Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 28, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | HLIT | ||
Entity Registrant Name | HARMONIC INC | ||
Entity Central Index Key | 851,310 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 84,097,572 | ||
Entity Public Float | $ 157,264,000 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 57,024 | $ 55,635 |
Short-term investments | 0 | 6,923 |
Accounts receivable, net | 69,844 | 86,765 |
Inventories | 25,976 | 41,193 |
Prepaid expenses and other current assets | 18,931 | 26,319 |
Total current assets | 171,775 | 216,835 |
Property and equipment, net | 29,265 | 32,164 |
Goodwill | 242,827 | 237,279 |
Intangibles, net | 21,279 | 29,231 |
Other long-term assets | 42,913 | 38,560 |
Total assets | 508,059 | 554,069 |
Current liabilities: | ||
Other debts and capital lease obligations, current | 7,610 | 7,275 |
Accounts payable | 33,112 | 28,892 |
Income taxes payable | 233 | 1,166 |
Deferred revenue | 52,429 | 52,414 |
Accrued and other current liabilities | 48,705 | 55,150 |
Total current liabilities | 142,089 | 144,897 |
Convertible notes, long-term | 108,748 | 103,259 |
Other debts and capital lease obligations, long-term | 15,336 | 13,915 |
Income taxes payable, long-term | 917 | 2,926 |
Other non-current liabilities | 22,626 | 18,431 |
Total liabilities | 289,716 | 283,428 |
Commitments and contingencies (Note 18) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, 5,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.001 par value, 150,000 shares authorized; 82,554 and 78,456 shares issued and outstanding at December 31, 2017 and 2016, respectively | 83 | 78 |
Additional paid-in capital | 2,272,690 | 2,254,055 |
Accumulated deficit | (2,057,812) | (1,976,222) |
Accumulated other comprehensive income (loss) | 3,382 | (7,270) |
Total stockholders’ equity | 218,343 | 270,641 |
Total liabilities and stockholders’ equity | $ 508,059 | $ 554,069 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 82,554,000 | 78,456,000 |
Common stock, shares outstanding | 82,554,000 | 78,456,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Income Statement [Abstract] | |||||
Product | $ 224,645 | $ 285,260 | $ 276,876 | ||
Service | 133,601 | 120,651 | 100,151 | ||
Total net revenue | [1] | 358,246 | [2] | 405,911 | 377,027 |
Product | 119,802 | 145,714 | 121,988 | ||
Service | 68,624 | 59,447 | 52,327 | ||
Total cost of revenue | 188,426 | 205,161 | 174,315 | ||
Total gross profit | 169,820 | 200,750 | 202,712 | ||
Operating expenses: | |||||
Research and development | 95,978 | 98,401 | 87,545 | ||
Selling, general and administrative | 136,270 | 144,381 | 120,960 | ||
Amortization of intangibles | 3,142 | 10,402 | 5,783 | ||
Restructuring and related charges | 5,307 | 14,602 | 1,372 | ||
Total operating expenses | 240,697 | 267,786 | 215,660 | ||
Loss from operations | (70,877) | [3] | (67,036) | (12,948) | |
Interest expense, net | (11,078) | (10,628) | (333) | ||
Other expense, net | (2,222) | (31) | (282) | ||
Loss on impairment of long-term investment | (530) | (2,735) | (2,505) | ||
Loss before income taxes | (84,707) | [3] | (80,430) | (16,068) | |
Benefit from income taxes | (1,752) | (8,116) | (407) | ||
Net loss | $ (82,955) | $ (72,314) | $ (15,661) | ||
Net loss per share: | |||||
Basic and diluted | $ (1.02) | $ (0.93) | $ (0.18) | ||
Shares used in per share calculations: | |||||
Basic and diluted | 80,974 | 77,705 | 87,514 | ||
[1] | Revenue is attributed to countries based on the location of the customer. | ||||
[2] | The Company has historically employed an aggregate allocation methodology based on total revenues to attribute professional services revenue and sales expenses between its Video and Cable Edge segments. Beginning in the fourth quarter of 2017, the Company has prospectively changed to a more precise attribution methodology as the activities of selling and supporting the CableOS solution have become increasingly distinct from those of Video solutions. The impact of making this change in the fourth quarter of 2017 compared to the Company’s historical approach was a reduction in operating income of $2.4 million from the Video segment and a corresponding increase to the operating income of the Cable Edge segment. The Company believes that the updated allocation methodology will provide greater clarity regarding the operating metrics of the Video and Cable Edge business segments. | ||||
[3] | For the years ended December 31, 2017 and 2016, the unallocated corporate expenses included TVN acquisition- and integration-related costs, TVN VDP costs (see Note 10, “Restructuring and Related charges-TVN VDP,” for more information on TVN VDP ) and Cable Edge product line inventory obsolescence costs, totaling $7.9 million and $32.2 million, respectively. In addition, in fiscal year 2017, the unallocated corporate expenses included $8.0 million of Avid litigation settlement cost and associated legal fees (see Note 19, “Legal Proceedings,” for more information). The remaining unallocated corporate expenses for all years presented above include primarily other restructuring charges and excess facilities charges. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Net loss | $ (82,955) | $ (72,314) | $ (15,661) |
Other comprehensive income (loss), before tax: | |||
Unrealized gain (loss), net arising during the period | 0 | 202 | (133) |
Loss (gain) reclassified into earnings | 0 | 44 | (424) |
Other Comprehensive Income (Loss) before tax, Cash Flow Hedges | 0 | 246 | (557) |
Unrealized loss, net arising during the period | (658) | (903) | (785) |
Loss reclassified into earnings | 384 | 2,735 | |
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, before Tax | (274) | 1,832 | (785) |
Adjustment to pension benefit plan | 528 | (279) | 0 |
Unrealized foreign exchange loss, net on intercompany long-term loans arising during the period | (1,705) | ||
Translation gain (loss) arising during the period | 11,471 | (4,633) | (1,111) |
Loss reclassified into earnings | 106 | 0 | 0 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax | 11,577 | (4,633) | (1,111) |
Other comprehensive income (loss) before tax | 10,126 | (2,834) | (2,453) |
Provision for (benefit from) income taxes | (526) | 18 | (15) |
Other comprehensive income (loss), net of tax | 10,652 | (2,852) | (2,438) |
Total comprehensive loss | $ (72,303) | $ (75,166) | $ (18,099) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] |
Balance at Dec. 31, 2014 | $ 371,813 | $ 88 | $ 2,261,952 | $ (1,888,247) | $ (1,980) |
Balance, Shares at Dec. 31, 2014 | 87,700 | ||||
Net loss | (15,661) | (15,661) | |||
Other comprehensive loss, net of tax | (2,438) | (2,438) | |||
Issuance of Common Stock under option, stock award and purchase plans | 5,673 | $ 3 | 5,670 | ||
Issuance of Common Stock under option, stock award and purchase plans, Shares | 2,855 | ||||
Repurchase of Common Stock | (72,863) | $ (15) | (72,848) | ||
Repurchase of Common Stock, Shares | (14,540) | ||||
Stock-based compensation | 15,582 | 15,582 | |||
Conversion feature of convertible notes due 2020 | 26,062 | 26,062 | |||
Balance at Dec. 31, 2015 | 328,168 | $ 76 | 2,236,418 | (1,903,908) | (4,418) |
Balance, Shares at Dec. 31, 2015 | 76,015 | ||||
Net loss | (72,314) | (72,314) | |||
Other comprehensive loss, net of tax | (2,852) | (2,852) | |||
Issuance of Common Stock under option, stock award and purchase plans | 2,800 | $ 2 | 2,798 | ||
Issuance of Common Stock under option, stock award and purchase plans, Shares | 2,441 | ||||
Stock-based compensation | 13,242 | 13,242 | |||
Issuance of warrant | 1,597 | 1,597 | |||
Balance at Dec. 31, 2016 | 270,641 | $ 78 | 2,254,055 | (1,976,222) | (7,270) |
Balance, Shares at Dec. 31, 2016 | 78,456 | ||||
Cumulative Effect on Retained Earnings, Net of Tax | Accounting Standards Update 2016-09 [Member] | 69 | 69 | (69) | ||
Cumulative Effect on Retained Earnings, Net of Tax | Accounting Standards Update 2016-16 [Member] | 1,434 | 1,434 | |||
Balance at Jan. 01, 2017 | 272,075 | $ 78 | 2,254,124 | (1,974,857) | (7,270) |
Balance, Shares at Jan. 01, 2017 | 78,456 | ||||
Balance at Dec. 31, 2016 | 270,641 | $ 78 | 2,254,055 | (1,976,222) | (7,270) |
Balance, Shares at Dec. 31, 2016 | 78,456 | ||||
Net loss | (82,955) | (82,955) | |||
Other comprehensive loss, net of tax | 10,652 | 10,652 | |||
Issuance of Common Stock under option, stock award and purchase plans | 1,959 | $ 5 | 1,954 | ||
Issuance of Common Stock under option, stock award and purchase plans, Shares | 4,098 | ||||
Stock-based compensation | 16,612 | 16,612 | |||
Balance at Dec. 31, 2017 | $ 218,343 | $ 83 | $ 2,272,690 | $ (2,057,812) | $ 3,382 |
Balance, Shares at Dec. 31, 2017 | 82,554 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Cash flows from operating activities: | ||||
Net loss | $ (82,955) | $ (72,314) | $ (15,661) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Amortization of intangibles | 8,322 | [1] | 14,836 | 6,502 |
Depreciation | 14,599 | 18,819 | 13,241 | |
Stock-based compensation | 16,610 | 13,060 | 15,582 | |
Amortization of discount on convertible debt | 5,489 | 4,964 | 216 | |
Provision for non-cash warrant | 153 | 434 | ||
Restructuring, asset impairment and loss on retirement of fixed assets | 1,906 | 2,305 | 641 | |
Loss on impairment of long-term investment | 530 | 2,735 | 2,505 | |
Unrealized foreign exchange (gain) loss | 2,369 | (856) | (1,047) | |
Gain on pension curtailment | 0 | (1,955) | ||
Deferred income taxes, net | 2,189 | (10,085) | (512) | |
Provision for doubtful accounts, returns and discounts | 4,912 | 2,589 | 2,034 | |
Provision for excess and obsolete inventories | 6,005 | 6,871 | 1,585 | |
Other non-cash adjustments, net | 445 | 408 | 0 | |
Changes in operating assets and liabilities, net of effects of acquisition: | ||||
Accounts receivable | 12,598 | (2,563) | 2,595 | |
Inventories | 11,687 | (4,107) | (5,954) | |
Prepaid expenses and other assets | 6,642 | (1,892) | (8,206) | |
Accounts payable | 3,432 | 5,793 | 4,683 | |
Deferred revenues | (392) | 18,106 | (4,541) | |
Income taxes payable | (2,978) | (133) | (1,637) | |
Accrued and other liabilities | (8,499) | 3,423 | (5,675) | |
Net cash provided by operating activities | 3,064 | 438 | 6,351 | |
Cash flows from investing activities: | ||||
Acquisition of business, net of cash acquired | 0 | (75,669) | ||
Purchases of investments | 0 | 0 | (25,261) | |
Proceeds from maturities of investments | 3,106 | 19,707 | 30,379 | |
Proceeds from sales of investments | 3,792 | 0 | 0 | |
Purchases of property and equipment | (11,399) | (15,107) | (14,356) | |
Purchases of long-term investments | 0 | 0 | (85) | |
Decrease (increase) in restricted cash | 288 | 591 | (1,091) | |
Net cash used in investing activities | (4,213) | (70,478) | (10,414) | |
Cash flows from financing activities: | ||||
Proceeds from convertible debt | 0 | 0 | 128,250 | |
Payment of convertible debt issuance cost | 0 | (582) | (3,527) | |
Proceeds from other debts | 6,344 | 5,968 | ||
Repayment of other debts and capital leases | (7,408) | (8,338) | ||
Proceeds from common stock issued to employees | 4,716 | 4,444 | 9,222 | |
Payment of tax withholding obligations related to net share settlements of restricted stock units | (2,757) | (1,644) | (3,549) | |
Payments for repurchases of common stock | 0 | 0 | (72,863) | |
Net cash provided by (used in) financing activities | 895 | (152) | 57,533 | |
Effect of exchange rate changes on cash and cash equivalents | 1,643 | (363) | (312) | |
Net increase (decrease) in cash and cash equivalents | 1,389 | (70,555) | 53,158 | |
Cash and cash equivalents at beginning of period | 55,635 | 126,190 | 73,032 | |
Cash and cash equivalents at end of period | 57,024 | 55,635 | 126,190 | |
Supplemental disclosures of cash flow information: | ||||
Income tax payments (refunds), net | 2,141 | (54) | 952 | |
Interest payments, net | 5,515 | 5,275 | ||
Supplemental schedule of non-cash investing and financing activities: | ||||
Capital expenditures incurred but not yet paid | 337 | 394 | 235 | |
Debt issuance costs incurred but not yet paid | $ 0 | $ 0 | $ 582 | |
[1] | For the years ended December 31, 2017 and 2016, the unallocated corporate expenses included TVN acquisition- and integration-related costs, TVN VDP costs (see Note 10, “Restructuring and Related charges-TVN VDP,” for more information on TVN VDP ) and Cable Edge product line inventory obsolescence costs, totaling $7.9 million and $32.2 million, respectively. In addition, in fiscal year 2017, the unallocated corporate expenses included $8.0 million of Avid litigation settlement cost and associated legal fees (see Note 19, “Legal Proceedings,” for more information). The remaining unallocated corporate expenses for all years presented above include primarily other restructuring charges and excess facilities charges. |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | DESCRIPTION OF BUSINESS Harmonic Inc. (“Harmonic” or the “Company”) designs, manufactures and sells versatile and high performance video infrastructure products and system solutions that enable its customers to efficiently create, prepare and deliver a full range of video and broadband services to customer devices, such as televisions, personal computers, laptops, tablets and smart phones. Our products generally fall into three principal categories: video production platforms and playout solutions, video processing solutions and cable edge solutions. Harmonic also provides technical support and professional services to its customers worldwide. We sell our products and services to cable operators, broadcast and media companies, satellite and telecommunications (telco) Pay-TV service providers and streaming new media companies. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements of Harmonic include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s fiscal quarters are based on 13-week periods, except for the fourth quarter which ends on December 31. On February 29, 2016, the Company completed the acquisition of Thomson Video Networks (“TVN”) and its results of operations are included in the Company’s Consolidated Statements of Operations beginning March 1, 2016. Use of Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. These reclassifications did not have material impact on previously reported total assets, total liabilities, stockholders’ equity, results of operations or cash flows. Cash and Cash Equivalents Cash and cash equivalents include all cash and highly liquid investments with maturities of three months or less at the date of purchase. The carrying amount of cash and cash equivalents approximates fair value because of the short maturity of those instruments. Restricted Cash and Deposits The Company had $1.7 million and $1.8 million of total restricted cash deposits, as of December 31, 2017 and 2016 , respectively. These restricted cash deposits serve as collateral for certain bank guarantees and they are invested in bank deposits and cannot be withdrawn from the Company’s accounts without the prior written consent of the applicable secured party. In the Company’s Consolidated Balance Sheets, $0.5 million and $0.7 million of the restricted cash balances as of December 31, 2017 and 2016 , respectively, were included in “Prepaid expenses and other currents”, and the remaining restricted cash balances of $1.2 million and $1.1 million as of December 31, 2017 and 2016 , respectively, were included in “Other Long-term Assets”. Short-Term Investments As of December 31, 2017 , the Company did not have any outstanding short-term investments. The short-term investments as of December 31, 2016 of $6.9 million , which consisted of commercial bonds, were sold or redeemed during 2017 and the realized gain was not material. Since these available-for-sale investments were intended to support current operations, they are presented as “Current Assets” in the Consolidated Balance Sheet as of December 31, 2016. Investments in Equity Securities From time to time, the Company may acquire certain equity investments for the promotion of business and strategic objectives and these investments may be in marketable equity securities or non-marketable equity securities. The Company accounts for its investments in entities that it does not have significant influence under the cost method. Investments in equity securities are carried at fair value if the fair value of the security is readily determinable. Equity investments carried at fair value are classified as long-term investments and included in “Other long-term assets” in the Company’s Consolidated Balance Sheet. Unrealized gains and losses, net of taxes, on the long-term investments are included in the Company’s Consolidated Balance Sheet as a component of accumulated other comprehensive loss. Investments in equity securities that do not qualify for fair value accounting or equity method accounting are accounted for under the cost method. In accordance with the cost method, the Company’s initial investment is recorded at cost and the Company reviews all of its cost method investments quarterly to determine if impairment indicators exist. Cost method investments are classified as long-term investments and included in “Other long-term assets” in the Company’s Consolidated Balance Sheet. The Company’s total investment in equity securities of other privately and publicly held companies, were $3.6 million and $4.4 million , as of December 31, 2017 and December 31, 2016 , respectively. Liquidity As of December 31, 2017, the Company’s principal sources of liquidity consisted of cash and cash equivalents of $57.0 million , net accounts receivable of $69.8 million , its $15 million line of credit with Silicon Valley Bank and financing from French government agencies. As of December 31, 2017, the Company had $128.25 million in convertible senior notes outstanding (“Notes”), which are due on December 1, 2020. The Notes bear interest at a fixed rate of 4.00% per year, payable semiannually in arrears on June 1 and December 1 of each year. The Company also had debts with French government agencies and to a lesser extent, with other financial institutions, primarily in France, in the aggregate of $22.9 million at December 31, 2017. The Company’s principal uses of cash will include repayments of debt and related interest, purchases of inventory, payroll, restructuring expenses, and other operating expenses related to the development and marketing of our products, purchases of property and equipment and other contractual obligations for the foreseeable future. The Company believes that its cash and cash equivalents of $57.0 million at December 31, 2017 will be sufficient to fund its principal uses of cash for at least the next 12 months. However, if its expectations are incorrect, it may need to raise additional funds to fund our operations, to take advantage of unanticipated strategic opportunities or to strengthen our financial position. Additional funds may not be available on terms favorable to us or at all. Credit Risk and Major Customers/Supplier Concentration Financial instruments which subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. Cash, cash equivalents and short-term investments are invested in short-term, highly liquid, investment-grade obligations of commercial or governmental issuers, in accordance with the Company’s investment policy. The investment policy limits the amount of credit exposure to any one financial institution, commercial or governmental issuer. The Company’s accounts receivable are derived from sales to worldwide cable, satellite, telco, and broadcast and media companies. The Company generally does not require collateral from its customers, and performs ongoing credit evaluations of its customers and provides for expected losses. The Company maintains an allowance for doubtful accounts based upon the expected collectability of its accounts receivable. No customers had a balance greater than 10% of the Company’s net accounts receivable balance as of December 31, 2017 and 2016 . In the years ended December 31, 2017 and 2016 , no customer accounted for more than 10% of the Company’s net revenue. Certain of the components and subassemblies included in the Company’s products are obtained from a single source or a limited group of suppliers. Although the Company seeks to reduce dependence on those sole source and limited source suppliers, the partial or complete loss of certain of these sources could have at least a temporary adverse effect on the Company’s results of operations and damage customer relationships. Revenue Recognition The Company’s principal sources of revenue are from the sale of hardware, software, hardware and software maintenance contracts, and end-to-end solutions, encompassing design, manufacture, test, integration and installation of products. The Company also derives subscription revenues, which are comprised of subscription fees from customers utilizing the Company’s cloud-based media processing solutions. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been provided, the sale price is fixed or determinable, and collectability is reasonably assured. Subscription revenue is recognized over the subscription period as the service is delivered. Revenue from the sale of hardware and software products is recognized when risk of loss and title have transferred. For most of the Company’s product sales, these criteria are met at the time the product is shipped or delivery has occurred. Revenue from distributors and system integrators is recognized on delivery of the related products, provided all other revenue recognition criteria have been met. The Company’s agreements with these distributors and system integrators have terms which are generally consistent with the standard terms and conditions for the sale of the Company’s equipment to end users, and do not provide for product rotation or pricing allowances, as are typically found in agreements with stocking distributors. The Company accrues for sales returns and other allowances based on the expected customer returns at the end of each reporting period. Deferred revenue includes billings in excess of revenue recognized and invoiced amounts remain deferred until applicable revenue recognition criteria are met. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of revenue in the Company’s Consolidated Statements of Operations. Costs associated with services are generally recognized as incurred. The Company recognizes revenue from the sale of hardware products and software bundled with hardware that is essential to the functionality of the hardware in accordance with applicable revenue recognition accounting guidance. For the sale of stand-alone software products, bundled with hardware but not essential to the functionality of the hardware, revenue is allocated between the hardware, including essential software and related elements, and the non-essential software and related elements. Revenue for the hardware and essential software elements are recognized under the relative allocation method. Revenue for the non-essential software and related elements are recognized under the residual method in accordance with software accounting guidance. Revenue associated with service and maintenance agreements is recognized on a straight-line basis over the period in which the services are performed, generally one year . Further details of these accounting policies are described below. Multiple Element Arrangements. The Company has revenue arrangements that include hardware and software essential to the hardware product’s functionality, and non-essential software, services and support. The Company allocates revenue to all deliverables based on their relative selling prices. The Company determines the relative selling prices by first considering vendor-specific objective evidence of fair value (“VSOE”), if it exists; otherwise third-party evidence (“TPE”) of the selling price is used. If neither VSOE nor TPE exists for a deliverable, the Company uses a best estimate of the selling price (“BESP”) for that deliverable. Once revenue is allocated to all deliverables based on their relative selling prices, revenue related to hardware elements (hardware, essential software and related services) are recognized using a relative selling price allocation and non-essential software and related services are recognized under the residual method. The Company has established VSOE for certain elements of its arrangements based on either historical stand-alone sales to third parties or stated renewal rates for maintenance. The Company has VSOE of fair value for maintenance, training and certain professional services. TPE is determined based on competitor prices for similar deliverables when sold separately. The Company is typically not able to determine TPE for competitors’ products or services. Generally, the Company’s go-to-market strategy differs from that of its competitors’ and the Company’s offerings contain a significant level of differentiation, such that the comparable pricing of products with similar functionality cannot be obtained. Furthermore, the Company is unable to reliably determine what competitor similar products’ selling prices are on a stand-alone basis. When the Company is unable to establish fair value of non-software deliverables using VSOE or TPE, the Company uses BESP in its allocation of arrangement consideration. The objective of using BESP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand-alone basis. The Company determines BESP for a product or service by considering multiple factors, including, but not limited to, pricing practices, market conditions, competitive landscape, internal costs, geographies and gross margin. The determination of BESP is made through consultation with Company’s management, taking into consideration the Company’s go-to-market strategy. Software. Sales of stand-alone software that are not considered essential to the functionality of the hardware continue to be subject to the software revenue recognition guidance. In accordance with the software revenue recognition guidance, the Company applies the residual method to recognize revenue for the delivered elements in stand-alone software transactions. Under the residual method, the amount of revenue allocated to delivered elements equals the total arrangement consideration, less the aggregate fair value of any undelivered elements, typically maintenance, provided that VSOE of fair value exists for all undelivered elements. VSOE of fair value is based on the price charged when the element is sold separately or, in the case of maintenance, VSOE may be based on substantive renewal rates. Solution Sales. Solution sales for the design, manufacture, test, integration and installation of products, including equipment acquired from third parties to be integrated with Harmonic’s products, that are customized to meet the customer’s specifications are accounted for in accordance with applicable guidance on accounting for performance of construction/production contracts. Accordingly, for each arrangement that the Company enters into that includes both products and services, the Company performs a detailed evaluation to determine whether the arrangement should be accounted for under guidance for construction/production contracts or, alternatively, for arrangements that do not involve significant production, modification or customization, under other applicable accounting guidance. The Company has a long-standing history of entering into contractual arrangements to deliver the solution sales described. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. The cost of inventories is comprised of material, labor and manufacturing overhead. The Company’s manufacturing overhead standards for product costs are calculated assuming full absorption of forecasted spending over projected volumes. The Company establishes provisions for excess and obsolete inventories to reduce such inventories to their estimated net realizable value after evaluation of historical sales, future demand and market conditions, expected product life cycles and current inventory levels. Such provisions are charged to cost of revenue in the Company’s Consolidated Statements of Operations. Capitalized Software Development Costs External-use software. Research and development costs are generally charged to expense as incurred. The Company has not capitalized any such development costs because the costs incurred between the attainment of technological feasibility for the related software product through the date when the product is available for general release to customers has been insignificant. Internal-use software. The Company capitalizes costs associated with internally developed and/or purchased software systems for internal use that have reached the application development stage. Capitalized costs include external direct costs of materials and services utilized in developing or obtaining internal-use software and payroll and payroll-related expenses for employees who are directly associated with and devote time to the internal-use software project. Capitalization of such costs begins when the preliminary project stage is complete and ceases no later than the point at which the project is substantially complete and ready for its intended purpose. These capitalized costs are amortized on a straight-line basis, generally three years . During the year ended December 31, 2017, the Company capitalized $1.1 million of its software development costs related to the development of its VOS Cloud and VOS 360 SaaS offerings. In the years ended December 31, 2016 and 2015 , research and development costs capitalized for internal use software were not significant. Property and Equipment Property and equipment are recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are generally, five years for furniture and fixtures, three years for software and four years for machinery and equipment. Depreciation and amortization for leasehold improvements are computed using the shorter of the remaining useful lives of the assets, up to 10 years, or the lease term of the respective assets . Business Combination The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of assets acquired and the liabilities assumed. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, intangibles and other asset lives, among other items. Fair value is defined as the price that would be received in a sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Market participants are assumed to be buyers and sellers in the principal (most advantageous) market for the asset or liability. Additionally, fair value measurements for an asset assume the highest and best use of that asset by market participants. As a result, the Company may have been required to value the acquired assets at fair value measurements that do not reflect its intended use of those assets. Use of different estimates and judgments could yield different results. Any excess of the purchase price over the fair value of the net assets acquired is recognized as goodwill. Goodwill As of December 31, 2017 , the Company had goodwill of $242.8 million which represents the difference between the purchase price and the estimated fair value of the identifiable assets acquired and liabilities assumed. The Company tests for goodwill impairment at the reporting unit level on an annual basis in the fourth quarter of each of its fiscal years, and at any other time at which events occur or circumstances indicate that the carrying amount of goodwill may exceed its fair value. The Company uses a two-step process to determine the amount of goodwill impairment. The first step requires comparing the fair value of the reporting unit to its net book value, including goodwill. A potential impairment exists if the fair value of the reporting unit is lower than its net book value. The second step of the process, which is performed only if a potential impairment exists, involves determining the difference between the fair value of the reporting unit’s net assets, other than goodwill, and the fair value of the reporting unit. If this difference is less than the net book value of goodwill, an impairment exists and is recorded. The Company has two reporting units, which are the same as its operating segments. Goodwill is assigned to the reporting units using the relative fair values of the reporting units and the fair values of the reporting units were determined utilizing a blend of the income approach and the market approach. There was no impairment of goodwill resulting from the Company’s fiscal 2017 annual impairment testing in the fourth quarter of 2017 . (See Note 7, “Goodwill and Identified Intangible Assets,” for additional information). Long-lived Assets Long-lived assets represent property and equipment and purchased intangible assets. Purchased intangible assets from business combinations and asset acquisitions include customer contracts, trademarks and trade names, and maintenance agreements and related relationships, the amortization of which is charged to general and administrative expenses, and core technology and developed technology, the amortization of which is charged to cost of revenue. The Company evaluates the recoverability of intangible assets and other long-lived assets when indicators of impairment are present. When impairment indicators are present, the Company evaluates the recoverability of intangible assets and other long-lived assets on the basis of undiscounted cash flows expected to result from the use of each asset group and its eventual disposition. If the undiscounted expected future cash flows are less than the carrying amount of the asset, an impairment loss is recognized in order to write down the carrying value of the asset to its estimated fair market value. There were no impairment charges for long-lived assets in the years ended December 31, 2017 , 2016 and 2015 . Foreign Currency The functional currency of the Company’s Israeli, Cayman and Swiss operations is the U.S. dollar. All other foreign subsidiaries use the respective local currency as the functional currency. When the local currency is the functional currency, gains and losses from translation of these foreign currency financial statements into U.S. dollars are recorded as a separate component of other comprehensive loss in stockholders’ equity. The Company’s foreign currency exposure is also related to its net position of monetary assets and monetary liabilities held by its subsidiaries in their nonfunctional currencies. These monetary assets and monetary liabilities are being remeasured into the functional currencies of the subsidiaries using exchange rates prevailing on the balance sheet date. Such remeasurement gains and losses are included in other expense, net in the Company’s Consolidated Statements of Operations. During the years ended December 31, 2017 , 2016 and 2015 , the Company recorded remeasurement losses of $2.2 million , $0.2 million and $0.5 million , respectively. Derivative Instruments The Company enters into derivative instruments, primarily foreign currency forward contracts, to minimize the short-term impact of foreign currency exchange rate fluctuations on certain foreign currency denominated assets and liabilities as well as certain foreign currencies denominated expenses. The Company does not enter into derivative instruments for trading purposes and these derivatives generally have maturities within twelve months. The derivative instruments are recorded at fair value in prepaid expenses and other current assets or accrued and other current liabilities in the Company’s Consolidated Balance Sheet. For derivative instruments designated and qualifying as cash flow hedges of forecasted foreign currency denominated transactions expected to occur within twelve months, the effective portion of the gain or loss on these hedges is reported as a component of “Accumulated other comprehensive loss” in stockholders’ equity, and is reclassified into earnings when the hedged transaction affects earnings. If the transaction being hedged fails to occur, or if a portion of any derivative is (or becomes) ineffective, the gain or loss on the associated financial instrument is recorded immediately in earnings. For derivative instruments used to hedge existing foreign currency denominated assets or liabilities, the gains or losses on these hedges are recorded immediately in earnings to offset the changes in the fair value of the assets or liabilities being hedged. The Company did not enter into any cash flow hedges during the year ended December 31, 2017 . Research and Development Research and development (“R&D”) costs are expensed as incurred and consists primarily of employee salaries and related expenses, contractors and outside consultants, supplies and materials, equipment depreciation and facilities costs, all associated with the design and development of new products and enhancements of existing products. R&D expense was $96.0 million , $98.4 million and $87.5 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. R&D expense was net of $6.0 million of reimbursements from one of our large customers in each of the years ended December 31, 2017 and 2016 . The Company’s TVN French Subsidiary participates in the French Crédit d’Impôt Recherche (“CIR”) program which allows companies to monetize eligible research expenses. The R&D tax credits receivable from the French government for spending on innovative R&D under the CIR program is recorded as an offset to R&D expenses. In the years ended December 31, 2017 and 2016 , the R&D expenses were net of $5.9 million and $6.1 million of R&D tax credits, respectively. There were no such reimbursement from customers or R&D tax credits in the year ended December 31, 2015. Restructuring and Related Charges The Company’s restructuring charges consist primarily of employee severance, one-time termination benefits related to the reduction of its workforce, lease exit costs, and other costs. Liabilities for costs associated with a restructuring activity are recognized when the liability is incurred and are measured at fair value. One-time termination benefits are expensed at the date the entity notifies the employee, unless the employee must provide future service, in which case the benefits are expensed ratably over the future service period. Termination benefits are calculated based on regional benefit practices and local statutory requirements. Costs to terminate a lease before the end of its term are recognized when the entity terminates the contract in accordance with the contract terms. The Company determines the excess facilities accrual based on expected cash payments, under the applicable facility lease, reduced by any estimated sublease rental income for such facility. (S ee Note 10, “Restructuring and related Charges” for additional information). Warranty The Company accrues for estimated warranty costs at the time of revenue recognition and records such accrued liabilities as part of cost of revenue. Management periodically reviews its warranty liability and adjusts the accrued liability based on the terms of warranties provided to customers, historical and anticipated warranty claims experience, and estimates of the timing and cost of warranty claims. Advertising Expenses All advertising costs are expensed as incurred and included in “Selling, general and administrative expenses” in the Company’s Consolidated Statements of Operations. Advertising expense was $0.7 million , $1.4 million and $1.4 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Stock-based Compensation Expense The Company measures and recognizes compensation expense for all stock-based compensation awards made to employees and non-employee directors, including stock options, restricted stock units (“RSUs”) and awards related to the Company’s Employee Stock Purchase Plan (“ESPP”), based upon the grant-date fair value of those awards. Prior to January 1, 2017, stock-based compensation expense was recorded net of estimated forfeitures over the requisite service period and, accordingly, was recorded for only those stock-based awards that the Company expected to vest. Upon the adoption of the Accounting Standard Update No. 2016-09, Compensation - Stock Compensation (Topic 718), issued by the Financial Accounting Standards Board. The Company changed its accounting policy to account for forfeitures as they occur. The change was applied on a modified retrospective approach with a cumulative effect adjustment of $69,000 to retained earnings as of January 1, 2017 (which increased the accumulated deficit). The fair value of the Company’s stock options and ESPP is estimated at grant date using the Black-Scholes option pricing model. The fair value of the Company’s RSUs is calculated based on the fair market value of the Company’s stock at the grant date. The fair value of the Company’s market-based RSUs is estimated using the Monte-Carlo valuation model with market vesting conditions. The Company recognizes the stock-based compensation expense for performance-based RSUs (“PRSUs”) based on the probability of achieving certain performance criteria, as defined in the PRSU agreements. The Company estimates the number of PRSUs ultimately expected to vest and recognizes expense using the graded vesting attribution method over the requisite service period. Changes in the estimates related to probability of achieving certain performance criteria and number of PRSUs expected to vest could significantly affect the stock-based compensation expense from one period to the next. Pension Plan Under French law, the Company’s subsidiaries in France, including the acquired TVN French Subsidiary, is obligated to provide for a defined benefit plan to its employees upon their retirement from the Company. The Company’s defined benefit pension plan in France is unfunded. The Company records annual amounts relating to the pension plans based on calculations which include various actuarial assumptions including employees’ age and period of service with the company; projected mortality rates, mobility rates and increases in salaries; and a discount rate. The Company reviews its actuarial assumptions on an annual basis as of December 31 (or more frequently if a significant event requiring remeasurement occurs) and modifies the assumptions based on current rates and trends when it is appropriate to do so. The Company believes that the assumptions utilized in recording its obligations under its pension plan are reasonable based on its experience, market conditions and input from its actuaries. The Company accounts for the actuarial gains (losses) in accordance with ASC 715, “Compensation - Retirement Benefits”. If the net accumulated gain or loss exceeds 10% of the projected plan benefit obligation a portion of the net gain or loss is amortized and included in expense for the following year based upon the average remaining service period of active plan participants, unless the Company’s policy is to recognize all actuarial gains (losses) when they occur. The Company elected to defer actuarial gains (losses) in accumulated other comprehensive loss. As of December 31, 2017, the Company did not meet the 10% requirement, and therefore no amortization of 2017 actuarial gain would be recorded in 2018. S ee Note 12, “Employee Benefit Plans and Stock-based Compensation-French Retirement Benefit Plan,” for additional information. Income Taxes In preparing the Company’s financial statements, the Company estimates the income taxes for each of the jurisdictions in which the Company operates. This involves estimating the Company’s actual current tax exposures and assessing temporary and permanent differences resulting from differing treatment of items, such as reserves and accruals, for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the Company’s Consolidated Balance Sheet. The Company’s income tax policy is to record the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the Company’s accompanying Consolidated Balance Sheets, as well as operating loss and tax credit carryforwards. The Company follows the guidelines set forth in the applicable accounting guidance regarding the recoverability of any tax assets recorded on the Consolidated Balance Sheet and provides any necessary allowances as required. Determining necessary allowances requires the Co |
