Echelon 10-Q 7 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 31, 2017
Document and Entity Information [Abstract]
Document Fiscal Period Focus	Q2
Entity Registrant Name	ECHELON CORP
Entity Central Index Key	31,347
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Document Fiscal Year Focus	2,017
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		4,454,155

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 7,727	$ 9,803
Restricted investments	1,250	1,250
Short-term investments	11,973	11,983
Accounts receivable, net	3,607	3,015
Inventories	2,636	2,570
Deferred cost of revenues	1,229	1,104
Other current assets	1,305	900
Total current assets	29,727	30,625
Property and equipment, net	360	445
Intangible assets, net	840	953
Other long-term assets	863	885
Total assets	31,790	32,908
CURRENT LIABILITIES:
Accounts payable	2,235	1,697
Accrued liabilities	1,732	2,174
Deferred revenues	3,838	3,671
Total current liabilities	7,805	7,542
LONG-TERM LIABILITIES:
Other long-term liabilities	703	688
Total long-term liabilities	703	688
STOCKHOLDERS’ EQUITY:
Common stock	48	48
Additional paid-in capital	358,967	358,123
Treasury stock	(28,130)	(28,130)
Accumulated other comprehensive loss	(2,108)	(2,437)
Accumulated deficit	(305,749)	(303,180)
Total Echelon Corporation stockholders’ equity	23,028	24,424
Noncontrolling interest in subsidiary	254	254
Total stockholders’ equity	23,282	24,678
Total liabilities and stockholders’ equity	$ 31,790	$ 32,908

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
Revenues	[1]	$ 8,021	$ 8,061	$ 15,820	$ 16,708
Cost of revenues	[2]	3,495	3,415	6,821	7,220
Gross profit		4,526	4,646	8,999	9,488
Operating expenses:
Product development	[3]	2,255	1,985	4,482	4,178
Sales and marketing	[3]	1,463	1,679	2,925	2,981
General and administrative	[3]	1,929	2,197	3,853	4,208
Total operating expenses		5,647	5,861	11,260	11,367
Loss from operations		(1,121)	(1,215)	(2,261)	(1,879)
Interest and other income (expense), net		(220)	503	(285)	298
Loss before provision for income taxes		(1,341)	(712)	(2,546)	(1,581)
Income tax expense (benefit)		29	51	23	57
Net loss		$ (1,370)	$ (763)	$ (2,569)	$ (1,638)
Basic and diluted net loss per share (usd per share)		$ (0.31)	$ (0.17)	$ (0.58)	$ (0.37)
Shares used in computing net loss per share:
Basic (in shares)		4,445	4,420	4,440	4,419
Diluted (in shares)		4,445	4,420	4,440	4,419
[1]	Represents the portfolio of available for sale securities that is included in restricted investments and short-term investments in the Company’s condensed consolidated balance sheets
[2]	Included in cash and cash equivalents in the Company’s condensed consolidated balance sheets
[3]	See Note 4 for summary of amounts included representing stock-based compensation expense.

Condensed Consolidated Stateme4

Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
Revenue from related parties	$ 0	$ 0	$ 0	$ 1,300,000

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
Net loss	$ (1,370)	$ (763)	$ (2,569)	$ (1,638)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	246	(523)	329	(339)
Unrealized holding gain (loss) on available-for-sale securities	1	1	0	13
Total other comprehensive income (loss)	247	(522)	329	(326)
Comprehensive loss	$ (1,123)	$ (1,285)	$ (2,240)	$ (1,964)

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net loss	$ (2,569,000)	$ (1,638,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	220,000	261,000
Reduction in allowance for doubtful accounts	(7,000)	2,000
Increase in accrued investment income	(40,000)	(20,000)
Stock-based compensation	909,000	176,000
Adjustment to contingent consideration	0	(318,000)
Change in operating assets and liabilities:
Accounts receivable	(668,000)	364,000
Inventories	(66,000)	79,000
Deferred cost of revenues	(111,000)	(230,000)
Other current assets	(398,000)	219,000
Accounts payable	544,000	(791,000)
Accrued liabilities	(111,000)	(1,022,000)
Deferred revenues	226,000	1,038,000
Deferred rent	(32,000)	99,000
Net cash used in operating activities	(2,103,000)	(1,781,000)
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases of available‑for‑sale short‑term investments	(11,950,000)	(7,988,000)
Proceeds from maturities and sales of available‑for‑sale short‑term investments	12,000,000	13,000,000
Change in other long‑term assets	24,000	0
Capital expenditures	(31,000)	(67,000)
Net cash provided by investing activities	43,000	4,945,000
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Repurchase of common stock from employees for payment of taxes on vesting of restricted stock units and upon exercise of stock options	(64,000)	(32,000)
Net cash used in financing activities	(64,000)	(32,000)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	48,000	(16,000)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(2,076,000)	3,116,000
CASH AND CASH EQUIVALENTS:
Beginning of period	9,803,000	7,691,000
End of period	7,727,000	10,807,000
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for income taxes	$ 68,000	$ 85,000

