Cover
Cover - shares | 9 Months Ended | |
Oct. 01, 2021 | Nov. 01, 2021 | |
Cover [Abstract] | ||
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000851310 | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Oct. 1, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-25826 | |
Entity Registrant Name | HARMONIC INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 77-0201147 | |
Entity Address, Address Line One | 2590 Orchard Parkway | |
Entity Address, City or Town | San Jose | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95131 | |
City Area Code | 408 | |
Local Phone Number | 542-2500 | |
Title of 12(b) Security | Common stock, $0.001 par value | |
Trading Symbol | HLIT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 102,568,369 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 01, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 128,434 | $ 98,645 |
Accounts receivable, net | 75,442 | 66,227 |
Inventories | 51,856 | 35,031 |
Prepaid expenses and other current assets | 35,443 | 38,132 |
Total current assets | 291,175 | 238,035 |
Property and equipment, net | 43,848 | 43,141 |
Operating lease right-of-use assets | 29,216 | 27,556 |
Other non-current assets | 38,325 | 39,117 |
Goodwill | 241,302 | 243,674 |
Total assets | 643,866 | 591,523 |
Current liabilities: | ||
Convertible debt, current | 36,592 | 0 |
Other debts, current | 5,028 | 11,771 |
Accounts payable | 32,352 | 23,543 |
Deferred revenue | 58,106 | 54,294 |
Operating lease liabilities, current | 6,698 | 7,354 |
Other current liabilities | 64,963 | 50,333 |
Total current liabilities | 203,739 | 147,295 |
Convertible debt, non-current | 97,563 | 129,507 |
Other debts, non-current | 13,538 | 10,086 |
Operating lease liabilities, non-current | 28,049 | 26,071 |
Other non-current liabilities | 26,181 | 20,262 |
Total liabilities | 369,070 | 333,221 |
Commitments and contingencies (Note 10) | ||
Convertible debt (Note 6) | 1,115 | 0 |
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; 102,549 and 98,204 shares issued and outstanding at October 1, 2021 and December 31, 2020, respectively | 103 | 98 |
Additional paid-in capital | 2,381,177 | 2,353,559 |
Accumulated deficit | (2,107,814) | (2,101,211) |
Accumulated other comprehensive income | 215 | 5,856 |
Total stockholders’ equity | 273,681 | 258,302 |
Total liabilities and stockholders’ equity | $ 643,866 | $ 591,523 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Oct. 01, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 102,549,000 | 98,204,000 |
Common stock, shares outstanding (in shares) | 102,549,000 | 98,204,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2021 | Sep. 25, 2020 | Oct. 01, 2021 | Sep. 25, 2020 | |
Total net revenue | $ 126,321 | $ 94,892 | $ 351,345 | $ 247,303 |
Total cost of revenue | 60,167 | 45,968 | 169,541 | 123,868 |
Total gross profit | 66,154 | 48,924 | 181,804 | 123,435 |
Operating expenses: | ||||
Research and development | 26,552 | 20,206 | 74,863 | 61,827 |
Selling, general and administrative | 34,231 | 28,773 | 102,728 | 86,996 |
Amortization of intangibles | 0 | 752 | 507 | 2,264 |
Restructuring and related charges | 0 | 814 | 43 | 1,572 |
Total operating expenses | 60,783 | 50,545 | 178,141 | 152,659 |
Income (loss) from operations | 5,371 | (1,621) | 3,663 | (29,224) |
Interest expense, net | (2,686) | (2,807) | (7,919) | (8,772) |
Loss on convertible debt extinguishment | 0 | 0 | 0 | (834) |
Other income (expense), net | (213) | (167) | 659 | (813) |
Income (loss) before income taxes | 2,472 | (4,595) | (3,597) | (39,643) |
Provision for income taxes | 942 | 786 | 3,006 | 3,093 |
Net income (loss) | $ 1,530 | $ (5,381) | $ (6,603) | $ (42,736) |
Net income (loss) per share: | ||||
Basic (in dollars per share) | $ 0.01 | $ (0.06) | $ (0.07) | $ (0.44) |
Diluted (in dollars per share) | $ 0.01 | $ (0.06) | $ (0.07) | $ (0.44) |
Shares used in per share calculation: | ||||
Basic (in shares) | 102,099 | 97,563 | 101,057 | 96,623 |
Diluted (in shares) | 106,421 | 97,563 | 101,057 | 96,623 |
Appliance and integration | ||||
Total net revenue | $ 91,853 | $ 63,251 | $ 250,427 | $ 153,227 |
Total cost of revenue | 47,326 | 32,082 | 130,310 | 81,153 |
SaaS and service | ||||
Total net revenue | 34,468 | 31,641 | 100,918 | 94,076 |
Total cost of revenue | $ 12,841 | $ 13,886 | $ 39,231 | $ 42,715 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2021 | Sep. 25, 2020 | Oct. 01, 2021 | Sep. 25, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 1,530 | $ (5,381) | $ (6,603) | $ (42,736) |
Other comprehensive income (loss) before tax: | ||||
Change in foreign currency translation adjustments | (2,372) | 3,518 | (5,302) | 3,238 |
Other comprehensive income (loss) before tax | (2,372) | 3,518 | (5,302) | 3,238 |
Provision for (benefit from) income taxes | 128 | (255) | 339 | (224) |
Other comprehensive income (loss), net of tax | (2,500) | 3,773 | (5,641) | 3,462 |
Total comprehensive loss | $ (970) | $ (1,608) | $ (12,244) | $ (39,274) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 31, 2019 | 91,875 | ||||
Beginning balance at Dec. 31, 2019 | $ 252,446 | $ 92 | $ 2,327,359 | $ (2,071,940) | $ (3,065) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (42,736) | (42,736) | |||
Other comprehensive income (loss), net of tax | 3,462 | 3,462 | |||
Issuance of common stock under stock option, award and purchase plans (in shares) | 3,444 | ||||
Issuance of common stock under stock option, award and purchase plans | 3,843 | $ 4 | 3,839 | ||
Stock-based compensation | 13,768 | 13,768 | |||
Conversion feature of 2022 Notes | 8,254 | 8,254 | |||
Reclassification from mezzanine equity to equity for 2020 Notes | 2,329 | 2,329 | |||
Conversion feature of exchanged portion of 2020 Notes | (6,909) | (6,909) | |||
Exercise of warrant (in shares) | 2,413 | ||||
Exercise of warrant | 0 | $ 2 | (2) | ||
Ending balance (in shares) at Sep. 25, 2020 | 97,732 | ||||
Ending balance at Sep. 25, 2020 | 234,457 | $ 98 | 2,348,638 | (2,114,676) | 397 |
Beginning balance (in shares) at Jun. 26, 2020 | 96,863 | ||||
Beginning balance at Jun. 26, 2020 | 230,282 | $ 97 | 2,342,856 | (2,109,295) | (3,376) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (5,381) | (5,381) | |||
Other comprehensive income (loss), net of tax | 3,773 | 3,773 | |||
Issuance of common stock under stock option, award and purchase plans (in shares) | 869 | ||||
Issuance of common stock under stock option, award and purchase plans | 1,892 | $ 1 | 1,891 | ||
Stock-based compensation | 3,972 | 3,972 | |||
Conversion feature of 2022 Notes | 0 | ||||
Reclassification from equity to mezzanine equity for Notes | (81) | (81) | |||
Ending balance (in shares) at Sep. 25, 2020 | 97,732 | ||||
Ending balance at Sep. 25, 2020 | 234,457 | $ 98 | 2,348,638 | (2,114,676) | 397 |
Beginning balance (in shares) at Dec. 31, 2020 | 98,204 | ||||
Beginning balance at Dec. 31, 2020 | 258,302 | $ 98 | 2,353,559 | (2,101,211) | 5,856 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (6,603) | (6,603) | |||
Other comprehensive income (loss), net of tax | (5,641) | (5,641) | |||
Issuance of common stock under stock option, award and purchase plans (in shares) | 4,345 | ||||
