Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 14, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | CLEARONE INC | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Entity Central Index Key | 840,715 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 9,185,039 | ||
Entity Public Float | $ 79,345,876 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 13,412 | $ 7,440 |
Marketable securities | 7,161 | 6,994 |
Receivables, net of allowance for doubtful accounts of $54 and $58, as of December 31, 2015 and 2014 respectively | 8,692 | 9,916 |
Inventories | 13,447 | 12,766 |
Distributor channel inventories | 1,628 | 1,698 |
Prepaid expenses and other assets | 1,806 | 2,143 |
Total current assets | 46,146 | 40,957 |
Long-term marketable securities | 19,204 | 19,162 |
Long-term inventories, net | 2,018 | 876 |
Property and equipment, net | 1,589 | 2,039 |
Intangibles, net | 6,638 | 7,896 |
Goodwill | 12,724 | 12,724 |
Deferred income taxes | 5,093 | 5,089 |
Other assets | 117 | 117 |
Total assets | 93,529 | 88,860 |
Current liabilities: | ||
Accounts payable | 2,815 | 3,057 |
Accrued liabilities | 2,243 | 2,694 |
Deferred product revenue | 4,549 | 5,004 |
Total current liabilities | 9,607 | 10,755 |
Deferred rent | 150 | 248 |
Other long-term liabilities | 1,203 | 1,841 |
Total liabilities | 10,960 | 12,844 |
Shareholders' equity: | ||
Common stock, par value $0.001, 50,000,000 shares authorized, 9,183,957 and 9,097,827 shares issued and outstanding as of December 31, 2015 and 2014, respectively | 9 | 9 |
Additional paid-in capital | 46,291 | 44,939 |
Accumulated other comprehensive (loss) | (166) | (8) |
Retained earnings | 36,435 | 31,076 |
Total shareholders' equity | 82,569 | 76,016 |
Total liabilities and shareholders' equity | $ 93,529 | $ 88,860 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 54 | $ 58 |
Common Stock: | ||
Par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, sharse issued (in shares) | 9,183,957 | 9,097,827 |
Common stock, shares outstanding (in shares) | 9,183,957 | 9,097,827 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||
Revenue | $ 57,796 | $ 57,909 |
Cost of goods sold | 21,077 | 22,586 |
Gross profit | 36,719 | 35,323 |
Operating expenses: | ||
Sales and marketing | 10,646 | 11,227 |
Research and product development | 8,318 | 8,969 |
General and administrative | 7,493 | 7,152 |
Total operating expenses | 26,457 | 27,348 |
Operating income | 10,262 | 7,975 |
Other income, net | 289 | 254 |
Income before income taxes | 10,551 | 8,229 |
Provision for income taxes | (3,775) | (2,633) |
Net income | $ 6,776 | $ 5,596 |
Basic earnings per common share | $ 0.74 | $ 0.61 |
Diluted earnings per common share | $ 0.71 | $ 0.58 |
Basic weighted average shares outstanding | 9,127,385 | 9,166,769 |
Diluted weighted average shares outstanding | 9,594,659 | 9,581,326 |
Unrealized gain (loss) on available-for-sale securities, net of tax | $ (81) | $ 14 |
Change in foreign currency translation adjustment | (77) | (45) |
Comprehensive income | $ 6,618 | $ 5,565 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Other Comprehensive Income (Loss) | Retained Earnings |
Common stock outstanding, beginning (in shares) at Dec. 31, 2013 | 8,986,080 | ||||
Balance at the beginning of the period at Dec. 31, 2013 | $ 70,335 | $ 9 | $ 41,311 | $ 23 | $ 28,992 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options (in shares) | 234,432 | ||||
Exercise of stock options | $ 1,337 | 1,337 | |||
Stock repurchased (in shares) | (272,767) | (272,767) | |||
Stock repurchased | $ (2,598) | (2,598) | |||
Cash dividends, $.10 per share | (914) | (914) | |||
Stock issued - Sabine acquisition (in shares) | 150,000 | ||||
Stock issued - Other | 1,679 | 1,679 | |||
Tax benefit - stock option exercises | 211 | 211 | |||
Stock-based compensation expense | 401 | 401 | |||
Employee stock purchase plan (in shares) | 82 | ||||
Employee stock purchase plan | 0 | 0 | |||
Unrealized gain on available-for-sale securities, net of tax | 14 | 14 | |||
Foreign currency translation adjustment | (45) | (45) | |||
Net income | $ 5,596 | 5,596 | |||
Common stock outstanding, ending (in shares) at Dec. 31, 2014 | 9,097,827 | 9,097,827 | |||
Balance at end of the period at Dec. 31, 2014 | $ 76,016 | $ 9 | 44,939 | (8) | 31,076 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options (in shares) | 56,143 | ||||
Exercise of stock options | 308 | 308 | |||
Cash dividends, $.10 per share | (1,417) | (1,417) | |||
Stock issued - Other | 155 | 155 | |||
Tax benefit - stock option exercises | 41 | 41 | |||
Stock-based compensation expense | 552 | 552 | |||
Stock-based compensation - Dividend Equivalents (in shares) | 15,005 | ||||
Stock-based compensation - Dividend Equivalents | 265 | 265 | |||
Stock-based compensation - ESPP | 31 | 31 | |||
Employee stock purchase plan (in shares) | 14,982 | ||||
Employee stock purchase plan | 31 | ||||
Unrealized gain on available-for-sale securities, net of tax | (81) | (81) | |||
Foreign currency translation adjustment | (77) | (77) | |||
Net income | $ 6,776 | 6,776 | |||
Common stock outstanding, ending (in shares) at Dec. 31, 2015 | 9,183,957 | 9,183,957 | |||
Balance at end of the period at Dec. 31, 2015 | $ 82,569 | $ 9 | $ 46,291 | $ (166) | $ 36,435 |
Consolidated Statements of Sha6
Consolidated Statements of Shareholders' Equity (parentheticals) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Common Stock, Dividends, Per Share, Declared | $ 0.155 | $ 0.100 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 6,776 | $ 5,596 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 2,058 | 1,972 |
Amortization of deferred rent | (95) | (79) |
Stock-based compensation expense | 848 | 401 |
Recoveries of doubtful accounts, net | (4) | (71) |
Write-down of inventory to net realizable value | 496 | 946 |
Loss on disposal of assets | 7 | 0 |
Tax benefit from exercise of stock options | (41) | (211) |
Deferred income taxes | (4) | (495) |
Changes in operating assets and liabilities: | ||
Receivables | 1,201 | (251) |
Inventories | (2,249) | (2,614) |
Prepaid expenses and other assets | 824 | 844 |
Accounts payable | (242) | (84) |
Accrued liabilities | (1,219) | 1,451 |
Income taxes payable | 323 | (947) |
Deferred product revenue | (447) | 858 |
Other long-term liabilities | (638) | (606) |
Net cash provided by operating activities | 7,594 | 6,710 |
Cash flows from investing activities: | ||
Payment towards business acquisitions | 0 | (13,068) |
Purchase of property and equipment | (359) | (642) |
Purchase of intangibles | 0 | (90) |
Proceeds from maturities and sales of marketable securities | 7,341 | 4,650 |
Purchase of marketable securities | (7,630) | (5,266) |
Net cash used in investing activities | (648) | (14,416) |
Cash flows from financing activities: | ||
Net proceeds from equity-based compensation programs | 463 | 1,337 |
Tax benefits from equity-based compensation programs | 41 | 211 |
Stock registration costs | 0 | (55) |
Dividend payments | (1,417) | (914) |
Payments for stock repurchases | 0 | (2,598) |
Net cash used in financing activities | (913) | (2,019) |
Effect of exchange rate changes on cash and cash equivalents | (61) | (27) |
Net increase (decrease) in cash and cash equivalents | 5,972 | (9,752) |
Cash and cash equivalents at the beginning of the period | 7,440 | 17,192 |
Cash and cash equivalents at the end of the period | 13,412 | 7,440 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 0 | 3 |
Cash paid for income taxes | 3,730 | 3,017 |
Issuance of common stock in connection with acquisition of Sabine | $ 0 | $ 1,679 |
Business Description, Basis of
Business Description, Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Business Description, Basis of Presentation and Significant Accounting Policies | Business Description, Basis of Presentation and Significant Accounting Policies Business Description: ClearOne, Inc., together with its subsidiaries (collectively, “ClearOne” or the “Company”), is a global company that designs, develops and sells conferencing, collaboration, streaming and digital signage solutions for audio and visual communications. The performance and simplicity of its advanced comprehensive solutions offer unprecedented levels of functionality, reliability and scalability. Basis of Presentation: Fiscal Year – This report on Form 10-K includes financial statements for the years ended December 31, 2015 and 2014 . Consolidation – These consolidated financial statements include the financial statements of ClearOne, Inc. and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting periods. Key estimates in the accompanying consolidated financial statements include, among others, revenue recognition, allowances for doubtful accounts and product returns, provisions for obsolete inventory, valuation of long-lived assets, and deferred income tax asset valuation allowances. Actual results could differ materially from these estimates. Foreign Currency Translation – We are exposed to foreign currency exchange risk through our foreign subsidiaries. Other than our Spain subsidiary, our foreign subsidiaries are U.S. dollar functional, for which gains and losses arising from remeasurement are included in earnings. Our Spain subsidiary is Euro functional, for which gains and losses arising from translation are included in accumulated other comprehensive income or loss. We translate and remeasure foreign assets and liabilities at exchange rates in effect at the balance sheet dates. We translate revenue and expenses using average rates during the year. Concentration Risk – We depend on an outsourced manufacturing strategy for our products. We outsource the manufacture of all of our products to third-party manufacturers located in both the U.S. and Asia. If any of these manufacturers experience difficulties in obtaining sufficient supplies of components, component prices significantly exceeding the anticipated costs, an interruption in their operations, or otherwise suffer capacity constraints, we would experience a delay in production and shipping of these products which would have a negative impact on our revenues. Should there be any disruption in services due to natural disaster, economic or political difficulties, transportation restrictions, acts of terror, quarantine or other restrictions associated with infectious diseases, or other similar events, or any other reason, such disruption may have a material adverse effect on our business. Operating in the international environment exposes us to certain inherent risks, including unexpected changes in regulatory requirements and tariffs, and potentially adverse tax consequences, which could materially affect our results of operations. Currently, we have no second source of manufacturing for a portion of our products. Significant Accounting Policies: Cash Equivalents – The Company considers all highly-liquid investments with a maturity of three months or less, when purchased, to be cash equivalents. The Company places its temporary cash investments with high-quality financial institutions. At times, such investments may be in excess of the Federal Deposit Insurance Corporation insurance limits. Marketable Securities - The Company has classified its marketable securities as available-for-sale securities. These securities are carried at estimated fair value with unrealized holding gains and losses included in accumulated other comprehensive income/loss in shareholders' equity until realized. Gains and losses on marketable security transactions are reported on the specific-identification method. Dividend and interest income are recognized when earned. A decline in the market value of any available-for-sale security below cost that is deemed other than temporary results in a charge to earnings and establishes a new cost basis for the security. Losses are charged against “Other income” when a decline in fair value is determined to be other than temporary. We review several factors to determine whether a loss is other than temporary. These factors include, but are not limited to: (i) the extent to which the fair value is less than cost and the cause for the fair value decline, (ii) the financial condition and near term prospects of the issuer, (iii) the length of time a security is in an unrealized loss position and (iv) our ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. There were no other-than-temporary impairments recognized during the years ended December 31, 2015 and 2014 . Accounts Receivable – Accounts receivable are recorded at the invoiced amount. Generally, credit is granted to customers on a short-term basis without requiring collateral, and as such, these accounts receivable, do not bear interest, although a finance charge may be applied to such receivables that are past due. The Company extends credit to customers who it believes have the financial strength to pay. The Company has in place credit policies and procedures, an approval process for sales returns and credit memos, and processes for managing and monitoring channel inventory levels. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Management regularly analyzes accounts receivable including current aging, historical write-off experience, customer concentrations, customer creditworthiness, and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. We review customer accounts quarterly by first assessing accounts with aging over a specific duration and balance over a specific amount. We review all other balances on a pooled basis based on past collection experience. Accounts identified in our customer-level review as exceeding certain thresholds are assessed for potential allowance adjustment if we conclude the financial condition of that customer has deteriorated, adversely affecting their ability to make payments. Delinquent account balances are written off if the Company determines that the likelihood of collection is not probable. If the assumptions that are used to determine the allowance for doubtful accounts change, the Company may have to provide for a greater level of expense in future periods or reverse amounts provided in prior periods. The Company’s allowance for doubtful accounts activity for the years ended December 31, 2015 and 2014 was as follows: Year Ended December 31, 2015 2014 Balance at beginning of the year $ 58 $ 129 Allowance increase (decrease) 36 (49 ) Write offs, net of recoveries (40 ) (22 ) Balance at end of the year $ 54 $ 58 Inventories – Inventories are valued at the lower of cost or market, with cost computed on a first-in, first-out (“FIFO”) basis. In addition to the price of the product purchased, the cost of inventory includes the Company’s internal manufacturing costs, including warehousing, engineering, material purchasing, quality and product planning expenses and applicable overhead, not in excess of estimated realizable value. Consideration is given to obsolescence, excessive levels, deterioration, direct selling expenses, and other factors in evaluating net realizable value. Distributor channel inventories include products that have been delivered to customers for which revenue recognition criteria have not been met. The inventory also includes advance replacement units (valued at cost) provided by the Company to end-users to service defective products under warranty. The value of advance replacement units included in the inventory was $75 and $47 , as of December 31, 2015 and 2014 , respectively. Property and Equipment – Property and equipment are stated at cost less accumulated depreciation and amortization. Expenditures that materially increase values or capacities or extend useful lives of property and equipment are capitalized. Routine maintenance, repairs, and renewal costs are expensed as incurred. Gains or losses from the sale, trade-in or retirement of property and equipment are recorded in current operations and the related book value of the property is removed from property and equipment accounts and the related accumulated depreciation and amortization accounts. Estimated useful lives are generally two to ten years. Depreciation and amortization are calculated over the estimated useful lives of the respective assets using the straight-line method. Leasehold improvement amortization is computed using the straight-line method over the shorter of the lease term or the estimated useful life of the related assets. Goodwill and Intangible Assets – Intangible assets acquired in a purchase business combination are amortized over their useful lives unless these lives are determined to be indefinite. Intangible assets are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, which are generally three to ten years. Goodwill represents the excess of costs over the fair value of net assets of businesses acquired. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized. In accordance with the provisions of FASB ASC Topic 350, Intangibles – Goodwill and Other , the Company tests goodwill and other intangible assets with indefinite lives for impairment at least annually at the beginning of the fourth quarter, or sooner if a triggering event occurs suggesting possible impairment of the values of these assets. Impairment testing for these assets involves a two-step process. In the first step, the fair value of the reporting unit holding the assets is compared to its carrying amount. If the carrying amount of the reporting unit exceeds its fair value, the second step of the impairment test is performed to measure the amount of the impairment loss, if any. In the second step, the fair value of the reporting unit is allocated to all of its assets and liabilities, including intangible assets and liabilities not recorded on the balance sheet. The excess, if any, of the fair value of the reporting unit over the sum of the fair values allocated to identified assets and liabilities is the value of goodwill to be compared to its carrying value (See Note 3 – Business Combinations, Goodwill and Intangibles ). ClearOne and all of its subsidiaries are considered as one reporting unit for this purpose. Impairment of Long-Lived Assets – Long-lived assets, such as property, equipment, and definite-lived intangibles subject to depreciation and amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated future undiscounted net cash flows of the related asset or group of assets over their remaining lives. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized for the amount by which the carrying amount exceeds the estimated fair value of the asset. Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable cash flows that are independent of other groups of assets. The impairment of long-lived assets requires judgments and estimates. If circumstances change, such estimates could also change. Revenue Recognition – Product revenue is recognized when (i) the products are shipped, (ii) persuasive evidence of an arrangement exists, (iii) the price is fixed and determinable, and (iv) collection is reasonably assured. The Company provides a right of return on product sales to certain distributors and other resellers under a product rotation program. Under this seldom-used program, once a quarter, a distributor or reseller is allowed to return products purchased during the prior 180 days for a total value generally not exceeding 15% of the distributor's or reseller’s net purchases during the preceding quarter. The distributor or reseller is, however, required to place a new purchase order for an amount not less than the value of products returned under the stock rotation program. When products are returned, the associated revenue, cost of goods sold, inventory and accounts receivable originally recorded are reversed. When the new order is fulfilled, the revenue, associated cost of goods sold, inventory and accounts receivable are recorded and the product revenue is subject to the deferral analysis described below. In a small number of cases, the distributors are also permitted to return products for other business reasons. Revenue from product sales to distributors is not recognized until the return privilege has expired or until it can be determined with reasonable certainty that the return privilege has expired, which approximates when product is sold-through to customers of the Company’s distributors (dealers, system integrators, value-added resellers, and end-users) rather than when the product is initially shipped to a distributor. At each quarter-end, the Company evaluates the inventory in the channel through information provided by our distributors. The level of inventory in the channel will fluctuate up-ward or down-ward each quarter, based upon its distributors’ individual operations. Accordingly, at each quarter-end, the deferral for revenue and associated cost of goods sold are calculated and recorded based upon the actual channel inventory reported at quarter-end. Further, with respect to distributors and other channel partners not reporting the channel inventory, the revenue and associated cost of goods sold are deferred until the Company receives payment for the product sales made to such distributors or channel partners. The amount of deferred cost of goods sold is included in distributor channel inventories. The details of deferred revenue and associated cost of goods sold and gross profit are as follows: As of December 31, 2015 2014 Deferred revenue $ 4,549 $ 5,004 Deferred cost of goods sold 1,628 1,698 Deferred gross profit $ 2,921 $ 3,306 The Company offers rebates and market development funds to certain of its distributors, dealers/resellers, and end-users based upon the volume of product purchased by them. The Company records rebates as a reduction of revenue in accordance with GAAP. The Company provides, at its discretion, advance replacement units to end-users on defective units of certain products under warranty. Since the purpose of these units is not revenue generating, the Company tracks the units due from the end-user, valued at retail price, until the defective unit has been returned, but no receivable balance is maintained on the Company’s balance sheet. Sales and Similar Taxes - Taxes collected from customers and remitted to government authorities are reported on a net basis and thus are excluded from revenues. Shipping and Handling Costs – Shipping and handling billed to customers is recorded as revenue. Shipping and handling costs are included in cost of goods sold. Warranty Costs – The Company accrues for warranty costs based on estimated warranty return rates and estimated costs to repair. These reserve costs are classified as accrued liabilities on the consolidated balance sheets. Factors that affect the Company’s warranty liability include the number of units sold, historical and anticipated rates of warranty returns, and repair cost. The Company reviews the adequacy of its recorded warranty accrual on a quarterly basis. The details of changes in the Company’s warranty accrual are as follows: Year Ended December 31, 2015 2014 Balance at the beginning of year $ 331 $ 338 Accruals/additions 442 511 Usage/claims (485 ) (518 ) Balance at end of year $ 288 $ 331 Advertising – The Company expenses advertising costs as incurred. Advertising costs consist of trade shows, magazine advertisements, and other forms of media. Advertising expenses for the years ended December 31, 2015 and 2014 totaled $728 and $768 , respectively, and are included under the caption “Sales and Marketing”. Research and Product Development Costs – The Company expenses research and product development costs as incurred. Income Taxes – The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carry-forwards. These temporary differences will result in deductible or taxable amounts in future years when the reported amounts of the assets or liabilities are recovered or settled. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some or all of the deferred tax assets may not be realized. The Company evaluates the realizability of its net deferred tax assets on a quarterly basis and valuation allowances are provided, as necessary. Adjustments to the valuation allowance increase or decrease the Company’s income tax provision or benefit. As of December 31, 2015 and 2014 , the Company had a valuation allowance of $1,071 and $786 against foreign net operating losses, and state research and development credits, respectively. The Company follows the provisions c o ntained in ASC Topic 740, Income Taxes. The Company recognizes the tax benefit from an uncertain tax position only if it is at least more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Judgment is required in determining the provision for income taxes and related accruals, deferred tax assets and liabilities. In the ordinary course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. Additionally, the Company’s tax returns are subject to audit by various tax authorities. Although the Company believes that its estimates are reasonable, actual results could differ from these estimates. Earnings Per Share – The following table sets forth the computation of basic and diluted earnings per common share: Year Ended December 31, 2015 2014 Numerator: Net income $ 6,776 $ 5,596 Denominator: Basic weighted average shares 9,127,385 9,166,769 Dilutive common stock equivalents using treasury stock method 467,274 414,557 Diluted weighted average shares 9,594,659 9,581,326 Basic earnings per common share: $ 0.74 $ 0.61 Diluted earnings per common share: $ 0.71 $ 0.58 Weighted average options outstanding 1,053,785 975,696 Anti-dilutive options not included in the computation 177,125 209,751 Share-Based Payment – We estimate the fair value of stock options using the Black-Scholes option pricing model, which requires certain estimates, including an expected forfeiture rate and expected term of options granted. We also make decisions regarding the method of calculating expected volatilities and the risk-free interest rate used in the option-pricing model. The resulting calculated fair value of stock options is recognized as compensation expense over the requisite service period, which is generally the vesting period. When there are changes to the assumptions used in the option-pricing model, including fluctuations in the market price of our common stock, there will be variations in the calculated fair value of our future stock option awards, which results in variation in the compensation cost recognized. Recent Accounting Pronouncements - In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either a full retrospective or retrospective with cumulative effect transition method. Early adoption is not permitted. The updated standard becomes effective for the Company on January 1, 2017. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on the consolidated financial statements. In November 2015 the FASB issued ASU 2015-17, Income Taxes (Topic 740), simplifying the presentation of deferred taxes on the balance sheet by requiring companies to classify everything as either a non-current asset or non-current liability. Early adoption of this ASU is permitted. ClearOne has adopted this standard update early as it would simplify the presentation of taxes on the balance sheet and within the income tax footnote. The quantitative effects of our adoption of this standard in our results and balances for the year ended December 31, 2014 are as follows: December 31, 2014 Originally Reported Effect of Adoption Reported Herein Balance Sheet: Deferred income taxes - current assets 3,824 (3,824 ) — Deferred income taxes - non-current assets 1,265 3,824 5,089 On February 25, 2016, FASB released Accounting Standards Update No. 2016-02, Leases (Topic 842) to bring transparency to lessee balance sheets. The ASU will require organizations that lease assets (lessees) to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The standard will apply to both types of leases-capital (or finance) leases and operating leases. Previously, GAAP has required only capital leases to be recognized on lessee balance sheets. The standard will take effect the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early application will be permitted for all organizations. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on the consolidated financial statements. |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | Marketable Securities The Company has classified its marketable securities as available-for-sale securities. These securities are carried at estimated fair value with unrealized holding gains and losses included in accumulated other comprehensive income/loss in shareholders' equity until realized. Gains and losses on marketable security transactions are reported on the specific-identification method. Dividend and interest income are recognized when earned. The amortized cost, gross unrealized holding gains, gross unrealized holding losses, and fair value for available-for-sale securities by major security type and class of security at December 31, 2015 and 2014 were as follows: Amortized cost Gross unrealized holding gains Gross unrealized holding losses Estimated fair value December 31, 2015 Available-for-sale securities: Corporate bonds and notes $ 20,827 $ 50 $ (133 ) $ 20,744 Municipal bonds 5,608 18 (5 ) 5,621 Total available-for-sale securities $ 26,435 $ 68 $ (138 ) $ 26,365 Amortized Gross Gross Estimated December 31, 2014 Available-for-sale securities: Corporate bonds and notes $ 19,804 $ 89 $ (55 ) $ 19,838 Municipal bonds 6,292 28 (2 ) 6,318 Total available-for-sale securities $ 26,096 $ 117 $ (57 ) $ 26,156 Maturities of marketable securities classified as available-for-sale securities were as follows at December 31, 2015 : Amortized cost Estimated fair value Due within one year $ 7,179 $ 7,161 Due after one year through five years 19,256 19,204 Due after five years through ten years — — Total available-for-sale securities $ 26,435 $ 26,365 Debt securities in an unrealized loss position as of December 31, 2015 were not deemed impaired at acquisition and subsequent declines in fair value are not deemed attributed to declines in credit quality. Management believes that it is more likely than not that the securities will receive a full recovery of par value. The available-for-sale marketable securities in a gross unrealized loss position as of December 31, 2015 are summarized as follows: Less than 12 months More than 12 months Total Estimated fair value Gross unrealized holding losses Estimated fair value Gross unrealized holding losses Estimated fair value Gross unrealized holding losses As of December 31, 2015 Corporate bonds and notes $ 10,256 $ (88 ) $ 3,298 $ (45 ) $ 13,554 $ (133 ) Municipal bonds 1,674 (4 ) 640 (1 ) 2,314 (5 ) $ 11,930 $ (92 ) $ 3,938 $ (46 ) $ 15,868 $ (138 ) |
