line Items] | ||
Number of product shipped, more than | microinverter | 13 | |
Gigawatts, over | watt | 3 | |
Residential and Commercial Systems | ||
Product Information [Line Items] | ||
Number of product deployed, more than | system | 580 | |
Number of countries in which product is deployed, over | country | 100 |
SUMMARY OF SIGNIFICANT ACCOUN44
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | Oct. 11, 2016shares | Sep. 28, 2016USD ($)shares | Jan. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jul. 31, 2016USD ($) | Mar. 16, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)deliverablefactorshares | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Feb. 28, 2017USD ($) | Dec. 31, 2013USD ($) |
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Cash balance | $ 17,764,000 | $ 17,764,000 | $ 28,452,000 | $ 17,764,000 | $ 28,452,000 | $ 42,032,000 | $ 38,190,000 | ||||||||||||
Working capital | 35,600,000 | 35,600,000 | 35,600,000 | ||||||||||||||||
Proceeds from issuance of common stock | $ 14,000,000 | 16,142,000 | 0 | 0 | |||||||||||||||
Issuance of common stock, net of offering costs | 15,924,000 | ||||||||||||||||||
Combined principal and interest balance | 16,900,000 | 29,150,000 | 0 | ||||||||||||||||
Expected decrease in annual operating expenses | 40,000,000 | ||||||||||||||||||
Allowance for doubtful accounts | 2,921,000 | 2,921,000 | 1,808,000 | 2,921,000 | 1,808,000 | 569,000 | $ 2,000,000 | ||||||||||||
Asset impairments | 2,600,000 | 500,000 | |||||||||||||||||
Restructuring costs and asset impairment charges | 3,190,000 | 522,000 | 249,000 | ||||||||||||||||
Goodwill, impairment loss | 0 | 0 | 0 | ||||||||||||||||
Impairment of intangible assets | $ 0 | 0 | 0 | ||||||||||||||||
Number of factors considered in estimating replacement cost | factor | 3 | ||||||||||||||||||
Research and development expense | $ 11,378,000 | $ 13,169,000 | $ 13,091,000 | $ 13,066,000 | $ 12,544,000 | $ 12,059,000 | $ 12,786,000 | $ 13,430,000 | $ 50,703,000 | $ 50,819,000 | $ 45,386,000 | ||||||||
Stock-based compensation requisite service period | 4 years | ||||||||||||||||||
Envoy Communications Gateway Device and Enlighten Web-Based Monitoring Service | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Revenue recognition, number of deliverables | deliverable | 2 | ||||||||||||||||||
First and Second Generation | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Product warranty, term | 15 years | ||||||||||||||||||
Third and Fourth Generation | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Product warranty, term | 25 years | ||||||||||||||||||
Envoy Communications Gateway | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Product warranty, term | 5 years | ||||||||||||||||||
AC Battery Storage Solution | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Product warranty, term | 10 years | ||||||||||||||||||
Minimum | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Property and equipment estimated useful life | 3 years | ||||||||||||||||||
Intangible assets, estimated useful life | 3 years | ||||||||||||||||||
Product warranty, term | 15 years | ||||||||||||||||||
Product installation period | 3 months | ||||||||||||||||||
Period failure rate measurement lags product sale | 3 months | ||||||||||||||||||
Maximum | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Property and equipment estimated useful life | 10 years | ||||||||||||||||||
Intangible assets, estimated useful life | 5 years | ||||||||||||||||||
Product warranty, term | 25 years | ||||||||||||||||||
Product installation period | 9 months | ||||||||||||||||||
Period failure rate measurement lags product sale | 9 months | ||||||||||||||||||
Maximum | Enlighten | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Revenue recognition period | 10 years | ||||||||||||||||||
Common Stock | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Common stock, shares issued (shares) | shares | 13,000,000 | 14,950,000 | |||||||||||||||||
Over-Allotment Option | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Proceeds from issuance of common stock | $ 16,200,000 | ||||||||||||||||||
Over-Allotment Option | Common Stock | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Common stock, shares issued (shares) | shares | 1,950,000 | 15,000,000 | |||||||||||||||||
At The Market Issuance Sales Agreement (ATM) | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Issuance of common stock, net of offering costs | $ 17,000,000 | ||||||||||||||||||
Subsequent event | At The Market Issuance Sales Agreement (ATM) | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Proceeds from issuance of common stock | $ 17,000,000 | ||||||||||||||||||
Subsequent event | Private Placement [Member] | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Proceeds from issuance of common stock | $ 10,000,000 | ||||||||||||||||||
Tennenbaum Capital Partners, LLC | Secured debt | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Debt instrument principal amount | $ 25,000,000 | ||||||||||||||||||
Proceeds from term loan, net of issuance costs | 25,000,000 | ||||||||||||||||||
Tennenbaum Capital Partners, LLC | Secured debt | Term Loan Agreement | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Debt instrument principal amount | 25,000,000 | ||||||||||||||||||
Proceeds from term loan, net of issuance costs | 25,000,000 | ||||||||||||||||||
Tennenbaum Capital Partners, LLC | Subsequent event | Secured debt | Amended Term Loan Agreement | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Debt instrument principal amount | $ 25,000,000 | ||||||||||||||||||