Investments in Other Equity Sec
Investments in Other Equity Securities | 12 Months Ended |
Dec. 31, 2017 | |
Investments, All Other Investments [Abstract] | |
Cost-method Investments | INVESTMENTS IN OTHER EQUITY SECURITIES Vislink In 2014, the Company acquired a 3.3% interest in Vislink plc (“Vislink”), a U.K. public company listed on the AIM exchange, for $3.3 million . The investment in Vislink is being accounted for as a cost method investment as the Company does not have significant influence over the operational and financial policies of Vislink. Since the Vislink investment is also an available-for-sale security, its value is marked to market for the difference in fair value at period end. The accumulated unrealized gain (loss) arising from the change in Vislink’s fair value for each reporting period is included in the Consolidated Balance Sheet as a component of “Accumulated other comprehensive loss (AOCI)”. Since mid-2016, Vislink’s stock price has traded below its cost basis since mid-2016. The Company assessed this available-for-sale investment on an individual basis to determine if the decline in fair value was other than temporary. The assessment as to the nature of a decline in fair value is based on, among other things, the length of time and the extent to which the market value has been less than the Company’s cost basis; the financial condition and near-term prospects of the investment; and the Company’s intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in market value. As a result of these assessments, impairment charges of $1.5 million and $1.2 million were recognized in the first and third quarter of 2016, respectively, reflecting new reduced cost basis at September 30, 2016. In the fourth quarter of 2016, Vislink’s stock price recovered 67% from September 30, 2016, and the carrying value as of December 31, 2016 was $0.8 million . Vislinks accumulated unrealized gain recorded in AOIC was $0.3 million at December 31, 2016. On February 3, 2017, Vislink (from thereon, referred to as Pebble Beach Systems) completed the disposal of its hardware division and changed its name to Pebble Beach Systems. On February 6, 2017, Pebble Beach Systems announced its financial results for fiscal 2016 which showed a significant increase in operating losses and at the same time Pebble Beach Systems announced the consideration to sell the company. Since February 2017, Pebble Beach Systems’ stock price began to decline to below the Company’s reduced cost basis. In view of Pebble Beach Systems’ potential sale opportunity, the Company determined that the decline in the fair value of Pebble Beach Systems’ investment in the first nine months of 2017 was not considered permanent yet. However, in the fourth quarter of 2017, Pebble Beach announced that it had withdrawn from the sale process due to a lack of viable offers and that it would work on refinancing their debts and revising the bank covenants to improve its liquidity. Based on Pebble Beach Systems’ fourth quarter announcement, without the sale opportunity and its highly leveraged financial conditions, the Company believes that it is more-likely-than-not that Pebble Beach Systems’ investment is recoverable. As a result, during the fourth quarter of 2017, the Company wrote off the remaining carrying value and released all the balances in the AOCI to earnings, resulting in an impairment charge of $0.5 million in the fourth quarter of 2017. Unconsolidated Variable Interest Entities (“VIE”) From time to time, the Company may enter into investments in entities that are considered variable interest entities under Accounting Standards Codification (ASC) Topic 810. If the Company is the primary beneficiary of a variable interest entity (“VIE”), it is required to consolidate it. To determine if the Company is the primary beneficiary of a VIE, the Company evaluates whether it has (1) the power to direct the activities that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The assessment of whether the Company is the primary beneficiary of its VIE requires significant assumptions and judgments. EDC In 2014, the Company acquired an 18.4% interest in Encoding.com, Inc. (“EDC”), a video transcoding service company headquartered in San Francisco, California, for $3.5 million by purchasing EDC’s Series B preferred stock. EDC is considered a VIE but the Company determined that it is not the primary beneficiary of EDC. As a result, EDC is accounted for as a cost method investment. The Company determined that there were no indicators existing at December 31, 2017 that would indicate that the EDC investment was impaired. The Company’s maximum exposure to loss from the EDC’s investment at December 31, 2017 was limited to its investment cost of $3.6 million , including $0.1 million of transaction costs. VJU In 2014, the Company acquired a 19.8% interest in VJU ITV Development GmbH (“VJU”), a software company based in Austria, for $2.5 million . In March 2015, at the VJU board meeting, the Company was made aware of significant decreases in VJU’s business prospects, VJU’s existing working capital and prospects for additional funding. Based on the Company’s assessment, of VJU’s expected cash flows, the entire investment is expected to be non-recoverable. As a result, the Company recorded an impairment charge of $2.5 million in the first quarter of 2015. The VJU investment was sold for $6,000 in the fourth quarter of 2017. |
Derivative and Hedging Activiti
Derivative and Hedging Activities Derivative and Hedging Activities | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure | DERIVATIVES AND HEDGING ACTIVITIES Derivatives Not Designated as Hedging Instruments (Balance Sheet Hedges) The Company’s balance sheet hedges consist of foreign currency forward contracts which mature generally within three months, These forward contracts are carried at fair value and they are used to minimize the short-term impact of foreign currency exchange rate fluctuation on cash and certain trade and inter-company receivables and payables. Changes in the fair value of these foreign currency forward contracts are recognized in “Other expense, net” in the Consolidated Statement of Operations and are largely offset by the changes in the fair value of the assets or liabilities being hedged. The locations and amounts of designated and non-designated derivative instruments’ gains and losses reported in the Company’s A OCI and Consolidated Statements of Operations are as follows (in thousands): Year ended December 31, Financial Statement Location 2017 2016 2015 Derivatives not designated as hedging instruments: Gains recognized in income Other income (expense), net $ 155 $ 343 $ 344 Derivatives designated as hedging instruments (1) : Gains (losses) in AOCI on derivatives (effective portion) AOCI $ — $ 202 $ (133 ) Gains (losses) reclassified from AOCI into income (effective portion) Cost of Revenue $ — $ (6 ) $ 59 Operating Expense — (38 ) 365 Total $ — $ (44 ) $ 424 (Losses) recognized in income on derivatives (ineffectiveness portion and amount excluded from effectiveness testing) Other income (expense), net $ — $ (63 ) $ (87 ) (1) The Company did not enter into any new cash flow hedge contracts since December 31, 2016. The U.S. dollar equivalents of all outstanding notional amounts of foreign currency forward contracts are summarized as follows (in thousands): December 31, 2017 2016 Derivatives not designated as hedging instruments: Purchase $ 12,875 $ 4,056 Sell $ 1,509 $ 11,157 The locations and fair value amounts of the Company’s derivative instruments reported in its Consolidated Balance Sheets are as follows (in thousands): Asset Derivatives Liability Derivatives Balance Sheet Location December 31, 2017 December 31, 2016 Balance Sheet Location December 31, 2017 December 31, 2016 Derivatives not designated as hedging instruments: Foreign currency contracts Prepaid expenses and other current assets $ 33 $ 54 Accrued and other current Liabilities $ 4 $ 40 $ 33 $ 54 $ 4 $ 40 Offsetting of Derivative Assets and Liabilities The Company recognizes all derivative instruments on a gross basis in the Consolidated Balance Sheets. However, the arrangements with its counterparties allows for net settlement, which are designed to reduce credit risk by permitting net settlement with the same counterparty. As of December 31, 2017 , information related to the offsetting arrangements was as follows (in thousands): Gross Amounts of Derivatives Not Offset in the Consolidated Balance Sheets Gross Amounts of Derivatives Gross Amounts of Derivatives Offset in the Consolidated Balance Sheets Net Amounts of Derivatives Presented in the Consolidated Balance Sheets Financial Instrument Cash Collateral Pledged Net Amount Derivative Assets $ 33 $ — $ 33 $ (4 ) $ — $ 29 Derivative Liabilities $ 4 $ — $ 4 $ (4 ) $ — $ — In connection with the foreign currency derivatives entered in Israel, the Company’s subsidiaries in Israel are required to maintain a compensating balance with their bank at the end of each month. These compensating balance arrangements do not legally restrict the use of cash. As of December 31, 2017 , the total compensating balance maintained was $1.0 million . |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The applicable accounting guidance establishes a framework for measuring fair value and requires disclosure about the fair value measurements of assets and liabilities. This guidance requires the Company to classify and disclose assets and liabilities measured at fair value on a recurring basis, as well as fair value measurements of assets and liabilities measured on a nonrecurring basis in periods subsequent to initial measurement, in a three-tier fair value hierarchy as described below. The guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The guidance describes three levels of inputs that may be used to measure fair value: • Level 1 — Observable inputs that reflect quoted prices for identical assets or liabilities in active markets. • Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or 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. The Company primarily uses broker quotes for valuation of its short-term investments. The forward exchange contracts are classified as Level 2 because they are valued using quoted market prices and other observable data for similar instruments in an active market. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying value of the Company’s financial instruments, including cash equivalents, restricted cash, short-term investments, accounts receivable, accounts payable and accrued and other current liabilities, approximate fair value due to their short maturities. The Company uses the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The fair value of the Company’s convertible notes is influenced by interest rates, the Company’s stock price and stock market volatility. The fair values of the Company’s convertible notes as of December 31, 2017 and 2016 was $129.9 million and $143.5 million , based on the bond’s quoted market price as of December 31, 2017 and 2016 , respectively, and represents a Level 2 valuation. The Company’s other debts assumed from the TVN acquisition are classified within Level 2 because these borrowings are not actively traded and the majority of them have a variable interest rate structure based upon market rates currently available to the Company for debt with similar terms and maturities, therefore, the carrying value of these debts approximate its fair value. The other debts, excluding capital leases, outstanding as of December 31, 2017 and 2016 were in the aggregate of $21.8 million and $19.3 million , respectively. The fair value of the Company’s TVN defined pension benefit plan liability as of December 31, 2017 and 2016 of $5.0 million and $4.3 million , respectively, is disclosed in Note 12, “Employee Benefit Plans and Stock-based Compensation-TVN Retirement Benefit Plan.” During the years ended December 31, 2017 , 2016 and 2015 there were no nonrecurring fair value measurements of assets and liabilities subsequent to initial recognition. The following tables provide the fair value measurement amounts for other financial assets recorded in the Company’s Consolidated Balance Sheets based on the three-tier fair value hierarchy: Level 1 Level 2 Level 3 (1) Total As of December 31, 2017 Cash equivalents Money market funds $ 22 $ — $ — $ 22 Prepaids and other current assets Derivative assets — 33 — 33 Total assets measured and recorded at fair value $ 22 $ 33 $ — $ 55 Accrued and other current liabilities Derivative liabilities $ — $ 4 $ — $ 4 Total liabilities measured and recorded at fair value $ — $ 4 $ — $ 4 (1) The Company’s liability for the TVN VDP at December 31, 2017 was $5.1 million . This amount is not included in the table above because its fair value at inception, based on Level 3 inputs, was determined during the fourth quarter of fiscal 2016. Subsequently there is no recurring fair value remeasurement for this liability based on the applicable accounting guidance. Level 1 Level 2 Level 3 (1) Total As of December 31, 2016 Cash equivalents Money market funds $ 8,301 $ — $ — $ 8,301 Short-term investments Corporate bonds — 6,923 — 6,923 Prepaids and other current assets Derivative assets — 54 — 54 Other assets Long-term investment 809 — — 809 Total assets measured and recorded at fair value $ 9,110 $ 6,977 $ — $ 16,087 Accrued and other current liabilities Derivative liabilities $ — $ 40 $ — $ 40 Accrued TVN VDP, current portion — — 6,597 6,597 Other non-current liabilities Accrued TVN VDP, long-term portion — — 3,053 3,053 Total liabilities measured and recorded at fair value $ — $ 40 $ 9,650 $ 9,690 (1) The Company’s liability for the TVN VDP is classified within Level 3 because discount rates which are unobservable in the market were being used to measure the fair value of this liability during the fourth quarter of fiscal 2016. |
Business Acquisition
Business Acquisition | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | BUSINESS ACQUISITION On February 29, 2016, the Company completed its acquisition of TVN, a global leader in advanced video compression solutions headquartered in Rennes, France, for $82.5 million in cash. The acquisition strengthened the Company’s competitive position in the video infrastructure market and enhanced the depth and scale of the Company’s research and development and service and support capabilities in the video arena. During the fourth quarter of 2016, the Company completed the accounting for this business combination. The purchase price has been allocated to tangible and intangible assets acquired and liabilities assumed on the basis of their respective estimated fair values on the acquisition date. The Company’s allocation of TVN purchase consideration is as follows (in thousands): Assets: Cash and cash equivalents $ 6,843 Accounts receivable, net 14,933 Inventories 3,462 Prepaid expenses and other current assets 2,412 Property and equipment, net 9,942 French R&D tax credit receivables (1) 26,421 Other long-term assets 2,134 Total assets $ 66,147 Liabilities: Other debts and capital lease obligations, current 8,362 Accounts payable 12,494 Deferred revenue 2,504 Accrued and other current liabilities 18,365 Other debts and capital lease obligations, long-term 16,087 Other non-current liabilities 6,467 Deferred tax liabilities 2,126 Total liabilities $ 66,405 Goodwill 41,670 Intangibles 41,100 Total purchase consideration $ 82,512 (1) See Note 9, “Certain Balance Sheet Components-Prepaid expenses and other current assets,” for more information on French R&D tax credit receivables. The following table presents details of the intangible assets acquired through this business combination (in thousands, except years): Estimated Useful Life Fair Value Backlog 6 months $ 3,600 Developed technology 4 years 21,700 Customer relationships 5 years 15,200 Trade name 4 years 600 $ 41,100 Acquired identifiable intangible assets were valued using the income method and are amortized on a straight line basis over their respective estimated useful lives. Goodwill of $41.7 million arising from the acquisition was derived from expected benefits from the business synergies to be derived from the combined entities and the experienced workforce who joined the Company in connection with the acquisition. The goodwill is not expected to be deductible for income tax purposes but the intangibles assets acquired are expected to be deductible for income tax purposes in certain jurisdictions. Both goodwill and intangibles assets acquired were assigned to the Company’s video reporting unit. Acquisition-and integration-related expenses As a result of the TVN acquisition, the Company incurred acquisition-and integration-related expenses and these costs are expensed as incurred. Acquisition-related costs include outside legal, accounting and other professional services. Acquisition-and integration-related expenses for the TVN acquisition are summarized in the table below (in thousands): Acquisition-related Integration-related (1) Year ended December 31, 2016 Year ended December 31, 2017 (unaudited) Year ended December 31, 2016 (unaudited) Product cost of revenue $ — $ 342 $ 1,049 Research and development — 7 974 Selling, general and administrative 3,855 2,469 11,058 Total acquisition- and integration-related expenses $ 3,855 $ 2,818 $ 13,081 (1) Integration-related costs include incremental costs resulting from the TVN acquisition that are not expected to generate future benefits once the integration is fully consummated. All integration efforts were completed by 2017 and the Company does not expect any more such expenses to continue after 2017. |
Goodwill and Identified Intangi
Goodwill and Identified Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Identified Intangible Assets | GOODWILL AND IDENTIFIED INTANGIBLE ASSETS Goodwill Goodwill represents the difference between the purchase price and the estimated fair value of the identifiable assets acquired and liabilities assumed. Goodwill is allocated among and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. The Company has two reporting units, Video and Cable Edge. The Company tests for goodwill impairment at the reporting unit level on an annual basis, or more frequently if events or changes in circumstances indicate that the asset is more likely than not impaired. The Company’s annual goodwill impairment test is performed in the fiscal fourth quarter, with a testing date at the end of fiscal October. The changes in the Company’s carrying amount of goodwill are as follows (in thousands): Video Cable Edge Total Balance as of December 31, 2015 $ 136,904 $ 60,877 $ 197,781 Goodwill from TVN acquisition (1) 41,670 — 41,670 Foreign currency translation adjustment (2,055 ) (117 ) (2,172 ) Balance as of December 31, 2016 $ 176,519 $ 60,760 $ 237,279 Foreign currency translation adjustment 5,493 55 5,548 Balance as of December 31, 2017 $ 182,012 $ 60,815 $ 242,827 (1) Goodwill from the TVN acquisition is assigned to the Company’s Video reporting unit. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows and determining appropriate discount rates, growth rates, an appropriate control premium and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit which could trigger impairment. If the Company’s assumptions and related estimates change in the future, or if the Company’s reporting structure changes or other events and circumstances change (e.g. such as a sustained decrease in the Company’s stock price), the Company may be required to record impairment charges in future periods. Any impairment charges that the Company may take in the future could be material to its results of operations and financial condition. The Company performed its annual goodwill impairment review at October 31, 2017. As of October 31, 2017, with a closing stock price of $3.70 on The NASDAQ Stock Market, the Company’s market capitalization was approximately $302 million . When assessing goodwill for impairment, the Company used multiple valuation methodologies to determine its enterprise value and reporting units fair values. The valuation methods used included the Company’s market capitalization adjusted for a control premium and the Company’s discounted cash flow analysis, which involves making significant assumptions and estimates, including expectations of the Company’s future financial performance, the Company’s weighted average cost of capital and the Company’s interpretation of then currently enacted tax laws. Based on the impairment test performed, management concluded that goodwill was not impaired. The Company has not recorded any impairment charges related to goodwill for any prior periods. Intangible Assets The table below is a summary of the Company’s identified intangible assets (in thousands): December 31, 2017 December 31, 2016 Weighted Average Remaining Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed core technology 2.2 $ 31,707 $ (20,396 ) $ 11,311 $ 31,707 $ (15,216 ) $ 16,491 Customer relationships/contracts 3.2 44,819 (35,205 ) 9,614 44,384 (32,098 ) 12,286 Trademarks and tradenames 2.2 654 (300 ) 354 573 (119 ) 454 Maintenance agreements and related relationships N/A 5,500 (5,500 ) — 5,500 (5,500 ) — Order Backlog N/A 3,177 (3,177 ) — 3,011 (3,011 ) — Total identifiable intangibles $ 85,857 $ (64,578 ) $ 21,279 $ 85,175 $ (55,944 ) $ 29,231 Amortization expense for the identifiable intangible assets was allocated as follows (in thousands): Year Ended December 31, 2017 2016 2015 Included in cost of revenue $ 5,180 $ 4,434 $ 719 Included in operating expenses 3,142 10,402 5,783 Total amortization expense $ 8,322 $ 14,836 $ 6,502 The estimated future amortization expense of identifiable intangible assets with definite lives as of December 31, 2017 is as follows (in thousands): Cost of Revenue Operating Expenses Total Year ended December 31, 2018 $ 5,180 $ 3,199 $ 8,379 2019 5,180 3,199 8,379 2020 951 3,063 4,014 2021 — 507 507 Total future amortization expense $ 11,311 $ 9,968 $ 21,279 |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Accounts Receivable | ACCOUNTS RECEIVABLE Accounts receivable, net of allowances, consisted of the following (in thousands): December 31, 2017 2016 Accounts receivable, net: Accounts receivable $ 74,475 $ 91,596 Less: allowance for doubtful accounts and sales returns (4,631 ) (4,831 ) Total $ 69,844 $ 86,765 Trade accounts receivable are recorded at invoiced amounts and do not bear interest. The Company generally does not require collateral and performs ongoing credit evaluations of its customers and provides for expected losses. The Company maintains an allowance for doubtful accounts based upon the expected collectability of its accounts receivable. The expectation of collectability is based on the Company’s review of credit profiles of customers, contractual terms and conditions, current economic trends and historical payment experience. The following table is a summary of activities in allowances for doubtful accounts and sales returns (in thousands): Balance at Beginning of Period Charges to Revenue Charges (Credits) to Expense Additions to (Deductions from) Reserves Balance at End of Period Year ended December 31, 2017 $ 4,831 $ 4,030 $ 881 $ (5,111 ) $ 4,631 2016 $ 4,340 $ 1,488 $ 1,100 $ (2,097 ) $ 4,831 2015 $ 7,057 $ 1,826 $ 208 $ (4,751 ) $ 4,340 |
Certain Balance Sheet Component
Certain Balance Sheet Components | 12 Months Ended |
Dec. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Certain Balance Sheet Components | CERTAIN BALANCE SHEET COMPONENTS The following tables provide details of selected balance sheet components (in thousands): December 31, 2017 2016 Prepaid expenses and other current assets: French R&D tax credits receivables (1) 6,609 5,895 Deferred cost of revenue 4,440 6,856 Prepaid maintenance, royalty, rent, property taxes and value added tax 3,867 5,526 Restricted cash (2) 530 731 Other 3,485 7,311 Total $ 18,931 $ 26,319 (1) The Company’s acquired TVN subsidiary in France (the “TVN French Subsidiary”) participates in the French Crédit d’Impôt Recherche (“CIR”) program (the “R&D tax credits”) which allows companies to monetize eligible research expenses. The R&D tax credits can be used to offset against income tax payable to the French government in each of the four years after being incurred, or if not utilized, are recoverable in cash. The amount of R&D tax credits recoverable are subject to audit by the French government and in the year ended December 31, 2017 and 2016 , the French government approved the 2013 and 2012 claims and refunded $6.4 million and $5.8 million to the TVN French Subsidiary, respectively. The remaining R&D tax credit receivables at December 31, 2017 were approximately $28.5 million and are expected to be recoverable from 2018 through 2021 with $6.6 million reported under “Prepaid and other Current Assets” and $21.9 million reported under “Other Long-term Assets” on the Company’s Consolidated Balance Sheets. (2) The restricted cash balances are held as cash collateral security for certain bank guarantees. These restricted funds are invested in bank deposits and cannot be withdrawn from the Company’s accounts without the prior written consent of the applicable secured party. Additionally, as of December 31, 2017 , the Company had approximately $1.2 million of restricted cash for the bank guarantee associated with the TVN French Subsidiary’s office building lease. This amount is reported under “Other Long-term Assets” on the Company’s Consolidated Balance Sheets. December 31, 2017 2016 Inventories: Raw materials $ 2,881 $ 9,889 Work-in-process 933 2,318 Finished goods 10,130 17,776 Service-related spares 12,032 11,210 Total $ 25,976 $ 41,193 December 31, 2017 2016 Property and equipment, net: Machinery and equipment (1) $ 87,121 $ 97,989 Capitalized software 35,139 34,519 Leasehold improvements 15,051 14,455 Furniture and fixtures (1) 6,534 8,993 Property and equipment, gross 143,845 155,956 Less: accumulated depreciation and amortization (1) (114,580 ) (123,792 ) Total $ 29,265 $ 32,164 (1) The reductions in these balances in 2017, compared to 2016, were due to retirement of fully depreciated assets. December 31, 2017 2016 Accrued and other current liabilities: Accrued employee compensation and related expenses $ 16,414 $ 19,377 Customer deposits 5,020 4,537 Accrued warranty 4,381 4,862 Contingent inventory reserves 3,806 2,210 Accrued TVN VDP, current (1) 3,186 6,597 Accrued royalty payments 2,195 1,912 Other 13,703 15,655 Total $ 48,705 $ 55,150 (1) See Note 10, “Restructuring and related charges” for additional information on the Company’s TVN VDP liabilities. |
Restructuring and Excess Facili
Restructuring and Excess Facilities | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Excess Facilities | RESTRUCTURING AND RELATED CHARGES The Company implemented several restructuring plans in the past few years. The goal of these plans was to bring operational expenses to appropriate levels relative to Company’s net revenues, while simultaneously implementing extensive company-wide expense control programs. The Company accounts for its restructuring plans under the authoritative guidance for exit or disposal activities. The restructuring and asset impairment charges are included in “Product cost of revenue” and “Operating expenses-restructuring and related charges” in the Consolidated Statements of Operations. The following table summarizes the Company’s restructuring and related charges (in thousands): Year ended December 31, 2017 2016 (1) 2015 Product cost of revenue $ 1,279 $ 3,400 $ 113 Operating expenses-Restructuring and related charges 5,307 14,602 1,372 Total $ 6,586 $ 18,002 $ 1,485 (1) The restructuring and related charges for the year ended December 31, 2016 is net of $0.6 million and $1.4 million , in product cost of revenue and operating expenses-restructuring and related charges, respectively, of gain from TVN pension curtailment. See discussion below “Harmonic 2016 Restructuring Plan-TVN VDP” for additional information on the gain from TVN pension curtailment. Harmonic 2017 Restructuring In the third quarter of 2017, the Company implemented a restructuring plan (the “Harmonic 2017 Restructuring Plan”) to better align its operating costs with the continued decline in its net revenues. In 2017, the Company recorded $2.5 million of restructuring and related charges under this plan consisting of $2.1 million of employee severance and $0.4 million related to the closure of one of the Company’s offices in New York. The activities under this plan were completed in 2017. In 2017, the Company made $2.0 million payments for this plan and the remaining $0.5 million liability outstanding at December 31, 2017 which relates to the accrual for thew New York excess facility will be paid out over the remainder of the New York leased properties’ terms, which continue through August 2020. Harmonic 2016 Restructuring In the first quarter of 2016, the Company implemented a restructuring plan (the “Harmonic 2016 Restructuring Plan”) to reduce operating costs by consolidating duplicative resources in connection with the acquisition of TVN. The planned activities included global workforce reductions, exiting certain operating facilities and disposing of excess assets and an employee voluntary departure plan in France (the “TVN VDP”). In 2016, the Company recorded an aggregate of $20.0 million of restructuring and related charges under the Harmonic 2016 Restructuring Plan, of which $2.2 million is primarily related to the exit from the excess facility at the U.S. headquarters and the remaining $17.8 million is related to severance and benefits for the termination of 118 employees worldwide, including 83 employees in France who participated in the TVN VDP. Additionally, the restructuring and related charges under this plan were offset by $2.0 million of gain from TVN pension curtailment. For the employees who participated in the TVN VDP, their pension benefit will be funded by the TVN VDP and as a result, the TVN defined benefit pension plan was remeasured at December 31, 2016, which resulted in a non-cash curtailment gain. In 2017, the Company recorded an additional $1.1 million in severance and benefits and this plan was completed in June 2017. TVN VDP Based on the applicable accounting guidance, the Company recorded $1.8 million and $13.1 million of TVN VDP costs in the years ended December 31, 2017 and 2016 , respectively. In aggregate, in 2016 and 2017, the Company had paid $10.7 million of TVN VDP costs. The TVN VDP liability balance as of December 31, 2017 was $5.1 million , payable from 2018 through 2020. Excess Facilities in San Jose, California In January 2016, the Company exited an excess facility at its U.S. headquarters in San Jose, California and recorded $1.4 million in facility exit costs. The fair value of these liabilities is based on a net present value model using a credit-adjusted risk-free rate. The liability will be paid out over the remainder of the leased properties’ terms, which continue through August 2020. As of the cease-use date, the fair value of this restructuring liability totaled $2.5 million . Offsetting these charges was an adjustment for deferred rent liability relating to this space of $1.1 million . As a result of a change in the estimate of the sublease income, the restructuring liability was increased by $1.2 million and $0.6 million , as of December 31, 2017 and 2016 , respectively. The following table summarizes the activity in the Company’s restructuring accrual related to the Harmonic 2016 Restructuring Plan (in thousands): Excess facilities VDP Non-VDP Severance and benefits Other charges Total Charges for 2016 Restructuring Plan $ 1,655 $ 13,175 $ 4,702 $ 247 $ 19,779 Adjustments to restructuring provisions 582 — (88 ) (247 ) 247 Reclassification of deferred rent 1,087 — — — 1,087 Cash payments (948 ) (3,484 ) (3,075 ) — (7,507 ) Foreign exchange loss (1 ) (41 ) (20 ) — (62 ) Balance at December 31, 2016 2,375 9,650 1,519 — 13,544 Adjustments to restructuring provisions 1,223 1,766 1,134 — 4,123 Cash payments (1,172 ) (7,203 ) (2,690 ) — (11,065 ) Foreign exchange gain — 915 37 — 952 Balance at December 31, 2017 2,426 5,128 — — 7,554 Less: current portion (1) (645 ) (3,186 ) — — (3,831 ) Long-term portion (1) $ 1,781 $ 1,942 $ — $ — $ 3,723 (1) The current portion and long-term portion of the restructuring liability are reported under “Accrued and other current liabilities” and “Other non-current liabilities”, respectively, on the Company’s Consolidated Balance Sheets. Harmonic 2015 Restructuring In the fourth quarter of 2014, the Company implemented the Harmonic 2015 Restructuring Plan to reduce operating costs. The plan was completed in 2015 and the Company recorded $3.7 million restructuring charges, in aggregate, under this plan, of which $2.2 million and $ 1.5 million were recorded in 2014 and 2015, respectively. All liabilities under this plan were fully paid in 2016. |
Convertible Notes and Credit Fa
Convertible Notes and Credit Facilities | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Credit Facilities | CONVERTIBLE NOTES, OTHER DEBTS AND CAPITAL LEASES 4.00% Convertible Senior Notes In December 2015, the Company issued $128.25 million aggregate principal amount of 4.00% unsecured convertible senior notes due December 1, 2020 (the “offering” or “Notes”, as applicable) through a private placement with a financial institution. The Notes do not contain any financial covenants and the Company can settle the Notes in cash, shares of common stock, or any combination thereof. The Notes can be converted under certain circumstances described below, based on an initial conversion rate of 173.9978 shares of common stock per $1,000 principal amount of Notes (which represents an initial conversion price of approximately $5.75 per share). Interest on the Notes is payable semiannually in arrears on June 1 and December 1 of each year. Concurrent with the closing of the offering, the Company used $49.9 million of the net proceeds to repurchase 11.1 million shares of the Company’s common stock from purchasers of the offering in privately negotiated transactions. In addition, the Company incurred approximately $4.1 million of debt issuance cost resulting in net proceeds to the Company of approximately $74.2 million , which was used to fund the TVN acquisition. Prior to September 1, 2020, the Notes will be convertible only under the following circumstances: (1) during any fiscal quarter (and only during such fiscal quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price of the Notes on each applicable trading day; (2) during the five business day period after any 5 consecutive trading day period (the “ measurement period ”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. Commencing on September 1, 2020 until the close of business on the second scheduled trading day immediately preceding the maturity date, the Notes will be convertible in multiples of $1,000 principal amount regardless of the foregoing circumstances. If a fundamental change occurs, holders of the Notes may require the Company to purchase all or any portion of their Notes for cash at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, if specific corporate events occur prior to the maturity date, the conversion rate may be increased for a holder who elects to convert the Notes in connection with such a corporate event. In accordance with accounting guidance on embedded conversion features, the conversion feature associated with the Notes is valued and bifurcated from the host debt instrument and recorded in stockholders’ equity. The resulting debt discounts on the Notes are being amortized to interest expense at the effective interest rate over the contractual terms of the Notes. The following table presents the components of the Notes as of December 31, 2017 and December 31, 2016 (in thousands, except for years and percentages): December 31, 2017 2016 Liability: Principal amount $ 128,250 128,250 Less: Debt discount, net of amortization (17,404 ) (22,302 ) Less: Debt issuance costs, net of amortization (2,098 ) (2,689 ) Carrying amount $ 108,748 103,259 Remaining amortization period (years) 2.9 years 3.9 years Effective interest rate on liability component 9.94 % 9.94 % Carrying amount of equity component $ 26,062 $ 26,062 The following table presents interest expense recognized related to the Notes (in thousands): Year ended December 31, 2017 2016 2015 Contractual interest expense $ 5,130 5,130 240 Amortization of debt discount 4,898 4,430 193 Amortization of debt issuance costs 591 534 23 Total interest expense recognized $ 10,619 10,094 456 Other Debts and Capital Leases In connection with the TVN acquisition, the Company assumed a variety of debt and credit facilities in France to satisfy the financing requirements of TVN operations. These arrangements are summarized in the table below (in thousands): December 31, 2017 2016 Financing from French government agencies related to various government incentive programs (1) 20,565 17,930 Term loans 1,282 1,400 Obligations under capital leases 1,099 1,860 Total debt obligations 22,946 21,190 Less: current portion (7,610 ) (7,275 ) Long-term portion 15,336 13,915 (1) Loans backed by French R&D tax credit receivables were $17.7 million and $14.7 million as of December 31, 2017 and 2016 , respectively. As of December 31, 2017 , the TVN French Subsidiary had an aggregate of $28.5 million of R&D tax credit receivables from the French government from 2018 through 2021. (See Note 9, “Certain Balance Sheet Components-Prepaid expenses and other current assets,” for more information). These tax loans have a fixed rate of 0.6% , plus EURIBOR 1 month plus 1.3% and mature between 2018 through 2020. The remaining loans of $2.9 million and $3.2 million as of December 31, 2017 and 2016, respectively, primarily relate to financial support from French government agencies for R&D innovation projects at minimal interest rates and the loans outstanding at December 31, 2017 mature between 2020 through 2025. Future minimum repayments The table below shows the future minimum repayments of debts and capital lease obligations as of December 31, 2017 (in thousands): Years ending December 31, Capital lease obligations Other Debt obligations 2018 930 6,674 2019 95 7,141 2020 51 6,942 2021 23 515 2022 — 474 Thereafter — 101 Total $ 1,099 $ 21,847 Line of Credit On September 27, 2017, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank (the “Bank”). The Loan Agreement provides for a secured revolving credit facility in an aggregate principal amount of up to $15.0 million . Under the terms of the Loan Agreement, the principal amount of loans, plus the face amount of any outstanding letters of credit, at any time cannot exceed up to 85% of the Company’s eligible receivables. Under the terms of the Loan Agreement, the Company may also request letters of credit from the Bank. The proceeds of any loans under the Loan Agreement will be used for working capital and general corporate purposes. Loans under the Loan Agreement will bear interest, at the Company’s option, and subject to certain conditions, at an annual rate of either a prime rate or a LIBOR rate plus an applicable margin of 2.25% . There will be no applicable margin for prime rate advances when the Company is in compliance with the liquidity requirement of at least $20.0 million in the aggregate of consolidated cash plus availability under the Loan Agreement (the “Liquidity Requirement”) and a 0.25% margin for prime rate advances when the Company is not in compliance with the Liquidity Requirement. The Company may not request LIBOR advances when it is not in compliance with the Liquidity Requirement. Interest on each advance is due and payable monthly and the principal balance is due at maturity. The Company’s obligations under the revolving credit facility are secured by a security interest on substantially all of its assets, excluding intellectual property. The Loan Agreement contains customary affirmative and negative covenants. The Company must comply with financial covenants requiring it to maintain (i) minimum a short-term asset to short-term liabilities ratio and (ii) minimum adjusted EBITDA, in the amounts and for the periods as set forth in the Loan Agreement. The Company must also maintain a minimum liquidity amount, comprised of unrestricted cash held at accounts with the Bank plus proceeds available to be drawn under the Loan Agreement, equal to $10.0 million at all times. As of December 31, 2017, the Company was in compliance with the covenants under the Loan Agreement. There were no borrowings under the Loan Agreement from the closing of the Loan Agreement through December 31, 2017. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS AND STOCK-BASED COMPENSATION Equity Award Plans 1995 Stock Plan The 1995 Stock Plan provides for the grant of incentive stock options, non-statutory stock options and RSUs. Incentive stock options may be granted only to employees. All other awards may be granted to employees and consultants. Under the terms of the 1995 Stock Plan, incentive stock options may be granted at prices not less than 100% of the fair value of the Company’s common stock on the date of grant and non-statutory stock options may be granted at prices not less than 85% of the fair value of the Company’s common stock on the date of grant. RSUs have no exercise price. Both options and RSUs vest over a period of time as determined by the Company’s Board of Directors (the “Board”), generally two to four years, and expire seven years from date of grant. Grants of RSUs and any non-statutory stock options issued at prices less than the fair market value on the date of grant decrease the plan reserve 1.5 shares for every unit or share granted and any forfeitures of these awards due to their not vesting would increase the plan reserve by 1.5 shares for every unit or share forfeited. The Company’s stockholders approved an amendment to the 1995 Stock Plan at the Company’s 2017 annual meeting of stockholders (“2017 Annual Meeting”) which increased the number of shares of common stock reserved for issuance under the 1995 Stock Plan by 7,000,000 shares. As of December 31, 2017 , an aggregate of 14,858,418 shares of common stock were reserved for issuance under the 1995 Stock Plan, of which 8,381,707 shares remained available for grant. 