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2017
Summary of Significant Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Basis of Presentation The condensed consolidated financial statements include the accounts of Echelon Corporation, a Delaware corporation, its wholly-owned subsidiaries, and a subsidiary in which it has a controlling interest (collectively referred to as the “Company”). The Company reports non-controlling interests in consolidated entities as a component of equity separate from the Company’s equity. All material inter-company transactions between and among the Company and its consolidated subsidiaries and other consolidated entities have been eliminated in consolidation. While the financial information furnished is unaudited, the condensed consolidated financial statements included in this report reflect all adjustments (consisting only of normal recurring adjustments) which the Company considers necessary for the fair presentation of the results of operations for the interim periods covered, and of the financial condition of the Company at the date of the interim balance sheet. The results for interim periods are not necessarily indicative of the results for the entire year. The condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2016 included in its Annual Report on Form 10‑K. There have been no material changes to the Company’s significant accounting policies as compared to the significant accounting policies described in its Annual Report on Form 10‑K for the fiscal year ended December 31, 2016 . Risks and Uncertainties The Company’s operations and performance depend significantly on worldwide economic conditions and their impact on purchases of the Company’s products, as well as the ability of suppliers to provide the Company with products and services in a timely manner. The impact of any of the matters described below could have an adverse effect on the Company’s business, results of operations and financial condition. • The Company’s sales are currently concentrated, as approximately 29.1% of revenues for the six months ended June 30, 2017 , were derived from one customer, Avnet Europe Comm VA ("Avnet"), the Company's primary distributor of its IIoT products in Europe and Japan. Customers in any of the Company’s target market sectors may experience unexpected reductions in demand for their products and consequently reduce their purchases from the Company, resulting in either the loss of a significant customer or a notable decrease in the level of sales to a significant customer. In addition, if any of these customers are unable to obtain the necessary capital to operate their business, they may be unable to satisfy their payment obligations to the Company. • The Company utilizes third-party contract electronic manufacturers to manufacture, assemble, and test its products. If any of these third-parties were unable to obtain the necessary capital to operate their business, they may be unable to provide the Company with timely services or to make timely deliveries of products. • From time to time, the Company has experienced shortages or interruptions in supply for certain products or components used in the manufacture of the Company’s products that have been or will be discontinued. In order to ensure an adequate supply of these items, the Company has occasionally purchased quantities of these items that are in excess of the Company’s then current estimate of short-term requirements. If the long-term requirements do not materialize as originally expected, or if the Company develops alternative solutions that no longer employ these items and the Company is not able to dispose of these excess products or components, the Company could be subject to increased levels of excess and obsolete inventories. • In an effort to manage costs and inventory risks, the Company has decreased the inventory levels of certain products. If there is an unexpected increase in demand for these items, the Company might not be able to supply its customers with products in a timely manner. Use of Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions, and estimates that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Significant estimates and judgments are used for revenue recognition, performance-based equity compensation, inventory valuation, intangible asset valuation, contingent consideration valuation, allowance for warranty costs, and other loss contingencies. In order to determine the carrying values of assets and liabilities that are not readily apparent from other sources, the Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances. Actual results experienced by the Company may differ materially from management’s estimates. Recently Issued Accounting Standards (i) New Accounting Standards Recently Adopted In July 2015, the FASB issued an update to ASC 330, Inventory: Simplifying the Measurement of Inventory . Under this update, subsequent measurement of inventory is based on the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and disposal. This update does not apply to inventory that is measured using last-in, first-out or the retail inventory method. This update was adopted by the Company in the first quarter of fiscal year 2017. There was no impact on the Company's financial statements as a result of the adoption. (ii) New Accounting Standards Not Yet Effective In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which superseded existing revenue recognition guidance under current U.S. GAAP. The standard is a comprehensive revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In doing so, among other things, companies will generally need to use more judgment and make more estimates than under the current guidance. Recently, the FASB has issued guidance clarifying certain topics such as (i) gross versus net revenue reporting, (ii) identifying performance obligations and licensing, (iii) accounting for shipping and handling fees and costs, and (iv) accounting for consideration given by a vendor to a customer. The standard permits two methods of adoption: (i) retrospectively to each prior reporting period presented (the full retrospective method), or (ii) retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application (the cumulative catch-up transition method). The Company currently anticipates adopting the standard using the full retrospective method to restate each prior reporting period presented. The standard will be effective for Echelon in the fiscal year beginning January 1, 2018. The Company currently anticipates the standard will have a material impact on its financial statements and disclosures, and continues to make progress in assessing all potential impacts of the standard, including any impacts of recently issued amendments. The Company currently believes the most significant impact of adopting the new standard will relate to its accounting for sales made to distributors under agreements that contain a limited right to return unsold products and price adjustment provisions. Under the existing revenue guidance, the Company has historically concluded that the price to these distributors is not fixed or determinable at the time it delivers products to them. Accordingly, revenue from sales to these distributors has not historically been recognized until the distributor resells the product. By contrast, under the new standard, the Company expects to recognize revenue, including estimates for applicable variable consideration, predominately at the time of shipment to these distributors, thereby accelerating the timing of revenue for products sold through the distribution channel. During the year ended December 31, 2016 , the Company recognized approximately $14.7 million of revenue sold through such distributors. As of December 31, 2016 , the amount of revenue and cost of revenues sold through the distribution channel that were deferred was $2.6 million and $668,000 , respectively. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires, among other things, the recognition of lease assets and lease liabilities on the balance sheet by lessees for certain leases classified as operating leases under previous GAAP. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. ASU 2016-02 mandates a modified retrospective transition method with early adoption permitted. The Company is currently evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures. Revenue Recognition The Company’s revenues are derived from the sale and license of its products and, to a lesser extent, from fees associated with training, technical support, and custom software design services offered to its customers. Product revenues consist of revenues from hardware sales and software licensing arrangements. Service revenues consist of product technical support (including, in limited circumstances, software post-contract support services) and training. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery to the customer’s carrier (and acceptance, as applicable) has occurred, the sales price is fixed or determinable, collectability is probable, and there are no post-delivery obligations. For non-distributor hardware sales, including sales to third party manufacturers, these criteria are generally met at the time of delivery to the customer’s carrier. However, for arrangements that contain contractual acceptance provisions, revenue recognition may be delayed until acceptance by the customer or the acceptance provisions lapse unless the Company can objectively demonstrate that the contractual acceptance criteria have been satisfied, which is generally accomplished by establishing a history of acceptance for the same or similar products. For sales made to the Company’s distributor partners, revenue recognition criteria are generally met at the time the distributor sells the products through to its end-use customer. Service revenue is recognized as the training services are performed, or ratably over the term of the support period. The Company accounts for the rights of return, price protection, rebates, and other sales incentives offered to distributors of its products as a reduction in revenue. With the exception of sales to certain distributors, the Company’s customers are generally not entitled to return products for a refund. For sales to certain distributors, due to contractual rights of return and other factors that impact its ability to make a reasonable estimate of future returns and other sales incentives, revenues are not recognized until the distributor has shipped its products to the end customer . Deferred Revenue and Deferred Cost of Revenues Deferred revenue consists of amounts billed or payments received in advance of revenue recognition. Deferred cost of revenues related to deferred product revenues includes direct product costs and applied overhead. Deferred cost of revenues related to deferred service revenues includes direct labor costs and applied overhead. Once all revenue recognition criteria have been met, the deferred revenues and associated cost of revenues are recognized. Restricted Investments As of June 30, 2017 , restricted investments consist of balances maintained by the Company with an investment advisor in money market funds and permitted treasury bills. These balances represent collateral for a $1.0 million operating line of credit issued to the Company by its primary bank for credit card purchases. Because the Company’s agreement with the lender prevents the Company from withdrawing these funds, they are considered restricted. Fair Value Measurements The Company measures at fair value its cash equivalents and available-for-sale investments using a valuation hierarchy based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's own assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1 - Quoted prices for identical instruments in active markets; • Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires the Company to minimize the use of unobservable inputs and to use observable market data, if available, when estimating fair value. Other than cash and money market funds, the Company's only financial assets and liabilities required to be measured at fair value on a recurring basis at June 30, 2017 , are its fixed income available-for-sale securities. See Note 2 of these Notes to condensed consolidated financial statements for a summary of the input levels used in determining the fair value of these assets and liabilities as of June 30, 2017 . Long-Lived Assets We perform periodic reviews to determine whether facts and circumstances exist that would indicate that the carrying amounts of property, plant and equipment and long-lived intangible assets might not be fully recoverable. If facts and circumstances indicate that the carrying amount of these assets might not be fully recoverable, we compare projected undiscounted net cash flows associated with the related asset or group of assets over their estimated remaining useful lives against their respective carrying amounts. In the event that the projected undiscounted cash flows are not sufficient to recover the carrying value of the assets, the assets are written down to their estimated fair values based on the expected discounted future cash flows attributable to the assets. Evaluation of impairment of property, plant and equipment and long-lived intangible assets requires estimates in the forecast of future operating results that are used in the preparation of the expected future undiscounted cash flows. Actual future operating results and the remaining economic lives of our property, plant and equipment and long-lived intangible assets could differ from our estimates used in assessing the recoverability of these assets. These differences could result in impairment charges, which could have a material adverse impact on our results of operations. Contingent Consideration During the quarter ended March 31, 2016, the contingent consideration payable to Lumewave's shareholders, which the Company recognized upon its purchase of Lumewave in August 2014, decreased by approximately $318,000 . This reduction was due to the Company's determination that it was no longer probable that the minimum targets specified in the purchase agreement would be met due to sales force transitions and scheduling delays for some of our larger lighting projects. Accordingly, the Company reduced the associated liability to $0 as of March 31, 2016 . This resulted in a $318,000 adjustment, which was recorded as a reduction to general and administrative expenses in the Company's condensed consolidated statements of operations.

