x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OREGON | 91-1761992 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
226 Airport Parkway, Suite 595 San Jose, California | 95110 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ¨ | Accelerated filer | x | |
Non-accelerated filer | ¨ | Smaller reporting company | x | |
Emerging growth company | ¨ |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock | PXLW | The Nasdaq Global Market |
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1A. | ||
Item 6. | ||
Item 1. | Financial Statements. |
March 31, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 17,346 | $ | 17,944 | |||
Short-term marketable securities | 6,566 | 6,069 | |||||
Accounts receivable, net | 5,853 | 6,982 | |||||
Inventories | 3,018 | 2,954 | |||||
Prepaid expenses and other current assets | 2,828 | 1,494 | |||||
Total current assets | 35,611 | 35,443 | |||||
Property and equipment, net | 5,409 | 6,151 | |||||
Operating lease right of use assets | 5,658 | — | |||||
Other assets, net | 1,700 | 1,132 | |||||
Acquired intangible assets, net | 3,826 | 4,208 | |||||
Goodwill | 18,407 | 18,407 | |||||
Total assets | $ | 70,611 | $ | 65,341 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 2,647 | $ | 2,116 | |||
Accrued liabilities and current portion of long-term liabilities | 13,780 | 14,823 | |||||
Current portion of income taxes payable | 440 | 263 | |||||
Total current liabilities | 16,867 | 17,202 | |||||
Long-term liabilities, net of current portion | 700 | 1,017 | |||||
Operating lease liabilities, net of current portion | 3,900 | — | |||||
Income taxes payable, net of current portion | 2,342 | 2,299 | |||||
Total liabilities | 23,809 | 20,518 | |||||
Commitments and contingencies (Note 14) | |||||||
Shareholders’ equity: | |||||||
Preferred stock | — | — | |||||
Common stock | 430,907 | 428,903 | |||||
Accumulated other comprehensive income | 19 | 15 | |||||
Accumulated deficit | (384,124 | ) | (384,095 | ) | |||
Total shareholders’ equity | 46,802 | 44,823 | |||||
Total liabilities and shareholders’ equity | $ | 70,611 | $ | 65,341 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Revenue, net | $ | 16,648 | $ | 15,292 | |||
Cost of revenue (1) | 8,176 | 7,490 | |||||
Gross profit | 8,472 | 7,802 | |||||
Operating expenses: | |||||||
Research and development (2) | 6,472 | 4,463 | |||||
Selling, general and administrative (3) | 5,460 | 4,614 | |||||
Restructuring | — | 19 | |||||
Total operating expenses | 11,932 | 9,096 | |||||
Loss from operations | (3,460 | ) | (1,294 | ) | |||
Gain on sale of patents | 3,905 | — | |||||
Interest income (expense) and other, net (4) | (66 | ) | 972 | ||||
Total other income, net | 3,839 | 972 | |||||
Income (loss) before income taxes | 379 | (322 | ) | ||||
Provision for income taxes | 408 | 276 | |||||
Net loss | $ | (29 | ) | $ | (598 | ) | |
Net loss per share - basic and diluted | $ | (0.00 | ) | $ | (0.02 | ) | |
Weighted average shares outstanding - basic and diluted | 37,247 | 35,183 | |||||
(1) Includes: | |||||||
Amortization of acquired intangible assets | 298 | 298 | |||||
Stock-based compensation | 95 | 66 | |||||
Inventory step-up and backlog amortization | 12 | 122 | |||||
(2) Includes stock-based compensation | 661 | 595 | |||||
(3) Includes: | |||||||
Stock-based compensation | 933 | 539 | |||||
Amortization of acquired intangible assets | 84 | 101 | |||||
(4) Includes: | |||||||
Gain on debt extinguishment | — | (1,272 | ) | ||||
Discount accretion on convertible debt fair value | — | 69 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Net loss | $ | (29 | ) | $ | (598 | ) | |
Other comprehensive loss: | |||||||
Unrealized gain on available-for-sale securities | 4 | — | |||||
Total comprehensive loss | $ | (25 | ) | $ | (598 | ) |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (29 | ) | $ | (598 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Gain on sale of patents | (3,905 | ) | — | ||||
