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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Harmonic Inc | NASDAQ:HLIT | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.275 | 2.43% | 11.575 | 11.57 | 11.58 | 11.75 | 11.32 | 11.32 | 686,904 | 18:34:58 |
ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
77-0201147
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
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Common Stock, par value $0.001 per share
|
HLIT
|
The NASDAQ Global Select Market
|
Large accelerated filer
|
¨
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Accelerated filer
|
ý
|
Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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ITEM 1
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ITEM 1A
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ITEM 1B
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ITEM 2
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ITEM 3
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ITEM 4
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ITEM 5
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ITEM 6
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ITEM 7
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ITEM 7A
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ITEM 8
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ITEM 9
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ITEM 9A
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ITEM 9B
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ITEM 10
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ITEM 11
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ITEM 12
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ITEM 13
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ITEM 14
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ITEM 15
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ITEM 16
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•
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developing trends and demands in the markets we address, particularly streaming and over-the-top services and emerging markets;
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•
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economic conditions, particularly in certain geographies, and in financial markets;
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•
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new and future products and services of ours or of those in the markets we address;
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•
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spending of our customers;
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•
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our strategic direction, future business plans and growth strategy;
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•
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industry and customer consolidation;
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•
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expected demand for and benefits of our products and services;
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•
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concentration of revenue sources;
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•
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expectations regarding our CableOS solutions;
|
•
|
expectations regarding the impact of the software license agreement with Comcast on our business;
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•
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potential future acquisitions and dispositions;
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•
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anticipated results of potential or actual litigation;
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•
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our competitive environment;
|
•
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the impact of our restructuring plans;
|
•
|
the impact of governmental regulations, including with respect to tariffs and economic sanctions;
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•
|
anticipated revenue and expenses, including the sources of such revenue and expenses;
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•
|
expected impacts of changes in accounting rules;
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•
|
expectations regarding the usability of our inventory and the risk that inventory will exceed forecasted demand;
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•
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expectations and estimates related to goodwill and intangible assets and their associated carrying value; and
|
•
|
use of cash, cash needs and ability to raise capital, including repaying our convertible notes.
|
Item 1.
|
BUSINESS
|
▪
|
Demand for Streaming services. In our ubiquitous multiscreen video environment, video programming and content needs to be transformed into multiple formats, bit rates and resolutions for display on a broad range of devices using streaming technology.
|
▪
|
Demand for High Quality Video. Consumer demand for high quality video anytime, anywhere and on any device requires ever-increasing bandwidth capacity in service providers’ networks, as well as technology that maximizes network bandwidth efficiency. With Ultra High Definition (Ultra HD) televisions and “over-the-top” (OTT) services increasingly being rendered in “4K” high resolution and consuming approximately four times the bandwidth of traditional HD channels, we believe next-generation compression technologies, such as High Efficiency Video Compression (HEVC) or advances in H.264/AVC codecs, as well as increasing requirements for HDR encoding, will continue to remain a high priority for distributors of video.
|
▪
|
Time-Shifted Viewing. “Time-shifting” technologies include digital video recorders (DVRs), cloud and network DVRs (cDVR and nDVR) that allow a subscriber to store programming on the service provider’s servers or in the cloud, and video-on-demand (VOD) services.
|
•
|
service providers and broadcast and media companies continue to provide more of their own OTT streaming video services, including OTT streaming of live (or “linear”) television programming;
|
•
|
we believe providers of these OTT services will continue to expand monetization opportunities with personalized and dynamic ad insertion, thereby expanding technological and infrastructure requirements;
|
•
|
service providers are competing to offer higher quality video signals in HD, including evolving initiatives to deliver video in 4K Ultra HD resolution;
|
•
|
service providers are developing and expanding their content delivery and Internet Protocol (IP) networks, and increasing the capacity and efficiency of their networks with investments in various delivery infrastructure technologies to, among other things, maximize video quality and minimize bandwidth utilization;
|
•
|
service providers continue to consolidate to achieve greater economies of scale and subscriber concentration, and acquire media companies to expand their content libraries and capabilities to develop original content;
|
•
|
service providers continue to enhance and differentiate their content offerings, either through in-house development of new content or through acquisitions of existing content brands; and
|
•
|
service providers have an ongoing need, despite the migration of traffic to OTT, to provide services over their existing broadcast distribution infrastructures.
|
•
|
Cable Operators. Cable operators continue to focus on various initiatives to improve and differentiate their service offerings from competing service providers, including: bundled digital video, voice and high speed data services; expansion of VOD libraries, live sporting events and on-demand and streaming service offerings; upgraded consumer-facing applications; video delivery over IP to broadband enabled consumer devices; and capacity enhancement of high-speed data services.
|
•
|
Satellite Operators. Satellite operators around the world have established digital television services that serve tens of millions of subscribers, with the ability to provide tens of thousands of linear channels. We expect satellite operators to expand their offerings and launch new streaming services, such as Sling TV and DirecTV Now, to address younger generation viewers and new consumption habits.
|
•
|
Telcos and Mobile Operators. Many telcos and a growing number of mobile operators have established video offerings to successfully compete in the video marketplace, including high-quality HD content, larger VOD libraries, time-shifting television services, bundled voice, data and video packages and, more recently, streaming services. In many cases, telcos are making significant infrastructure investments to expand their video offerings into IP services and gain market share, while certain telcos are also acquiring satellite and/or cable companies to achieve market reach and scale.
|
•
|
Network broadcasters, programmers and content owners require video contribution and distribution solutions to transmit live programming of news and sports to their studios for subsequent broadcast, and deliver the same programming and content to service providers for distribution to their subscribers. Broadcasters generally produce their own news and sports highlight content, along with hundreds of channels of network programming that is played-to-air under strict reliability requirements using playout servers and software.
|
•
|
With broadcast and media companies continuing to expand their offerings to support a wide range of live and linear content and making content available in higher quality video formats and on-demand, we believe these trends are accelerating demand for functionally collapsed playout systems with integrated media orchestration software, as well as increasing demand for media servers and video-optimized storage solutions equipped to support higher resolution formats. In addition, in order to achieve faster time-to-market and reduce operational costs, we believe content providers are adopting cloud-based technologies and transitioning portions of their operations into public cloud environments, thereby enabling expanded services at a more rapid pace, the distribution of video directly to consumers or to distributors over IP and public networks, and more efficient and scalable global operations.
|
•
|
In the terrestrial broadcasting market, while broadcasters in various countries that have not yet completed converting from analog to digital transmission continue with change-over efforts, operators in numerous other
|
•
|
According to an annual study on Internet data traffic published by Cisco Systems, IP video traffic accounts for a significant majority of Internet traffic globally, and video traffic will only continue to increase for the foreseeable future. We believe service providers and broadcast and media companies with OTT services and offerings will continue to require high-quality video processing solutions and new technologies in order to process and distribute large amounts of live and VOD content from a wide variety of sources to a broad array of consumer devices, and to optimize adaptive bitrate video streaming quality and bandwidth utilization.
|
•
|
With the continued proliferation of OTT streaming content and program channels similar to channels currently available from service providers, monetizing this content through the use of national, regionalized and personalized advertising delivered to the varied devices of individual viewers has become a key area of focus for companies with OTT offerings. We believe OTT ad insertion and other related content customization solutions will continue to attract increased investments from OTT companies.
|
•
|
With a growing middle class across emerging markets, we believe the Pay-TV business will continue to grow for the foreseeable future in the Asia Pacific region, South Asia, the Middle East, Africa and Central and South America. We currently derive a meaningful portion of our revenue from countries in emerging markets.
|
•
|
Many consumers who are entering the middle class are now able to afford a monthly video service to gain access to their favorite programs and movies. We believe some of the leading video service providers serving emerging markets will experience high subscriber growth rates and may become worldwide industry leaders.
|
•
|
We believe subscribers in these markets will demand increasingly sophisticated video services over time as consumer consumption trends in these markets track to those in more developed markets. A growing number of new regional OTT entrants in emerging markets, where global brands such as Netflix and Amazon’s Prime Video are less dominant, are delivering a variety of OTT services and experiencing rapid growth. As a result, we believe that the infrastructure and technology investments of these service providers and new market entrants are likely to grow significantly for the foreseeable future.
|
•
|
Media companies addressing emerging markets are aggressively investing in the creation of new content, particularly content that is localized and responsive to consumer demands, with the goal of creating strong brands and a growing, loyal customer base. We believe that this growth in content creation will require these media companies to significantly increase their capabilities in video storage, processing and related technologies.
|
•
|
Network Function Virtualization. We believe the industry will continue to adopt network function virtualization and unified video processing systems, whereby what had been historically discrete hardware video processing functions are integrated into software and run on the latest Intel processors in order to leverage high-performance and scalable appliance-based hardware, and as software-only virtual instances designed to run on private and/or public cloud environments.
|
•
|
Function collapse. By combining historically discrete video chain functions into unified playout, distribution and streaming subsystems, we believe functionally collapsed video infrastructures with integrated control systems will enable content and service providers to run their operations more efficiently and, as a result, deliver broader and higher-quality services to their end-customers.
|
•
|
Outsourcing of Video Infrastructure Functionality. We believe there is industry momentum for shifting virtualized and unified video processing infrastructure from broadcast center or production facilities to third party SaaS offerings hosted on public cloud infrastructure. We believe this transition enables media companies and new OTT entrants to more rapidly adapt to market dynamics, utilize A/B testing methodologies to optimize service offerings and expand within and beyond core markets.
|
•
|
more users with more connected devices and applications;
|
•
|
bundled digital video, voice and high-speed data services; and
|
•
|
bandwidth-intensive VOD and OTT streaming video services, and interactive cloud applications.
|
•
|
DOCSIS 3.1. We believe the cable industry will continue to deploy the DOCSIS 3.1 standard, which enables high bandwidth data transfer over existing broadband infrastructure.