Financial Instruments

Financial Instruments	6 Months Ended
	Jun. 30, 2017
Fair Value Disclosures [Abstract]
Financial Instruments	Financial Instruments: The Company’s financial instruments consist of cash equivalents, restricted investments, short-term investments, accounts receivable, and accounts payable. The carrying value of the Company’s financial instruments approximates fair value. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of investments, which are classified as either cash equivalents, restricted investments, or short-term investments, and accounts receivable. With respect to its investments, the Company has an investment policy that limits the amount of credit exposure to any one financial institution and restricts placement of the Company’s investments to financial institutions independently evaluated as highly creditworthy. With respect to its accounts receivable, the Company performs ongoing credit evaluations of each of its customers’ financial condition. For a customer whose credit worthiness does not meet the Company’s minimum criteria, the Company may require partial or full payment prior to shipment. Alternatively, prior to shipment, customers may be required to provide the Company with an irrevocable letter of credit or arrange for some other form of coverage to mitigate the risk of uncollectibility, such as a bank guarantee. Additionally, the Company establishes an allowance for doubtful accounts and sales return allowances based upon factors surrounding the credit risk of specific customers, historical trends, and other available information. Assets and Liabilities Measured at Fair Value on a Recurring Basis On a recurring basis, the Company measures certain of its financial assets, namely its cash equivalents and available-for-sale investments, at fair value. The fair value of the Company’s financial assets measured at fair value on a recurring basis was determined using the following inputs at June 30, 2017 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (1) $ 4,570 $ 4,570 $ — $ — U.S. government securities (2) 13,223 — 13,223 — Total $ 17,793 $ 4,570 $ 13,223 $ — The fair value of the Company’s financial assets measured at fair value on a recurring basis was determined using the following inputs at December 31, 2016 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (1) $ 4,513 $ 4,513 $ — $ — U.S. government securities (2) 13,233 — 13,233 — Total $ 17,746 $ 4,513 $ 13,233 $ — (1) Included in cash and cash equivalents in the Company’s condensed consolidated balance sheets (2) Represents the portfolio of available for sale securities that is included in restricted investments and short-term investments in the Company’s condensed consolidated balance sheets Cash equivalents consist of either investments with remaining maturities of three months or less at the date of purchase, or money market funds for which the carrying amount is a reasonable estimate of fair value. The Company’s available-for-sale securities consist of U.S. government securities with a minimum and weighted average credit rating of A-1+. The Company values these securities based on pricing from pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. However, the Company classifies all of its fixed income available-for-sale securities as having Level 2 inputs. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques. The Company's procedures include controls to ensure that appropriate fair values are recorded by comparing prices obtained from a third party independent source. As of June 30, 2017 , the Company’s available-for-sale securities had contractual maturities of six months and an average remaining term to maturity of three months. As of June 30, 2017 , the amortized cost basis, aggregate fair value, and gross unrealized holding gains and losses of the Company’s short-term investments by major security type were as follows (in thousands): Amortized Cost Aggregate Fair Value Unrealized Holding Gains Unrealized Holding Losses U.S. government securities $ 11,970 $ 11,968 $ — $ 2 The amortized cost basis, aggregate fair value and gross unrealized holding gains and losses for the Company’s available-for-sale short-term investments, by major security type, were as follows as of December 31, 2016 (in thousands): Amortized Cost Aggregate Fair Value Unrealized Holding Gains Unrealized Holding Losses U.S. government securities $ 11,984 $ 11,983 $ — $ 1 Market values were determined for each individual security in the investment portfolio. The Company reviews its investments on a regular basis to evaluate whether or not any have experienced an other-than-temporary decline in fair value.

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jun. 30, 2017
Earnings Per Share [Abstract]
Earnings Per Share	Earnings Per Share: The computation of diluted net loss per share does not include stock options, performance shares, and contingently issuable shares of 923,306 and 355,338 for the three and six months ended June 30, 2017 and 2016 , respectively, because the effect of their inclusion would be anti-dilutive based on their respective exercise prices.

Stockholders' Equity and Employ

Stockholders' Equity and Employee Stock Option Plans	6 Months Ended
	Jun. 30, 2017
Stockholders' Equity and Employee Stock Option Plans [Abstract]
Stockholders' Equity and Employee Stock Option Plans	Stockholders’ Equity and Employee Stock Option Plans: On April 17, 2017, the Company's Board of Directors approved an amendment to the Tax Benefit Preservation Plan (the "Tax Plan"), dated as of April 22, 2016, by and between the Company and Computershare Inc., as rights agent (the “Rights Agent”), to extend the Final Expiration Date (as such term is defined in the Tax Plan) to April 25, 2019. Stock-based Compensation Expense The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2017 and 2016 and its allocation within the condensed consolidated statements of operations (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Cost of revenues $ 45 $ (28 ) $ 74 $ (17 ) Product development 119 41 243 40 Sales and marketing 27 43 129 (78 ) General and administrative 251 121 463 231 Total $ 442 $ 177 $ 909 $ 176 The negative expense amounts reflected in the table above are primarily due to the reversal of previously recognized expense resulting from the forfeiture of equity awards for certain employees whose employment terminated during the respective periods. Stock Award Activity There were no options exercised during the three and six months ended June 30, 2017 and 2016 . The total fair value of RSUs vested and released during the three and six months ended June 30, 2017 was $147,000 and $196,000 , respectively. The total fair value of RSUs vested and released during the three and six months ended June 30, 2016 was approximately $92,000 and $96,000 , respectively. The fair value is calculated by multiplying the fair market value of the Company’s common stock on the vesting date by the number of shares of common stock issued upon vesting.