Stock-based compensation | 1,689 | 1,200 | |||||
Depreciation and amortization | 913 | 826 | |||||
Amortization of acquired intangible assets | 382 | 399 | |||||
Reversal of uncertain tax positions | (31 | ) | — | ||||
Accretion on short-term marketable securities | (24 | ) | — | ||||
Inventory step-up and backlog amortization | 12 | 122 | |||||
Gain on debt extinguishment | — | (1,272 | ) | ||||
Discount accretion on convertible debt fair value | — | 69 | |||||
Changes in operating assets and liabilities, net of acquisition: | |||||||
Accounts receivable, net | 1,129 | 189 | |||||
Inventories | (76 | ) | 135 | ||||
Prepaid expenses and other current and long-term assets, net | (666 | ) | (2,378 | ) | |||
Accounts payable | 519 | 725 | |||||
Accrued current and long-term liabilities | (2,198 | ) | (3,828 | ) | |||
Income taxes payable | 251 | (19 | ) | ||||
Net cash used in operating activities | (2,034 | ) | (4,430 | ) | |||
Cash flows from investing activities: | |||||||
Proceeds from sale of patents | 4,250 | — | |||||
Purchases of short-term marketable securities | (3,417 | ) | — | ||||
Proceeds from maturities of short-term marketable securities | 2,950 | — | |||||
Purchases of property and equipment | (1,655 | ) | (150 | ) | |||
Purchases of licensed technology | (521 | ) | — | ||||
Payment associated with sale of patents | (345 | ) | — | ||||
Net cash provided by (used in) investing activities | 1,262 | (150 | ) | ||||
Cash flows from financing activities: | |||||||
Proceeds from issuance of common stock under employee equity incentive plans | 315 | 233 | |||||
Payments on asset financings | (141 | ) | (345 | ) | |||
Payments on convertible debt | — | (2,220 | ) | ||||
Net cash provided by (used in) financing activities | 174 | (2,332 | ) | ||||
Net decrease in cash and cash equivalents | (598 | ) | (6,912 | ) | |||
Cash and cash equivalents, beginning of period | 17,944 | 27,523 | |||||
Cash and cash equivalents, end of period | $ | 17,346 | $ | 20,611 | |||
Supplemental disclosure of cash flow information: | |||||||
Cash paid for income taxes, net of refunds received | $ | 192 | $ | 294 | |||
Cash paid during the period for interest | 29 | 256 | |||||
Non-cash investing and financing activities: | |||||||
Value of debt converted into shares | $ | — | $ | 2,644 |
Common Stock | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Shareholders' Equity | |||||||||||||||
2019 | Shares | Amount | ||||||||||||||||
Balance as of December 31, 2018 | 36,937,458 | $ | 428,903 | $ | 15 | $ | (384,095 | ) | $ | 44,823 | ||||||||
Stock issued under employee equity incentive plans | 605,911 | 315 | — | — | 315 | |||||||||||||
Stock-based compensation expense | — | 1,689 | — | — | 1,689 | |||||||||||||
Unrealized gain on available for sale securities | — | — | 4 | — | 4 | |||||||||||||
Net loss | — | — | — | (29 | ) | (29 | ) | |||||||||||
Balance as of March 31, 2019 | 37,543,369 | $ | 430,907 | $ | 19 | $ | (384,124 | ) | $ | 46,802 | ||||||||
2018 | ||||||||||||||||||
Balance as of December 31, 2017 | 34,651,087 | $ | 418,891 | $ | 20 | $ | (379,474 | ) | $ | 39,437 | ||||||||
Stock issued under employee equity incentive plans | 495,686 | 233 | — | — | 233 | |||||||||||||
Stock-based compensation expense | — | 1,200 | — | — | 1,200 | |||||||||||||
Debt conversion | 435,353 | 2,644 | — | — | 2,644 | |||||||||||||
Net loss | — | — | — | (598 | ) | (598 | ) | |||||||||||
Balance as of March 31, 2018 | 35,582,126 | $ | 422,968 | $ | 20 | $ | (380,072 | ) | $ | 42,916 |
March 31, 2019 | December 31, 2018 | ||||||
Accounts receivable, gross | $ | 5,891 | $ | 7,003 | |||
Less: allowance for doubtful accounts | (38 | ) | (21 | ) | |||
Accounts receivable, net | $ | 5,853 | $ | 6,982 |
Three Months Ended | |||||||
March 31, | |||||||
2019 | 2018 | ||||||