|
•
|
Virtualization. We believe cable operators are moving toward more software-driven architectures. Virtualized software solutions that are decoupled from underlying hardware and run on commercial off-the-shelf (COTS) servers and/or cloud-native architectures allow for significantly increased efficiencies, upgradability, configuration flexibility, service agility and scalability not feasible with hardware-centric approaches. We believe a software-based cable access solution can significantly reduce cable operator facility costs, especially costs related to physical space and power consumption, and increase operational efficiency, and that the deployment of these systems will be an important step in cable operators’ transition to all-IP networks.
|
•
|
Distributed Access Architecture. In addition to centralized cable access solutions, we believe there is growing interest in distributed Remote PHY solutions, particularly in competitive gigabit service markets where cable operators are competing with fiber-to-the-home (FTTH) services and are extending fiber networks deeper into their access networks. A Remote PHY architecture coupled with a software-based cable access solution running on COTS servers at a headend, and the distribution of Remote PHY nodes closer to end users, alleviates the power and space requirements of centralized systems at headend sites due to the fact that the RF processing is distributed into the field outside of the headend. We believe this distributed architecture will enable service providers to efficiently scale to support data and IP video growth.
|
Item 1A.
|
RISK FACTORS
|
Item 1B.
|
UNRESOLVED STAFF COMMENTS
|
Item 2.
|
PROPERTIES
|
Item 3.
|
LEGAL PROCEEDINGS
|
Item 4.
|
MINE SAFETY DISCLOSURE
|
Item 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
12/14
|
|
12/15
|
|
12/16
|
|
12/17
|
|
12/18
|
|
12/19
|
||||||
Harmonic Inc.
|
|
100.00
|
|
|
58.06
|
|
|
71.33
|
|
|
59.91
|
|
|
67.33
|
|
|
111.27
|
|
S&P 500
|
|
100.00
|
|
|
101.38
|
|
|
113.51
|
|
|
138.29
|
|
|
132.23
|
|
|
173.86
|
|
NASDAQ Telecom
|
|
100.00
|
|
|
97.86
|
|
|
102.87
|
|
|
128.43
|
|
|
127.73
|
|
|
143.14
|
|
Item 6.
|
SELECTED FINANCIAL DATA
|
|
Year ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||||||
Consolidated Statements of Operations Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
402,874
|
|
|
$
|
403,558
|
|
|
$
|
358,246
|
|
|
$
|
405,911
|
|
|
$
|
377,027
|
|
Cost of revenue
|
179,862
|
|
|
194,349
|
|
|
188,426
|
|
|
205,161
|
|
|
174,315
|
|
|||||
Gross profit
|
223,012
|
|
|
209,209
|
|
|
169,820
|
|
|
200,750
|
|
|
202,712
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
84,614
|
|
|
89,163
|
|
|
95,978
|
|
|
98,401
|
|
|
87,545
|
|
|||||
Selling, general and administrative
|
119,035
|
|
|
118,952
|
|
|
136,270
|
|
|
144,381
|
|
|
120,960
|
|
|||||
Amortization of intangibles
|
3,139
|
|
|
3,187
|
|
|
3,142
|
|
|
10,402
|
|
|
5,783
|
|
|||||
Restructuring and related charges
|
3,141
|
|
|
2,918
|
|
|
5,307
|
|
|
14,602
|
|
|
1,372
|
|
|||||
Total operating expenses
|
209,929
|
|
|
214,220
|
|
|
240,697
|
|
|
267,786
|
|
|
215,660
|
|
|||||
Income (loss) from operations
|
13,083
|
|
|
(5,011
|
)
|
|
(70,877
|
)
|
|
(67,036
|
)
|
|
(12,948
|
)
|
|||||
Interest expense, net
|
(11,651
|
)
|
|
(11,401
|
)
|
|
(11,078
|
)
|
|
(10,628
|
)
|
|
(333
|
)
|
|||||
Loss on debt extinguishment
|
(5,695
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other expense, net
|
(2,333
|
)
|
|
(536
|
)
|
|
(2,222
|
)
|
|
(31
|
)
|
|
(282
|
)
|
|||||
Loss on impairment of long-term investments
|
—
|
|
|
—
|
|
|
(530
|
)
|
|
(2,735
|
)
|
|
(2,505
|
)
|
|||||
Loss from continuing operations before income taxes
|
(6,596
|
)
|
|
(16,948
|
)
|
|
(84,707
|
)
|
|
(80,430
|
)
|
|
(16,068
|
)
|
|||||
Provision for (benefit from) income taxes
|
(672
|
)
|
|
4,087
|
|
|
(1,752
|
)
|
|
(8,116
|
)
|
|
(407
|
)
|
|||||
Loss from continuing operations
|
$
|
(5,924
|
)
|
|
$
|
(21,035
|
)
|
|
$
|
(82,955
|
)
|
|
$
|
(72,314
|
)
|
|
$
|
(15,661
|
)
|
Net loss per share from continuing operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted
|
$
|
(0.07
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(1.02
|
)
|
|
$
|
(0.93
|
)
|
|
$
|
(0.18
|
)
|
Shares used in per share calculations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted
|
89,575
|
|
|
85,615
|
|
|
80,974
|
|
|
77,705
|
|
|
87,514
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Consolidated Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and short-term investments
|
$
|
93,058
|
|
|
$
|
65,989
|
|
|
$
|
57,024
|
|
|
$
|
62,558
|
|
|
$
|
152,794
|
|
Working capital
|
$
|
59,463
|
|
|
$
|
60,297
|
|
|
$
|
29,686
|
|
|
$
|
71,938
|
|
|
$
|
201,250
|
|
Total assets
|
$
|
587,327
|
|
|
$
|
510,835
|
|
|
$
|
508,059
|
|
|
$
|
554,069
|
|
|
$
|
524,957
|
|
Convertible notes, long-term
|
$
|
88,629
|
|
|
$
|
114,808
|
|
|
$
|
108,748
|
|
|
$
|
103,259
|
|
|
$
|
98,295
|
|
Total stockholders’ equity
|
$
|
252,446
|
|
|
$
|
228,250
|
|
|
$
|
218,343
|
|
|
$
|
270,641
|
|
|
$
|
328,168
|
|
Item 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Revenue recognition;
|
•
|
Valuation of inventories;
|
•
|
Impairment of goodwill or long-lived assets;
|
•
|
Accounting for income taxes; and
|
•
|
Stock-based compensation.
|
|
Year ended December 31,
|
|
|
|
|
|
|
||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||||||
Americas
|
$
|
224,193
|
|
|
$
|
218,900
|
|
|
$
|
171,736
|
|
|
$
|
5,293
|
|
2
|
%
|
|
$
|
47,164
|
|
27
|
%
|
EMEA
|
117,477
|
|
|
107,074
|
|
|
117,129
|
|
|
10,403
|
|
10
|
%
|
|
(10,055
|
)
|
(9
|
)%
|
|||||
APAC
|
61,204
|
|
|
77,584
|
|
|
69,381
|
|
|
(16,380
|
)
|
(21
|
)%
|
|
8,203
|
|
12
|
%
|
|||||
Total net revenue
|
$
|
402,874
|
|
|
$
|
403,558
|
|
|
$
|
358,246
|
|
|
$
|
(684
|
)
|
—
|
%
|
|
$
|
45,312
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Regional revenue as a % of total net revenue:
|
|
|
|
|
|
|
|
|
|||||||||||||||
Americas
|
56
|
%
|
|
54
|
%
|
|
48
|
%
|
|
|
|
|
|
|
|||||||||
EMEA
|
29
|
%
|
|
27
|
%
|
|
33
|
%
|
|
|
|
|
|
|
|||||||||
APAC
|
15
|
%
|
|
19
|
%
|
|
19
|
%
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
|
|
|
||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||||||
Gross profit
|
$
|
223,012
|
|
|
$
|
209,209
|
|
|
$
|
169,820
|
|
|
$
|
13,803
|
|
7
|
%
|
|
$
|
39,389
|
|
23
|
%
|
As a percentage of net revenue (“gross margin”)
|
55.4
|
%
|
|
51.8
|
%
|
|
47.4
|
%
|
|
3.6
|
%
|
|
|
4.4
|
%
|
|
|
Year ended December 31,
|
|
|
|
|
|
|
||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||||||
Research and development
|
$
|
84,614
|
|
|
$
|
89,163
|
|
|
$
|
95,978
|
|
|
$
|
(4,549
|
)
|
(5
|
)%
|
|
$
|
(6,815
|
)
|
(7
|
)%
|
As a percentage of net revenue
|
21.0
|
%
|
|
22.1
|
%
|
|
26.8
|
%
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
|
|
|
||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||||||
Selling, general and administrative
|
$
|
119,035
|
|
|
$
|
118,952
|
|
|
$
|
136,270
|
|
|
$
|
83
|
|
—
|
%
|
|
$
|
(17,318
|
)
|
(13
|
)%
|
As a percentage of net revenue
|
29.5
|
%
|
|
29.5
|
%
|
|
38.0
|
%
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
|
|
|
||||||||||||||||
|
2019
|
|
2018 (1)
|
|
2017
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||||||
Video
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
$
|
278,028
|
|
|
$
|
313,828
|
|
|
$
|
319,473
|
|
|
$
|
(35,800
|
)
|
(11
|
)%
|
|
$
|
(5,645
|
)
|
(2
|
)%
|
Gross profit
|
162,156
|
|
|
178,170
|
|
|
173,414
|
|
|
(16,014
|
)
|
(9
|
)%
|
|
4,756
|
|
3
|
%
|
|||||