Issuance of common stock under stock option, award and purchase plans | 9,783 | $ 5 | 9,778 | ||
Stock-based compensation | 18,955 | 18,955 | |||
Reclassification from equity to mezzanine equity for Notes | (1,115) | (1,115) | |||
Ending balance (in shares) at Oct. 01, 2021 | 102,549 | ||||
Ending balance at Oct. 01, 2021 | 273,681 | $ 103 | 2,381,177 | (2,107,814) | 215 |
Beginning balance (in shares) at Jul. 02, 2021 | 101,794 | ||||
Beginning balance at Jul. 02, 2021 | 267,324 | $ 102 | 2,373,851 | (2,109,344) | 2,715 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 1,530 | 1,530 | |||
Other comprehensive income (loss), net of tax | (2,500) | (2,500) | |||
Issuance of common stock under stock option, award and purchase plans (in shares) | 755 | ||||
Issuance of common stock under stock option, award and purchase plans | 1,908 | $ 1 | 1,907 | ||
Stock-based compensation | 6,534 | 6,534 | |||
Reclassification from equity to mezzanine equity for Notes | (1,115) | (1,115) | |||
Ending balance (in shares) at Oct. 01, 2021 | 102,549 | ||||
Ending balance at Oct. 01, 2021 | $ 273,681 | $ 103 | $ 2,381,177 | $ (2,107,814) | $ 215 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 01, 2021 | Sep. 25, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (6,603) | $ (42,736) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 9,395 | 8,683 |
Amortization of intangibles | 507 | 3,214 |
Stock-based compensation | 18,863 | 13,737 |
Amortization of convertible debt discount | 4,685 | 5,451 |
Amortization of warrant | 1,302 | 1,307 |
Foreign currency remeasurement | (3,435) | 2,537 |
Loss on convertible debt extinguishment | 0 | 834 |
Deferred income taxes | 1,268 | 1,527 |
Provision for expected credit losses and returns | 3,049 | 1,966 |
Provision for excess and obsolete inventories | 1,849 | 1,390 |
Other adjustments | 215 | 177 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (12,470) | 5,436 |
Inventories | (18,783) | (9,301) |
Other assets | 2,614 | 23,685 |
Accounts payable | 10,144 | (11,047) |
Deferred revenues | 9,978 | 6,066 |
Other liabilities | 11,078 | (15,345) |
Net cash provided by (used in) operating activities | 33,656 | (2,419) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (10,570) | (26,176) |
Net cash used in investing activities | (10,570) | (26,176) |
Cash flows from financing activities: | ||
Payment of convertible debt | 0 | (25) |
Payment of convertible debt issuance costs | 0 | (672) |
Proceeds from other debts | 3,861 | 9,398 |
Repayment of other debts | (6,070) | (6,342) |
Proceeds from common stock issued to employees | 11,401 | 5,227 |
Payment of tax withholding obligations related to net share settlements of restricted stock units | (1,619) | (1,384) |
Net cash provided by financing activities | 7,573 | 6,202 |
Effect of exchange rate changes on cash and cash equivalents | (870) | 152 |
Net increase (decrease) in cash and cash equivalents | 29,789 | (22,241) |
Cash and cash equivalents at beginning of period | 98,645 | 93,058 |
Cash and cash equivalents at end of period | 128,434 | 70,817 |
Supplemental disclosures of cash flow information: | ||
Income taxes, net of refunds | 1,732 | (426) |
Interest payments | 3,242 | 3,216 |
Supplemental schedule of non-cash investing and financing activities: | ||
Capital expenditures incurred but not yet paid | 1,055 | 3,284 |
Fair value of 2022 Notes used to settle 2020 Notes | $ 0 | $ 44,357 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Oct. 01, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and include the accounts of Harmonic Inc. and its controlled subsidiaries (collectively, “Harmonic” or the “Company”). Intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the Company's financial position as of balance sheet dates and its operating results and cash flows for the interim periods presented. Operating results for the three and nine month periods ended October 1, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. Certain prior period balances have been reclassified to conform to the current period’s presentation. These reclassifications did not have a material impact on previously reported financial statements. The Company’s significant accounting policies are described in Note 2 to its audited Consolidated Financial Statements included in the 2020 Form 10-K. There have been no significant changes to these policies during the nine months ended October 1, 2021. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Oct. 01, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-06, Accounting for Convertible Instruments in an Entity’s Own Equity, which simplifies the accounting for convertible instruments and contracts on an entity’s own equity. Among other changes, ASU No. 2020-06 removes from U.S. GAAP the liability and equity separation model for convertible instruments with a cash conversion feature, and as a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt. Similarly, the embedded conversion feature will no longer be amortized into income as interest expense over the life of the instrument. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. This ASU is effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted after December 15, 2020 and can be adopted either on a modified retrospective or full retrospective basis. The Company is evaluating the impact, timing and method of adoption of this ASU. Upon adoption of this ASU, the Company expects to recombine the equity conversion component of its convertible notes, which was initially separated and recorded in equity, and remove the remaining debt discounts recorded for this previous separation. Adoption of this ASU will also result in the elimination of a portion of non-cash interest expense related to amortization of debt discount. Additionally, ASU No. 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share, which would result in an increase in the number of shares for calculating diluted earnings per share by approximately 19.9 million shares. From time to time, new accounting pronouncements are issued by the FASB, or other standards setting bodies, that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial position, results of operations and cash flows upon adoption. |
CONTRACT ASSETS AND DEFERRED RE
CONTRACT ASSETS AND DEFERRED REVENUE | 9 Months Ended |