2002 Director Plan The 2002 Director Plan provides for the grant of non-statutory stock options and RSUs to non-employee directors of the Company. Under the terms of the 2002 Director Plan, non-statutory stock options may be granted at prices not less than 100% of the fair value of the Company’s common stock on the date of grant. RSUs have no exercise price. Both options and RSUs vest over a period of time as determined by the Board, generally three years for the initial grant and one year for subsequent grants to a non-employee director, and expire seven years from date of grant. Grants of RSUs decrease the plan reserve 1.5 shares for every unit granted and any forfeiture of these awards due to their not vesting would increase the plan reserve by 1.5 shares for every unit forfeited. The Company’s stockholders approved an amendment to the 2002 Director Stock Plan at the 2017 Annual Meeting which increased the number of shares of common stock reserved for issuance under the 2002 Director Stock Plan by 400,000 shares. As of December 31, 2017 , an aggregate of 837,174 shares of common stock were reserved for issuance under the 2002 Director Plan, of which 623,034 shares remained available for grant. Employee Stock Purchase Plan The 2002 Employee Stock Purchase Plan (“ESPP”) provides for the issuance of share purchase rights to employees of the Company. The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. The ESPP enables employees to purchase shares at 85% of the fair market value of the Common Stock at the beginning or end of the offering period, whichever is lower. Offering periods generally begin on the first trading day on or after January 1 and July 1 of each year. Employees may participate through payroll deductions of 1% to 10% of their earnings. In the event that there are insufficient shares in the plan to fully fund the issuance, the available shares will be allocated across all participants based on their contributions relative to the total contributions received for the offering period. Under the ESPP, 1,291,875 , 1,265,458 and 888,152 shares were issued during fiscal 2017 , 2016 and 2015 , respectively, representing $4.4 million , $3.7 million and $5.2 million in contributions. As of December 31, 2017 , 1,114,796 shares were reserved for future purchases by eligible employees. Stock Option and RSU activities The following table summarizes the Company’s stock option and RSU activities during the year ended December 31, 2017 (in thousands, except per share amounts): Stock Options Outstanding Restricted Stock Units Outstanding Shares Available for Grant Number of Shares Weighted Average Exercise Price Number of Units Weighted Average Grant Date Fair Value Balance at December 31, 2016 3,912 5,019 $ 6.01 3,864 $ 4.26 Authorized 7,400 — — — Granted (5,351 ) 30 5.10 3,546 5.12 Options exercised — (106 ) 2.97 — Shares released — — — (3,184 ) 4.10 Forfeited or canceled 3,043 (1,063 ) 6.18 (1,322 ) 5.14 Balance at December 31, 2017 9,004 3,880 $ 6.04 2,904 $ 5.09 The following table summarizes information about stock options outstanding as of December 31, 2017 (in thousands, except per share amounts and term): Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Vested and expected to vest 3,845 $ 6.06 2.8 $ 946 Exercisable 3,367 6.21 2.6 664 The intrinsic value of options vested and expected to vest and exercisable as of December 31, 2017 is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of December 31, 2017 . The intrinsic value of options exercised during the years ended December 31, 2017 , 2016 and 2015 was $0.3 million , $0.1 million and $1.7 million , respectively, and is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of the exercise date. The following table summarizes information about RSUs outstanding as of December 31, 2017 (in thousands, except term): Number of Shares Underlying Restricted Stock Units Weighted Average Remaining Vesting Period (Years) Aggregate Fair Value Vested and expected to vest 2,402 0.6 $ 10,088 The fair value of RSUs vested and expected to vest as of December 31, 2017 is calculated based on the fair value of the Company’s common stock as of December 31, 2017 . Performance- and Market-based awards Starting 2015, the Company began to fund a portion of its incentive bonus payment to its eligible employees issuing performance-based RSU (“PRSU”) awards from the 1995 Stock Plan. The Company granted 1,165,685 , 898,533 and 395,760 shares of PRSUs to its employees during the years ended December 31, 2017 , 2016 and 2015 , respectively, of which 1,165,685 , 610,579 and 239,744 shares of PRSUs vested during the years December 31, 2017 , 2016 and 2015 , respectively. No PRSUs awards were outstanding as of December 31, 2017 . The vesting of the PRSUs awards is based on the achievement of certain financial and non-financial operating goals of the Company. The stock-based compensation recognized for PRSUs were $3.2 million , $2.8 million and $0.6 million , for the years ended December 31, 2017 , 2016 and 2015 , respectively. In 2017, the Company granted 344,500 market-based RSUs (“MRSUs”) under the 1995 Stock Plan to its key executives and certain eligible employees that may vest during a three-year period as part of its long-term incentive program. The vesting conditions of these awards are tied to the market value of the Company's common stock. None of the MRSUs vested during the year ended December 31, 2017 . The fair value of these shares was estimated using a Monte-Carlo simulation and the stock-based compensation recognized in 2017 for these MRSUs was $0.9 million . The unrecognized stock-based compensation at December 31, 2017 was $0.2 million for the MRSU and is expected to be fully recognized in 2018. TVN Employee Equity Benefit Plan In connection with the TVN acquisition, the Company assumed two of TVN’s existing employee equity benefit plans, which were fully vested and settled in 2016 for $2.9 million . French Retirement Benefit Plan Under French law, the Company’s subsidiaries in France, including the acquired TVN French Subsidiary, are obligated to make certain payments to its employees upon their retirement from the Company. These payments are based on the retiring employee’s salary for a number of months that varies according to the employee’s period of service and position. Salary used in the calculation is the employee’s average monthly salary for the twelve months prior to retirement. The payments are made in one lump-sum at the time of retirement. The French pension plan is unfunded and there are no contributions to the plan required by any laws or funding regulations, discretionary contributions or non-cash contributions expected to be made. The company’s defined benefit pension obligations are measured as of December 31. The present value of these lump-sum payments is determined on an actuarial basis and the actuarial valuation takes into account the employees’ age and period of service with the company, projected mortality rates, mobility rates and increases in salaries, and a discount rate. The table below shows the present value of the Company’s pension obligations as of December 31, 2017 and December 31, 2016 and the changes to the Company’s pension obligations for each of those years (in thousands): December 31, 2017 2016 Projected benefit obligation: Balance at January 1 $ 4,264 $ — Acquired from TVN acquisition — 5,907 Service cost 259 217 Interest cost 71 87 Actuarial (gains) losses (528 ) 279 Curtailment (1) — (1,955 ) Adjustment for prior year balance 343 — Foreign currency translation adjustment 624 (271 ) Balance at December 31 $ 5,033 $ 4,264 Presented on the Consolidated Balance Sheets under: Current portion (presented under “Accrued and other current liabilities”) $ 34 27 Long-term portion (presented under “Other non-current liabilities”) $ 4,999 4,237 (1) As a result of the TVN VDP, the defined benefit pension plan was remeasured in the fourth quarter of 2016, which resulted in a non-cash curtailment gain of $2.0 million . The curtailment gain was recognized in the Consolidated Statement of Operations during the fourth quarter of 2016 and the Company’s pension liability was reduced by the same amount. Of the $2.0 million pension curtailment gain, $0.6 million is included in product cost of revenue and the remaining $ 1.4 million is included in operating expenses-restructuring and related charges in the Consolidated Statement of Operations. The remeasurement did not have a material effect on other components of net periodic pension expense for the year ended December 31, 2016. The table below shows the components of net periodic benefit costs (in thousands): Year ended December 31, 2017 2016 Service cost $ 259 $ 217 Interest cost 71 87 Amortization of net actuarial loss (gain) (1) — — Net periodic benefit cost included in operating loss $ 330 $ 304 (1) The Company uses the allowable 10% corridor approach to determine the amount of actuarial gains or losses subject to amortization in pension cost. Gains or losses are amortized on a straight-line basis over the average future remaining service period of active plan participants. The following assumptions were used in determining the Company’s pension obligation: December 31, 2017 2016 Discount rate 1.5 % 1.5 % Mobility rate 6.0 % 3.0 % Salary progression rate 2.0 % 2.0 % The Company evaluates the discount rate assumption annually. The discount rate is determined using the average yields on high-quality fixed-income securities that have maturities consistent with the timing of benefit payments. The Company also evaluates other assumptions related to demographic factors, such as retirement age, mortality rates and turnover periodically, updating them to reflect experience and expectations for the future. The mortality assumption related to the Company’s defined benefit pension plan used mortality tables published in January 2017, which is the most current, by the French National Institute of Statistics and Economic Studies. As of December 31, 2017 , future benefits expected to be paid in each of the next five years, and in the aggregate for the five year period thereafter are as follows (in thousands): Years ending December 31, 2018 $ 34 2019 53 2020 — 2021 44 2022 143 2023 - 2027 2,858 $ 3,132 401(k) Plan The Company has a retirement/savings plan which qualifies as a thrift plan under Section 401(k) of the Internal Revenue Code. This plan allows participants to contribute up to the applicable Internal Revenue Code limitations under the plan. The Company can make discretionary contributions to the plan of 25% of the first 4% contributed by eligible participants, up to a maximum contribution per participant of $1,000 per year. The Company’s contributions to the plan were $0.3 million for fiscal year 2017 and $0.4 million for each of the fiscal years 2016 and 2015. Stock-based Compensation The following table summarizes stock-based compensation expense for all plans (in thousands): Year ended December 31, 2017 2016 2015 Stock-based compensation in: Cost of revenue $ 2,370 $ 1,554 $ 1,862 Research and development expense 5,313 3,711 4,435 Selling, general and administrative expense 8,927 7,795 9,285 Total stock-based compensation in operating expense 14,240 11,506 13,720 Total stock-based compensation recognized in net loss $ 16,610 $ 13,060 $ 15,582 As of December 31, 2017 , total unrecognized stock-based compensation cost, net of estimated forfeitures, related to unvested stock options and RSUs was $9.9 million and is expected to be recognized over a weighted-average period of 1.4 years. Valuation Assumptions The Company estimates the fair value of employee stock options and stock purchase rights under the ESPP using a Black-Scholes option valuation model. The value of the stock purchase rights under the ESPP consists of: (1) the 15% discount on the purchase of the stock; (2) 85% of the fair value of the call option; and (3) 15% of the fair value of the put option. The call option and put option were valued using the Black-Scholes option pricing model. At the date of grant, the Company estimated the fair value of each stock option grant and stock purchase right granted under the ESPP using the following weighted average assumptions: Employee Stock Options ESPP 2017 2016 2015 2017 2016 2015 Expected term (in years) 4.30 4.30 4.65 0.50 0.50 0.50 Volatility 42 % 36 % 38 % 48 % 70 % 34 % Risk-free interest rate 1.8 % 1.4 % 1.5 % 1.2 % 0.6 % 0.3 % Expected dividends 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % The expected term of the employee stock option represents the weighted-average period that the stock options are expected to remain outstanding. The computation of expected term was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The expected term of the stock purchase right under ESPP represents the period of time from the beginning of the offering period to the purchase date. The Company uses its historical volatility for a period equivalent to the expected term of the options to estimate the expected volatility. The risk-free interest rate that the Company uses in the Black-Scholes option valuation model is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term. The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and, therefore, used an expected dividend yield of zero in the valuation model. Prior to January 1, 2017, stock-based compensation expense was recorded net of estimated forfeitures in the Company’s Consolidated Statements of Operations and, accordingly, was recorded for only those stock-based awards that the Company expected to vest. Upon the adoption of the accounting standard update (ASU 2016-09, “Improvements to Employee Share-Based payments”) issued by FASB, effective January 1, 2017, the Company changed its accounting policy to account for forfeitures as they occur. The change was applied on a modified retrospective approach with a cumulative effect adjustment of $69,000 to retained earnings as of January 1, 2017 (which increased the accumulated deficit). The weighted-average fair value per share of options granted for the years ended December 31, 2017 , 2016 and 2015 was $1.85 , $0.99 and $2.51 , respectively. The fair value of all stock options vested during the years ended December 31, 2017 , 2016 and 2015 was $1.7 million , $2.3 million and $3.0 million , respectively. The estimated weighted-average fair value per share of stock purchase rights granted for the years ended December 31, 2017 , 2016 and 2015 was $1.50 , $1.04 and $1.69 , respectively. The Company realized no income tax benefit from stock option exercises for the years ended December 31, 2017 , 2016 and 2015 due to recurring losses and valuation allowances. The estimated fair value of RSUs is based on the market price of the Company’s common stock on the grant date. The fair value of all restricted stock units issued during the years ended December 31, 2017 , 2016 and 2015 was $13.0 million , $9.7 million and $11.1 million , respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Preferred Stock Harmonic has 5,000,000 authorized shares of preferred stock. No shares of preferred stock were issued or outstanding in any of the periods presented. Common Stock Repurchases Our stock repurchase program expired on December 31, 2016. No stock was repurchased during the fiscal year of 2017 and 2016. Any further stock repurchases would require authorization from the Board. Accumulated Other Comprehensive Income (Loss) (“AOCI”) The components of AOCI, on an after-tax basis where applicable, were as follows (in thousands): December 31, 2017 2016 Foreign currency translation adjustments $ 4,310 $ (7,267 ) Unrealized foreign exchange loss on intercompany long-term loans, net of taxes (1,177 ) — Gain on investments, net of taxes (1) — 276 Actuarial gain (loss) 249 (279 ) Total accumulated other comprehensive income (loss) $ 3,382 $ (7,270 ) (1) See Consolidated Statements of Comprehensive Loss for the amounts related to investments that were reclassified into the Consolidated Statements of Operations for the periods presented. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Loss from operations before income taxes consists of the following (in thousands): Year ended December 31, 2017 2016 2015 United States $ (50,041 ) $ (53,833 ) $ (16,826 ) International (34,666 ) (26,597 ) 758 Loss before income taxes $ (84,707 ) $ (80,430 ) $ (16,068 ) The components of the benefit from income taxes consist of the following (in thousands): Year ended December 31, 2017 2016 2015 Current: Federal $ (4,530 ) $ (950 ) $ (1,981 ) State 129 181 120 International 273 2,738 1,966 Deferred: Federal — (713 ) — State — — — International 2,376 (9,372 ) (512 ) Total benefit from income taxes $ (1,752 ) $ (8,116 ) $ (407 ) The differences between the benefit from income taxes computed at the U.S. federal statutory rate at 35% and the Company’s actual benefit from income taxes are as follows (in thousands): Year ended December 31, 2017 2016 2015 Benefit from for income taxes at U.S. Federal statutory rate $ (29,648 ) $ (28,150 ) $ (5,624 ) Differential in rates on foreign earnings 15,920 11,741 1,584 Non-deductible amortization expense — 617 947 Tax Reform Tax rate reduction 14,527 — — Change in valuation allowance (2,834 ) 4,465 2,230 Change in liabilities for uncertain tax positions (2,009 ) (960 ) (1,083 ) Non-deductible stock-based compensation 1,934 1,480 1,398 Non-deductible meals and entertainment 380 441 395 Non-deductible acquisition cost — — 457 Adjustments related to tax positions taken during prior years (473 ) (163 ) (781 ) Adjustments made under intercompany transactions — 1,779 — Tax Refund (834 ) — — Other 1,285 634 70 Total benefit from income taxes $ (1,752 ) $ (8,116 ) $ (407 ) The Company operates in multiple jurisdictions and its profits are taxed pursuant to the tax laws of these jurisdictions. Our effective income tax rate may be affected by changes in or interpretations of tax laws and tax agreements in any given jurisdiction, utilization of net operating loss and tax credit carry forwards, changes in geographical mix of income and expense, and changes in management’s assessment of matters such as the ability to realize deferred tax assets. The Company’s effective tax rate varies from year to year primarily due to the absence of several onetime, discrete items that benefited or decremented the tax rates in the previous years. In 2017, the Company had a worldwide consolidated loss before tax of $84.7 million and tax benefit of $1.8 million , with an effective income tax rate of 2% . The Company’s 2017 effective income tax rate differed from the U.S. federal statutory rate of 35% primarily due to the Company’s geographical income mix, favorable tax rates associated with certain earnings from operations in lower-tax jurisdictions, tax rate change in foreign jurisdictions, tax benefits associated with the release of tax reserves for uncertain tax positions resulting from the expiration of the statutes of limitations, a one-time benefit of $2.6 million from the reduction of a valuation allowance on alternative minimum tax (“AMT”) credit carryforwards that will be refundable as a result of the TCJA, partially offset by the increase in the valuation allowance against U.S. federal, California and other state deferred tax assets, detriment from non-deductible stock-based compensation, and the net of various other discrete tax adjustments . On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was enacted which, among other things, lowered the U.S. federal corporate income tax rate from 35% to 21% , requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. As of December 31, 2017, the Company has not completed the accounting for the tax effects of enactment of the TCJA; however, the effects on existing deferred tax balances has been determined and recorded. The impact of remeasuring deferred tax assets at the lower tax rate is a $14.5 million reduction of the value of net deferred tax assets (which represent future tax benefits), which is offset by a corresponding reduction in the related valuation allowance. As a result, there is net zero impact to the Company’s tax expense for 2017. Under the TCJA, the corporate AMT was repealed. Therefore, corporations which have been unable to utilize AMT credit carryforwards now have the opportunity to realize them through cash refunds. The Company has an AMT credit carryforward of $2.6 million that previously was not considered realizable and as such had a valuation allowance recorded. As a result of the TCJA, the valuation allowance was released and is reflected as a benefit in the Company's 2017 income tax provision. The Company has reclassified the $2.6 million credit carryforward to other receivables in the consolidated balance sheet to reflect the expected cash refund. The TCJA also includes a requirement to pay a one-time transition tax on the cumulative value of earnings and profits that were previously not repatriated for U.S. income tax purposes. Although the Company currently does not expect to be impacted by the mandatory deemed repatriation provision of the TCJA., because the Company believes our cumulative unremitted earnings and profits are negative, due to the complexity of our international tax and legal entity structure, the Company will continue to analyze the earnings and profits and tax pools of our foreign subsidiaries to reasonably estimate the effects of the mandatory deemed repatriation provision of the TCJA over the one-year measurement period. In 2016, the Company had a worldwide consolidated loss before tax of $80.4 million and tax benefit of $8.1 million , with an annual effective tax rate of 10% . The Company’s 2016 effective income tax rate differed from the U.S. federal statutory rate of 35% primarily due to geographical income mix and its tax valuation allowance, favorable tax rates associated with certain earnings from operations in lower-tax jurisdictions, favorable resolutions of uncertain tax positions, and the tax benefit from the realization of certain deferred tax assets as a result of the TVN acquisition, partially offset by the increase in the valuation allowance against U.S. federal, California and other state deferred tax assets, detriment from non-deductible stock-based compensation, non-deductible amortization of foreign intangibles, and the net of various discrete tax adjustments. In 2015, the Company had a worldwide consolidated loss before tax of $16.1 million and tax benefit of $0.4 million , with an effective income tax rate of 3% . The Company’s 2015 effective income tax rate differed from the U.S. federal statutory rate of 35% primarily due to a difference in foreign tax rates and the Company’s U.S. losses generated for the year received no tax benefit as a result of a full valuation allowance against all of its U.S. deferred tax assets, as well as adjustments relating to its 2014 U.S. federal tax return filed in September 2015 and the reversal of uncertain tax positions resulting from the expiration of the statutes of limitations. In addition, the impairment of the VJU investment (see Note 3, “Investments in Other Equity Securities”) received no tax benefit. The components of net deferred tax assets included in the Consolidated Balance Sheets are as follows (in thousands): December 31, 2017 2016 Deferred tax assets: Reserves and accruals $ 17,247 $ 25,527 Net operating loss carryforwards 34,915 33,321 Research and development credit carryforwards 34,419 28,759 Deferred stock-based compensation 2,677 4,292 Depreciation and amortization — 554 Intangibles 2,062 — Other tax credits — 2,738 Other 1,441 — Gross deferred tax assets 92,761 95,191 Valuation allowance (77,756 ) (74,480 ) Gross deferred tax assets after valuation allowance 15,005 20,711 Deferred tax liabilities: Depreciation and amortization (259 ) — Intangibles — (1,417 ) Convertible notes (4,284 ) (8,603 ) Other — (510 ) Gross deferred tax liabilities (4,543 ) (10,530 ) Net deferred tax assets $ 10,462 $ 10,181 The following table summarizes the activities related to the Company’s valuation allowance (in thousands): Year ended December 31, 2017 2016 2015 Balance at beginning of period $ 74,480 $ 64,545 $ 75,199 Additions 9,028 18,291 3,068 Deductions (5,752 ) (8,356 ) (13,722 ) Balance at end of period $ 77,756 $ 74,480 $ 64,545 Management regularly assesses the ability to realize deferred tax assets recorded based upon the weight of available evidence, including such factors as recent earnings history and expected future taxable income on a jurisdiction by jurisdiction basis. In the event that the Company changes its determination as to the amount of realizable deferred tax assets, the Company will adjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. In 2017, the Company continued to record a valuation allowance against all of its United States deferred tax assets as well as its net operating losses generated in 2017 due to significant cumulative losses in the United States, resulting in a net increase in valuation allowance of $9.0 million . This increase in valuation allowance is offset partially by the release of $3.2 million of valuation allowance associated with the Company’s foreign subsidiaries and $2.6 million associated with the AMT refund related to the TCJA. As of December 31, 2017 , the Company had a valuation allowance of $77.8 million against all of its U.S. federal, California and other state net deferred tax assets, including net operating loss carryforwards and R&D tax credit carryforwards, and against the majority of its foreign deferred tax assets. The Company adopted ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, using a modified-retrospective transition method, in the first quarter of fiscal 2017. As a result, the Company recorded a cumulative effect of $4.6 million of additional gross deferred tax asset associated with shared-based payment and an offsetting valuation allowance of the same amount, therefore resulting in no net impact to the Company’s beginning retained earnings or effective tax rate for 2017. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (topic 740): Intra-Entity Transfers of Assets Other Than Inventory, which requires companies to recognize the income tax consequences of all intra-entity sales of assets other than inventory when they occur. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The Company early adopted this ASU during the first quarter of fiscal 2017 on a modified retrospective approach and recorded a cumulative-effect adjustment of $1.4 million to the retained earnings as of January 1, 2017 (which reduced the accumulated deficit). Correspondingly, in the first quarter of fiscal 2017, the Company recognized an additional $1.1 million of net deferred tax assets, after netting with $2.1 million of valuation allowance, and write off the remaining $0.3 million of unamortized tax expenses deferred under the previous guidance to provision for income taxes in the first quarter of fiscal 2017. On July 27, 2015, the U.S. Tax Court issued an opinion in Altera Corp. v. Commissioner, 145 T.C. No.3 (2015) related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. A final decision was entered by the U.S. Tax Court on December 1, 2015. On February 19, 2016, the U.S. Internal Revenue Service filed a notice of appeal in Altera Corp. v. Commissioner , 145 T.C. No. 3 (2015), to the Ninth Circuit Court of Appeal. The Ninth Circuit will decide whether a regulation that mandates that stock-based compensation costs related to the intangible development activity of a qualified cost sharing arrangement (a “QCSA”) must be included in the joint cost pool of the QCSA (the “all costs rule”) is consistent with the arm’s length standard as set forth in Section 482 of the Internal Revenue Code. The Company concluded that no adjustment to the consolidated financial statements as of December 31, 2016 and 2017 is appropriate at this time due to the uncertainties with respect to the ultimate resolution of this case. As of December 31, 2017 , the Company had $111.4 million , $49.1 million , $25.4 million and $53.2 million of foreign, U.S. federal, U.S. California state, and U.S. other states net operating loss carryforwards (“NOL”), respectively. There is no expiration to the utilization of the foreign NOL, while the U.S. federal and California NOL will begin to expire at various dates beginning in 2018 through 2037 , if not utilized. As of December 31, 2017 , the Company had U.S. federal and California state tax credit carryforwards of approximately $11.3 million and $33.9 million , respectively. If not utilized, the U.S. federal tax credit carryforwards will begin to expire in 2031 , while the California tax credit forward will not expire . The Company has not provided U.S. federal and California state income taxes, as well as foreign withholding taxes, on approximately $10.5 million of cumulative undistributed earnings for certain non-U.S. subsidiaries, because such earnings are intended to be indefinitely reinvested. Determination of the amount of unrecognized deferred tax liability for temporary differences related to investment in these non-U.S. subsidiaries that are essentially permanent in duration is not practicable. The Company applies the provisions of the applicable accounting guidance regarding accounting for uncertainty in income taxes, which requires application of a more-likely-than-not threshold to the recognition and derecognition of uncertain tax positions. If the recognition threshold is met, the applicable accounting guidance permits the recognition of a tax benefit measured at the largest amount of such tax benefit that, in our judgment, is more than fifty percent likely to be realized upon settlement. It further requires that a change in judgment related to the expected ultimate resolution of uncertain tax positions be recognized in earnings in the period in which such determination is made. The Company will continue to review its tax positions and provide for, or reverse, unrecognized tax benefits as issues arise. As of December 31, 2017 , the Company had $18.8 million that would favorably impact the effective tax rate in future periods if recognized. The following table summarizes the activity related to the Company’s gross unrecognized tax benefits (in millions): Year ended December 31, 2017 2016 2015 Balance at beginning of period $ 19.2 $ 15.6 $ 15.7 Increase in balance related to tax positions taken during current year 1.4 4.6 0.7 Decrease in balance as a result of a lapse of the applicable statues of limitations (2.2 ) (1.0 ) (0.9 ) Increase in balance related to tax positions taken during prior years 1.8 — 0.3 Decrease in balance related to tax positions taken during prior years (1.4 ) — (0.2 ) Balance at end of period $ 18.8 $ 19.2 $ 15.6 The Company recognizes interest and penalties related to unrecognized tax positions in income tax expenses on the Consolidated Statements of Operations. The net interest and penalties charges recorded for the years ended December 31, 2015 through 2017, were not material. The Company had approximately $0.5 million of accrued interest and penalties related to uncertain tax positions as of December 31, 2017 and December 31, 2016 . The Company files U.S. federal, state, and foreign income tax returns in jurisdictions with varying statutes of limitations during which such tax returns may be audited and adjusted by the relevant tax authorities. In 2016, the U.S. Internal Revenue Service concluded its audit for the Company’s 2012 tax year. As a result, the Company released $1.1 million of related tax reserves, including accrued interests and penalties in 2016. The 2014 through 2016 tax years generally remain subject to examination by U.S. federal and most state tax authorities. In significant foreign jurisdictions, the 2007 through 2015 tax years generally remain subject to examination by their respective tax authorities. In addition, a subsidiary of the Company is under audit for the 2013 and 2016 tax years, by the Israel tax authority. If, upon the conclusion of these audits, the ultimate determination of taxes owed in the United States or Israel is for an amount in excess of the tax provision the Company has recorded in the applicable period, the Company’s overall tax expense, effective tax rate, operating results and cash flow could be materially and adversely impacted in the period of adjustment. The Company’s operations in Switzerland are subject to a reduced tax rate under the Switzerland tax holiday which requires various thresholds of investment and employment in Switzerland. The Company has met these various thresholds and the Switzerland tax holiday is effective through the end of 2018 . The income tax benefits attributable to the Switzerland holiday were estimated to be approximately $0.6 million for fiscal year 2017 and approximately $0.7 million for each of the fiscal years 2016 and 2015 , increasing diluted earnings per share by approximately $0.007 , $0.008 and $0.008 for each of the fiscal years 2017 , 2016 and 2015 , respectively. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | NET LOSS PER SHARE Basic net loss per share is computed by dividing the net loss attributable to common stockholders for the applicable period by the weighted average number of common shares outstanding during the period. Potentially dilutive shares, consisting of outstanding stock options, restricted stock units, ESPP plan awards as well as the Notes, are excluded from the net loss per share computations when their effect is anti-dilutive. The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Numerator: Net loss $ (82,955 ) $ (72,314 ) $ (15,661 ) Denominator: Weighted average number of shares outstanding: Basic and diluted 80,974 77,705 87,514 Net loss per share: Basic and diluted $ (1.02 ) $ (0.93 ) $ (0.18 ) The diluted net loss per share is the same as basic net loss per share for the years ended December 31, 2017, 2016 and 2015 because potential common shares are only considered when their effect would be dilutive. The following table presents the potential weighted common shares outstanding that were excluded from the computation of basic and diluted net loss per share calculations (in thousands): December 31, 2017 2016 2015 Stock options 4,470 5,295 6,460 Restricted stock units 3,059 2,536 2,178 Stock purchase rights under the ESPP 620 659 518 Warrants (1) 782 206 — Total (2) 8,931 8,696 9,156 (1) In 2016, in connection with the execution of a product supply agreement the Company granted Comcast a warrant to purchase shares of its common stock. (See Note 16, “Warrants” for additional information). (2) Excluded from the table above are the Notes, which are convertible under certain conditions into an aggregate of 22,304,348 shares of common stock (see Note 11, “Convertible Notes, Other Debts and Capital Leases” for additional information on the Notes). Since the Company’s intent is to settle the principal amount of the Notes in cash, the treasury stock method is being used to calculate any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share when the Company’s average market price of its common stock for a given period exceeds the conversion price of $5.75 per share. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Warrants Disclosure [Text Block] | WARRANTS On September 26, 2016, the Company granted a warrant to purchase shares of common stock (the “Warrant”) to Comcast pursuant to which Comcast may, subject to certain vesting provisions, purchase up to 7,816,162 shares of the Company’s common stock subject to adjustment in accordance with the terms of the Warrant, for a per share exercise price of $4.76 . Comcast may exercise the Warrant for cash or on a net share basis. The Warrant expires on September 26, 2023 or the prior consummation of a change of control of the Company. Comcast’s right to purchase 781,617 shares vested as of the issuance date as an incentive to enter into the software license product supply agreement. Comcast’s rights to purchase an additional 1,954,042 shares vest upon achievement of milestones that occur upon or prior to Comcast’s election for enterprise license pricing for certain of the Company’s software products. Such pricing would obligate Comcast to make certain total payments to the Company over the term of the product supply agreement. Comcast’s rights to purchase an additional 1,172,425 shares vest when Comcast exceeds specified cumulative purchase amounts from the Company under the product supply agreement. Comcast’s rights to purchase the remaining shares vest in specified tranches at the earlier of Comcast’s enterprise license pricing election (if completed by a certain date) or achievement of specified cumulative purchase amounts from the Company. Because the Warrant contains performance criteria under which Comcast must achieve for the Warrant to vest, the final measurement date for the Warrant is the date on which the Warrant vests. Prior to the final measurement, when achievement of the performance criteria has been deemed probable, the estimated fair value of the Warrant is recorded as a reduction to net revenue based on the projected number of shares underlying the Warrant that are expected to vest, the proportion of purchases by Comcast and its affiliates within the period relative to the aggregate purchase levels required for the Warrant to vest and the then-current fair value of the Warrant. To the extent that projections change as to the number of shares underlying the Warrant that will vest, fair market value of the Warrant changes, a cumulative catch-up adjustment is recorded in the period in which the estimates change. The fair value of the Warrant is determined using the Black-Scholes option pricing model. The assumptions utilized in the Black-Scholes model include the risk-free interest rate, expected volatility, and expected life in years. The risk-free interest rate over the expected life is equal to the prevailing U.S. Treasury note rate over the same period. Expected volatility is determined utilizing historical volatility over a period of time equal to the expected life of the Warrant. Expected life is equal to the remaining contractual term of the Warrant. The dividend yield is assumed to be zero since we have not historically declared dividends and does not have any plans to declare dividends in the future. A portion of the Warrant vested on September 26, 2016 and had a fair value of $1.6 million . During the year ended December 31, 2017 and 2016, the Company recorded as a reduction to net revenues in connection with the Warrant of $0.2 million and $0.4 million , respectively. The remaining unamortized value of $1.0 million is recorded as an asset under “Prepaid expenses and other current assets” on the Company’s Consolidated Balance Sheet as of December 31, 2017. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION, GEOGRAPHIC INFORMATION AND CUSTOMER CONCENTRATION Segment Information Operating segments are defined as components of an enterprise that engage in business activities for which separate financial information is available and evaluated by the Company’s CODM, which for the Company is its Chief Executive Officer, in deciding how to allocate resources and assess performance. Based on our internal reporting structure, the Company consists of two operating segments: Video and Cable Edge. The operating segments were determined based on the nature of the products offered. The Video segment sells video processing and production and playout solutions and services worldwide to broadcast and media companies, streaming new media companies, cable operators, and satellite and telecommunications (telco) Pay-TV service providers. The Cable Edge segment sells CableOS, cable edge solutions and related services to cable operators globally. The Company does not allocate amortization of intangibles, stock-based compensation, restructuring and related charges, TVN acquisition- and integration-related costs, and certain other non-recurring charges to the operating income (loss) for each segment because management does not include this information in the measurement of the performance of the operating segments. A measure of assets by segment is not applicable as segment assets are not included in the discrete financial information provided to the CODM. On February 29, 2016, the Company completed its acquisition of 100% of the outstanding equity of TVN and assigned TVN to its Video operating segment. The following table provides summary financial information by reportable segment (in thousands): Year ended December 31, 2017 (1) 2016 2015 Video Revenue $ 319,473 $ 351,489 $ 291,779 Gross profit 173,414 194,044 167,573 Operating income (loss) (2,024 ) 11,963 13,529 Cable Edge Revenue $ 38,773 $ 54,422 $ 85,248 Gross profit 8,892 21,174 37,832 Operating loss (23,154 ) (12,131 ) (1,599 ) Total Revenue $ 358,246 $ 405,911 $ 377,027 Gross profit 182,306 215,218 205,405 Operating income (loss) (25,178 ) (168 ) 11,930 (1) The Company has historically employed an aggregate allocation methodology based on total revenues to attribute professional services revenue and sales expenses between its Video and Cable Edge segments. Beginning in the fourth quarter of 2017, the Company has prospectively changed to a more precise attribution methodology as the activities of selling and supporting the CableOS solution have become increasingly distinct from those of Video solutions. The impact of making this change in the fourth quarter of 2017 compared to the Company’s historical approach was a reduction in operating income of $2.4 million from the Video segment and a corresponding increase to the operating income of the Cable Edge segment. The Company believes that the updated allocation methodology will provide greater clarity regarding the operating metrics of the Video and Cable Edge business segments. A reconciliation of the Company’s consolidated segment operating income (loss) to consolidated loss before income taxes is as follows (in thousands): Year ended December 31, 2017 (1) 2016 2015 Total segment operating income (loss) $ (25,178 ) $ (168 ) $ 11,930 Unallocated corporate expenses (1) (20,767 ) (38,972 ) (2,794 ) Stock-based compensation (16,610 ) (13,060 ) (15,582 ) Amortization of intangibles (8,322 ) (14,836 ) (6,502 ) Consolidated loss from operations (70,877 ) (67,036 ) (12,948 ) Non-operating expense, net (13,830 ) (13,394 ) (3,120 ) Loss before income taxes $ (84,707 ) $ (80,430 ) $ (16,068 ) (1) For the years ended December 31, 2017 and 2016 , the unallocated corporate expenses included TVN acquisition- and integration-related costs, TVN VDP costs (see Note 10, “Restructuring and Related charges-TVN VDP,” for more information on TVN VDP ) and Cable Edge product line inventory obsolescence costs, totaling $7.9 million and $32.2 million , respectively. In addition, in fiscal year 2017, the unallocated corporate expenses included $8.0 million of Avid litigation settlement cost and associated legal fees (see Note 19, “Legal Proceedings,” for more information). The remaining unallocated corporate expenses for all years presented above include primarily other restructuring charges and excess facilities charges. Geographic Information The geographic distribution of Harmonics’ revenue and property and equipment, net is summarized in the tables below (in thousands): Year ended December 31, 2017 2016 2015 Net revenue (1) : United States $ 131,773 $ 171,016 $ 175,466 Other countries 226,473 234,895 201,561 Total $ 358,246 $ 405,911 $ 377,027 (1) Revenue is attributed to countries based on the location of the customer. Other than the U.S., no single country accounted for 10% or more of the Company’s net revenues for the years ended December 31, 2017, 2016 and 2015. As of December 31, 2017 2016 Property and equipment, net: United States $ 13,786 $ 15,197 Israel 8,904 9,966 France 4,573 4,872 Other countries 2,002 2,129 Total $ 29,265 $ 32,164 Customer Concentration During the years ended December 31, 2017 and 2016, no single customer accounted for more than 10% of our net revenue. Net revenue from Comcast accounted for 12% of the Company’s total net revenue during the year ended December 31, 2015 . Other than Comcast, no single customer accounted for 10% or more of the Company’s total net revenue for fiscal year 2015. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Leases The Company leases its facilities under non-cancelable operating leases which expire at various dates through June 2028 . In addition, the Company leases vehicles and phones in Israel under non-cancelable operating leases, the last of which expires in 2020 . Total rent expense related to these operating leases was $10.2 million , $9.7 million and $9.0 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Future minimum lease payments under non-cancellable operating leases at December 31, 2017 , are as follows (in thousands): Operating Leases Year ending December 31, 2018 $ 13,534 2019 12,132 2020 8,716 2021 2,958 2022 2,497 Thereafter 9,145 Total minimum payments $ 48,982 Warranty The Company accrues for estimated warranty costs at the time of product shipment. Management periodically reviews the estimated warranty liability and records adjustments based on the terms of warranties provided to customers, historical and anticipated warranty claims experience, and estimates of the timing and cost of warranty claims. Activities for the Company’s warranty accrual for each fiscal year, which is included in accrued and other current liabilities, is summarized below (in thousands): 2017 2016 2015 Balance at beginning of period $ 4,862 $ 3,913 $ 4,242 Accrual for current period warranties 5,117 5,482 5,378 Balance assumed from TVN acquisition — 1,012 — Warranty costs incurred (5,598 ) (5,545 ) (5,707 ) Balance at end of period $ 4,381 $ 4,862 $ 3,913 Bank Guarantees and standby Letters of Credit As of December 31, 2017 , the Company has outstanding bank guarantees and standby letters of credit in aggregate of $2.7 million , consisting primarily of $1.4 million for a building lease for the TVN French Subsidiary and $0.5 million for a credit card facility, and the remainder mainly related to performance bonds issued to customers. During 2017, one of the Company’s subsidiaries entered into a $2.0 million credit facility with a foreign bank for the purpose of issuing performance guarantees. The credit facility is secured by a $2.2 million indemnity issued by the parent company. There were no amounts outstanding under this credit facility as of December 31, 2017. Indemnification The Company is obligated to indemnify its officers and its directors pursuant to its bylaws and contractual indemnity agreements. The Company also indemnifies some of its suppliers and most of its customers for specified intellectual property matters pursuant to certain contractual arrangements, subject to certain limitations. The scope of these indemnities varies, but, in some instances, includes indemnification for damages and expenses (including reasonable attorneys’ fees). There have been no amounts accrued in respect of the indemnification provisions through December 31, 2017 . Royalties The Company has licensed certain technologies from various companies. It incorporates these technologies into its own products and is required to pay royalties for such use, usually based on shipment of the related products. In addition, the Company has obtained research and development grants under various Israeli government programs that require the payment of royalties on sales of certain products resulting from such research. Royalty expenses were $5.2 million , $4.1 million and $2.9 million for the years ended December 31, 2017 , 2016 and 2015 , respectively, and they are included in product cost of revenue in the Company’s Consolidated Statements of Operations. Purchase Obligations The Company relies on a limited number of contract manufacturers and suppliers to provide manufacturing services for a substantial majority of its products. Obligations to purchase inventory and other commitments are generally expected to be fulfilled within one year. The Company had approximately $40.2 million of non-cancelable commitments to purchase inventories and other commitments as of December 31, 2017 . The Company recognized $3.8 million of net losses on firm inventory purchase commitments as of December 31, 2017 . |