Operating income (loss)
|
15,837
|
|
|
26,170
|
|
|
(2,024
|
)
|
|
(10,333
|
)
|
(39
|
)%
|
|
28,194
|
|
(1,393
|
)%
|
|||||
Segment revenue as % of total segment revenue
|
69.0
|
%
|
|
77.5
|
%
|
|
89.2
|
%
|
|
(8.5
|
)%
|
|
|
(11.7
|
)%
|
|
|||||||
Gross margin %
|
58.3
|
%
|
|
56.8
|
%
|
|
54.3
|
%
|
|
1.5
|
%
|
|
|
2.5
|
%
|
|
|||||||
Operating margin %
|
5.7
|
%
|
|
8.3
|
%
|
|
(0.6
|
)%
|
|
(2.6
|
)%
|
|
|
8.9
|
%
|
|
|||||||
Cable Access
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
$
|
124,894
|
|
|
$
|
90,908
|
|
|
$
|
38,773
|
|
|
$
|
33,986
|
|
37
|
%
|
|
$
|
52,135
|
|
134
|
%
|
Gross profit
|
68,596
|
|
|
40,207
|
|
|
8,892
|
|
|
28,389
|
|
71
|
%
|
|
31,315
|
|
352
|
%
|
|||||
Operating income (loss)
|
22,219
|
|
|
(578
|
)
|
|
(23,154
|
)
|
|
22,797
|
|
(3,944
|
)%
|
|
22,576
|
|
(98
|
)%
|
|||||
Segment revenue as % of total segment revenue
|
31.0
|
%
|
|
22.5
|
%
|
|
10.8
|
%
|
|
8.5
|
%
|
|
|
11.7
|
%
|
|
|||||||
Gross margin %
|
54.9
|
%
|
|
44.2
|
%
|
|
22.9
|
%
|
|
10.7
|
%
|
|
|
21.3
|
%
|
|
|||||||
Operating margin %
|
17.8
|
%
|
|
(0.6
|
)%
|
|
(59.7
|
)%
|
|
18.4
|
%
|
|
|
59.1
|
%
|
|
|||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment Revenue
|
$
|
402,922
|
|
|
$
|
404,736
|
|
|
$
|
358,246
|
|
|
$
|
(1,814
|
)
|
—
|
%
|
|
$
|
46,490
|
|
13
|
%
|
Gross profit
|
230,752
|
|
|
218,377
|
|
|
182,306
|
|
|
12,375
|
|
6
|
%
|
|
36,071
|
|
20
|
%
|
|||||
Operating income (loss)
|
38,056
|
|
|
25,592
|
|
|
(25,178
|
)
|
|
12,464
|
|
49
|
%
|
|
50,770
|
|
(202
|
)%
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018 (1)
|
|
2017
|
||||||
Total segment operating income (loss)
|
$
|
38,056
|
|
|
$
|
25,592
|
|
|
$
|
(25,178
|
)
|
Amortization of non-cash warrants
|
(48
|
)
|
|
(1,178
|
)
|
|
—
|
|
|||
Unallocated corporate expenses
|
(4,532
|
)
|
|
(3,769
|
)
|
|
(20,767
|
)
|
|||
Stock-based compensation
|
(12,074
|
)
|
|
(17,289
|
)
|
|
(16,610
|
)
|
|||
Amortization of intangibles
|
(8,319
|
)
|
|
(8,367
|
)
|
|
(8,322
|
)
|
|||
Consolidated income (loss) from operations
|
13,083
|
|
|
(5,011
|
)
|
|
(70,877
|
)
|
|||
Loss on debt extinguishment
|
(5,695
|
)
|
|
—
|
|
|
—
|
|
|||
Non-operating expense, net
|
(13,984
|
)
|
|
(11,937
|
)
|
|
(13,830
|
)
|
|||
Loss before income taxes
|
$
|
(6,596
|
)
|
|
$
|
(16,948
|
)
|
|
$
|
(84,707
|
)
|
|
Year ended December 31,
|
|
|
|
|
|
|
||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||||||
Amortization of intangibles
|
$
|
3,139
|
|
|
$
|
3,187
|
|
|
$
|
3,142
|
|
|
$
|
(48
|
)
|
(2
|
)%
|
|
$
|
45
|
|
1
|
%
|
As a percentage of net revenue
|
0.8
|
%
|
|
0.8
|
%
|
|
0.9
|
%
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||||||||
Cost of revenue
|
$
|
1,391
|
|
|
$
|
857
|
|
|
$
|
1,279
|
|
|
$
|
534
|
|
|
62
|
%
|
|
$
|
(422
|
)
|
|
(33
|
)%
|
Operating expenses-Restructuring and related charges
|
3,141
|
|
|
2,918
|
|
|
5,307
|
|
|
223
|
|
|
8
|
%
|
|
(2,389
|
)
|
|
(45
|
)%
|
|||||
Total restructuring and related charges
|
$
|
4,532
|
|
|
$
|
3,775
|
|
|
$
|
6,586
|
|
|
$
|
757
|
|
|
20
|
%
|
|
$
|
(2,811
|
)
|
|
(43
|
)%
|
|
Year ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Loss before income taxes
|
(6,596
|
)
|
|
(16,948
|
)
|
|
(84,707
|
)
|
Provision for (benefit from) income taxes
|
(672
|
)
|
|
4,087
|
|
|
(1,752
|
)
|
Effective income tax rate
|
10
|
%
|
|
(24
|
)%
|
|
2
|
%
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Net cash provided by operating activities
|
$
|
31,295
|
|
|
$
|
12,284
|
|
|
$
|
3,064
|
|
Net cash used in investing activities
|
(10,328
|
)
|
|
(6,940
|
)
|
|
(4,501
|
)
|
|||
Net cash provided by financing activities
|
6,305
|
|
|
2,651
|
|
|
895
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(203
|
)
|
|
(763
|
)
|
|
1,879
|
|
|||
Net increase in cash, cash equivalents and restricted cash
|
$
|
27,069
|
|
|
$
|
7,232
|
|
|
$
|
1,337
|
|
|
Payments due in each fiscal year
|
||||||||||||||||||
|
Total
Amounts Committed |
|
Less than 1 year
|
|
1 to 3 years
|
|
4 to 5 years
|
|
More than 5 years
|
||||||||||
Convertible debt
|
$
|
161,285
|
|
|
$
|
45,785
|
|
|
$
|
—
|
|
|
$
|
115,500
|
|
|
$
|
—
|
|
Operating leases (1)
|
46,760
|
|
|
9,169
|
|
|
15,519
|
|
|
4,503
|
|
|
17,569
|
|
|||||
Purchase commitments (2)
|
62,272
|
|
|
51,019
|
|
|
11,236
|
|
|
17
|
|
|
—
|
|
|||||
TVN debt
|
17,152
|
|
|
6,664
|
|
|
10,264
|
|
|
112
|
|
|
112
|
|
|||||
Interest on convertible debt
|
13,298
|
|
|
4,058
|
|
|
6,930
|
|
|
2,310
|
|
|
—
|
|
|||||
Other commitments (4)
|
2,366
|
|
|
1,654
|
|
|
712
|
|
|
—
|
|
|
—
|
|
|||||
Avid litigation settlement fees
|
2,000
|
|
|
2,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
French VDP obligations (3)
|
806
|
|
|
806
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Finance lease
|
71
|
|
|
49
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
306,010
|
|
|
$
|
121,204
|
|
|
$
|
44,683
|
|
|
$
|
122,442
|
|
|
$
|
17,681
|
|
Other commercial commitments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Standby letters of credit
|
$
|
2,674
|
|
|
$
|
2,591
|
|
|
$
|
83
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total commercial commitments
|
$
|
2,674
|
|
|
$
|
2,591
|
|
|
$
|
83
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||
Purchase
|
|
$
|
14,806
|
|
|
$
|
28,975
|
|
Sell
|
|
$
|
2,629
|
|
|
$
|
—
|
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
Page
|
/s/Armanino LLP
|
/s/ PricewaterhouseCoopers LLP
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
93,058
|
|
|
$
|
65,989
|
|
Accounts receivable, net
|
88,500
|
|
|
81,795
|
|
||
Inventories, net
|
29,042
|
|
|
25,638
|
|
||
Prepaid expenses and other current assets
|
40,762
|
|
|
23,280
|
|
||
Total current assets
|
251,362
|
|
|
196,702
|
|
||
Property and equipment, net
|
22,928
|
|
|
22,321
|
|
||
Operating lease right-of-use assets
|
27,491
|
|
|
—
|
|
||
Goodwill
|
239,780
|
|
|
240,618
|
|
||
Intangibles, net
|
4,461
|
|
|
12,817
|
|
||
Other long-term assets
|
41,305
|
|
|
38,377
|
|
||
Total assets
|
$
|
587,327
|
|
|
$
|
510,835
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Other debts and finance lease obligations, current
|
$
|
6,713
|
|
|
$
|
7,175
|
|
Accounts payable
|
40,933
|
|
|
33,778
|
|
||
Income taxes payable
|
1,226
|
|
|
1,099
|
|
||
Deferred revenue
|
37,117
|
|
|
41,592
|
|
||
Accrued and other current liabilities
|
62,535
|
|
|
52,761
|
|
||
Convertible notes, short-term
|
43,375
|
|
|
—
|
|
||
Total current liabilities
|
191,899
|
|
|
136,405
|
|
||
Convertible notes, long-term
|
88,629
|
|
|
114,808
|
|
||
Other debts and finance lease obligations, long-term
|
10,511
|
|
|
12,684
|
|
||
Income taxes payable, long-term
|
178
|
|
|
460
|
|
||
Other non-current liabilities
|
41,254
|
|
|
18,228
|
|
||
Total liabilities
|
332,471
|
|
|
282,585
|
|
||
Commitments and contingencies (Note 19)
|
|
|
|
||||
Convertible notes
|
2,410
|
|
|
—
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value, 5,000 shares authorized; no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value, 150,000 shares authorized; 91,875 and 87,057 shares issued and outstanding at December 31, 2019 and 2018, respectively
|
92
|
|
|
87
|
|
||
Additional paid-in capital
|
2,327,359
|
|
|
2,296,795
|
|
||
Accumulated deficit
|
(2,071,940
|
)
|
|
(2,067,416
|
)
|
||
Accumulated other comprehensive loss
|
(3,065
|
)
|
|
(1,216
|
)
|
||
Total stockholders’ equity
|
252,446
|
|
|
228,250
|
|
||
Total liabilities and stockholders’ equity
|
$
|
587,327
|
|
|
$
|
510,835
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Appliance and integration
