Radisys (RSYS) 10-Q 2 May 17 2017 Q1 Quarterly report Financial data

DEI Document

DEI Document - shares	3 Months Ended
	Mar. 31, 2017	Apr. 27, 2017	Dec. 31, 2016
DEI [Abstract]
Common Stock, Shares, Issued	38,441,000		37,026,000
Entity Registrant Name	Radisys Corporation
Entity Central Index Key	873,044
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		38,928,674
Common Stock, Shares, Outstanding	38,441,000		37,026,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues	$ 37,610	$ 55,146
Cost of Goods Sold, Product	22,175	35,732
Revenue, Product	28,699	47,317
Revenue, Service	8,911	7,829
Cost of sales:
Cost of Goods Sold, Service	5,286	4,703
Amortization of purchased technology	1,927	1,927
Total cost of sales	29,388	42,362
Gross margin	8,222	12,784
Research and development	6,480	5,653
Selling, general and administrative	9,382	7,639
Intangible asset amortization	1,260	1,260
Restructuring and acquisition-related charges, net	235	682
Income (loss) from operations	(9,135)	(2,450)
Interest expense	(272)	(117)
Other income (expense), net	(297)	139
Income (loss) before income tax expense (benefit)	(9,704)	(2,428)
Income tax expense (benefit)	304	537
Net income (loss)	$ (10,008)	$ (2,965)
Net income (loss) per share:
Basic (in dollars per share)	$ (0.26)	$ (0.08)
Diluted (in dollars per share)	$ (0.26)	$ (0.08)
Weighted average shares outstanding:
Basic (in shares)	38,715	37,007
Diluted (in shares)	38,715	37,007

Condensed Consolidated Stateme3

Condensed Consolidated Statement of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Net income (loss)	$ (10,008)	$ (2,965)
Other comprehensive income (loss):
Translation adjustments	664	457
Net adjustment for fair value of hedge derivatives (A)	502	134
Foreign Currency Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net	29	348
Other comprehensive income (loss)	1,166	591
Comprehensive income (loss)	$ (8,842)	$ (2,374)

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 32,025	$ 33,087
Accounts receivable, net	49,925	38,378
Other receivables	3,446	4,161
Inventories, net	10,845	20,021
Other current assets	3,557	2,990
Total current assets	99,798	98,637
Property and equipment, net	7,325	6,713
Intangible assets, net	14,388	17,575
Long-term deferred tax assets, net	1,013	1,117
Other assets	2,035	4,143
Total assets	124,559	128,185
Current liabilities:
Accounts payable	13,674	20,805
Accrued wages and bonuses	4,144	6,572
Deferred Revenue	6,496	5,715
Line of Credit Facility, Amount Outstanding	40,000	25,000
Other accrued liabilities	6,631	7,571
Total current liabilities	70,945	65,663
Long-term liabilities:
Other long-term liabilities	6,782	5,966
Total long-term liabilities	6,782	5,966
Total liabilities	77,727	71,629
Shareholders' equity:
Common stock — no par value, 100,000 shares authorized; 28,173 and 27,949 shares issued and outstanding at June 30, 2012 and December 31, 2011	340,811	339,715
Accumulated deficit	(293,586)	(281,600)
Accumulated other comprehensive income:
Cumulative translation adjustments	(368)	(1,032)
Unrealized loss on hedge instruments	(25)	(527)
Total accumulated other comprehensive income	(393)	(1,559)
Total shareholders’ equity	46,832	56,556
Total liabilities and shareholders' equity	$ 124,559	$ 128,185

Condensed Consolidated Balance5

Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets Parenthetical - $ / shares shares in Thousands	Mar. 31, 2017	Dec. 31, 2016
Balance Sheet Parenthetical [Abstract]
Common Stock, Par Value	$ 0	$ 0
Common Stock, Shares Authorized	100,000	100,000
Common Stock, Shares, Issued	38,441	37,026
Common Stock, Shares, Outstanding	38,441	37,026

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net income (loss)	$ (10,008)	$ (2,965)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	4,358	4,345
Inventory valuation allowance and adverse purch commitment charges	702	545
Deferred income taxes	195	12
Stock-based compensation expense	1,154	688
Other	(185)	372
Changes in operating assets and liabilities
Accounts receivable	(11,547)	22,134
Other receivables	741	8,254
Increase (Decrease) in Inventory and Deferred Cost of Sales	(8,681)	(578)
Accounts payable	(7,038)	(12,155)
Accrued restructuring	(1,124)	435
Accrued wages and other	(2,368)	(3,207)
Increase (Decrease) in Deferred Revenue	1,578	(16,693)
Other Accrued Liabilities	350	(661)
Net cash provided by operating activities	(14,511)	1,682
Cash flows from investing activities:
Capital expenditures	(1,803)	(422)
Net cash used in investing activities	(1,803)	(422)
Cash flows from financing activities:
Proceeds from (Repayments of) Lines of Credit	37,000	18,000
Repayments of Lines of Credit	(22,000)	(18,000)
Restricted Stock, Value, Shares Issued Net of Tax Withholdings	(192)	(2)
Other financing activities	108	107
Net cash provided by (used in) financing activities	14,916	105
Effect of exchange rate changes on cash	336	254
Net increase (decrease) in cash and cash equivalents	(1,062)	1,619
Cash and Cash Equivalents, beginning of period	33,087	20,764
Cash and Cash Equivalents, end of period	32,025	22,383
Supplemental disclosure of cash flow information:
Interest	247	123
Income taxes	$ 286	$ 228

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Significant Accounting Policies	In October 2016, the FASB issued Accounting standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (''ASU 2016-16''). ASU 2016-16 modifies how intra-entity transfer of assets other than inventory are accounted for and presented in the financial statements. ASU 2016-16 is effective for public companies for annual reporting periods beginning after December 15, 2017. The Company adopted this ASU in the first quarter of 2017. The Company recognized a tax charge of approximately $2.0 million related to intra-entity transactions other than inventory which could not be previously recognized. The unrecognized tax charge is reflected as an adjustment to retained earnings. In March 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Shared-Based Payment Accounting (''ASU 2016-09''). ASU 2016-09 simplifies how several aspects of share-based payments are accounted for and presented in the financial statements. ASU 2016-09 is effective for public companies for annual reporting periods beginning after December 15, 2016. The Company adopted this ASU in the first quarter of 2017. Upon adoption, the Company no longer uses a forfeiture rate in the calculation of stock based compensation expense. The impact of this election did not result in a significant charge to retained earnings from applying an estimated forfeiture rate in previous periods. The balance of the unrecognized excess tax benefits was reversed with the impact recorded to retained earnings and included changes to the valuation allowance as a result of the adoption. The Company has excess tax benefits for which a benefit could not be previously recognized of approximately $4.5 million . Due to the full valuation allowance on the U.S. deferred tax assets, there was no impact to the financial statements beyond disclosure as a result of this adoption. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires lessees to recognize a lease liability and a right-of-use asset on the balance sheet and aligns many of the underlying principles of the new lessor model with those in Accounting Standards Codification Topic 606, Revenue from Contracts with Customers. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the requirements of ASU 2016-02 and has not yet determined its impact on the condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," which is the new comprehensive revenue recognition standard that will supersede all existing revenue recognition guidance under U.S. GAAP. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which was issued in August 2015, revised the effective date for this ASU to annual and interim periods beginning on or after December 15, 2017, with early adoption permitted, but not earlier than the original effective date of annual and interim periods beginning on or after December 15, 2016, for public entities. 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 Company does not plan to early adopt this new standard, and accordingly, the Company will adopt the new standard effective January 1, 2018. The Company currently plans to adopt using the modified retrospective approach. However, a decision regarding the adoption method has not been finalized at this time. The final determination will depend on a number of factors, such as the significance of the impact of the new standard on financial results, system readiness and the Company's ability to accumulate and analyze the information necessary to assess the impact on prior period financial statements, as necessary. The Company's evaluation of the impact of the new standard on the Company's accounting policies, processes, and system requirements is ongoing. While the Company continues to assess all potential impacts under the new standard, the Company does not believe there will be significant changes to the timing of recognition of hardware sales, software license sales or service contracts. As part of the Company's preliminary evaluation, the Company also considered the impact of the guidance in ASC 340-40, " Other Assets and Deferred Costs; Contracts with Customers ". This guidance requires the capitalization of all incremental costs that we incur to obtain a contract with a customer that the Company would not have incurred if the contract had not been obtained, provided the Company expects to recover the costs. The Company preliminarily believes that there will not be significant changes to the timing of the recognition of sales commissions since the Company's commission plan is earned based on the recognition of revenue; however, there is a potential that the amortization period for commission costs may be longer than the contract term in some cases, as the new cost guidance requires entities to determine whether the costs relate to specific anticipated contracts as well. While the Company continues to assess the potential impacts of the new standard, including the areas described above, the Company cannot reasonably estimate quantitative information related to the impact of the new standard on its financial statements at this time. Immaterial Revision to Prior Period Financial Statement The Company has revised the presentation of revenue and cost of sales to separately present those amounts that are associated with service and related activities from those amounts associated with product sales. This change does not impact the Company’s previously reported total revenues, gross margin, loss from operations or net loss for the periods presented.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value Disclosures	Fair Value of Financial Instruments Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company measures at fair value certain financial assets and liabilities. GAAP specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. These two types of inputs have created the following fair-value hierarchy: Level 1— Quoted prices for identical instruments in active markets; Level 2— Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3— Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Foreign currency forward contracts are measured at fair value using models based on observable market inputs such as foreign currency exchange rates; therefore, they are classified within Level 2 of the valuation hierarchy. The following table summarizes the fair value measurements for the Company's financial instruments (in thousands): Fair Value Measurements as of March 31, 2017 Total Level 1 Level 2 Level 3 Foreign currency forward contracts $ 846 — $ 846 — Fair Value Measurements as of December 31, 2016 Total Level 1 Level 2 Level 3 Foreign currency forward contracts $ 94 — $ 94 —