Legal Proceedings
Legal Proceedings | 12 Months Ended |
Dec. 31, 2017 | |
Loss Contingency [Abstract] | |
Legal Proceedings | LEGAL PROCEEDINGS In October 2011, Avid Technology, Inc. (“Avid”) filed a complaint in the United States District Court for the District of Delaware alleging that Harmonic’s Media Grid product infringes two patents held by Avid. A jury trial on this complaint commenced on January 23, 2014 and, on February 4, 2014, the jury returned a unanimous verdict in favor of us, rejecting Avid’s infringement allegations in their entirety. In January 2015, Avid filed an appeal with respect to the jury’s verdict with the Federal Circuit. In January 2016, the Federal Circuit issued an order vacating the verdict of noninfringement and remanding the case to the trial court for a new trial on infringement. In June 2012, Avid served a subsequent complaint in the United States District Court for the District of Delaware alleging that the Company’s Spectrum product infringes one patent held by Avid. The complaint sought injunctive relief and unspecified damages. In September 2013, the U.S. Patent Trial and Appeal Board (“PTAB”) authorized an inter partes review to be instituted as to claims 1-16 of the patent asserted in this second complaint. In July 2014, the PTAB issued a decision finding claims 1-10 invalid and claims 11-16 not invalid. We filed an appeal with respect to the PTAB’s decision on claims 11-16 in September 2014, and the Federal Circuit affirmed the PTAB’s decision in April 2016. In July 2017, the court issued a scheduling order consolidating both cases and setting the trial date for November 6, 2017. On October 19, 2017, the parties agreed to settle the consolidated cases by entering into a settlement and patent portfolio cross-license agreement, and the cases were dismissed with prejudice. In connection with the agreement, the Company recorded a $6.0 million litigation settlement expense in “Selling, general and administrative expenses” in the Company’s 2017 Consolidated Statement of Operations. Of the associated $6.0 million settlement liability, $2.5 million was paid in October 2017 and the remaining $1.5 million and $2.0 million will be paid in the second quarter of 2019 and the third quarter of 2020, respectively. From time to time, the Company is involved in lawsuits as well as subject to various legal proceedings, claims, threats of litigation, and investigations in the ordinary course of business, including claims of alleged infringement of third-party patents and other intellectual property rights, commercial, employment, and other matters. The Company assesses potential liabilities in connection with each lawsuit and threatened lawsuits and accrues an estimated loss for these loss contingencies if both of the following conditions are met: information available prior to issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. While certain matters to which the Company is a party specify the damages claimed, such claims may not represent reasonably probable losses. Given the inherent uncertainties of litigation, the ultimate outcome of these matters cannot be predicted at this time, nor can the amount of possible loss or range of loss, if any, be reasonably estimated. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENT Harmonic 2018 Restructuring To better align the Company's resources and strategic goals, in the first quarter of 2018, the Company committed to a new restructuring plan (the “Harmonic 2018 Restructuring Plan”). The restructuring activities under this plan primarily include workforce reductions of the company worldwide. The estimated cost for implementing this plan is approximately $1.7 million . The restructuring activities under this plan will commence in the first quarter of 2018 and are expected to continue into the second quarter of 2018. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Selected Quarterly Financial Data | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) The following table sets forth our unaudited quarterly Consolidated Statement of Operations data for each of the eight quarters ended December 31, 2017 . In management’s opinion, the data has been prepared on the same basis as the audited Consolidated Financial Statements included in this report, and reflects all necessary adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of this data. Fiscal 2017 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter (In thousands, except per share amounts) Quarterly Data: Net revenue $ 82,943 $ 82,315 $ 92,014 $ 100,974 Gross profit (4) 40,408 33,815 47,025 48,572 Net loss (2) (5) (6) $ (24,027 ) $ (31,500 ) $ (15,583 ) $ (11,516 ) Net loss per share: Basic and diluted $ (0.30 ) $ (0.39 ) $ (0.19 ) $ (0.14 ) Shares used in per share calculations: Basic and diluted 79,810 80,590 81,445 82,014 Fiscal 2016 (1) 1st Quarter (6) 2nd Quarter 3rd Quarter 4th Quarter (3) (In thousands, except per share amounts) Quarterly Data: Net revenue $ 81,832 $ 109,571 $ 101,406 $ 113,102 Gross profit 40,654 51,040 51,363 57,693 Net loss (2) (5) (6) $ (25,180 ) $ (20,679 ) $ (16,012 ) $ (10,443 ) Net loss per share: Basic and diluted $ (0.33 ) $ (0.27 ) $ (0.21 ) $ (0.13 ) Shares used in per share calculations: Basic and diluted 76,996 77,342 78,092 78,389 (1) On February 29, 2016, the Company completed the acquisition of TVN and applied the acquisition method of accounting for the business combination. The selected quarterly financial data for the year ended December 31, 2016 of the combined entity includes 10 months of operating results of TVN beginning March 1, 2016. (2) As a result of the TVN acquisition, in 2016 and 2017, the Company incurred acquisition- and integration-related expenses of $3.0 million , $3.4 million , $5.3 million and $5.2 million , in the first through fourth quarter of 2016, respectively, and $2.2 million , $0.5 million , $0.1 million and $0.1 million in the first through fourth quarter of 2017. These costs consisted of acquisition-related costs which include outside legal, accounting and other professional services as well as integration-related costs which include incremental costs resulting from the TVN acquisition that are not expected to generate future benefits once the integration is fully consummated. These costs are expensed as incurred and the Company does not expect to incur any TVN acquisition- and integration-related expenses after 2017. (3) In 2016, as part of the TVN integration plan, the Company established the TVN VDP to enable the French employees of TVN to voluntarily terminate with certain benefits. The Company recorded a charge of $13.1 million for TVN VDP in the fourth quarter of 2016. (4) Gross margin decreased to 41.1% in the second quarter of 2017 compared to 48.7% in the first quarter of 2017, primarily due to lower service margins and higher inventory obsolescence charges for the Company’s legacy broadcast video inventory due to reduced demand, as well as higher inventory obsolescence charge for our older Cable Edge product lines. The factors negatively impacting the gross margin in the second quarter of 2017 were mostly absent in the third quarter of 2017, and together with a more favorable product mix, the gross margin increased to 51.1% in the third quarter of 2017 compared to 41.1% in the second quarter of 2017. Gross margin increased to 50.7% in the third quarter of 2016 compared to 46.6% in the second quarter of 2016 primarily due to the absence of the Cable Edge inventory obsolescence charge in the third quarter of 2016. (5) In the fourth quarter of 2016 and 2017, the Company recorded additional valuation allowances of $18.3 and $9.0 million against all of the U.S. deferred tax assets, respectively. These increases in valuation allowances were offset partially by the release of $8.4 million and $5.8 million in the fourth quarter of 2016 and 2017, respectively, of valuation allowances associated with the Company’s foreign subsidiaries, including a one-time benefit associated with the alternative minimum tax refund related to the TCJA in the fourth quarter of 2017. (6) In the first and third quarter of 2016 and the fourth quarter of 2017, the Company recorded impairment charges of $1.5 million , $1.2 million , and $0.5 million , respectively, for its investment in Vislink. (See Note 3, “Investments in Other Equity Securities,” of the notes to the Consolidated Financial Statements for additional information). |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements of Harmonic include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s fiscal quarters are based on 13-week periods, except for the fourth quarter which ends on December 31. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. These reclassifications did not have material impact on previously reported total assets, total liabilities, stockholders’ equity, results of operations or cash flows. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include all cash and highly liquid investments with maturities of three months or less at the date of purchase. The carrying amount of cash and cash equivalents approximates fair value because of the short maturity of those instruments. |
Restricted Cash and Deposits | Restricted Cash and Deposits The Company had $1.7 million and $1.8 million of total restricted cash deposits, as of December 31, 2017 and 2016 , respectively. These restricted cash deposits serve as collateral for certain bank guarantees and they are invested in bank deposits and cannot be withdrawn from the Company’s accounts without the prior written consent of the applicable secured party. In the Company’s Consolidated Balance Sheets, $0.5 million and $0.7 million of the restricted cash balances as of December 31, 2017 and 2016 , respectively, were included in “Prepaid expenses and other currents”, and the remaining restricted cash balances of $1.2 million and $1.1 million as of December 31, 2017 and 2016 , respectively, were included in “Other Long-term Assets”. |
Short-Term Investments | Short-Term Investments As of December 31, 2017 , the Company did not have any outstanding short-term investments. The short-term investments as of December 31, 2016 of $6.9 million , which consisted of commercial bonds, were sold or redeemed during 2017 and the realized gain was not material. Since these available-for-sale investments were intended to support current operations, they are presented as “Current Assets” in the Consolidated Balance Sheet |
Investments in Equity Securities | Investments in Equity Securities From time to time, the Company may acquire certain equity investments for the promotion of business and strategic objectives and these investments may be in marketable equity securities or non-marketable equity securities. The Company accounts for its investments in entities that it does not have significant influence under the cost method. Investments in equity securities are carried at fair value if the fair value of the security is readily determinable. Equity investments carried at fair value are classified as long-term investments and included in “Other long-term assets” in the Company’s Consolidated Balance Sheet. Unrealized gains and losses, net of taxes, on the long-term investments are included in the Company’s Consolidated Balance Sheet as a component of accumulated other comprehensive loss. Investments in equity securities that do not qualify for fair value accounting or equity method accounting are accounted for under the cost method. In accordance with the cost method, the Company’s initial investment is recorded at cost and the Company reviews all of its cost method investments quarterly to determine if impairment indicators exist. Cost method investments are classified as long-term investments and included in “Other long-term assets” in the Company’s Consolidated Balance Sheet. The Company’s total investment in equity securities of other privately and publicly held companies, were $3.6 million and $4.4 million , as of December 31, 2017 and December 31, 2016 , respectively. |
Concentrations of Credit Risk/Major Customers/Supplier Concentration | Major Customers/Supplier Concentration Financial instruments which subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. Cash, cash equivalents and short-term investments are invested in short-term, highly liquid, investment-grade obligations of commercial or governmental issuers, in accordance with the Company’s investment policy. The investment policy limits the amount of credit exposure to any one financial institution, commercial or governmental issuer. The Company’s accounts receivable are derived from sales to worldwide cable, satellite, telco, and broadcast and media companies. The Company generally does not require collateral from its customers, and performs ongoing credit evaluations of its customers and provides for expected losses. The Company maintains an allowance for doubtful accounts based upon the expected collectability of its accounts receivable. No customers had a balance greater than 10% of the Company’s net accounts receivable balance as of December 31, 2017 and 2016 . In the years ended December 31, 2017 and 2016 , no customer accounted for more than 10% of the Company’s net revenue. Certain of the components and subassemblies included in the Company’s products are obtained from a single source or a limited group of suppliers. Although the Company seeks to reduce dependence on those sole source and limited source suppliers, the partial or complete loss of certain of these sources could have at least a temporary adverse effect on the Company’s results of operations and damage customer relationships. |
Revenue Recognition | Revenue Recognition The Company’s principal sources of revenue are from the sale of hardware, software, hardware and software maintenance contracts, and end-to-end solutions, encompassing design, manufacture, test, integration and installation of products. The Company also derives subscription revenues, which are comprised of subscription fees from customers utilizing the Company’s cloud-based media processing solutions. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been provided, the sale price is fixed or determinable, and collectability is reasonably assured. Subscription revenue is recognized over the subscription period as the service is delivered. Revenue from the sale of hardware and software products is recognized when risk of loss and title have transferred. For most of the Company’s product sales, these criteria are met at the time the product is shipped or delivery has occurred. Revenue from distributors and system integrators is recognized on delivery of the related products, provided all other revenue recognition criteria have been met. The Company’s agreements with these distributors and system integrators have terms which are generally consistent with the standard terms and conditions for the sale of the Company’s equipment to end users, and do not provide for product rotation or pricing allowances, as are typically found in agreements with stocking distributors. The Company accrues for sales returns and other allowances based on the expected customer returns at the end of each reporting period. Deferred revenue includes billings in excess of revenue recognized and invoiced amounts remain deferred until applicable revenue recognition criteria are met. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of revenue in the Company’s Consolidated Statements of Operations. Costs associated with services are generally recognized as incurred. The Company recognizes revenue from the sale of hardware products and software bundled with hardware that is essential to the functionality of the hardware in accordance with applicable revenue recognition accounting guidance. For the sale of stand-alone software products, bundled with hardware but not essential to the functionality of the hardware, revenue is allocated between the hardware, including essential software and related elements, and the non-essential software and related elements. Revenue for the hardware and essential software elements are recognized under the relative allocation method. Revenue for the non-essential software and related elements are recognized under the residual method in accordance with software accounting guidance. Revenue associated with service and maintenance agreements is recognized on a straight-line basis over the period in which the services are performed, generally one year . Further details of these accounting policies are described below. |
Multiple Element Arrangements | Multiple Element Arrangements. The Company has revenue arrangements that include hardware and software essential to the hardware product’s functionality, and non-essential software, services and support. The Company allocates revenue to all deliverables based on their relative selling prices. The Company determines the relative selling prices by first considering vendor-specific objective evidence of fair value (“VSOE”), if it exists; otherwise third-party evidence (“TPE”) of the selling price is used. If neither VSOE nor TPE exists for a deliverable, the Company uses a best estimate of the selling price (“BESP”) for that deliverable. Once revenue is allocated to all deliverables based on their relative selling prices, revenue related to hardware elements (hardware, essential software and related services) are recognized using a relative selling price allocation and non-essential software and related services are recognized under the residual method. The Company has established VSOE for certain elements of its arrangements based on either historical stand-alone sales to third parties or stated renewal rates for maintenance. The Company has VSOE of fair value for maintenance, training and certain professional services. TPE is determined based on competitor prices for similar deliverables when sold separately. The Company is typically not able to determine TPE for competitors’ products or services. Generally, the Company’s go-to-market strategy differs from that of its competitors’ and the Company’s offerings contain a significant level of differentiation, such that the comparable pricing of products with similar functionality cannot be obtained. Furthermore, the Company is unable to reliably determine what competitor similar products’ selling prices are on a stand-alone basis. When the Company is unable to establish fair value of non-software deliverables using VSOE or TPE, the Company uses BESP in its allocation of arrangement consideration. The objective of using BESP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand-alone basis. The Company determines BESP for a product or service by considering multiple factors, including, but not limited to, pricing practices, market conditions, competitive landscape, internal costs, geographies and gross margin. The determination of BESP is made through consultation with Company’s management, taking into consideration the Company’s go-to-market strategy. |
Software | Software. Sales of stand-alone software that are not considered essential to the functionality of the hardware continue to be subject to the software revenue recognition guidance. In accordance with the software revenue recognition guidance, the Company applies the residual method to recognize revenue for the delivered elements in stand-alone software transactions. Under the residual method, the amount of revenue allocated to delivered elements equals the total arrangement consideration, less the aggregate fair value of any undelivered elements, typically maintenance, provided that VSOE of fair value exists for all undelivered elements. VSOE of fair value is based on the price charged when the element is sold separately or, in the case of maintenance, VSOE may be based on substantive renewal rates. |
Solution Sales | Solution Sales. Solution sales for the design, manufacture, test, integration and installation of products, including equipment acquired from third parties to be integrated with Harmonic’s products, that are customized to meet the customer’s specifications are accounted for in accordance with applicable guidance on accounting for performance of construction/production contracts. Accordingly, for each arrangement that the Company enters into that includes both products and services, the Company performs a detailed evaluation to determine whether the arrangement should be accounted for under guidance for construction/production contracts or, alternatively, for arrangements that do not involve significant production, modification or customization, under other applicable accounting guidance. The Company has a long-standing history of entering into contractual arrangements to deliver the solution sales described. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. The cost of inventories is comprised of material, labor and manufacturing overhead. The Company’s manufacturing overhead standards for product costs are calculated assuming full absorption of forecasted spending over projected volumes. The Company establishes provisions for excess and obsolete inventories to reduce such inventories to their estimated net realizable value after evaluation of historical sales, future demand and market conditions, expected product life cycles and current inventory levels. Such provisions are charged to cost of revenue in the Company’s Consolidated Statements of Operations. |
Capitalized Software Development Costs | Capitalized Software Development Costs External-use software. Research and development costs are generally charged to expense as incurred. The Company has not capitalized any such development costs because the costs incurred between the attainment of technological feasibility for the related software product through the date when the product is available for general release to customers has been insignificant. Internal-use software. The Company capitalizes costs associated with internally developed and/or purchased software systems for internal use that have reached the application development stage. Capitalized costs include external direct costs of materials and services utilized in developing or obtaining internal-use software and payroll and payroll-related expenses for employees who are directly associated with and devote time to the internal-use software project. Capitalization of such costs begins when the preliminary project stage is complete and ceases no later than the point at which the project is substantially complete and ready for its intended purpose. These capitalized costs are amortized on a straight-line basis, generally three years . |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are generally, five years for furniture and fixtures, three years for software and four years for machinery and equipment. Depreciation and amortization for leasehold improvements are computed using the shorter of the remaining useful lives of the assets, up to 10 years, or the lease term of the respective assets |
Acquisitions | Business Combination The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of assets acquired and the liabilities assumed. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, intangibles and other asset lives, among other items. Fair value is defined as the price that would be received in a sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Market participants are assumed to be buyers and sellers in the principal (most advantageous) market for the asset or liability. Additionally, fair value measurements for an asset assume the highest and best use of that asset by market participants. As a result, the Company may have been required to value the acquired assets at fair value measurements that do not reflect its intended use of those assets. Use of different estimates and judgments could yield different results. Any excess of the purchase price over the fair value of the net assets acquired is recognized as goodwill. |
Goodwill | Goodwill As of December 31, 2017 , the Company had goodwill of $242.8 million which represents the difference between the purchase price and the estimated fair value of the identifiable assets acquired and liabilities assumed. The Company tests for goodwill impairment at the reporting unit level on an annual basis in the fourth quarter of each of its fiscal years, and at any other time at which events occur or circumstances indicate that the carrying amount of goodwill may exceed its fair value. The Company uses a two-step process to determine the amount of goodwill impairment. The first step requires comparing the fair value of the reporting unit to its net book value, including goodwill. A potential impairment exists if the fair value of the reporting unit is lower than its net book value. The second step of the process, which is performed only if a potential impairment exists, involves determining the difference between the fair value of the reporting unit’s net assets, other than goodwill, and the fair value of the reporting unit. If this difference is less than the net book value of goodwill, an impairment exists and is recorded. The Company has two reporting units, which are the same as its operating segments. Goodwill is assigned to the reporting units using the relative fair values of the reporting units and the fair values of the reporting units were determined utilizing a blend of the income approach and the market approach. There was no impairment of goodwill resulting from the Company’s fiscal 2017 annual impairment testing in the fourth quarter of 2017 . (See Note 7, “Goodwill and Identified Intangible Assets,” for additional information) |
Long-lived Assets | Long-lived Assets Long-lived assets represent property and equipment and purchased intangible assets. Purchased intangible assets from business combinations and asset acquisitions include customer contracts, trademarks and trade names, and maintenance agreements and related relationships, the amortization of which is charged to general and administrative expenses, and core technology and developed technology, the amortization of which is charged to cost of revenue. The Company evaluates the recoverability of intangible assets and other long-lived assets when indicators of impairment are present. When impairment indicators are present, the Company evaluates the recoverability of intangible assets and other long-lived assets on the basis of undiscounted cash flows expected to result from the use of each asset group and its eventual disposition. If the undiscounted expected future cash flows are less than the carrying amount of the asset, an impairment loss is recognized in order to write down the carrying value of the asset to its estimated fair market value. There were no impairment charges for long-lived assets in the years ended December 31, 2017 , 2016 and 2015 . |
Foreign Currency | Foreign Currency The functional currency of the Company’s Israeli, Cayman and Swiss operations is the U.S. dollar. All other foreign subsidiaries use the respective local currency as the functional currency. When the local currency is the functional currency, gains and losses from translation of these foreign currency financial statements into U.S. dollars are recorded as a separate component of other comprehensive loss in stockholders’ equity. The Company’s foreign currency exposure is also related to its net position of monetary assets and monetary liabilities held by its subsidiaries in their nonfunctional currencies. These monetary assets and monetary liabilities are being remeasured into the functional currencies of the subsidiaries using exchange rates prevailing on the balance sheet date. Such remeasurement gains and losses are included in other expense, net in the Company’s Consolidated Statements of Operations. During the years ended December 31, 2017 , 2016 and 2015 , the Company recorded remeasurement losses of $2.2 million , $0.2 million and $0.5 million , respectively |
Derivative Instruments | Derivative Instruments The Company enters into derivative instruments, primarily foreign currency forward contracts, to minimize the short-term impact of foreign currency exchange rate fluctuations on certain foreign currency denominated assets and liabilities as well as certain foreign currencies denominated expenses. The Company does not enter into derivative instruments for trading purposes and these derivatives generally have maturities within twelve months. The derivative instruments are recorded at fair value in prepaid expenses and other current assets or accrued and other current liabilities in the Company’s Consolidated Balance Sheet. For derivative instruments designated and qualifying as cash flow hedges of forecasted foreign currency denominated transactions expected to occur within twelve months, the effective portion of the gain or loss on these hedges is reported as a component of “Accumulated other comprehensive loss” in stockholders’ equity, and is reclassified into earnings when the hedged transaction affects earnings. If the transaction being hedged fails to occur, or if a portion of any derivative is (or becomes) ineffective, the gain or loss on the associated financial instrument is recorded immediately in earnings. For derivative instruments used to hedge existing foreign currency denominated assets or liabilities, the gains or losses on these hedges are recorded immediately in earnings to offset the changes in the fair value of the assets or liabilities being hedged. The Company did not enter into any cash flow hedges during the year ended December 31, 2017 . Derivatives Not Designated as Hedging Instruments (Balance Sheet Hedges) The Company’s balance sheet hedges consist of foreign currency forward contracts which mature generally within three months, These forward contracts are carried at fair value and they are used to minimize the short-term impact of foreign currency exchange rate fluctuation on cash and certain trade and inter-company receivables and payables. Changes in the fair value of these foreign currency forward contracts are recognized in “Other expense, net” in the Consolidated Statement of Operations and are largely offset by the changes in the fair value of the assets or liabilities being hedged. |
Research and Development | Research and Development Research and development (“R&D”) costs are expensed as incurred and consists primarily of employee salaries and related expenses, contractors and outside consultants, supplies and materials, equipment depreciation and facilities costs, all associated with the design and development of new products and enhancements of existing products. R&D expense was $96.0 million , $98.4 million and $87.5 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. R&D expense was net of $6.0 million of reimbursements from one of our large customers in each of the years ended December 31, 2017 and 2016 . The Company’s TVN French Subsidiary participates in the French Crédit d’Impôt Recherche (“CIR”) program which allows companies to monetize eligible research expenses. The R&D tax credits receivable from the French government for spending on innovative R&D under the CIR program is recorded as an offset to R&D expenses. In the years ended December 31, 2017 and 2016 , the R&D expenses were net of $5.9 million and $6.1 million of R&D tax credits, respectively. There were no such reimbursement from customers or R&D tax credits in the year ended December 31, 2015. |
Restructuring and Related Charges | Restructuring and Related Charges The Company’s restructuring charges consist primarily of employee severance, one-time termination benefits related to the reduction of its workforce, lease exit costs, and other costs. Liabilities for costs associated with a restructuring activity are recognized when the liability is incurred and are measured at fair value. One-time termination benefits are expensed at the date the entity notifies the employee, unless the employee must provide future service, in which case the benefits are expensed ratably over the future service period. Termination benefits are calculated based on regional benefit practices and local statutory requirements. Costs to terminate a lease before the end of its term are recognized when the entity terminates the contract in accordance with the contract terms. The Company determines the excess facilities accrual based on expected cash payments, under the applicable facility lease, reduced by any estimated sublease rental income for such facility. (S ee Note 10, “Restructuring and related Charges” for additional information) |
Warranty | Warranty The Company accrues for estimated warranty costs at the time of revenue recognition and records such accrued liabilities as part of cost of revenue. Management periodically reviews its warranty liability and adjusts the accrued liability based on the terms of warranties provided to customers, historical and anticipated warranty claims experience, and estimates of the timing and cost of warranty claims The Company accrues for estimated warranty costs at the time of product shipment. Management periodically reviews the estimated warranty liability and records adjustments based on the terms of warranties provided to customers, historical and anticipated warranty claims experience, and estimates of the timing and cost of warranty claims. |
Advertising Expenses | Advertising Expenses All advertising costs are expensed as incurred and included in “Selling, general and administrative expenses” in the Company’s Consolidated Statements of Operations. Advertising expense was $0.7 million , $1.4 million and $1.4 million for the years ended December 31, 2017 , 2016 and 2015 , respectively |
Stock-based Compensation Expense | Stock-based Compensation Expense The Company measures and recognizes compensation expense for all stock-based compensation awards made to employees and non-employee directors, including stock options, restricted stock units (“RSUs”) and awards related to the Company’s Employee Stock Purchase Plan (“ESPP”), based upon the grant-date fair value of those awards. Prior to January 1, 2017, stock-based compensation expense was recorded net of estimated forfeitures over the requisite service period and, accordingly, was recorded for only those stock-based awards that the Company expected to vest. Upon the adoption of the Accounting Standard Update No. 2016-09, Compensation - Stock Compensation (Topic 718), issued by the Financial Accounting Standards Board. The Company changed its accounting policy to account for forfeitures as they occur. The change was applied on a modified retrospective approach with a cumulative effect adjustment of $69,000 to retained earnings as of January 1, 2017 (which increased the accumulated deficit). The fair value of the Company’s stock options and ESPP is estimated at grant date using the Black-Scholes option pricing model. The fair value of the Company’s RSUs is calculated based on the fair market value of the Company’s stock at the grant date. The fair value of the Company’s market-based RSUs is estimated using the Monte-Carlo valuation model with market vesting conditions. The Company recognizes the stock-based compensation expense for performance-based RSUs (“PRSUs”) based on the probability of achieving certain performance criteria, as defined in the PRSU agreements. The Company estimates the number of PRSUs ultimately expected to vest and recognizes expense using the graded vesting attribution method over the requisite service period. Changes in the estimates related to probability of achieving certain performance criteria and number of PRSUs expected to vest could significantly affect the stock-based compensation expense from one period to the next Valuation Assumptions The Company estimates the fair value of employee stock options and stock purchase rights under the ESPP using a Black-Scholes option valuation model. The value of the stock purchase rights under the ESPP consists of: (1) the 15% discount on the purchase of the stock; (2) 85% of the fair value of the call option; and (3) 15% of the fair value of the put option. The call option and put option were valued using the Black-Scholes option pricing model. At the date of grant, the Company estimated the fair value of each stock option grant and stock purchase right granted under the ESPP using the following weighted average assumptions: Employee Stock Options ESPP 2017 2016 2015 2017 2016 2015 Expected term (in years) 4.30 4.30 4.65 0.50 0.50 0.50 Volatility 42 % 36 % 38 % 48 % 70 % 34 % Risk-free interest rate 1.8 % 1.4 % 1.5 % 1.2 % 0.6 % 0.3 % Expected dividends 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % The expected term of the employee stock option represents the weighted-average period that the stock options are expected to remain outstanding. The computation of expected term was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The expected term of the stock purchase right under ESPP represents the period of time from the beginning of the offering period to the purchase date. The Company uses its historical volatility for a period equivalent to the expected term of the options to estimate the expected volatility. The risk-free interest rate that the Company uses in the Black-Scholes option valuation model is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term. The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and, therefore, used an expected dividend yield of zero in the valuation model. Prior to January 1, 2017, stock-based compensation expense was recorded net of estimated forfeitures in the Company’s Consolidated Statements of Operations and, accordingly, was recorded for only those stock-based awards that the Company expected to vest. Upon the adoption of the accounting standard update (ASU 2016-09, “Improvements to Employee Share-Based payments”) issued by FASB, effective January 1, 2017, the Company changed its accounting policy to account for forfeitures as they occur. The change was applied on a modified retrospective approach with a cumulative effect adjustment of $69,000 to retained earnings as of January 1, 2017 (which increased the accumulated deficit). |