Significant Customers

Significant Customers	6 Months Ended
	Jun. 30, 2017
Risks and Uncertainties [Abstract]
Significant Customers	Significant Customers: The Company markets its products and services throughout the world to original equipment manufacturers (OEMs) and systems integrators in the building, industrial, transportation, utility/home, and other automation markets. During the three and six months ended June 30, 2017 and 2016 , the Company had two customers that accounted for a significant portion of its revenues: Avnet Europe Comm VA (“Avnet”), the Company’s primary distributors of its IIoT products in Europe and Japan, and Enel Distribuzione Spa ("Enel"), an Italian utility company. For the three and six months ended June 30, 2017 and 2016 , the percentage of the Company’s revenues attributable to sales made to these customers was as follows: Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Avnet 28.6 % 29.9 % 29.1 % 28.3 % Enel — % — % — % 7.9 % Total 28.6 % 29.9 % 29.1 % 36.2 %

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments And Contingencies	Commitments and Contingencies: Legal Actions From time to time, in the ordinary course of business, the Company may be subject to certain legal proceedings, claims, investigations, and other proceedings, including claims of alleged infringement of third-party patents and other intellectual property rights, and commercial, employment, or other matters. In accordance with generally accepted accounting principles, the Company makes a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. While the Company believes it has adequately provided for such contingencies as of June 30, 2017 , the amounts of which were immaterial, it is possible that the Company’s results of operations, cash flows, and financial position could be harmed by the resolution of any such outstanding claims. Line of Credit As of June 30, 2017 , the Company maintained an operating credit line of $1.0 million with its primary bank for company credit card purchases. This line of credit is secured by a collateral of the first priority on $1.3 million of the Company's investments (presented as restricted investments in the condensed consolidated balance sheets). The restricted investments are classified as current assets due to the contractual duration of the underlying credit agreement.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income (Loss), Net of Tax	6 Months Ended
	Jun. 30, 2017
Equity [Abstract]
Accumulated Other Comprehensive Income (Loss), Net of Tax	Accumulated Other Comprehensive Income (Loss), Net of Tax (Amounts in thousands): Foreign currency translation adjustment Unrealized gain (loss) on available-for-sale securities Accumulated Other Comprehensive Income (Loss) Beginning balance at December 31, 2016 $ (2,435 ) $ (2 ) $ (2,437 ) Change during January - June 2017 329 — 329 Balance at June 30, 2017 $ (2,106 ) $ (2 ) $ (2,108 ) None of the above amounts have been reclassified in the condensed consolidated statement of operations.

Inventories

Inventories	6 Months Ended
	Jun. 30, 2017
Inventory Disclosure [Abstract]
Inventories	Inventories: Inventories are stated at the lower of cost (first‑in, first‑out) or market and include material, labor and manufacturing overhead. When required, provisions are made to reduce excess and obsolete inventories to their estimated net realizable value. Inventories consist of the following (in thousands): June 30, December 31, Purchased materials $ 103 $ 148 Finished goods 2,533 2,422 $ 2,636 $ 2,570

Accrued Liabilities

Accrued Liabilities	6 Months Ended
	Jun. 30, 2017
Payables and Accruals [Abstract]
Accrued Liabilities	Accrued Liabilities: Accrued liabilities consist of the following (in thousands): June 30, December 31, Accrued payroll and related costs $ 953 $ 1,299 Warranty reserve 138 118 Restructuring charges 185 273 Other accrued liabilities 456 484 $ 1,732 $ 2,174

Segment Disclosure

Segment Disclosure	6 Months Ended
	Jun. 30, 2017
Segment Reporting [Abstract]
Segment Disclosure	Segment Disclosure: ASC Topic 280, Segment Reporting , establishes standards for reporting information about operating segments, products and services, geographic areas of operations and major customers. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing business performance. The Company’s chief operating decision-making group is the Executive Staff, which is comprised of the Chief Executive Officer and his direct reports (CODM). The Company operates in one principal industry segment - the IIoT segment, which is its reportable segment. The Company operates in three main geographic areas: the Americas; Europe, Middle East and Africa (“EMEA”); and Asia Pacific / Japan (“APJ”). Each geographic area provides products and services to the Company’s customers located in the respective region. The Company’s long-lived and other assets include property and equipment, acquired intangible assets, and deposits on its leased facilities. Long-lived assets are attributed to geographic areas based on the country where the assets are located. As of June 30, 2017 and December 31, 2016 , long-lived assets of approximately $2.0 million and $2.2 million , respectively, were domiciled in the United States. Long-lived assets for all other locations are not material to the condensed consolidated financial statements. In North America, the Company sells its products primarily through a direct sales organization and select third-party electronics representatives. Outside North America, the Company sells its products through direct sales organizations, value-added resellers, and local distributors, primarily in EMEA and APJ. Revenues are attributed to geographic areas based on the country where the products are shipped to or the services are delivered. Summary revenue information by geography for the three and six months ended June 30, 2017 and 2016 is as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Americas $ 3,295 $ 3,154 $ 6,465 $ 5,709 EMEA 2,774 3,189 5,649 7,861 APJ 1,952 1,718 3,706 3,138 Total $ 8,021 $ 8,061 $ 15,820 $ 16,708 For information regarding the Company’s major customers, please refer to Note 5, Significant Customers.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2017
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes: The provision for income taxes for the three months ended June 30, 2017 and 2016 was $29,000 and $51,000 , respectively. The provision for income taxes for the six months ended June 30, 2017 and 2016 were $23,000 and $57,000 , respectively. The difference between the statutory rate and the Company’s effective tax rate is primarily due to the impact of foreign taxes, changes in the valuation allowance on deferred tax assets, and changes in the accruals related to unrecognized tax benefits. As of June 30, 2017 and December 31, 2016 , the Company had gross unrecognized tax benefits of approximately $9.3 million and $9.2 million , respectively, of which $357,000 and $364,000 , respectively, if recognized, would impact the effective tax rate on income from continuing operations. The Company’s policy is to recognize interest and/or penalties related to unrecognized tax benefits in income tax expense. As of June 30, 2017 and December 31, 2016 , the Company had accrued $52,000 and $62,000 , respectively, for interest and penalties. The $10,000 reduction in interest and penalties on gross unrecognized tax benefits during the six months ended June 30, 2017 was primarily attributable to the expiration of the statute of limitations in certain foreign jurisdictions.