|
$
|
275,797
|
|
|
$
|
287,564
|
|
|
$
|
246,353
|
|
SaaS and service
|
127,077
|
|
|
115,994
|
|
|
111,893
|
|
|||
Total net revenue
|
402,874
|
|
|
403,558
|
|
|
358,246
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Appliance and integration
|
130,284
|
|
|
148,472
|
|
|
142,545
|
|
|||
SaaS and service
|
49,578
|
|
|
45,877
|
|
|
45,881
|
|
|||
Total cost of revenue
|
179,862
|
|
|
194,349
|
|
|
188,426
|
|
|||
Total gross profit
|
223,012
|
|
|
209,209
|
|
|
169,820
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
84,614
|
|
|
89,163
|
|
|
95,978
|
|
|||
Selling, general and administrative
|
119,035
|
|
|
118,952
|
|
|
136,270
|
|
|||
Amortization of intangibles
|
3,139
|
|
|
3,187
|
|
|
3,142
|
|
|||
Restructuring and related charges
|
3,141
|
|
|
2,918
|
|
|
5,307
|
|
|||
Total operating expenses
|
209,929
|
|
|
214,220
|
|
|
240,697
|
|
|||
Income (loss) from operations
|
13,083
|
|
|
(5,011
|
)
|
|
(70,877
|
)
|
|||
Interest expense, net
|
(11,651
|
)
|
|
(11,401
|
)
|
|
(11,078
|
)
|
|||
Loss on debt extinguishment
|
(5,695
|
)
|
|
—
|
|
|
—
|
|
|||
Other expense, net
|
(2,333
|
)
|
|
(536
|
)
|
|
(2,222
|
)
|
|||
Loss on impairment of long-term investments
|
—
|
|
|
—
|
|
|
(530
|
)
|
|||
Loss before income taxes
|
(6,596
|
)
|
|
(16,948
|
)
|
|
(84,707
|
)
|
|||
Provision for (benefit from) income taxes
|
(672
|
)
|
|
4,087
|
|
|
(1,752
|
)
|
|||
Net loss
|
$
|
(5,924
|
)
|
|
$
|
(21,035
|
)
|
|
$
|
(82,955
|
)
|
|
|
|
|
|
|
||||||
Net loss per share:
|
|
|
|
|
|
||||||
Basic and diluted
|
$
|
(0.07
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(1.02
|
)
|
Shares used in per share calculations:
|
|
|
|
|
|
||||||
Basic and diluted
|
89,575
|
|
|
85,615
|
|
|
80,974
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net loss
|
$
|
(5,924
|
)
|
|
$
|
(21,035
|
)
|
|
$
|
(82,955
|
)
|
Change in unrealized gain (loss) on available-for-sale securities:
|
|
|
|
|
|
||||||
Unrealized loss, net
|
—
|
|
|
—
|
|
|
(658
|
)
|
|||
Loss reclassified into earnings
|
—
|
|
|
—
|
|
|
384
|
|
|||
|
—
|
|
|
—
|
|
|
(274
|
)
|
|||
Adjustment to pension benefit plan
|
(206
|
)
|
|
202
|
|
|
528
|
|
|||
Unrealized foreign exchange gain (loss), net on intercompany long-term loans
|
291
|
|
|
667
|
|
|
(1,705
|
)
|
|||
Change in foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Translation gain (loss)
|
(1,728
|
)
|
|
(5,100
|
)
|
|
11,471
|
|
|||
Loss reclassified into earnings
|
56
|
|
|
11
|
|
|
106
|
|
|||
|
(1,672
|
)
|
|
(5,089
|
)
|
|
11,577
|
|
|||
Other comprehensive income (loss) before tax
|
(1,587
|
)
|
|
(4,220
|
)
|
|
10,126
|
|
|||
Provision for (benefit from) income taxes
|
262
|
|
|
378
|
|
|
(526
|
)
|
|||
Other comprehensive income (loss), net of tax
|
(1,849
|
)
|
|
(4,598
|
)
|
|
10,652
|
|
|||
Total comprehensive loss
|
$
|
(7,773
|
)
|
|
$
|
(25,633
|
)
|
|
$
|
(72,303
|
)
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at December 31, 2016
|
78,456
|
|
|
$
|
78
|
|
|
$
|
2,254,055
|
|
|
$
|
(1,976,222
|
)
|
|
$
|
(7,270
|
)
|
|
$
|
270,641
|
|
Cumulative effect to retained earnings related to adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
69
|
|
|
(69
|
)
|
|
—
|
|
|
—
|
|
|||||
Cumulative effect to retained earnings related to adoption of ASU 2016-16
|
—
|
|
|
—
|
|
|
—
|
|
|
1,434
|
|
|
—
|
|
|
1,434
|
|
|||||
Balance at January 1, 2017
|
78,456
|
|
|
78
|
|
|
2,254,124
|
|
|
(1,974,857
|
)
|
|
(7,270
|
)
|
|
272,075
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(82,955
|
)
|
|
—
|
|
|
(82,955
|
)
|
|||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,652
|
|
|
10,652
|
|
|||||
Issuance of common stock under option, stock award and purchase plans
|
4,098
|
|
|
5
|
|
|
1,954
|
|
|
—
|
|
|
—
|
|
|
1,959
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
16,612
|
|
|
—
|
|
|
—
|
|
|
16,612
|
|
|||||
Balance at December 31, 2017
|
82,554
|
|
|
83
|
|
|
2,272,690
|
|
|
(2,057,812
|
)
|
|
3,382
|
|
|
218,343
|
|
|||||
Cumulative effect to retained earnings related to adoption of ASC 606 (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
11,431
|
|
|
—
|
|
|
11,431
|
|
|||||
Balance at January 1, 2018
|
82,554
|
|
|
83
|
|
|
2,272,690
|
|
|
(2,046,381
|
)
|
|
3,382
|
|
|
229,774
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,035
|
)
|
|
—
|
|
|
(21,035
|
)
|
|||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,598
|
)
|
|
(4,598
|
)
|
|||||
Issuance of common stock under option, stock award and purchase plans
|
4,503
|
|
|
4
|
|
|
4,713
|
|
|
—
|
|
|
—
|
|
|
4,717
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
17,097
|
|
|
—
|
|
|
—
|
|
|
17,097
|
|
|||||
Issuance of warrant
|
—
|
|
|
—
|
|
|
2,295
|
|
|
—
|
|
|
—
|
|
|
2,295
|
|
|||||
Balance at December 31, 2018
|
87,057
|
|
|
87
|
|
|
2,296,795
|
|
|
(2,067,416
|
)
|
|
(1,216
|
)
|
|
228,250
|
|
|||||
Cumulative effect to retained earnings related to adoption of Topic 718 (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,400
|
|
|
—
|
|
|
1,400
|
|
|||||
Balance at January 1, 2019
|
87,057
|
|
|
87
|
|
|
2,296,795
|
|
|
(2,066,016
|
)
|
|
(1,216
|
)
|
|
229,650
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,924
|
)
|
|
—
|
|
|
(5,924
|
)
|
|||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,849
|
)
|
|
(1,849
|
)
|
|||||
Issuance of common stock under option, stock award and purchase plans
|
4,014
|
|
|
4
|
|
|
6,910
|
|
|
—
|
|
|
—
|
|
|
6,914
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
12,156
|
|
|
—
|
|
|
—
|
|
|
12,156
|
|
|||||
Issuance of warrant
|
—
|
|
|
—
|
|
|
16,142
|
|
|
—
|
|
|
—
|
|
|
16,142
|
|
|||||
Exercise of warrant
|
804
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Reclassification from equity to mezzanine equity for 4.00% Convertible Senior Notes due in 2020
|
—
|
|
|
—
|
|
|
(2,410
|
)
|
|
—
|
|
|
—
|
|
|
(2,410
|
)
|
|||||
Portion of repurchase price recorded in additional paid-in capital in connection with partial repurchase of 4.00% convertible notes due 2020
|
—
|
|
|
—
|
|
|
(27,111
|
)
|
|
—
|
|
|
—
|
|
|
(27,111
|
)
|
|||||
Conversion feature of 2.00% convertible notes due 2024
|
—
|
|
|
—
|
|
|
24,878
|
|
|
—
|
|
|
—
|
|
|
24,878
|
|
|||||
Balance at December 31, 2019
|
91,875
|
|
|
$
|
92
|
|
|
$
|
2,327,359
|
|
|
$
|
(2,071,940
|
)
|
|
$
|
(3,065
|
)
|
|
$
|
252,446
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(5,924
|
)
|
|
$
|
(21,035
|
)
|
|
$
|
(82,955
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Amortization of intangibles
|
8,319
|
|
|
8,367
|
|
|
8,322
|
|
|||
Depreciation
|
11,287
|
|
|
12,971
|
|
|
14,599
|
|
|||
Stock-based compensation
|
12,074
|
|
|
17,289
|
|
|
16,610
|
|
|||
Amortization of discount on convertible debt
|
6,756
|
|
|
6,060
|
|
|
5,489
|
|
|||
Amortization of non-cash warrant
|
13,576
|
|
|
1,178
|
|
|
153
|
|
|||
Restructuring, asset impairment and loss on retirement of fixed assets
|
124
|
|
|
1,491
|
|
|
1,906
|
|
|||
Loss on impairment of long-term investments
|
—
|
|
|
—
|
|
|
530
|
|
|||
Foreign currency adjustments
|
(290
|
)
|
|
(1,906
|
)
|
|
2,369
|
|
|||
Loss on debt extinguishment
|
5,695
|
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes, net
|
(2,076
|
)
|
|
661
|
|
|
2,189
|
|
|||
Provision for doubtful accounts, returns and discounts
|
1,500
|
|
|
2,521
|
|
|
4,912
|
|
|||
Provision for excess and obsolete inventories
|
1,479
|
|
|
1,649
|
|
|
6,005
|
|
|||
Other non-cash adjustments, net
|
1,225
|
|
|
407
|
|
|
445
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(8,388
|
)
|
|
(14,700
|
)
|
|
12,598
|
|
|||
Inventories
|