Pension Plan | Pension Plan Under French law, the Company’s subsidiaries in France, including the acquired TVN French Subsidiary, is obligated to provide for a defined benefit plan to its employees upon their retirement from the Company. The Company’s defined benefit pension plan in France is unfunded. The Company records annual amounts relating to the pension plans based on calculations which include various actuarial assumptions including employees’ age and period of service with the company; projected mortality rates, mobility rates and increases in salaries; and a discount rate. The Company reviews its actuarial assumptions on an annual basis as of December 31 (or more frequently if a significant event requiring remeasurement occurs) and modifies the assumptions based on current rates and trends when it is appropriate to do so. The Company believes that the assumptions utilized in recording its obligations under its pension plan are reasonable based on its experience, market conditions and input from its actuaries. The Company accounts for the actuarial gains (losses) in accordance with ASC 715, “Compensation - Retirement Benefits”. If the net accumulated gain or loss exceeds 10% of the projected plan benefit obligation a portion of the net gain or loss is amortized and included in expense for the following year based upon the average remaining service period of active plan participants, unless the Company’s policy is to recognize all actuarial gains (losses) when they occur. The Company elected to defer actuarial gains (losses) in accumulated other comprehensive loss. As of December 31, 2017, the Company did not meet the 10% requirement, and therefore no amortization of 2017 actuarial gain would be recorded in 2018. S ee Note 12, “Employee Benefit Plans and Stock-based Compensation-French Retirement Benefit Plan,” for additional information |
Income Taxes | Income Taxes In preparing the Company’s financial statements, the Company estimates the income taxes for each of the jurisdictions in which the Company operates. This involves estimating the Company’s actual current tax exposures and assessing temporary and permanent differences resulting from differing treatment of items, such as reserves and accruals, for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the Company’s Consolidated Balance Sheet. The Company’s income tax policy is to record the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the Company’s accompanying Consolidated Balance Sheets, as well as operating loss and tax credit carryforwards. The Company follows the guidelines set forth in the applicable accounting guidance regarding the recoverability of any tax assets recorded on the Consolidated Balance Sheet and provides any necessary allowances as required. Determining necessary allowances requires the Company to make assessments about the timing of future events, including the probability of expected future taxable income and available tax planning opportunities. A history of operating losses in recent years has led to uncertainty with respect to our ability to realize certain of our net deferred tax assets, and as a result we applied full valuation allowance against our U.S. net deferred tax assets as of December 31, 2017. In the event that actual results differ from these estimates or the Company adjusts these estimates in future periods, the Company’s operating results and financial position could be materially affected. The Company is subject to examination of its income tax returns by various tax authorities on a periodic basis. The Company regularly assesses the likelihood of adverse outcomes resulting from such examinations to determine the adequacy of its provision for income taxes. The Company has applied the provisions of the applicable accounting guidance on accounting for uncertainty in income taxes, which requires application of a more-likely-than-not threshold to the recognition and de-recognition of uncertain tax positions. If the recognition threshold is met, the applicable accounting guidance permits the Company to recognize a tax benefit measured at the largest amount of tax benefit that, in the Company’s judgment, is more than 50% likely to be realized upon settlement. It further requires that a change in judgment related to the expected ultimate resolution of uncertain tax positions be recognized in earnings in the period of such change. The Company files annual income tax returns in multiple taxing jurisdictions around the world. A number of years may elapse before an uncertain tax position is audited and finally resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company believes that its reserves for income taxes reflect the most likely outcome. The Company adjusts these reserves and penalties, as well as the related interest, in light of changing facts and circumstances. Changes in the Company’s assessment of its uncertain tax positions or settlement of any particular position could materially and adversely impact the Company’s income tax rate, operating results, financial position and cash flows The Company recognizes interest and penalties related to unrecognized tax positions in income tax expenses on the Consolidated Statements of Operations. Management regularly assesses the ability to realize deferred tax assets recorded based upon the weight of available evidence, including such factors as recent earnings history and expected future taxable income on a jurisdiction by jurisdiction basis. In the event that the Company changes its determination as to the amount of realizable deferred tax assets, the Company will adjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. The Company has not provided U.S. federal and California state income taxes, as well as foreign withholding taxes, on approximately $10.5 million of cumulative undistributed earnings for certain non-U.S. subsidiaries, because such earnings are intended to be indefinitely reinvested. Determination of the amount of unrecognized deferred tax liability for temporary differences related to investment in these non-U.S. subsidiaries that are essentially permanent in duration is not practicable. The Company applies the provisions of the applicable accounting guidance regarding accounting for uncertainty in income taxes, which requires application of a more-likely-than-not threshold to the recognition and derecognition of uncertain tax positions. If the recognition threshold is met, the applicable accounting guidance permits the recognition of a tax benefit measured at the largest amount of such tax benefit that, in our judgment, is more than fifty percent likely to be realized upon settlement. It further requires that a change in judgment related to the expected ultimate resolution of uncertain tax positions be recognized in earnings in the period in which such determination is made. |
Sales Taxes | Sales Taxes The Company accounts for sales taxes imposed on its goods and services and collected from customers on a net basis in the Consolidated Statements of Operations |
Segment Reporting | Segment Reporting Operating segments are defined as components of an enterprise that engage in business activities for which separate financial information is available and is evaluated by the Chief Operating Decision Maker (“CODM”), which for the Company is its Chief Executive Officer, in deciding how to allocate resources and assess performance. The Company has two operating segments: Video and Cable Edge. Segment Information Operating segments are defined as components of an enterprise that engage in business activities for which separate financial information is available and evaluated by the Company’s CODM, which for the Company is its Chief Executive Officer, in deciding how to allocate resources and assess performance. Based on our internal reporting structure, the Company consists of two operating segments: Video and Cable Edge. The operating segments were determined based on the nature of the products offered. The Video segment sells video processing and production and playout solutions and services worldwide to broadcast and media companies, streaming new media companies, cable operators, and satellite and telecommunications (telco) Pay-TV service providers. The Cable Edge segment sells CableOS, cable edge solutions and related services to cable operators globally. The Company does not allocate amortization of intangibles, stock-based compensation, restructuring and related charges, TVN acquisition- and integration-related costs, and certain other non-recurring charges to the operating income (loss) for each segment because management does not include this information in the measurement of the performance of the operating segments. A measure of assets by segment is not applicable as segment assets are not included in the discrete financial information provided to the CODM. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) includes net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes cumulative translation adjustments, unrealized foreign exchange gains and losses on intercompany long-term loans, unrealized gains and losses on certain foreign currency forward contracts that qualify as cash flow hedges and available-for-sale securities, as well as actuarial gains and losses on pension plan. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements New Standards to be Implemented In May 2014, Financial Accounting Standards Board (“FASB”) issued a new Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, as amended, which will supersede nearly all existing revenue recognition guidance. Under ASU 2014-09, an entity is required to recognize revenue upon transfer of promised goods or services to customers in an amount that reflects the expected consideration received in exchange for those goods or services. ASU No. 2014-09 defines a five-step process in order to achieve this core principle, which may require the use of judgment and estimates, and also requires expanded qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including significant judgments and estimates used. The FASB has issued several amendments to the new standard, including clarification on accounting for licenses of intellectual property and identifying performance obligations. The amendments include ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606)-Principal versus Agent Considerations, which was issued in March 2016, and clarifies the implementation guidance for principal versus agent considerations in ASU 2014-09, and ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606)-Identifying Performance Obligations and Licensing, which was issued in April 2016, and amends the guidance in ASU No. 2014-09 related to identifying performance obligations and accounting for licenses of intellectual property. The new standard permits adoption either by using (i) a full retrospective approach for all periods presented in the period of adoption or (ii) a modified retrospective approach with the cumulative effect of initially applying the new standard recognized at the date of initial application and providing certain additional disclosures. The new standard is effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted for annual reporting periods beginning after December 15, 2016. The Company will adopt the new standard effective January 1, 2018. The Company plans to adopt using the modified retrospective approach. The Company currently believes that there will be changes to the timing of recognition of software licenses with undelivered features and professional services revenue related to service contracts with acceptance terms. Under current industry-specific software revenue recognition guidance, the Company has historically concluded that it did not have vendor-specific objective evidence (“VSOE”) of fair value of the undelivered features relating to delivered software licenses, and accordingly, it has deferred entire revenue for such software licenses until the delivery of features. Professional services included in arrangements with acceptances have also been recognized on receipt of acceptance. The new standard, which does not retain the concept of VSOE, requires an evaluation of whether the undelivered features are distinct performance obligations and, therefore, should be separately recognized when delivered compared to the timing of delivery of software licenses. Professional services will generally be recorded as services are provided. As a result, the timing of when revenue is recognized is expected to be earlier for future features and professional services under the new standard. The revenue allocated to hardware and services (including professional services) will also likely change due to the change in contingent revenue rules under the new standard. The Company has substantially completed its evaluation of the impact of the new standard on its accounting policies, processes, and system requirements. However, due to the modified retrospective method’s requirement to quantify the impact of the changes on open contracts as of December 31, 2017, and the implementation of revenue system changes and the volume of the required data analysis, the Company is finalizing its assessments, including the transition adjustment for open contracts and expects to complete that before the Q1, 2018 10Q filing. As part of the Company’s evaluation, it has also considered the impact of the guidance in Accounting Standards Codification (“ASC”) 340-40, Other Assets and Deferred Costs; Contracts with Customers, and the interpretations of the FASB Transition Resource Group for Revenue Recognition (“TRG”) from their November 7, 2016 meeting with respect to capitalization and amortization of incremental costs of obtaining a contract. The Company does not expect this standard to have a significant impact on the accounting for costs to obtain the contract. Under the Company’s current accounting policy, it expenses the commission costs as incurred. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments (Topic 825): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires equity investments to be measured at fair value with changes in fair value recognized in net income and simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. This ASU will be effective for the Company beginning in the first quarter of fiscal 2018. The Company only has one available-for-sale equity investment, Vislink plc, which was fully written off as of December 31, 2017 and the Company only has one cost method equity investment, EDC, which will be subject to this new ASU. The adoption of this new ASU is not expected to have a material impact on the Company’s consolidated financial statements. (See note 3, “Investments in Other Equity Securities,” for more information on Vislink and EDC). In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842), to amend the existing accounting standard for lease accounting. Under this guidance, lessees and lessors should apply a “right-of-use” model in accounting for all leases (including subleases) and eliminate the concept of operating leases and off-balance sheet leases. This new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. This new ASU will be effective for the Company beginning in the first quarter of fiscal 2019 and early adoption is permitted. The Company is currently evaluating the methods and impact of adopting the new ASU on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets and certain other instruments. For trade receivables and other instruments, the Company will be required to use a new forward-looking “expected loss” model. Additionally, credit losses on available-for-sale debt securities should be recorded through an allowance for credit losses limited to the amount by which fair value is below amortized cost. This new ASU will be effective for the Company beginning in the first quarter of fiscal 2020 and early adoption is permitted. The Company is currently evaluating the impact of adopting this new ASU on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires entities to present the aggregate changes in cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, the statement of cash flows will be required to present restricted cash and restricted cash equivalents as a part of the beginning and ending balances of cash and cash equivalents. The new ASU will be effective for the Company beginning in the first quarter of fiscal 2018 on a retrospective basis. The Company’s total restricted cash balances was $1.7 million , $1.8 million and $1.1 million , as of December 31, 2017, 2016, and 2015, respectively, and accordingly, these balances will be presented as a part of the beginning and ending balances of cash and cash equivalents for the preparation of the Company’s Consolidated Statements of Cash Flows for the corresponding periods. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This new ASU removes Step 2 of the goodwill impairment test and requires the assessment of fair value of individual assets and liabilities of a reporting unit to measure goodwill impairments. Goodwill impairment will then be the amount by which a reporting unit's carrying value exceeds its fair value. This new ASU will be effective for the Company beginning in the first quarter of fiscal 2020 on a prospective basis, and early adoption is permitted. The Company is currently evaluating the impact of adopting this new ASU on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The objective of ASU 2017-01 is to clarify the definition of a business in order to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. ASU 2017-01 is effective for the Company beginning in the first quarter of fiscal 2018. This new ASU is not expected to have a material impact on the Company’s consolidated financial statements. Standards Implemented In March 2016, the FASB issued ASU No. 2016-07, Investments- Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting. This guidance eliminates the requirement to retroactively adopt the equity method of accounting when an investment qualifies for using the equity method due to an increase in the level of ownership interest or degree of influence. In that situation, the ASU requires an investor to apply the equity method only on a go-forward basis. Under this new ASU, an investor that has an available-for-sale security that subsequently qualifies for the equity method will recognize in net income the unrealized holding gains or losses in accumulated other comprehensive income related to that security when it begins applying the equity method. The Company adopted this new ASU beginning in the first quarter of fiscal 2017 and it did not have any impact to the Company’s 2017 consolidated financial statements because none of its equity investments qualify for equity method of accounting during 2017. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, for the accounting of share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The new standard eliminated the requirement to report excess tax benefits and certain tax deficiencies related to share-based payment transactions as additional paid-in capital. It also removes the requirement to delay recognition of a windfall tax benefit until it reduces current taxes payable. Under the new guidance, the benefit will be recorded when it arises, subject to normal valuation allowance considerations. The Company adopted this new ASU beginning in the first quarter of fiscal 2017 using a modified-retrospective transition method and recorded a cumulative effect of $4.6 million of additional gross deferred tax asset associated with shared-based payment and an offsetting valuation allowance of the same amount, therefore resulting in no net impact to the Company’s beginning retained earnings. Prior to January 1, 2017, stock-based compensation expense was recorded net of estimated forfeitures in the Company’s Consolidated Statements of Operations and, accordingly, was recorded for only those stock-based awards that the Company expected to vest. Upon the adoption of this ASU, effective January 1, 2017, the Company changed its accounting policy to account for forfeitures as they occur. The change was applied on a modified retrospective approach with a cumulative effect adjustment of $69,000 to retained earnings as of January 1, 2017 (which increased the accumulated deficit). The implementation of this ASU has no impact to the Company’s Consolidated Statement of Cash Flows because the Company does not have any excess tax benefits from share-based compensation because its tax provision is primarily under full valuation allowance. In addition, the Company has historically been reporting excess tax benefits as an operating activity in the Company’s Consolidated Statement of Cash Flows, therefore, no prior periods were recast as a result of this change in accounting policy. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (topic 740): Intra-Entity Transfers of Assets Other Than Inventory, which requires companies to recognize the income tax consequences of all intra-entity sales of assets other than inventory when they occur. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The Company early adopted this ASU during the first quarter of fiscal 2017 on a modified retrospective approach and recorded a cumulative-effect adjustment of $1.4 million to the retained earnings as of January 1, 2017 (which reduced the accumulated deficit). Correspondingly, in the first quarter of fiscal 2017, the Company recognized an additional $1.1 million of net deferred tax assets, after netting with $2.1 million of valuation allowance, and write off the remaining $0.3 million of unamortized tax expenses deferred under the previous guidance to provision for income taxes in the first quarter of fiscal 2017. |
Derivative and Hedging Activi30
Derivative and Hedging Activities Derivative and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative [Line Items] | |
Schedule of Derivatives Instruments Gain and Losses Reported in Statement of Operations | The locations and amounts of designated and non-designated derivative instruments’ gains and losses reported in the Company’s A OCI and Consolidated Statements of Operations are as follows (in thousands): Year ended December 31, Financial Statement Location 2017 2016 2015 Derivatives not designated as hedging instruments: Gains recognized in income Other income (expense), net $ 155 $ 343 $ 344 Derivatives designated as hedging instruments (1) : Gains (losses) in AOCI on derivatives (effective portion) AOCI $ — $ 202 $ (133 ) Gains (losses) reclassified from AOCI into income (effective portion) Cost of Revenue $ — $ (6 ) $ 59 Operating Expense — (38 ) 365 Total $ — $ (44 ) $ 424 (Losses) recognized in income on derivatives (ineffectiveness portion and amount excluded from effectiveness testing) Other income (expense), net $ — $ (63 ) $ (87 ) |
Schedule of Notional Amounts of Outstanding Derivative Positions | The U.S. dollar equivalents of all outstanding notional amounts of foreign currency forward contracts are summarized as follows (in thousands): December 31, 2017 2016 Derivatives not designated as hedging instruments: Purchase $ 12,875 $ 4,056 Sell $ 1,509 $ 11,157 |
Schedule of Foreign Exchange Contracts - Balance Sheet | The locations and fair value amounts of the Company’s derivative instruments reported in its Consolidated Balance Sheets are as follows (in thousands): Asset Derivatives Liability Derivatives Balance Sheet Location December 31, 2017 December 31, 2016 Balance Sheet Location December 31, 2017 December 31, 2016 Derivatives not designated as hedging instruments: Foreign currency contracts Prepaid expenses and other current assets $ 33 $ 54 Accrued and other current Liabilities $ 4 $ 40 $ 33 $ 54 $ 4 $ 40 |
Offsetting of Derivative Assets and Liabilities | As of December 31, 2017 , information related to the offsetting arrangements was as follows (in thousands): Gross Amounts of Derivatives Not Offset in the Consolidated Balance Sheets Gross Amounts of Derivatives Gross Amounts of Derivatives Offset in the Consolidated Balance Sheets Net Amounts of Derivatives Presented in the Consolidated Balance Sheets Financial Instrument Cash Collateral Pledged Net Amount Derivative Assets $ 33 $ — $ 33 $ (4 ) $ — $ 29 Derivative Liabilities $ 4 $ — $ 4 $ (4 ) $ — $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value Based on Three-Tier Fair Value Hierarchy | The following tables provide the fair value measurement amounts for other financial assets recorded in the Company’s Consolidated Balance Sheets based on the three-tier fair value hierarchy: Level 1 Level 2 Level 3 (1) Total As of December 31, 2017 Cash equivalents Money market funds $ 22 $ — $ — $ 22 Prepaids and other current assets Derivative assets — 33 — 33 Total assets measured and recorded at fair value $ 22 $ 33 $ — $ 55 Accrued and other current liabilities Derivative liabilities $ — $ 4 $ — $ 4 Total liabilities measured and recorded at fair value $ — $ 4 $ — $ 4 (1) The Company’s liability for the TVN VDP at December 31, 2017 was $5.1 million . This amount is not included in the table above because its fair value at inception, based on Level 3 inputs, was determined during the fourth quarter of fiscal 2016. Subsequently there is no recurring fair value remeasurement for this liability based on the applicable accounting guidance. Level 1 Level 2 Level 3 (1) Total As of December 31, 2016 Cash equivalents Money market funds $ 8,301 $ — $ — $ 8,301 Short-term investments Corporate bonds — 6,923 — 6,923 Prepaids and other current assets Derivative assets — 54 — 54 Other assets Long-term investment 809 — — 809 Total assets measured and recorded at fair value $ 9,110 $ 6,977 $ — $ 16,087 Accrued and other current liabilities Derivative liabilities $ — $ 40 $ — $ 40 Accrued TVN VDP, current portion — — 6,597 6,597 Other non-current liabilities Accrued TVN VDP, long-term portion — — 3,053 3,053 Total liabilities measured and recorded at fair value $ — $ 40 $ 9,650 $ 9,690 (1) The Company’s liability for the TVN VDP is classified within Level 3 because discount rates which are unobservable in the market were being used to measure the fair value of this liability during the fourth quarter of fiscal 2016. |
Business Acquisition (Tables)
Business Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Assets: Cash and cash equivalents $ 6,843 Accounts receivable, net 14,933 Inventories 3,462 Prepaid expenses and other current assets 2,412 Property and equipment, net 9,942 French R&D tax credit receivables (1) 26,421 Other long-term assets 2,134 Total assets $ 66,147 Liabilities: Other debts and capital lease obligations, current 8,362 Accounts payable 12,494 Deferred revenue 2,504 Accrued and other current liabilities 18,365 Other debts and capital lease obligations, long-term 16,087 Other non-current liabilities 6,467 Deferred tax liabilities 2,126 Total liabilities $ 66,405 Goodwill 41,670 Intangibles 41,100 Total purchase consideration $ 82,512 (1) See Note 9, “Certain Balance Sheet Components-Prepaid expenses and other current assets,” for more information on French R&D tax credit receivables. The following table presents details of the intangible assets acquired through this business combination (in thousands, except years): Estimated Useful Life Fair Value Backlog 6 months $ 3,600 Developed technology 4 years 21,700 Customer relationships 5 years 15,200 Trade name 4 years 600 $ 41,100 |
Business combination acquisition and integration cost | Acquisition-and integration-related expenses for the TVN acquisition are summarized in the table below (in thousands): Acquisition-related Integration-related (1) Year ended December 31, 2016 Year ended December 31, 2017 (unaudited) Year ended December 31, 2016 (unaudited) Product cost of revenue $ — $ 342 $ 1,049 Research and development — 7 974 Selling, general and administrative 3,855 2,469 11,058 Total acquisition- and integration-related expenses $ 3,855 $ 2,818 $ 13,081 |
Goodwill and Identified Intan33
Goodwill and Identified Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | (in thousands): Video Cable Edge Total Balance as of December 31, 2015 $ 136,904 $ 60,877 $ 197,781 Goodwill from TVN acquisition (1) 41,670 — 41,670 Foreign currency translation adjustment (2,055 ) (117 ) (2,172 ) Balance as of December 31, 2016 $ 176,519 $ 60,760 $ 237,279 Foreign currency translation adjustment 5,493 55 5,548 Balance as of December 31, 2017 $ 182,012 $ 60,815 $ 242,827 |
Summary of Identified Intangible Assets | The table below is a summary of the Company’s identified intangible assets (in thousands): December 31, 2017 December 31, 2016 Weighted Average Remaining Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed core technology 2.2 $ 31,707 $ (20,396 ) $ 11,311 $ 31,707 $ (15,216 ) $ 16,491 Customer relationships/contracts 3.2 44,819 (35,205 ) 9,614 44,384 (32,098 ) 12,286 Trademarks and tradenames 2.2 654 (300 ) 354 573 (119 ) 454 Maintenance agreements and related relationships N/A 5,500 (5,500 ) — 5,500 (5,500 ) — Order Backlog N/A 3,177 (3,177 ) — 3,011 (3,011 ) — Total identifiable intangibles $ 85,857 $ (64,578 ) $ 21,279 $ 85,175 $ (55,944 ) $ 29,231 |
Purchased Intangibles Amortization Expense Allocation | Amortization expense for the identifiable intangible assets was allocated as follows (in thousands): Year Ended December 31, 2017 2016 2015 Included in cost of revenue $ 5,180 $ 4,434 $ 719 Included in operating expenses 3,142 10,402 5,783 Total amortization expense $ 8,322 $ 14,836 $ 6,502 |
Schedule of Finite-Lived Intangible Assets, Estimated Future Amortization Expense | The estimated future amortization expense of identifiable intangible assets with definite lives as of December 31, 2017 is as follows (in thousands): Cost of Revenue Operating Expenses Total Year ended December 31, 2018 $ 5,180 $ 3,199 $ 8,379 2019 5,180 3,199 8,379 2020 951 3,063 4,014 2021 — 507 507 Total future amortization expense $ 11,311 $ 9,968 $ 21,279 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Accounts Receivable, Net of Allowances | Accounts receivable, net of allowances, consisted of the following (in thousands): December 31, 2017 2016 Accounts receivable, net: Accounts receivable $ 74,475 $ 91,596 Less: allowance for doubtful accounts and sales returns (4,631 ) (4,831 ) Total $ 69,844 $ 86,765 |
Summary of Activity in Allowances for Doubtful Accounts, Returns and Discounts | The following table is a summary of activities in allowances for doubtful accounts and sales returns (in thousands): Balance at Beginning of Period Charges to Revenue Charges (Credits) to Expense Additions to (Deductions from) Reserves Balance at End of Period Year ended December 31, 2017 $ 4,831 $ 4,030 $ 881 $ (5,111 ) $ 4,631 2016 $ 4,340 $ 1,488 $ 1,100 $ (2,097 ) $ 4,831 2015 $ 7,057 $ 1,826 $ 208 $ (4,751 ) $ 4,340 |
Certain Balance Sheet Compone35
Certain Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Prepaid Expenses and Other Current Assets | The following tables provide details of selected balance sheet components (in thousands): December 31, 2017 2016 Prepaid expenses and other current assets: French R&D tax credits receivables (1) 6,609 5,895 Deferred cost of revenue 4,440 6,856 Prepaid maintenance, royalty, rent, property taxes and value added tax 3,867 5,526 Restricted cash (2) 530 731 Other 3,485 7,311 Total $ 18,931 $ 26,319 (1) The Company’s acquired TVN subsidiary in France (the “TVN French Subsidiary”) participates in the French Crédit d’Impôt Recherche (“CIR”) program (the “R&D tax credits”) which allows companies to monetize eligible research expenses. The R&D tax credits can be used to offset against income tax payable to the French government in each of the four years after being incurred, or if not utilized, are recoverable in cash. The amount of R&D tax credits recoverable are subject to audit by the French government and in the year ended December 31, 2017 and 2016 , the French government approved the 2013 and 2012 claims and refunded $6.4 million and $5.8 million to the TVN French Subsidiary, respectively. The remaining R&D tax credit receivables at December 31, 2017 were approximately $28.5 million and are expected to be recoverable from 2018 through 2021 with $6.6 million reported under “Prepaid and other Current Assets” and $21.9 million reported under “Other Long-term Assets” on the Company’s Consolidated Balance Sheets. (2) The restricted cash balances are held as cash collateral security for certain bank guarantees. These restricted funds are invested in bank deposits and cannot be withdrawn from the Company’s accounts without the prior written consent of the applicable secured party. Additionally, as of December 31, 2017 , the Company had approximately $1.2 million of restricted cash for the bank guarantee associated with the TVN French Subsidiary’s office building lease. This amount is reported under “Other Long-term Assets” on the Company’s Consolidated Balance Sheets. |
Inventories | December 31, 2017 2016 Inventories: Raw materials $ 2,881 $ 9,889 Work-in-process 933 2,318 Finished goods 10,130 17,776 Service-related spares 12,032 11,210 Total $ 25,976 $ 41,193 |
Property and Equipment | December 31, 2017 2016 Property and equipment, net: Machinery and equipment (1) $ 87,121 $ 97,989 Capitalized software 35,139 34,519 Leasehold improvements 15,051 14,455 Furniture and fixtures (1) 6,534 8,993 Property and equipment, gross 143,845 155,956 Less: accumulated depreciation and amortization (1) (114,580 ) (123,792 ) Total $ 29,265 $ 32,164 (1) The reductions in these balances in 2017, compared to 2016, were due to retirement of fully depreciated assets. |
Accrued Liabilities | December 31, 2017 2016 Accrued and other current liabilities: Accrued employee compensation and related expenses $ 16,414 $ 19,377 Customer deposits 5,020 4,537 Accrued warranty 4,381 4,862 Contingent inventory reserves 3,806 2,210 Accrued TVN VDP, current (1) 3,186 6,597 Accrued royalty payments 2,195 1,912 Other 13,703 15,655 Total $ 48,705 $ 55,150 (1) See Note 10, “Restructuring and related charges” for additional information on the Company’s TVN VDP liabilities. |
Restructuring and Excess Faci36
Restructuring and Excess Facilities Restructuring and Excess Facilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring and Related Costs [Table Text Block] | The following table summarizes the Company’s restructuring and related charges (in thousands): Year ended December 31, 2017 2016 (1) 2015 Product cost of revenue $ 1,279 $ 3,400 $ 113 Operating expenses-Restructuring and related charges 5,307 14,602 1,372 Total $ 6,586 $ 18,002 $ 1,485 |
Harmonic 2016 Restructuring Plan [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | The following table summarizes the activity in the Company’s restructuring accrual related to the Harmonic 2016 Restructuring Plan (in thousands): Excess facilities VDP Non-VDP Severance and benefits Other charges Total Charges for 2016 Restructuring Plan $ 1,655 $ 13,175 $ 4,702 $ 247 $ 19,779 Adjustments to restructuring provisions 582 — (88 ) (247 ) 247 Reclassification of deferred rent 1,087 — — — 1,087 Cash payments (948 ) (3,484 ) (3,075 ) — (7,507 ) Foreign exchange loss (1 ) (41 ) (20 ) — (62 ) Balance at December 31, 2016 2,375 9,650 1,519 — 13,544 Adjustments to restructuring provisions 1,223 1,766 1,134 — 4,123 Cash payments (1,172 ) (7,203 ) (2,690 ) — (11,065 ) Foreign exchange gain — 915 37 — 952 Balance at December 31, 2017 2,426 5,128 — — 7,554 Less: current portion (1) (645 ) (3,186 ) — — (3,831 ) Long-term portion (1) $ 1,781 $ 1,942 $ — $ — $ 3,723 (1) The current portion and long-term portion of the restructuring liability are reported under “Accrued and other current liabilities” and “Other non-current liabilities”, respectively, on the Company’s Consolidated Balance Sheets. |
Convertible Notes and Credit 37
Convertible Notes and Credit Facilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following table presents the components of the Notes as of December 31, 2017 and December 31, 2016 (in thousands, except for years and percentages): December 31, 2017 2016 Liability: Principal amount $ 128,250 128,250 Less: Debt discount, net of amortization (17,404 ) (22,302 ) Less: Debt issuance costs, net of amortization (2,098 ) (2,689 ) Carrying amount $ 108,748 103,259 Remaining amortization period (years) 2.9 years 3.9 years Effective interest rate on liability component 9.94 % 9.94 % Carrying amount of equity component $ 26,062 $ 26,062 |
Convertible Interest Expense Recognized | The following table presents interest expense recognized related to the Notes (in thousands): Year ended December 31, 2017 2016 2015 Contractual interest expense $ 5,130 5,130 240 Amortization of debt discount 4,898 4,430 193 Amortization of debt issuance costs 591 534 23 Total interest expense recognized $ 10,619 10,094 456 |
Schedule of Debt | In connection with the TVN acquisition, the Company assumed a variety of debt and credit facilities in France to satisfy the financing requirements of TVN operations. These arrangements are summarized in the table below (in thousands): December 31, 2017 2016 Financing from French government agencies related to various government incentive programs (1) 20,565 17,930 Term loans 1,282 1,400 Obligations under capital leases 1,099 1,860 Total debt obligations 22,946 21,190 Less: current portion (7,610 ) (7,275 ) Long-term portion 15,336 13,915 (1) Loans backed by French R&D tax credit receivables were $17.7 million and $14.7 million as of December 31, 2017 and 2016 , respectively. As of December 31, 2017 , the TVN French Subsidiary had an aggregate of $28.5 million of R&D tax credit receivables from the French government from 2018 through 2021. (See Note 9, “Certain Balance Sheet Components-Prepaid expenses and other current assets,” for more information). These tax loans have a fixed rate of 0.6% , plus EURIBOR 1 month plus 1.3% and mature between 2018 through 2020. The remaining loans of $2.9 million and $3.2 million as of December 31, 2017 and 2016, respectively, primarily relate to financial support from French government agencies for R&D innovation projects at minimal interest rates and the loans outstanding at December 31, 2017 mature between 2020 through 2025. |
Schedule of Maturities of Long-term Debt | The table below shows the future minimum repayments of debts and capital lease obligations as of December 31, 2017 (in thousands): Years ending December 31, Capital lease obligations Other Debt obligations 2018 930 6,674 2019 95 7,141 2020 51 6,942 2021 23 515 2022 — 474 Thereafter — 101 Total $ 1,099 $ 21,847 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Company's Stock Option and Restricted Stock Unit Activity | Stock Option and RSU activities The following table summarizes the Company’s stock option and RSU activities during the year ended December 31, 2017 (in thousands, except per share amounts): Stock Options Outstanding Restricted Stock Units Outstanding Shares Available for Grant Number of Shares Weighted Average Exercise Price Number of Units Weighted Average Grant Date Fair Value Balance at December 31, 2016 3,912 5,019 $ 6.01 3,864 $ 4.26 Authorized 7,400 — — — Granted (5,351 ) 30 5.10 3,546 5.12 Options exercised — (106 ) 2.97 — Shares released — — — (3,184 ) 4.10 Forfeited or canceled 3,043 (1,063 ) 6.18 (1,322 ) 5.14 Balance at December 31, 2017 9,004 3,880 $ 6.04 2,904 $ 5.09 |
Summary of Stock Options Outstanding | The following table summarizes information about stock options outstanding as of December 31, 2017 (in thousands, except per share amounts and term): Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Vested and expected to vest 3,845 $ 6.06 2.8 $ 946 Exercisable 3,367 6.21 2.6 664 |
Summary of Restricted Stock Units Outstanding | The following table summarizes information about RSUs outstanding as of December 31, 2017 (in thousands, except term): Number of Shares Underlying Restricted Stock Units Weighted Average Remaining Vesting Period (Years) Aggregate Fair Value Vested and expected to vest 2,402 0.6 $ 10,088 |
Schedule of Defined Benefit Plans Disclosures | The table below shows the present value of the Company’s pension obligations as of December 31, 2017 and December 31, 2016 and the changes to the Company’s pension obligations for each of those years (in thousands): December 31, 2017 2016 Projected benefit obligation: Balance at January 1 $ 4,264 $ — Acquired from TVN acquisition — 5,907 Service cost 259 217 Interest cost 71 87 Actuarial (gains) losses (528 ) 279 Curtailment (1) — (1,955 ) Adjustment for prior year balance 343 — Foreign currency translation adjustment 624 (271 ) Balance at December 31 $ 5,033 $ 4,264 Presented on the Consolidated Balance Sheets under: Current portion (presented under “Accrued and other current liabilities”) $ 34 27 Long-term portion (presented under “Other non-current liabilities”) $ 4,999 4,237 |
Components of Net Periodic Benefit Costs | The table below shows the components of net periodic benefit costs (in thousands): Year ended December 31, 2017 2016 Service cost $ 259 $ 217 Interest cost 71 87 Amortization of net actuarial loss (gain) (1) — — Net periodic benefit cost included in operating loss $ 330 $ 304 (1) The Company uses the allowable 10% corridor approach to determine the amount of actuarial gains or losses subject to amortization in pension cost. Gains or losses are amortized on a straight-line basis over the average future remaining service period of active plan participants. |
Schedule of Pension Obligations Assumptions Used | The following assumptions were used in determining the Company’s pension obligation: December 31, 2017 2016 Discount rate 1.5 % 1.5 % Mobility rate 6.0 % 3.0 % Salary progression rate 2.0 % 2.0 % |