Balance at beginning of period | $ | 21 | $ | 47 | |||
Additions charged (reductions credited) | 17 | (2 | ) | ||||
Balance at end of period | $ | 38 | $ | 45 |
March 31, 2019 | December 31, 2018 | ||||||
Finished goods | $ | 1,578 | $ | 1,577 | |||
Work-in-process | 1,440 | 1,377 | |||||
Inventories | $ | 3,018 | $ | 2,954 |
March 31, 2019 | December 31, 2018 | ||||||
Gross carrying amount | $ | 23,019 | $ | 22,882 | |||
Less: accumulated depreciation and amortization | (17,610 | ) | (16,731 | ) | |||
Property and equipment, net | $ | 5,409 | $ | 6,151 |
March 31, 2019 | December 31, 2018 | ||||||
Developed technology | $ | 5,050 | $ | 5,050 | |||
Customer relationships | 1,270 | 1,270 | |||||
Backlog and tradename | 410 | 410 | |||||
6,730 | 6,730 | ||||||
Less: accumulated amortization | (2,904 | ) | (2,522 | ) | |||
Acquired intangible assets, net | $ | 3,826 | $ | 4,208 |
Nine months ending December 31: | |||
2019 | $ | 1,123 | |
Years ending December 31: | |||
2020 | 1,496 | ||
2021 | 1,117 | ||
2022 | 90 | ||
$ | 3,826 |
March 31, 2019 | December 31, 2018 | ||||||
Accrued interest payable | $ | 3,205 | $ | 3,079 | |||
Accrued payroll and related liabilities | 2,809 | 4,428 | |||||
Accrued royalties | 2,757 | 2,791 | |||||
Operating lease liabilities, current | 2,213 | — | |||||
Current portion of accrued liabilities for asset financings | 607 | 748 | |||||
Deferred revenue | 186 | 96 | |||||
Liability for warranty returns | 13 | 13 | |||||
Accrued costs related to restructuring | — | 200 | |||||
Other | 1,990 | 3,468 | |||||
Accrued liabilities and current portion of long-term liabilities | $ | 13,780 | $ | 14,823 |
Three Months Ended | |||||||
March 31, | |||||||
2019 | 2018 | ||||||
Deferred revenue: | |||||||
Balance at beginning of period | $ | 96 | $ | 418 | |||
Revenue deferred | 275 | 270 | |||||
Revenue recognized | (185 | ) | (346 | ) | |||
Balance at end of period | $ | 186 | $ | 342 | |||
Liability for warranty returns: | |||||||
Balance at beginning of period | $ | 13 | $ | 17 | |||
Charge-offs | — | (4 | ) | ||||
Provision | — | 2 | |||||
Balance at end of period | $ | 13 | $ | 15 |
Cost | Unrealized Gain (Loss) | Fair Value | |||||||||
Short-term marketable securities: | |||||||||||
As of March 31, 2019: | |||||||||||
Corporate debt securities | $ | 2,740 | $ | 3 | $ | 2,743 | |||||
Commercial paper | 1,983 | — | 1,983 | ||||||||
U.S. government treasury bills | 1,839 | 1 | 1,840 | ||||||||
$ | 6,562 | $ | 4 | $ | 6,566 | ||||||
As of December 31, 2018: | |||||||||||
Corporate debt securities | $ | 3,238 | $ | (2 | ) | $ | 3,236 | ||||
Commercial paper | 992 | — | 992 | ||||||||
U.S. government treasury bills | 1,841 | — | 1,841 | ||||||||
$ | 6,071 | $ | (2 | ) | $ | 6,069 |
Level 1: | Valuations based on quoted prices in active markets for identical assets and liabilities. |
Level 2: | Valuations based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. |
Level 3: | Valuations based on unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions. |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
As of March 31, 2019: | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents: | |||||||||||||||
Money market funds | $ | 9,038 | $ | — | $ | — | $ | 9,038 | |||||||
Short-term marketable securities: | |||||||||||||||
U.S. government treasury bills | 1,840 | — | — | 1,840 | |||||||||||
Corporate debt securities | — | 2,743 | — | 2,743 | |||||||||||
Commercial paper | — | 1,983 | — | 1,983 | |||||||||||
As of December 31, 2018: | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents: | |||||||||||||||
Money market funds | $ | 13,388 | $ | — | $ | — | $ | 13,388 | |||||||
Commercial paper | — | 250 | — | 250 | |||||||||||
Corporate debt securities | — | 249 | — | 249 | |||||||||||
Short-term marketable securities: | |||||||||||||||
U.S. government treasury bills | 1,841 | — | — | 1,841 | |||||||||||
Corporate debt securities | — | 3,236 | — | 3,236 | |||||||||||