Wells Fargo Bank | Line of credit | Revolving credit facility | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Combined principal and interest balance | $ 10,300,000 | ||||||||||||||||||
Product concentration risk | Revenue | Enlighten | |||||||||||||||||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||||||||||||||||
Percent of revenue represented by product line or service, less than | 2.00% |
SUMMARY OF SIGNIFICANT ACCOUN45
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Activity in Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance, at beginning of year | $ 1,808 | $ 569 | $ 2,000 |
Net charges to expenses | 3,097 | 1,502 | 711 |
Write-offs, net of recoveries | (1,984) | (263) | (2,142) |
Balance, at end of year | $ 2,921 | $ 1,808 | $ 569 |
INVENTORY - Summary of Inventor
INVENTORY - Summary of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 5,095 | $ 2,202 |
Finished goods | 26,865 | 38,598 |
Total inventory | $ 31,960 | $ 40,800 |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 71,110 | $ 63,627 |
Less accumulated depreciation and amortization | (39,670) | (31,509) |
Property and equipment, net | $ 31,440 | 32,118 |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (Years) | 3 years | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (Years) | 10 years | |
Equipment and machinery | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 38,486 | 34,694 |
Equipment and machinery | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (Years) | 7 years | |
Equipment and machinery | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (Years) | 10 years | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,635 | 3,556 |
Furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (Years) | 5 years | |
Furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (Years) | 7 years | |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,913 | 2,699 |
Computer equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (Years) | 3 years | |
Computer equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (Years) | 5 years | |
Capitalized software costs | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 11,324 | 11,041 |
Capitalized software costs | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (Years) | 3 years | |
Capitalized software costs | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (Years) | 5 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 9,477 | 8,643 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (Years) | 4 years | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (Years) | 10 years | |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 6,275 | $ 2,994 |
PROPERTY AND EQUIPMENT, NET - N
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 9.9 | $ 10 | $ 8.1 |
Unamortized capitalized software costs | $ 1.9 | $ 3.3 |
ACQUISITION AND DIVESTURE, GO49
ACQUISITION AND DIVESTURE, GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | Dec. 12, 2014 | Oct. 31, 2015 | Jul. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 3,664 | $ 3,664 | $ 3,745 | ||||
Revaluation of contingent consideration liability | 0 | 1,827 | $ 0 | ||||
Gain on business divestiture | 640 | 0 | 0 | ||||
Aggregate amortization expense | $ 700 | $ 500 | $ 100 | ||||
ASIC | |||||||
Business Acquisition [Line Items] | |||||||
Licensed technology term | 3 years | ||||||
Patents | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets, estimated useful life | 3 years | ||||||
NPS | |||||||
Business Acquisition [Line Items] | |||||||
Total purchase consideration | $ 4,800 | ||||||
Purchase consideration, cash | 2,500 | ||||||
Contingent consideration | 2,300 | ||||||
Goodwill | 3,700 | ||||||
Purchase consideration, cash withheld | 200 | ||||||
Contingent consideration earn-out period | 2 years | ||||||
Revaluation of contingent consideration liability | $ 1,800 | ||||||
NPS | Customer relationships | |||||||
Business Acquisition [Line Items] | |||||||
Customer relationships | $ 900 | ||||||
NPS | |||||||
Business Acquisition [Line Items] | |||||||
Gain on business divestiture | $ 600 |
ACQUISITION AND DIVESTURE, GO50
ACQUISITION AND DIVESTURE, GOODWILL AND INTANGIBLE ASSETS - Summary of Goodwill and Purchased Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||
Goodwill, gross | $ 3,664 | $ 3,745 |
Goodwill | 3,664 | 3,745 |
Other indefinite-lived intangibles | 286 | 286 |
Intangibles assets with finite lives: | ||
Total | 659 | |
Total purchased intangibles, gross | 1,951 | 2,851 |
Total purchased intangibles, accumulated amortization | (1,006) | (631) |
Total purchased intangibles, net | 945 | 2,220 |
Customer relationships | ||
Intangibles assets with finite lives: | ||
Gross | 0 | 900 |
Accumulated Amortization | 0 | (180) |
Total | 0 | 720 |
Patents and licensed technology | ||
Intangibles assets with finite lives: | ||
Gross | 1,665 | 1,665 |
Accumulated Amortization | (1,006) | (451) |
Total | $ 659 | $ 1,214 |
ACQUISITION AND DIVESTURE, GO51
ACQUISITION AND DIVESTURE, GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated Future Amortization Expense Related to Finite-lived Intangible Assets (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2,017 | $ 430 |
2,018 | 229 |
Total | $ 659 |
ACCRUED LIABILITIES - Schedule
ACCRUED LIABILITIES - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued Liabilities [Abstract] | ||
Salaries, commissions, incentive compensation and benefits | $ 4,227 | $ 5,402 |
Customer rebates and sales incentives | 11,786 | 8,274 |
Freight | 2,321 | 3,063 |
Other | 4,603 | 2,553 |