Business Combination, Goodwill
Business Combination, Goodwill and Intangibles | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Business Combinations, Goodwill and Intangibles | Business Combinations, Goodwill and Intangibles Acquisition of Sabine On March 7, 2014 , the Company completed the acquisition of Sabine, Inc. ("Sabine") through a stock purchase agreement ("SPA"). Sabine manufactures, designs and sells Sacom professional wireless microphone systems for live and installed audio. It also makes FBX Feedback Exterminator for reliable automatic feedback control. With the addition of Sabine, ClearOne will have reliable and exclusive access to the wireless microphones that are a critical component of ClearOne’s complete microphone portfolio. Pursuant to the SPA, the Company (i) paid initial consideration of $8,141 in cash, (ii) accrued for possible additional earn-out payments over the next two years, estimated to be $657 , and (iii) issued 150,000 shares of restricted common stock of the Company, valued at $1,679 (determined on the basis of the closing market price of the Company's stock on the acquisition date). The purchase price was paid out of cash on hand. The SPA contains representations, warranties and indemnifications customary for a transaction of this type. The following table summarizes the consideration paid for the acquisition: Consideration Cash $ 8,141 Common stock 1,679 Contingent consideration 657 Total $ 10,477 The fair values of Sabine assets acquired and liabilities assumed are based on the information that was available during the measurement period of twelve months from the date of acquisition. The fair value of identified assets and liabilities acquired and goodwill is as follows: Fair value Cash $ 125 Accounts receivable 255 Inventories 844 Prepaid and other 105 Intangibles 3,970 Property and equipment 292 Other long-term assets 11 Goodwill 5,510 Deferred tax asset 245 Trade accounts payable (420 ) Accrued liabilities (405 ) Stock registration costs (55 ) Total $ 10,477 The goodwill of $5,510 related to the acquisition of of Sabine is composed of expected synergies in utilizing Sabine technology in ClearOne product offerings, reduction in future combined research and development expenses, and intangible assets including acquired workforce that do not qualify for separate recognition. The goodwill balance of $5,510 related to the acquisition of Sabine is expected to be deductible for tax purposes. Spontania business of Spain-based Dialcom Networks, S.L. On April 1, 2014 ClearOne, Inc. closed on the acquisition of the Spontania business of Spain-based Dialcom Networks, S.L. The Spontania cloud-based service empowers customers to deploy HD video conferencing, web collaboration, and more with equipment most businesses have and use every day - video-conferencing endpoints, desktops, laptops, web browsers, tablets, and smartphones. With Spontania there is no hardware investment and the service operates off of a reservation-less model, enabling on-demand video communications from virtually anywhere, anytime, with anyone on any device. The aggregate purchase price under the terms of the transaction was approximately €3.66 million in cash (approximately US$5.1 million ), after certain closing adjustments. ClearOne did not assume any debt or cash. The cash purchase price was paid out of cash on hand. The addition of this technology was an integral part of the company’s strategy to build an all-inclusive video collaboration portfolio. The fair value of identified assets and liabilities acquired from the Spontania acquisition was as follows: Fair value Intangibles $ 1,335 Property and equipment 47 Goodwill 3,741 Accrued liabilities (71 ) Total $ 5,052 The goodwill of $3,741 relates to the acquisition of Spontania cloud-based technology and intangible assets including acquired workforce that does not qualify for separate recognition. The goodwill of $3,741 from the Spontania acquisition is expected to be deductible for tax purposes. Acquisitions Expenses The Company incurred $588 in acquisition related expenses for the Sabine and Spontania acquisitions, all of which were categorized under General and administrative expenses in the Consolidated Statement of Income and Comprehensive Income for the year ended December 31, 2014 . Goodwill Changes in the carrying amount of the company's goodwill for the years ended December 31, 2015 and 2014 were as follows: 2015 2014 Balance as of January 1, Goodwill $ 12,724 $ 3,472 Accumulated impairment losses — — 12,724 3,472 Goodwill acquired during the year — 9,252 Balance as of December 31, Goodwill 12,724 12,724 Accumulated impairment losses — — $ 12,724 $ 12,724 Intangible Assets Intangible assets as of December 31, 2015 and 2014 consisted of the following: Estimated As of December 31, useful lives 2015 2014 Tradename 5 to 7 years $ 555 $ 555 Patents and technological know-how 10 years 5,850 5,850 Proprietary software 3 to 15 years 4,341 4,341 Other 3 to 5 years 324 324 11,070 11,070 Accumulated amortization (4,432 ) (3,174 ) Total intangible assets, net $ 6,638 $ 7,896 During the years ended December 31, 2015 and 2014 , amortization of these intangible assets were $1,258 and $1,210 , respectively. The estimated future amortization expense of intangible assets is as follows: Years ending December 31, 2016 $ 1,120 2017 925 2018 851 2019 778 2020 600 Thereafter 2,364 $ 6,638 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories, net of reserves, consisted of the following: As of December 31, 2015 2014 Current: Raw materials $ 2,735 $ 3,056 Finished goods 10,712 9,710 $ 13,447 $ 12,766 Long-term: Raw materials $ 375 $ 59 Finished goods 1,643 817 $ 2,018 $ 876 Long-term inventory represents inventory held in excess of our current (next 12 months) requirements based on our recent sales and forecasted level of sales. We have developed programs to reduce the inventory to normal operating levels in the near future. We expect to sell the above inventory, net of reserves, at or above the stated cost and believe that no loss will be incurred on its sale. Current finished goods do not include distributor channel inventories in the amounts of approximately $1,628 and $1,698 as of December 31, 2015 and 2014 , respectively. Distributor channel inventories represent inventory at distributors and other customers where revenue recognition criteria have not been achieved. The losses incurred on valuation of inventory at the lower of cost or market value and write-off of obsolete inventory amounted to $496 and $946 during the years ended December 31, 2015 and 2014 , respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Major classifications of property and equipment and estimated useful lives were as follows: Estimated As of December 31, useful lives 2015 2014 Office furniture and equipment 3 to 10 years $ 4,412 $ 7,234 Leasehold improvements 1 to 6 years 1,488 1,474 Manufacturing and test equipment 2 to 10 years 2,483 3,023 8,383 11,731 Accumulated depreciation and amortization (6,794 ) (9,692 ) Property and equipment, net $ 1,589 $ 2,039 Depreciation expense on property and equipment for the years ended December 31, 2015 and 2014 was $801 and $761 , respectively. |
Leases and Deferred Rent
Leases and Deferred Rent | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Leases and Deferred Rent | Leases and Deferred Rent Rent expense is recognized on a straight-line basis over the period of the lease taking into account future rent escalation and holiday periods. Rent expense was $1,420 and $1,236 , including amortization of deferred rent of $95 and $79 , for the years ended December 31, 2015 and 2014 , respectively. We occupy a 31,000 square-foot facility in Salt Lake City, Utah under the terms of an operating lease expiring in May 2019 which supports our principal administrative, sales, marketing, customer support, and research and product development activities. We occupy a 46,000 square-foot manufacturing facility in Alachua, Florida under the terms of an operating lease expiring in March 2016 with an option to extend the lease month-to-month. The Alachua facility is used primarily to manufacture our wireless microphone products and to support this line of business. We occupy a 40,000 square-foot warehouse in Salt Lake City, Utah under the terms of an operating lease expiring in December 2021 , which serves as our primary inventory fulfillment and repair center. This facility also serves as our assembly workshop for digital signage products. We occupy two facilities in Austin, Texas - a 7,070 square-foot facility under the terms of an operating lease expiring in October 2019 and a 11,100 square-foot facility under the terms of an operating lease expiring in August 2016 . These facilities support our administrative, sales, marketing, customer support, and research and development activities. We occupied 5,600 square-feet of warehouse space in Hong Kong to support our partners and customers located in the Asia-Pacific region. This operating lease expired in February 2014 and has not been renewed. We occupy a 4,700 square-foot office facility in Hod Hasharon, Israel under the terms of an operating lease expiring in December 2017 which serves to support our research and development activities. Upon expiration, we will have the option to extend the lease for two additional years. Future minimum lease payments under non-cancellable operating leases with initial terms of one year or more are as follows: Years ending December 31, 2016 $ 1,016 2017 883 2018 825 2019 419 2020 189 Thereafter 195 Total minimum lease payments $ 3,527 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consist of the following: As of December 31, 2015 2014 Accrued salaries and other compensation $ 1,170 $ 340 Dividends payable — 914 Sales and marketing programs 477 642 Product warranty 288 331 Other accrued liabilities 308 467 Total $ 2,243 $ 2,694 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We establish contingent liabilities when a particular contingency is both probable and estimable. The Company is not aware of any pending claims or assessments, other than as described below, which may have a material adverse impact on the Company’s financial position or results of operations. Outsource Manufacturers. We have manufacturing agreements with electronics manufacturing service ("EMS") providers related to the outsourced manufacturing of our products. Certain manufacturing agreements establish annual volume commitments. We are also obligated to repurchase Company-forecasted but unused materials. The Company has non-cancellable, non-returnable, and long-lead time commitments with its EMS providers and certain suppliers for inventory components that will be used in production. The Company’s purchase commitments under such agreements is approximately $2,970 as of December 31, 2015 . Uncertain Tax Positions. As further discussed in Note 12, we had $1,126 of uncertain tax positions as of December 31, 2015 . Due to the inherent uncertainty of the underlying tax positions, it is not possible to forecast the payment of this liability to any particular year. Legal Proceedings. We are also involved from time to time in various claims and legal proceedings which arise in the normal course of our business. Such matters are subject to many uncertainties and outcomes that are not predictable. However, based on the information available to us, we do not believe any such proceedings will have a material adverse effect on our business, results of operations, financial position, or liquidity. Conclusion We believe there are no other items that will have a material adverse impact on the Company's financial position or results of operations. Legal proceedings are subject to all of the risks and uncertainties of legal proceedings and there can be no assurance as to the probable result of any legal proceedings. The Company believes it has adequately accrued for the aforementioned contingent liabilities. While we have not identified specific legal proceedings above, there exists the possibility of general adverse legal outcomes that we estimate could be up to $1,000 over and above amounts we may have provided for. If adverse outcomes were to occur, our financial position, results of operations and cash flows could be negatively affected materially for the period in which the adverse outcomes are known. |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Payments | Share-Based Payments Employee Stock Option Plans The Company’s share-based incentive plans offering stock options primarily consists of two plans. Under both plans, one new share is issued for each stock option exercised. The plans are described below. The Company’s 1998 Incentive Plan (the “1998 Plan”) was the Company's primary plan through November 2007. Under this plan shares of common stock was made available for issuance to employees and directors. Through December 1999, 1,066,000 options were granted that would cliff vest after 9.8 years; however, such vesting was accelerated for 637,089 of these options upon meeting certain earnings per share goals through the fiscal year ended June 30, 2003. Subsequent to December 1999 and through June 2002, 1,248,250 options were granted that would cliff vest after 6.0 years; however, such vesting was accelerated for 300,494 of these options upon meeting certain earnings per share goals through the fiscal year ended June 30, 2005. The Company's 2007 Equity Incentive Plan (the “2007 Plan”) was restated and approved by the shareholders on December 12, 2014. Provisions of the restated 2007 Plan include the granting