Schedule of Expected Benefit Payments | future benefits expected to be paid in each of the next five years, and in the aggregate for the five year period thereafter are as follows (in thousands): Years ending December 31, 2018 $ 34 2019 53 2020 — 2021 44 2022 143 2023 - 2027 2,858 $ 3,132 |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The following table summarizes stock-based compensation expense for all plans (in thousands): Year ended December 31, 2017 2016 2015 Stock-based compensation in: Cost of revenue $ 2,370 $ 1,554 $ 1,862 Research and development expense 5,313 3,711 4,435 Selling, general and administrative expense 8,927 7,795 9,285 Total stock-based compensation in operating expense 14,240 11,506 13,720 Total stock-based compensation recognized in net loss $ 16,610 $ 13,060 $ 15,582 |
Valuation Assumptions for Stock Options | The Company estimates the fair value of employee stock options and stock purchase rights under the ESPP using a Black-Scholes option valuation model. The value of the stock purchase rights under the ESPP consists of: (1) the 15% discount on the purchase of the stock; (2) 85% of the fair value of the call option; and (3) 15% of the fair value of the put option. The call option and put option were valued using the Black-Scholes option pricing model. At the date of grant, the Company estimated the fair value of each stock option grant and stock purchase right granted under the ESPP using the following weighted average assumptions: Employee Stock Options ESPP 2017 2016 2015 2017 2016 2015 Expected term (in years) 4.30 4.30 4.65 0.50 0.50 0.50 Volatility 42 % 36 % 38 % 48 % 70 % 34 % Risk-free interest rate 1.8 % 1.4 % 1.5 % 1.2 % 0.6 % 0.3 % Expected dividends 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The components of AOCI, on an after-tax basis where applicable, were as follows (in thousands): December 31, 2017 2016 Foreign currency translation adjustments $ 4,310 $ (7,267 ) Unrealized foreign exchange loss on intercompany long-term loans, net of taxes (1,177 ) — Gain on investments, net of taxes (1) — 276 Actuarial gain (loss) 249 (279 ) Total accumulated other comprehensive income (loss) $ 3,382 $ (7,270 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income (Loss) Before Income Tax Provision | Loss from operations before income taxes consists of the following (in thousands): Year ended December 31, 2017 2016 2015 United States $ (50,041 ) $ (53,833 ) $ (16,826 ) International (34,666 ) (26,597 ) 758 Loss before income taxes $ (84,707 ) $ (80,430 ) $ (16,068 ) |
Provision for Income Taxes | The components of the benefit from income taxes consist of the following (in thousands): Year ended December 31, 2017 2016 2015 Current: Federal $ (4,530 ) $ (950 ) $ (1,981 ) State 129 181 120 International 273 2,738 1,966 Deferred: Federal — (713 ) — State — — — International 2,376 (9,372 ) (512 ) Total benefit from income taxes $ (1,752 ) $ (8,116 ) $ (407 ) |
Reconciliation of Provision for Income Taxes | The differences between the benefit from income taxes computed at the U.S. federal statutory rate at 35% and the Company’s actual benefit from income taxes are as follows (in thousands): Year ended December 31, 2017 2016 2015 Benefit from for income taxes at U.S. Federal statutory rate $ (29,648 ) $ (28,150 ) $ (5,624 ) Differential in rates on foreign earnings 15,920 11,741 1,584 Non-deductible amortization expense — 617 947 Tax Reform Tax rate reduction 14,527 — — Change in valuation allowance (2,834 ) 4,465 2,230 Change in liabilities for uncertain tax positions (2,009 ) (960 ) (1,083 ) Non-deductible stock-based compensation 1,934 1,480 1,398 Non-deductible meals and entertainment 380 441 395 Non-deductible acquisition cost — — 457 Adjustments related to tax positions taken during prior years (473 ) (163 ) (781 ) Adjustments made under intercompany transactions — 1,779 — Tax Refund (834 ) — — Other 1,285 634 70 Total benefit from income taxes $ (1,752 ) $ (8,116 ) $ (407 ) |
Components of Deferred Tax Assets and Liabilities | The components of net deferred tax assets included in the Consolidated Balance Sheets are as follows (in thousands): December 31, 2017 2016 Deferred tax assets: Reserves and accruals $ 17,247 $ 25,527 Net operating loss carryforwards 34,915 33,321 Research and development credit carryforwards 34,419 28,759 Deferred stock-based compensation 2,677 4,292 Depreciation and amortization — 554 Intangibles 2,062 — Other tax credits — 2,738 Other 1,441 — Gross deferred tax assets 92,761 95,191 Valuation allowance (77,756 ) (74,480 ) Gross deferred tax assets after valuation allowance 15,005 20,711 Deferred tax liabilities: Depreciation and amortization (259 ) — Intangibles — (1,417 ) Convertible notes (4,284 ) (8,603 ) Other — (510 ) Gross deferred tax liabilities (4,543 ) (10,530 ) Net deferred tax assets $ 10,462 $ 10,181 |
Activities Related to Valuation Allowance | The following table summarizes the activities related to the Company’s valuation allowance (in thousands): Year ended December 31, 2017 2016 2015 Balance at beginning of period $ 74,480 $ 64,545 $ 75,199 Additions 9,028 18,291 3,068 Deductions (5,752 ) (8,356 ) (13,722 ) Balance at end of period $ 77,756 $ 74,480 $ 64,545 |
Activities Related to Gross Unrecognized Tax Benefits | The following table summarizes the activity related to the Company’s gross unrecognized tax benefits (in millions): Year ended December 31, 2017 2016 2015 Balance at beginning of period $ 19.2 $ 15.6 $ 15.7 Increase in balance related to tax positions taken during current year 1.4 4.6 0.7 Decrease in balance as a result of a lapse of the applicable statues of limitations (2.2 ) (1.0 ) (0.9 ) Increase in balance related to tax positions taken during prior years 1.8 — 0.3 Decrease in balance related to tax positions taken during prior years (1.4 ) — (0.2 ) Balance at end of period $ 18.8 $ 19.2 $ 15.6 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Numerators and Denominators of Basic and Diluted Net Income (Loss) Per Share Computations | The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Numerator: Net loss $ (82,955 ) $ (72,314 ) $ (15,661 ) Denominator: Weighted average number of shares outstanding: Basic and diluted 80,974 77,705 87,514 Net loss per share: Basic and diluted $ (1.02 ) $ (0.93 ) $ (0.18 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents the potential weighted common shares outstanding that were excluded from the computation of basic and diluted net loss per share calculations (in thousands): December 31, 2017 2016 2015 Stock options 4,470 5,295 6,460 Restricted stock units 3,059 2,536 2,178 Stock purchase rights under the ESPP 620 659 518 Warrants (1) 782 206 — Total (2) 8,931 8,696 9,156 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Summary of Revenue by Product Type | The following table provides summary financial information by reportable segment (in thousands): Year ended December 31, 2017 (1) 2016 2015 Video Revenue $ 319,473 $ 351,489 $ 291,779 Gross profit 173,414 194,044 167,573 Operating income (loss) (2,024 ) 11,963 13,529 Cable Edge Revenue $ 38,773 $ 54,422 $ 85,248 Gross profit 8,892 21,174 37,832 Operating loss (23,154 ) (12,131 ) (1,599 ) Total Revenue $ 358,246 $ 405,911 $ 377,027 Gross profit 182,306 215,218 205,405 Operating income (loss) (25,178 ) (168 ) 11,930 (1) The Company has historically employed an aggregate allocation methodology based on total revenues to attribute professional services revenue and sales expenses between its Video and Cable Edge segments. Beginning in the fourth quarter of 2017, the Company has prospectively changed to a more precise attribution methodology as the activities of selling and supporting the CableOS solution have become increasingly distinct from those of Video solutions. The impact of making this change in the fourth quarter of 2017 compared to the Company’s historical approach was a reduction in operating income of $2.4 million from the Video segment and a corresponding increase to the operating income of the Cable Edge segment. The Company believes that the updated allocation methodology will provide greater clarity regarding the operating metrics of the Video and Cable Edge business segments. |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] | A reconciliation of the Company’s consolidated segment operating income (loss) to consolidated loss before income taxes is as follows (in thousands): Year ended December 31, 2017 (1) 2016 2015 Total segment operating income (loss) $ (25,178 ) $ (168 ) $ 11,930 Unallocated corporate expenses (1) (20,767 ) (38,972 ) (2,794 ) Stock-based compensation (16,610 ) (13,060 ) (15,582 ) Amortization of intangibles (8,322 ) (14,836 ) (6,502 ) Consolidated loss from operations (70,877 ) (67,036 ) (12,948 ) Non-operating expense, net (13,830 ) (13,394 ) (3,120 ) Loss before income taxes $ (84,707 ) $ (80,430 ) $ (16,068 ) (1) For the years ended December 31, 2017 and 2016 , the unallocated corporate expenses included TVN acquisition- and integration-related costs, TVN VDP costs (see Note 10, “Restructuring and Related charges-TVN VDP,” for more information on TVN VDP ) and Cable Edge product line inventory obsolescence costs, totaling $7.9 million and $32.2 million , respectively. In addition, in fiscal year 2017, the unallocated corporate expenses included $8.0 million of Avid litigation settlement cost and associated legal fees (see Note 19, “Legal Proceedings,” for more information). The remaining unallocated corporate expenses for all years presented above include primarily other restructuring charges and excess facilities charges. |
Summary of Revenue, Property and Equipment, Net by Geographic Region | Year ended December 31, 2017 2016 2015 Net revenue (1) : United States $ 131,773 $ 171,016 $ 175,466 Other countries 226,473 234,895 201,561 Total $ 358,246 $ 405,911 $ 377,027 (1) Revenue is attributed to countries based on the location of the customer. Other than the U.S., no single country accounted for 10% or more of the Company’s net revenues for the years ended December 31, 2017, 2016 and 2015. |
Reconciliation of Assets from Segment to Consolidated [Table Text Block] | As of December 31, 2017 2016 Property and equipment, net: United States $ 13,786 $ 15,197 Israel 8,904 9,966 France 4,573 4,872 Other countries 2,002 2,129 Total $ 29,265 $ 32,164 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments Under Noncancelable Operating Leases | Future minimum lease payments under non-cancellable operating leases at December 31, 2017 , are as follows (in thousands): Operating Leases Year ending December 31, 2018 $ 13,534 2019 12,132 2020 8,716 2021 2,958 2022 2,497 Thereafter 9,145 Total minimum payments $ 48,982 |
Summary of Warranty Accrual Included in Accrued Liabilities | Activities for the Company’s warranty accrual for each fiscal year, which is included in accrued and other current liabilities, is summarized below (in thousands): 2017 2016 2015 Balance at beginning of period $ 4,862 $ 3,913 $ 4,242 Accrual for current period warranties 5,117 5,482 5,378 Balance assumed from TVN acquisition — 1,012 — Warranty costs incurred (5,598 ) (5,545 ) (5,707 ) Balance at end of period $ 4,381 $ 4,862 $ 3,913 |
Selected Quarterly Financial 44
Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |
Summary of Quarterly Financial Data | The following table sets forth our unaudited quarterly Consolidated Statement of Operations data for each of the eight quarters ended December 31, 2017 . In management’s opinion, the data has been prepared on the same basis as the audited Consolidated Financial Statements included in this report, and reflects all necessary adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of this data. Fiscal 2017 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter (In thousands, except per share amounts) Quarterly Data: Net revenue $ 82,943 $ 82,315 $ 92,014 $ 100,974 Gross profit (4) 40,408 33,815 47,025 48,572 Net loss (2) (5) (6) $ (24,027 ) $ (31,500 ) $ (15,583 ) $ (11,516 ) Net loss per share: Basic and diluted $ (0.30 ) $ (0.39 ) $ (0.19 ) $ (0.14 ) Shares used in per share calculations: Basic and diluted 79,810 80,590 81,445 82,014 Fiscal 2016 (1) 1st Quarter (6) 2nd Quarter 3rd Quarter 4th Quarter (3) (In thousands, except per share amounts) Quarterly Data: Net revenue $ 81,832 $ 109,571 $ 101,406 $ 113,102 Gross profit 40,654 51,040 51,363 57,693 Net loss (2) (5) (6) $ (25,180 ) $ (20,679 ) $ (16,012 ) $ (10,443 ) Net loss per share: Basic and diluted $ (0.33 ) $ (0.27 ) $ (0.21 ) $ (0.13 ) Shares used in per share calculations: Basic and diluted 76,996 77,342 78,092 78,389 (1) On February 29, 2016, the Company completed the acquisition of TVN and applied the acquisition method of accounting for the business combination. The selected quarterly financial data for the year ended December 31, 2016 of the combined entity includes 10 months of operating results of TVN beginning March 1, 2016. (2) As a result of the TVN acquisition, in 2016 and 2017, the Company incurred acquisition- and integration-related expenses of $3.0 million , $3.4 million , $5.3 million and $5.2 million , in the first through fourth quarter of 2016, respectively, and $2.2 million , $0.5 million , $0.1 million and $0.1 million in the first through fourth quarter of 2017. These costs consisted of acquisition-related costs which include outside legal, accounting and other professional services as well as integration-related costs which include incremental costs resulting from the TVN acquisition that are not expected to generate future benefits once the integration is fully consummated. These costs are expensed as incurred and the Company does not expect to incur any TVN acquisition- and integration-related expenses after 2017. (3) In 2016, as part of the TVN integration plan, the Company established the TVN VDP to enable the French employees of TVN to voluntarily terminate with certain benefits. The Company recorded a charge of $13.1 million for TVN VDP in the fourth quarter of 2016. (4) Gross margin decreased to 41.1% in the second quarter of 2017 compared to 48.7% in the first quarter of 2017, primarily due to lower service margins and higher inventory obsolescence charges for the Company’s legacy broadcast video inventory due to reduced demand, as well as higher inventory obsolescence charge for our older Cable Edge product lines. The factors negatively impacting the gross margin in the second quarter of 2017 were mostly absent in the third quarter of 2017, and together with a more favorable product mix, the gross margin increased to 51.1% in the third quarter of 2017 compared to 41.1% in the second quarter of 2017. Gross margin increased to 50.7% in the third quarter of 2016 compared to 46.6% in the second quarter of 2016 primarily due to the absence of the Cable Edge inventory obsolescence charge in the third quarter of 2016. (5) In the fourth quarter of 2016 and 2017, the Company recorded additional valuation allowances of $18.3 and $9.0 million against all of the U.S. deferred tax assets, respectively. These increases in valuation allowances were offset partially by the release of $8.4 million and $5.8 million in the fourth quarter of 2016 and 2017, respectively, of valuation allowances associated with the Company’s foreign subsidiaries, including a one-time benefit associated with the alternative minimum tax refund related to the TCJA in the fourth quarter of 2017. (6) In the first and third quarter of 2016 and the fourth quarter of 2017, the Company recorded impairment charges of $1.5 million , $1.2 million , and $0.5 million , respectively, for its investment in Vislink. (See Note 3, “Investments in Other Equity Securities,” of the notes to the Consolidated Financial Statements for additional information). |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Additional Information (Detail) | Jan. 01, 2017USD ($) | Mar. 30, 2018USD ($) | Dec. 31, 2014USD ($)segment | Dec. 31, 2017USD ($)Customersegment | Dec. 31, 2016USD ($)Customer | Dec. 31, 2015USD ($) | Sep. 29, 2017USD ($) | Mar. 31, 2017USD ($) | |
Cash and cash equivalents maximum maturity | 3 months | 3 months | 3 months | ||||||
Restricted Cash | $ 1,700,000 | $ 1,800,000 | $ 1,100,000 | ||||||
Restricted Cash, Current | [1] | 530,000 | 731,000 | ||||||
Short-term investments | 0 | 6,923,000 | |||||||
Cost Method Investments, Carrying Value | 3,600,000 | 4,400,000 | |||||||
Cash and cash equivalents | $ 73,032,000 | 57,024,000 | 55,635,000 | 126,190,000 | |||||
Accounts receivable, net | 69,844,000 | 86,765,000 | |||||||
Debt Instrument, Face Amount | $ 128,250,000 | $ 128,250,000 | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | 4.00% | |||||||
Debt and Capital Lease Obligations | $ 22,946,000 | $ 21,190,000 | |||||||
Number Of Customers Accounting For More Than Ten Percent of Revenue | Customer | 0 | ||||||||
Revenue recognition period, associated with service and maintenance agreement | 1 year | ||||||||
Capitalized Software Development Costs for Software Sold to Customers | $ 1,100,000 | ||||||||
Goodwill | $ 242,827,000 | 237,279,000 | 197,781,000 | ||||||
Number of reporting units | 2 | ||||||||
Goodwill, Impairment Loss | $ 0 | 0 | 0 | ||||||
Impairment of Intangible Assets, Finite-lived | 0 | 0 | 0 | ||||||
Foreign Currency Cash Flow Hedge Derivative at Fair Value, Net | 0 | ||||||||
Research and Development Expense | 95,978,000 | 98,401,000 | 87,545,000 | ||||||
Reimbursements of Engineering Spending | 6,000,000 | 6,000,000 | |||||||
Advertising expense | $ 700,000 | 1,400,000 | 1,400,000 | ||||||
Net Accumulated Gain or Loss as a Percentage of Projected Plan Benefit Obligation | 10.00% | ||||||||
More Likely Than Not Threshold Recognition of Uncertain Tax Position | 50.00% | ||||||||
Number of reportable segments | segment | 2 | 2 | |||||||
Goodwill, Acquired During Period | $ 41,670,000 | ||||||||
Discount rate | 1.50% | 1.50% | |||||||
Defined Benefit Plan, Benefit Obligation | $ 5,033,000 | $ 4,264,000 | 0 | ||||||
Deferred Tax Assets, Net | 10,462,000 | 10,181,000 | |||||||
Deferred Tax Assets, Valuation Allowance | $ 75,199,000 | $ 77,756,000 | $ 74,480,000 | $ 64,545,000 | |||||
Furniture and Fixtures [Member] | |||||||||
Property, plant and equipment estimated useful life | 5 years | ||||||||
Internal Use Software [Member] | |||||||||
Property, plant and equipment estimated useful life | 3 years | ||||||||
Machinery and Equipment [Member] | |||||||||
Property, plant and equipment estimated useful life | 4 years | ||||||||
Leasehold Improvements [Member] | |||||||||
Property, plant and equipment estimated useful life | 10 years | ||||||||
Property, plant and equipment leasehold improvements useful lives | shorter of the remaining useful lives of the assets, up to 10 years, or the lease term of the respective assets | ||||||||
Forward Contracts [Member] | |||||||||
Derivative, Term of Contract | 12 months | ||||||||
Software [Member] | |||||||||
Property, plant and equipment estimated useful life | 3 years | ||||||||
Accounts Receivable [Member] | |||||||||
Number of significant customers for accounts receivable | Customer | 0 | 0 | |||||||
Entity-wide revenue, major customer, revenue or accounts receivable percentage | 10.00% | 10.00% | |||||||
Net Revenue [Member] | |||||||||
Entity-wide revenue, major customer, revenue or accounts receivable percentage | 10.00% | ||||||||
Number Of Customers Accounting For More Than Ten Percent of Revenue | Customer | 0 | 0 | |||||||
Net Revenue [Member] | Comcast [Member] | |||||||||
Entity-wide revenue, major customer, revenue or accounts receivable percentage | 12.00% | ||||||||
TVN [Member] | |||||||||
Goodwill | $ 41,670,000 | ||||||||
R&D Tax Credits | $ 5,900,000 | 6,100,000 | $ 0 | ||||||
Other Expense [Member] | |||||||||
Remeasurement Losses, Reporting Currency Denominated, Value | 2,200,000 | 200,000 | $ 500,000 | ||||||
Other Assets [Member] | |||||||||
Restricted Cash and Investments, Noncurrent | 1,200,000 | $ 1,100,000 | |||||||
Accounting Standards Update 2016-09 [Member] | |||||||||
Cumulative Effect on Retained Earnings, Net of Tax | $ 69,000 | ||||||||
Accounting Standards Update 2016-09 [Member] | Retained Earnings [Member] | |||||||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income | 0 | ||||||||
Accounting Standards Update 2016-09 [Member] | Deferred Tax Assets Gross [Member] | |||||||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income | 4,600,000 | ||||||||
Accounting Standards Update 2016-16 [Member] | |||||||||
Cumulative Effect on Retained Earnings, Net of Tax | 1,434,000 | ||||||||
Deferred Tax Assets, Net | $ 1,100,000 | ||||||||
Deferred Tax Assets, Valuation Allowance | 2,100,000 | ||||||||
Deferred Tax Assets, Tax Deferred Expense | $ 300,000 | ||||||||
Silicon Valley Bank [Member] | Revolving Credit Facility [Member] | |||||||||
Line of Credit Facility, Current Borrowing Capacity | $ 15,000,000 | $ 15,000,000 | |||||||
Subsequent Event [Member] | |||||||||
Defined Benefit Plan, Actuarial Gain (Loss), Immediate Recognition as Component in Net Periodic Benefit (Cost) Credit | $ 0 | ||||||||
Cash Flow Hedging [Member] | Forward Contracts [Member] | Designated as Hedging Instrument [Member] | |||||||||
Derivative, Term of Contract | 12 months | ||||||||
Valuation Allowance of Deferred Tax Assets [Member] | Accounting Standards Update 2016-09 [Member] | |||||||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income | $ 4,600,000 | ||||||||
[1] | The restricted cash balances are held as cash collateral security for certain bank guarantees. These restricted funds are invested in bank deposits and cannot be withdrawn from the Company’s accounts without the prior written consent of the applicable secured party. Additionally, as of December 31, 2017, the Company had approximately $1.2 million of restricted cash for the bank guarantee associated with the TVN French Subsidiary’s office building lease. This amount is reported under “Other Long-term Assets” on the Company’s Consolidated Balance Sheets. |
Investments in Other Equity S46
Investments in Other Equity Securities (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Apr. 01, 2016 | Apr. 03, 2015 | Dec. 31, 2016 | Dec. 31, 2014 | Oct. 22, 2014 | Sep. 02, 2014 | |
Schedule of Cost-method Investments [Line Items] | |||||||||
Cost Method Investments, Carrying Value | $ 3,600,000 | $ 4,400,000 | $ 4,400,000 | ||||||
Vislink plc [Member] | |||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||
Cost Method Investments, Original Cost | $ 3,300,000 | ||||||||
Cost-method Investments, Other than Temporary Impairment | 500,000 | $ 1,200,000 | $ 1,500,000 | ||||||
Stock Price Increase, Percentage | 67.00% | ||||||||
Cost Method Investments, Carrying Value | $ 800,000 | 800,000 | |||||||
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax | $ 300,000 | ||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 3.30% | ||||||||
VJU Gmbh [Member] | |||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||
Cost Method Investments, Original Cost | $ 2,500,000 | ||||||||
Cost-method Investments, Other than Temporary Impairment | $ 2,500,000 | ||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 19.80% | ||||||||
Proceeds from Sales of Assets, Investing Activities | 6,000 | ||||||||
EDC [Member] | |||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||
Cost Method Investments, Original Cost | $ 3,500,000 | ||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 18.40% | ||||||||
Cost-method Investments [Member] | Variable Interest Entity, Not Primary Beneficiary [Member] | EDC [Member] | |||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | 3,600,000 | ||||||||
Other Expense [Member] | Variable Interest Entity, Not Primary Beneficiary [Member] | EDC [Member] | |||||||||
Schedule of Cost-method Investments [Line Items] | |||||||||
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | $ 100,000 |
Derivative and Hedging Activi47
Derivative and Hedging Activities Derivative and Hedging Activities Additional Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Derivative [Line Items] | |
Foreign Currency Cash Flow Hedge Derivative at Fair Value, Net | $ 0 |
Foreign Exchange Forward [Member] | |
Derivative [Line Items] | |
Compensating Balance, Amount | $ 1,000 |
Fair Value Hedging [Member] | Foreign Exchange Forward [Member] | |
Derivative [Line Items] | |
Derivative, Term of Contract | 3 months |
Derivative and Hedging Activi48
Derivative and Hedging Activities Derivative and Hedging Activities - Gain Loss in Statement of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Designated as Hedging Instrument [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains reclassified from AOCI into income (effective portion) | $ 424 | |||
Derivative Instruments, Loss Reclassified from Accumulated OCI into Income, Effective Portion | $ 0 | [1] | $ (44) | |
Cost of revenue [Member] | Designated as Hedging Instrument [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains reclassified from AOCI into income (effective portion) | 59 | |||
Derivative Instruments, Loss Reclassified from Accumulated OCI into Income, Effective Portion | 0 | [1] | (6) | |
Operating expense [Member] | Designated as Hedging Instrument [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains reclassified from AOCI into income (effective portion) | 365 | |||
Derivative Instruments, Loss Reclassified from Accumulated OCI into Income, Effective Portion | 0 | [1] | (38) | |
Other Nonoperating Income (Expense) [Member] | Designated as Hedging Instrument [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
(Losses) Recognized in Income on Derivatives (Amount Excluded from Effectiveness Testing | 0 | [1] | (63) | (87) |
Other Nonoperating Income (Expense) [Member] | Not Designated as Hedging Instrument [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recorded in other expense, net | 155 | 343 | 344 | |
Other Comprehensive Income (Loss) [Member] | Designated as Hedging Instrument [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Instruments, Gain Recognized in Other Comprehensive Income (Loss), Effective Portion | $ 0 | [1] | $ 202 | |
(Losses) in AOCI on derivatives (effective portion) | $ (133) | |||
[1] | The Company did not enter into any new cash flow hedge contracts since December 31, 2016. |
Derivative and Hedging Activi49
Derivative and Hedging Activities Derivative and Hedging Activities - Notional Values (Details) - Foreign Exchange Forward [Member] - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Long [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Purchase | $ 12,875 | $ 4,056 |
Short [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Sell | $ 1,509 | $ 11,157 |
Derivative and Hedging Activi50
Derivative and Hedging Activities Derivative and Hedging Activities - Balance Sheet Location (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | ||
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value | $ 33 | $ 54 |
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value | 4 | 40 |
Prepaid Expenses and Other Current Assets [Member] | Not Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | ||
Derivative [Line Items] | ||
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Asset at Fair Value | 33 | 54 |
Accrued Liabilities [Member] | Not Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member] | ||
Derivative [Line Items] | ||
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Liability at Fair Value | $ 4 | $ 40 |
Derivative and Hedging Activi51
Derivative and Hedging Activities Derivative and Hedging Activities - Offsetting of Derivative Assets and Liabiltiies (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Derivative [Line Items] | |
Derivative Asset, Fair Value, Gross Asset | $ 33 |
Derivative Asset, Fair Value, Gross Liability | 0 |
Derivative Asset, Fair Value, Amount Not Offset Against Collateral | 33 |
Derivative, Collateral, Obligation to Return Securities | (4) |
Derivative, Collateral, Obligation to Return Cash | 0 |
Derivative Asset, Fair Value, Amount Offset Against Collateral | 29 |
Derivative Liability, Fair Value, Gross Liability | 4 |
Derivative Liability, Fair Value, Gross Asset | 0 |
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | 4 |
Derivative Liability, Securities Sold under Agreements to Resell, Securities Loaned, Collateral, Right to Reclaim Securities | (4) |
Derivative, Collateral, Right to Reclaim Cash | 0 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | $ 0 |
Fair Value Measurements Additio
Fair Value Measurements Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Defined Benefit Plan, Benefit Obligation | $ 5,033 | $ 4,264 | $ 0 | |
Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Convertible Debt, Fair Value Disclosures | 129,900 | 143,500 | ||
Other Debts, excluding capital leases | 21,800 | $ 19,300 | ||
TVN Voluntary Departure Plan [Member] | Harmonic 2016 Restructuring Plan [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Voluntary Departure Plan, Liability | [1] | $ 5,128 | ||
[1] | The current portion and long-term portion of the restructuring liability are reported under “Accrued and other current liabilities” and “Other non-current liabilities”, respectively, on the Company’s Consolidated Balance Sheets. |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value Based on Three-Tier Fair Value Hierarchy (Detail) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | $ 55,000 | $ 16,087,000 | ||||
Total liabilities measured and recorded at fair value | 4,000 | 9,690,000 | ||||
Accrued TVN VDP, long-term portion | 4,999,000 | 4,237,000 | ||||
Assets, Fair Value Disclosure, Nonrecurring | 0 | 0 | $ 0 | |||
Liabilities, Fair Value Disclosure, Nonrecurring | 0 | 0 | $ 0 | |||
Cash equivalents [Member] | Money market funds [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | 22,000 | 8,301,000 | ||||
Short-term investments [Member] | Corporate bonds [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | 6,923,000 | |||||
Prepaid Expenses and Other Current Assets [Member] | Foreign exchange forward contracts [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | 33,000 | 54,000 | ||||
Accrued and Other Current Liabilities [Member] | Foreign exchange forward contracts [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total liabilities measured and recorded at fair value | 4,000 | 40,000 | ||||
Cost-method Investments [Member] | Equity Securities [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | 809,000 | |||||
Level 1 [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | 22,000 | 9,110,000 | ||||
Total liabilities measured and recorded at fair value | 0 | 0 | ||||
Level 1 [Member] | Cash equivalents [Member] | Money market funds [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | 22,000 | 8,301,000 | ||||
Level 1 [Member] | Short-term investments [Member] | Corporate bonds [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | 0 | |||||
Level 1 [Member] | Prepaid Expenses and Other Current Assets [Member] | Foreign exchange forward contracts [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | 0 | 0 | ||||
Level 1 [Member] | Accrued and Other Current Liabilities [Member] | Foreign exchange forward contracts [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total liabilities measured and recorded at fair value | 0 | 0 | ||||
Level 1 [Member] | Cost-method Investments [Member] | Equity Securities [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | 809,000 | |||||
Level 2 [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | 33,000 | 6,977,000 | ||||
Total liabilities measured and recorded at fair value | 4,000 | 40,000 | ||||
Level 2 [Member] | Cash equivalents [Member] | Money market funds [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | 0 | 0 | ||||
Level 2 [Member] | Short-term investments [Member] | Corporate bonds [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | 6,923,000 | |||||
Level 2 [Member] | Prepaid Expenses and Other Current Assets [Member] | Foreign exchange forward contracts [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | 33,000 | 54,000 | ||||
Level 2 [Member] | Accrued and Other Current Liabilities [Member] | Foreign exchange forward contracts [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total liabilities measured and recorded at fair value | 4,000 | 40,000 | ||||
Level 3 [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | [1] | 0 | ||||
Total liabilities measured and recorded at fair value | 0 | [1] | 9,650,000 | [2] | ||
Level 3 [Member] | Cash equivalents [Member] | Money market funds [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | [1] | 0 | ||||
Level 3 [Member] | Prepaid Expenses and Other Current Assets [Member] | Foreign exchange forward contracts [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total assets measured and recorded at fair value | [1] | 0 | ||||
Level 3 [Member] | Accrued and Other Current Liabilities [Member] | Foreign exchange forward contracts [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Total liabilities measured and recorded at fair value | 0 | [1] | 0 | [2] | ||
TVN Voluntary Departure Plan [Member] | Accrued and Other Current Liabilities [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Accrued TVN VDP, current portion | 6,597,000 | |||||
TVN Voluntary Departure Plan [Member] | Other non-current liabilities [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Accrued TVN VDP, long-term portion | 3,053,000 | |||||
TVN Voluntary Departure Plan [Member] | Level 3 [Member] | Accrued and Other Current Liabilities [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Accrued TVN VDP, current portion | [2] | 6,597,000 | ||||
TVN Voluntary Departure Plan [Member] | Level 3 [Member] | Other non-current liabilities [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Accrued TVN VDP, long-term portion | [2] | $ 3,053,000 | ||||
TVN Voluntary Departure Plan [Member] | Harmonic 2016 Restructuring Plan [Member] | ||||||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ||||||
Accrued TVN VDP, current portion | [3] | $ 5,128,000 | ||||
[1] | The Company’s liability for the TVN VDP at December 31, 2017 was $5.1 million. This amount is not included in the table above because its fair value at inception, based on Level 3 inputs, was determined during the fourth quarter of fiscal 2016. Subsequently there is no recurring fair value remeasurement for this liability based on the applicable accounting guidance. | |||||
[2] | The Company’s liability for the TVN VDP is classified within Level 3 because discount rates which are unobservable in the market were being used to measure the fair value of this liability during the fourth quarter of fiscal 2016. | |||||
[3] | The current portion and long-term portion of the restructuring liability are reported under “Accrued and other current liabilities” and “Other non-current liabilities”, respectively, on the Company’s Consolidated Balance Sheets. |
Business Acquisition Narratives
Business Acquisition Narratives (Details) - USD ($) $ in Thousands | Feb. 29, 2016 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 237,279 | $ 242,827 | $ 197,781 | |
TVN [Member] | ||||
Business Acquisition [Line Items] | ||||
Total purchase consideration | $ 82,500 | 82,512 | ||
Goodwill | $ 41,670 |
Preliminary allocation of the e
Preliminary allocation of the estimated purchase consideration (Details) - USD ($) $ in Thousands | Feb. 29, 2016 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2015 | |
Business Combination, Separately Recognized Transactions [Line Items] | |||||
Goodwill | $ 237,279 | $ 242,827 | $ 197,781 | ||
TVN [Member] | |||||
Business Combination, Separately Recognized Transactions [Line Items] | |||||
Cash and cash equivalents | 6,843 | ||||
Accounts receivable, net | 14,933 | ||||
Inventories | 3,462 | ||||
Prepaid expenses and other current assets | 2,412 | ||||
Property and equipment, net | 9,942 | ||||
French R&D tax credit receivables (1) | [1] | 26,421 | |||
Other long-term assets | 2,134 | ||||
Total assets | 66,147 | ||||
Other debts and capital lease obligations, current | 8,362 | ||||
Accounts payable | 12,494 | ||||
Deferred revenue | 2,504 | ||||
Accrued and other current liabilities | 18,365 | ||||
Other debts and capital lease obligations, long-term | 16,087 | ||||
Other non-current liabilities | 6,467 | ||||
Deferred tax liabilities | 2,126 | ||||
Total liabilities | 66,405 | ||||
Goodwill | 41,670 | ||||
Intangibles | 41,100 | ||||
Total purchase consideration | $ 82,500 | $ 82,512 | |||
[1] | See Note 9, “Certain Balance Sheet Components-Prepaid expenses and other current assets,” for more information on French R&D tax credit receivables. |
Business Acquisition, Intangibl
Business Acquisition, Intangible Assets Useful Lives (Details) - TVN [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangibles | $ 41,100 |
Order or Production Backlog [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 months |
Intangibles | $ 3,600 |
Developed Technology Rights [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years |
Intangibles | $ 21,700 |
Customer Relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years |
Intangibles | $ 15,200 |
Trade Names [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years |
Intangibles | $ 600 |
Business Acquisition - Acquisit
Business Acquisition - Acquisition and Integration Expenses (Details) - TVN [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Cost of Goods, Product Line [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Integration Related Costs | [1] | $ 342 | $ 1,049 |
Business Combination, Acquisition Related Costs | 0 | ||
Research and Development Expense [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Integration Related Costs | [1] | 7 | 974 |
Business Combination, Acquisition Related Costs | 0 | ||
Selling, General and Administrative Expenses [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Integration Related Costs | [1] | 2,469 | 11,058 |
Business Combination, Acquisition Related Costs | 3,855 | ||
Operating expense [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Integration Related Costs | [1] | $ 2,818 | 13,081 |
Business Combination, Acquisition Related Costs | $ 3,855 | ||
[1] | Integration-related costs include incremental costs resulting from the TVN acquisition that are not expected to generate future benefits once the integration is fully consummated. All integration efforts were completed by 2017 and the Company does not expect any more such expenses to continue after 2017. |
Goodwill and Identified Intan58
Goodwill and Identified Intangible Assets Goodwill and Identified Intangible Assets Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Oct. 31, 2017USD ($)$ / shares | |
Goodwill [Line Items] | ||||
Number of reporting units | 2 | |||
Share Price | $ / shares | $ 3.70 | |||
Market Capitalization | $ 302,000,000 | |||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 |
Goodwill and Identified Intan59
Goodwill and Identified Intangible Assets - Changes in Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Line Items] | ||
Balance at beginning of period | $ 237,279 | $ 197,781 |
Goodwill, Acquired During Period | 41,670 | |
Foreign currency translation adjustment | 5,548 | (2,172) |
Balance at end of period | 242,827 | 237,279 |
Video [Member] | ||
Goodwill [Line Items] | ||
Balance at beginning of period | 176,519 | 136,904 |
Goodwill, Acquired During Period | 41,670 | |
Foreign currency translation adjustment | 5,493 | (2,055) |
Balance at end of period | 182,012 | 176,519 |
Cable Edge [Member] | ||
Goodwill [Line Items] | ||
Balance at beginning of period | 60,760 | 60,877 |
Foreign currency translation adjustment | 55 | (117) |
Balance at end of period | $ 60,815 | $ 60,760 |
Goodwill and Identified Intan60
Goodwill and Identified Intangible Assets - Summary of Goodwill and Identified Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 85,857 | $ 85,175 |
Accumulated Amortization | (64,578) | (55,944) |
Total future amortization expense | $ 21,279 | 29,231 |
Developed core technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years 2 months 12 days | |
Gross Carrying Amount | $ 31,707 | 31,707 |
Accumulated Amortization | (20,396) | (15,216) |
Total future amortization expense | $ 11,311 | 16,491 |
Customer relationships/contracts [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years 2 months 12 days | |
Gross Carrying Amount | $ 44,819 | 44,384 |
Accumulated Amortization | (35,205) | (32,098) |
Total future amortization expense | $ 9,614 | 12,286 |
Trademarks and tradenames [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years 2 months 12 days | |
Gross Carrying Amount | $ 654 | 573 |
Accumulated Amortization | (300) | (119) |
Total future amortization expense | 354 | 454 |
Maintenance agreements and related relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5,500 | 5,500 |
Accumulated Amortization | (5,500) | (5,500) |
Total future amortization expense | 0 | 0 |
Order or Production Backlog [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,177 | 3,011 |
Accumulated Amortization | (3,177) | (3,011) |
Total future amortization expense | $ 0 | $ 0 |
Goodwill and Identified Intan61
Goodwill and Identified Intangible Assets - Allocation (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense for identified intangibles | $ 8,322 | [1] | $ 14,836 | $ 6,502 |
Cost of revenue [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense for identified intangibles | 5,180 | 4,434 | 719 | |
Operating expense [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense for identified intangibles | $ 3,142 | $ 10,402 | $ 5,783 | |
[1] | For the years ended December 31, 2017 and 2016, the unallocated corporate expenses included TVN acquisition- and integration-related costs, TVN VDP costs (see Note 10, “Restructuring and Related charges-TVN VDP,” for more information on TVN VDP ) and Cable Edge product line inventory obsolescence costs, totaling $7.9 million and $32.2 million, respectively. In addition, in fiscal year 2017, the unallocated corporate expenses included $8.0 million of Avid litigation settlement cost and associated legal fees (see Note 19, “Legal Proceedings,” for more information). The remaining unallocated corporate expenses for all years presented above include primarily other restructuring charges and excess facilities charges. |
Goodwill and Identified Intan62
Goodwill and Identified Intangible Assets Goodwill and Intangible Assets - Estimated Future Amortized Intangible Expense by Purchased Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
2,018 | $ 8,379 | |
2,019 | 8,379 | |
2,020 | 4,014 | |
2,021 | 507 | |
Total future amortization expense | 21,279 | $ 29,231 |
Operating expense [Member] | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
2,018 | 3,199 | |
2,019 | 3,199 | |
2,020 | 3,063 | |
2,021 | 507 | |
Total future amortization expense | 9,968 | |
Cost of Sales [Member] | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
2,018 | 5,180 | |
2,019 | 5,180 | |
2,020 | 951 | |
2,021 | 0 | |
Total future amortization expense | $ 11,311 |
Accounts Receivable - Accounts
Accounts Receivable - Accounts Receivable, Net of Allowances (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Accounts receivable | $ 74,475 | $ 91,596 |
Less: allowance for doubtful accounts and sales returns | (4,631) | (4,831) |
Accounts Receivable, Net, Current, Total | $ 69,844 | $ 86,765 |
Accounts Receivable - Summary o