Related Parties

Related Parties	6 Months Ended
	Jun. 30, 2017
Related Party Transactions [Abstract]
Related Parties	Related Parties: In June 2000, the Company entered into a stock purchase agreement with Enel pursuant to which Enel purchased 300,000 newly issued shares of its common stock for $130.7 million . The closing of this stock purchase occurred on September 11, 2000. At the closing, Enel had agreed that it would not, except under limited circumstances, sell or otherwise transfer any of those shares for a specified time period. That time period expired September 11, 2003. To the Company’s knowledge, Enel has disposed of none of its 300,000 shares. Under the terms of the stock purchase agreement, Enel has the right to nominate one member of the Company’s board of directors. While a representative of Enel served on the board until March 14, 2012, no Enel representative is presently on the board. In October 2006, the Company entered into a new development and supply agreement with Enel. Under the development and supply agreement, Enel and its contract manufacturers purchase additional electronic components and finished goods from the Company. The development and supply agreement expired in March 2016. For the three and six months ended June 30, 2017 , the Company recognized no revenue from products sold to Enel and its designated manufacturers. For the three and six months ended June 30, 2016 , the Company recognized revenue from products sold to Enel and its designated manufacturers of approximately $0 and $1.3 million , respectively. As of June 30, 2017 and December 31, 2016 , none of the Company’s total accounts receivable balance related to amounts owed by Enel and its designated manufacturers.

Joint Venture

Joint Venture	6 Months Ended
	Jun. 30, 2017
Less Than Wholly Owned Subsidiary [Abstract]
Joint Venture	Joint Venture: On March 23, 2012, the Company entered into an agreement with Holley Metering Limited (“Holley Metering”), a designer and manufacturer of energy meters in China, to create a joint venture, Zhejiang Echelon-Holley Technology Co., Ltd. (“Echelon-Holley”). The joint venture's intended focus was on the development and sales of smart energy products for China and rest-of-world markets. The Company has a 51.0% ownership interest in the joint venture and exercises controlling influence. Therefore, Echelon-Holley’s accounts are included in the Company’s condensed consolidated financial statements as of June 30, 2017 and 2016, and for the six months then ended. Holley Metering’s interests in Echelon-Holley’s net assets are reported in the non-controlling interest in subsidiary on the condensed consolidated balance sheet as of June 30, 2017 . Net loss attributable to the non-controlling interest in Echelon-Holley was $0 and $0 during the three and six months ended June 30, 2017 and 2016, respectively. As of June 30, 2017 , Echelon and Holley Metering had contributed in cash a total of approximately $4.0 million in Share Capital, as defined in the joint venture agreement, to Echelon-Holley in proportion to their respective ownership interests. In connection with the decision to sell the Grid business announced in the third quarter of 2014, the Company undertook a process to sell the remaining net assets of the joint venture and recorded the net assets and liabilities of the joint venture at the lower of their carrying amount or fair value less cost to sell, and classified them as held for sale on the accompanying balance sheet at December 31, 2014. The major classes of assets and liabilities that were classified as held for sale were inventory, deferred revenues and the related deferred costs of sales, and accrued liabilities. During the quarter ended September 30, 2015, the Company concluded that it would no longer pursue a sale, but would instead work with Holley Metering to shut the joint venture down. The remaining net assets of the joint venture were immaterial as of September 30, 2015. As of June 30, 2017 , the Company is continuing to work with Holley Metering to complete the shut-down.

Restructuring

Restructuring	6 Months Ended
	Jun. 30, 2017
Restructuring and Related Activities [Abstract]
Restructuring	Restructuring: During the fourth quarter of 2016, the Company undertook restructuring actions affecting approximately 7 employees to be terminated between October 2016 and September 2017, as part of an overall plan to reshape the Company for the future. In connection with this restructuring, the Company recorded restructuring charges of approximately $286,000 related to termination benefits for these personnel during the year ended December 31, 2016. The following table sets forth a summary of restructuring activities related to the Company's 2016 restructuring program (in thousands): December 31, 2016 Costs Incurred Cash Payments June 30, 2017 Accrued termination benefits $ 273 $ — $ (88 ) $ 185