of up to 2,000,000 incentive and non-qualified stock options, stock appreciation rights, restricted stock and restricted stock units. Options may be granted to employees, officers, non-employee directors and other service providers and may be granted upon such terms as the Compensation Committee of the Board of Directors determines in their sole discretion. Of the options granted subsequent to June 2002, all vesting schedules are based on 3 or 4-year vesting schedules, with either one-third or one-fourth vesting on the first anniversary and the remaining options vesting ratably over the remainder of the vesting term. Generally, directors and officers have 3 -year vesting schedules and all other employees have 4 -year vesting schedules. Additionally, in the event of a change in control or the occurrence of a corporate transaction, the Company’s Board of Directors has the authority to elect that all unvested options shall vest and become exercisable immediately prior to the event or closing of the transaction. All options outstanding as of December 31, 2015 had contractual lives of ten years. Under the 1998 Plan, 2,500,000 shares were authorized for grant. As of December 31, 2015 , there were 345,000 options outstanding under the 1998 Plan, which includes the cliff vesting and 3 or 4-year vesting options discussed above. As of December 31, 2015 , there were 683,935 options outstanding under the 2007 Plan. As of December 31, 2015 , the 2007 Plan had 1,049,918 authorized unissued options, while there were no options remaining that could be granted under the 1998 Plan. The Company uses judgment in determining the fair value of the share-based payments on the date of grant using an option-pricing model with assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the risk-free interest rate of the awards, the expected life of the awards, the expected volatility over the term of the awards, and the expected dividends of the awards. The Company uses the Black-Scholes option pricing model to determine the fair value of share-based payments granted under the guidelines of ASC Topic 718. In applying the Black-Scholes methodology to the options granted, the Company used the following assumptions: Year ended December 31, 2015 2014 Risk-free interest rate, average 2.0% 2.2% Expected option life, average 6.1 years 8.2 years Expected price volatility, average 44.3% 47.6% Expected dividend yield 1.1% —% The risk-free interest rate is determined using the U.S. Treasury rate in effect as of the date of the grant, based on the expected life of the stock option. The expected life of the stock option is determined using historical data. The expected price volatility is determined using a weighted average of daily historical volatility of the Company’s stock price over the corresponding expected option life. Under guidelines of ASC Topic 718, the Company recognizes compensation cost net of an expected forfeiture rate and recognized the associated compensation cost for only those awards expected to vest on a straight-line basis over the underlying requisite service period. The Company estimated the forfeiture rates based on its historical experience and expectations about future forfeitures. The following table shows the stock option activity: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value As of December 31, 2014 1,040,081 $ 5.65 Granted 56,666 13.03 Reinstated 4,583 4.47 Expired and canceled (1,000 ) 3.42 Forfeited prior to vesting (15,252 ) 7.85 Exercised (56,143 ) 5.51 As of December 31, 2015 1,028,935 $ 6.03 4.73 $ 7,104 Vested and Expected to Vest at December 31, 2015 1,028,935 $ 6.03 4.73 $ 7,104 Vested at December 31, 2015 820,022 $ 5.10 3.74 $ 6,419 The weighted average per share fair value of options granted during the years ending December 31, 2015 and 2014 was $5.27 and $4.85 respectively. The total intrinsic value of options exercised during the years ended December 31, 2015 and 2014 was $404 and $1,337 , respectively. The total pre-tax compensation cost related to stock options recognized during the years ended December 31, 2015 and 2014 was $552 and $401 , respectively. Tax benefit from compensation cost related to stock options during the years ended December 31, 2015 and 2014 was $41 and $211 , respectively. As of December 31, 2015 , the total compensation cost related to stock options not yet recognized and before the effect of any forfeitures was $919 , which is expected to be recognized over approximately the next 2.1 years on a straight-line basis. Employee Stock Purchase Plan During 2015 , the Company issued shares to employees under the Company's 2014 Employee Stock Purchase Plan (the "ESPP"). The ESPP was approved by the Company’s shareholders on December 12, 2014. As of December 31, 2015 485,033 of the originally approved 500,000 shares were available for offerings under the ESPP. Offering periods under the ESPP commence on each Jan 1 and July 1, and continue for a duration of six months. The ESPP is available to all employees who do not own, or are deemed to own, shares of stock making up an excess of 5% of the combined voting power of the Company, its parent or subsidiary. During each offering period, each eligible employee may purchase shares under the ESPP after authorizing payroll deductions. Under the ESPP, each employee may purchase up to the lesser of 2,500 shares or $25 of fair market value (based on the established purchase price) of the Company's stock for each offering period. Unless the employee has previously withdrawn from the offering, his or her accumulated payroll deductions will be used to purchase common stock on the last business day of the period at a price equal to 85% (or a 15% discount) of the fair market value of the common stock on the first or last day of the offering period, whichever is lower. Shares purchased and compensation expense associated Employee Stock Purchase Plans were as follows: 2015 2014 Shares purchased under ESPP plans 14,982 82 Plan compensation expense $ 31 $ — Stock Repurchase Program and Cash Dividends In May 2012, our Board of Directors authorized a stock repurchase program to purchase the Company's common stock in the open market. A total of 272,767 shares costing $2,598 were purchased under this program during the year ended December 31, 2014 . The cost of shares purchased were recorded as a reduction to shareholders' equity. On December 2, 2014, the Company announced the discontinuance of the stock repurchase program along with the initiation of a cash dividend plan. On February 25, 2016 , the Company declared its most recent dividend under this plan of $0.05 per share of ClearOne common stock, payable on March 18, 2016 to shareholders of record on March 7, 2016 . |
Significant Customers
Significant Customers | 12 Months Ended |
Dec. 31, 2015 | |
Risks and Uncertainties [Abstract] | |
Significant Customers | Significant Customers Sales to significant customers that represented more than 10 percent of total revenues are as follows: Year ended December 31, 2015 2014 Customer A 14.2 % 16.0 % Customer B 10.4 % — % * Total 24.6 % 16.0 % * Sales didn't exceed 10% of the revenue. The following table summarizes the percentage of total gross accounts receivable from significant customers: As of December 31, 2015 2014 Customer A 18.0 % 21.0 % Customer B 16.0 % 10.0 % Total 34.0 % 31.0 % These customers facilitate product sales to a large number of end-users, none of which is known to account for more than 10 percent of the Company’s revenue from product sales. Nevertheless, the loss of one or more of these customers could reduce revenue and have a material adverse effect on the Company’s business and results of operations. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value of the Company's financial instruments reflects the amounts that the Company estimates it will receive in connection with the sale of an asset or pay in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). The fair value hierarchy prioritizes the use of inputs used in valuation techniques into the following three levels: Level 1 - Quoted prices in active markets for identical assets and liabilities. Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. This category generally includes U.S. Government and agency securities; municipal securities; mutual funds and securities sold and not yet settled. Level 3 - Unobservable inputs. The substantial majority of the Company’s financial instruments are valued using quoted prices in active markets or based on other observable inputs. The following tables set forth the fair value of the financial instruments re-measured by the Company as of December 31, 2015 and 2014 : Level 1 Level 2 Level 3 Total December 31, 2015 Corporate bonds and notes $ — $ 20,744 $ — $ 20,744 Municipal bonds — 5,621 — 5,621 Total $ — $ 26,365 $ — $ 26,365 Level 1 Level 2 Level 3 Total December 31, 2014 Corporate bonds and notes $ — $ 19,838 $ — $ 19,838 Municipal bonds — 6,318 — 6,318 Total $ — $ 26,156 $ — $ 26,156 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Consolidated income before taxes for domestic and foreign operations consisted of the following: Year ended December 31, 2015 2014 Domestic $ 13,295 $ 9,615 Foreign (2,744 ) (1,386 ) Total $ 10,551 $ 8,229 The Company's (provision) for income taxes consisted of the following: Year ended December 31, 2015 2014 Current: Federal $ (3,386 ) $ (2,750 ) State (344 ) (173 ) Foreign — (109 ) Total current (3,730 ) (3,032 ) Deferred: Federal (220 ) 379 State (10 ) 27 Foreign 470 401 240 807 Change in valuation allowance (285 ) (408 ) Total deferred (45 ) 399 (Provision) for income taxes $ (3,775 ) $ (2,633 ) The income tax (provision) differs from that computed at the federal statutory corporate income tax rate as follows: Year ended December 31, 2015 2014 Tax (provision) at Federal statutory rate $ (3,587 ) $ (2,798 ) State income tax (provision), net of federal benefit (408 ) (257 ) Research and development tax credits 456 549 Foreign earnings or losses taxed at different rates (231 ) (102 ) Other 280 383 Change in valuation allowance (285 ) (408 ) Tax (provision) $ (3,775 ) $ (2,633 ) The tax effects of significant temporary differences representing net deferred tax assets and liabilities consisted of the following: 2015 2014 Deferred revenue $ 1,019 $ 1,120 Basis difference in intangible assets 26 42 Inventory reserve 2,452 2,213 Net operating loss carryforwards 1,347 957 Research and development tax credits — 60 Accrued expenses 165 292 Stock-based compensation 672 577 Allowance for sales returns and doubtful accounts 20 22 Difference in property and equipment basis (423 ) (318 ) Other 886 910 Total net deferred income tax asset 6,164 5,875 Less: Valuation allowance (1,071 ) (786 ) Net deferred income tax asset (liability) $ 5,093 $ 5,089 The Company has not provided for U.S. deferred income taxes or foreign withholding taxes on undistributed earnings of its non-U.S. subsidiaries since these earnings are intended to be reinvested indefinitely, in accordance with guidelines contained in ASC Topic 740, Accounting for Income Taxes . It is not practical to estimate the amount of additional taxes that might be payable on such undistributed earnings. In accordance with ASC Topic 740, the Company analyzed its valuation allowance at December 31, 2015 and determined that, based upon available evidence, it is more likely than not that certain of its deferred tax assets may not be realized and, as such, has established a valuation allowance against certain deferred tax assets. These deferred tax assets include foreign net operating loss carryforwards and foreign intangible assets. The Company has federal net operating loss (“NOL”) carryforwards of approximately $818 (pre-tax), Hong Kong NOL carryforwards of approximately $1,577 , and Spain NOL carryforwards of approximately $2,434 . The federal NOL carryforwards will begin to expire in 2029 . The Hong Kong and Spain NOL carryforwards do not expire. Effective July 1, 2007, the Company adopted the accounting standards related to uncertain tax positions. This standard requires that tax positions be assessed using a two-step process. A tax position is recognized if it meets a "more likely than not" threshold, and is measured at the largest amount of benefit that is greater than 50 percent likely of being realized. Uncertain tax positions must be reviewed at each balance sheet date. Liabilities recorded as a result of this analysis must generally be recorded separately from any current or deferred income tax accounts. The total amount of unrecognized tax benefits at December 31, 2015 and 2014 , that would favorably impact our effective tax rate if recognized was $176 and $723 , respectively. As of December 31, 2015 and 2014 , we accrued $55 and $40 , respectively, in interest and penalties related to unrecognized tax benefits. We account for interest expense and penalties for unrecognized tax benefits as part of our income tax provision. Although we believe our estimates are reasonable, we can make no assurance that the final tax outcome of these matters will not be different from that which we have reflected in our historical income tax provisions and accruals. Such difference could have a material impact on our income tax provision and operating results in the period in which we make such determination. A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions is as follows: Year ended December 31, 2015 2014 Balance - beginning of year $ 1,678 $ 1,901 Additions based on tax positions related to the current year 52 564 Additions for tax positions of prior years 5 — Reductions for tax positions of prior years (503 ) (468 ) Settlements — (40 ) Lapse in statutes of limitations (106 ) (279 ) Uncertain tax positions, ending balance $ 1,126 $ 1,678 The Company’s U.S. federal income tax returns for 2012 through 2014 are subject to examination. The Company also files in various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to federal, state, or non-U.S. income tax examinations by tax authorities for years prior to 2012. The Company completed its audit by the Internal Revenue Service (“IRS”) for its 2006 tax return in 2010. As a result of the audit by the IRS, there were no material adjustments made to the Company’s tax return. The IRS commenced an examination of the Company's 2012 tax return. We do not anticipate the examination will result in a material change to its financial position. The Inland Revenue Department of Hong Kong, a Special Administrative Region (the “IRD”), commenced an examination of the Company's Hong Kong profits tax returns for 2009 through 2011 in the fourth quarter of 2012 that is anticipated to be completed in 2016. The Company does not anticipate the examination will result in a material change to its financial position. During the next twelve months, it is reasonably possible that the amount of the Company's unrecognized income tax benefits could change significantly. These changes could be the result of our ongoing tax audits or the settlement of outstanding audit issues. However, due to the issues being examined, at the current time, an estimate of the range of reasonably possible outcomes cannot be made, beyond amounts currently accrued. |