Oct. 01, 2021 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT ASSETS AND DEFERRED REVENUE | CONTRACT ASSETS AND DEFERRED REVENUE Contract Balances. Contract assets exist when the Company has satisfied a performance obligation but does not have an unconditional right to consideration (e.g., because the entity first must satisfy another performance obligation in the contract before it is entitled to invoice the customer). Deferred revenue represents the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. Contract assets and deferred revenue consisted of the following: As of (in thousands) October 1, 2021 December 31, 2020 Contract assets $ 11,688 $ 9,800 Deferred revenue $ 73,267 $ 63,533 Contract assets and Deferred revenue (long-term) are reported as components of “Prepaid expenses and other current assets” and “Other non-current liabilities,” respectively, on the Condensed Consolidated Balance Sheets. During the three months ended October 1, 2021 and September 25, 2020, the Company recognized revenue of $8.2 million and $5.7 million, respectively, that was included in the deferred revenue balance at the beginning of each fiscal year. During the nine months ended October 1, 2021 and September 25, 2020, the Company recognized revenue of $47.3 million and $32.4 million, respectively, that was included in the deferred revenue balance at the beginning of each fiscal year. In July 2019, Comcast elected enterprise license pricing for the Company’s CableOS ® software under certain existing commercial agreements between the Company and Comcast (the “CableOS software license agreement”), which also includes maintenance and support services, and material rights. As of October 1, 2021, the aggregate amount of the transaction price under this agreement allocated to the remaining performance obligations is $52.1 million, and the Company will recognize this revenue as the related performance obligations are delivered over the next 21 months. Refer to Note 9, “Segment Information” for disaggregated revenue information. |
LEASES
LEASES | 9 Months Ended |
Oct. 01, 2021 | |
Leases [Abstract] | |
LEASES | LEASES The components of lease expense are as follows: Three Months Ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Operating lease cost $ 1,911 $ 1,873 $ 5,654 $ 6,556 Variable lease cost 467 681 1,494 2,183 Total lease cost $ 2,378 $ 2,554 $ 7,148 $ 8,739 Supplemental information related to leases are as follows: Three Months Ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Cash payments $ 1,987 $ 3,134 $ 5,744 $ 7,772 Right-of-use assets obtained in exchange for operating lease obligations $ 194 $ 69 $ 5,670 $ 1,740 |
OTHER FINANCIAL STATEMENT INFOR
OTHER FINANCIAL STATEMENT INFORMATION | 9 Months Ended |
Oct. 01, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER FINANCIAL STATEMENT INFORMATION | OTHER FINANCIAL STATEMENT INFORMATION The following tables provide details of selected balance sheet components: As of (in thousands) October 1, 2021 December 31, 2020 Accounts receivable, net: Accounts receivable $ 77,962 $ 68,295 Less: allowances for expected credit losses and sales returns (2,520) (2,068) Total $ 75,442 $ 66,227 As of (in thousands) October 1, 2021 December 31, 2020 Inventories: Raw materials $ 12,105 $ 2,529 Work-in-process 2,945 1,689 Finished goods 28,761 22,777 Service-related spares 8,045 8,036 Total $ 51,856 $ 35,031 As of (in thousands) October 1, 2021 December 31, 2020 Prepaid expenses and other current assets: Prepaid expenses $ 9,900 $ 11,453 Contract assets 11,688 9,800 Other 13,855 16,879 Total $ 35,443 $ 38,132 As of (in thousands) October 1, 2021 December 31, 2020 Property and equipment, net: Machinery and equipment $ 76,357 $ 72,731 Capitalized software 38,107 37,141 Leasehold improvements 40,489 38,718 Furniture and fixtures 2,880 2,913 Construction-in-progress 3,150 2,209 Property and equipment, gross 160,983 153,712 Less: accumulated depreciation and amortization (117,135) (110,571) Total $ 43,848 $ 43,141 As of (in thousands) October 1, 2021 December 31, 2020 Other current liabilities: Accrued employee compensation and related expenses $ 19,118 $ 23,131 Customers’ advances and deposits 22,534 3,385 Other 23,311 23,817 Total $ 64,963 $ 50,333 |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 9 Months Ended |
Oct. 01, 2021 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBT | CONVERTIBLE DEBT 4.375% Convertible Senior Notes due 2022 (the “2022 Notes”) In June 2020, the Company issued the 2022 Notes with an aggregate principal amount of $37.7 million in a non-cash exchange for its 2020 Notes with an equal principal amount pursuant to an indenture, dated June 2, 2020 (the “2022 Notes Indenture”), by and between the Company and U.S. Bank National Association, as trustee. The 2022 Notes bear interest at a rate of 4.375% per year, payable in cash on June 1 and December 1 of each year. The 2022 Notes will mature on December 1, 2022, unless earlier repurchased or redeemed by the Company, or converted pursuant to their terms. The 2022 Notes are convertible into cash, shares of the Company’s common stock, par value $0.001 (“Common Stock”), or a combination thereof, at the Company’s election, at an initial conversion rate of 173.9978 shares of Common Stock per $1,000 principal amount of 2022 Notes (which is equivalent to an initial conversion price of approximately $5.75 per share). The conversion rate, and thus the effective conversion price, may be adjusted under certain circumstances, including in connection with conversions made following certain fundamental changes and under other circumstances as set forth in the 2022 Notes Indenture. Prior to the close of business on the business day immediately preceding September 1, 2022, the 2022 Notes will be convertible only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ended on June 26, 2020 (and only during such fiscal quarter), if the last reported sale price of 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 on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2022 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of Common Stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. Commencing on September 1, 2022 until the close of business on the second scheduled trading day immediately preceding the maturity date, the 2022 Notes will be convertible in multiples of $1,000 principal amount regardless of the foregoing circumstances. As the 2022 Notes were issued in exchange for the 2020 Notes, which was accounted for as an extinguishment, the 2022 Notes were initially accounted for at fair value, which was estimated to be $44.4 million. In accordance with the accounting guidance on embedded conversion features, the conversion feature associated with the 2022 Notes was initially valued at $8.3 million and bifurcated from the host debt instrument and recorded in “Additional paid-in capital.” The remaining amount of $36.0 million, which represents the fair value of the liability component of the 2022 Notes, was recorded as the initial carrying value of the 2022 Notes. The initial debt discount on the 2022 Notes is $1.7 million, calculated as the difference between the stated principal amount of $37.7 million and the initial carrying value of the liability component of $36.0 million. The debt discount is being amortized to interest expense at the effective interest rate over the contractual term of the 2022 Notes. The following table presents the components of the 2022 Notes: As of (in thousands, except for years and percentages) October 1, 2021 December 31, 2020 Liability component: Principal amount $ 37,707 $ 37,707 Less: Debt discount, net of amortization (849) (1,357) Less: Debt issuance costs, net of amortization (266) (425) Carrying amount $ 36,592 $ 35,925 Remaining debt discount amortization period (years) 1.2 1.9 Effective interest rate on liability component 6.95 % 6.95 % The following table presents interest expense recognized for the 2022 Notes: Three