Commercial paper | — | 992 | — | 992 |
Three Months Ended | |||||||
March 31, | |||||||
2019 | 2018 | ||||||
Operating expenses — restructuring: | |||||||
Employee severance and benefits | $ | — | $ | 19 | |||
Total restructuring expense | $ | — | $ | 19 |
Balance as of December 31, 2018 | Adjustment | Balance as of March 31, 2019 | |||||||||
Facility closure and consolidations | $ | 360 | $ | (360 | ) | $ | — | ||||
Accrued costs related to restructuring | $ | 360 | $ | (360 | ) | $ | — |
Three Months Ended | ||
March 31, 2019 | ||
Operating lease cost: | 629 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | 674 | |
Weighted average remaining lease term (in years): | 3.71 | |
Weighted average discount rate: | 5.75 | % |
Operating Lease Payments | |||
Nine months ending December 31, 2019 | $ | 1,847 | |
Years ending December 31: | |||
2020 | 1,878 | ||
2021 | 1,215 | ||
2022 | 756 | ||
2023 | 624 | ||
Thereafter | 513 | ||
Total operating lease payments | 6,833 | ||
Less imputed interest | (720 | ) | |
Total operating lease liabilities | $ | 6,113 |
Operating Leases | ||
2019 | 1,856 | |
2020 | 1,039 | |
2021 | 708 | |
2022 | 539 | |
2023 | 492 | |
2024 | 378 |
Three Months Ended | |||||||
March 31, | |||||||
2019 | 2018 | ||||||
IC sales | $ | 15,074 | $ | 14,556 | |||
Engineering services, license and other | 1,574 | 736 | |||||
Total revenues | $ | 16,648 | $ | 15,292 |
Three Months Ended | |||||||
March 31, | |||||||
2019 | 2018 | ||||||
Interest expense | $ | (166 | ) | $ | (288 | ) | |
Interest income | 100 | 57 | |||||
Gain on debt extinguishment | — | 1,272 | |||||
Discount accretion on convertible debt fair value | — | (69 | ) | ||||
Total interest income (expense) and other, net | $ | (66 | ) | $ | 972 |
Three Months Ended | |||||||
March 31, | |||||||
2019 | 2018 | ||||||
Net loss | $ | (29 | ) | $ | (598 | ) | |
Weighted average shares outstanding - basic and diluted | 37,247 | 35,183 | |||||
Net loss per share - basic and diluted | $ | (0.00 | ) | $ | (0.02 | ) |
Three Months Ended | |||||
March 31, | |||||
2019 | 2018 | ||||
Employee equity incentive plans | 3,265 | 3,423 |
Three Months Ended | |||||||
March 31, | |||||||
2019 | 2018 | ||||||
Japan | $ | 13,461 | $ | 13,344 | |||
China | 1,862 | 927 | |||||
United States | 714 | 590 | |||||
Taiwan | 518 | 170 | |||||
Korea | 60 | 211 | |||||
Europe | 33 | 50 | |||||
$ | 16,648 | $ | 15,292 |
Three Months Ended | |||||
March 31, | |||||
2019 | 2018 | ||||
Distributors: | |||||
All distributors | 27 | % | 37 | % | |
Distributor A | 22 | % | 22 | % | |
End customers: 1 | |||||
Top five end customers | 82 | % | 80 | % | |
End customer A | 56 | % | 53 | % | |
End customer B | 16 | % | 7 | % |
1 | End customers include customers who purchase directly from us, as well as customers who purchase our products indirectly through distributors. |
March 31, 2019 | December 31, 2018 | ||||
Account X | 52 | % | 34 | % | |
Account Y | 23 | % | 54 | % |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
Revenue, net | $ | 16,648 | $ | 15,292 | $ | 1,356 | 9 | % |
Three Months Ended March 31, | |||||||||||||
2019 | % of revenue | 2018 | % of revenue | ||||||||||
Direct product costs and related overhead 1 | $ | 7,794 | 47 | % | $ | 7,016 | 46 | % | |||||
Amortization of acquired intangible assets | 298 | 2 | 298 | 2 | |||||||||
Stock-based compensation | 95 | 1 | 66 | 0 | |||||||||
Inventory step-up and backlog amortization | 12 | 0 | 122 | 1 | |||||||||
Inventory charges 2 | (23 | ) | 0 | (12 | ) | 0 | |||||||
Total cost of revenue | $ | 8,176 | 49 | % | $ | 7,490 | 49 | % | |||||
Gross profit | $ | 8,472 | 51 | % | $ | 7,802 | 51 | % |
1 | Includes purchased materials, assembly, test, labor, employee benefits and royalties. |
2 | Includes charges to reduce inventory to lower of cost or market and a benefit for sales of previously written down inventory. |