Geographic Sales Information
Geographic Sales Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Geographic Sales Information | Geographic Sales Information The United States was the only country to contribute more than 10 percent of total revenues in each fiscal year. The Company’s revenues are substantially denominated in U.S. dollars and are summarized geographically as follows: Year ended December 31, 2015 2014 United States $ 39,563 $ 39,837 All other countries 18,233 18,072 Total $ 57,796 $ 57,909 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 25, 2016 , the Company declared a stock dividend of $0.05 per share of ClearOne common stock payable on March 18, 2016 to shareholders of record on March 7, 2016 . On March 9, 2016 , the Board of Directors of the Company authorized the repurchase of up to $10,000 of the company’s outstanding shares of common stock. |
Business Description, Basis o22
Business Description, Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Fiscal Year | Fiscal Year – This report on Form 10-K includes financial statements for the years ended December 31, 2015 and 2014 . |
Consolidation | Consolidation – These consolidated financial statements include the financial statements of ClearOne, Inc. and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. |
Use of Estimates | Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting periods. Key estimates in the accompanying consolidated financial statements include, among others, revenue recognition, allowances for doubtful accounts and product returns, provisions for obsolete inventory, valuation of long-lived assets, and deferred income tax asset valuation allowances. Actual results could differ materially from these estimates. |
Foreign Currency Translation | Foreign Currency Translation – We are exposed to foreign currency exchange risk through our foreign subsidiaries. Other than our Spain subsidiary, our foreign subsidiaries are U.S. dollar functional, for which gains and losses arising from remeasurement are included in earnings. Our Spain subsidiary is Euro functional, for which gains and losses arising from translation are included in accumulated other comprehensive income or loss. We translate and remeasure foreign assets and liabilities at exchange rates in effect at the balance sheet dates. We translate revenue and expenses using average rates during the year. |
Concentration Risk | Concentration Risk – We depend on an outsourced manufacturing strategy for our products. We outsource the manufacture of all of our products to third-party manufacturers located in both the U.S. and Asia. If any of these manufacturers experience difficulties in obtaining sufficient supplies of components, component prices significantly exceeding the anticipated costs, an interruption in their operations, or otherwise suffer capacity constraints, we would experience a delay in production and shipping of these products which would have a negative impact on our revenues. Should there be any disruption in services due to natural disaster, economic or political difficulties, transportation restrictions, acts of terror, quarantine or other restrictions associated with infectious diseases, or other similar events, or any other reason, such disruption may have a material adverse effect on our business. Operating in the international environment exposes us to certain inherent risks, including unexpected changes in regulatory requirements and tariffs, and potentially adverse tax consequences, which could materially affect our results of operations. Currently, we have no second source of manufacturing for a portion of our products. |
Cash Equivalents | Cash Equivalents – The Company considers all highly-liquid investments with a maturity of three months or less, when purchased, to be cash equivalents. The Company places its temporary cash investments with high-quality financial institutions. At times, such investments may be in excess of the Federal Deposit Insurance Corporation insurance limits. |
Marketable Securities | Marketable Securities - The Company has classified its marketable securities as available-for-sale securities. These securities are carried at estimated fair value with unrealized holding gains and losses included in accumulated other comprehensive income/loss in shareholders' equity until realized. Gains and losses on marketable security transactions are reported on the specific-identification method. Dividend and interest income are recognized when earned. A decline in the market value of any available-for-sale security below cost that is deemed other than temporary results in a charge to earnings and establishes a new cost basis for the security. Losses are charged against “Other income” when a decline in fair value is determined to be other than temporary. We review several factors to determine whether a loss is other than temporary. These factors include, but are not limited to: (i) the extent to which the fair value is less than cost and the cause for the fair value decline, (ii) the financial condition and near term prospects of the issuer, (iii) the length of time a security is in an unrealized loss position and (iv) our ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. There were no other-than-temporary impairments recognized during the years ended December 31, 2015 and 2014 . |
Accounts Receivable | Accounts Receivable – Accounts receivable are recorded at the invoiced amount. Generally, credit is granted to customers on a short-term basis without requiring collateral, and as such, these accounts receivable, do not bear interest, although a finance charge may be applied to such receivables that are past due. The Company extends credit to customers who it believes have the financial strength to pay. The Company has in place credit policies and procedures, an approval process for sales returns and credit memos, and processes for managing and monitoring channel inventory levels. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Management regularly analyzes accounts receivable including current aging, historical write-off experience, customer concentrations, customer creditworthiness, and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. We review customer accounts quarterly by first assessing accounts with aging over a specific duration and balance over a specific amount. We review all other balances on a pooled basis based on past collection experience. Accounts identified in our customer-level review as exceeding certain thresholds are assessed for potential allowance adjustment if we conclude the financial condition of that customer has deteriorated, adversely affecting their ability to make payments. Delinquent account balances are written off if the Company determines that the likelihood of collection is not probable. If the assumptions that are used to determine the allowance for doubtful accounts change, the Company may have to provide for a greater level of expense in future periods or reverse amounts provided in prior periods. |
Inventories | Inventories – Inventories are valued at the lower of cost or market, with cost computed on a first-in, first-out (“FIFO”) basis. In addition to the price of the product purchased, the cost of inventory includes the Company’s internal manufacturing costs, including warehousing, engineering, material purchasing, quality and product planning expenses and applicable overhead, not in excess of estimated realizable value. Consideration is given to obsolescence, excessive levels, deterioration, direct selling expenses, and other factors in evaluating net realizable value. Distributor channel inventories include products that have been delivered to customers for which revenue recognition criteria have not been met. The inventory also includes advance replacement units (valued at cost) provided by the Company to end-users to service defective products under warranty. The value of advance replacement units included in the inventory was $75 and $47 , as of December 31, 2015 and 2014 , respectively. |
Property and Equipment | Property and Equipment – Property and equipment are stated at cost less accumulated depreciation and amortization. Expenditures that materially increase values or capacities or extend useful lives of property and equipment are capitalized. Routine maintenance, repairs, and renewal costs are expensed as incurred. Gains or losses from the sale, trade-in or retirement of property and equipment are recorded in current operations and the related book value of the property is removed from property and equipment accounts and the related accumulated depreciation and amortization accounts. Estimated useful lives are generally two to ten years. Depreciation and amortization are calculated over the estimated useful lives of the respective assets using the straight-line method. Leasehold improvement amortization is computed using the straight-line method over the shorter of the lease term or the estimated useful life of the related assets. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets – Intangible assets acquired in a purchase business combination are amortized over their useful lives unless these lives are determined to be indefinite. Intangible assets are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, which are generally three to ten years. Goodwill represents the excess of costs over the fair value of net assets of businesses acquired. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized. In accordance with the provisions of FASB ASC Topic 350, Intangibles – Goodwill and Other , the Company tests goodwill and other intangible assets with indefinite lives for impairment at least annually at the beginning of the fourth quarter, or sooner if a triggering event occurs suggesting possible impairment of the values of these assets. Impairment testing for these assets involves a two-step process. In the first step, the fair value of the reporting unit holding the assets is compared to its carrying amount. If the carrying amount of the reporting unit exceeds its fair value, the second step of the impairment test is performed to measure the amount of the impairment loss, if any. In the second step, the fair value of the reporting unit is allocated to all of its assets and liabilities, including intangible assets and liabilities not recorded on the balance sheet. The excess, if any, of the fair value of the reporting unit over the sum of the fair values allocated to identified assets and liabilities is the value of goodwill to be compared to its carrying value (See Note 3 – Business Combinations, Goodwill and Intangibles ). ClearOne and all of its subsidiaries are considered as one reporting unit for this purpose. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets – Long-lived assets, such as property, equipment, and definite-lived intangibles subject to depreciation and amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated future undiscounted net cash flows of the related asset or group of assets over their remaining lives. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized for the amount by which the carrying amount exceeds the estimated fair value of the asset. Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable cash flows that are independent of other groups of assets. The impairment of long-lived assets requires judgments and estimates. If circumstances change, such estimates could also change. |
Revenue Recognition | Revenue Recognition – Product revenue is recognized when (i) the products are shipped, (ii) persuasive evidence of an arrangement exists, (iii) the price is fixed and determinable, and (iv) collection is reasonably assured. The Company provides a right of return on product sales to certain distributors and other resellers under a product rotation program. Under this seldom-used program, once a quarter, a distributor or reseller is allowed to return products purchased during the prior 180 days for a total value generally not exceeding 15% of the distributor's or reseller’s net purchases during the preceding quarter. The distributor or reseller is, however, required to place a new purchase order for an amount not less than the value of products returned under the stock rotation program. When products are returned, the associated revenue, cost of goods sold, inventory and accounts receivable originally recorded are reversed. When the new order is fulfilled, the revenue, associated cost of goods sold, inventory and accounts receivable are recorded and the product revenue is subject to the deferral analysis described below. In a small number of cases, the distributors are also permitted to return products for other business reasons. Revenue from product sales to distributors is not recognized until the return privilege has expired or until it can be determined with reasonable certainty that the return privilege has expired, which approximates when product is sold-through to customers of the Company’s distributors (dealers, system integrators, value-added resellers, and end-users) rather than when the product is initially shipped to a distributor. At each quarter-end, the Company evaluates the inventory in the channel through information provided by our distributors. The level of inventory in the channel will fluctuate up-ward or down-ward each quarter, based upon its distributors’ individual operations. Accordingly, at each quarter-end, the deferral for revenue and associated cost of goods sold are calculated and recorded based upon the actual channel inventory reported at quarter-end. Further, with respect to distributors and other channel partners not reporting the channel inventory, the revenue and associated cost of goods sold are deferred until the Company receives payment for the product sales made to such distributors or channel partners. The amount of deferred cost of goods sold is included in distributor channel inventories. The Company offers rebates and market development funds to certain of its distributors, dealers/resellers, and end-users based upon the volume of product purchased by them. The Company records rebates as a reduction of revenue in accordance with GAAP. The Company provides, at its discretion, advance replacement units to end-users on defective units of certain products under warranty. Since the purpose of these units is not revenue generating, the Company tracks the units due from the end-user, valued at retail price, until the defective unit has been returned, but no receivable balance is maintained on the Company’s balance sheet. |