Months Ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Contractual interest expense $ 412 $ 412 $ 1,236 $ 540 Amortization of debt discount 171 161 508 210 Amortization of debt issuance costs 54 50 159 65 Total interest expense recognized $ 637 $ 623 $ 1,903 $ 815 The 2022 Notes became convertible as of October 1, 2021, as the last reported sale price of the Company’s common stock for at least 20 trading days during a period of 30 consecutive trading days ending on October 1, 2021 was greater than 130% of the conversion price of the 2022 Notes on each applicable trading day. As a result of the 2022 Notes becoming convertible for cash up to the principal amount of $37.7 million, the Company reclassified the unamortized debt discount for the 2022 Notes in the amount of $1.1 million from “Additional paid-in capital” to “Convertible Debt” in the mezzanine equity section in the Condensed Consolidated Balance Sheet as of October 1, 2021. Additionally, all $36.6 million of the net carrying amount of the liability component of the 2022 Notes outstanding as of October 1, 2021 was classified as a current liability as of that date. 2.00% Convertible Senior Notes due 2024 (the “2024 Notes”) In September 2019, the Company issued the 2024 Notes with an aggregate principal amount of $115.5 million pursuant to an indenture (the “2024 Notes Indenture”), dated September 13, 2019, by and between the Company and U.S. Bank National Association, as trustee. The 2024 Notes bear interest at a rate of 2.00% per year, payable semiannually on March 1 and September 1 of each year. The 2024 Notes will mature on September 1, 2024, unless earlier repurchased or redeemed by the Company, or converted pursuant to their terms. The 2024 Notes are convertible into cash, shares of the Company’s common stock, par value $0.001 (“Common Stock”), or a combination thereof, at the Company’s election, at an initial conversion rate of 115.5001 shares of Common Stock per $1,000 principal amount of 2024 Notes (which is equivalent to an initial conversion price of approximately $8.66 per share). The conversion rate, and thus the effective conversion price, may be adjusted under certain circumstances, including in connection with conversions made following certain fundamental changes or a notice of redemption and under other circumstances, in each case, as set forth in the 2024 Notes Indenture. Prior to the close of business on the business day immediately preceding June 1, 2024, the 2024 Notes will be convertible only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ended on December 31, 2019, and only during such fiscal quarter, if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) in a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price for the 2024 Notes on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2024 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Common Stock and the conversion rate on each such trading day; (3) if the Company calls any or all of the 2024 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after June 1, 2024, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the 2024 Notes may convert all or any portion of their 2024 Notes regardless of the foregoing conditions. In accordance with the accounting guidance on embedded conversion features, the conversion feature associated with the 2024 Notes was valued at $24.9 million and bifurcated from the host debt instrument and recorded in “Additional paid-in capital”. The resulting debt discount on the 2024 Notes is being amortized to interest expense at the effective interest rate over the contractual term of the 2024 Notes. The following table presents the components of the 2024 Notes: As of (in thousands, except for years and percentages) October 1, 2021 December 31, 2020 Liability component: Principal amount $ 115,500 $ 115,500 Less: Debt discount, net of amortization (15,789) (19,294) Less: Debt issuance costs, net of amortization (2,148) (2,624) Carrying amount $ 97,563 $ 93,582 Remaining debt discount amortization period (years) 2.9 3.7 Effective interest rate on liability component 7.95 % 7.95 % The following table presents interest expense recognized for the 2024 Notes: Three Months Ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Contractual interest expense $ 578 $ 578 $ 1,734 $ 1,734 Amortization of debt discount 1,193 1,102 3,505 3,237 Amortization of debt issuance costs 162 153 476 443 Total interest expense recognized $ 1,933 $ 1,833 $ 5,715 $ 5,414 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Oct. 01, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company’s financial instruments not measured at fair value on a recurring basis were as follows: October 1, 2021 December 31, 2020 Carrying Fair Value Carrying Fair Value ( in thousands ) Value Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 2022 Notes $ 36,592 $ — $ 62,405 $ — $ 35,925 $ — $ 54,204 $ — 2024 Notes $ 97,563 $ — $ 140,720 $ — $ 93,582 $ — $ 125,953 $ — The fair value of the Company’s convertible notes is influenced by interest rates, the Company’s stock price and stock market volatility. The difference between the carrying value and the fair value is primarily due to the spread between the conversion price and the market value of the shares underlying the conversion as of each respective balance sheet date. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Oct. 01, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the computation of the basic and diluted net income (loss) per share: Three Months ended Nine Months Ended (in thousands, except per share amounts) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Numerator: Net income (loss) $ 1,530 $ (5,381) $ (6,603) $ (42,736) Denominator: Weighted average number of shares outstanding: Basic 102,099 97,563 101,057 96,623 Effect of dilutive securities: Stock options, restricted stock units and ESPP 1,505 — — — Convertible debt 2,817 — — — Diluted 106,421 97,563 101,057 96,623 Net income (loss) per share: Basic $ 0.01 $ (0.06) $ (0.07) $ (0.44) Diluted $ 0.01 $ (0.06) $ (0.07) $ (0.44) The diluted net loss per share was the same as basic net loss per share for the three and nine months ended September 25, 2020 and nine months ended October 1, 2021, as the inclusion of potential common shares outstanding would have been anti-dilutive due to the Company’s net losses for these periods. The following table sets forth the potential weighted common shares outstanding and anti-dilutive weighted shares that were excluded from the computation of basic and diluted net income (loss) per share: Three Months ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Convertible debt — — 2,085 390 Stock options — 1,558 926 1,637 Restricted stock units 69 3,336 3,079 3,066 Stock purchase rights under the ESPP — 525 381 516 Total 69 5,419 6,471 5,609 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Oct. 01, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 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 Chief Operating Decision Maker (the “CODM”), which for the Company is its Chief Executive Officer, in deciding how to allocate resources and assess performance. Based