Total | $ 22,937 | $ 19,292 |
WARRANTY OBLIGATIONS - Summary
WARRANTY OBLIGATIONS - Summary of Warranty Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in the Company's product warranty liability | |||
Balance, at beginning of year | $ 30,547 | $ 33,940 | $ 30,432 |
Accruals for warranties issued during the year | 4,130 | 4,383 | 4,309 |
Changes in estimates | 2,562 | 31 | 8,391 |
Settlements | (8,523) | (7,269) | (8,793) |
Increase due to accretion expense | 1,772 | 1,001 | 195 |
Fair value adjustments | 926 | (1,539) | (594) |
Balance, at end of year | 31,414 | 30,547 | 33,940 |
Less current portion | (8,596) | (7,072) | (7,607) |
Long-term portion | $ 22,818 | $ 23,475 | $ 26,333 |
WARRANTY OBLIGATIONS - Narrativ
WARRANTY OBLIGATIONS - Narrative (Details) microinverter in Millions, $ in Millions | 12 Months Ended | 42 Months Ended | 54 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016microinverter | Dec. 31, 2015microinverter | Jun. 30, 2012microinverter | |
Second generation | ||||||
Product Liability Contingency [Line Items] | ||||||
Number of units sold | microinverter | 1 | |||||
Second generation | Labor reimbursement cost | ||||||
Product Liability Contingency [Line Items] | ||||||
Increase (decrease) in warranty expense due to changes in warranty variables estimates | $ 1.5 | $ 0.7 | $ 1.3 | |||
Second generation | Failure rate | ||||||
Product Liability Contingency [Line Items] | ||||||
Increase (decrease) in warranty expense due to changes in warranty variables estimates | 3 | 0.8 | 8.6 | |||
Third generation | ||||||
Product Liability Contingency [Line Items] | ||||||
Number of units sold | microinverter | 3.9 | |||||
Fourth generation | ||||||
Product Liability Contingency [Line Items] | ||||||
Number of units sold | microinverter | 8.1 | |||||
Fourth generation | Replacement cost | ||||||
Product Liability Contingency [Line Items] | ||||||
Increase (decrease) in warranty expense due to changes in warranty variables estimates | $ (1.5) | |||||
Fourth and fifth generation | Replacement cost | ||||||
Product Liability Contingency [Line Items] | ||||||
Increase (decrease) in warranty expense due to changes in warranty variables estimates | $ (2.1) | |||||
All product generations | Replacement cost | ||||||
Product Liability Contingency [Line Items] | ||||||
Increase (decrease) in warranty expense due to changes in warranty variables estimates | (1.5) | |||||
Net decrease in warranty expense due to changes in warranty variables estimates | $ 0.2 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Level 2 | ||||
Assets: | ||||
Foreign currency forward contracts | $ 0 | $ 86 | ||
Liabilities: | ||||
Foreign currency forward contracts | 0 | 9 | ||
Level 3 | Warranty obligations | ||||
Liabilities: | ||||
Warranty obligations/ Contingent consideration | 10,332 | 6,182 | $ 3,562 | $ 0 |
Level 3 | Contingent consideration | ||||
Liabilities: | ||||
Warranty obligations/ Contingent consideration | $ 0 | $ 473 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Warranty obligations | Discounted cash flows | Recurring | Level 3 | |||
Derivative [Line Items] | |||
Decrease to fair value measurement as a result of 100 basis point increase | $ 370,000 | ||
Increase to fair value measurement as a result of 100 basis point decrease | 402,000 | ||
Foreign exchange forward | Not designated as hedging instrument | |||
Derivative [Line Items] | |||
Notional amount of foreign currency | 0 | $ 2,400,000 | |
Net gain (loss) on foreign currency | $ 100,000 | $ 300,000 | $ 300,000 |
FAIR VALUE MEASUREMENTS - Sch57
FAIR VALUE MEASUREMENTS - Schedule of Reconciliation of Beginning and Ending Balances of Warranty Obligations Measured at Fair Value (Details) - Recurring - Level 3 - Warranty obligations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Warranty Obligations at Fair Value [Roll Forward] | |||
Beginning balance | $ 6,182 | $ 3,562 | $ 0 |
Accruals for warranties issued during period | 4,091 | 4,140 | 3,989 |
Changes in estimates | (1,616) | (755) | 26 |
Settlements | (1,023) | (227) | (54) |
Increase due to accretion expense | 1,772 | 1,001 | 195 |
Fair value adjustments | 926 | (1,539) | (594) |
Ending balance | $ 10,332 | $ 6,182 | $ 3,562 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Significant Unobservable Inputs used in the Fair Value Measurements of the Company's Liabilities Designated as Level 3 (Details) - Recurring - Level 3 - Discounted cash flows | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Warranty obligations for microinverters sold since January 1, 2014 | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Profit element and risk premium | 17.00% | 17.00% |
Credit-adjusted risk-free rate | 19.00% | 25.00% |
Contingent consideration | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Risk-adjusted discount rate | 17.00% |
RESTRUCTURING AND OTHER (Detail
RESTRUCTURING AND OTHER (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring Cost and Reserve [Line Items] | |||
Consideration | $ 1,375 | ||
Identifiable assets | (979) | ||
Contingent Consideration | 244 | ||
Gain on business divestiture | $ 640 | $ 0 | $ 0 |
Employee severance | Restructuring Plan 2016 | |||
Restructuring Cost and Reserve [Line Items] | |||
Workforce reduction, percentage | 11.00% |
RESTRUCTURING AND OTHER - Sched
RESTRUCTURING AND OTHER - Schedule Restructuring Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring and Related Activities [Abstract] | |||
Employee severance and benefit arrangements | $ 1,263 | $ 0 | $ 0 |
Asset impairments | 2,575 | 0 | 0 |
Lease loss and other | 579 | ||