Accounts Receivable and Other R

Accounts Receivable and Other Receivables	3 Months Ended
	Mar. 31, 2017
Receivables [Abstract]
Accounts Receivable and Other Receivables	Accounts Receivable and Other Receivables Accounts receivable consists of sales to the Company's customers which are generally based on standard terms and conditions. Accounts receivable balances consisted of the following (in thousands): March 31, December 31, Accounts receivable, gross $ 49,980 $ 38,433 Less: allowance for doubtful accounts (55 ) (55 ) Accounts receivable, net $ 49,925 $ 38,378 As of March 31, 2017 and December 31, 2016 , the balance in other receivables was $3.4 million and $4.2 million . Other receivables consisted primarily of non-trade receivables including inventory sold to the Company's contract manufacturing partner or other integration partners (on which the Company does not recognize revenue) and net receivables for value-added taxes.

Inventories

Inventories	3 Months Ended
	Mar. 31, 2017
Inventory Disclosure [Abstract]
Inventory Disclosure	Inventories Inventories consisted of the following (in thousands): March 31, December 31, Raw materials $ 16,917 $ 24,805 Work-in-process — 12 Finished goods 3,924 5,005 20,841 29,822 Less: inventory valuation allowance (9,996 ) (9,801 ) Inventories, net $ 10,845 $ 20,021 Consigned inventory is held at third-party locations, which include the Company's contract manufacturing partner and customers. The Company retains title to the inventory until purchased by the third-party. Consigned gross inventory, consisting of raw materials and finished goods was $11.6 million and $11.8 million at March 31, 2017 and December 31, 2016 . The Company’s consignment inventory with its contract manufacturer consists of inventory transferred from the Company’s prior contract manufacturer as well as inventory that has been purchased by the contract manufacturer as a result of the Company's forecasted demand. The Company was contractually obligated to purchase inventory transferred from the Company's prior contract manufacturer after the inventory ages for 365 days. All transferred inventory not consumed was repurchased by the Company in 2016. The Company is also contractually obligated to purchase inventory that has been purchased by its contract manufacturer as a result of the Company's forecasted demand when the inventory ages beyond 180 days and has no forecasted demand. The Company’s consigned inventory at its contract manufacturing partner was $11.6 million and $11.8 million as of March 31, 2017 and December 31, 2016 . The Company records a liability for adverse purchase commitments of inventory owned by its contract manufacturing partner. See Note 7 - Commitments and Contingencies for additional information regarding the Company's adverse purchase commitment liability. The Company recorded the following charges associated with the valuation of inventory and the adverse purchase commitment liabilities (in thousands): Three Months Ended March 31, 2017 2016 Inventory, net $ 501 $ 266 Adverse purchase commitments (A) 201 279 Net charges $ 702 $ 545

Restructuring and Other Charges

Restructuring and Other Charges	3 Months Ended
	Mar. 31, 2017
Restructuring and Related Activities [Abstract]
Restructuring and Other Charges	Restructuring and Other Charges The following table summarizes the Company's restructuring and other charges as presented in the Condensed Consolidated Statement of Operations (in thousands): Three Months Ended March 31, 2017 2016 Employee-related restructuring expenses $ 42 $ 682 Integration-related and other non-recurring expenses 193 — Restructuring and other charges, net $ 235 $ 682 Restructuring and other charges includes expenses incurred for employee terminations due to a reduction of personnel resources resulting from modifications of business strategy or business emphasis. Employee-related restructuring expenses include severance benefits, notice pay and outplacement services. Restructuring and other charges may also include expenses incurred associated with acquisition or divestiture activities, facility abandonments and other expenses associated with business restructuring actions. For the three months ended March 31, 2017 , the Company recorded the following restructuring charges: • $0.1 million net expense relating to the severance for 2 employees in connection with a reduction to our hardware engineering presence in Shenzhen; and • $0.2 million in non-recurring legal expenses associated with closing a strategic agreement with a MediaEngine channel partner. For the three months ended March 31, 2016 , the Company recorded the following restructuring and other charges: • $0.7 million net expense relating to the severance for 21 employees primarily in connection with a reduction to our hardware engineering presence in Asia. Accrued restructuring, which is included in other accrued liabilities in the accompanying Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016 , consisted of the following (in thousands): Severance, payroll taxes and other employee benefits Facility reductions Total Balance accrued as of December 31, 2016 $ 1,347 $ 90 $ 1,437 Additions 156 — 156 Reversals (114 ) — (114 ) Expenditures (1,136 ) (30 ) (1,166 ) Balance accrued as of March 31, 2017 $ 253 $ 60 $ 313 The Company evaluates the adequacy of the accrued restructuring charges on a quarterly basis. Reversals are recorded in the period in which the Company determines that expected restructuring obligations are less than the amounts accrued.