on the Company’s internal reporting structure, the Company consists of two operating segments: Video and Cable Access. The operating segments were determined based on the nature of the products offered. The Video segment provides 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 Pay-TV service providers. The Cable Access segment provides cable access solutions and related services to cable operators globally. A measure of assets by segment is not applicable as segment assets are not included in the discrete financial information provided to the CODM. The following table provides summary financial information by reportable segment: Three Months Ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Video Revenue $ 68,729 $ 54,641 $ 202,415 $ 156,466 Gross profit 42,534 29,825 118,879 83,756 Operating income (loss) 7,904 (1,699) 13,235 (12,203) Cable Access Revenue $ 57,592 $ 40,251 $ 148,930 $ 90,837 Gross profit 24,165 19,682 65,111 42,224 Operating income 3,903 5,876 10,191 1,733 Total Revenue $ 126,321 $ 94,892 $ 351,345 $ 247,303 Gross profit 66,699 49,507 183,990 125,980 Operating income (loss) $ 11,807 $ 4,177 $ 23,426 $ (10,470) A reconciliation of the Company’s consolidated segment operating income (loss) to consolidated income (loss) before income taxes is as follows: Three Months Ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Total consolidated segment operating income (loss) $ 11,807 $ 4,177 $ 23,426 $ (10,470) Unallocated corporate expenses (1) — (1,116) (389) (1,803) Stock-based compensation (6,436) (3,930) (18,867) (13,737) Amortization of intangibles — (752) (507) (3,214) Consolidated income (loss) from operations 5,371 (1,621) 3,663 (29,224) Non-operating expense, net (2,899) (2,974) (7,260) (10,419) Income (loss) before income taxes $ 2,472 $ (4,595) $ (3,597) $ (39,643) (1) Together with amortization of intangibles and stock-based compensation, the Company does not allocate restructuring and related 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. Geographic Information Three Months ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Net revenue (1) United States $ 64,451 $ 44,933 $ 192,840 $ 114,559 Other countries 61,870 49,959 158,505 132,744 Total $ 126,321 $ 94,892 $ 351,345 $ 247,303 (1) Revenue is attributed to countries based on the location of the customer. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Oct. 01, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Indemnification The Company is obligated to indemnify its officers and the members of its Board of 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 these indemnification provisions through October 1, 2021. Legal proceedings From time to time, the Company is involved in lawsuits as well as subject to various legal proceedings, claims, threats of litigation, audits of royalty payments for licensed technology 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. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Oct. 01, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. |
Reclassification | Certain prior period balances have been reclassified to conform to the current period’s presentation. These reclassifications did not have a material impact on previously reported financial statements. |
Recent Accounting Pronouncements | In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-06, Accounting for Convertible Instruments in an Entity’s Own Equity, which simplifies the accounting for convertible instruments and contracts on an entity’s own equity. Among other changes, ASU No. 2020-06 removes from U.S. GAAP the liability and equity separation model for convertible instruments with a cash conversion feature, and as a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt. Similarly, the embedded conversion feature will no longer be amortized into income as interest expense over the life of the instrument. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. This ASU is effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted after December 15, 2020 and can be adopted either on a modified retrospective or full retrospective basis. The Company is evaluating the impact, timing and method of adoption of this ASU. Upon adoption of this ASU, the Company expects to recombine the equity conversion component of its convertible notes, which was initially separated and recorded in equity, and remove the remaining debt discounts recorded for this previous separation. Adoption of this ASU will also result in the elimination of a portion of non-cash interest expense related to amortization of debt discount. Additionally, ASU No. 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share, which would result in an increase in the number of shares for calculating diluted earnings per share by approximately 19.9 million shares. |
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 Chief Operating Decision Maker (the “CODM”), which for the Company is its Chief Executive Officer, in deciding how to allocate resources and assess performance. Based on the Company’s internal reporting structure, the Company consists of two operating segments: Video and Cable Access. The operating segments were determined based on the nature of the products offered. |
Indemnification | The Company is obligated to indemnify its officers and the members of its Board of 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). |
CONTRACT ASSETS AND DEFERRED _2
CONTRACT ASSETS AND DEFERRED REVENUE (Tables) | 9 Months Ended |
Oct. 01, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract assets and Deferred Revenue | Contract assets and deferred revenue consisted of the following: As of (in thousands) October 1, 2021 December 31, 2020 Contract assets $ 11,688 $ 9,800 Deferred revenue $ 73,267 $ 63,533 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Oct. 01, 2021 | |
Leases [Abstract] | |
Schedule of Lease Expense | The components of lease expense are as follows: Three Months Ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Operating lease cost $ 1,911 $ 1,873 $ 5,654 $ 6,556 Variable lease cost 467 681 1,494 2,183 Total lease cost $ 2,378 $ 2,554 $ 7,148 $ 8,739 Supplemental information related to leases are as follows: Three Months Ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Cash payments $ 1,987 $ 3,134 $ 5,744 $ 7,772 Right-of-use assets obtained in exchange for operating lease obligations $ 194 $ 69 $ 5,670 $ 1,740 |
OTHER FINANCIAL STATEMENT INF_2
OTHER FINANCIAL STATEMENT INFORMATION (Tables) | 9 Months Ended |
Oct. 01, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts Receivable, Net | The following tables provide details of selected balance sheet components: As of (in thousands) October 1, 2021 December 31, 2020 Accounts receivable, net: Accounts receivable $ 77,962 $ 68,295 Less: allowances for expected credit losses and sales returns (2,520) (2,068) Total $ 75,442 $ 66,227 |
Schedule of Inventories | As of (in thousands) October 1, 2021 December 31, 2020 Inventories: Raw materials $ 12,105 $ 2,529 Work-in-process 2,945 1,689 Finished goods 28,761 22,777 Service-related spares 8,045 8,036 Total $ 51,856 $ 35,031 |