Gain on business divestiture | (640) | 0 | 0 |
Total restructuring and other | $ 3,777 | $ 0 | $ 0 |
RESTRUCTURING AND OTHER - Rollf
RESTRUCTURING AND OTHER - Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring Cost and Reserve [Line Items] | |||||||
Charges | $ 1,060 | $ 2,717 | $ 0 | $ 0 | $ 3,777 | $ 0 | $ 0 |
Restructuring Plan 2016 | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring reserve, beginning | 0 | 0 | |||||
Charges | 4,417 | ||||||
Cash payments | (1,160) | ||||||
Non-cash settlement | (2,575) | ||||||
Restructuring reserve, ending | 682 | 682 | 0 | ||||
Employee Severance and Benefits | Restructuring Plan 2016 | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring reserve, beginning | 0 | 0 | |||||
Charges | 1,263 | ||||||
Cash payments | (1,065) | ||||||
Non-cash settlement | 0 | ||||||
Restructuring reserve, ending | 198 | 198 | 0 | ||||
Asset Impairments | Restructuring Plan 2016 | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring reserve, beginning | 0 | 0 | |||||
Charges | 2,575 | ||||||
Cash payments | 0 | ||||||
Non-cash settlement | (2,575) | ||||||
Restructuring reserve, ending | 0 | 0 | 0 | ||||
Lease Loss and Other | Restructuring Plan 2016 | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring reserve, beginning | $ 0 | 0 | |||||
Charges | 579 | ||||||
Cash payments | (95) | ||||||
Non-cash settlement | 0 | ||||||
Restructuring reserve, ending | $ 484 | $ 484 | $ 0 |
DEBT - Revolving Credit Facilit
DEBT - Revolving Credit Facility (Details) - Line of credit - Wells Fargo Bank - Revolving credit facility - USD ($) | Nov. 07, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 18, 2015 |
Debt Instrument [Line Items] | ||||
Credit line facility | $ 50,000,000 | |||
Uncommitted accordion feature | $ 25,000,000 | |||
Amount of liquidity required for debt compliance | 15,000,000 | |||
Amount of undrawn credit for debt compliance | $ 12,500,000 | |||
Outstanding borrowings | $ 10,100,000 | $ 17,000,000 | ||
Remaining borrowing capacity | $ 12,900,000 | |||
Weighted-average interest rate | 5.30% | |||
LIBOR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.00% | |||
Unused commitment fee percent | 0.25% | |||
LIBOR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.75% | |||
Unused commitment fee percent | 0.375% |
DEBT - Term Loan (Details)
DEBT - Term Loan (Details) - Tennenbaum Capital Partners, LLC | 1 Months Ended |
Jul. 31, 2016USD ($) | |
Line of Credit Facility [Line Items] | |
Line of credit facility, interest rate during period | 10.25% |
Commitment fee percentage | 3.30% |
Closing fee, percentage | 10.00% |
Secured debt | |
Line of Credit Facility [Line Items] | |
Debt instrument principal amount | $ 25,000,000 |
Proceeds from term loan, net of issuance costs | $ 25,000,000 |
LIBOR | |
Line of Credit Facility [Line Items] | |
Line of credit facility, interest rate during period | 9.5625% |
Reduction of interest rate during period, percent | 1.00% |
Minimum | |
Line of Credit Facility [Line Items] | |
Prepayment fee, percent | 1.00% |
Maximum | |
Line of Credit Facility [Line Items] | |
Prepayment fee, percent | 3.00% |
DEBT - Long-term debt (Details)
DEBT - Long-term debt (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
Term loan | $ 25,000 | $ 0 |
Less unamortized discount and issuance costs | (1,200) | 0 |
Carrying amount of debt | 23,800 | 0 |
Less current portion | (3,032) | 0 |
Long-term debt, excluding current maturities | $ 20,768 | $ 0 |
DEBT - Maturity Schedule (Detai
DEBT - Maturity Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
2,017 | $ 3,032 | |
2,018 | 7,824 | |
2,019 | 8,665 | |
2,020 | 5,479 | |
Total | $ 25,000 | $ 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense | $ 3.8 | $ 3.2 | $ 2.6 |
Purchase obligation | $ 16.9 |
COMMITMENTS AND CONTINGENCIES67
COMMITMENTS AND CONTINGENCIES - Schedule of Minimum Lease Payments Under Noncancelable Operating Leases (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,017 | $ 2,778 |
2,018 | 2,770 |
2,019 | 2,812 |
2,020 | 2,653 |
2,021 | 2,677 |
Thereafter | 2,291 |
Total minimum lease payments | $ 15,981 |
SALE OF COMMON STOCK (Details)
SALE OF COMMON STOCK (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 11, 2016 | Sep. 28, 2016 | Dec. 31, 2016 | Mar. 16, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Subsidiary, Sale of Stock [Line Items] | |||||||
Proceeds from issuance of common stock | $ 14,000 | $ 16,142 | $ 0 | $ 0 | |||
Stock issued, value, stock options exercised, net | $ 2,200 | ||||||
Issuance of common stock, net of offering costs | 15,924 | ||||||
Over-Allotment Option | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Proceeds from issuance of common stock | $ 16,200 | ||||||
At The Market Issuance Sales Agreement (ATM) | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Issuance of common stock, net of offering costs | $ 17,000 | ||||||
Common Stock | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Common stock, shares issued (shares) | 13,000,000 | 14,950,000 | |||||
Shares issued, price per share (in USD per share) | $ 1.20 | ||||||
Common Stock | Over-Allotment Option | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Common stock, shares issued (shares) | 1,950,000 | 15,000,000 | |||||
Subsequent event | At The Market Issuance Sales Agreement (ATM) | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Proceeds from issuance of common stock | $ 17,000 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) | Jan. 01, 2017shares | Dec. 31, 2016USD ($)purchase_period$ / sharesshares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options outstanding (shares) | 8,730,000 | 8,170,000 | 8,632,000 | 8,509,000 | |