Short-Term Borrowings

Short-Term Borrowings	3 Months Ended
	Mar. 31, 2017
Short-term Debt [Abstract]
Short-term Debt	Short-Term Borrowings Silicon Valley Bank On September 19, 2016, the Company entered into a Credit Agreement (as amended, the “Credit Agreement”) with Silicon Valley Bank (“SVB”), as administrative agent, and the other lenders party thereto. The Credit Agreement replaces the Company’s Third Amended and Restated Loan and Security Agreement with SVB, dated March 14, 2014 (as amended, the “2014 Agreement”). On January 5, 2017, the Company entered into the First Amendment to the Credit Agreement. The following takes into account the terms per the agreement as amended on January 5, 2017. The Credit Agreement provides for a revolving loan commitment of $55.0 million and has a stated maturity date of September 19, 2019. The Credit Agreement includes a $10.0 million sub-limit for swingline loans and a $10.0 million sub-limit for letters of credit. The Credit Agreement also includes an accordion feature that allows the Company, at any time, to increase the aggregate revolving loan commitments by up to an additional $25.0 million, subject to the satisfaction of certain conditions, including obtaining the lenders’ agreement to participate in the increase. Borrowings under the Credit Agreement are subject to a borrowing base, which is a formula based upon certain eligible accounts receivable plus up to $7.5 million if the Company’s Liquidity (as defined in the Credit Agreement) is above $ 20.0 million in the first and second month of any fiscal quarter and $25.0 million for the last month of a fiscal quarter, measured as of the last day of the applicable month. Eligible accounts receivable include 85% of certain U.S. and 75% of certain foreign accounts receivable ( 85% in certain cases). The Credit Agreement also provides for non-formula advances during the last business day of any fiscal quarter, provided that Liquidity on the date of a requested non-formula advance must be greater than or equal to $40.0 million , the non-formula advance must be repaid on or before the first business day after the applicable fiscal quarter end, and subject to the satisfaction of certain other conditions. Outstanding borrowings under the revolving loan commitment bear interest at a per annum rate based upon the Company's Availability (as defined in the Credit Agreement), which means the quotient of the amount available for borrowings under the Credit Agreement divided by the lesser of the total commitment and the borrowing base, calculated as a daily average over the immediately preceding fiscal month. The Credit Agreement provides that the per annum interest rate on or before March 31, 2017 and at any time thereafter when the Consolidated Adjusted EBITDA (as defined in the Credit Agreement) as measured on a trailing twelve-month basis for the immediately preceding fiscal quarter period is less than the Consolidated Adjusted EBITDA threshold as specified in the Credit Agreement will be as follows: • When Availability is 70% or more, the interest rate is the prime rate (as published in Wall Street Journal) plus 0.50% ; • When Availability is 30% or more and less than 70% , the interest rate is the prime rate plus 0.75% ; and • When Availability is below 30% , the interest rate is the prime rate plus 1.00% . After March 31, 2017, if Consolidated Adjusted EBITDA as measured on a trailing twelve-month basis for the immediately preceding fiscal quarter period is equal to or greater than the Consolidated Adjusted EBITDA threshold as specified in the Credit Agreement, the rate per annum will be as follows: • When Availability is 70% or more, the interest rate is the prime rate plus 0.25% ; • When Availability is 30% or more and less than 70% , the interest rate is the prime rate plus 0.50% ; and • When Availability is below 30% , the interest rate is the prime rate plus 0.75% . Under the Credit Agreement, the Company is required to make interest payments monthly. The Company is further required to pay $25,000 in annual administrative fees, $82,500 in annual commitment fees and a commitment fee based on the average unused portion of the revolving credit commitment, and certain other fees in connection with letters of credit. The commitment fee is determined as follows and is payable quarterly in arrears: • When Availability is 70% or more, the commitment fee is 0.35% of the average unused portion of the revolving credit commitment; • When Availability is 30% or more and less than 70% , the commitment fee is 0.325% of the average unused portion of the revolving credit commitment; and • When Availability is below 30% , the commitment fee is 0.3% of the average unused portion of the revolving credit commitment. The Company paid a total of $0.3 million loan origination fees which were capitalized and will be expensed over the term of the Credit Agreement. If the Company reduces or terminates the revolving loan commitment under the Credit Agreement prior to September 19, 2017, the Company is required to pay a cancellation fee equal to 0.75% of the total revolving loan commitment. The Credit Agreement requires that the Company comply with financial covenants requiring the Company to maintain a minimum monthly Liquidity of $15.0 million as of the last day of the first and second month of any fiscal quarter and $20.0 million as of the last day of the third month of any fiscal quarter. Additionally, the Credit Agreement requires the Company to maintain a minimum trailing twelve months Consolidated Adjusted EBITDA each quarter of fiscal year 2017. The Credit Agreement also provides that following fiscal year 2017, SVB, as administrative agent, and the required lenders under the Credit Agreement will re-set the required minimum Consolidated Adjusted EBITDA levels for the periods tested in fiscal years 2018 and 2019. All obligations under the 2016 Agreement are unconditionally guaranteed by the Company's wholly owned subsidiary, Radisys International LLC. The obligations under the Credit Agreement are secured by a first priority lien on the assets of the Company and the subsidiary guarantor. If the Company acquires or forms a material U.S. subsidiary, then that subsidiary will also be required to guarantee the obligations under the Credit Agreement and grant a first priority lien on its assets. As of March 31, 2017 and December 31, 2016 , the Company had an outstanding balance of $40.0 million and $25.0 million under the Credit Agreement. At March 31, 2017 , the Company had $3.9 million of total borrowing availability remaining under the Credit Agreement. Under the First Amendment, the Company may borrow up to $55.0 million at fiscal quarter ends. The Company's gross borrowing availability was $43.9 million excluding the quarter end non-formula availability. At March 31, 2017 , the Company was in compliance with all covenants under the Amended Agreement.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies Disclosure	Commitments and Contingencies Adverse Purchase Commitments The Company is contractually obligated to reimburse its contract manufacturer for the cost of excess inventory used in the manufacture of the Company's products if there is no alternative use. Estimates for adverse purchase commitments are derived from reports received on a quarterly basis from the Company's contract manufacturer. Increases to this liability are charged to cost of sales. If and when the Company takes possession of inventory reserved for in this liability, the liability is transferred from other accrued liabilities to the excess and obsolete inventory valuation allowance (Note 4 — Inventories and Deferred Cost of Sales ). The adverse purchase commitment liability is included in other accrued liabilities in the accompanying Condensed Consolidated Balance Sheets and was $0.5 million and $0.3 million as of March 31, 2017 and December 31, 2016 . Guarantees and Indemnification Obligations As permitted under Oregon law, the Company has agreements whereby it indemnifies its officers, directors and certain finance employees for certain events or occurrences while an officer, director or employee is or was serving in such capacity at the request of the Company. The term of the indemnification period is for the officer's, director's or employee's lifetime. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a Director and Officer insurance policy that limits its exposure and enables the Company to recover a portion of any future amounts paid. To date, the Company has not incurred any costs associated with these indemnification agreements and, as a result, management believes the estimated fair value of these indemnification agreements is minimal. Accordingly, the Company has not recorded any liabilities for these agreements as of March 31, 2017 . The Company enters into standard indemnification agreements in its ordinary course of business. Pursuant to these agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company's business partners or customers, in connection with patent, copyright or other intellectual property infringement claims by any third party with respect to the Company's current products, as well as claims relating to property damage or personal injury resulting from the performance of services by us or the Company's subcontractors. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is generally limited. Historically, the Company's costs to defend lawsuits or settle claims relating to such indemnity agreements have been minimal. Accrued Warranty The Company provides for the estimated cost of product warranties at the time it recognizes revenue. Products are generally sold with warranty coverage for a period of 12 or 24 months after shipment. Parts and labor are covered under the terms of the warranty agreement. The workmanship of the Company’s products produced by the contract manufacturer is covered under warranties provided by the contract manufacturer for 12 to 24 months. The warranty provision is based on historical experience by product family. The Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its components suppliers; however ongoing failure rates, material usage and service delivery costs incurred in correcting product failure, as well as specific product class failures out of the Company’s baseline experience, affect the estimated warranty obligation. If actual product failure rates, material usage or service delivery costs differ from estimates, revisions to the estimated warranty liability would be required. The following is a summary of the change in the Company's warranty accrual reserve (in thousands): Three Months Ended March 31, 2017 2016 Warranty liability balance, beginning of the period $ 1,821 $ 2,553 Product warranty accruals 223 385 Utilization of accrual (315 ) (603 ) Warranty liability balance, end of the period $ 1,729 $ 2,335 At March 31, 2017 and December 31, 2016 , $1.4 million and $1.5 million of the warranty liability balance was included in other accrued liabilities and $0.3 million and $0.4 million was included in other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets.