Sales and Similar Taxes | Sales and Similar Taxes - Taxes collected from customers and remitted to government authorities are reported on a net basis and thus are excluded from revenues. |
Shipping and Handling Costs | Shipping and Handling Costs – Shipping and handling billed to customers is recorded as revenue. Shipping and handling costs are included in cost of goods sold. |
Warranty Costs | Warranty Costs – The Company accrues for warranty costs based on estimated warranty return rates and estimated costs to repair. These reserve costs are classified as accrued liabilities on the consolidated balance sheets. Factors that affect the Company’s warranty liability include the number of units sold, historical and anticipated rates of warranty returns, and repair cost. The Company reviews the adequacy of its recorded warranty accrual on a quarterly basis. |
Advertising | Advertising – The Company expenses advertising costs as incurred. Advertising costs consist of trade shows, magazine advertisements, and other forms of media. Advertising expenses for the years ended December 31, 2015 and 2014 totaled $728 and $768 , respectively, and are included under the caption “Sales and Marketing”. |
Research and Product Development Costs | Research and Product Development Costs – The Company expenses research and product development costs as incurred. |
Income Taxes | Income Taxes – The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carry-forwards. These temporary differences will result in deductible or taxable amounts in future years when the reported amounts of the assets or liabilities are recovered or settled. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some or all of the deferred tax assets may not be realized. The Company evaluates the realizability of its net deferred tax assets on a quarterly basis and valuation allowances are provided, as necessary. Adjustments to the valuation allowance increase or decrease the Company’s income tax provision or benefit. As of December 31, 2015 and 2014 , the Company had a valuation allowance of $1,071 and $786 against foreign net operating losses, and state research and development credits, respectively. The Company follows the provisions c o ntained in ASC Topic 740, Income Taxes. The Company recognizes the tax benefit from an uncertain tax position only if it is at least more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Judgment is required in determining the provision for income taxes and related accruals, deferred tax assets and liabilities. In the ordinary course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. Additionally, the Company’s tax returns are subject to audit by various tax authorities. Although the Company believes that its estimates are reasonable, actual results could differ from these estimates. |
Share-Based Payment | Share-Based Payment – We estimate the fair value of stock options using the Black-Scholes option pricing model, which requires certain estimates, including an expected forfeiture rate and expected term of options granted. We also make decisions regarding the method of calculating expected volatilities and the risk-free interest rate used in the option-pricing model. The resulting calculated fair value of stock options is recognized as compensation expense over the requisite service period, which is generally the vesting period. When there are changes to the assumptions used in the option-pricing model, including fluctuations in the market price of our common stock, there will be variations in the calculated fair value of our future stock option awards, which results in variation in the compensation cost recognized. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements - In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either a full retrospective or retrospective with cumulative effect transition method. Early adoption is not permitted. The updated standard becomes effective for the Company on January 1, 2017. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on the consolidated financial statements. In November 2015 the FASB issued ASU 2015-17, Income Taxes (Topic 740), simplifying the presentation of deferred taxes on the balance sheet by requiring companies to classify everything as either a non-current asset or non-current liability. Early adoption of this ASU is permitted. ClearOne has adopted this standard update early as it would simplify the presentation of taxes on the balance sheet and within the income tax footnote. On February 25, 2016, FASB released Accounting Standards Update No. 2016-02, Leases (Topic 842) to bring transparency to lessee balance sheets. The ASU will require organizations that lease assets (lessees) to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The standard will apply to both types of leases-capital (or finance) leases and operating leases. Previously, GAAP has required only capital leases to be recognized on lessee balance sheets. The standard will take effect the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early application will be permitted for all organizations. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on the consolidated financial statements. |
Business Description, Basis o23
Business Description, Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | The Company’s allowance for doubtful accounts activity for the years ended December 31, 2015 and 2014 was as follows: Year Ended December 31, 2015 2014 Balance at beginning of the year $ 58 $ 129 Allowance increase (decrease) 36 (49 ) Write offs, net of recoveries (40 ) (22 ) Balance at end of the year $ 54 $ 58 |
Schedule of Deferred Revenue and Associated Cost of Goods Sold and Gross Profit | The details of deferred revenue and associated cost of goods sold and gross profit are as follows: As of December 31, 2015 2014 Deferred revenue $ 4,549 $ 5,004 Deferred cost of goods sold 1,628 1,698 Deferred gross profit $ 2,921 $ 3,306 |
Schedule of Product Warranty Liability | The details of changes in the Company’s warranty accrual are as follows: Year Ended December 31, 2015 2014 Balance at the beginning of year $ 331 $ 338 Accruals/additions 442 511 Usage/claims (485 ) (518 ) Balance at end of year $ 288 $ 331 |
Schedule of Earnings Per Share, Basic and Diluted | Earnings Per Share – The following table sets forth the computation of basic and diluted earnings per common share: Year Ended December 31, 2015 2014 Numerator: Net income $ 6,776 $ 5,596 Denominator: Basic weighted average shares 9,127,385 9,166,769 Dilutive common stock equivalents using treasury stock method 467,274 414,557 Diluted weighted average shares 9,594,659 9,581,326 Basic earnings per common share: $ 0.74 $ 0.61 Diluted earnings per common share: $ 0.71 $ 0.58 Weighted average options outstanding 1,053,785 975,696 Anti-dilutive options not included in the computation 177,125 209,751 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The quantitative effects of our adoption of this standard in our results and balances for the year ended December 31, 2014 are as follows: December 31, 2014 Originally Reported Effect of Adoption Reported Herein Balance Sheet: Deferred income taxes - current assets 3,824 (3,824 ) — Deferred income taxes - non-current assets 1,265 3,824 5,089 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation | The amortized cost, gross unrealized holding gains, gross unrealized holding losses, and fair value for available-for-sale securities by major security type and class of security at December 31, 2015 and 2014 were as follows: Amortized cost Gross unrealized holding gains Gross unrealized holding losses Estimated fair value December 31, 2015 Available-for-sale securities: Corporate bonds and notes $ 20,827 $ 50 $ (133 ) $ 20,744 Municipal bonds 5,608 18 (5 ) 5,621 Total available-for-sale securities $ 26,435 $ 68 $ (138 ) $ 26,365 Amortized Gross Gross Estimated December 31, 2014 Available-for-sale securities: Corporate bonds and notes $ 19,804 $ 89 $ (55 ) $ 19,838 Municipal bonds 6,292 28 (2 ) 6,318 Total available-for-sale securities $ 26,096 $ 117 $ (57 ) $ 26,156 |
Marketable Securities | Maturities of marketable securities classified as available-for-sale securities were as follows at December 31, 2015 : Amortized cost Estimated fair value Due within one year $ 7,179 $ 7,161 Due after one year through five years 19,256 19,204 Due after five years through ten years — — Total available-for-sale securities $ 26,435 $ 26,365 |
Available-for-sale Marketable Securities | The available-for-sale marketable securities in a gross unrealized loss position as of December 31, 2015 are summarized as follows: Less than 12 months More than 12 months Total Estimated fair value Gross unrealized holding losses Estimated fair value Gross unrealized holding losses Estimated fair value Gross unrealized holding losses As of December 31, 2015 Corporate bonds and notes $ 10,256 $ (88 ) $ 3,298 $ (45 ) $ 13,554 $ (133 ) Municipal bonds 1,674 (4 ) 640 (1 ) 2,314 (5 ) $ 11,930 $ (92 ) $ 3,938 $ (46 ) $ 15,868 $ (138 ) |
Business Combination, Goodwil25
Business Combination, Goodwill and Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Acquisition [Line Items] | |
Schedule of Goodwill | Changes in the carrying amount of the company's goodwill for the years ended December 31, 2015 and 2014 were as follows: 2015 2014 Balance as of January 1, Goodwill $ 12,724 $ 3,472 Accumulated impairment losses — — 12,724 3,472 Goodwill acquired during the year — 9,252 Balance as of December 31, Goodwill 12,724 12,724 Accumulated impairment losses — — $ 12,724 $ 12,724 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | Intangible assets as of December 31, 2015 and 2014 consisted of the following: Estimated As of December 31, useful lives 2015 2014 Tradename 5 to 7 years $ 555 $ 555 Patents and technological know-how 10 years 5,850 5,850 Proprietary software 3 to 15 years 4,341 4,341 Other 3 to 5 years 324 324 11,070 11,070 Accumulated amortization (4,432 ) (3,174 ) Total intangible assets, net $ 6,638 $ 7,896 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated future amortization expense of intangible assets is as follows: Years ending December 31, 2016 $ 1,120 2017 925 2018 851 2019 778 2020 600 Thereafter 2,364 $ 6,638 |
Spontania | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The fair value of identified assets and liabilities acquired from the Spontania acquisition was as follows: Fair value Intangibles $ 1,335 Property and equipment 47 Goodwill 3,741 Accrued liabilities (71 ) Total $ 5,052 |
Sabine, Inc. | |
Business Acquisition [Line Items] | |
Business Acquisition, Consideration Transferred | The following table summarizes the consideration paid for the acquisition: Consideration Cash $ 8,141 Common stock 1,679 Contingent consideration 657 Total $ 10,477 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The fair value of identified assets and liabilities acquired and goodwill is as follows: Fair value Cash $ 125 Accounts receivable 255 Inventories 844 Prepaid and other 105 Intangibles 3,970 Property and equipment 292 Other long-term assets 11 Goodwill 5,510 Deferred tax asset 245 Trade accounts payable (420 ) Accrued liabilities (405 ) Stock registration costs (55 ) Total $ 10,477 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current and Non-Current | Inventories, net of reserves, consisted of the following: As of December 31, 2015 2014 Current: Raw materials $ 2,735 $ 3,056 Finished goods 10,712 9,710 $ 13,447 $ 12,766 Long-term: Raw materials $ 375 $ 59 Finished goods 1,643 817 $ 2,018 $ 876 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Major classifications of property and equipment and estimated useful lives were as follows: Estimated As of December 31, useful lives 2015 2014 Office furniture and equipment 3 to 10 years $ 4,412 $ 7,234 Leasehold improvements 1 to 6 years 1,488 1,474 Manufacturing and test equipment 2 to 10 years 2,483 3,023 8,383 11,731 Accumulated depreciation and amortization (6,794 ) (9,692 ) Property and equipment, net $ 1,589 $ 2,039 |
Leases and Deferred Rent (Table
Leases and Deferred Rent (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments under non-cancellable operating leases with initial terms of one year or more are as follows: Years ending December 31, 2016 $ 1,016 2017 883 2018 825 2019 419 2020 189 Thereafter 195 Total minimum lease payments $ 3,527 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following: As of December 31, 2015 2014 Accrued salaries and other compensation $ 1,170 $ 340 Dividends payable — 914 Sales and marketing programs 477 642 Product warranty 288 331 Other accrued liabilities 308 467 Total $ 2,243 $ 2,694 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation - Black-Scholes assumptions | In applying the Black-Scholes methodology to the options granted, the Company used the following assumptions: Year ended December 31, 2015 2014 Risk-free interest rate, average 2.0% 2.2% Expected option life, average 6.1 years 8.2 years Expected price volatility, average 44.3% 47.6% Expected dividend yield 1.1% —% |
Schedule of Share-based Compensation, Stock Options, Activity | The following table shows the stock option activity: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value As of December 31, 2014 1,040,081 $ 5.65 Granted 56,666 13.03 Reinstated 4,583 4.47 Expired and canceled (1,000 ) 3.42 Forfeited prior to vesting (15,252 ) 7.85 Exercised (56,143 ) 5.51 As of December 31, 2015 1,028,935 $ 6.03 4.73 $ 7,104 Vested and Expected to Vest at December 31, 2015 1,028,935 $ 6.03 4.73 $ 7,104 Vested at December 31, 2015 820,022 $ 5.10 3.74 $ 6,419 |
Schedule of Share-based Compensation, Employee Stock Purchase Plan, Activity | Shares purchased and compensation expense associated Employee Stock Purchase Plans were as follows: 2015 2014 Shares purchased under ESPP plans 14,982 82 Plan compensation expense $ 31 $ — |
Significant Customers (Tables)