Schedule of Prepaid expenses and Other Current Assets | As of (in thousands) October 1, 2021 December 31, 2020 Prepaid expenses and other current assets: Prepaid expenses $ 9,900 $ 11,453 Contract assets 11,688 9,800 Other 13,855 16,879 Total $ 35,443 $ 38,132 |
Schedule of Property and Equipment, Net | As of (in thousands) October 1, 2021 December 31, 2020 Property and equipment, net: Machinery and equipment $ 76,357 $ 72,731 Capitalized software 38,107 37,141 Leasehold improvements 40,489 38,718 Furniture and fixtures 2,880 2,913 Construction-in-progress 3,150 2,209 Property and equipment, gross 160,983 153,712 Less: accumulated depreciation and amortization (117,135) (110,571) Total $ 43,848 $ 43,141 |
Schedule of Other Current Liabilities | As of (in thousands) October 1, 2021 December 31, 2020 Other current liabilities: Accrued employee compensation and related expenses $ 19,118 $ 23,131 Customers’ advances and deposits 22,534 3,385 Other 23,311 23,817 Total $ 64,963 $ 50,333 |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 9 Months Ended |
Oct. 01, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following table presents the components of the 2022 Notes: As of (in thousands, except for years and percentages) October 1, 2021 December 31, 2020 Liability component: Principal amount $ 37,707 $ 37,707 Less: Debt discount, net of amortization (849) (1,357) Less: Debt issuance costs, net of amortization (266) (425) Carrying amount $ 36,592 $ 35,925 Remaining debt discount amortization period (years) 1.2 1.9 Effective interest rate on liability component 6.95 % 6.95 % The following table presents the components of the 2024 Notes: As of (in thousands, except for years and percentages) October 1, 2021 December 31, 2020 Liability component: Principal amount $ 115,500 $ 115,500 Less: Debt discount, net of amortization (15,789) (19,294) Less: Debt issuance costs, net of amortization (2,148) (2,624) Carrying amount $ 97,563 $ 93,582 Remaining debt discount amortization period (years) 2.9 3.7 Effective interest rate on liability component 7.95 % 7.95 % |
Schedule of Convertible Debt Interest | The following table presents interest expense recognized for the 2022 Notes: Three Months Ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Contractual interest expense $ 412 $ 412 $ 1,236 $ 540 Amortization of debt discount 171 161 508 210 Amortization of debt issuance costs 54 50 159 65 Total interest expense recognized $ 637 $ 623 $ 1,903 $ 815 The following table presents interest expense recognized for the 2024 Notes: Three Months Ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Contractual interest expense $ 578 $ 578 $ 1,734 $ 1,734 Amortization of debt discount 1,193 1,102 3,505 3,237 Amortization of debt issuance costs 162 153 476 443 Total interest expense recognized $ 1,933 $ 1,833 $ 5,715 $ 5,414 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Oct. 01, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instruments Not Measured at Fair Value on a Recurring Basis | The Company’s financial instruments not measured at fair value on a recurring basis were as follows: October 1, 2021 December 31, 2020 Carrying Fair Value Carrying Fair Value ( in thousands ) Value Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 2022 Notes $ 36,592 $ — $ 62,405 $ — $ 35,925 $ — $ 54,204 $ — 2024 Notes $ 97,563 $ — $ 140,720 $ — $ 93,582 $ — $ 125,953 $ — |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Oct. 01, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income (Loss) Per Share | The following table sets forth the computation of the basic and diluted net income (loss) per share: Three Months ended Nine Months Ended (in thousands, except per share amounts) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Numerator: Net income (loss) $ 1,530 $ (5,381) $ (6,603) $ (42,736) Denominator: Weighted average number of shares outstanding: Basic 102,099 97,563 101,057 96,623 Effect of dilutive securities: Stock options, restricted stock units and ESPP 1,505 — — — Convertible debt 2,817 — — — Diluted 106,421 97,563 101,057 96,623 Net income (loss) per share: Basic $ 0.01 $ (0.06) $ (0.07) $ (0.44) Diluted $ 0.01 $ (0.06) $ (0.07) $ (0.44) |
Schedule of Antidilutive Securities | The following table sets forth the potential weighted common shares outstanding and anti-dilutive weighted shares that were excluded from the computation of basic and diluted net income (loss) per share: Three Months ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Convertible debt — — 2,085 390 Stock options — 1,558 926 1,637 Restricted stock units 69 3,336 3,079 3,066 Stock purchase rights under the ESPP — 525 381 516 Total 69 5,419 6,471 5,609 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Oct. 01, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The following table provides summary financial information by reportable segment: Three Months Ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Video Revenue $ 68,729 $ 54,641 $ 202,415 $ 156,466 Gross profit 42,534 29,825 118,879 83,756 Operating income (loss) 7,904 (1,699) 13,235 (12,203) Cable Access Revenue $ 57,592 $ 40,251 $ 148,930 $ 90,837 Gross profit 24,165 19,682 65,111 42,224 Operating income 3,903 5,876 10,191 1,733 Total Revenue $ 126,321 $ 94,892 $ 351,345 $ 247,303 Gross profit 66,699 49,507 183,990 125,980 Operating income (loss) $ 11,807 $ 4,177 $ 23,426 $ (10,470) |
Schedule of Reconciliation of Operating Profit (Loss) from Segments to Consolidated | A reconciliation of the Company’s consolidated segment operating income (loss) to consolidated income (loss) before income taxes is as follows: Three Months Ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Total consolidated segment operating income (loss) $ 11,807 $ 4,177 $ 23,426 $ (10,470) Unallocated corporate expenses (1) — (1,116) (389) (1,803) Stock-based compensation (6,436) (3,930) (18,867) (13,737) Amortization of intangibles — (752) (507) (3,214) Consolidated income (loss) from operations 5,371 (1,621) 3,663 (29,224) Non-operating expense, net (2,899) (2,974) (7,260) (10,419) Income (loss) before income taxes $ 2,472 $ (4,595) $ (3,597) $ (39,643) (1) Together with amortization of intangibles and stock-based compensation, the Company does not allocate restructuring and related 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. |
Schedule of Revenue from External Customers by Geographic Areas | Three Months ended Nine Months Ended (in thousands) October 1, 2021 September 25, 2020 October 1, 2021 September 25, 2020 Net revenue (1) United States $ 64,451 $ 44,933 $ 192,840 $ 114,559 Other countries 61,870 49,959 158,505 132,744 Total $ 126,321 $ 94,892 $ 351,345 $ 247,303 (1) Revenue is attributed to countries based on the location of the customer. |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS - Narrative (Details) - shares shares in Thousands | Jan. 01, 2022 | Oct. 01, 2021 | Sep. 25, 2020 | Oct. 01, 2021 | Sep. 25, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Increased number of shares for diluted EPS using if-converted method (in shares) | 2,817 | 0 | 0 | 0 | |
Subsequent event | ASU 2020-06 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Increased number of shares for diluted EPS using if-converted method (in shares) | 19,900 |