Basic and Diluted Net Income (L

Basic and Diluted Net Income (Loss) Per Share	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Earnings Per Share [Text Block]	Basic and Diluted Net Loss per Share A reconciliation of the numerator and the denominator used to calculate basic and diluted net loss per share is as follows (in thousands, except per share amounts): Three Months Ended March 31, 2017 2016 Numerator Net loss $ (10,008 ) $ (2,965 ) Denominator — Basic Weighted average shares used to calculate net loss per share, basic 38,715 37,007 Denominator — Diluted Weighted average shares used to calculate net loss per share, basic 38,715 37,007 Effect of dilutive restricted stock units (A) — — Effect of dilutive stock options (A) — — Weighted average shares used to calculate net loss per share, diluted 38,715 37,007 Net loss per share Basic $ (0.26 ) $ (0.08 ) Diluted $ (0.26 ) $ (0.08 ) (A) For the three months ended March 31, 2017 and 2016 , the following equity awards, by type, were excluded from the calculation, as their effect would have been anti-dilutive (in thousands): Three Months Ended March 31, 2017 2016 Stock options 3,827 2,808 Restricted stock units 541 122 Performance based restricted stock units (B) 1,049 2,305 Total equity award shares excluded 5,417 5,235 (B) Performance based restricted stock units are presented based on attainment of 100% of the performance goals being met.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2017
Income Tax Disclosure [Abstract]
Income Tax Disclosure	Income Taxes The Company's effective tax rate for the three months ended March 31, 2017 differs from the statutory rate due to a full valuation allowance provided against its United States (“U.S.”) net deferred tax assets, and taxes on foreign income that differ from the U.S. tax rate. The Company utilizes the asset and liability method of accounting for income taxes. The Company records deferred tax assets to the extent it believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. Based upon the Company's review of all positive and negative evidence, including its three year U.S. cumulative pre-tax book loss and taxable loss, it concluded that a full and a partial valuation allowance should continue to be recorded against its U.S. and Canadian net deferred tax assets at March 31, 2017 . In certain other foreign jurisdictions, where the Company does not have cumulative losses or other negative evidence, the Company had net deferred tax assets of $1.0 million and $1.1 million at March 31, 2017 and December 31, 2016 . In the future, if the Company determines that it is more likely than not that it will realize its U.S. and Canadian net deferred tax assets, it will reverse the applicable portion of the valuation allowance and recognize an income tax benefit in the period in which such determination is made. The ending balance for the unrecognized tax benefits for uncertain tax positions was approximately $3.5 million at March 31, 2017 . The related interest and penalties were $0.8 million and $0.3 million . The uncertain tax positions that are reasonably possible to decrease in the next twelve months are insignificant. The Company is currently under tax examination in India. The periods covered under examination are the Company's financial years 2005, 2006, 2008 and 2011. The examinations are in various stages of appellate proceedings and all material uncertain tax positions associated with the examination have been taken into account in the ending balance of the unrecognized tax benefits at March 31, 2017 . The Company is currently under tax examination in Canada. The periods covered under examination in Canada are the Company's financial years 2013 and 2014. No examination adjustments have been proposed. As of March 31, 2017 , the Company is not under examination by tax authorities in any other jurisdictions.

Stock-based Compensation

Stock-based Compensation	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Disclosure of Compensation Related Costs, Share-based Payments	Stock-based Compensation The following table summarizes awards granted under the Radisys Corporation 2007 and LTIP Stock Plans (in thousands): Three Months Ended March 31, 2017 2016 Stock options — 1,036 Restricted stock units 467 — Performance based restricted stock awards (A) 670 680 Total 1,137 1,716 (A) On March 10, 2017, the Compensation Committee approved grants of performance-based restricted stock units ("PRSUs") to certain employees. The awards will vest only on satisfaction of certain performance criteria during two separate annual performance periods and a portion of the award earned will vest upon satisfaction of a time-based service component. 50% of the awards can be earned by meeting strategic revenue targets in fiscal year 2017 and 50% can be earned by meeting strategic revenue targets in fiscal year 2018. One-half of any PRSUs earned during each performance period will vest upon meeting the performance criteria, and the remaining half will be subject to a further time-based service component and will vest one year after meeting the targets. By meeting the relevant performance criteria set forth in the award agreement, employees can earn 0%, 75%, 100% or 125% of the award during each performance period. If an employee earns less than 100% of the award for the 2017 performance period, the employee is eligible to earn the remaining portion of the award in fiscal year 2018 if cumulative 2017 and 2018 strategic revenue targets are met in the two year period. Shares are presented based on attainment of 100% of the performance goals being met. At attainment of 125%, the amount of shares eligible to be earned is 837,500. On March 28, 2016, the Compensation Committee approved grants of PRSUs to certain senior executives. The PRSUs will vest only on satisfaction of certain annual performance criteria during the performance period beginning on the grant date. Specifically, 50% of shares will vest on meeting targets of strategic revenue during fiscal year 2016 and 50% of shares will vest on meeting targets of strategic revenue during fiscal year 2017, subject to the attainment of achieving certain operating income thresholds defined by the Company's ratified 2017 annual operating plans. The awards have two separate annual performance achievement periods in 2016 and 2017 and vest upon attainment and approval of the respective performance conditions. The awards associated with strategic revenue targets in 2016 were earned and settled in shares in the three month period ended March 31, 2017. Stock-based compensation was recognized and allocated as follows (in thousands): Three Months Ended March 31, 2017 2016 Cost of sales $ 97 $ 46 Research and development 230 153 Selling, general and administrative 827 489 Total $ 1,154 $ 688