Summary of Significant Accoun21

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2017
Summary of Significant Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The condensed consolidated financial statements include the accounts of Echelon Corporation, a Delaware corporation, its wholly-owned subsidiaries, and a subsidiary in which it has a controlling interest (collectively referred to as the “Company”). The Company reports non-controlling interests in consolidated entities as a component of equity separate from the Company’s equity. All material inter-company transactions between and among the Company and its consolidated subsidiaries and other consolidated entities have been eliminated in consolidation. While the financial information furnished is unaudited, the condensed consolidated financial statements included in this report reflect all adjustments (consisting only of normal recurring adjustments) which the Company considers necessary for the fair presentation of the results of operations for the interim periods covered, and of the financial condition of the Company at the date of the interim balance sheet. The results for interim periods are not necessarily indicative of the results for the entire year. The condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2016 included in its Annual Report on Form 10‑K. There have been no material changes to the Company’s significant accounting policies as compared to the significant accounting policies described in its Annual Report on Form 10‑K for the fiscal year ended December 31, 2016 .
Risks and Uncertainties	Risks and Uncertainties The Company’s operations and performance depend significantly on worldwide economic conditions and their impact on purchases of the Company’s products, as well as the ability of suppliers to provide the Company with products and services in a timely manner. The impact of any of the matters described below could have an adverse effect on the Company’s business, results of operations and financial condition. • The Company’s sales are currently concentrated, as approximately 29.1% of revenues for the six months ended June 30, 2017 , were derived from one customer, Avnet Europe Comm VA ("Avnet"), the Company's primary distributor of its IIoT products in Europe and Japan. Customers in any of the Company’s target market sectors may experience unexpected reductions in demand for their products and consequently reduce their purchases from the Company, resulting in either the loss of a significant customer or a notable decrease in the level of sales to a significant customer. In addition, if any of these customers are unable to obtain the necessary capital to operate their business, they may be unable to satisfy their payment obligations to the Company. • The Company utilizes third-party contract electronic manufacturers to manufacture, assemble, and test its products. If any of these third-parties were unable to obtain the necessary capital to operate their business, they may be unable to provide the Company with timely services or to make timely deliveries of products. • From time to time, the Company has experienced shortages or interruptions in supply for certain products or components used in the manufacture of the Company’s products that have been or will be discontinued. In order to ensure an adequate supply of these items, the Company has occasionally purchased quantities of these items that are in excess of the Company’s then current estimate of short-term requirements. If the long-term requirements do not materialize as originally expected, or if the Company develops alternative solutions that no longer employ these items and the Company is not able to dispose of these excess products or components, the Company could be subject to increased levels of excess and obsolete inventories. • In an effort to manage costs and inventory risks, the Company has decreased the inventory levels of certain products. If there is an unexpected increase in demand for these items, the Company might not be able to supply its customers with products in a timely manner.
Use of Estimates	Use of Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions, and estimates that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Significant estimates and judgments are used for revenue recognition, performance-based equity compensation, inventory valuation, intangible asset valuation, contingent consideration valuation, allowance for warranty costs, and other loss contingencies. In order to determine the carrying values of assets and liabilities that are not readily apparent from other sources, the Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances. Actual results experienced by the Company may differ materially from management’s estimates.
Recently Issued Accounting Standards	Recently Issued Accounting Standards (i) New Accounting Standards Recently Adopted In July 2015, the FASB issued an update to ASC 330, Inventory: Simplifying the Measurement of Inventory . Under this update, subsequent measurement of inventory is based on the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and disposal. This update does not apply to inventory that is measured using last-in, first-out or the retail inventory method. This update was adopted by the Company in the first quarter of fiscal year 2017. There was no impact on the Company's financial statements as a result of the adoption. (ii) New Accounting Standards Not Yet Effective In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which superseded existing revenue recognition guidance under current U.S. GAAP. The standard is a comprehensive revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In doing so, among other things, companies will generally need to use more judgment and make more estimates than under the current guidance. Recently, the FASB has issued guidance clarifying certain topics such as (i) gross versus net revenue reporting, (ii) identifying performance obligations and licensing, (iii) accounting for shipping and handling fees and costs, and (iv) accounting for consideration given by a vendor to a customer. The standard permits two methods of adoption: (i) retrospectively to each prior reporting period presented (the full retrospective method), or (ii) retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application (the cumulative catch-up transition method). The Company currently anticipates adopting the standard using the full retrospective method to restate each prior reporting period presented. The standard will be effective for Echelon in the fiscal year beginning January 1, 2018. The Company currently anticipates the standard will have a material impact on its financial statements and disclosures, and continues to make progress in assessing all potential impacts of the standard, including any impacts of recently issued amendments. The Company currently believes the most significant impact of adopting the new standard will relate to its accounting for sales made to distributors under agreements that contain a limited right to return unsold products and price adjustment provisions. Under the existing revenue guidance, the Company has historically concluded that the price to these distributors is not fixed or determinable at the time it delivers products to them. Accordingly, revenue from sales to these distributors has not historically been recognized until the distributor resells the product. By contrast, under the new standard, the Company expects to recognize revenue, including estimates for applicable variable consideration, predominately at the time of shipment to these distributors, thereby accelerating the timing of revenue for products sold through the distribution channel. During the year ended December 31, 2016 , the Company recognized approximately $14.7 million of revenue sold through such distributors. As of December 31, 2016 , the amount of revenue and cost of revenues sold through the distribution channel that were deferred was $2.6 million and $668,000 , respectively. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires, among other things, the recognition of lease assets and lease liabilities on the balance sheet by lessees for certain leases classified as operating leases under previous GAAP. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. ASU 2016-02 mandates a modified retrospective transition method with early adoption permitted. The Company is currently evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures
Revenue Recognition	Revenue Recognition The Company’s revenues are derived from the sale and license of its products and, to a lesser extent, from fees associated with training, technical support, and custom software design services offered to its customers. Product revenues consist of revenues from hardware sales and software licensing arrangements. Service revenues consist of product technical support (including, in limited circumstances, software post-contract support services) and training. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery to the customer’s carrier (and acceptance, as applicable) has occurred, the sales price is fixed or determinable, collectability is probable, and there are no post-delivery obligations. For non-distributor hardware sales, including sales to third party manufacturers, these criteria are generally met at the time of delivery to the customer’s carrier. However, for arrangements that contain contractual acceptance provisions, revenue recognition may be delayed until acceptance by the customer or the acceptance provisions lapse unless the Company can objectively demonstrate that the contractual acceptance criteria have been satisfied, which is generally accomplished by establishing a history of acceptance for the same or similar products. For sales made to the Company’s distributor partners, revenue recognition criteria are generally met at the time the distributor sells the products through to its end-use customer. Service revenue is recognized as the training services are performed, or ratably over the term of the support period. The Company accounts for the rights of return, price protection, rebates, and other sales incentives offered to distributors of its products as a reduction in revenue. With the exception of sales to certain distributors, the Company’s customers are generally not entitled to return products for a refund. For sales to certain distributors, due to contractual rights of return and other factors that impact its ability to make a reasonable estimate of future returns and other sales incentives, revenues are not recognized until the distributor has shipped its products to the end customer .
Deferred Revenue and Deferred Cost of Revenue	Deferred Revenue and Deferred Cost of Revenues Deferred revenue consists of amounts billed or payments received in advance of revenue recognition. Deferred cost of revenues related to deferred product revenues includes direct product costs and applied overhead. Deferred cost of revenues related to deferred service revenues includes direct labor costs and applied overhead. Once all revenue recognition criteria have been met, the deferred revenues and associated cost of revenues are recognized.
Restricted Investments	Restricted Investments As of June 30, 2017 , restricted investments consist of balances maintained by the Company with an investment advisor in money market funds and permitted treasury bills. These balances represent collateral for a $1.0 million operating line of credit issued to the Company by its primary bank for credit card purchases. Because the Company’s agreement with the lender prevents the Company from withdrawing these funds, they are considered restricted.
Fair Value Measurements	Fair Value Measurements The Company measures at fair value its cash equivalents and available-for-sale investments using a valuation hierarchy based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's own assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1 - Quoted prices for identical instruments in active markets; • Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires the Company to minimize the use of unobservable inputs and to use observable market data, if available, when estimating fair value. Other than cash and money market funds, the Company's only financial assets and liabilities required to be measured at fair value on a recurring basis at June 30, 2017 , are its fixed income available-for-sale securities. See Note 2 of these Notes to condensed consolidated financial statements for a summary of the input levels used in determining the fair value of these assets and liabilities as of June 30, 2017 .
Long-Lived Assets	Long-Lived Assets We perform periodic reviews to determine whether facts and circumstances exist that would indicate that the carrying amounts of property, plant and equipment and long-lived intangible assets might not be fully recoverable. If facts and circumstances indicate that the carrying amount of these assets might not be fully recoverable, we compare projected undiscounted net cash flows associated with the related asset or group of assets over their estimated remaining useful lives against their respective carrying amounts. In the event that the projected undiscounted cash flows are not sufficient to recover the carrying value of the assets, the assets are written down to their estimated fair values based on the expected discounted future cash flows attributable to the assets. Evaluation of impairment of property, plant and equipment and long-lived intangible assets requires estimates in the forecast of future operating results that are used in the preparation of the expected future undiscounted cash flows. Actual future operating results and the remaining economic lives of our property, plant and equipment and long-lived intangible assets could differ from our estimates used in assessing the recoverability of these assets. These differences could result in impairment charges, which could have a material adverse impact on our results of operations.