(4,819
|
)
|
|
(2,045
|
)
|
|
11,687
|
|
|||
Prepaid expenses and other assets
|
(3,347
|
)
|
|
3,227
|
|
|
6,642
|
|
|||
Accounts payable
|
5,086
|
|
|
1,018
|
|
|
3,432
|
|
|||
Deferred revenues
|
(3,436
|
)
|
|
(4,808
|
)
|
|
(392
|
)
|
|||
Income taxes payable
|
(136
|
)
|
|
440
|
|
|
(2,978
|
)
|
|||
Accrued and other liabilities
|
(7,410
|
)
|
|
(501
|
)
|
|
(8,499
|
)
|
|||
Net cash provided by operating activities
|
31,295
|
|
|
12,284
|
|
|
3,064
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Proceeds from maturities of investments
|
—
|
|
|
—
|
|
|
3,106
|
|
|||
Proceeds from sales of investments
|
—
|
|
|
104
|
|
|
3,792
|
|
|||
Purchases of property and equipment
|
(10,328
|
)
|
|
(7,044
|
)
|
|
(11,399
|
)
|
|||
Net cash used in investing activities
|
(10,328
|
)
|
|
(6,940
|
)
|
|
(4,501
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from convertible debt
|
115,500
|
|
|
—
|
|
|
—
|
|
|||
Payments of convertible debt
|
(109,603
|
)
|
|
—
|
|
|
—
|
|
|||
Payment of convertible debt issuance costs
|
(4,277
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from other debts and finance leases
|
4,684
|
|
|
5,066
|
|
|
6,344
|
|
|||
Repayment of other debts and finance leases
|
(6,913
|
)
|
|
(7,132
|
)
|
|
(7,408
|
)
|
|||
Proceeds from common stock issued to employees
|
8,406
|
|
|
4,947
|
|
|
4,716
|
|
|||
Payment of tax withholding obligations related to net share settlements of restricted stock units
|
(1,492
|
)
|
|
(230
|
)
|
|
(2,757
|
)
|
|||
Net cash provided by financing activities
|
6,305
|
|
|
2,651
|
|
|
895
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(203
|
)
|
|
(763
|
)
|
|
1,879
|
|
|||
Net increase in cash, cash equivalents and restricted cash
|
27,069
|
|
|
7,232
|
|
|
1,337
|
|
|||
Cash, cash equivalents and restricted cash, beginning of the year
|
65,989
|
|
|
58,757
|
|
|
57,420
|
|
|||
Cash, cash equivalents and restricted cash, end of the year
|
$
|
93,058
|
|
|
$
|
65,989
|
|
|
$
|
58,757
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Income tax payments, net
|
$
|
1,138
|
|
|
$
|
2,031
|
|
|
$
|
2,141
|
|
Interest payments, net
|
4,260
|
|
|
5,273
|
|
|
5,515
|
|
|||
Supplemental schedule of non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Capital expenditures incurred but not yet paid
|
$
|
2,055
|
|
|
$
|
148
|
|
|
$
|
337
|
|
Issuance of warrant
|
16,142
|
|
|
2,295
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
93,058
|
|
|
$
|
65,989
|
|
|
$
|
57,024
|
|
Restricted cash included in prepaid expenses and other current assets
|
—
|
|
|
—
|
|
|
530
|
|
|||
Restricted cash included in other long-term assets
|
—
|
|
|
—
|
|
|
1,203
|
|
|||
Total cash, cash equivalents and restricted cash
|
$
|
93,058
|
|
|
$
|
65,989
|
|
|
$
|
58,757
|
|
|
Year ended December 31,
|
||
|
2019
|
||
Operating lease cost
|
$
|
9,574
|
|
Variable lease cost
|
3,232
|
|
|
Total lease cost
|
$
|
12,806
|
|
|
Year ended December 31,
|
||
|
2019
|
||
Cash paid for amounts included in the measurement of operating lease liabilities
|
$
|
9,702
|
|
ROU assets obtained in exchange for operating lease obligations
|
$
|
12,032
|
|
|
Year ended December 31,
|
|
|
2019
|
|
Operating leases
|
|
|
Weighted-average remaining lease term (years)
|
7.0
|
|
Weighted-average discount rate
|
7.1
|
%
|
Years ending December 31,
|
|
||
2020
|
$
|
9,169
|
|
2021
|
6,181
|
|
|
2022
|
4,814
|
|
|
2023
|
4,524
|
|
|
2024
|
4,503
|
|
|
Thereafter
|
17,569
|
|
|
Total future minimum lease payments
|
$
|
46,760
|
|
Less: imputed interest
|
(11,546
|
)
|
|
Total
|
$
|
35,214
|
|
Years ending December 31,
|
|
||
2019
|
$
|
13,515
|
|
2020
|
10,139
|
|
|
2021
|
4,088
|
|
|
2022
|
2,523
|
|
|
2023
|
2,220
|
|
|
Thereafter
|
6,694
|
|
|
Total future minimum lease payments
|
$
|
39,179
|
|
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
Financial Statement Location
|
|
2019
|
|
2018
|
|
2017
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||
Gains (losses) recognized in income
|
|
Other expense, net
|
|
$
|
1,374
|
|
|
$
|
(2,325
|
)
|
|
$
|
155
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||
Purchase
|
|
$
|
14,806
|
|
|
$
|
28,975
|
|
Sell
|
|
$
|
2,629
|
|
|
$
|
—
|
|
|
|
|
|
|
Asset Derivatives
|
||||||
|
|
|
Balance Sheet Location
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
|
Prepaid expenses and other current assets
|
|
$
|
43
|
|
|
$
|
—
|
|
|
|
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
|
|
|
|
Liability Derivatives
|
||||||
|
|
|
Balance Sheet Location
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
|
Accrued and other current liabilities
|
|
$
|
112
|
|
|
$
|
333
|
|
|
|
|
|
|
$
|
112
|
|
|
$
|
333
|
|
|
|
Gross Amounts of Derivatives
|
|
Gross Amounts of Derivatives Offset in the Consolidated Balance Sheets
|
|
Net Amounts of Derivatives Presented in the Consolidated Balance Sheets
|
||||||
Derivative assets
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
43
|
|
Derivative liabilities
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
112
|
|
•
|
Level 1 — Observable inputs that reflect quoted prices for identical assets or liabilities in active markets.
|
•
|
Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The forward exchange contracts are classified as Level 2 because they are valued using quoted market prices and other observable data for similar instruments in an active market.
|
•
|
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
As of December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Prepaid and other current assets
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
43
|
|
Total assets measured and recorded at fair value
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
43
|
|
Accrued and other current liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
112
|
|
Total liabilities measured and recorded at fair value
|
$
|
—
|
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
112
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
As of December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Accrued and other current liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
333
|
|
|
$
|
—
|
|
|
$
|
333
|
|
Total liabilities measured and recorded at fair value
|
$
|
—
|
|
|
$
|
333
|
|
|
$
|
—
|
|
|
$
|
333
|
|
|
|
Video
|
|
Cable Access
|
|
Total
|
||||||
Balance as of December 31, 2017
|
|
$
|
182,012
|
|
|
$
|
60,815
|
|
|
$
|
242,827
|
|
Foreign currency translation adjustment
|
|
(2,173
|
)
|
|
(36
|
)
|
|
(2,209
|
)
|
|||
Balance as of December 31, 2018
|
|
$
|
179,839
|
|
|
$
|
60,779
|
|
|
$
|
240,618
|
|
Foreign currency translation adjustment
|
|
(857
|
)
|
|
19
|
|
|
(838
|
)
|
|||
Balance as of December 31, 2019
|
|
$
|
178,982
|
|
|
$
|
60,798
|
|
|
$
|
239,780
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Weighted Average Remaining Life (Years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Developed core technology
|
0.2
|
|
$
|
31,707
|
|
|
$
|
(30,757
|
)
|
|
$
|
950
|
|
|
$
|
31,707
|
|
|
$
|
(25,576
|
)
|
|
$
|
6,131
|
|
Customer relationships/contracts
|
1.2
|
|
44,577
|
|
|
(41,092
|
)
|
|
3,485
|
|
|
44,650
|
|
|
(38,146
|
)
|
|
6,504
|
|
||||||
Trademarks and tradenames
|
0.2
|
|
609
|
|
|
(583
|
)
|
|
26
|
|
|
623
|
|
|
(441
|
)
|
|
182
|
|
||||||
Maintenance agreements and related relationships
|
N/A
|
|
5,500
|
|
|
(5,500
|
)
|
|
—
|
|
|
5,500
|
|
|
(5,500
|
)
|
|
—
|
|
||||||
Order Backlog
|
N/A
|
|
3,085
|
|
|
(3,085
|
)
|
|
—
|
|
|
3,112
|
|
|
(3,112
|
)
|
|
—
|
|
||||||
Total identifiable intangibles
|
|
|
$
|
85,478
|
|
|
$
|
(81,017
|