Hedging

Hedging	3 Months Ended
	Mar. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Instruments and Hedging Activities Disclosure [Text Block]	Hedging The Company’s activities expose it to a variety of market risks, including the effects of changes in foreign currency exchange rates. The Company manages these risks through the use of forward exchange contracts, designated as foreign-currency cash flow hedges, in an attempt to reduce the potentially adverse effects of foreign currency exchange rate fluctuations that occur in the normal course of business. As such, the Company’s hedging activities are employed solely for risk management purposes. All hedging transactions are conducted with, in the opinion of management, financially stable and reputable financial institutions. As of March 31, 2017 and December 31, 2016 , the only hedge instruments executed by the Company are associated with its exposure to fluctuations in the Indian Rupee, which result from obligations such as payroll and rent paid in this currency. These derivatives are recognized on the balance sheet at their fair value. Unrealized gain positions are recorded as other current assets and unrealized loss positions are recorded as other current liabilities. Changes in the fair values of the outstanding derivatives that are highly effective are recorded in other comprehensive income until net income (loss) is affected by the variability of the cash flows of the hedged transaction. Typically, hedge ineffectiveness could result when the amount of the Company’s hedge contracts exceed the Company’s forecasted or actual transactions for which the hedge contracts were designed to hedge. Once a hedge contract matures, the associated gain (loss) on the contract will remain in other comprehensive income (loss) until the underlying hedged transaction affects net income (loss), at which time the gain (loss) will be reclassified out of accumulated other comprehensive income (loss) and recorded to the expense line item being hedged. The Company only enters into derivative contracts in order to hedge foreign currency exposure, and these contracts do not exceed two years from inception. If the Company entered into a contract for speculative reasons or if the Company’s current hedge position becomes ineffective, changes in the fair values of the derivatives would be recognized in earnings in the current period. The Company assesses, both at the inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions have been highly effective in offsetting changes in the cash flows of hedged items and whether those derivatives are expected to remain highly effective in future periods. For the three months ended March 31, 2017 and 2016 , the Company had no hedge ineffectiveness. During the three m onths ended March 31, 2017 the Company entered into 6 new foreign currency forward contracts, with total contractual values of $3.6 million . During the three months ended March 31, 2016 , the Company entered into 12 new foreign currency contracts, with total contractual values of $3.6 million . A summary of the aggregate contractual or notional amounts, balance sheet location and estimated fair values of derivative financial instruments designated as cash flow hedges at March 31, 2017 is as follows (in thousands): Contractual/ Notional Amount Condensed Consolidated Balance Sheet Classification Estimated Fair Value Type of Cash Flow Hedge Asset (Liability) Foreign currency forward exchange contracts $ 16,963 Other current assets $ 846 $ — A summary of the aggregate contractual or notional amounts, balance sheet location and estimated fair values of derivative financial instruments designated as cash flow hedges at December 31, 2016 is as follows (in thousands): Contractual/ Notional Amount Condensed Consolidated Balance Sheet Classification Estimated Fair Value Type of Cash Flow Hedge Asset (Liability) Foreign currency forward exchange contracts $ 16,166 Other current assets $ 94 $ — The following table summarizes the effect of derivative instruments on the consolidated financial statements as a loss (gain) as follows (in thousands): Three Months Ended March 31, 2017 2016 Cost of sales $ 10 $ 108 Research and development 14 173 Selling, general and administrative 5 67 Total $ 29 $ 348 The following is a summary of changes to comprehensive income (loss) associated with the Company's hedging activities (in thousands): Three Months Ended March 31, 2017 2016 Beginning balance of unrealized loss on forward exchange contracts $ (527 ) $ (819 ) Other comprehensive income (loss) before reclassifications 473 (214 ) Amounts reclassified from other comprehensive income (loss) 29 348 Other comprehensive income (loss) 502 134 Ending balance of unrealized loss on forward exchange contracts $ (25 ) $ (685 ) Over the next twelve months, the Company expects to reclassify into earnings income of approximately $0.4 million currently recorded as accumulated other comprehensive income, as a result of the maturity of currently held forward exchange contracts. The bank counterparties in these contracts expose the Company to credit-related losses in the event of their nonperformance. However, to mitigate that risk, the Company only contracts with counterparties who meet its minimum requirements regarding counterparty credit worthiness. In addition, the Company monitors credit ratings, credit spreads and potential downgrades prior to entering into any new hedging contracts.

Segment Information

Segment Information	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Segment Reporting Disclosure	Segment Information The Company is made up of two operating segments: Software-Systems and Hardware Solutions. The Company's Chief Executive Officer, or chief operating decision maker, regularly reviews discrete financial information for purposes of allocating resources and assessing the performance of each segment: • Software-Systems. Software-Systems is comprised of three product lines: FlowEngine, MediaEngine and CellEngine, each of which delivers software-centric solutions to service providers. • Hardware Solutions. Hardware Solutions includes the Company's DCEngine products and legacy embedded product portfolio which includes hardware solutions targeted for service providers. Cost of sales, research and development and selling, general and administrative expenses are allocated to Software-Systems and Hardware Solutions. Expenses, reversals, gains and losses not allocated to Software-Systems or Hardware Solutions include amortization of acquired intangible assets, stock-based compensation, restructuring and other charges, and other one-time non-recurring events. These items are allocated to corporate and other. The Company recorded the following revenues, gross margin and income (loss) from operations by operating segment for the three months ended March 31, 2017 and 2016 (in thousands): Three Months Ended March 31, 2017 2016 Revenue Software-Systems $ 10,149 $ 14,059 Hardware Solutions 27,461 41,087 Total revenues $ 37,610 $ 55,146 Three Months Ended March 31, 2017 2016 Gross margin Software-Systems $ 5,465 $ 8,788 Hardware Solutions 4,781 5,969 Corporate and other (2,024 ) (1,973 ) Total gross margin $ 8,222 $ 12,784 Three Months Ended March 31, 2017 2016 Income (loss) from operations Software-Systems $ (3,273 ) $ 780 Hardware Solutions (1,286 ) 1,327 Corporate and other (4,576 ) (4,557 ) Total loss from operations $ (9,135 ) $ (2,450 ) Assets are not allocated to segments for internal reporting purposes. A portion of depreciation is allocated to the respective segment. It is impracticable for the Company to separately identify the amount of depreciation by segment that is included in the measure of segment profit or loss. Revenues by geographic area were as follows (in thousands): Three Months Ended March 31, 2017 2016 United States $ 23,152 $ 37,765 Other North America 19 78 Asia Pacific ("APAC") 5,419 7,618 Netherlands 5,223 7,235 Other EMEA 3,797 2,450 Europe, the Middle East and Africa (“EMEA”) 9,020 9,685 Foreign Countries 14,458 17,381 Total $ 37,610 $ 55,146 Long-lived assets by geographic area are as follows (in thousands): March 31, December 31, Property and equipment, net United States $ 4,950 $ 4,566 Other North America 102 129 China 406 438 India 1,867 1,580 Total APAC 2,273 2,018 Foreign Countries 2,375 2,147 Total property and equipment, net $ 7,325 $ 6,713 Intangible assets, net United States $ 14,388 $ 17,575 Total intangible assets, net $ 14,388 $ 17,575 The following customers accounted for more than 10% of the Company's total revenues: Three Months Ended March 31, 2017 2016 Customer A 41.2 % 42.3 % Customer B 15.0 % 14.3 % The following customers accounted for more than 10% of accounts receivable: March 31, 2017 December 31, 2016 Customer A 37.7 % 10.4 % Customer D 24.0 % 32.6 % Customer B N/A 15.4 %

Significant Accounting Polici19

Significant Accounting Policies Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Use of Estimates, Policy [Policy Text Block]	The preparation of these statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Additionally, the accompanying financial data as of March 31, 2017 and for the three months ended March 31, 2017 and 2016 has been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading.

Fair Value of Financial Instr20

Fair Value of Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]	Fair Value Measurements as of December 31, 2016 Total Level 1 Level 2 Level 3 Foreign currency forward contracts $ 94 — $ 94 — The following table summarizes the fair value measurements for the Company's financial instruments (in thousands): Fair Value Measurements as of March 31, 2017 Total Level 1 Level 2 Level 3 Foreign currency forward contracts $ 846 — $ 846 —

Accounts Receivable and Other21

Accounts Receivable and Other Receivables (Tables)	3 Months Ended
	Mar. 31, 2017
Receivables [Abstract]
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]	Accounts receivable balances consisted of the following (in thousands): March 31, December 31, Accounts receivable, gross $ 49,980 $ 38,433 Less: allowance for doubtful accounts (55 ) (55 ) Accounts receivable, net $ 49,925 $ 38,378

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Mar. 31, 2017
Inventory Disclosure [Abstract]
Schedule of Inventory, Current [Table Text Block]	Inventories consisted of the following (in thousands): March 31, December 31, Raw materials $ 16,917 $ 24,805 Work-in-process — 12 Finished goods 3,924 5,005 20,841 29,822 Less: inventory valuation allowance (9,996 ) (9,801 ) Inventories, net $ 10,845 $ 20,021
Charges Associated with Inventory [Table Text Block]	The Company recorded the following charges associated with the valuation of inventory and the adverse purchase commitment liabilities (in thousands): Three Months Ended March 31, 2017 2016 Inventory, net $ 501 $ 266 Adverse purchase commitments (A) 201 279 Net charges $ 702 $ 545 (A) When the Company takes possession of inventory reserved for under the adverse purchase liability (Note 7 — Commitments and Contingencies), the associated liability is transferred from other accrued liabilities to the excess and obsolete inventory valuation allowance.