Total unrecognized compensation cost | $ | $ 16,200,000 | ||||
Weighted-average period | 2 years 7 months 15 days | ||||
Income tax benefit recognized relating to stock-based compensation expense | $ | $ 0 | ||||
Income tax benefit realized from exercised stock options | $ | 0 | ||||
Intrinsic value of options exercised | $ | $ 700,000 | $ 4,900,000 | $ 5,200,000 | ||
Number of options outstanding that were vested and expected to vest (shares) | 8,600,000 | ||||
Weighted-average fair value, vested (usd per share) | $ / shares | $ 4.57 | ||||
Weighted-average remaining contractual term, vested | 4 years 1 month 16 days | ||||
Aggregate intrinsic value, exercisable shares | $ | $ 900,000 | ||||
Number of shares exercisable (shares) | 6,289,000 | ||||
Common stock fair value (usd per share) | $ / shares | $ 1.01 | ||||
Restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Intrinsic value of units vested | $ | $ 900,000 | $ 4,200,000 | $ 3,200,000 | ||
Weighted average remaining contractual term | 1 year 8 months 12 days | ||||
Intrinsic value of restricted stock units outstanding | $ | $ 600,000 | ||||
2006 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity awards granted period, vest over | 4 years | ||||
Equity awards granted contractual term | 10 years | ||||
Options outstanding (shares) | 3,000,000 | ||||
Number of shares available for issuance (shares) | 0 | ||||
2011 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity awards granted period, vest over | 4 years | ||||
Number of shares available for issuance (shares) | 2,239,444 | ||||
Issue of common stock (shares) | 2,643,171 | ||||
Increase on each January 1 in number of shares of common stock reserved for issuance under the stock incentive plan | 4.50% | ||||
2011 Plan | Subsequent event | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Increase in shares authorized for issuance under plan (shares) | 2,802,124 | ||||
2011 Plan | Before August 1, 2012 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expiration term of ESPP | 10 years | ||||
2011 Plan | After August 1, 2012 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity awards granted contractual term | 7 years | ||||
2011 Employee Stock Purchase Plan (ESPP) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares available for issuance (shares) | 37,821 | ||||
Issue of common stock (shares) | 669,603 | ||||
Annual share increase in reserved shares on each January 1 (shares) | 330,396 | ||||
Increase in shares authorized as a percentage of the total number of shares of common stock outstanding | 1.00% | ||||
Number of interim purchase periods, up to | purchase_period | 4 | ||||
General duration (months) of employee stock purchase plan | 24 months | ||||
Payroll deductions | 15.00% | ||||
Fair market value | 85.00% | ||||
Look-back feature in ESPP | 2 years | ||||
Recognition period for additional expense triggered by the reset feature | 24 months | ||||
Purchase of common stock limit | $ | $ 25,000 | ||||
2011 Employee Stock Purchase Plan (ESPP) | Subsequent event | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual share increase in reserved shares on each January 1 (shares) | 330,996 |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Weighted Average Assumptions used to Estimate Fair Value of Stock Options Granted (Details) - Stock options - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
The Fair Value of Each Option Granted During the Period [Abstract] | |||
Expected term (in years) | 4 years 6 months | 4 years 6 months | 4 years 6 months |
Expected volatility | 80.00% | 72.50% | 67.70% |
Annual risk-free rate of return | 1.10% | 1.40% | 1.40% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Weighted-average fair value on grant date (usd per share) | $ 1.29 | $ 4.68 | $ 5.64 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Total Stock Based Compensation Expense Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 10,326 | $ 12,696 | $ 9,740 |
Cost of revenues | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 1,188 | 1,217 | 816 |
Research and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 3,879 | 4,559 | 3,127 |
Sales and marketing | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 2,144 | 3,162 | 2,487 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 3,115 | $ 3,758 | $ 3,310 |
STOCK-BASED COMPENSATION - Su72
STOCK-BASED COMPENSATION - Summary of Stock Based Compensation Expense Associated with Each Type of Award (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 10,326 | $ 12,696 | $ 9,740 |
Stock options and restricted stock units | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 8,384 | 10,685 | 8,845 |
ESPP | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 1,942 | $ 2,011 | $ 895 |
STOCK-BASED COMPENSATION - Su73
STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Shares | |||
Options outstanding, beginning (shares) | 8,170 | 8,632 | 8,509 |
Granted (shares) | 2,440 | 1,289 | 1,311 |
Exercised (shares) | (375) | (1,079) | (886) |
Canceled (shares) | (1,505) | (672) | (302) |
Options outstanding, ending (shares) | 8,730 | 8,170 | 8,632 |
Weighted- Average Exercise Price per Share | |||
Options outstanding, beginning (usd per share) | $ 5.36 | $ 4.75 | $ 3.94 |
Granted (usd per share) | 2.12 | 8.20 | 10.36 |
Exercised (usd per share) | 0.39 | 1.40 | 4.33 |
Canceled (usd per share) | 6.01 | 9.31 | 7.58 |
Options outstanding, ending (usd per share) | $ 4.55 | $ 5.36 | $ 4.75 |