)
|
|
$
|
4,461
|
|
|
$
|
85,592
|
|
|
$
|
(72,775
|
)
|
|
$
|
12,817
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Included in cost of revenue
|
$
|
5,180
|
|
|
$
|
5,180
|
|
|
$
|
5,180
|
|
Included in operating expenses
|
3,139
|
|
|
3,187
|
|
|
3,142
|
|
|||
Total amortization expense
|
$
|
8,319
|
|
|
$
|
8,367
|
|
|
$
|
8,322
|
|
|
Cost of Revenue
|
|
Operating
Expenses
|
|
Total
|
||||||
Year ended December 31,
|
|
|
|
|
|
||||||
2020
|
$
|
951
|
|
|
$
|
3,012
|
|
|
$
|
3,963
|
|
2021
|
—
|
|
|
498
|
|
|
498
|
|
|||
Total future amortization expense
|
$
|
951
|
|
|
$
|
3,510
|
|
|
$
|
4,461
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Accounts receivable, net:
|
|
|
|
||||
Accounts receivable
|
$
|
91,513
|
|
|
$
|
85,292
|
|
Less: allowance for doubtful accounts and sales returns
|
(3,013
|
)
|
|
(3,497
|
)
|
||
Total
|
$
|
88,500
|
|
|
$
|
81,795
|
|
|
Balance at
Beginning of
Period
|
|
Charges to
Revenue
|
|
Charges
(Credits) to
Expense
|
|
Additions to
(Deductions
from) Reserves
|
|
Balance at End
of Period
|
||||||||||
Year ended December 31,
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
$
|
3,497
|
|
|
$
|
1,896
|
|
|
$
|
(396
|
)
|
|
$
|
(1,984
|
)
|
|
$
|
3,013
|
|
2018
|
$
|
4,631
|
|
|
$
|
1,949
|
|
|
$
|
572
|
|
|
$
|
(3,655
|
)
|
|
$
|
3,497
|
|
2017
|
$
|
4,831
|
|
|
$
|
4,030
|
|
|
$
|
881
|
|
|
$
|
(5,111
|
)
|
|
$
|
4,631
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Inventories, net:
|
|
|
|
||||
Raw materials
|
$
|
4,179
|
|
|
$
|
1,705
|
|
Work-in-process
|
1,633
|
|
|
991
|
|
||
Finished goods
|
14,080
|
|
|
12,267
|
|
||
Service-related spares
|
9,150
|
|
|
10,675
|
|
||
Total
|
$
|
29,042
|
|
|
$
|
25,638
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Prepaid expenses and other current assets:
|
|
|
|
||||
Contract assets (1)
|
$
|
13,969
|
|
|
3,834
|
|
|
French R&D tax credits receivable (2)
|
7,343
|
|
|
$
|
7,305
|
|
|
Deferred cost of revenue
|
2,631
|
|
|
3,671
|
|
||
Prepaid maintenance, royalty, rent, and property taxes
|
1,594
|
|
|
3,497
|
|
||
Capitalized commission
|
1,309
|
|
|
1,098
|
|
||
Other
|
13,916
|
|
|
3,875
|
|
||
Total
|
$
|
40,762
|
|
|
$
|
23,280
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Property and equipment, net:
|
|
|
|
||||
Machinery and equipment
|
$
|
75,229
|
|
|
$
|
75,094
|
|
Capitalized software
|
34,190
|
|
|
32,696
|
|
||
Leasehold improvements
|
15,170
|
|
|
14,951
|
|
||
Furniture and fixtures
|
6,036
|
|
|
6,049
|
|
||
Construction in progress
|
5,506
|
|
|
—
|
|
||
Property and equipment, gross
|
136,131
|
|
|
128,790
|
|
||
Less: accumulated depreciation and amortization
|
(113,203
|
)
|
|
(106,469
|
)
|
||
Total
|
$
|
22,928
|
|
|
$
|
22,321
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Other long-term assets:
|
|
|
|
||||
French R&D tax credits receivable
|
$
|
15,899
|
|
|
$
|
19,249
|
|
Deferred tax assets
|
10,575
|
|
|
8,695
|
|
||
Equity investment
|
3,593
|
|
|
3,593
|
|
||
Other
|
11,238
|
|
|
6,840
|
|
||
Total
|
$
|
41,305
|
|
|
$
|
38,377
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Accrued and other current liabilities:
|
|
|
|
||||
Accrued employee compensation and related expenses
|
$
|
19,454
|
|
|
$
|
21,451
|
|
Operating lease liability (short-term)
|
8,881
|
|
|
—
|
|
||
Accrued warranty
|
4,308
|
|
|
4,869
|
|
||
Customer deposits
|
3,557
|
|
|
4,642
|
|
||
Accrued royalty payments
|
2,642
|
|
|
1,998
|
|
||
Contingent inventory reserves
|
2,208
|
|
|
2,500
|
|
||
Accrued French VDP, current (1)
|
2,055
|
|
|
1,585
|
|
||
Accrued Avid litigation settlement fees, current
|
2,000
|
|
|
1,500
|
|
||
Other
|
17,430
|
|
|
14,216
|
|
||
Total
|
$
|
62,535
|
|
|
$
|
52,761
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Other non-current liabilities:
|
|
|
|
||||
Operating lease liability (long-term)
|
$
|
25,766
|
|
|
$
|
—
|
|
Deferred revenue (long-term)
|
6,333
|
|
|
5,330
|
|
||
Others
|
9,155
|
|
|
12,898
|
|
||
Total
|
$
|
41,254
|
|
|
$
|
18,228
|
|
|
Year ended December 31,
|
||||||||||
Restructuring and related charges in:
|
2019
|
|
2018
|
|
2017
|
||||||
Cost of revenue
|
$
|
1,391
|
|
|
$
|
857
|
|
|
$
|
1,279
|
|
Operating expenses - Restructuring and related charges
|
3,141
|
|
|
2,918
|
|
|
5,307
|
|
|||
Total restructuring and related charges
|
$
|
4,532
|
|
|
$
|
3,775
|
|
|
$
|
6,586
|
|
|
Excess facilities
|
|
Severance and Benefits
|
|
French VDP
|
|
Others
|
|
Total
|
||||||||||
Balance at December 31, 2018
|
$
|
2,926
|
|
|
$
|
—
|
|
|
$
|
2,409
|
|
|
$
|
—
|
|
|
$
|
5,335
|
|
Charges for current period
|
—
|
|
|
4,102
|
|
|
50
|
|
|
380
|
|
|
4,532
|
|
|||||
Adjustments to restructuring provisions and others
|
(334
|
)
|
|
11
|
|
|
(28
|
)
|
|
—
|
|
|
(351
|
)
|
|||||
Cash payments
|
(1,872
|
)
|
|
(819
|
)
|
|
(1,625
|
)
|
|
(350
|
)
|
|
(4,666
|
)
|
|||||
Balance at December 31, 2019
|
$
|
720
|
|
|
$
|
3,294
|
|
|
$
|
806
|
|
|
$
|
30
|
|
|
$
|
4,850
|
|
|
December 31,
|
||
|
2019
|
||
Liability:
|
|
||
Principal amount
|
115,500
|
|
|
Less: Debt discount, net of amortization
|
(23,652
|
)
|
|
Less: Debt issuance costs, net of amortization
|
(3,219
|
)
|
|
Carrying amount
|
$
|
88,629
|
|
Remaining amortization period (years)
|
4.7 years
|
|
|
Effective interest rate on liability component
|
7.95
|
%
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Liability:
|
|
|
|
||||
Principal amount
|
$
|
45,785
|
|
|
$
|
128,250
|
|
Less: Debt discount, net of amortization
|
(2,151
|
)
|
|
(11,996
|
)
|
||
Less: Debt issuance costs, net of amortization
|
(259
|
)
|
|
(1,446
|
)
|
||
Carrying amount
|
$
|
43,375
|
|
|
$
|
114,808
|
|
Remaining amortization period (years)
|
0.9 years
|
|
|
1.9 years
|
|
||
Effective interest rate on liability component
|
9.94
|
%
|
|
9.94
|
%
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Contractual interest expense
|
$
|
4,835
|
|
|
$
|
5,130
|
|
|
$
|
5,130
|
|
Amortization of debt discount
|
6,013
|
|
|
5,408
|
|
|
4,898
|
|
|||
Amortization of debt issuance costs
|
743
|
|
|
652
|
|
|
591
|
|
|||
Total interest expense recognized
|
$
|
11,591
|
|
|
$
|
11,190
|
|
|
$
|
10,619
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Financing from French government agencies related to various government incentive programs (1)
|
$
|
16,566
|
|
|
$
|
18,783
|
|
Term loans
|
587
|
|
|
914
|
|
||
Obligations under finance leases
|
71
|
|
|
162
|
|
||
Total debt obligations
|
17,224
|
|
|
19,859
|
|
||
Less: current portion
|
(6,713
|
)
|
|
(7,175
|
)
|
||
Long-term portion
|
$
|
10,511
|
|
|
$
|
12,684
|
|
Years ending December 31,
|
Finance lease obligations
|
|
Other Debt obligations
|
||||
2020
|
49
|
|
|
6,664
|
|
||
2021
|
22
|
|
|
5,216
|
|
||
2022
|
—
|
|
|
4,897
|
|
||
2023
|
—
|
|
|
151
|
|
||
2024
|
—
|
|
|
112
|
|
||
Thereafter
|
—
|
|
|
112
|
|
||
Total
|
$
|
71
|
|
|
$
|
17,152
|
|
|
Stock Options Outstanding
|
|||||||||||
|
Number
of
Shares
|
|
Weighted
Average
Exercise
Price (per share)
|
|
Weighted Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Balance at December 31, 2018
|
3,068
|
|
|
$
|
5.76
|
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(801
|
)
|
|
5.40
|
|
|
|
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
|
|
|
|||
Canceled or expired
|
(379
|
)
|
|
6.14
|
|
|
|
|
|
|||
Balance at December 31, 2019
|
1,888
|
|
|
5.83
|
|
|
1.8
|
|
$
|
3,715.5
|
|
|
As of December 31, 2019
|
|
|
|
|
|
|
|
|||||
Vested and expected to vest
|
1,888
|
|
|
$
|
5.83
|
|
|
1.8
|
|
$
|
3,715.5
|
|
Exercisable
|
1,888
|
|
|
$
|
5.83
|
|
|
1.8
|
|
$
|
3,715.5
|
|
|
Restricted Stock Units Outstanding