Restructuring and Other Charg23

Restructuring and Other Charges (Tables)	3 Months Ended
	Mar. 31, 2017
Restructuring and Related Activities [Abstract]
Schedule of Restructuring and Related Costs [Table Text Block]	The following table summarizes the Company's restructuring and other charges as presented in the Condensed Consolidated Statement of Operations (in thousands): Three Months Ended March 31, 2017 2016 Employee-related restructuring expenses $ 42 $ 682 Integration-related and other non-recurring expenses 193 — Restructuring and other charges, net $ 235 $ 682
Schedule of Restructuring Reserve by Type of Cost [Table Text Block]	Accrued restructuring, which is included in other accrued liabilities in the accompanying Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016 , consisted of the following (in thousands): Severance, payroll taxes and other employee benefits Facility reductions Total Balance accrued as of December 31, 2016 $ 1,347 $ 90 $ 1,437 Additions 156 — 156 Reversals (114 ) — (114 ) Expenditures (1,136 ) (30 ) (1,166 ) Balance accrued as of March 31, 2017 $ 253 $ 60 $ 313

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Schedule of Product Warranty Liability [Table Text Block]	The following is a summary of the change in the Company's warranty accrual reserve (in thousands): Three Months Ended March 31, 2017 2016 Warranty liability balance, beginning of the period $ 1,821 $ 2,553 Product warranty accruals 223 385 Utilization of accrual (315 ) (603 ) Warranty liability balance, end of the period $ 1,729 $ 2,335

Basic and Diluted Net Income 25

Basic and Diluted Net Income (Loss) Per Share (Tables)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]	(A) For the three months ended March 31, 2017 and 2016 , the following equity awards, by type, were excluded from the calculation, as their effect would have been anti-dilutive (in thousands): Three Months Ended March 31, 2017 2016 Stock options 3,827 2,808 Restricted stock units 541 122 Performance based restricted stock units (B) 1,049 2,305 Total equity award shares excluded 5,417 5,235 (B) Performance based restricted stock units are presented based on attainment of 100% of the performance goals being met.
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]		A reconciliation of the numerator and the denominator used to calculate basic and diluted net loss per share is as follows (in thousands, except per share amounts): Three Months Ended March 31, 2017 2016 Numerator Net loss $ (10,008 ) $ (2,965 ) Denominator — Basic Weighted average shares used to calculate net loss per share, basic 38,715 37,007 Denominator — Diluted Weighted average shares used to calculate net loss per share, basic 38,715 37,007 Effect of dilutive restricted stock units (A) — — Effect of dilutive stock options (A) — — Weighted average shares used to calculate net loss per share, diluted 38,715 37,007 Net loss per share Basic $ (0.26 ) $ (0.08 ) Diluted $ (0.26 ) $ (0.08 )

Stock-based Compensation (Table

Stock-based Compensation (Tables)	3 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Equity awards granted during the period,Grants in Period, Gross [Table Text Block]	The following table summarizes awards granted under the Radisys Corporation 2007 and LTIP Stock Plans (in thousands): Three Months Ended March 31, 2017 2016 Stock options — 1,036 Restricted stock units 467 — Performance based restricted stock awards (A) 670 680 Total 1,137 1,716
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]	Stock-based compensation was recognized and allocated as follows (in thousands): Three Months Ended March 31, 2017 2016 Cost of sales $ 97 $ 46 Research and development 230 153 Selling, general and administrative 827 489 Total $ 1,154 $ 688

Hedging (Tables)

Hedging (Tables)	3 Months Ended
	Mar. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]	A summary of the aggregate contractual or notional amounts, balance sheet location and estimated fair values of derivative financial instruments designated as cash flow hedges at December 31, 2016 is as follows (in thousands): Contractual/ Notional Amount Condensed Consolidated Balance Sheet Classification Estimated Fair Value Type of Cash Flow Hedge Asset (Liability) Foreign currency forward exchange contracts $ 16,166 Other current assets $ 94 $ — A summary of the aggregate contractual or notional amounts, balance sheet location and estimated fair values of derivative financial instruments designated as cash flow hedges at March 31, 2017 is as follows (in thousands): Contractual/ Notional Amount Condensed Consolidated Balance Sheet Classification Estimated Fair Value Type of Cash Flow Hedge Asset (Liability) Foreign currency forward exchange contracts $ 16,963 Other current assets $ 846 $ —
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block]	A summary of the aggregate contractual or notional amounts, balance sheet location and estimated fair values of derivative financial instruments designated as cash flow hedges at March 31, 2017 is as follows (in thousands): Contractual/ Notional Amount Condensed Consolidated Balance Sheet Classification Estimated Fair Value Type of Cash Flow Hedge Asset (Liability) Foreign currency forward exchange contracts $ 16,963 Other current assets $ 846 $ — A summary of the aggregate contractual or notional amounts, balance sheet location and estimated fair values of derivative financial instruments designated as cash flow hedges at December 31, 2016 is as follows (in thousands): Contractual/ Notional Amount Condensed Consolidated Balance Sheet Classification Estimated Fair Value Type of Cash Flow Hedge Asset (Liability) Foreign currency forward exchange contracts $ 16,166 Other current assets $ 94 $ — The following table summarizes the effect of derivative instruments on the consolidated financial statements as a loss (gain) as follows (in thousands): Three Months Ended March 31, 2017 2016 Cost of sales $ 10 $ 108 Research and development 14 173 Selling, general and administrative 5 67 Total $ 29 $ 348
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) [Table Text Block]	The following is a summary of changes to comprehensive income (loss) associated with the Company's hedging activities (in thousands): Three Months Ended March 31, 2017 2016 Beginning balance of unrealized loss on forward exchange contracts $ (527 ) $ (819 ) Other comprehensive income (loss) before reclassifications 473 (214 ) Amounts reclassified from other comprehensive income (loss) 29 348 Other comprehensive income (loss) 502 134 Ending balance of unrealized loss on forward exchange contracts $ (25 ) $ (685 )

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Revenue from External Customers by Products and Services [Table Text Block]	Three Months Ended March 31, 2017 2016 Revenue Software-Systems $ 10,149 $ 14,059 Hardware Solutions 27,461 41,087 Total revenues $ 37,610 $ 55,146 Three Months Ended March 31, 2017 2016 Gross margin Software-Systems $ 5,465 $ 8,788 Hardware Solutions 4,781 5,969 Corporate and other (2,024 ) (1,973 ) Total gross margin $ 8,222 $ 12,784 Three Months Ended March 31, 2017 2016 Income (loss) from operations Software-Systems $ (3,273 ) $ 780 Hardware Solutions (1,286 ) 1,327 Corporate and other (4,576 ) (4,557 ) Total loss from operations $ (9,135 ) $ (2,450 )
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block]	Three Months Ended March 31, 2017 2016 United States $ 23,152 $ 37,765 Other North America 19 78 Asia Pacific ("APAC") 5,419 7,618 Netherlands 5,223 7,235 Other EMEA 3,797 2,450 Europe, the Middle East and Africa (“EMEA”) 9,020 9,685 Foreign Countries 14,458 17,381 Total $ 37,610 $ 55,146 Long-lived assets by geographic area are as follows (in thousands): March 31, December 31, Property and equipment, net United States $ 4,950 $ 4,566 Other North America 102 129 China 406 438 India 1,867 1,580 Total APAC 2,273 2,018 Foreign Countries 2,375 2,147 Total property and equipment, net $ 7,325 $ 6,713 Intangible assets, net United States $ 14,388 $ 17,575 Total intangible assets, net $ 14,388 $ 17,575 Three Months Ended March 31, 2017 2016 United States $ 23,152 $ 37,765 Other North America 19 78 Asia Pacific ("APAC") 5,419 7,618 Netherlands 5,223 7,235 Other EMEA 3,797 2,450 Europe, the Middle East and Africa (“EMEA”) 9,020 9,685 Foreign Countries 14,458 17,381 Total $ 37,610 $ 55,146
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]	The following customers accounted for more than 10% of the Company's total revenues: Three Months Ended March 31, 2017 2016 Customer A 41.2 % 42.3 % Customer B 15.0 % 14.3 %
Schedules of Concentration of Risk, by Risk Factor [Table Text Block]	The following customers accounted for more than 10% of accounts receivable: March 31, 2017 December 31, 2016 Customer A 37.7 % 10.4 % Customer D 24.0 % 32.6 % Customer B N/A 15.4 %