STOCK-BASED COMPENSATION - Su74
STOCK-BASED COMPENSATION - Summary of Stock Options Outstanding (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Exercise Price Range of Options Outstanding and Options Exercisable [Line Items] | |
Options Outstanding - Number of Shares (shares) | shares | 8,730 |
Options Outstanding - Weighted- Average Remaining Life | |
Options Outstanding - Weighted- Average Exercise Price (usd per share) | |
Options Exercisable - Number of Shares Exercisable (shares) | shares | 6,289 |
Options Exercisable - Weighted- Average Exercise Price (usd per share) | |
$0.27 – $1.63 | |
Exercise Price Range of Options Outstanding and Options Exercisable [Line Items] | |
Range of Exercise Prices - Lower Range Limit (usd per share) | 0.27 |
Range of Exercise Prices - Upper Range Limit (usd per share) | $ 1.63 |
Options Outstanding - Number of Shares (shares) | shares | 2,594 |
Options Outstanding - Weighted- Average Remaining Life | 3 years 2 months 12 days |
Options Outstanding - Weighted- Average Exercise Price (usd per share) | $ 1 |
Options Exercisable - Number of Shares Exercisable (shares) | shares | 2,521 |
Options Exercisable - Weighted- Average Exercise Price (usd per share) | $ 1 |
$1.88 - $6.90 | |
Exercise Price Range of Options Outstanding and Options Exercisable [Line Items] | |
Range of Exercise Prices - Lower Range Limit (usd per share) | 1.88 |
Range of Exercise Prices - Upper Range Limit (usd per share) | $ 6.9 |
Options Outstanding - Number of Shares (shares) | shares | 1,839 |
Options Outstanding - Weighted- Average Remaining Life | 5 years 9 months 18 days |
Options Outstanding - Weighted- Average Exercise Price (usd per share) | $ 2.08 |
Options Exercisable - Number of Shares Exercisable (shares) | shares | 358 |
Options Exercisable - Weighted- Average Exercise Price (usd per share) | $ 2.09 |
$6.98 – $8.57 | |
Exercise Price Range of Options Outstanding and Options Exercisable [Line Items] | |
Range of Exercise Prices - Lower Range Limit (usd per share) | 6.98 |
Range of Exercise Prices - Upper Range Limit (usd per share) | $ 8.57 |
Options Outstanding - Number of Shares (shares) | shares | 1,765 |
Options Outstanding - Weighted- Average Remaining Life | 3 years 9 months 18 days |
Options Outstanding - Weighted- Average Exercise Price (usd per share) | $ 5.23 |
Options Exercisable - Number of Shares Exercisable (shares) | shares | 1,412 |
Options Exercisable - Weighted- Average Exercise Price (usd per share) | $ 5.41 |
$8.58 - $15.15 | |
Exercise Price Range of Options Outstanding and Options Exercisable [Line Items] | |
Range of Exercise Prices - Lower Range Limit (usd per share) | 8.58 |
Range of Exercise Prices - Upper Range Limit (usd per share) | $ 15.15 |
Options Outstanding - Number of Shares (shares) | shares | 1,797 |
Options Outstanding - Weighted- Average Remaining Life | 4 years |
Options Outstanding - Weighted- Average Exercise Price (usd per share) | $ 8.34 |
Options Exercisable - Number of Shares Exercisable (shares) | shares | 1,517 |
Options Exercisable - Weighted- Average Exercise Price (usd per share) | $ 8.28 |
$16.01 - $16.01 | |
Exercise Price Range of Options Outstanding and Options Exercisable [Line Items] | |
Range of Exercise Prices - Lower Range Limit (usd per share) | 16.01 |
Range of Exercise Prices - Upper Range Limit (usd per share) | $ 16.01 |
Options Outstanding - Number of Shares (shares) | shares | 735 |
Options Outstanding - Weighted- Average Remaining Life | 4 years 6 months |
Options Outstanding - Weighted- Average Exercise Price (usd per share) | $ 12.40 |
Options Exercisable - Number of Shares Exercisable (shares) | shares | 481 |
Options Exercisable - Weighted- Average Exercise Price (usd per share) | $ 12.27 |
STOCK-BASED COMPENSATION - Su75
STOCK-BASED COMPENSATION - Summary of Restricted Stock Unit Activity (Details) - Restricted stock units - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restricted Stock Units | |||
Outstanding units, beginning (shares) | 1,313 | 1,345 | 418 |
Granted (shares) | 54 | 683 | 1,250 |
Vested (shares) | (464) | (488) | (281) |
Canceled (shares) | (297) | (227) | (42) |
Outstanding units, ending (shares) | 606 | 1,313 | 1,345 |
Weighted Average Fair Value per Share at Grant Date | |||
Outstanding units, beginning (usd per share) | $ 9.31 | $ 8.25 | $ 6.31 |
Granted (usd per share) | 1.99 | 11.22 | 8.68 |
Vested (usd per share) | 9.06 | 8.58 | 7.38 |
Canceled (usd per share) | 8.32 | 10.32 | 7.56 |
Outstanding units, ending (usd per share) | $ 9.33 | $ 9.31 | $ 8.25 |
STOCK-BASED COMPENSATION - Su76
STOCK-BASED COMPENSATION - Summary of ESPP Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Proceeds from common stock issued under ESPP | $ 999 | $ 2,497 | $ 1,531 |
Shares of common stock issued (shares) | 659 | 499 | 410 |
Weighted-average price per share (usd per share) | $ 1.52 | $ 5 | $ 3.73 |
INCOME TAXES - Schedule of Dome
INCOME TAXES - Schedule of Domestic and Foreign Components of Loss before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||||||||||
United States | $ (67,631) | $ (22,120) | $ (8,732) | ||||||||
Foreign | 1,644 | 1,417 | 1,446 | ||||||||
Loss before income taxes | $ (12,437) | $ (18,612) | $ (16,379) | $ (18,559) | $ (15,108) | $ 935 | $ (377) | $ (6,153) | $ (65,987) | $ (20,703) | $ (7,286) |
INCOME TAXES - Schedule of Prov
INCOME TAXES - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||||||||||
Federal | $ 0 | $ 0 | $ 0 | ||||||||
State | 36 | 44 | 85 | ||||||||
Foreign | 785 | 693 | 716 | ||||||||
Total | 821 | 737 | 801 | ||||||||