Financial Instruments (Tables)

Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2017
Fair Value Disclosures [Abstract]
Fair value of asset measured on a recurring basis	The fair value of the Company’s financial assets measured at fair value on a recurring basis was determined using the following inputs at June 30, 2017 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (1) $ 4,570 $ 4,570 $ — $ — U.S. government securities (2) 13,223 — 13,223 — Total $ 17,793 $ 4,570 $ 13,223 $ — The fair value of the Company’s financial assets measured at fair value on a recurring basis was determined using the following inputs at December 31, 2016 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Money market funds (1) $ 4,513 $ 4,513 $ — $ — U.S. government securities (2) 13,233 — 13,233 — Total $ 17,746 $ 4,513 $ 13,233 $ — (1) Included in cash and cash equivalents in the Company’s condensed consolidated balance sheets (2) Represents the portfolio of available for sale securities that is included in restricted investments and short-term investments in the Company’s condensed consolidated balance sheets
Fair value of short term investment unrealized holdings and gains	As of June 30, 2017 , the amortized cost basis, aggregate fair value, and gross unrealized holding gains and losses of the Company’s short-term investments by major security type were as follows (in thousands): Amortized Cost Aggregate Fair Value Unrealized Holding Gains Unrealized Holding Losses U.S. government securities $ 11,970 $ 11,968 $ — $ 2 The amortized cost basis, aggregate fair value and gross unrealized holding gains and losses for the Company’s available-for-sale short-term investments, by major security type, were as follows as of December 31, 2016 (in thousands): Amortized Cost Aggregate Fair Value Unrealized Holding Gains Unrealized Holding Losses U.S. government securities $ 11,984 $ 11,983 $ — $ 1

Stockholders' Equity And Empl23

Stockholders' Equity And Employee Stock Option Plans (Tables)	6 Months Ended
	Jun. 30, 2017
Stockholders' Equity and Employee Stock Option Plans [Abstract]
Stock-based Compensation Expense	Stock-based Compensation Expense The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2017 and 2016 and its allocation within the condensed consolidated statements of operations (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Cost of revenues $ 45 $ (28 ) $ 74 $ (17 ) Product development 119 41 243 40 Sales and marketing 27 43 129 (78 ) General and administrative 251 121 463 231 Total $ 442 $ 177 $ 909 $ 176

Significant Customers (Tables)

Significant Customers (Tables)	6 Months Ended
	Jun. 30, 2017
Risks and Uncertainties [Abstract]
Revenues attributable to sales to major customers	For the three and six months ended June 30, 2017 and 2016 , the percentage of the Company’s revenues attributable to sales made to these customers was as follows: Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Avnet 28.6 % 29.9 % 29.1 % 28.3 % Enel — % — % — % 7.9 % Total 28.6 % 29.9 % 29.1 % 36.2 %

Accumulated Other Comprehensi25

Accumulated Other Comprehensive Income (Loss), Net of Tax (Tables)	6 Months Ended
	Jun. 30, 2017
Equity [Abstract]
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]	Foreign currency translation adjustment Unrealized gain (loss) on available-for-sale securities Accumulated Other Comprehensive Income (Loss) Beginning balance at December 31, 2016 $ (2,435 ) $ (2 ) $ (2,437 ) Change during January - June 2017 329 — 329 Balance at June 30, 2017 $ (2,106 ) $ (2 ) $ (2,108 )

Inventories (Tables)

Inventories (Tables)	6 Months Ended
	Jun. 30, 2017
Inventory Disclosure [Abstract]
Schedule of Inventory	Inventories consist of the following (in thousands): June 30, December 31, Purchased materials $ 103 $ 148 Finished goods 2,533 2,422 $ 2,636 $ 2,570

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	6 Months Ended
	Jun. 30, 2017
Payables and Accruals [Abstract]
Accrued liabilities	Accrued liabilities consist of the following (in thousands): June 30, December 31, Accrued payroll and related costs $ 953 $ 1,299 Warranty reserve 138 118 Restructuring charges 185 273 Other accrued liabilities 456 484 $ 1,732 $ 2,174

Segment Disclosure (Tables)

Segment Disclosure (Tables)	6 Months Ended
	Jun. 30, 2017
Segment Reporting [Abstract]
Revenue information by geography	Summary revenue information by geography for the three and six months ended June 30, 2017 and 2016 is as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Americas $ 3,295 $ 3,154 $ 6,465 $ 5,709 EMEA 2,774 3,189 5,649 7,861 APJ 1,952 1,718 3,706 3,138 Total $ 8,021 $ 8,061 $ 15,820 $ 16,708

Restructuring (Tables)

Restructuring (Tables)	6 Months Ended
	Jun. 30, 2017
Restructuring and Related Activities [Abstract]
Schedule of Restructuring and Related Costs	The following table sets forth a summary of restructuring activities related to the Company's 2016 restructuring program (in thousands): December 31, 2016 Costs Incurred Cash Payments June 30, 2017 Accrued termination benefits $ 273 $ — $ (88 ) $ 185

Summary of Significant Accoun30

Summary of Significant Accounting Policies (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017USD ($)customer	Jun. 30, 2016USD ($)customer	Jun. 30, 2017USD ($)	Jun. 30, 2016USD ($)customer	Dec. 31, 2016USD ($)
Revenues attributable to sales [Line Items]
Numbers of customers | customer	1	2		2
Deferred revenue	$ 3,838,000		$ 3,838,000		$ 3,671,000
Cost of revenues	$ 2,533,000		2,533,000		2,422,000
Line of Credit Maintained			1,000,000
Adjustment to contingent consideration		$ (318,000)	$ 0	$ (318,000)
Contingent liability		$ 0		$ 0
Accounting Standards Update 2014-09
Revenues attributable to sales [Line Items]
Revenue sold through distribution channel					14,700,000
Deferred revenue					2,600,000
Cost of revenues					$ 668,000
Significant Customers
Revenues attributable to sales [Line Items]
Percentage of net revenue	28.60%	29.90%	29.10%	36.20%
Significant Customers | Avnet
Revenues attributable to sales [Line Items]
Percentage of net revenue	28.60%	29.90%	29.10%	28.30%

Financial Instruments (Details)

Financial Instruments (Details) - USD ($) $ in Thousands		Jun. 30, 2017	Dec. 31, 2016
Fair value of asset measured on a recurring basis
Fixed income available-for-sale securities		$ 11,968	$ 11,983
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair value of asset measured on a recurring basis
Money market funds	[1]	4,570	4,513
Fixed income available-for-sale securities	[2]	0	0
Total		4,570	4,513
Significant Other Observable Inputs (Level 2)
Fair value of asset measured on a recurring basis
Money market funds	[1]	0	0
Fixed income available-for-sale securities	[2]	13,223	13,233
Total		13,223	13,233
Significant Unobservable Inputs (Level 3)
Fair value of asset measured on a recurring basis
Money market funds	[1]	0	0
Fixed income available-for-sale securities	[2]	0	0
Total		0	0
Recurring
Fair value of asset measured on a recurring basis
Money market funds	[1]	4,570	4,513
Fixed income available-for-sale securities	[2]	13,223	13,233
Total		$ 17,793	$ 17,746
[1]	Included in cash and cash equivalents in the Company’s condensed consolidated balance sheets
[2]	Represents the portfolio of available for sale securities that is included in restricted investments and short-term investments in the Company’s condensed consolidated balance sheets

Financial Instruments (Details

Financial Instruments (Details Textual)	6 Months Ended
	Jun. 30, 2017
Financial Instruments (Textual) [Abstract]
Maximum remaining maturities period of investments included in cash equivalents	3 months
Short-term investments contractual maturity period maximum	6 months
Average short-term investments maturity period	3 months