Significant Customers (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Risks and Uncertainties [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | Sales to significant customers that represented more than 10 percent of total revenues are as follows: Year ended December 31, 2015 2014 Customer A 14.2 % 16.0 % Customer B 10.4 % — % * Total 24.6 % 16.0 % * Sales didn't exceed 10% of the revenue. The following table summarizes the percentage of total gross accounts receivable from significant customers: As of December 31, 2015 2014 Customer A 18.0 % 21.0 % Customer B 16.0 % 10.0 % Total 34.0 % 31.0 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of the Financial Instruments Re-measured by the Company | The following tables set forth the fair value of the financial instruments re-measured by the Company as of December 31, 2015 and 2014 : Level 1 Level 2 Level 3 Total December 31, 2015 Corporate bonds and notes $ — $ 20,744 $ — $ 20,744 Municipal bonds — 5,621 — 5,621 Total $ — $ 26,365 $ — $ 26,365 Level 1 Level 2 Level 3 Total December 31, 2014 Corporate bonds and notes $ — $ 19,838 $ — $ 19,838 Municipal bonds — 6,318 — 6,318 Total $ — $ 26,156 $ — $ 26,156 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Consolidated income before taxes for domestic and foreign operations consisted of the following: Year ended December 31, 2015 2014 Domestic $ 13,295 $ 9,615 Foreign (2,744 ) (1,386 ) Total $ 10,551 $ 8,229 |
Schedule of Components of Income Tax Expense (Benefit) | The Company's (provision) for income taxes consisted of the following: Year ended December 31, 2015 2014 Current: Federal $ (3,386 ) $ (2,750 ) State (344 ) (173 ) Foreign — (109 ) Total current (3,730 ) (3,032 ) Deferred: Federal (220 ) 379 State (10 ) 27 Foreign 470 401 240 807 Change in valuation allowance (285 ) (408 ) Total deferred (45 ) 399 (Provision) for income taxes $ (3,775 ) $ (2,633 ) |
Schedule of Effective Income Tax Rate Reconciliation | The income tax (provision) differs from that computed at the federal statutory corporate income tax rate as follows: Year ended December 31, 2015 2014 Tax (provision) at Federal statutory rate $ (3,587 ) $ (2,798 ) State income tax (provision), net of federal benefit (408 ) (257 ) Research and development tax credits 456 549 Foreign earnings or losses taxed at different rates (231 ) (102 ) Other 280 383 Change in valuation allowance (285 ) (408 ) Tax (provision) $ (3,775 ) $ (2,633 ) |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of significant temporary differences representing net deferred tax assets and liabilities consisted of the following: 2015 2014 Deferred revenue $ 1,019 $ 1,120 Basis difference in intangible assets 26 42 Inventory reserve 2,452 2,213 Net operating loss carryforwards 1,347 957 Research and development tax credits — 60 Accrued expenses 165 292 Stock-based compensation 672 577 Allowance for sales returns and doubtful accounts 20 22 Difference in property and equipment basis (423 ) (318 ) Other 886 910 Total net deferred income tax asset 6,164 5,875 Less: Valuation allowance (1,071 ) (786 ) Net deferred income tax asset (liability) $ 5,093 $ 5,089 |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions is as follows: Year ended December 31, 2015 2014 Balance - beginning of year $ 1,678 $ 1,901 Additions based on tax positions related to the current year 52 564 Additions for tax positions of prior years 5 — Reductions for tax positions of prior years (503 ) (468 ) Settlements — (40 ) Lapse in statutes of limitations (106 ) (279 ) Uncertain tax positions, ending balance $ 1,126 $ 1,678 |
Geographic Sales Information (T
Geographic Sales Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Area | The United States was the only country to contribute more than 10 percent of total revenues in each fiscal year. The Company’s revenues are substantially denominated in U.S. dollars and are summarized geographically as follows: Year ended December 31, 2015 2014 United States $ 39,563 $ 39,837 All other countries 18,233 18,072 Total $ 57,796 $ 57,909 |
Business Description, Basis o35
Business Description, Basis of Presentation and Significant Accounting Policies - Narrative In-text Details (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Accounting Policies [Abstract] | ||
Product return policy, number of days | 180 days | |
Product return policy, threshhold, not to exceed net purchases during preceeding quarter, percent | 0.15 | |
Advertising expense | $ 728 | $ 768 |
Valuation allowance | $ 1,071 | $ 786 |
Business Description, Basis o36
Business Description, Basis of Presentation and Significant Accounting Policies - Rollforward Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance at beginning of the year | $ 58 | $ 129 |
Allowance increase (decrease) | 36 | (49) |
Write offs, net of recoveries | (40) | (22) |
Balance at end of the year | $ 54 | $ 58 |
Business Description, Basis o37
Business Description, Basis of Presentation and Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Value of advance replacement units | $ 75 | $ 47 |
Deferred revenue | 4,549 | 5,004 |
Deferred cost of goods sold | 1,628 | 1,698 |
Deferred gross profit | $ 2,921 | $ 3,306 |
Business Description, Basis o38
Business Description, Basis of Presentation and Significant Accounting Policies - Warranty Accrual (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Movement in Standard Product Warranty Accrual | ||
Balance at the beginning of year | $ 331 | $ 338 |
Accruals/additions | 442 | 511 |
Usage/claims | (485) | (518) |
Balance at end of year | $ 288 | $ 331 |
Business Description, Basis o39
Business Description, Basis of Presentation and Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator: | ||
Net income | $ 6,776 | $ 5,596 |
Denominator: | ||
Basic weighted average shares outstanding | 9,127,385 | 9,166,769 |
Dilutive common stock equivalents using treasury stock method | 467,274 | 414,557 |
Diluted weighted average shares (in shares) | 9,594,659 | 9,581,326 |
Basic earnings per common share: (in dollars per share) | $ 0.74 | $ 0.61 |
Diluted earnings per common share: (in dollars per share) | $ 0.71 | $ 0.58 |
Weighted average options outstanding | 1,053,785 | 975,696 |
Anti-dilutive options not included in the computation | 177,125 | 209,751 |
Business Description, Basis o40
Business Description, Basis of Presentation and Significant Accounting Policies - Property Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Minimum | |
Property, Plant and Equipment | |
Property, plant and equipment, estimated useful lives | 2 years |
Maximum | |
Property, Plant and Equipment | |
Property, plant and equipment, estimated useful lives | 10 years |
Business Description, Basis o41
Business Description, Basis of Presentation and Significant Accounting Policies - Goodwill and Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful life | 3 years |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful life | 10 years |
Business Description, Basis o42
Business Description, Basis of Presentation and Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred income taxes - current assets | $ 0 | |
Deferred income taxes - non-current assets | $ 5,093 | 5,089 |
Originally Reported | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred income taxes - current assets | 3,824 | |
Deferred income taxes - non-current assets | 1,265 | |
Effect of Adoption | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred income taxes - current assets | (3,824) | |
Deferred income taxes - non-current assets | $ 3,824 |
Marketable Securities - Gains a
Marketable Securities - Gains and Losses (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Gain (Loss) on Investments [Line Items] | ||
Amortized cost | $ 26,435 | $ 26,096 |
Gross unrealized holding gains | 68 | 117 |
Gross unrealized holding losses | (138) | (57) |
Estimated fair value | 26,365 | 26,156 |
Less than 12 months, Estimated fair value | 11,930 | |
Less than 12 months, Gross unrealized holding losses | (92) | |
More than 12 months, Estimated fair value | 3,938 | |
More than 12 months, Gross unrealized holding losses | (46) | |
Total, Estimated fair value | 15,868 | |
Total, Gross unrealized holding losses | (138) | |
Corporate bonds and notes | ||
Gain (Loss) on Investments [Line Items] | ||
Amortized cost | 20,827 | 19,804 |
Gross unrealized holding gains | 50 | 89 |
Gross unrealized holding losses | (133) | (55) |
Estimated fair value | 20,744 | 19,838 |
Less than 12 months, Estimated fair value | 10,256 | |
Less than 12 months, Gross unrealized holding losses | (88) | |
More than 12 months, Estimated fair value | 3,298 | |
More than 12 months, Gross unrealized holding losses | (45) | |
Total, Estimated fair value | 13,554 | |
Total, Gross unrealized holding losses | (133) | |
Municipal bonds | ||
Gain (Loss) on Investments [Line Items] | ||
Amortized cost | 5,608 | 6,292 |
Gross unrealized holding gains | 18 | 28 |
Gross unrealized holding losses | (5) | (2) |
Estimated fair value | 5,621 | $ 6,318 |
Less than 12 months, Estimated fair value | 1,674 | |
Less than 12 months, Gross unrealized holding losses | (4) | |
More than 12 months, Estimated fair value | 640 | |
More than 12 months, Gross unrealized holding losses | (1) | |
Total, Estimated fair value | 2,314 | |
Total, Gross unrealized holding losses | $ (5) |
Marketable Securities - Maturit
Marketable Securities - Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Investments, Debt and Equity Securities [Abstract] | ||
Amortized cost, Due within one year | $ 7,179 | |
Amortized cost, Due after one year through five years | 19,256 | |
Amortized cost, Due after five years through ten years | 0 | |
Amortized cost, Total available-for-sale securities | 26,435 | $ 26,096 |
Estimated fair value, Due within one year | 7,161 | |
Estimated fair value, Due after one year through five years | 19,204 | |
Estimated fair value, Due after five years through ten years | 0 | |
Estimated fair value, Total available-for-sale securities | $ 26,365 |
Business Combination, Goodwil45
Business Combination, Goodwill and Intangibles - Business Combinations, Consideration Paid (Details) € in Thousands, $ in Thousands | Apr. 01, 2014USD ($) | Apr. 01, 2014EUR (€) | Mar. 07, 2014USD ($)shares |
Sabine, Inc. | |||
Noncash or Part Noncash Acquisitions [Line Items] | |||
Consideration paid | $ 10,477 | ||
Sabine, Inc. | Cash | |||
Noncash or Part Noncash Acquisitions [Line Items] | |||
Consideration paid | $ 8,141 | ||
Sabine, Inc. | Common stock | |||
Noncash or Part Noncash Acquisitions [Line Items] | |||
Number of shares of restricted common stock issued | shares | 150,000 | ||
Consideration paid | $ 1,679 | ||
Sabine, Inc. | Contingent consideration | |||
Noncash or Part Noncash Acquisitions [Line Items] | |||
Consideration paid | $ 657 | ||
Spontania | |||
Noncash or Part Noncash Acquisitions [Line Items] | |||
Aggregate purchase price in cash | $ 5,100 | ||
Consideration paid | € | € 3,660 |
Business Combination, Goodwil46
Business Combination, Goodwill and Intangibles - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Apr. 01, 2014 | Mar. 07, 2014 |
Sabine, Inc. | ||
Business Acquisition [Line Items] | ||
Cash | $ 125 | |
Accounts receivable | 255 | |
Inventories | 844 | |
Prepaid and other | 105 | |
Intangibles | 3,970 | |
Property and equipment | 292 | |
Other long-term assets | 11 | |
Goodwill | 5,510 | |
Deferred tax asset | 245 | |
Trade accounts payable | (420) | |
Accrued liabilities | (405) | |
Stock registration costs | (55) | |
Total | $ 10,477 | |
Spontania | ||
Business Acquisition [Line Items] | ||
Intangibles | $ 1,335 | |
Property and equipment | 47 | |
Goodwill | 3,741 | |
Accrued liabilities | (71) | |
Total | $ 5,052 |
Business Combination, Goodwil47
Business Combination, Goodwill and Intangibles - Acquisition Related Expenses (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Business Combinations [Abstract] | |
Total acquisition related expenses | $ 588 |
Business Combination, Goodwil48
Business Combination, Goodwill and Intangibles - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | ||
Beginning goodwill, gross | $ 12,724 | $ 3,472 |
Beginning acculumlated impairment losses | 0 | 0 |
Balance at the beginning of the year | 12,724 | 3,472 |
Goodwill acquired during the year | 0 | 9,252 |
Ending goodwill, gross | 12,724 | 12,724 |
Ending accumulated impairment losses | 0 | 0 |
Balance at end of year | $ 12,724 | $ 12,724 |
Business Combination, Goodwil49
Business Combination, Goodwill and Intangibles - Intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Total finite and indefinite-lived intangible assets, gross | $ 11,070 | $ 11,070 |
Accumulated amortization | (4,432) | (3,174) |
Total intangible assets, net | 6,638 | 7,896 |
Amortization of intangibles | 1,258 | 1,210 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2,016 | 1,120 | |
2,017 | 925 | |
2,018 | 851 | |
2,019 | 778 | |
2,020 | 600 | |
Thereafter | 2,364 | |
Finite-lived intangible assets, future amortization expense | $ 6,638 | |
Minimum | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible assets, useful life (in years) | 3 years | |
Maximum | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible assets, useful life (in years) | 10 years | |
Tradename | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible assets, gross | $ 555 | 555 |
Tradename | Minimum | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible assets, useful life (in years) | 5 years | |
Tradename | Maximum | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible assets, useful life (in years) | 7 years | |
Patents and technological know-how | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible assets, useful life (in years) | 10 years | |
Finite-lived intangible assets, gross | $ 5,850 | 5,850 |
Proprietary software | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible assets, gross | $ 4,341 | 4,341 |
Proprietary software | Minimum | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible assets, useful life (in years) | 3 years | |
Proprietary software | Maximum | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible assets, useful life (in years) | 15 years | |
Other | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible assets, gross | $ 324 | $ 324 |
Other | Minimum | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible assets, useful life (in years) | 3 years | |
Other | Maximum | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible assets, useful life (in years) | 5 years |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Inventory Disclosure [Abstract] | ||
Losses incurred on valuation of inventory and write-off of obsolete inventory | $ 496 | $ 946 |
Deferred cost of goods sold | 1,628 | 1,698 |
Current: | ||
Raw materials | 2,735 | 3,056 |
Finished goods | 10,712 | 9,710 |
Inventories | 13,447 | 12,766 |
Long-term: | ||
Raw materials | 375 | 59 |
Finished goods | 1,643 | 817 |
Inventories, long-term | $ 2,018 | $ 876 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 8,383 | $ 11,731 |
Accumulated depreciation and amortization | (6,794) | (9,692) |
Property and equipment, net | 1,589 | 2,039 |
Depreciation expense | $ 801 | 761 |
Minimum | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, useful life | 2 years | |
Maximum | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, useful life | 10 years | |
Office furniture and equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 4,412 | 7,234 |