Accounts Receivable - Summary of Activity in Allowances for Doubtful Accounts, Returns and Discounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | |||
Balance at Beginning of Period | $ 4,831 | $ 4,340 | $ 7,057 |
Charges to Revenue | 4,030 | 1,488 | 1,826 |
Charges (Credits) to Expense | 881 | 1,100 | 208 |
Additions to (Deductions from) Reserves | (5,111) | (2,097) | (4,751) |
Balance at End of Period | $ 4,631 | $ 4,831 | $ 4,340 |
Certain Balance Sheet Compone65
Certain Balance Sheet Components Certain Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
French R&D tax credits receivables (1) | [1] | $ 6,609 | $ 5,895 |
Deferred cost of revenue | 4,440 | 6,856 | |
Prepaid maintenance, royalty, rent, property taxes and value added tax | 3,867 | 5,526 | |
Restricted cash (2) | [2] | 530 | 731 |
Other | 3,485 | 7,311 | |
Prepaid Expense and Other Assets, Current | $ 18,931 | $ 26,319 | |
[1] | The Company’s acquired TVN subsidiary in France (the “TVN French Subsidiary”) participates in the French Crédit d’Impôt Recherche (“CIR”) program (the “R&D tax credits”) which allows companies to monetize eligible research expenses. The R&D tax credits can be used to offset against income tax payable to the French government in each of the four years after being incurred, or if not utilized, are recoverable in cash. The amount of R&D tax credits recoverable are subject to audit by the French government and in the year ended December 31, 2017 and 2016, the French government approved the 2013 and 2012 claims and refunded $6.4 million and $5.8 million to the TVN French Subsidiary, respectively. The remaining R&D tax credit receivables at December 31, 2017 were approximately $28.5 million and are expected to be recoverable from 2018 through 2021 with $6.6 million reported under “Prepaid and other Current Assets” and $21.9 million reported under “Other Long-term Assets” on the Company’s Consolidated Balance Sheets. | ||
[2] | The restricted cash balances are held as cash collateral security for certain bank guarantees. These restricted funds are invested in bank deposits and cannot be withdrawn from the Company’s accounts without the prior written consent of the applicable secured party. Additionally, as of December 31, 2017, the Company had approximately $1.2 million of restricted cash for the bank guarantee associated with the TVN French Subsidiary’s office building lease. This amount is reported under “Other Long-term Assets” on the Company’s Consolidated Balance Sheets. |
Certain Balance Sheet Compone66
Certain Balance Sheet Components Certain Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Raw materials | $ 2,881 | $ 9,889 |
Work-in-process | 933 | 2,318 |
Finished goods | 10,130 | 17,776 |
Service-related spares | 12,032 | 11,210 |
Inventories | $ 25,976 | $ 41,193 |
Certain Balance Sheet Compone67
Certain Balance Sheet Components Certain Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | $ 143,845 | $ 155,956 | |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | [1] | (114,580) | (123,792) |
Property, Plant and Equipment, Net | 29,265 | 32,164 | |
Machinery and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | [1] | 87,121 | 97,989 |
Software Development [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 35,139 | 34,519 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | 15,051 | 14,455 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | [1] | $ 6,534 | $ 8,993 |
[1] | The reductions in these balances in 2017, compared to 2016, were due to retirement of fully depreciated assets. |
Certain Balance Sheet Compone68
Certain Balance Sheet Components Certain Balance Sheet Components - Accrued and other current liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |||
Accrued employee compensation and related expenses | $ 16,414 | $ 19,377 | |
Customer deposits | 5,020 | 4,537 | |
Accrued warranty | 4,381 | 4,862 | |
Contingent inventory reserves | 3,806 | 2,210 | |
Accrued TVN VDP, current (1) | 3,186 | 6,597 | [1] |
Accrued royalty payments | 2,195 | 1,912 | |
Other | 13,703 | 15,655 | |
Total | $ 48,705 | $ 55,150 | |
[1] | See Note 10, “Restructuring and related charges” for additional information on the Company’s TVN VDP liabilities. |
Certain Balance Sheet Compone69
Certain Balance Sheet Components Certain Balance Sheet Components - Narratives (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Jul. 01, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 26, 2016 | ||
Condensed Financial Statements, Captions [Line Items] | |||||
Income Taxes Receivable, Current | [1] | $ 6,609 | $ 5,895 | ||
TVN [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Proceeds from Income Tax Refunds | $ 5,800 | 6,400 | |||
Research Tax Credit Carryforward [Member] | TVN [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Income Taxes Receivable, Noncurrent | 28,500 | ||||
Other Noncurrent Assets [Member] | Research Tax Credit Carryforward [Member] | TVN [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Income Taxes Receivable, Noncurrent | 21,900 | ||||
Prepaid Expenses and Other Current Assets [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Prepaid Warrants Incentive | 1,000 | ||||
Comcast Product Supply Agreement [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Warrants and Rights Outstanding | $ 1,600 | ||||
Property Lease Guarantee [Member] | Other Noncurrent Assets [Member] | TVN [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Restricted Cash and Cash Equivalents | $ 1,200 | ||||
[1] | The Company’s acquired TVN subsidiary in France (the “TVN French Subsidiary”) participates in the French Crédit d’Impôt Recherche (“CIR”) program (the “R&D tax credits”) which allows companies to monetize eligible research expenses. The R&D tax credits can be used to offset against income tax payable to the French government in each of the four years after being incurred, or if not utilized, are recoverable in cash. The amount of R&D tax credits recoverable are subject to audit by the French government and in the year ended December 31, 2017 and 2016, the French government approved the 2013 and 2012 claims and refunded $6.4 million and $5.8 million to the TVN French Subsidiary, respectively. The remaining R&D tax credit receivables at December 31, 2017 were approximately $28.5 million and are expected to be recoverable from 2018 through 2021 with $6.6 million reported under “Prepaid and other Current Assets” and $21.9 million reported under “Other Long-term Assets” on the Company’s Consolidated Balance Sheets. |
Restructuring and Excess Faci70
Restructuring and Excess Facilities - Restructuring and Asset Impairment Charges COS vs OPEX (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | [1] | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | ||||
Product cost of revenue | $ 1,279 | $ 3,400 | $ 113 | |
Operating expenses - Restructuring and related Charges | 5,307 | 14,602 | 1,372 | |
Restructuring and Related Cost | $ 6,586 | $ 18,002 | $ 1,485 | |
[1] | The restructuring and related charges for the year ended December 31, 2016 is net of $0.6 million and $1.4 million, in product cost of revenue and operating expenses-restructuring and related charges, respectively, of gain from TVN pension curtailment. See discussion below “Harmonic 2016 Restructuring Plan-TVN VDP” for additional information on the gain from TVN pension curtailment. |
Restructuring and Excess Faci71
Restructuring and Excess Facilities - Additional Information (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | 24 Months Ended | |||||||
Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)Employees | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2015USD ($) | Jan. 04, 2016USD ($) | |||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Gain From TVN Pension Curtailment | $ 0 | $ 1,955 | ||||||||
Restructuring and Related Cost | 6,586 | [1] | 18,002 | $ 1,485 | ||||||
Curtailment | [2] | 0 | (1,955) | |||||||
Adjustments to restructuring provisions | 5,307 | 14,602 | 1,372 | |||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | 330 | 304 | ||||||||
TVN Voluntary Departure Plan [Member] | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring and Related Cost | $ 13,100 | |||||||||
Harmonic 2017 Restructuring Plan [Member] | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring charges | 2,500 | |||||||||
Payments for Restructuring | 2,000 | |||||||||
Restructuring Reserve | 500 | $ 500 | ||||||||
Harmonic 2017 Restructuring Plan [Member] | Employee Severance [Member] | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring charges | 2,100 | |||||||||
Harmonic 2017 Restructuring Plan [Member] | Facility Closing [Member] | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring charges | 400 | |||||||||
Harmonic 2015 Restructuring [Member] | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring and Related Cost | $ 1,500 | $ 2,200 | $ 3,700 | |||||||
Harmonic 2016 Restructuring Plan [Member] | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring charges | 19,779 | |||||||||
Payments for Restructuring | 11,065 | 7,507 | ||||||||
Restructuring Reserve | 13,544 | 7,554 | 13,544 | 7,554 | ||||||
Restructuring and Related Cost | 20,000 | |||||||||
Adjustments to restructuring provisions | 4,123 | 247 | ||||||||
Harmonic 2016 Restructuring Plan [Member] | Employee Severance [Member] | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring charges | 4,702 | |||||||||
Payments for Restructuring | 2,690 | 3,075 | ||||||||
Restructuring Reserve | 1,519 | 0 | 1,519 | 0 | ||||||
Adjustments to restructuring provisions | 1,134 | (88) | ||||||||
Harmonic 2016 Restructuring Plan [Member] | Facility Closing [Member] | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring charges | [3] | 1,655 | ||||||||
Payments for Restructuring | [3] | 1,172 | 948 | |||||||
Restructuring Reserve | [3] | 2,375 | 2,426 | 2,375 | 2,426 | |||||
Restructuring and Related Cost | 2,200 | |||||||||
Adjustments to restructuring provisions | [3] | 1,223 | 582 | |||||||
Harmonic 2016 Restructuring Plan [Member] | Severance [Member] | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring and Related Cost | $ 17,800 | |||||||||
Restructuring and Related Cost, Number of Positions Eliminated | Employees | 118 | |||||||||
Harmonic 2016 Restructuring Plan [Member] | TVN Voluntary Departure Plan [Member] | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring charges | $ 13,175 | |||||||||
Payments for Restructuring | 7,203 | 3,484 | ||||||||
Restructuring Reserve | [3] | $ 9,650 | 5,128 | 9,650 | 5,128 | |||||
Restructuring and Related Cost | 1,100 | |||||||||
Adjustments to restructuring provisions | 1,766 | 0 | ||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | $ 13,100 | |||||||||
Payments of Voluntary Plan Benefit Obligation | $ 10,700 | |||||||||
TVN [Member] | Cost of revenue [Member] | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Gain From TVN Pension Curtailment | 600 | |||||||||
TVN [Member] | Restructuring Charges [Member] | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Gain From TVN Pension Curtailment | 1,400 | |||||||||
TVN [Member] | Harmonic 2016 Restructuring Plan [Member] | Severance [Member] | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring and Related Cost, Number of Positions Eliminated | Employees | 83 | |||||||||
San Jose CA Excess Facility [Member] | Harmonic 2016 Restructuring Plan [Member] | Facility Closing [Member] | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring charges | $ 1,400 | |||||||||
Adjustments to restructuring provisions | $ 1,200 | $ 600 | ||||||||
Other Liabilities, Fair Value Disclosure | $ 2,500 | |||||||||
Deferred Rent Credit | $ 1,100 | |||||||||
[1] | The restructuring and related charges for the year ended December 31, 2016 is net of $0.6 million and $1.4 million, in product cost of revenue and operating expenses-restructuring and related charges, respectively, of gain from TVN pension curtailment. See discussion below “Harmonic 2016 Restructuring Plan-TVN VDP” for additional information on the gain from TVN pension curtailment. | |||||||||
[2] | As a result of the TVN VDP, the defined benefit pension plan was remeasured in the fourth quarter of 2016, which resulted in a non-cash curtailment gain of $2.0 million. The curtailment gain was recognized in the Consolidated Statement of Operations during the fourth quarter of 2016 and the Company’s pension liability was reduced by the same amount. Of the $2.0 million pension curtailment gain, $0.6 million is included in product cost of revenue and the remaining $1.4 million is included in operating expenses-restructuring and related charges in the Consolidated Statement of Operations. The remeasurement did not have a material effect on other components of net periodic pension expense for the year ended December 31, 2016. | |||||||||
[3] | The current portion and long-term portion of the restructuring liability are reported under “Accrued and other current liabilities” and “Other non-current liabilities”, respectively, on the Company’s Consolidated Balance Sheets. |
Restructuring and Excess Faci72
Restructuring and Excess Facilities Restructuring and Excess Facilities - 2016 Restructuring Roll Forward (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Restructuring Cost and Reserve [Line Items] | ||||
Adjustments to restructuring provisions | $ 5,307 | $ 14,602 | $ 1,372 | |
Harmonic 2016 Restructuring Plan [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 19,779 | |||
Adjustments to restructuring provisions | 4,123 | 247 | ||
Reclassification of deferred rent | 1,087 | |||
Cash payments | (11,065) | (7,507) | ||
Foreign exchange loss | 952 | (62) | ||
Restructuring reserve | 7,554 | 13,544 | ||
Less: current portion (4) | (3,831) | |||
Long-term portion (4) | 3,723 | |||
Facility Closing [Member] | Harmonic 2016 Restructuring Plan [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | [1] | 1,655 | ||
Adjustments to restructuring provisions | [1] | 1,223 | 582 | |
Reclassification of deferred rent | [1] | 1,087 | ||
Cash payments | [1] | (1,172) | (948) | |
Foreign exchange loss | [1] | (1) | ||
Restructuring reserve | [1] | 2,426 | 2,375 | |
Less: current portion (4) | [1] | (645) | ||
Long-term portion (4) | [1] | 1,781 | ||
TVN Voluntary Departure Plan [Member] | Harmonic 2016 Restructuring Plan [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 13,175 | |||
Adjustments to restructuring provisions | 1,766 | 0 | ||
Reclassification of deferred rent | 0 | |||
Cash payments | (7,203) | (3,484) | ||
Foreign exchange loss | 915 | (41) | ||
Restructuring reserve | [1] | 5,128 | 9,650 | |
Less: current portion (4) | (3,186) | |||
Long-term portion (4) | 1,942 | |||
Employee Severance [Member] | Harmonic 2016 Restructuring Plan [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 4,702 | |||
Adjustments to restructuring provisions | 1,134 | (88) | ||
Reclassification of deferred rent | 0 | |||
Cash payments | (2,690) | (3,075) | ||
Foreign exchange loss | 37 | (20) | ||
Restructuring reserve | 0 | 1,519 | ||
Less: current portion (4) | 0 | |||
Long-term portion (4) | $ 0 | |||
Other Restructuring [Member] | Harmonic 2016 Restructuring Plan [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 247 | |||
Adjustments to restructuring provisions | $ (247) | |||
[1] | The current portion and long-term portion of the restructuring liability are reported under “Accrued and other current liabilities” and “Other non-current liabilities”, respectively, on the Company’s Consolidated Balance Sheets. |
Convertible Notes and Credit 73
Convertible Notes and Credit Facilities - Additional Information (Detail) | Dec. 14, 2015shares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)$ / shares | Sep. 29, 2017USD ($) | |
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | 4.00% | ||||
Debt Instrument, Face Amount | $ 128,250,000 | $ 128,250,000 | ||||
Debt Instrument, Convertible, Conversion Ratio | 173.9978 | |||||
Debt Conversion, Converted Instrument, Amount | $ 1,000 | $ 1,000 | ||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 5.75 | $ 5.75 | ||||
Proceeds from convertible debt | $ 0 | $ 0 | $ 128,250,000 | |||
Stock Repurchased and Retired During Period, Shares | shares | 0 | 0 | ||||
Debt Issuance Cost | 4,100,000 | |||||
Percentage Of Principal Amount Of Convertible Notes Is Equal To Repurchase Price | 100.00% | |||||
Loans Payable to Bank | [1] | $ 20,565,000 | $ 17,930,000 | |||
Stock price greater or equal 130 percent of Note Conversion Price [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Convertible, Threshold Trading Days | 20 | |||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 30 | |||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 130.00% | |||||
Note price less than 98 percent of stock price times conversion rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Conversion, Converted Instrument, Amount | $ 1,000 | |||||
Debt Instrument, Convertible, Threshold Trading Days | 5 | |||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 5 | |||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 98.00% | |||||
Revolving Credit Facility [Member] | Silicon Valley Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Current Borrowing Capacity | $ 15,000,000 | $ 15,000,000 | ||||
Outstanding Borrowing Limit Based on Eligible Receivables, Percentage | 85.00% | |||||
Minimum Net Worth Required for Compliance | 20,000,000 | |||||
Minimum Liquidity Amount on and after November 1, 2017 | 10,000,000 | |||||
Line of Credit Facility, Fair Value of Amount Outstanding | 0 | |||||
Performance Guarantee [Member] | Foreign Line of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Fair Value of Amount Outstanding | 0 | |||||
Long-term Line of Credit | 2,000,000 | |||||
Privately Negotiated Transactions [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from convertible debt | 49,900,000 | |||||
Stock Repurchased and Retired During Period, Shares | shares | 11,100,000 | |||||
TVN [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from convertible debt | $ 74,200,000 | |||||
Income Taxes Receivable | $ 28,500,000 | |||||
Loans Backed By French Research And Development Tax Credit Receivables [Member] | TVN [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 0.60% | |||||
Loans Payable to Bank | $ 17,700,000 | 14,700,000 | ||||
Adjusted EURIBOR Rate, Term | 1 month | |||||
Debt Instrument, Basis Spread on Variable Rate | 1.30% | |||||
Loans Backed By French Government Agencies for R&D Innovation Projects [Member] | TVN [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Loans Payable to Bank | $ 2,900,000 | $ 3,200,000 | ||||
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility [Member] | Silicon Valley Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | |||||
Not Comply with Liquidity Requirement [Member] | Prime Rate [Member] | Revolving Credit Facility [Member] | Silicon Valley Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 0.25% | |||||
Comply with Liquidity Requirement [Member] | Prime Rate [Member] | Revolving Credit Facility [Member] | Silicon Valley Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 0.00% | |||||
[1] | backed by French R&D tax credit receivables were $17.7 million and $14.7 million as of December 31, 2017 and 2016, respectively. As of December 31, 2017, the TVN French Subsidiary had an aggregate of $28.5 million of R&D tax credit receivables from the French government from 2018 through 2021. (See Note 9, “Certain Balance Sheet Components-Prepaid expenses and other current assets,” for more information). These tax loans have a fixed rate of 0.6%, plus EURIBOR 1 month plus 1.3% and mature between 2018 through 2020. The remaining loans of $2.9 million and $3.2 million as of December 31, 2017 and 2016, respectively, primarily relate to financial support from French government agencies for R&D innovation projects at minimal interest rates and the loans outstanding at December 31, 2017 mature between 2020 through 2025. |
Convertible Notes and Credit 74
Convertible Notes and Credit Facilities Convertible Notes and Credit Facilities - Convertible Roll Forward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Principal amount | $ 128,250 | $ 128,250 |
Less: Debt discount, net of amortization | (17,404) | (22,302) |
Less: Debt issuance costs, net of amortization | (2,098) | (2,689) |
Carrying amount | $ 108,748 | $ 103,259 |
Remaining amortization period (years) | 2 years 10 months 28 days | 3 years 10 months 28 days |
Effective interest rate on liability component | 9.94% | 9.94% |
Carrying amount | $ 26,062 | $ 26,062 |
Convertible Notes and Credit 75
Convertible Notes and Credit Facilities Convertible Notes and Credit Facilities - Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |||
Contractual interest expense | $ 5,130 | $ 5,130 | $ 240 |
Amortization of Debt Discount | 4,898 | 4,430 | 193 |
Amortization of debt issuance costs | 591 | 534 | 23 |
Total interest expense recognized | $ 10,619 | $ 10,094 | $ 456 |
Convertible Notes and Credit 76
Convertible Notes and Credit Facilities Convertible Notes - Other Debts and Capital Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |||
Loans Payable to Bank | [1] | $ 20,565 | $ 17,930 |
Other Loans Payable | 1,282 | 1,400 | |
Capital Lease Obligations | 1,099 | 1,860 | |
Debt and Capital Lease Obligations | 22,946 | 21,190 | |
Long-term Debt and Capital Lease Obligations, Current | (7,610) | (7,275) | |
Long-term Debt and Capital Lease Obligations | $ 15,336 | $ 13,915 | |
[1] | backed by French R&D tax credit receivables were $17.7 million and $14.7 million as of December 31, 2017 and 2016, respectively. As of December 31, 2017, the TVN French Subsidiary had an aggregate of $28.5 million of R&D tax credit receivables from the French government from 2018 through 2021. (See Note 9, “Certain Balance Sheet Components-Prepaid expenses and other current assets,” for more information). These tax loans have a fixed rate of 0.6%, plus EURIBOR 1 month plus 1.3% and mature between 2018 through 2020. The remaining loans of $2.9 million and $3.2 million as of December 31, 2017 and 2016, respectively, primarily relate to financial support from French government agencies for R&D innovation projects at minimal interest rates and the loans outstanding at December 31, 2017 mature between 2020 through 2025. |
Convertible Notes and Credit 77
Convertible Notes and Credit Facilities Convertible Notes, Other Debts and Capital Leases - Debt Maturities (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Debt Disclosure [Abstract] | |
Capital Lease Obligations 2018 | $ 930 |
Other Debt Obligations 2018 | 6,674 |
Capital Lease Obligations 2019 | 95 |
Other Debt Obligations 2019 | 7,141 |
Capital Lease Obligations 2020 | 51 |
Other Debt Obligations 2020 | 6,942 |
Capital Lease Obligations 2021 | 23 |
Other Debt Obligations 2021 | 515 |
Capital Lease Obligations 2022 | 0 |
Other Debt Obligations 2022 | 474 |
Capital Lease Obligations Thereafter | 0 |
Other Debt Obligations Thereafter | 101 |
Capital Lease Obligations Total | 1,099 |
Long-term Debt | $ 21,847 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) | Jan. 01, 2017 | Jun. 09, 2016 | Sep. 29, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Additional shares authorized | 7,400,000 | |||||||
Shares available for grant | 9,004,000 | 3,912,000 | ||||||
Intrinsic value of options exercised | $ 300,000 | $ 100,000 | $ 1,700,000 | |||||
Allocated Share-based Compensation Expense | 16,610,000 | [1] | 13,060,000 | 15,582,000 | ||||
Payment for Pension and Other Postretirement Benefits | 0 | |||||||
Defined Benefit Plan, Benefit Obligation, (Increase) Decrease for Curtailment | [2] | 0 | 1,955,000 | |||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Curtailment | $ 0 | 1,955,000 | ||||||
Net Accumulated Gain or Loss as a Percentage of Projected Plan Benefit Obligation | 10.00% | |||||||
Company discretionary employee match | 25.00% | |||||||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 4.00% | |||||||
Employer contributions made | $ 300,000 | $ 400,000 | $ 400,000 | |||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 9,900,000 | |||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 4 months 8 days | |||||||
Maximum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Employer contributions made | $ 1,000 | |||||||
Stock Options [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 6.04 | $ 6.01 | ||||||
Dividend yield | 0.00% | 0.00% | 0.00% | |||||
Weighted-average fair value per share of option granted | $ 1.85 | $ 0.99 | $ 2.51 | |||||
Fair value of options vested | $ 1,700,000 | $ 2,300,000 | $ 3,000,000 | |||||
Employee Service Share-based Compensation, Tax Benefit from Exercise of Stock Options | $ 0 | $ 0 | $ 0 | |||||
Performance Shares [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 1,165,685 | 898,533 | 395,760 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 1,165,685 | 610,579 | 239,744 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 0 | |||||||
Allocated Share-based Compensation Expense | $ 3,200,000 | $ 2,800,000 | $ 600,000 | |||||
Market-based awards [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 344,500 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 0 | |||||||
Allocated Share-based Compensation Expense | $ 900,000 | |||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 200,000 | |||||||
Restricted Stock [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 3,546,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 3,184,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 2,904,000 | 3,864,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 5.12 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 13,000,000 | $ 9,700,000 | $ 11,100,000 | |||||
Employee Stock Purchase Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Price at which stock options or ESPP may be granted | 85.00% | |||||||
Common stock reserved for issuance | 1,114,796 | |||||||
ESPP Employee Percentage of Payroll Deductions, Minimum | 1.00% | |||||||
ESPP Employee Percentage of Payroll Deductions, Maximum | 10.00% | |||||||
Common stock issued under the 2002 ESPP | 1,291,875 | 1,265,458 | 888,152 | |||||
Stock contributions value under 2002 ESPP | $ 4,400,000 | $ 3,700,000 | $ 5,200,000 | |||||
Discount Percentage On Purchase Of Stock | 15.00% | |||||||
Value Of Stock Purchase Right Percentage Of Put Option | 15.00% | |||||||
Dividend yield | 0.00% | 0.00% | 0.00% | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 1.50 | $ 1.04 | $ 1.69 | |||||
1995 Stock Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Price at which stock options or ESPP may be granted | 100.00% | |||||||
Expiration period | 7 years | |||||||
Reduced the number of shares reserved for every unit granted | 1.5 | |||||||
Increased number of shares reserved for every unit forfeited | 1.5 | |||||||
Additional shares authorized | 7,000,000 | |||||||
Common stock reserved for issuance | 14,858,418 | |||||||
Shares available for grant | 8,381,707 | |||||||
1995 Stock Plan [Member] | Minimum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 2 years | |||||||
1995 Stock Plan [Member] | Maximum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 4 years | |||||||
1995 Stock Plan [Member] | Stock Options [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Price at which stock options or ESPP may be granted | 85.00% | |||||||
1995 Stock Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 0 | |||||||
2002 Director Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Price at which stock options or ESPP may be granted | 100.00% | |||||||
Reduced the number of shares reserved for every unit granted | 1.5 | |||||||
Increased number of shares reserved for every unit forfeited | 1.5 | |||||||
Additional shares authorized | 400,000 | |||||||
Common stock reserved for issuance | 837,174 | |||||||
Shares available for grant | 623,034 | |||||||
2002 Director Plan [Member] | Options and Restricted Stock Units [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 3 years | |||||||
Expiration period | 7 years | |||||||
2002 Director Plan [Member] | Options and Restricted Stock Units [Member] | Subsequent Grants [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Vesting period | 1 year | |||||||
2002 Director Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 0 | |||||||
Assumed Employee Equity Plans [Member] | TVN [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Acquisition Consideration, Assumed Existing Employee Equity Benefit Plans Fully Vested and Settled | $ 2,900,000 | |||||||
Cost of Sales [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Allocated Share-based Compensation Expense | $ 2,370,000 | $ 1,554,000 | $ 1,862,000 | |||||
Cost of Sales [Member] | TVN [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Curtailment | 600,000 | |||||||
Restructuring Charges [Member] | TVN [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Curtailment | $ 1,400,000 | |||||||
Accounting Standards Update 2016-09 [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Cumulative Effect on Retained Earnings, Net of Tax | $ 69,000 | |||||||
[1] | For the years ended December 31, 2017 and 2016, the unallocated corporate expenses included TVN acquisition- and integration-related costs, TVN VDP costs (see Note 10, “Restructuring and Related charges-TVN VDP,” for more information on TVN VDP ) and Cable Edge product line inventory obsolescence costs, totaling $7.9 million and $32.2 million, respectively. In addition, in fiscal year 2017, the unallocated corporate expenses included $8.0 million of Avid litigation settlement cost and associated legal fees (see Note 19, “Legal Proceedings,” for more information). The remaining unallocated corporate expenses for all years presented above include primarily other restructuring charges and excess facilities charges. | |||||||
[2] | As a result of the TVN VDP, the defined benefit pension plan was remeasured in the fourth quarter of 2016, which resulted in a non-cash curtailment gain of $2.0 million. The curtailment gain was recognized in the Consolidated Statement of Operations during the fourth quarter of 2016 and the Company’s pension liability was reduced by the same amount. Of the $2.0 million pension curtailment gain, $0.6 million is included in product cost of revenue and the remaining $1.4 million is included in operating expenses-restructuring and related charges in the Consolidated Statement of Operations. The remeasurement did not have a material effect on other components of net periodic pension expense for the year ended December 31, 2016. |
Employee Benefit Plans - Summar
Employee Benefit Plans - Summary of Company's Stock Option and Restricted Stock Unit Activity (Detail) shares in Thousands | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Available for Grant, Beginning balance | 3,912 |
Shares Available for Grant, Authorized | 7,400 |
Number of Shares, Granted, Shares Available for Grant | (5,351) |
Number of Shares, Forfeited or Canceled, Options and Other than Options | 3,043 |
Shares Available for Grant, Ending balance | 9,004 |
Stock Options Outstanding [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, Beginning balance | 5,019 |
Number of Shares, Authorized | 0 |
Number of Shares, Granted | 30 |
Number of Shares, Options exercised | (106) |
Number of Shares, Forfeited or cancelled | (1,063) |
Number of Shares, Ending balance | 3,880 |
Weighted Average Exercise Price, Beginning balance | $ / shares | $ 6.01 |
Weighted Average Exercise Price, Granted | $ / shares | 5.10 |
Weighted Average Exercise Price, Options exercised | $ / shares | 2.97 |
Weighted Average Exercise Price, Forfeited or cancelled | $ / shares | 6.18 |
Weighted Average Exercise Price, Ending balance | $ / shares | $ 6.04 |
Restricted Stock Units Outstanding [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, Authorized | 0 |
Number of Units, Beginning balance | 3,864 |
Number of Units, Granted | 3,546 |
Number of Units, Exercised | 0 |
Number of Units, Shares released | (3,184) |
Number of Units, Forfeited or cancelled | (1,322) |
Number of Units, Ending balance | 2,904 |
Weighted Average Grant Date Fair Value, Beginning balance | $ / shares | $ 4.26 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 5.12 |
Weighted Average Grant Date Fair Value, Shares released | $ / shares | 4.10 |
Weighted Average Grant Date Fair Value, Forfeited or cancelled | $ / shares | 5.14 |
Weighted Average Grant Date Fair Value, Ending balance | $ / shares | $ 5.09 |
Employee Benefit Plans - Summ80
Employee Benefit Plans - Summary of Stock Options Outstanding (Detail) - Stock Options Outstanding [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, Vested and expected to vest | shares | 3,845 |
Weighted Average Exercise Price, Vested and expected to vest | $ / shares | $ 6.06 |
Weighted Average Remaining Contractual Term (Years), Vested and expected to vest | 2 years 9 months 18 days |
Aggregate Intrinsic Value, Vested and expected to vest | $ | $ 946 |
Number of Shares, Exercisable | shares | 3,367 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 6.21 |
Weighted Average Remaining Contractual Term (Years), Exercisable | 2 years 7 months 6 days |
Aggregate Intrinsic Value, Exercisable | $ | $ 664 |
Employee Benefit Plans - Summ81
Employee Benefit Plans - Summary of Restricted Stock Units Outstanding (Detail) - Restricted Stock Units Outstanding [Member] shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares Underlying Restricted Stock Units, Vested and expected to vest | shares | 2,402 |
Weighted Average Remaining Vesting Period (Years), Vested and expected to vest | 7 months 6 days |
Aggregate Fair Value, Vested and expected to vest | $ | $ 10,088 |
Employee Benefit Plans - Pensio
Employee Benefit Plans - Pension Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Retirement Benefits [Abstract] | ||||
Defined Benefit Plan, Benefit Obligation | $ 5,033 | $ 4,264 | $ 0 | |
Acquired from TVN acquisition | 0 | 5,907 | ||
Service cost | 259 | 217 | ||
Interest cost | 71 | 87 | ||
Actuarial (gains) losses | (528) | 279 | ||
Curtailment | [1] | 0 | (1,955) | |
Adjustment for prior year balance | 343 | 0 | ||
Foreign currency translation adjustment | 624 | (271) | ||
Current portion (presented under “Accrued and other current liabilities”) | 34 | 27 | ||
Long-term portion (presented under “Other non-current liabilities”) | $ 4,999 | $ 4,237 | ||
[1] | As a result of the TVN VDP, the defined benefit pension plan was remeasured in the fourth quarter of 2016, which resulted in a non-cash curtailment gain of $2.0 million. The curtailment gain was recognized in the Consolidated Statement of Operations during the fourth quarter of 2016 and the Company’s pension liability was reduced by the same amount. Of the $2.0 million pension curtailment gain, $0.6 million is included in product cost of revenue and the remaining $1.4 million is included in operating expenses-restructuring and related charges in the Consolidated Statement of Operations. The remeasurement did not have a material effect on other components of net periodic pension expense for the year ended December 31, 2016. |
Employee Benefit Plans And Stoc
Employee Benefit Plans And Stock-Based Compensation Employee Benefit Plans - Components of Net Periodic Benefit Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Postemployment Benefits [Abstract] | |||
Service cost | $ 259 | $ 217 | |
Interest cost | 71 | 87 | |
Amortization of net actuarial loss (gain) | [1] | 0 | 0 |
Net periodic benefit cost included in operating loss | $ 330 | $ 304 | |
[1] | The Company uses the allowable 10% corridor approach to determine the amount of actuarial gains or losses subject to amortization in pension cost. Gains or losses are amortized on a straight-line basis over the average future remaining service period of active plan participants. |
Employee Benefits - Pension Obl
Employee Benefits - Pension Obligations Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | ||
Discount rate | 1.50% | 1.50% |
Mobility rate | 6.00% | 3.00% |
Salary progression rate | 2.00% | 2.00% |
Employee Benefit Plans - Expect
Employee Benefit Plans - Expected Future Benefits (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Retirement Benefits [Abstract] | |
2,018 | $ 34 |
2,019 | 53 |
2,020 | 0 |
2,021 | 44 |
2,022 | 143 |
2023 - 2027 | 2,858 |
Defined Benefit Plan Expected Future Benefit Payments | $ 3,132 |
Employee Benefits Plans - Summa
Employee Benefits Plans - Summary of Stock-Based Compensation Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total employee stock-based compensation recognized in income (loss) from continuing operations | $ 16,610 | [1] | $ 13,060 | $ 15,582 |
Cost of Sales [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total employee stock-based compensation recognized in income (loss) from continuing operations | 2,370 | 1,554 | 1,862 | |
Research and Development Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total employee stock-based compensation recognized in income (loss) from continuing operations | 5,313 | 3,711 | 4,435 | |
Selling General And Administrative Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total employee stock-based compensation recognized in income (loss) from continuing operations | 8,927 | 7,795 | 9,285 | |
Operating expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total employee stock-based compensation recognized in income (loss) from continuing operations | $ 14,240 | $ 11,506 | $ 13,720 | |
[1] | For the years ended December 31, 2017 and 2016, the unallocated corporate expenses included TVN acquisition- and integration-related costs, TVN VDP costs (see Note 10, “Restructuring and Related charges-TVN VDP,” for more information on TVN VDP ) and Cable Edge product line inventory obsolescence costs, totaling $7.9 million and $32.2 million, respectively. In addition, in fiscal year 2017, the unallocated corporate expenses included $8.0 million of Avid litigation settlement cost and associated legal fees (see Note 19, “Legal Proceedings,” for more information). The remaining unallocated corporate expenses for all years presented above include primarily other restructuring charges and excess facilities charges. |
Employee Benefits Plan - Stock-
Employee Benefits Plan - Stock-Based Compensation - Valuation Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 4 years 3 months 18 days | 4 years 3 months 18 days | 4 years 7 months 25 days |
Volatility | 42.00% | 36.00% | 38.00% |
Risk-free interest rate | 1.80% | 1.40% | 1.50% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 6 months | 6 months | 6 months |
Volatility | 48.00% | 70.00% | 34.00% |
Risk-free interest rate | 1.20% | 0.60% | 0.30% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - shares | Dec. 14, 2015 | Dec. 31, 2017 | Dec. 31, 2016 |
Class of Stock [Line Items] | |||
Preferred stock authorized | 5,000,000 | 5,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common stock repurchased and retired, shares | 0 | 0 | |
Privately Negotiated Transactions [Member] | |||
Class of Stock [Line Items] | |||
Common stock repurchased and retired, shares | 11,100,000 |
Stockholders' Equity - Componen
Stockholders' Equity - Components of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Equity [Abstract] | |||
Foreign currency translation adjustments | $ 4,310 | $ (7,267) | |
Unrealized foreign exchange loss on intercompany long-term loans, net of taxes | (1,177) | 0 | |
Gainon investments, net of taxes (1) | [1] | 276 | |
Actuarial gain (loss) | 249 | (279) | |
Total accumulated other comprehensive loss | $ 3,382 | $ (7,270) | |
[1] | See Consolidated Statements of Comprehensive Loss for the amounts related to investments that were reclassified into the Consolidated Statements of Operations for the periods presented. |
Income Taxes - Income (Loss) Be
Income Taxes - Income (Loss) Before Income Tax Provision (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Income Tax Disclosure [Abstract] | ||||
United States | $ (50,041) | $ (53,833) | $ (16,826) | |
International | (34,666) | (26,597) | 758 | |
Loss before income taxes | $ (84,707) | [1] | $ (80,430) | $ (16,068) |
[1] | For the years ended December 31, 2017 and 2016, the unallocated corporate expenses included TVN acquisition- and integration-related costs, TVN VDP costs (see Note 10, “Restructuring and Related charges-TVN VDP,” for more information on TVN VDP ) and Cable Edge product line inventory obsolescence costs, totaling $7.9 million and $32.2 million, respectively. In addition, in fiscal year 2017, the unallocated corporate expenses included $8.0 million of Avid litigation settlement cost and associated legal fees (see Note 19, “Legal Proceedings,” for more information). The remaining unallocated corporate expenses for all years presented above include primarily other restructuring charges and excess facilities charges. |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||
Federal | $ (4,530) | $ (950) | $ (1,981) |
State | 129 | 181 | 120 |
International | 273 | 2,738 | 1,966 |
Deferred: | |||
Federal | 0 | (713) | 0 |
State | 0 | 0 | 0 |
International | 2,376 | (9,372) | (512) |
Total benefit from income taxes | $ (1,752) | $ (8,116) | $ (407) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | Jan. 01, 2017 | Feb. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2017 | Dec. 31, 2014 | |
Debt Instrument, Face Amount | $ 128,250,000 | $ 128,250,000 | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 35.00% | 35.00% | |||||
Effective Income Tax Rate Reconciliation, Tax Settlement, Other, Amount | $ (834,000) | |||||||
World Consolidated Loss Before Tax | 84,707,000 | [1] | $ 80,430,000 | $ 16,068,000 | ||||
Income Tax Benefit | $ 1,752,000 | $ 8,116,000 | $ 407,000 | |||||
Effective Income Tax Rate Reconciliation, Percent | 2.00% | 10.00% | 3.00% | |||||
Deferred Tax Assets, Valuation Allowance | $ 77,756,000 | $ 74,480,000 | $ 64,545,000 | $ 75,199,000 | ||||
Decrease in balance as a result of a lapse of the applicable statues of limitations | 2,200,000 | 1,000,000 | 900,000 | |||||
Gross unrecognized tax benefits including interest and penalties | 18,800,000 | |||||||
Accrued potential interest related to unrecognized tax benefits | 500,000 | 500,000 | ||||||
Cumulative Undistributed Earnings of non-U.S. subsidiaries intended to be indefinitely reinvested | $ 10,500,000 | |||||||
More Likely Than Not Threshold Recognition of Uncertain Tax Position | 50.00% | |||||||
Deferred Tax Assets, Net | $ 10,462,000 | 10,181,000 | ||||||
US Tax Cuts Jobs Act [Member] | AMT credit carryover [Member] | ||||||||
Effective Income Tax Rate Reconciliation, Tax Settlement, Other, Amount | 2,600,000 | |||||||
Income Taxes Receivable, Current | 2,600,000 | |||||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | (2,600,000) | |||||||
Foreign [Member] | ||||||||
Operating Loss Carryforwards | 111,400,000 | |||||||
Federal [Member] | ||||||||
Operating Loss Carryforwards | 49,100,000 | |||||||
Tax credit carryovers | $ 11,300,000 | |||||||
Year that federal tax credits expire | Jan. 1, 2031 | |||||||
California Franchise Tax Board [Member] | ||||||||