|
|||||
|
Number
of
Shares
|
|
Weighted
Average Grant
Date Fair Value
Per Share
|
|||
Balance at December 31, 2018
|
3,403
|
|
|
$
|
3.99
|
|
Granted
|
2,717
|
|
|
5.78
|
|
|
Vested
|
(2,421
|
)
|
|
4.02
|
|
|
Forfeited
|
(98
|
)
|
|
5.10
|
|
|
Balance at December 31, 2019
|
3,601
|
|
|
$
|
5.18
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Projected benefit obligation:
|
|
|
|
||||
Balance at January 1
|
$
|
4,881
|
|
|
$
|
5,033
|
|
Service cost
|
227
|
|
|
243
|
|
||
Interest cost
|
78
|
|
|
74
|
|
||
Actuarial (gains) losses
|
206
|
|
|
(202
|
)
|
||
Benefits paid
|
(31
|
)
|
|
(13
|
)
|
||
Foreign currency translation adjustment
|
(102
|
)
|
|
(254
|
)
|
||
Balance at December 31
|
$
|
5,259
|
|
|
$
|
4,881
|
|
|
|
|
|
||||
Presented on the Consolidated Balance Sheets under:
|
|
|
|
||||
Current portion (presented under “Accrued and other current liabilities”)
|
$
|
30
|
|
|
63
|
|
|
Long-term portion (presented under “Other non-current liabilities”)
|
$
|
5,229
|
|
|
4,818
|
|
|
Year ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Service cost
|
$
|
227
|
|
|
$
|
243
|
|
Interest cost
|
78
|
|
|
74
|
|
||
Net periodic benefit cost included in operating loss
|
$
|
305
|
|
|
$
|
317
|
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||
Discount rate
|
0.7
|
%
|
|
1.7
|
%
|
Mobility rate
|
5.0
|
%
|
|
6.0
|
%
|
Salary progression rate
|
2.0
|
%
|
|
2.0
|
%
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Stock-based compensation in:
|
|
|
|
|
|
||||||
Cost of revenue
|
$
|
1,124
|
|
|
$
|
1,953
|
|
|
$
|
2,370
|
|
Research and development expense
|
3,261
|
|
|
5,192
|
|
|
5,313
|
|
|||
Selling, general and administrative expense
|
7,689
|
|
|
10,144
|
|
|
8,927
|
|
|||
Total stock-based compensation in operating expense
|
10,950
|
|
|
15,336
|
|
|
14,240
|
|
|||
Total stock-based compensation recognized in net loss
|
$
|
12,074
|
|
|
$
|
17,289
|
|
|
$
|
16,610
|
|
|
Employee Stock Options
|
|
ESPP
|
||||||||
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||
Expected term (in years)
|
4.30
|
|
|
0.50
|
|
|
0.50
|
|
|
0.50
|
|
Volatility
|
42
|
%
|
|
38
|
%
|
|
55
|
%
|
|
48
|
%
|
Risk-free interest rate
|
1.8
|
%
|
|
2.3
|
%
|
|
1.9
|
%
|
|
1.2
|
%
|
Expected dividends
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Foreign currency translation adjustments
|
$
|
(2,449
|
)
|
|
$
|
(779
|
)
|
Unrealized foreign exchange loss on intercompany long-term loans, net of taxes
|
(857
|
)
|
|
(888
|
)
|
||
Actuarial gain
|
241
|
|
|
451
|
|
||
Total accumulated other comprehensive income (loss)
|
$
|
(3,065
|
)
|
|
$
|
(1,216
|
)
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
$
|
1,769
|
|
|
$
|
(19,780
|
)
|
|
$
|
(50,041
|
)
|
International
|
(8,365
|
)
|
|
2,832
|
|
|
(34,666
|
)
|
|||
Loss before income taxes
|
$
|
(6,596
|
)
|
|
$
|
(16,948
|
)
|
|
$
|
(84,707
|
)
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(180
|
)
|
|
$
|
(305
|
)
|
|
$
|
(4,530
|
)
|
State
|
108
|
|
|
116
|
|
|
129
|
|
|||
International
|
1,525
|
|
|
2,958
|
|
|
273
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
International
|
(2,125
|
)
|
|
1,318
|
|
|
2,376
|
|
|||
Total provision for (benefit from) income taxes
|
$
|
(672
|
)
|
|
$
|
4,087
|
|
|
$
|
(1,752
|
)
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Benefit from for income taxes at U.S. Federal statutory rate
|
$
|
(1,384
|
)
|
|
$
|
(3,559
|
)
|
|
$
|
(29,648
|
)
|
Differential in rates on foreign earnings
|
2,422
|
|
|
4,299
|
|
|
15,920
|
|
|||
Tax Reform tax rate reduction
|
—
|
|
|
—
|
|
|
14,527
|
|
|||
Change in valuation allowance
|
(923
|
)
|
|
1,449
|
|
|
(2,834
|
)
|
|||
Change in liabilities for uncertain tax positions
|
(411
|
)
|
|
(250
|
)
|
|
(2,009
|
)
|
|||
Non-deductible stock-based compensation
|
553
|
|
|
1,363
|
|
|
1,934
|
|
|||
Permanent Differences
|
(698
|
)
|
|
1,096
|
|
|
380
|
|
|||
Adjustments related to tax positions taken during prior years
|
(403
|
)
|
|
184
|
|
|
(473
|
)
|
|||
Tax refund
|
—
|
|
|
(305
|
)
|
|
(834
|
)
|
|||
Other
|
172
|
|
|
(190
|
)
|
|
1,285
|
|
|||
Total provision for (benefit from) income taxes
|
$
|
(672
|
)
|
|
$
|
4,087
|
|
|
$
|
(1,752
|
)
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Reserves and accruals
|
$
|
20,622
|
|
|
$
|
17,090
|
|
Net operating loss carryforwards
|
33,811
|
|
|
29,900
|
|
||
Research and development credit carryforwards
|
36,914
|
|
|
36,446
|
|
||
Deferred stock-based compensation
|
1,675
|
|
|
2,201
|
|
||
Intangibles
|
8,224
|
|
|
2,585
|
|
||
Operating lease liabilities
|
5,877
|
|
|
—
|
|
||
Capitalized research and development expenses
|
10,897
|
|
|
—
|
|
||
Other
|
—
|
|
|
939
|
|
||
Gross deferred tax assets
|
118,020
|
|
|
89,161
|
|
||
Valuation allowance
|
(95,518
|
)
|
|
(77,144
|
)
|
||
Gross deferred tax assets after valuation allowance
|
22,502
|
|
|
12,017
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Depreciation
|
(1,272
|
)
|
|
(391
|
)
|
||
Convertible notes
|
(6,275
|
)
|
|
(2,931
|
)
|
||
Operating lease right-of-use assets
|
(4,061
|
)
|
|
—
|
|
||
Other
|
(319
|
)
|
|
—
|
|
||
Gross deferred tax liabilities
|
(11,927
|
)
|
|
(3,322
|
)
|
||
Net deferred tax assets
|
$
|
10,575
|
|
|
$
|
8,695
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at beginning of period
|
$
|
77,144
|
|
|
$
|
77,756
|
|
|
$
|
74,480
|
|
Additions
|
23,929
|
|
|
928
|
|
|
9,028
|
|
|||
Deductions
|
(5,555
|
)
|
|
(1,540
|
)
|
|
(5,752
|
)
|
|||
Balance at end of period
|
$
|
95,518
|
|
|
$
|
77,144
|
|
|
$
|
77,756
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at beginning of period
|
$
|
18.0
|
|
|
$
|
18.8
|
|
|
$
|
19.2
|
|
Increase in balance related to tax positions taken during current year
|
0.2
|
|
|
1.0
|
|
|
1.4
|
|
|||
Decrease in balance as a result of a lapse of the applicable statues of limitations
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(2.2
|
)
|
|||
Decrease in balance due to settlement with tax authorities
|
—
|
|
|
(1.6
|
)
|
|
—
|
|
|||
Increase in balance related to tax positions taken during prior years
|
—
|
|
|
0.2
|
|
|
1.8
|
|
|||
Decrease in balance related to tax positions taken during prior years
|
(1.1
|
)
|
|
(0.3
|
)
|
|
(1.4
|
)
|
|||
Balance at end of period
|
$
|
17.0
|
|
|
$
|
18.0
|
|
|
$
|
18.8
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(5,924
|
)
|
|
$
|
(21,035
|
)
|
|
$
|
(82,955
|
)
|
Denominator:
|
|
|
|
|
|
||||||
Weighted average number of shares outstanding:
|
|
|
|
|
|
||||||
Basic and diluted
|
89,575
|
|
|
85,615
|
|
|
80,974
|
|
|||
Net loss per share:
|
|
|
|
|
|
||||||
Basic and diluted
|
$
|
(0.07
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(1.02
|
)
|
|
December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Convertible notes
|
1,322
|
|
|
—
|
|
|
—
|
|
Stock options
|
2,568
|
|
|
3,327
|
|
|
4,470
|
|
Restricted stock units
|
2,955
|
|
|
2,997
|
|
|
3,059
|
|
Stock purchase rights under the ESPP
|
478
|
|
|
609
|
|
|
620
|
|
Warrants (1)
|
4,321
|
|
|
1,268
|
|
|
782
|
|
Total
|
11,644
|
|
|
8,201
|
|
|
8,931
|
|
•
|
The conversion spread of 7,962,609 shares had a dilutive impact on diluted net income per share as the Company’s average market price of its common stock for a given period exceeded the conversion price of $5.75 per share for the 2020 Notes.
|
•
|
The conversion spread of 13,337,182 shares will have a dilutive impact on diluted net income per share when the Company’s average market price of its common stock for a given period exceeds the conversion price of $8.66 per share for the 2024 Notes.