Significant Accounting Polici29

Significant Accounting Policies Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred Income Tax Expense (Benefit)	$ 195	$ 12
Accounting Standards Update 2016-16 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative Effect on Retained Earnings, Net of Tax	$ 2,000
Accounting Standards Update 2016-09 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred Income Tax Expense (Benefit)		$ 4,500

Fair Value of Financial Instr30

Fair Value of Financial Instruments Fair Value Measurements (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign Currency Contract, Asset, Fair Value Disclosure	$ 0	$ 0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign Currency Contract, Asset, Fair Value Disclosure	846	94
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign Currency Contract, Asset, Fair Value Disclosure	0	$ 0
Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign Currency Contract, Asset, Fair Value Disclosure	$ 846

Accounts Receivable and Other31

Accounts Receivable and Other Receivables (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Receivables [Abstract]
Accounts Receivable, Gross	$ 49,980	$ 38,433
Less: allowance for doubtful accounts	(55)	(55)
Accounts Receivable, Net	49,925	38,378
Other receivables	$ 3,446	$ 4,161

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Inventory Disclosure [Abstract]
Inventory Charges, net (E&O and APC)	$ 501	$ 266
Inventory, Net [Abstract]
Raw materials	16,917		$ 24,805
Work-in-process	0		12
Finished goods	3,924		5,005
Inventory, Gross	20,841		29,822
Less: inventory valuation allowance	(9,996)		(9,801)
Inventories, net	10,845		20,021
Other Inventory, Materials, Supplies and Merchandise under Consignment, Gross	$ 11,600		11,800
Age of consignment inventory purchased by contract manufacturer	365 days
Age of consignment inventory purchased as a result of forecasted demand	180 days
Inventory Charges, Inventory Valuation, Deposit And Adverse Purchase Commitment Liability	$ 702	545
Adverse Purchase Commitments	201	$ 279
Inventory for Long-term Contracts or Programs, Gross	$ 11,600		$ 11,800

Restructuring and Other Charg33

Restructuring and Other Charges (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ 42
Business Combination, Integration Related Costs	193	$ 0
Severance Costs, net		(682)
Restructuring and acquisition-related charges, net	235	$ 682
Other Expense [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ 100

Restructuring and Other Charg34

Restructuring and Other Charges - Restructuring Reserve Rollforward (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Restructuring Cost and Reserve [Line Items]
Severance Costs	$ 42
Business Combination, Integration Related Costs	193	$ 0
Balance accrued as of December 31, 2013	1,437
Restructuring Charges	156
Restructuring Reserve, Accrual Adjustment	(114)
Expenditures	(1,166)
Balance accrued as of September 30, 2014	313
Severance, Payroll Taxes and Other Employee Benefits [Member]
Restructuring Cost and Reserve [Line Items]
Balance accrued as of December 31, 2013	1,347
Restructuring Charges	156
Restructuring Reserve, Accrual Adjustment	(114)
Expenditures	(1,136)
Balance accrued as of September 30, 2014	253
Lease Abandonment Charges [Member]
Restructuring Cost and Reserve [Line Items]
Balance accrued as of December 31, 2013	90
Restructuring Charges	0
Restructuring Reserve, Accrual Adjustment	0
Expenditures	(30)
Balance accrued as of September 30, 2014	$ 60

Short-Term Borrowings (Details)

Short-Term Borrowings (Details) - USD ($)	Sep. 19, 2016	Mar. 31, 2017	Dec. 31, 2016
Line of Credit Facility [Line Items]
Outstanding balance		$ 40,000,000	$ 25,000,000
Remaining borrowing capacity		3,900,000
Geographic Distribution, Foreign [Member] | Trade Accounts Receivable [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Borrowing formula, eligible accounts receivable	85.00%
Swingline Loan [Member] | 2016 Debt Agreement [Domain]
Line of Credit Facility [Line Items]
Current borrowing capacity	$ 10,000,000
Letter of Credit [Member] | 2016 Debt Agreement [Domain]
Line of Credit Facility [Line Items]
Current borrowing capacity	10,000,000
Line of Credit [Member] | 2016 Debt Agreement [Domain]
Line of Credit Facility [Line Items]
Current borrowing capacity	55,000,000
Maximum borrowing capacity	25,000,000	55,000,000
Borrowing formula, amount over eligible accounts receivable (up to $5.0 million)	7,500,000
Liquidity threshold for the first and second month of any fiscal quarter	20,000,000
Liquidity threshold for the last month of any fiscal quarter	25,000,000
Annual administrative fee	25,000
Annual commitment fee	82,500
Loan origination fees	$ 300,000
Cancellation fee percentage	0.75%
Line of Credit, Gross Borrowing Availability		$ 43,900,000
Line of Credit [Member] | 2016 Debt Agreement [Domain] | Availability, 70 Percent Or More [Member]
Line of Credit Facility [Line Items]
Percentage of commitment fee on unused capacity	0.35%
Line of Credit [Member] | 2016 Debt Agreement [Domain] | Availability, 30 Percent Or More And Less Than 70 Percent [Member]
Line of Credit Facility [Line Items]
Percentage of commitment fee on unused capacity	0.325%
Line of Credit [Member] | 2016 Debt Agreement [Domain] | Availability, Below 30 Percent [Member]
Line of Credit Facility [Line Items]
Percentage of commitment fee on unused capacity	0.30%
Line of Credit [Member] | 2016 Debt Agreement [Domain] | Prime Rate [Member] | Availability, 70 Percent Or More [Member]
Line of Credit Facility [Line Items]
Basis spread on variable interest rate	0.50%	0.25%
Line of Credit [Member] | 2016 Debt Agreement [Domain] | Prime Rate [Member] | Availability, 30 Percent Or More And Less Than 70 Percent [Member]
Line of Credit Facility [Line Items]
Basis spread on variable interest rate	0.75%	0.50%
Line of Credit [Member] | 2016 Debt Agreement [Domain] | Prime Rate [Member] | Availability, Below 30 Percent [Member]
Line of Credit Facility [Line Items]
Basis spread on variable interest rate	1.00%	0.75%
Line of Credit [Member] | 2016 Debt Agreement [Domain] | Minimum [Member]
Line of Credit Facility [Line Items]
Liquidity threshold for the last month of any fiscal quarter			$ 40,000,000
Financial covenant, monthly liquidity as of the last day of the first and second month of any fiscal quarter	$ 15,000,000
Financial covenant, monthly liquidity as of the last day of the last month of the quarter	$ 20,000,000
Line of Credit [Member] | 2016 Debt Agreement [Domain] | Geographic Distribution, Domestic [Member] | Trade Accounts Receivable [Member]
Line of Credit Facility [Line Items]
Borrowing formula, eligible accounts receivable	85.00%
Line of Credit [Member] | 2016 Debt Agreement [Domain] | Geographic Distribution, Foreign [Member] | Trade Accounts Receivable [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Borrowing formula, eligible accounts receivable	75.00%