CONTRACT ASSETS AND DEFERRED _3
CONTRACT ASSETS AND DEFERRED REVENUE - Summary of Contract Assets and Deferred Revenue (Details) - USD ($) $ in Thousands | Oct. 01, 2021 | Dec. 31, 2020 |
Capitalized Contract Cost [Line Items] | ||
Contract assets | $ 11,688 | $ 9,800 |
Prepaid expenses and other current assets | ||
Capitalized Contract Cost [Line Items] | ||
Contract assets | 11,688 | 9,800 |
Other non-current liabilities | ||
Capitalized Contract Cost [Line Items] | ||
Deferred revenue | $ 73,267 | $ 63,533 |
CONTRACT ASSETS AND DEFERRED _4
CONTRACT ASSETS AND DEFERRED REVENUE - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2021 | Sep. 25, 2020 | Oct. 01, 2021 | Sep. 25, 2020 | |
Revenue from Contract with Customer [Abstract] | ||||
Revenue recognized | $ 8.2 | $ 5.7 | $ 47.3 | $ 32.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-02 | Comcast CableOS Software | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Revenue, remaining performance obligation, amount | $ 52.1 | $ 52.1 | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 21 months | 21 months |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2021 | Sep. 25, 2020 | Oct. 01, 2021 | Sep. 25, 2020 | |
Leases [Abstract] | ||||
Operating lease cost | $ 1,911 | $ 1,873 | $ 5,654 | $ 6,556 |
Variable lease cost | 467 | 681 | 1,494 | 2,183 |
Total lease cost | 2,378 | 2,554 | 7,148 | 8,739 |
Cash payments | 1,987 | 3,134 | 5,744 | 7,772 |
Right-of-use assets obtained in exchange for operating lease obligations | $ 194 | $ 69 | $ 5,670 | $ 1,740 |
OTHER FINANCIAL STATEMENT INF_3
OTHER FINANCIAL STATEMENT INFORMATION - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Oct. 01, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts receivable | $ 77,962 | $ 68,295 |
Less: allowances for expected credit losses and sales returns | (2,520) | (2,068) |
Total | $ 75,442 | $ 66,227 |
OTHER FINANCIAL STATEMENT INF_4
OTHER FINANCIAL STATEMENT INFORMATION - Inventories (Details) - USD ($) $ in Thousands | Oct. 01, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 12,105 | $ 2,529 |
Work-in-process | 2,945 | 1,689 |
Finished goods | 28,761 | 22,777 |
Service-related spares | 8,045 | 8,036 |
Total | $ 51,856 | $ 35,031 |
OTHER FINANCIAL STATEMENT INF_5
OTHER FINANCIAL STATEMENT INFORMATION - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Oct. 01, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 9,900 | $ 11,453 |
Contract assets | 11,688 | 9,800 |
Other | 13,855 | 16,879 |
Total | $ 35,443 | $ 38,132 |
OTHER FINANCIAL STATEMENT INF_6
OTHER FINANCIAL STATEMENT INFORMATION - Property and Equipment, Net (Details) - USD ($) $ in Thousands | Oct. 01, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 160,983 | $ 153,712 |
Less: accumulated depreciation and amortization | (117,135) | (110,571) |
Total | 43,848 | 43,141 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 76,357 | 72,731 |
Capitalized software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 38,107 | 37,141 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 40,489 | 38,718 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,880 | 2,913 |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,150 | $ 2,209 |
OTHER FINANCIAL STATEMENT INF_7
OTHER FINANCIAL STATEMENT INFORMATION - Other Current Liabilities (Details) - USD ($) $ in Thousands | Oct. 01, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued employee compensation and related expenses | $ 19,118 | $ 23,131 |
Customers’ advances and deposits | 22,534 | 3,385 |
Other | 23,311 | 23,817 |
Total | $ 64,963 | $ 50,333 |
CONVERTIBLE DEBT - Narrative (D
CONVERTIBLE DEBT - Narrative (Details) $ / shares in Units, $ in Thousands | Oct. 01, 2021USD ($)day$ / shares | Jun. 02, 2020USD ($)day$ / shares | Sep. 13, 2019USD ($)day$ / shares | Dec. 31, 2020USD ($)$ / shares |
Debt Instrument [Line Items] | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Convertible debt in mezzanine equity section | $ 1,115 | $ 0 | ||
Carrying value of liability | 97,563 | 129,507 | ||
2022 Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument principal amount | 37,707 | 37,707 | ||
Unamortized debt discount | 849 | 1,357 | ||
Carrying value of liability | 36,592 | 35,925 | ||
2022 Notes | Senior notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument principal amount | 37,700 | $ 37,700 | ||
Debt instrument stated percentage (as a percent) | 4.375% | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||
Debt instrument conversion ratio | 173.9978 | |||
Debt instrument conversion price (in dollars per share) | $ / shares | $ 5.75 | |||
Fair value of debt instrument | $ 44,400 | |||
Carrying amount of equity component | 8,300 | |||
Convertible debt | 36,000 | |||
Unamortized debt discount | $ 1,700 | |||
Carrying value of liability | $ 36,600 | |||
2022 Notes | Senior notes | Stock price greater or equal 130 percent of note conversion rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument threshold trading days | day | 20 | 20 | ||
Debt instrument threshold consecutive trading days | day | 30 | 30 | ||
Debt instrument threshold percentage of stock price trigger (as a percent) | 130.00% | 130.00% | ||
2022 Notes | Senior notes | Note price less than 98 percent of stock price times conversion rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument threshold trading days | day | 5 | |||
Debt instrument threshold consecutive trading days | day | 5 | |||
Debt instrument threshold percentage of stock price trigger (as a percent) | 98.00% | |||
2024 Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument principal amount | $ 115,500 | 115,500 | ||
Unamortized debt discount | 15,789 | 19,294 | ||
Carrying value of liability | $ 97,563 | $ 93,582 | ||
2024 Notes | Senior notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument principal amount | $ 115,500 | |||
Debt instrument stated percentage (as a percent) | 2.00% | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||
Debt instrument conversion ratio | 115.5001 | |||
Debt instrument conversion price (in dollars per share) | $ / shares | $ 8.66 | |||
Carrying amount of equity component | $ 24,900 | |||
2024 Notes | Senior notes | Stock price greater or equal 130 percent of note conversion rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument threshold trading days | day | 20 | |||
Debt instrument threshold consecutive trading days | day | 30 | |||
Debt instrument threshold percentage of stock price trigger (as a percent) | 130.00% | |||
2024 Notes | Senior notes | Note price less than 98 percent of stock price times conversion rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument threshold trading days | day | 5 | |||
Debt instrument threshold consecutive trading days | day | 5 | |||
Debt instrument threshold percentage of stock price trigger (as a percent) | 98.00% |
CONVERTIBLE DEBT - Components o
CONVERTIBLE DEBT - Components of Convertible Notes (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Oct. 01, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Carrying amount | $ 97,563 | $ 129,507 |