Office furniture and equipment | Minimum | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, useful life | 3 years | |
Office furniture and equipment | Maximum | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, useful life | 10 years | |
Leasehold improvements | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 1,488 | 1,474 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, useful life | 1 year | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, useful life | 6 years | |
Manufacturing and test equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 2,483 | $ 3,023 |
Manufacturing and test equipment | Minimum | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, useful life | 2 years | |
Manufacturing and test equipment | Maximum | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, useful life | 10 years |
Leases and Deferred Rent (Detai
Leases and Deferred Rent (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)ft² | Dec. 31, 2014USD ($) | |
Operating Leased Asset | ||
Rent expense | $ 1,420 | $ 1,236 |
Amortization of deferred rent | 95 | $ 79 |
Future minimum lease payments | ||
2,016 | 1,016 | |
2,017 | 883 | |
2,018 | 825 | |
2,019 | 419 | |
2,020 | 189 | |
Thereafter | 195 | |
Total minimum lease payments | $ 3,527 | |
Office Building | Salt Lake City, Utah | ||
Operating Leased Asset | ||
Area leased (sqft) | ft² | 31,000 | |
Office Building | Austin, Texas | ||
Operating Leased Asset | ||
Area leased (sqft) | ft² | 7,070 | |
Office Building | Israel | ||
Operating Leased Asset | ||
Area leased (sqft) | ft² | 4,700 | |
Manufacturing Facility | Alachua, Florida | ||
Operating Leased Asset | ||
Area leased (sqft) | ft² | 46,000 | |
Warehouse | Salt Lake City, Utah | ||
Operating Leased Asset | ||
Area leased (sqft) | ft² | 40,000 | |
Warehouse | Hong Kong | ||
Operating Leased Asset | ||
Area leased (sqft) | ft² | 5,600 | |
Warehouse | Israel | Minimum | ||
Operating Leased Asset | ||
Term of lease commitment | 2 years | |
Research Facility, Secondary Location | Austin, Texas | ||
Operating Leased Asset | ||
Area leased (sqft) | ft² | 11,100 |
Accrued Liabilities Accrued Lia
Accrued Liabilities Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Other Commitments [Line Items] | ||
Accrued liabilities | $ 2,243 | $ 2,694 |
Accrued salaries and other compensation | ||
Other Commitments [Line Items] | ||
Accrued liabilities | 1,170 | 340 |
Dividends payable | ||
Other Commitments [Line Items] | ||
Accrued liabilities | 0 | 914 |
Sales and marketing programs | ||
Other Commitments [Line Items] | ||
Accrued liabilities | 477 | 642 |
Product warranty | ||
Other Commitments [Line Items] | ||
Accrued liabilities | 288 | 331 |
Other accrued liabilities | ||
Other Commitments [Line Items] | ||
Accrued liabilities | $ 308 | $ 467 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Contingencies | |||
Uncertain tax positions | $ 1,126 | $ 1,678 | $ 1,901 |
Loss Contingency, Estimate of Possible Loss | 1,000 | ||
Inventories | |||
Schedule of Contingencies | |||
Long-term purchase commitment, amount | $ 2,970 |
Share-Based Payments - Employee
Share-Based Payments - Employee Stock Option Plans (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | 24 Months Ended | 30 Months Ended | |||
Jun. 30, 2005shares | Jun. 30, 2003shares | Dec. 31, 2015USD ($)plan$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 1999shares | Jun. 30, 2002shares | Dec. 12, 2014shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Number of share-based compensation plans | plan | 2 | ||||||
Share-based payment award, expiration period | 10 years | ||||||
Share-based payment award, options, outstanding, number | 1,028,935 | 1,040,081 | |||||
Weighted average per share fair value of options granted (in usd per share) | $ / shares | $ 5.27 | $ 4.85 | |||||
Total intrinsic value of options exercised | $ | $ 404 | $ 401 | |||||
Proceeds from options exercised | $ | 463 | 1,337 | |||||
Tax benefit from compensation cost related to stock options | $ | 41 | $ 211 | |||||
Nonvested awards, total compensation cost not yet recognized, stock options | $ | $ 919 | ||||||
Nonvested awards, total compensation cost not yet recognized, period for recognition | 2 years 1 month 2 days | ||||||
Employee Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Stock-based compensation expense | $ | $ 552 | ||||||
Director and Officer | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Award vesting period | 3 years | ||||||
Employee | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Award vesting period | 4 years | ||||||
Incentive Plan, 1998 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Options, grants in period, gross | 1,066,000 | 1,248,250 | |||||
Award vesting period | 9 years 9 months 18 days | 6 years | |||||
Share-based payment award, accelerated vesting, number | 300,494 | 637,089 | |||||
Share-based payment award, number of shares authorized | 2,500,000 | ||||||
Share-based payment award, options, outstanding, number | 345,000 | ||||||
Number of options authorized and unissued | 0 | ||||||
Equity Incentive Plan, 2007 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Share-based payment award, number of shares authorized | 2,000,000 | ||||||
Share-based payment award, options, outstanding, number | 683,935 | ||||||
Number of options authorized and unissued | 1,049,918 |
Share-Based Payments - Black-Sc
Share-Based Payments - Black-Scholes Assumptions (Details) - Employee Stock Option | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Risk-free interest rate, average | 2.00% | 2.20% |
Expected option life, average | 6 years 1 month 17 days | 8 years 2 months 1 day |
Expected price volatility, average | 44.30% | 47.60% |
Expected dividend yield | 1.10% | 0.00% |
Share-Based Payments - Option R
Share-Based Payments - Option Rollforward (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding, beginning (in shares) | shares | 1,040,081 |
Expired and canceled (in shares) | shares | (1,000) |
Forfeited prior to vesting (in shares) | shares | (15,252) |
Exercise of stock options (in shares) | shares | (56,143) |
Outstanding, ending (in shares) | shares | 1,028,935 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Weighted average exercise price, outstanding, beginning (in dollars per share) | $ / shares | $ 5.65 |
Weighted average exercise price, expired and canceled (in dollars per share) | $ / shares | 3.42 |
Weighted average exercise price, forfeited prior to vesting (in dollars per share) | $ / shares | 7.85 |
Weighted average exercise price, exercised (in dollars per share) | $ / shares | 5.51 |
Weighted average exercise price, outstanding, ending (in dollars per share) | $ / shares | $ 6.03 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract] | |
Vested (in shares) | shares | 820,022 |
Vested, weighted average exercise price (in dollars per share) | $ / shares | $ 5.10 |
Vested, weighted average remaining contractual term (in years) | 3 years 8 months 26 days |
Vested, aggregate intrinsic value (in dollars) | $ | $ 6,419 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Outstanding, weighted average remaining contractual term (in years) | 4 years 8 months 23 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ | $ 7,104 |
Initial Stock Option Grants | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Granted (in shares) | shares | 56,666 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Weighted average exercise price, granted (in dollars per share) | $ / shares | $ 13.03 |
Reinstated Options | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Granted (in shares) | shares | 4,583 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Weighted average exercise price, granted (in dollars per share) | $ / shares | $ 4.47 |
Share-Based Payments - Employ58
Share-Based Payments - Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 12, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for offerings under the ESPP | 485,033 | 500,000 | |
ESPP, maximum percentage of employee participation | 5.00% | ||
Number of shares that can be purchased (lesser of) | 2,500 | ||
Number of shares that can be purchased (lesser of), value | $ 25 | ||
Discount rate | 15.00% | ||
Plan compensation expense | $ 31 | $ 0 | |
Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares purchased under ESPP plans | 14,982 | 82 |
Share-Based Payments - Stock Re
Share-Based Payments - Stock Repurchase Program and Cash Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 25, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Stock repurchased (in shares) | 272,767 | ||
Stock repurchased | $ 2,598 | ||
Subsequent Event [Line Items] | |||
Common Stock, Dividends, Per Share, Declared | $ 0.155 | $ 0.100 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Common Stock, Dividends, Per Share, Declared | $ 0.05 |
Significant Customers (Details)
Significant Customers (Details) - Customer Concentration Risk | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues | ||
Concentration Risk | ||
Concentration risk, percentage | 24.60% | 16.00% |
Revenues | Customer A | ||
Concentration Risk | ||
Concentration risk, percentage | 14.20% | 16.00% |
Revenues | Customer B | ||
Concentration Risk | ||
Concentration risk, percentage | 10.40% | 0.00% |
Gross accounts receivable | ||
Concentration Risk | ||
Concentration risk, percentage | 34.00% | 31.00% |
Gross accounts receivable | Customer A | ||
Concentration Risk | ||
Concentration risk, percentage | 18.00% | 21.00% |
Gross accounts receivable | Customer B | ||
Concentration Risk | ||
Concentration risk, percentage | 16.00% | 10.00% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ||
Investments, fair value disclosure | $ 26,365 | $ 26,156 |
Corporate bonds and notes | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments, fair value disclosure | 20,744 | 19,838 |
Municipal bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments, fair value disclosure | 5,621 | 6,318 |
Level 1 | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments, fair value disclosure | 0 | 0 |
Level 1 | Corporate bonds and notes | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments, fair value disclosure | 0 | 0 |
Level 1 | Municipal bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments, fair value disclosure | 0 | 0 |
Level 2 | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments, fair value disclosure | 26,365 | 26,156 |
Level 2 | Corporate bonds and notes | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments, fair value disclosure | 20,744 | 19,838 |
Level 2 | Municipal bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments, fair value disclosure | 5,621 | 6,318 |
Level 3 | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments, fair value disclosure | 0 | 0 |
Level 3 | Corporate bonds and notes | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments, fair value disclosure | 0 | 0 |
Level 3 | Municipal bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investments, fair value disclosure | $ 0 | $ 0 |
Income Taxes - Income before Ta
Income Taxes - Income before Taxes and Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | ||
Domestic | $ 13,295 | $ 9,615 |
Foreign | (2,744) | (1,386) |
Total | 10,551 | 8,229 |
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||
Current, U.S. Federal | (3,386) | (2,750) |
Current, U.S. State | (344) | (173) |
Current, Non-U.S. | 0 | (109) |
Total current | (3,730) | (3,032) |
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||
Deferred, U.S. Federal | (220) | 379 |
Deferred U.S. State | (10) | 27 |
Deferred foreign | 470 | 401 |
Deferred provision before change in valuation allowance | 240 | 807 |
Change in valuation allowance | (285) | (408) |
Total deferred | (45) | 399 |
(Provision) for income taxes | $ (3,775) | $ (2,633) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Amount of Tax at Statutory Rate to Effective Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | ||
Tax (provision) at Federal statutory rate | $ (3,587) | $ (2,798) |
State income tax (provision), net of federal benefit | (408) | (257) |
Research and development tax credits | 456 | 549 |
Foreign earnings or losses taxed at different rates | (231) | (102) |
Other | 280 | 383 |
Change in valuation allowance | (285) | (408) |
(Provision) for income taxes | $ (3,775) | $ (2,633) |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Components of Deferred Tax Assets and Liabilities [Abstract] | ||
Deferred revenue | $ 1,019 | $ 1,120 |
Basis difference in intangible assets | 26 | 42 |
Inventory reserve | 2,452 | 2,213 |
Net operating loss carryforwards | 1,347 | 957 |
Research and development tax credits | 0 | 60 |
Accrued expenses | 165 | 292 |
Stock-based compensation | 672 | 577 |
Allowance for sales returns and doubtful accounts | 20 | 22 |
Difference in property and equipment basis | (423) | (318) |
Other | 886 | 910 |
Total net deferred income tax asset | 6,164 | 5,875 |
Less: Valuation allowance | (1,071) | (786) |
Net deferred income tax asset (liability) | $ 5,093 | $ 5,089 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance - beginning of year | $ 1,678 | $ 1,901 |
Additions based on tax positions related to the current year | 52 | 564 |
Additions for tax positions of prior years | 5 | 0 |
Reductions for tax positions of prior years | (503) | (468) |
Settlements | 0 | (40) |
Lapse in statutes of limitations | (106) | (279) |
Uncertain tax positions, ending balance | $ 1,126 | $ 1,678 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Operating Loss Carryforwards | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 176,000 | $ 723,000 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 55,000 | $ 40,000 |
Internal Revenue Service (IRS) | ||
Operating Loss Carryforwards | ||
Operating Loss Carryforwards | 818,000 | |
Hong Kong | Foreign Tax Authority [Member] | ||
Operating Loss Carryforwards | ||
Operating Loss Carryforwards | 1,577,000 | |
Spain | Foreign Tax Authority [Member] | ||
Operating Loss Carryforwards | ||
Operating Loss Carryforwards | $ 2,434,000 |
Geographic Sales Information (D
Geographic Sales Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 57,796 | $ 57,909 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 39,563 | 39,837 |
All other countries | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 18,233 | $ 18,072 |
Subsequent Events Authorization
Subsequent Events Authorization of Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 25, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 09, 2016 |
Subsequent Event [Line Items] | ||||
Common Stock, Dividends, Per Share, Declared | $ 0.155 | $ 0.100 | ||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Common Stock, Dividends, Per Share, Declared | $ 0.05 | |||
Stock Repurchase Program, Authorized Amount | $ 10,000 |