Financial Instruments-Available

Financial Instruments-Available for Sale Securities (Details 1) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Fair value of short term investment unrealized holdings and gains
Amortized Cost	$ 11,970	$ 11,984
Aggregate Fair Value	11,968	11,983
Unrealized Holding Gains	0	0
Unrealized Holding Losses	$ 2	$ 1

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Earnings Per Share [Abstract]
Number of antidilutive shares excluded from computation of earnings per share (in shares)	923,306	355,338	923,306	355,338

Stockholders' Equity and Empl35

Stockholders' Equity and Employee Stock Option Plans (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Stock-based Compensation Expense
Stock-based Compensation Expense, Total	$ 442	$ 177	$ 909	$ 176
Cost of Revenues [Member]
Stock-based Compensation Expense
Stock-based Compensation Expense, Total	45	(28)	74	(17)
Product development [Member]
Stock-based Compensation Expense
Stock-based Compensation Expense, Total	119	41	243	40
Sales and marketing [Member]
Stock-based Compensation Expense
Stock-based Compensation Expense, Total	27	43	129	(78)
General and administrative [Member]
Stock-based Compensation Expense
Stock-based Compensation Expense, Total	$ 251	$ 121	$ 463	$ 231

Stockholders' Equity and Empl36

Stockholders' Equity and Employee Stock Option Plans (Details Textual) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Stockholders' Equity and Employee Stock Option Plans (Textual) [Abstract]
Options exercised (in shares)	0	0	0	0
Total fair value of RSUs vested and released	$ 147	$ 92	$ 196	$ 96

Significant Customers (Details

Significant Customers (Details Textual) - customer	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Significant Customers (Textual) [Abstract]
Numbers of customers	1	2		2
Significant Customers
Revenues attributable to sales [Line Items]
Total	28.60%	29.90%	29.10%	36.20%
Significant Customers | Avnet
Revenues attributable to sales [Line Items]
Total	28.60%	29.90%	29.10%	28.30%
Significant Customers | Enel
Revenues attributable to sales [Line Items]
Total	0.00%	0.00%	0.00%	7.90%

Commitments and Contingencies L

Commitments and Contingencies Line of Credit (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Line of Credit Maintained	$ 1,000
Restricted investments	$ 1,250	$ 1,250

Accumulated Other Comprehensi39

Accumulated Other Comprehensive Income (Loss), Net of Tax (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2017USD ($)
Accumulated Other Comprehensive Income (Loss), Net of Tax:
Balance at beginning of period	$ 24,424
Balance at end of period	23,028
Foreign currency translation adjustment
Accumulated Other Comprehensive Income (Loss), Net of Tax:
Balance at beginning of period	(2,435)
Balance at end of period	(2,106)
Unrealized gain (loss) on available-for-sale securities
Accumulated Other Comprehensive Income (Loss), Net of Tax:
Balance at beginning of period	(2)
Balance at end of period	(2)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax:
Balance at beginning of period	(2,437)
Current period change	329
Balance at end of period	$ (2,108)

Inventories Inventories (Detail

Inventories Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Inventory Disclosure [Abstract]
Purchased materials	$ 103	$ 148
Finished goods	2,533	2,422
Inventory, Net	$ 2,636	$ 2,570

Accrued Liabilities (Details)

Accrued Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Payables and Accruals [Abstract]
Accrued payroll and related costs	$ 953	$ 1,299
Warranty reserve	138	118
Restructuring charges	185	273
Other accrued liabilities	456	484
Accrued liabilities	$ 1,732	$ 2,174

Segment Disclosure (Details Tex

Segment Disclosure (Details Textual) $ in Millions	6 Months Ended
	Jun. 30, 2017USD ($)segmentgeographic_area	Dec. 31, 2016USD ($)
Segment Disclosure (Textual) [Abstract]
Number of reportable segments (in segment) | segment	1
Number of geographic areas (in geographic area) | geographic_area	3
Long-lived assets US | $	$ 2	$ 2.2

Segment Disclosure (Details 1)

Segment Disclosure (Details 1) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues Information by Geography
Revenues	[1]	$ 8,021	$ 8,061	$ 15,820	$ 16,708
Americas
Revenues Information by Geography
Revenues		3,295	3,154	6,465	5,709
EMEA
Revenues Information by Geography
Revenues		2,774	3,189	5,649	7,861
APJ
Revenues Information by Geography
Revenues		$ 1,952	$ 1,718	$ 3,706	$ 3,138
[1]	Represents the portfolio of available for sale securities that is included in restricted investments and short-term investments in the Company’s condensed consolidated balance sheets

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 29	$ 51	$ 23	$ 57
Income Taxes (Textual) [Abstract]
Unrecognized tax benefits	9,300		9,300		$ 9,200
Unrecognized tax benefits that would impact effective tax rate	357		357		364
Accrued for interest and penalties	$ 52		52		$ 62
Reduction in gross unrecognized tax benefits			$ 10

Related Parties (Details Textua

Related Parties (Details Textual)	1 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2000USD ($)shares	Jun. 30, 2017USD ($)board_membershares	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)board_membershares	Jun. 30, 2016USD ($)	Dec. 31, 2016USD ($)
Related Parties - Enel (Additional Textual) [Abstract]
Newly issued shares (in shares) | shares	300,000
Value of newly issued shares	$ 130,700,000
Number of shares sold by related party (in shares) | shares		0		0
Number of board members Related Party can nominate (in board member) | board_member		1		1
Number of related party representatives on Board (in board member) | board_member		0		0
Revenue from related parties		$ 0	$ 0	$ 0	$ 1,300,000
Accounts receivable balance related to amounts owed by Enel and its designated manufacturers		$ 0		$ 0		$ 0

Joint Venture (Details)

Joint Venture (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Less Than Wholly Owned Subsidiary [Abstract]
Ownership interest in the joint venture	51.00%		51.00%
Net loss from discontinued operations attributable to non-controlling interest, net of income taxes	$ 0	$ 0	$ 0	$ 0
Registered capital of the Joint venture	$ 4,000		$ 4,000

Restructuring Restructuring Pla

Restructuring Restructuring Plan (Details Textual) - 2016 Restructuring Plan $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017USD ($)	Dec. 31, 2016USD ($)employee
Number of Positions Eliminated (in employee) | employee		7
Costs Incurred | $	$ 0	$ 286

Restructuring Restructuring P48

Restructuring Restructuring Plan (Details) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017USD ($)	Dec. 31, 2016USD ($)employee
Restructuring Reserve
Beginning balance	$ 273
Ending balance	185	$ 273
2016 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Number of Positions Eliminated (in employee) | employee		7
Restructuring Reserve
Beginning balance	273
Costs Incurred	0	$ 286
Cash Payments	(88)
Ending balance	$ 185	$ 273