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018 (1)
|
|
2017
|
||||||
Video
|
|
|
|
|
|
||||||
Revenue
|
$
|
278,028
|
|
|
$
|
313,828
|
|
|
$
|
319,473
|
|
Gross profit
|
162,156
|
|
|
178,170
|
|
|
173,414
|
|
|||
Operating income (loss)
|
15,837
|
|
|
26,170
|
|
|
(2,024
|
)
|
|||
Cable Access
|
|
|
|
|
|
||||||
Revenue
|
$
|
124,846
|
|
|
$
|
89,730
|
|
|
$
|
38,773
|
|
Gross profit
|
68,548
|
|
|
39,029
|
|
|
8,892
|
|
|||
Operating income (loss)
|
22,171
|
|
|
(1,756
|
)
|
|
(23,154
|
)
|
|||
Total
|
|
|
|
|
|
||||||
Revenue
|
$
|
402,874
|
|
|
$
|
403,558
|
|
|
$
|
358,246
|
|
Gross profit
|
230,704
|
|
|
217,199
|
|
|
182,306
|
|
|||
Operating income (loss)
|
38,008
|
|
|
24,414
|
|
|
(25,178
|
)
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017 (1)
|
||||||
Total segment operating income (loss)
|
$
|
38,008
|
|
|
$
|
24,414
|
|
|
$
|
(25,178
|
)
|
Unallocated corporate expenses (1)
|
(4,532
|
)
|
|
(3,769
|
)
|
|
(20,767
|
)
|
|||
Stock-based compensation
|
(12,074
|
)
|
|
(17,289
|
)
|
|
(16,610
|
)
|
|||
Amortization of intangibles
|
(8,319
|
)
|
|
(8,367
|
)
|
|
(8,322
|
)
|
|||
Consolidated income (loss) from operations
|
13,083
|
|
|
(5,011
|
)
|
|
(70,877
|
)
|
|||
Loss on debt extinguishment
|
(5,695
|
)
|
|
—
|
|
|
—
|
|
|||
Non-operating expense, net
|
(13,984
|
)
|
|
(11,937
|
)
|
|
(13,830
|
)
|
|||
Loss before income taxes
|
(6,596
|
)
|
|
$
|
(16,948
|
)
|
|
$
|
(84,707
|
)
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net revenue (1):
|
|
|
|
|
|
||||||
United States
|
$
|
202,272
|
|
|
$
|
181,965
|
|
|
$
|
131,773
|
|
Other countries
|
200,602
|
|
|
221,593
|
|
|
226,473
|
|
|||
Total
|
$
|
402,874
|
|
|
$
|
403,558
|
|
|
$
|
358,246
|
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Property and equipment, net:
|
|
|
|
||||
United States
|
$
|
13,301
|
|
|
$
|
10,376
|
|
Israel
|
5,919
|
|
|
6,975
|
|
||
France
|
2,615
|
|
|
3,519
|
|
||
Other countries
|
1,093
|
|
|
1,451
|
|
||
Total
|
$
|
22,928
|
|
|
$
|
22,321
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at beginning of period
|
$
|
4,869
|
|
|
$
|
4,381
|
|
|
$
|
4,862
|
|
Accrual for current period warranties
|
5,524
|
|
|
6,612
|
|
|
5,117
|
|
|||
Warranty costs incurred
|
(6,079
|
)
|
|
(6,124
|
)
|
|
(5,598
|
)
|
|||
Balance at end of period
|
$
|
4,314
|
|
|
$
|
4,869
|
|
|
$
|
4,381
|
|
|
Fiscal 2019
|
||||||||||||||
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||
Quarterly Data:
|
|
|
|
|
|
|
|
||||||||
Net revenue
|
$
|
80,106
|
|
|
$
|
84,865
|
|
|
$
|
115,725
|
|
|
$
|
122,178
|
|
Gross profit (1)
|
41,849
|
|
|
43,928
|
|
|
75,540
|
|
|
61,695
|
|
||||
Net income (loss)
|
(11,306
|
)
|
|
(11,845
|
)
|
|
11,657
|
|
|
5,570
|
|
||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
(0.13
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
0.13
|
|
|
$
|
0.06
|
|
Diluted
|
$
|
(0.13
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
0.12
|
|
|
$
|
0.06
|
|
Shares used in per share calculations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
88,165
|
|
|
88,931
|
|
|
89,964
|
|
|
91,124
|
|
||||
Diluted
|
88,165
|
|
|
88,931
|
|
|
97,596
|
|
|
97,499
|
|
||||
|
Fiscal 2018
|
||||||||||||||
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||
Quarterly Data:
|
|
|
|
|
|
|
|
||||||||
Net revenue
|
$
|
90,127
|
|
|
$
|
99,160
|
|
|
$
|
100,616
|
|
|
$
|
113,655
|
|
Gross profit (1)
|
47,183
|
|
|
51,603
|
|
|
50,102
|
|
|
60,321
|
|
||||
Net income (loss) (2) (3)
|
(13,694
|
)
|
|
(2,913
|
)
|
|
(7,758
|
)
|
|
3,330
|
|
||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted
|
$
|
(0.16
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
0.04
|
|
Shares used in per share calculations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
83,912
|
|
|
85,304
|
|
|
86,321
|
|
|
86,846
|
|
||||
Diluted
|
83,912
|
|
|
85,304
|
|
|
86,321
|
|
|
89,028
|
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
Item 9B.
|
OTHER INFORMATION
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Item 11.
|
EXECUTIVE COMPENSATION
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
Item 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
Item 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
Exhibit
Number
|
Description
|
|
|
|
|
3.1(ii)
|
|
|
|
3.2 (xiv)
|
|
|
|
4.1(i)
|
Form of Common Stock Certificate
|
|
|
4.2(iii)
|
|
|
|
4.3(viii)
|
|
|
|
4.4(vii)
|
|
|
|
4.5(ix)†
|
|
|
|
4.6 (xv)
|
|
|
|
4.7 (xv)
|
|
|
|
4.8
|
|
|
|
10.1(i)*
|
Form of Indemnification Agreement
|
|
|
10.2(vii)*
|
|
|
|
10.3(xvii)*
|
|
|
|
10.4(xiii)*
|
|
|
|
10.5(xii)*
|
|
|
|
10.6(xii)*
|
|
|
|
10.7(vii)*
|
|
|
|
10.8(iv)
|
|
|
|
10.9(iv)
|
|
|
|
10.10(iv)
|
|
|
|
10.11 (xi)
|
|
|
|
10.12(v)
|
|
|
|
10.14(x)
|
|
|
|
10.15(x)
|
|
|
|
10.17(xvi)
|
|
|
|
21.1
|
|
|
|
23.1
|
|
|
|
23.2
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
101
|
The following materials from Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019, formatted in Extensible Business Reporting Language (XBRL) includes: Consolidated Balance Sheets at December 31, 2019 and December 31, 2018; (ii) Consolidated Statements of Operations for the Years Ended December 31, 2019, December 31, 2018 and December 31, 2017; (iii) Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2019, December 31, 2018 and December 31, 2017; (iv) Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2019, December 31, 2018 and December 31, 2017; (v) Consolidated Statements of Cash Flows for the Years Ended December 31, 2019, December 31, 2018 and December 31, 2017; and (vi) Notes to Consolidated Financial Statements.
|
*
|
Indicates a management contract or compensatory plan or arrangement relating to executive officers or directors of the Company.
|
†
|
Registrant has omitted portions of this exhibit and filed such exhibit separately with the Securities and Exchange Commission pursuant to a grant of confidential treatment under Rule 406 promulgated under the Securities Act.
|
(i)
|
Previously filed as an Exhibit to the Company’s Registration Statement on Form S-1 No. 33-90752.
|
(ii)
|
Previously filed as an Exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001.
|
(iii)
|
Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated July 25, 2002.
|
(iv)
|
Previously filed as an Exhibit to the Company’s Current Annual Report on Form 10-K for the year ended December 31, 2008.
|
(v)
|
Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated December 18, 2009.
|
(vi)
|
N/A
|
(vii)
|
Previously filed as an Exhibit to the Company’s Registration Statement on Form S-8, dated June 22, 2017.
|
(viii)
|
Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated December 14, 2015.
|
(ix)
|
N/A
|
(xi)
|
Previously filed as an Exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.
|
(xii)
|
Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated March 26, 2018.
|
(xiii)
|
Previously filed as an Exhibit to the Company’ Registration Statement on Form S-8, dated June 28, 2019.
|
(xiv)
|
Previously filed as an exhibit to the Company’s Periodic Report on Form 10-Q, dated August 5, 2019.
|
(xv)
|
Previously filed as an exhibit to the Company’s Current Report on Form 8-K dated September 16, 2019.
|
Item 16.
|
FORM 10-K SUMMARY
|
HARMONIC INC.
|
|
|
|
By:
|
/s/ PATRICK J. HARSHMAN
|
|
Patrick J. Harshman
|
|
President and Chief Executive Officer
|
Signature
|
Title
|
Date
|
|
|
|
/s/ PATRICK J. HARSHMAN
|
President & Chief Executive Officer (Principal Executive Officer)
|
February 28, 2020
|
(Patrick J. Harshman)
|
|
|
|
|
|
/s/ SANJAY KALRA
|
Chief Financial Officer
|
February 28, 2020
|
(Sanjay Kalra)
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
/s/ PATRICK GALLAGHER
|
Chairperson
|
February 28, 2020
|
(Patrick Gallagher)
|
|
|
|
|
|
/s/ SUSAN G. SWENSON
|
Director
|
February 28, 2020
|
(Susan G. Swenson )
|
|
|
|
|
|
/s/ MITZI REAUGH
|
Director
|
February 28, 2020
|
(Mitzi Reaugh)
|
|
|
|
|
|
/s/ NIKOS THEODOSOPOULOS
|
Director
|
February 28, 2020
|
(Nikos Theodosopoulos)
|
|
|
|
|
|
/s/ DAVID KRALL
|
Director
|
February 28, 2020
|
(David Krall)
|
|
|
|
|
|
/s/ DEBORAH L. CLIFFORD
|
Director
|
February 28, 2020
|
(Deborah L. Clifford)
|
|
|
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