Commitments and Contingencies36

Commitments and Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Movement in Standard Product Warranty Accrual [Roll Forward]
Warranty liability balance, beginning of the period	$ 1,821	$ 2,553
Product warranty accruals	223	385
Utilization of accrual	(315)	(603)
Warranty liability balance, end of the period	1,729	$ 2,335
Product Warranty Accrual, Current	1,400		$ 1,500
Product Warranty Accrual, Noncurrent	$ 300		$ 400
Minimum [Member]
Product Warranty Liability [Line Items]
Warranty, Term	12 months
Maximum [Member]
Product Warranty Liability [Line Items]
Warranty, Term	24 months

Commitments and Contingencies A

Commitments and Contingencies Adverse Purchase Commitments Liability (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Commitments and Contingencies Disclosure - APC liability [Abstract]
Purchase Commitment, Remaining Minimum Amount Committed	$ 0.5	$ 0.3

Basic and Diluted Net Income 38

Basic and Diluted Net Income (Loss) Per Share - Earnings (Loss) Per Share Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net income (loss)	$ (10,008)	$ (2,965)
Weighted average shares used to calculate net income (loss) per share, basic	38,715	37,007
Weighted average shares used to calculate net income (loss) per share, diluted	38,715	37,007
Basic (in dollars per share)	$ (0.26)	$ (0.08)
Diluted (in dollars per share)	$ (0.26)	$ (0.08)
Restricted Stock Units (RSUs) [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Effect of dilutive equity awards	0	0
Stock Options [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Effect of dilutive equity awards	0	0

Basic and Diluted Net Income 39

Basic and Diluted Net Income (Loss) Per Share - Anti-Dilutive Securities (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	541	122
Securities Excluded from Computation of Earnings Per Share, Performance Target Not Met, Amount	1,049	2,305
Stock Compensation Plan [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	5,417	5,235
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	3,827	2,808

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Deferred Tax Assets, Net	$ 1	$ 1.1
Unrecognized Tax Benefits	3.5
Unrecognized Tax Benefits, Interest on Income Taxes Accrued	0.8
Unrecognized Tax Benefits, Income Tax Penalties Accrued	$ 0.3

Stock-based Compensation - Equi

Stock-based Compensation - Equity Awards (Details) - 2007 Stock Plan [Member] - shares shares in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, grants in period	0	1,036
Total grants in period	1,137	1,716
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instruments other than options, grants in period	467	0
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage		50.00%
Equity instruments other than options, grants in period	670	680

Stock-based Compensation - Stoc

Stock-based Compensation - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	$ 1,154	$ 688
Cost of Sales [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	97	46
Research and Development Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	230	153
Selling, General and Administrative Expenses [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	$ 827	$ 489

Hedging (Details)

Hedging (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)Derivatives	Mar. 31, 2016USD ($)Derivatives	Dec. 31, 2016USD ($)	Sep. 30, 2015USD ($)	Jun. 30, 2015USD ($)
Derivatives, Fair Value [Line Items]
Maximum Length of Time Hedged in Cash Flow Hedge	2 years
Derivative, Number of New Instruments During Period | Derivatives	6	12
Derivative, New Instruments During Period, Notional Amount	$ 3,600	$ 3,600
Foreign Currency Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net	29	348
Unrealized loss on hedge instruments	(25)	(527)	$ (527)	$ (685)	$ (819)
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax	473	(214)
Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net	29
Hedge Loss Recognized in Other Comprehensive Income (Loss)	502	134
Cost of Sales [Member]
Derivatives, Fair Value [Line Items]
Foreign Currency Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net	10	108
Research and Development Expense [Member]
Derivatives, Fair Value [Line Items]
Foreign Currency Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net	14	173
Selling, General and Administrative Expenses [Member]
Derivatives, Fair Value [Line Items]
Foreign Currency Cash Flow Hedge Gain (Loss) Reclassified to Earnings, Net	5	$ 67
Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Cash Flow Hedge Derivative Instrument Assets at Fair Value	846		94
Other Accrued Liabilities [Member]
Derivatives, Fair Value [Line Items]
Cash Flow Hedge Derivative Instrument Liabilities at Fair Value	0		0
Foreign Exchange Forward [Member]
Derivatives, Fair Value [Line Items]
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months	400
Notional Amount of Foreign Currency Cash Flow Hedge Derivatives	$ 16,963		$ 16,166
Foreign Exchange Forward [Member] | Cash Flow Hedging [Member]
Derivatives, Fair Value [Line Items]
Derivative, Number of New Instruments During Period | Derivatives	18
Derivative, New Instruments During Period, Notional Amount	$ 11,600

Segment Information - Product a

Segment Information - Product and Service and Product Group (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenue from External Customer [Line Items]
Revenues	$ 37,610	$ 55,146
Europe, the Middle East and Africa [Member]
Revenue from External Customer [Line Items]
Revenues	$ 9,020	$ 9,685

Segment Information - Geographi

Segment Information - Geographical Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 37,610	$ 55,146
Property and equipment, net	7,325		$ 6,713
Total Intangible Assets, Net	14,388		17,575
UNITED STATES
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	23,152	37,765
Property and equipment, net	4,950		4,566
Total Intangible Assets, Net			17,575
Foreign Countries [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	14,458	17,381
Property and equipment, net	2,375		2,147
Other North America
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	19	78
Property and equipment, net	102		129
Asia Pacific [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	5,419	7,618
Property and equipment, net	2,273		2,018
CHINA [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Property and equipment, net	406		438
INDIA
Revenues from External Customers and Long-Lived Assets [Line Items]
Property and equipment, net	1,867		$ 1,580
Netherlands [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	5,223	7,235
Other EMEA [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	3,797	2,450
Europe, the Middle East and Africa [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	$ 9,020	$ 9,685

Segment Information - Revenue b

Segment Information - Revenue by Major Customer (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2015
Customer A [Domain]
Revenue, Major Customer [Line Items]
Entity-Wide Revenue, Major Customer, Percentage	41.20%	42.30%
Customer B [Domain]
Revenue, Major Customer [Line Items]
Entity-Wide Revenue, Major Customer, Percentage	15.00%	14.30%
Accounts Receivable [Member] | Customer A [Domain]
Revenue, Major Customer [Line Items]
Entity-Wide Revenue, Major Customer, Percentage	37.70%		10.40%
Accounts Receivable [Member] | Customer B [Domain]
Revenue, Major Customer [Line Items]
Entity-Wide Revenue, Major Customer, Percentage			15.40%

Segment Information - Accounts

Segment Information - Accounts Receivable (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2015
Customer D [Domain] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Entity-Wide Revenue, Major Customer, Percentage	24.00%		32.60%
Customer B [Domain]
Concentration Risk [Line Items]
Entity-Wide Revenue, Major Customer, Percentage	15.00%	14.30%
Customer B [Domain] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Entity-Wide Revenue, Major Customer, Percentage			15.40%
Customer A [Domain]
Concentration Risk [Line Items]
Entity-Wide Revenue, Major Customer, Percentage	41.20%	42.30%
Customer A [Domain] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Entity-Wide Revenue, Major Customer, Percentage	37.70%		10.40%

Segment Information Operating S

Segment Information Operating Segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Segment Reporting Information [Line Items]
Operating Income (Loss)	$ (9,135)	$ (2,450)
Gross Profit	8,222	12,784
Revenues	37,610	55,146
Operating Segments [Member] | Software-Systems [Member]
Segment Reporting Information [Line Items]
Operating Income (Loss)	(3,273)	780
Gross Profit	5,465	8,788
Revenues	10,149	14,059
Operating Segments [Member] | Embedded Products and Hardware Services [Member]
Segment Reporting Information [Line Items]
Operating Income (Loss)	(1,286)	1,327
Gross Profit	4,781	5,969
Revenues	27,461	41,087
Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
Operating Income (Loss)	(4,576)	(4,557)
Gross Profit	$ (2,024)	$ (1,973)