2022 Notes | ||
Debt Instrument [Line Items] | ||
Principal amount | 37,707 | 37,707 |
Less: Debt discount, net of amortization | (849) | (1,357) |
Less: Debt issuance costs, net of amortization | (266) | (425) |
Carrying amount | $ 36,592 | $ 35,925 |
Remaining debt discount amortization period (years) | 1 year 2 months 12 days | 1 year 10 months 24 days |
Effective interest rate on liability component (as a percent) | 6.95% | 6.95% |
2024 Notes | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 115,500 | $ 115,500 |
Less: Debt discount, net of amortization | (15,789) | (19,294) |
Less: Debt issuance costs, net of amortization | (2,148) | (2,624) |
Carrying amount | $ 97,563 | $ 93,582 |
Remaining debt discount amortization period (years) | 2 years 10 months 24 days | 3 years 8 months 12 days |
Effective interest rate on liability component (as a percent) | 7.95% | 7.95% |
CONVERTIBLE DEBT - Interest Exp
CONVERTIBLE DEBT - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2021 | Sep. 25, 2020 | Oct. 01, 2021 | Sep. 25, 2020 | |
2022 Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 412 | $ 412 | $ 1,236 | $ 540 |
Amortization of debt discount | 171 | 161 | 508 | 210 |
Amortization of debt issuance costs | 54 | 50 | 159 | 65 |
Total interest expense recognized | 637 | 623 | 1,903 | 815 |
2024 Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 578 | 578 | 1,734 | 1,734 |
Amortization of debt discount | 1,193 | 1,102 | 3,505 | 3,237 |
Amortization of debt issuance costs | 162 | 153 | 476 | 443 |
Total interest expense recognized | $ 1,933 | $ 1,833 | $ 5,715 | $ 5,414 |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Instruments not Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Oct. 01, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | $ 97,563 | $ 129,507 |
2022 Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 36,592 | 35,925 |
2024 Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 97,563 | 93,582 |
Level 2 | 2022 Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 62,405 | 54,204 |
Level 2 | 2024 Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 140,720 | $ 125,953 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2021 | Sep. 25, 2020 | Oct. 01, 2021 | Sep. 25, 2020 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ 1,530 | $ (5,381) | $ (6,603) | $ (42,736) |
Weighted average number of shares outstanding: | ||||
Basic (in shares) | 102,099 | 97,563 | 101,057 | 96,623 |
Stock options, restricted stock units and ESPP (in shares) | 1,505 | 0 | 0 | 0 |
Convertible debt (in shares) | 2,817 | 0 | 0 | 0 |
Diluted (in shares) | 106,421 | 97,563 | 101,057 | 96,623 |
Net income (loss) per share: | ||||
Basic (in dollars per share) | $ 0.01 | $ (0.06) | $ (0.07) | $ (0.44) |
Diluted (in dollars per share) | $ 0.01 | $ (0.06) | $ (0.07) | $ (0.44) |
EARNINGS PER SHARE - Antidiluti
EARNINGS PER SHARE - Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2021 | Sep. 25, 2020 | Oct. 01, 2021 | Sep. 25, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential weighted common shares outstanding excluded from diluted net loss per share (in shares) | 69 | 5,419 | 6,471 | 5,609 |
Convertible debt | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential weighted common shares outstanding excluded from diluted net loss per share (in shares) | 0 | 0 | 2,085 | 390 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential weighted common shares outstanding excluded from diluted net loss per share (in shares) | 0 | 1,558 | 926 | 1,637 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential weighted common shares outstanding excluded from diluted net loss per share (in shares) | 69 | 3,336 | 3,079 | 3,066 |
Stock purchase rights under the ESPP | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential weighted common shares outstanding excluded from diluted net loss per share (in shares) | 0 | 525 | 381 | 516 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2021 | Sep. 25, 2020 | Oct. 01, 2021 | Sep. 25, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Increased number of shares for diluted EPS using if-converted method (in shares) | 2,817 | 0 | 0 | 0 |
Maximum | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Increased number of shares for diluted EPS using if-converted method (in shares) | 19,900 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 9 Months Ended |
Oct. 01, 2021segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
SEGMENT INFORMATION - Schedule
SEGMENT INFORMATION - Schedule of Financial Information by Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2021 | Sep. 25, 2020 | Oct. 01, 2021 | Sep. 25, 2020 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 126,321 | $ 94,892 | $ 351,345 | $ 247,303 |
Gross profit | 66,154 | 48,924 | 181,804 | 123,435 |
Operating income (loss) | 5,371 | (1,621) | 3,663 | (29,224) |
Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 126,321 | 94,892 | 351,345 | 247,303 |
Gross profit | 66,699 | 49,507 | 183,990 | 125,980 |
Operating income (loss) | 11,807 | 4,177 | 23,426 | (10,470) |
Operating segments | Video | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 68,729 | 54,641 | 202,415 | 156,466 |
Gross profit | 42,534 | 29,825 | 118,879 | 83,756 |
Operating income (loss) | 7,904 | (1,699) | 13,235 | (12,203) |
Operating segments | Cable Access | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 57,592 | 40,251 | 148,930 | 90,837 |
Gross profit | 24,165 | 19,682 | 65,111 | 42,224 |
Operating income (loss) | $ 3,903 | $ 5,876 | $ 10,191 | $ 1,733 |
SEGMENT INFORMATION - Segment I
SEGMENT INFORMATION - Segment Income or Loss Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2021 | Sep. 25, 2020 | Oct. 01, 2021 | Sep. 25, 2020 | |
Segment Reporting Information [Line Items] | ||||
Total consolidated segment operating income (loss) | $ 5,371 | $ (1,621) | $ 3,663 | $ (29,224) |
Unallocated corporate expenses | (60,783) | (50,545) | (178,141) | (152,659) |
Stock-based compensation | (6,436) | (3,930) | (18,867) | (13,737) |
Amortization of intangibles | 0 | (752) | (507) | (3,214) |
Non-operating expense, net | (2,899) | (2,974) | (7,260) | (10,419) |
Income (loss) before income taxes | 2,472 | (4,595) | (3,597) | (39,643) |
Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Total consolidated segment operating income (loss) | 11,807 | 4,177 | 23,426 | (10,470) |
Corporate, non-segments | ||||
Segment Reporting Information [Line Items] | ||||
Unallocated corporate expenses | $ 0 | $ (1,116) | $ (389) | $ (1,803) |
SEGMENT INFORMATION - Geographi
SEGMENT INFORMATION - Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2021 | Sep. 25, 2020 | Oct. 01, 2021 | Sep. 25, 2020 | |
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 126,321 | $ 94,892 | $ 351,345 | $ 247,303 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 64,451 | 44,933 | 192,840 | 114,559 |
Other countries | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 61,870 | $ 49,959 | $ 158,505 | $ 132,744 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) | Oct. 01, 2021USD ($) |
Indemnification | |
Other Commitments [Line Items] | |
Accrual for indemnification provisions | $ 0 |