Deferred: | |||||||||||
Federal | 594 | 652 | 0 | ||||||||
State | 59 | 41 | 0 | ||||||||
Foreign | 1 | (51) | (35) | ||||||||
Total | 654 | 642 | (35) | ||||||||
Provision for income taxes | $ 751 | $ 144 | $ 344 | $ 236 | $ 675 | $ 311 | $ 226 | $ 167 | $ 1,475 | $ 1,379 | $ 766 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | |||
Federal statutory income tax rate | 34.00% | 34.00% | 34.00% |
Undistributed foreign earnings deferred tax liabilities | $ 0.7 | ||
Increase in equity if and when deferred tax assets are ultimately realized | 2.3 | ||
Increase to unrecognized tax benefits | 0.5 | ||
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 130.9 | ||
Federal | Research tax credit carryforward | |||
Operating Loss Carryforwards [Line Items] | |||
Research tax credit carryforwards | 10.9 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 70.9 | ||
State | Research tax credit carryforward | |||
Operating Loss Carryforwards [Line Items] | |||
Research tax credit carryforwards | $ 11.3 |
INCOME TAXES - Schedule of Effe
INCOME TAXES - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||||||||||
Income tax benefit at statutory federal rate | $ (22,435) | $ (7,039) | $ (2,477) | ||||||||
State taxes, net of federal benefit | 63 | 56 | (4,576) | ||||||||
Change in valuation allowance | 21,370 | 7,812 | 16,646 | ||||||||
Foreign tax rate and tax law differential | 27 | (29) | (43) | ||||||||
Tax credits | (1,179) | (1,553) | (5,619) | ||||||||
Stock-based compensation | 1,775 | 1,932 | 957 | ||||||||
Other permanent items | 776 | 61 | 231 | ||||||||
Other nondeductible/nontaxable items | 920 | (72) | (4,586) | ||||||||
Uncertain tax positions | 158 | 211 | 233 | ||||||||
Provision for income taxes | $ 751 | $ 144 | $ 344 | $ 236 | $ 675 | $ 311 | $ 226 | $ 167 | $ 1,475 | $ 1,379 | $ 766 |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Allowances and reserves | $ 16,032 | $ 14,639 |
Net operating loss and tax credit carryforwards | 67,875 | 46,812 |
Stock-based compensation | 3,033 | 3,055 |
Deferred revenue | 8,289 | 5,966 |
Fixed assets and intangibles | 7,661 | 6,830 |
Other | 2,857 | 3,327 |
Subtotal | 105,747 | 80,629 |
Less valuation allowance | (104,554) | (80,529) |
Total deferred tax assets, net of valuation allowance | 1,193 | 100 |
Deferred tax liabilities: | ||
Goodwill | (1,346) | (693) |
Unremitted foreign earnings | (748) | 0 |
Total deferred tax liabilities | (2,094) | (693) |
Net deferred tax asset/(liability) | $ (901) | $ (593) |
INCOME TAXES - Schedule of Reco
INCOME TAXES - Schedule of Reconciliation of Total Amounts of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits—at beginning of year | $ 5,482 | $ 4,426 | $ 376 |
Increases in balances related to tax positions taken in prior years | 0 | 14 | 1,895 |
Increases in balances related to tax positions taken in current year | 571 | 1,053 | 2,155 |
Lapses in statutes of limitations | (37) | (11) | 0 |
Unrecognized tax benefits—at end of year | $ 6,016 | $ 5,482 | $ 4,426 |
CONCENTRATION OF CREDIT RISK 83
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Customer Accounting for the largest concentration of accounts payable | Accounts receivable | Credit concentration risk | |||
Revenue, Major Customer [Line Items] | |||
Percentage of concentration risk | 25.00% | 15.00% | |
Customer accounting for the largest concentration of revenue | Net revenue | Customer concentration risk | |||
Revenue, Major Customer [Line Items] | |||
Percentage of concentration risk | 18.00% | 17.00% | 24.00% |
Customer accounting for second largest concentration of revenue | Net revenue | Customer concentration risk | |||
Revenue, Major Customer [Line Items] | |||
Percentage of concentration risk | 12.00% | 16.00% |
NET LOSS PER SHARE - Schedule o
NET LOSS PER SHARE - Schedule of Potential Common Shares Outstanding Excluded from the Computation of Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (shares) | 9,887 | 10,263 | 9,955 |
Stock options to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (shares) | 8,981 | 8,646 | 8,502 |
Unvested restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (shares) | 906 | 1,506 | 1,258 |
Warrants to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total (shares) | 0 | 111 | 195 |
SEGMENT AND GEOGRAPHIC INFORM85
SEGMENT AND GEOGRAPHIC INFORMATION - Narrative (Details) | 12 Months Ended |
Dec. 31, 2016business_activitysegment | |
Segment Reporting [Abstract] | |
Number of business activities | business_activity | 1 |
Number of operating segments | 1 |
Number of reportable segments | 1 |
SEGMENT AND GEOGRAPHIC INFORM86
SEGMENT AND GEOGRAPHIC INFORMATION - Summary of Net Revenues by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | $ 90,601 | $ 88,684 | $ 79,185 | $ 64,121 | $ 65,629 | $ 102,874 | $ 102,093 | $ 86,653 | $ 322,591 | $ 357,249 | $ 343,904 |
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 259,080 | 303,195 | 294,549 | ||||||||
International | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | $ 63,511 | $ 54,054 | $ 49,355 |
SEGMENT AND GEOGRAPHIC INFORM87
SEGMENT AND GEOGRAPHIC INFORMATION - Summary of Long-Lived Assets by Geographic Region (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total | $ 31,440 | $ 32,118 | $ 30,824 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total | 22,634 | 21,913 | 20,037 |
China | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total | 5,727 | 7,950 | 9,585 |
Other | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total | $ 3,079 | $ 2,255 | $ 1,202 |
QUARTERLY FINANCIAL INFORMATI88