Operating Loss Carryforwards | $ 25,400,000 | |||||||
State [Member] | ||||||||
Operating Loss Carryforwards | 53,200,000 | |||||||
Tax credit carryovers | $ 33,900,000 | |||||||
Tax credit expiration | will not expire | |||||||
Switzerland [Member] | ||||||||
Tax savings due to reduction in tax rate | $ 600,000 | $ 700,000 | $ 700,000 | |||||
Increase in diluted earnings per share | $ 0.007 | $ 0.008 | $ 0.008 | |||||
Benefits from a tax ruling | The Company’s operations in Switzerland are subject to a reduced tax rate under the Switzerland tax holiday which requires various thresholds of investment and employment in Switzerland. | |||||||
Additional period for renewal for investment and employment in foreign country | effective through the end of 2018 | |||||||
Minimum [Member] | Federal [Member] | ||||||||
Operating loss carryforwards, expiration date | Jan. 1, 2018 | |||||||
Minimum [Member] | California Franchise Tax Board [Member] | ||||||||
Operating loss carryforwards, expiration date | Jan. 1, 2018 | |||||||
Maximum [Member] | Federal [Member] | ||||||||
Operating loss carryforwards, expiration date | Jan. 1, 2037 | |||||||
Maximum [Member] | California Franchise Tax Board [Member] | ||||||||
Operating loss carryforwards, expiration date | Jan. 1, 2037 | |||||||
Foreign [Member] | ||||||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ (3,200,000) | |||||||
Valuation Allowance, Operating Loss Carryforwards [Member] | ||||||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 9,000,000 | |||||||
US Tax Cuts Jobs Act [Member] | ||||||||
Income Tax Benefit | 0 | |||||||
Tax Year 2012 [Member] | Federal [Member] | ||||||||
Decrease in balance as a result of a lapse of the applicable statues of limitations | $ 1,100,000 | |||||||
Subsequent Event [Member] | US Tax Cuts Jobs Act [Member] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | |||||||
Accounting Standards Update 2016-16 [Member] | ||||||||
Deferred Tax Assets, Valuation Allowance | $ 2,100,000 | |||||||
Deferred Tax Assets, Tax Deferred Expense | 300,000 | |||||||
Cumulative Effect on Retained Earnings, Net of Tax | $ 1,434,000 | |||||||
Deferred Tax Assets, Net | $ 1,100,000 | |||||||
Accounting Standards Update 2016-09 [Member] | ||||||||
Cumulative Effect on Retained Earnings, Net of Tax | 69,000 | |||||||
Deferred Tax Assets Gross [Member] | US Tax Cuts Jobs Act [Member] | ||||||||
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | 14,500,000 | |||||||
Deferred Tax Assets Gross [Member] | Accounting Standards Update 2016-09 [Member] | ||||||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income | 4,600,000 | |||||||
Valuation Allowance of Deferred Tax Assets [Member] | US Tax Cuts Jobs Act [Member] | ||||||||
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | $ (14,500,000) | |||||||
Retained Earnings [Member] | Accounting Standards Update 2016-09 [Member] | ||||||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income | $ 0 | |||||||
[1] | For the years ended December 31, 2017 and 2016, the unallocated corporate expenses included TVN acquisition- and integration-related costs, TVN VDP costs (see Note 10, “Restructuring and Related charges-TVN VDP,” for more information on TVN VDP ) and Cable Edge product line inventory obsolescence costs, totaling $7.9 million and $32.2 million, respectively. In addition, in fiscal year 2017, the unallocated corporate expenses included $8.0 million of Avid litigation settlement cost and associated legal fees (see Note 19, “Legal Proceedings,” for more information). The remaining unallocated corporate expenses for all years presented above include primarily other restructuring charges and excess facilities charges. |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Benefit from for income taxes at U.S. Federal statutory rate | $ (29,648) | $ (28,150) | $ (5,624) |
Differential in rates on foreign earnings | 15,920 | 11,741 | 1,584 |
Non-deductible amortization expense | 0 | 617 | 947 |
Tax Reform Tax rate reduction | 14,527 | ||
Change in valuation allowance | (2,834) | 4,465 | 2,230 |
Change in liabilities for uncertain tax positions | (2,009) | (960) | (1,083) |
Non-deductible stock-based compensation | 1,934 | 1,480 | 1,398 |
Non-deductible meals and entertainment | 380 | 441 | 395 |
Non-deductible acquisition cost | 0 | 0 | 457 |
Adjustments related to tax positions taken during prior years | (473) | (163) | (781) |
Adjustments made under intercompany transactions | 0 | 1,779 | |
Tax Refund | (834) | ||
Other | 1,285 | 634 | 70 |
Total benefit from income taxes | $ (1,752) | $ (8,116) | $ (407) |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||||
Reserves and accruals | $ 17,247 | $ 25,527 | ||
Net operating loss carryforwards | 34,915 | 33,321 | ||
Research and development credit carryforwards | 34,419 | 28,759 | ||
Deferred stock-based compensation | 2,677 | 4,292 | ||
Depreciation and amortization | 0 | 554 | ||
Intangibles | 2,062 | |||
Other tax credits | 0 | 2,738 | ||
Other | 1,441 | |||
Gross deferred tax assets | 92,761 | 95,191 | ||
Valuation allowance | (77,756) | (74,480) | $ (64,545) | $ (75,199) |
Gross deferred tax assets after valuation allowance | 15,005 | 20,711 | ||
Deferred tax liabilities: | ||||
Depreciation and amortization | (259) | 0 | ||
Intangibles | 0 | (1,417) | ||
Convertible notes | (4,284) | (8,603) | ||
Other | 0 | (510) | ||
Gross deferred tax liabilities | (4,543) | (10,530) | ||
Net deferred tax assets | $ 10,462 | $ 10,181 |
Income Taxes Income Taxes - Sum
Income Taxes Income Taxes - Summary of Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Valuation Allowance [Abstract] | |||
Balance at beginning of period | $ 74,480 | $ 64,545 | $ 75,199 |
Additions | 9,028 | 18,291 | 3,068 |
Deductions | (5,752) | (8,356) | (13,722) |
Balance at end of period | $ 77,756 | $ 74,480 | $ 64,545 |
Income Taxes - Activities Relat
Income Taxes - Activities Related to Gross Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Balance at beginning of period | $ 19.2 | $ 15.6 | $ 15.7 |
Increase in balance related to tax positions taken during current year | 1.4 | 4.6 | 0.7 |
Decrease in balance as a result of a lapse of the applicable statues of limitations | (2.2) | (1) | (0.9) |
Increase in balance related to tax positions taken during prior years | 1.8 | 0 | 0.3 |
Decrease in balance related to tax positions taken during prior years | (1.4) | 0 | (0.2) |
Balance at end of period | $ 18.8 | $ 19.2 | $ 15.6 |
Net Income (Loss) Per Share - N
Net Income (Loss) Per Share - Numerators and Denominators of Basic and Diluted Net Income (Loss) Per Share Computations (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2017 | Sep. 29, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | [4] | Sep. 30, 2016 | Jul. 01, 2016 | Apr. 01, 2016 | [2] | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||||||
Numerator: | ||||||||||||||||||||
Net loss | $ (11,516) | [1],[2],[3] | $ (15,583) | [1],[2],[3] | $ (31,500) | [1],[2],[3] | $ (24,027) | [1],[2],[3] | $ (10,443) | [1],[2],[3],[5] | $ (16,012) | [1],[2],[3],[5] | $ (20,679) | [1],[2],[3],[5] | $ (25,180) | [1],[3],[5] | $ (82,955) | $ (72,314) | $ (15,661) | |
Denominator: | ||||||||||||||||||||
Basic and diluted | 80,974 | 77,705 | 87,514 | |||||||||||||||||
Basic and diluted | $ (1.02) | $ (0.93) | $ (0.18) | |||||||||||||||||
Basic net income (loss) per share from: | ||||||||||||||||||||
Net income (loss) per share - basic | $ (0.14) | $ (0.19) | $ (0.39) | $ (0.30) | ||||||||||||||||
Net loss per share: | ||||||||||||||||||||
Net income (loss) per share - diluted | [5] | $ (0.13) | $ (0.21) | $ (0.27) | $ (0.33) | |||||||||||||||
[1] | As a result of the TVN acquisition, in 2016 and 2017, the Company incurred acquisition- and integration-related expenses of $3.0 million, $3.4 million, $5.3 million and $5.2 million, in the first through fourth quarter of 2016, respectively, and $2.2 million, $0.5 million, $0.1 million and $0.1 million in the first through fourth quarter of 2017. These costs consisted of acquisition-related costs which include outside legal, accounting and other professional services as well as integration-related costs which include incremental costs resulting from the TVN acquisition that are not expected to generate future benefits once the integration is fully consummated. These costs are expensed as incurred and the Company does not expect to incur any TVN acquisition- and integration-related expenses after 2017. | |||||||||||||||||||
[2] | In the first and third quarter of 2016 and the fourth quarter of 2017, the Company recorded impairment charges of $1.5 million, $1.2 million, and $0.5 million, respectively, for its investment in Vislink. (See Note 3, “Investments in Other Equity Securities,” of the notes to the Consolidated Financial Statements for additional information). | |||||||||||||||||||
[3] | In the fourth quarter of 2016 and 2017, the Company recorded additional valuation allowances of $18.3 and $9.0 million against all of the U.S. deferred tax assets, respectively. These increases in valuation allowances were offset partially by the release of $8.4 million and $5.8 million in the fourth quarter of 2016 and 2017, respectively, of valuation allowances associated with the Company’s foreign subsidiaries, including a one-time benefit associated with the alternative minimum tax refund related to the TCJA in the fourth quarter of 2017. | |||||||||||||||||||
[4] | In 2016, as part of the TVN integration plan, the Company established the TVN VDP to enable the French employees of TVN to voluntarily terminate with certain benefits. The Company recorded a charge of $13.1 million for TVN VDP in the fourth quarter of 2016. | |||||||||||||||||||
[5] | On February 29, 2016, the Company completed the acquisition of TVN and applied the acquisition method of accounting for the business combination. The selected quarterly financial data for the year ended December 31, 2016 of the combined entity includes 10 months of operating results of TVN beginning March 1, 2016. |
Net Income (Loss) Per Share Net
Net Income (Loss) Per Share Net Income (Loss) Per Share - Anti Diluted Shares Excluded (Details) - shares shares in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | [1] | 8,931 | 8,696 | 9,156 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,470 | 5,295 | 6,460 | |
Restricted Stock Units (RSUs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,059 | 2,536 | 2,178 | |
Employee Stock Purchase Plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 620 | 659 | 518 | |
Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | [2] | 782 | 206 | 0 |
[1] | Excluded from the table above are the Notes, which are convertible under certain conditions into an aggregate of 22,304,348 shares of common stock (see Note 11, “Convertible Notes, Other Debts and Capital Leases” for additional information on the Notes). Since the Company’s intent is to settle the principal amount of the Notes in cash, the treasury stock method is being used to calculate any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share when the Company’s average market price of its common stock for a given period exceeds the conversion price of $5.75 per share. | |||
[2] | In 2016, in connection with the execution of a product supply agreement the Company granted Comcast a warrant to purchase shares of its common stock. (See Note 16, “Warrants” for additional information). |
Net Income (Loss) Per Share - A
Net Income (Loss) Per Share - Additional Information (Detail) - $ / shares | Dec. 31, 2017 | Dec. 31, 2015 |
Earnings Per Share [Abstract] | ||
Potential Common Shares Upon Notes Conversion If Only Settled In Shares | 22,304,348 | |
Debt Instrument, Convertible, Conversion Price | $ 5.75 | $ 5.75 |
Warrants Disclosure (Details)
Warrants Disclosure (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Sep. 26, 2016 | |
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 7,816,162 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 4.76 | ||
Expected Dividend Rate | 0.00% | ||
Comcast Product Supply Agreement [Member] | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Outstanding | 781,617 | ||
Warrants and Rights Outstanding | $ 1.6 | ||
Comcast Milestones Achievement [Member] | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Unissued | 1,954,042 | ||
Comcast Exceeding Specified Cumulative Purchase Volume [Member] | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Unissued | 1,172,425 | ||
Prepaid Expenses and Other Current Assets [Member] | |||
Class of Warrant or Right [Line Items] | |||
Prepaid Warrants Incentive | $ 1 | ||
Sales Revenue, Goods, Net [Member] | Comcast Product Supply Agreement [Member] | |||
Class of Warrant or Right [Line Items] | |||
Reduction to Net Revenues with the Warrant | $ 0.2 | $ 0.4 |
Segment Information - Narrative
Segment Information - Narratives (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2016USD ($)Customercountry | Dec. 31, 2014segment | Dec. 31, 2017USD ($)Customersegmentcountry | Dec. 31, 2016USD ($)Customercountry | Dec. 31, 2015USD ($)Customercountry | Feb. 29, 2016 | ||
Segment Reporting Information [Line Items] | |||||||
Number of reportable segments | segment | 2 | 2 | |||||
Restructuring and Related Cost, Incurred Cost | $ 6,586 | [1] | $ 18,002 | $ 1,485 | |||
Inventory Write-down | $ 6,005 | 6,871 | $ 1,585 | ||||
Number Of Customers Accounting For More Than Ten Percent of Revenue | Customer | 0 | ||||||
Operating Segments [Member] | Cable Edge [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Inventory Write-down | $ 32,200 | ||||||
Sales Revenue, Net [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Concentration Risk, Percentage | 10.00% | ||||||
Number Of Customers Accounting For More Than Ten Percent of Revenue | Customer | 0 | 0 | 0 | ||||
Number Of Customers Accounting For More Than Ten Percent Of Revenue Other Than Comcast | Customer | 0 | ||||||
Comcast [Member] | Sales Revenue, Net [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Concentration Risk, Percentage | 12.00% | ||||||
Customer concentration risk ten percent or more of net revenue [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Number Of Customers Accounting For More Than Ten Percent of Revenue | 0 | 0 | 0 | ||||
Customer concentration risk ten percent or more of net revenue other than Comcast [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Number Of Customers Accounting For More Than Ten Percent Of Revenue Other Than Comcast | Customer | 0 | ||||||
Customer concentration risk ten percent or more of net revenue other than Comcast [Member] | Sales Revenue, Net [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Concentration Risk, Percentage | 10.00% | ||||||
Non-US [Member] | Sales Revenue, Net [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Number Of Countries Accounting For More Than Ten Percent of Non United States Revenue | country | 0 | 0 | 0 | 0 | |||
Concentration Risk, Percentage | 10.00% | ||||||
TVN Voluntary Departure Plan [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Restructuring and Related Cost, Incurred Cost | $ 13,100 | ||||||
Harmonic Two Thousand And Sixteen Restructuring [Member] | TVN Voluntary Departure Plan [Member] | Corporate, Non-Segment [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Restructuring and Related Cost, Incurred Cost | $ 7,900 | ||||||
Avid Technology Inc. [Member] | Corporate, Non-Segment [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Litigation Settlement, Expense | 8,000 | ||||||
TVN [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ||||||
Operating expense [Member] | Change in Accounting Method Accounted for as Change in Estimate [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 2,400 | ||||||
[1] | The restructuring and related charges for the year ended December 31, 2016 is net of $0.6 million and $1.4 million, in product cost of revenue and operating expenses-restructuring and related charges, respectively, of gain from TVN pension curtailment. See discussion below “Harmonic 2016 Restructuring Plan-TVN VDP” for additional information on the gain from TVN pension curtailment. |
Segment Information, Geographic
Segment Information, Geographic Information And Customer Concentration Segment Information - Summary Financial Information by Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2017 | Sep. 29, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | [1],[2] | Sep. 30, 2016 | [2] | Jul. 01, 2016 | [2] | Apr. 01, 2016 | [2],[3] | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Revenue | $ 100,974 | $ 92,014 | $ 82,315 | $ 82,943 | $ 113,102 | $ 101,406 | $ 109,571 | $ 81,832 | $ 358,246 | [4],[5] | $ 405,911 | [4] | $ 377,027 | [4] | ||||||||
Gross profit | $ 48,572 | [6] | $ 47,025 | [6] | $ 33,815 | [6] | $ 40,408 | [6] | $ 57,693 | $ 51,363 | $ 51,040 | $ 40,654 | 169,820 | 200,750 | 202,712 | |||||||
Operating Income (Loss) | (70,877) | [7] | (67,036) | (12,948) | ||||||||||||||||||
Video [Member] | ||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Revenue | 319,473 | [5] | 351,489 | 291,779 | ||||||||||||||||||
Cable Edge [Member] | ||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Revenue | 38,773 | [5] | 54,422 | 85,248 | ||||||||||||||||||
Operating Segments [Member] | ||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Gross profit | 182,306 | [5] | 215,218 | 205,405 | ||||||||||||||||||
Operating Income (Loss) | (25,178) | [5],[7] | (168) | 11,930 | ||||||||||||||||||
Operating Segments [Member] | Video [Member] | ||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Gross profit | 173,414 | [5] | 194,044 | 167,573 | ||||||||||||||||||
Operating Income (Loss) | (2,024) | [5] | 11,963 | 13,529 | ||||||||||||||||||
Operating Segments [Member] | Cable Edge [Member] | ||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Gross profit | 8,892 | [5] | 21,174 | 37,832 | ||||||||||||||||||
Operating Income (Loss) | $ (23,154) | [5] | $ (12,131) | $ (1,599) | ||||||||||||||||||
[1] | In 2016, as part of the TVN integration plan, the Company established the TVN VDP to enable the French employees of TVN to voluntarily terminate with certain benefits. The Company recorded a charge of $13.1 million for TVN VDP in the fourth quarter of 2016. | |||||||||||||||||||||
[2] | On February 29, 2016, the Company completed the acquisition of TVN and applied the acquisition method of accounting for the business combination. The selected quarterly financial data for the year ended December 31, 2016 of the combined entity includes 10 months of operating results of TVN beginning March 1, 2016. | |||||||||||||||||||||
[3] | In the first and third quarter of 2016 and the fourth quarter of 2017, the Company recorded impairment charges of $1.5 million, $1.2 million, and $0.5 million, respectively, for its investment in Vislink. (See Note 3, “Investments in Other Equity Securities,” of the notes to the Consolidated Financial Statements for additional information). | |||||||||||||||||||||
[4] | Revenue is attributed to countries based on the location of the customer. | |||||||||||||||||||||
[5] | The Company has historically employed an aggregate allocation methodology based on total revenues to attribute professional services revenue and sales expenses between its Video and Cable Edge segments. Beginning in the fourth quarter of 2017, the Company has prospectively changed to a more precise attribution methodology as the activities of selling and supporting the CableOS solution have become increasingly distinct from those of Video solutions. The impact of making this change in the fourth quarter of 2017 compared to the Company’s historical approach was a reduction in operating income of $2.4 million from the Video segment and a corresponding increase to the operating income of the Cable Edge segment. The Company believes that the updated allocation methodology will provide greater clarity regarding the operating metrics of the Video and Cable Edge business segments. | |||||||||||||||||||||
[6] | Gross margin decreased to 41.1% in the second quarter of 2017 compared to 48.7% in the first quarter of 2017, primarily due to lower service margins and higher inventory obsolescence charges for the Company’s legacy broadcast video inventory due to reduced demand, as well as higher inventory obsolescence charge for our older Cable Edge product lines. The factors negatively impacting the gross margin in the second quarter of 2017 were mostly absent in the third quarter of 2017, and together with a more favorable product mix, the gross margin increased to 51.1% in the third quarter of 2017 compared to 41.1% in the second quarter of 2017. Gross margin increased to 50.7% in the third quarter of 2016 compared to 46.6% in the second quarter of 2016 primarily due to the absence of the Cable Edge inventory obsolescence charge in the third quarter of 2016. | |||||||||||||||||||||
[7] | For the years ended December 31, 2017 and 2016, the unallocated corporate expenses included TVN acquisition- and integration-related costs, TVN VDP costs (see Note 10, “Restructuring and Related charges-TVN VDP,” for more information on TVN VDP ) and Cable Edge product line inventory obsolescence costs, totaling $7.9 million and $32.2 million, respectively. In addition, in fiscal year 2017, the unallocated corporate expenses included $8.0 million of Avid litigation settlement cost and associated legal fees (see Note 19, “Legal Proceedings,” for more information). The remaining unallocated corporate expenses for all years presented above include primarily other restructuring charges and excess facilities charges. |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Operating Income to Consolidated Income Before Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2017 | Sep. 29, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | [1],[2] | Sep. 30, 2016 | [2] | Jul. 01, 2016 | [2] | Apr. 01, 2016 | [2],[3] | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||||
Revenue | $ 100,974 | $ 92,014 | $ 82,315 | $ 82,943 | $ 113,102 | $ 101,406 | $ 109,571 | $ 81,832 | $ 358,246 | [4],[5] | $ 405,911 | [4] | $ 377,027 | [4] | |||||
Unallocated corporate expenses | (240,697) | (267,786) | (215,660) | ||||||||||||||||
Stock-based compensation expense | (16,610) | [6] | (13,060) | (15,582) | |||||||||||||||
Amortization of Intangible Assets | (8,322) | [6] | (14,836) | (6,502) | |||||||||||||||
Operating Income (Loss) | (70,877) | [6] | (67,036) | (12,948) | |||||||||||||||
Non-operating expense, net | (13,830) | [6] | (13,394) | (3,120) | |||||||||||||||
Loss before income taxes | (84,707) | [6] | (80,430) | (16,068) | |||||||||||||||
Video [Member] | |||||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||||
Revenue | 319,473 | [5] | 351,489 | 291,779 | |||||||||||||||
Cable Edge [Member] | |||||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||||
Revenue | 38,773 | [5] | 54,422 | 85,248 | |||||||||||||||
Operating Segments [Member] | |||||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||||
Operating Income (Loss) | (25,178) | [5],[6] | (168) | 11,930 | |||||||||||||||
Operating Segments [Member] | Video [Member] | |||||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||||
Operating Income (Loss) | (2,024) | [5] | 11,963 | 13,529 | |||||||||||||||
Operating Segments [Member] | Cable Edge [Member] | |||||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||||
Operating Income (Loss) | (23,154) | [5] | (12,131) | (1,599) | |||||||||||||||
Corporate, Non-Segment [Member] | |||||||||||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||||||||||
Unallocated corporate expenses | [6] | $ (20,767) | $ (38,972) | $ (2,794) | |||||||||||||||
[1] | In 2016, as part of the TVN integration plan, the Company established the TVN VDP to enable the French employees of TVN to voluntarily terminate with certain benefits. The Company recorded a charge of $13.1 million for TVN VDP in the fourth quarter of 2016. | ||||||||||||||||||
[2] | On February 29, 2016, the Company completed the acquisition of TVN and applied the acquisition method of accounting for the business combination. The selected quarterly financial data for the year ended December 31, 2016 of the combined entity includes 10 months of operating results of TVN beginning March 1, 2016. | ||||||||||||||||||
[3] | In the first and third quarter of 2016 and the fourth quarter of 2017, the Company recorded impairment charges of $1.5 million, $1.2 million, and $0.5 million, respectively, for its investment in Vislink. (See Note 3, “Investments in Other Equity Securities,” of the notes to the Consolidated Financial Statements for additional information). | ||||||||||||||||||
[4] | Revenue is attributed to countries based on the location of the customer. | ||||||||||||||||||
[5] | The Company has historically employed an aggregate allocation methodology based on total revenues to attribute professional services revenue and sales expenses between its Video and Cable Edge segments. Beginning in the fourth quarter of 2017, the Company has prospectively changed to a more precise attribution methodology as the activities of selling and supporting the CableOS solution have become increasingly distinct from those of Video solutions. The impact of making this change in the fourth quarter of 2017 compared to the Company’s historical approach was a reduction in operating income of $2.4 million from the Video segment and a corresponding increase to the operating income of the Cable Edge segment. The Company believes that the updated allocation methodology will provide greater clarity regarding the operating metrics of the Video and Cable Edge business segments. | ||||||||||||||||||
[6] | For the years ended December 31, 2017 and 2016, the unallocated corporate expenses included TVN acquisition- and integration-related costs, TVN VDP costs (see Note 10, “Restructuring and Related charges-TVN VDP,” for more information on TVN VDP ) and Cable Edge product line inventory obsolescence costs, totaling $7.9 million and $32.2 million, respectively. In addition, in fiscal year 2017, the unallocated corporate expenses included $8.0 million of Avid litigation settlement cost and associated legal fees (see Note 19, “Legal Proceedings,” for more information). The remaining unallocated corporate expenses for all years presented above include primarily other restructuring charges and excess facilities charges. |
Segment Information - Summary o
Segment Information - Summary of Revenue, Property and Equipment, Net by Geographic Region (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2017 | Sep. 29, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | [2] | Jul. 01, 2016 | [2] | Apr. 01, 2016 | [2],[3] | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||||
Net revenues: | |||||||||||||||||||
Revenue | $ 100,974 | $ 92,014 | $ 82,315 | $ 82,943 | $ 113,102 | [1],[2] | $ 101,406 | $ 109,571 | $ 81,832 | $ 358,246 | [4],[5] | $ 405,911 | [4] | $ 377,027 | [4] | ||||
Property and equipment, net: | |||||||||||||||||||
Property and equipment, net | 29,265 | 32,164 | 29,265 | 32,164 | |||||||||||||||
UNITED STATES | |||||||||||||||||||
Net revenues: | |||||||||||||||||||
Revenue | [4] | 131,773 | 171,016 | 175,466 | |||||||||||||||
Property and equipment, net: | |||||||||||||||||||
Property and equipment, net | 13,786 | 15,197 | 13,786 | 15,197 | |||||||||||||||
International [Member] | |||||||||||||||||||
Net revenues: | |||||||||||||||||||
Revenue | [4] | 226,473 | 234,895 | $ 201,561 | |||||||||||||||
ISRAEL | |||||||||||||||||||
Property and equipment, net: | |||||||||||||||||||
Property and equipment, net | 8,904 | 9,966 | 8,904 | 9,966 | |||||||||||||||
FRANCE | |||||||||||||||||||
Property and equipment, net: | |||||||||||||||||||
Property and equipment, net | 4,573 | 4,872 | 4,573 | 4,872 | |||||||||||||||
All countries except United States, Israel and France [Member] [Member] | |||||||||||||||||||
Property and equipment, net: | |||||||||||||||||||
Property and equipment, net | $ 2,002 | $ 2,129 | $ 2,002 | $ 2,129 | |||||||||||||||
[1] | In 2016, as part of the TVN integration plan, the Company established the TVN VDP to enable the French employees of TVN to voluntarily terminate with certain benefits. The Company recorded a charge of $13.1 million for TVN VDP in the fourth quarter of 2016. | ||||||||||||||||||
[2] | On February 29, 2016, the Company completed the acquisition of TVN and applied the acquisition method of accounting for the business combination. The selected quarterly financial data for the year ended December 31, 2016 of the combined entity includes 10 months of operating results of TVN beginning March 1, 2016. | ||||||||||||||||||
[3] | In the first and third quarter of 2016 and the fourth quarter of 2017, the Company recorded impairment charges of $1.5 million, $1.2 million, and $0.5 million, respectively, for its investment in Vislink. (See Note 3, “Investments in Other Equity Securities,” of the notes to the Consolidated Financial Statements for additional information). | ||||||||||||||||||
[4] | Revenue is attributed to countries based on the location of the customer. | ||||||||||||||||||
[5] | The Company has historically employed an aggregate allocation methodology based on total revenues to attribute professional services revenue and sales expenses between its Video and Cable Edge segments. Beginning in the fourth quarter of 2017, the Company has prospectively changed to a more precise attribution methodology as the activities of selling and supporting the CableOS solution have become increasingly distinct from those of Video solutions. The impact of making this change in the fourth quarter of 2017 compared to the Company’s historical approach was a reduction in operating income of $2.4 million from the Video segment and a corresponding increase to the operating income of the Cable Edge segment. The Company believes that the updated allocation methodology will provide greater clarity regarding the operating metrics of the Video and Cable Edge business segments. |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Commitments [Line Items] | |||
Operating leases, rent expense | $ 10,200,000 | $ 9,700,000 | $ 9,000,000 |
Guarantees, Fair Value Disclosure | 2,700,000 | ||
Non-cancelable purchase commitments | 40,200,000 | ||
Indemnification [Member] | |||
Other Commitments [Line Items] | |||
Accrual for indemnification provisions | 0 | ||
ISRAEL | |||
Other Commitments [Line Items] | |||
Royalty expenses | $ 5,200,000 | $ 4,100,000 | $ 2,900,000 |
Property Subject to Operating Lease [Member] | Maximum [Member] | |||
Other Commitments [Line Items] | |||
Lease Expiration Date | Jun. 30, 2028 | ||
Property Subject to Operating Lease [Member] | Maximum [Member] | ISRAEL | |||
Other Commitments [Line Items] | |||
Lease Expiration Date | Jan. 1, 2020 | ||
Property Lease Guarantee [Member] | TVN [Member] | |||
Other Commitments [Line Items] | |||
Guarantees, Fair Value Disclosure | $ 1,400,000 | ||
Credit Card Facility [Member] | |||
Other Commitments [Line Items] | |||
Guarantees, Fair Value Disclosure | 500,000 | ||
Foreign Line of Credit [Member] | Performance Guarantee [Member] | |||
Other Commitments [Line Items] | |||
Long-term Line of Credit | 2,000,000 | ||
Indemnity issued to secure credit facility | 2,200,000 | ||
Line of Credit Facility, Fair Value of Amount Outstanding | 0 | ||
Inventories [Member] | |||
Other Commitments [Line Items] | |||
Net losses on firm inventory purchase commitments | $ 3,800,000 |
Commitments and Contingencie106
Commitments and Contingencies - Future Minimum Lease Payments Under Noncancelable Operating Leases (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 13,534 |
2,019 | 12,132 |
2,020 | 8,716 |
2,021 | 2,958 |
2,022 | 2,497 |
Thereafter | 9,145 |
Total minimum payments | $ 48,982 |
Commitments and Contingencie107
Commitments and Contingencies - Summary of Warranty Accrual Included in Accrued Liabilities (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Balance at beginning of period | $ 4,862 | $ 3,913 | $ 4,242 |
Accrual for current period warranties | 5,117 | 5,482 | 5,378 |
Balance assumed from TVN acquisition | 0 | 1,012 | 0 |
Warranty costs incurred | (5,598) | (5,545) | (5,707) |
Balance at end of period | $ 4,381 | $ 4,862 | $ 3,913 |
Legal Proceedings - Additional
Legal Proceedings - Additional Information (Detail) $ in Millions | Oct. 24, 2017USD ($) | Dec. 31, 2017USD ($) | Sep. 29, 2017USD ($) | Jun. 29, 2012Patents | Oct. 31, 2011Patents |
Avid [Member] | |||||
Loss Contingencies [Line Items] | |||||
Estimated Litigation Liability | $ 6 | ||||
Payments for Legal Settlements | $ 2.5 | ||||
Settled Litigation Payment Second Quarter of 2019 [Member] | Avid [Member] | |||||
Loss Contingencies [Line Items] | |||||
Estimated Litigation Liability, Noncurrent | 1.5 | ||||
Settled Litigation Payment Third Quarter of 2020 [Member] | Avid [Member] | |||||
Loss Contingencies [Line Items] | |||||
Estimated Litigation Liability, Noncurrent | $ 2 | ||||
Media grid [Member] | Avid Technology Inc. [Member] | |||||
Loss Contingencies [Line Items] | |||||
Infringements of number of patents held | Patents | 2 | ||||
Spectrum [Member] | Avid Technology Inc. [Member] | |||||
Loss Contingencies [Line Items] | |||||
Infringements of number of patents held | Patents | 1 | ||||
Selling, General and Administrative Expenses [Member] | Avid [Member] | |||||
Loss Contingencies [Line Items] | |||||
Litigation Settlement, Expense | $ 6 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Mar. 30, 2018USD ($) |
Harmonic 2018 Restructuring Plan [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Restructuring and Related Cost, Expected Cost Remaining | $ 1.7 |
Selected Quarterly Financial110
Selected Quarterly Financial Data - Summary of Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2017 | Sep. 29, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | [1] | Sep. 30, 2016 | Jul. 01, 2016 | Apr. 01, 2016 | [3] | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||||||||
Revenue, Net | $ 100,974 | $ 92,014 | $ 82,315 | $ 82,943 | $ 113,102 | [2] | $ 101,406 | [2] | $ 109,571 | [2] | $ 81,832 | [2] | $ 358,246 | [4],[5] | $ 405,911 | [4] | $ 377,027 | [4] | |||||
Gross profit | 48,572 | [6] | 47,025 | [6] | 33,815 | [6] | 40,408 | [6] | 57,693 | [2] | 51,363 | [2] | 51,040 | [2] | 40,654 | [2] | 169,820 | 200,750 | 202,712 | ||||
Net loss | $ (11,516) | [3],[7],[8] | $ (15,583) | [3],[7],[8] | $ (31,500) | [3],[7],[8] | $ (24,027) | [3],[7],[8] | $ (10,443) | [2],[3],[7],[8] | $ (16,012) | [2],[3],[7],[8] | $ (20,679) | [2],[3],[7],[8] | $ (25,180) | [2],[7],[8] | $ (82,955) | $ (72,314) | $ (15,661) | ||||
Basic net income (loss) per share from: | |||||||||||||||||||||||
Net income (loss) | $ (0.14) | $ (0.19) | $ (0.39) | $ (0.30) | |||||||||||||||||||
Net loss per share: | |||||||||||||||||||||||
Net income (loss), diluted (usd per share) | [2] | $ (0.13) | $ (0.21) | $ (0.27) | $ (0.33) | ||||||||||||||||||
Weighted average shares outstanding - diluted | 82,014 | 81,445 | 80,590 | 79,810 | 78,389 | [2] | 78,092 | [2] | 77,342 | [2] | 76,996 | [2] | |||||||||||
[1] | In 2016, as part of the TVN integration plan, the Company established the TVN VDP to enable the French employees of TVN to voluntarily terminate with certain benefits. The Company recorded a charge of $13.1 million for TVN VDP in the fourth quarter of 2016. | ||||||||||||||||||||||
[2] | On February 29, 2016, the Company completed the acquisition of TVN and applied the acquisition method of accounting for the business combination. The selected quarterly financial data for the year ended December 31, 2016 of the combined entity includes 10 months of operating results of TVN beginning March 1, 2016. | ||||||||||||||||||||||
[3] | In the first and third quarter of 2016 and the fourth quarter of 2017, the Company recorded impairment charges of $1.5 million, $1.2 million, and $0.5 million, respectively, for its investment in Vislink. (See Note 3, “Investments in Other Equity Securities,” of the notes to the Consolidated Financial Statements for additional information). | ||||||||||||||||||||||
[4] | Revenue is attributed to countries based on the location of the customer. | ||||||||||||||||||||||
[5] | The Company has historically employed an aggregate allocation methodology based on total revenues to attribute professional services revenue and sales expenses between its Video and Cable Edge segments. Beginning in the fourth quarter of 2017, the Company has prospectively changed to a more precise attribution methodology as the activities of selling and supporting the CableOS solution have become increasingly distinct from those of Video solutions. The impact of making this change in the fourth quarter of 2017 compared to the Company’s historical approach was a reduction in operating income of $2.4 million from the Video segment and a corresponding increase to the operating income of the Cable Edge segment. The Company believes that the updated allocation methodology will provide greater clarity regarding the operating metrics of the Video and Cable Edge business segments. | ||||||||||||||||||||||
[6] | Gross margin decreased to 41.1% in the second quarter of 2017 compared to 48.7% in the first quarter of 2017, primarily due to lower service margins and higher inventory obsolescence charges for the Company’s legacy broadcast video inventory due to reduced demand, as well as higher inventory obsolescence charge for our older Cable Edge product lines. The factors negatively impacting the gross margin in the second quarter of 2017 were mostly absent in the third quarter of 2017, and together with a more favorable product mix, the gross margin increased to 51.1% in the third quarter of 2017 compared to 41.1% in the second quarter of 2017. Gross margin increased to 50.7% in the third quarter of 2016 compared to 46.6% in the second quarter of 2016 primarily due to the absence of the Cable Edge inventory obsolescence charge in the third quarter of 2016. | ||||||||||||||||||||||
[7] | As a result of the TVN acquisition, in 2016 and 2017, the Company incurred acquisition- and integration-related expenses of $3.0 million, $3.4 million, $5.3 million and $5.2 million, in the first through fourth quarter of 2016, respectively, and $2.2 million, $0.5 million, $0.1 million and $0.1 million in the first through fourth quarter of 2017. These costs consisted of acquisition-related costs which include outside legal, accounting and other professional services as well as integration-related costs which include incremental costs resulting from the TVN acquisition that are not expected to generate future benefits once the integration is fully consummated. These costs are expensed as incurred and the Company does not expect to incur any TVN acquisition- and integration-related expenses after 2017. | ||||||||||||||||||||||
[8] | In the fourth quarter of 2016 and 2017, the Company recorded additional valuation allowances of $18.3 and $9.0 million against all of the U.S. deferred tax assets, respectively. These increases in valuation allowances were offset partially by the release of $8.4 million and $5.8 million in the fourth quarter of 2016 and 2017, respectively, of valuation allowances associated with the Company’s foreign subsidiaries, including a one-time benefit associated with the alternative minimum tax refund related to the TCJA in the fourth quarter of 2017. |
Selected Quarterly Financial111
Selected Quarterly Financial Data Selected Quarterly Financial Data - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2017 | Sep. 29, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jul. 01, 2016 | Apr. 01, 2016 | Apr. 03, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Income Tax Contingency [Line Items] | |||||||||||||
Restructuring and Related Cost | $ 6,586 | [1] | $ 18,002 | $ 1,485 | |||||||||
Gross Margin Percentage | 51.10% | 41.10% | 48.70% | 50.70% | 46.60% | ||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Curtailment | 0 | 1,955 | |||||||||||
Provision for excess and obsolete inventories | 6,005 | 6,871 | 1,585 | ||||||||||
Amortization of intangibles | 8,322 | [2] | 14,836 | 6,502 | |||||||||
Valuation Allowance Deferred Tax Asset Deductions | 5,752 | 8,356 | 13,722 | ||||||||||
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations | 2,200 | 1,000 | 900 | ||||||||||
Foreign [Member] | |||||||||||||
Income Tax Contingency [Line Items] | |||||||||||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ (5,800) | $ (8,400) | |||||||||||
Domestic Tax Authority [Member] | |||||||||||||
Income Tax Contingency [Line Items] | |||||||||||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 9,000 | 18,300 | |||||||||||
Vislink plc [Member] | |||||||||||||
Income Tax Contingency [Line Items] | |||||||||||||
Cost-method Investments, Other than Temporary Impairment | 500 | $ 1,200 | $ 1,500 | ||||||||||
VJU Gmbh [Member] | |||||||||||||
Income Tax Contingency [Line Items] | |||||||||||||
Cost-method Investments, Other than Temporary Impairment | $ 2,500 | ||||||||||||
TVN [Member] | |||||||||||||
Income Tax Contingency [Line Items] | |||||||||||||
Business Combination, Acquisition and Integration Related Expenses | $ 100 | $ 100 | $ 500 | $ 2,200 | 5,200 | $ 5,300 | $ 3,400 | $ 3,000 | |||||
TVN Voluntary Departure Plan [Member] | |||||||||||||
Income Tax Contingency [Line Items] | |||||||||||||
Restructuring and Related Cost | $ 13,100 | ||||||||||||
Cost of Sales [Member] | |||||||||||||
Income Tax Contingency [Line Items] | |||||||||||||
Amortization of intangibles | 5,180 | 4,434 | $ 719 | ||||||||||
Operating Segments [Member] | Cable Edge [Member] | |||||||||||||
Income Tax Contingency [Line Items] | |||||||||||||
Provision for excess and obsolete inventories | $ 32,200 | ||||||||||||
Valuation Allowance, Operating Loss Carryforwards [Member] | |||||||||||||
Income Tax Contingency [Line Items] | |||||||||||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 9,000 | ||||||||||||
[1] | The restructuring and related charges for the year ended December 31, 2016 is net of $0.6 million and $1.4 million, in product cost of revenue and operating expenses-restructuring and related charges, respectively, of gain from TVN pension curtailment. See discussion below “Harmonic 2016 Restructuring Plan-TVN VDP” for additional information on the gain from TVN pension curtailment. | ||||||||||||
[2] | For the years ended December 31, 2017 and 2016, the unallocated corporate expenses included TVN acquisition- and integration-related costs, TVN VDP costs (see Note 10, “Restructuring and Related charges-TVN VDP,” for more information on TVN VDP ) and Cable Edge product line inventory obsolescence costs, totaling $7.9 million and $32.2 million, respectively. In addition, in fiscal year 2017, the unallocated corporate expenses included $8.0 million of Avid litigation settlement cost and associated legal fees (see Note 19, “Legal Proceedings,” for more information). The remaining unallocated corporate expenses for all years presented above include primarily other restructuring charges and excess facilities charges. |