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) - Schedule of Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net revenues | $ 90,601 | $ 88,684 | $ 79,185 | $ 64,121 | $ 65,629 | $ 102,874 | $ 102,093 | $ 86,653 | $ 322,591 | $ 357,249 | $ 343,904 |
Cost of revenues | 74,367 | 72,805 | 65,049 | 52,361 | 49,929 | 71,408 | 69,066 | 58,629 | 264,583 | 249,032 | 230,861 |
Gross profit | 16,234 | 15,879 | 14,136 | 11,760 | 15,700 | 31,466 | 33,027 | 28,024 | 58,008 | 108,217 | 113,043 |
Operating expenses: | |||||||||||
Research and development | 11,378 | 13,169 | 13,091 | 13,066 | 12,544 | 12,059 | 12,786 | 13,430 | 50,703 | 50,819 | 45,386 |
Sales and marketing | 7,592 | 11,016 | 9,987 | 10,215 | 10,922 | 10,510 | 12,508 | 11,937 | 38,810 | 45,877 | 41,003 |
General and administrative | 6,296 | 6,708 | 6,846 | 7,567 | 7,405 | 7,118 | 8,102 | 8,205 | 27,418 | 30,830 | 31,083 |
Restructuring and other charges | 1,060 | 2,717 | 0 | 0 | 3,777 | 0 | 0 | ||||
Total operating expenses | 26,326 | 33,610 | 29,924 | 30,848 | 30,871 | 29,687 | 33,396 | 33,572 | 120,708 | 127,526 | 117,472 |
Loss from operations | (10,092) | (17,731) | (15,788) | (19,088) | (15,171) | 1,779 | (369) | (5,548) | (62,700) | (19,309) | (4,429) |
Other income (expense), net | (2,345) | (881) | (591) | 529 | 63 | (844) | (8) | (605) | (3,287) | (1,394) | (2,857) |
Loss before income taxes | (12,437) | (18,612) | (16,379) | (18,559) | (15,108) | 935 | (377) | (6,153) | (65,987) | (20,703) | (7,286) |
Provision for income taxes | (751) | (144) | (344) | (236) | (675) | (311) | (226) | (167) | (1,475) | (1,379) | (766) |
Net loss | $ (13,188) | $ (18,756) | $ (16,723) | $ (18,795) | $ (15,783) | $ 624 | $ (603) | $ (6,320) | $ (67,462) | $ (22,082) | $ (8,052) |
Net loss per share, basic and diluted (usd per share) | $ (0.21) | $ (0.40) | $ (0.36) | $ (0.41) | $ (1.34) | $ (0.49) | $ (0.19) | ||||
Net income (loss) per share, basic (usd per share) | $ (0.35) | $ 0.01 | $ (0.01) | $ (0.14) | |||||||
Net income (loss) per share, diluted (usd per share) | $ (0.35) | $ 0.01 | $ (0.01) | $ (0.14) |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) | 1 Months Ended | |
Feb. 28, 2017USD ($)$ / sharesshares | Jul. 31, 2016USD ($) | |
Closing date to March 31, 2018 | Amended term loan agreement, February 2017 | Secured debt | Subsequent event | ||
Subsequent Event [Line Items] | ||
Liquidity ratio required | 1.5 | |
April 1, 2019 and thereafter | Amended term loan agreement, February 2017 | Secured debt | Subsequent event | ||
Subsequent Event [Line Items] | ||
Liquidity ratio required | 1.75 | |
Tennenbaum Capital Partners, LLC | ||
Subsequent Event [Line Items] | ||
Line of credit facility, interest rate during period | 10.25% | |
Commitment fee percentage | 3.30% | |
Closing fee, percentage | 10.00% | |
Tennenbaum Capital Partners, LLC | Term loan agreement, July 2016 | Secured debt | ||
Subsequent Event [Line Items] | ||
Debt instrument principal amount | $ 25,000,000 | |
Proceeds from term loan, net of issuance costs | $ 25,000,000 | |
Line of credit facility, interest rate during period | 10.25% | |
Commitment fee percentage | 3.30% | |
Closing fee, percentage | 10.00% | |
Tennenbaum Capital Partners, LLC | Amended term loan agreement, February 2017 | Secured debt | Subsequent event | ||
Subsequent Event [Line Items] | ||
Debt instrument principal amount | $ 25,000,000 | |
Proceeds from term loan, net of issuance costs | $ 10,300,000 | |
Line of credit facility, interest rate during period | 10.3125% | |
Commitment fee percentage | 3.00% | |
Closing fee, percentage | 4.00% | |
Unrestricted cash requirement, minimum | $ 10,000,000 | |
Number of securities called by warrants (shares) | shares | 1,220,000 | |
Warrant to purchase common stock, price per share (usd per share) | $ / shares | $ 1.05 | |
Class of warrant term year | 7 years | |
LIBOR | Tennenbaum Capital Partners, LLC | ||
Subsequent Event [Line Items] | ||
Line of credit facility, interest rate during period | 9.5625% | |
Reduction of interest rate during period, percent | 1.00% | |
LIBOR | Tennenbaum Capital Partners, LLC | Term loan agreement, July 2016 | Secured debt | ||
Subsequent Event [Line Items] | ||
Line of credit facility, interest rate during period | 9.5625% | |
Reduction of interest rate during period, percent | 1.00% | |
LIBOR | Tennenbaum Capital Partners, LLC | Amended term loan agreement, February 2017 | Secured debt | Subsequent event | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 9.25% | |
Reduction of interest rate during period, percent | 1.00% | |
Minimum | Tennenbaum Capital Partners, LLC | ||
Subsequent Event [Line Items] | ||
Prepayment fee, percent | 1.00% | |
Minimum | Tennenbaum Capital Partners, LLC | Term loan agreement, July 2016 | Secured debt | ||
Subsequent Event [Line Items] | ||
Prepayment fee, percent | 1.00% | |
Minimum | Tennenbaum Capital Partners, LLC | Amended term loan agreement, February 2017 | Secured debt | Subsequent event | ||
Subsequent Event [Line Items] | ||
Prepayment fee, percent | 1.00% | |
Monthly payments | $ 15,000,000 | |
Maximum | Tennenbaum Capital Partners, LLC | ||
Subsequent Event [Line Items] | ||
Prepayment fee, percent | 3.00% | |
Maximum | Tennenbaum Capital Partners, LLC | Term loan agreement, July 2016 | Secured debt | ||
Subsequent Event [Line Items] | ||
Prepayment fee, percent | 3.00% | |
Maximum | Tennenbaum Capital Partners, LLC | Amended term loan agreement, February 2017 | Secured debt | Subsequent event | ||
Subsequent Event [Line Items] | ||
Prepayment fee, percent | 3.00% |