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
Research and development | $ | 6,472 | $ | 4,463 | $ | 2,009 | 45 | % |
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2019 | 2018 | $ Change | % Change | |||||||||||
Selling, general and administrative | $ | 5,460 | $ | 4,614 | $ | 846 | 18 | % |
Three Months Ended | |||||||
March 31, | |||||||
2019 | 2018 | ||||||
Employee severance and benefits | $ | — | $ | 19 | |||
Total restructuring expense | $ | — | $ | 19 | |||
Included in operating expenses | $ | — | $ | 19 |
Payments Due By Period | |||||||||||||||||||
Contractual Obligation | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | ||||||||||||||
Estimated purchase commitments to contract manufacturers | $ | 7,107 | $ | 7,107 | $ | — | $ | — | $ | — | |||||||||
Operating leases | 6,833 | 2,511 | 2,728 | 1,240 | 354 | ||||||||||||||
Other purchase obligations and commitments | 1,310 | 262 | 524 | 524 | — | ||||||||||||||
Payments on accrued balances related to asset financings | 832 | 659 | 173 | — | — | ||||||||||||||
Total 1 | $ | 16,082 | $ | 10,539 | $ | 3,425 | $ | 1,764 | $ | 354 |
1 | We are unable to reliably estimate the timing of future payments related to uncertain tax positions and repatriation of foreign earnings; therefore, $2.3 million of income taxes payable has been excluded from the table above. |
Item 4. | Controls and Procedures. |
Item 1A. | Risk Factors. |
• | difficulties in managing international distributors and manufacturers due to varying time zones, languages and business customs; |
• | compliance with U.S. laws affecting operations outside of the U.S., such as the Foreign Corrupt Practices Act; |
• | reduced or limited protection of our IP, particularly in software, which is more prone to design piracy; |
• | difficulties in collecting outstanding accounts receivable balances; |
• | changes in tax rates, tax laws and the interpretation of those laws; |
• | difficulties regarding timing and availability of export and import licenses; |
• | ensuring that we obtain complete and accurate information from our Asian operations to make proper disclosures in the United States; |
• | political and economic instability; |
• | difficulties in maintaining sales representatives outside of the U.S. that are knowledgeable about our industry and products; |
• | changes in the regulatory environment in China, Japan, Taiwan and Korea that may significantly impact purchases of our products by our customers or our customers’ sales of their own products; |
• | outbreaks of health epidemics in China or other parts of Asia; |
• | imposition of new tariffs, quotas, trade barriers and similar trade restrictions on our sales; |
• | varying employment and labor laws; and |
• | greater vulnerability to infrastructure and labor disruptions than in established markets. |
• | reduced end user demand due to the economic impact of any natural disaster; |
• | a disruption to the global supply chain for products manufactured in areas affected by natural disasters that are included in products purchased either by us or by our customers; |
• | an increase in the cost of products that we purchase due to reduced supply; and |
• | other unforeseen impacts as a result of the uncertainty resulting from a natural disaster. |
• | difficulties in hiring and retaining necessary technical personnel; |
• | difficulties in reallocating engineering resources and overcoming resource limitations; |
• | difficulties with contract manufacturers; |
• | changes to product specifications and customer requirements; |
• | changes to market or competitive product requirements; and |
• | unanticipated engineering complexities. |
• | stop selling products using technology that contains the allegedly infringing IP; |
• | attempt to obtain a license to the relevant IP, which may not be available on terms that are acceptable to us or at all; |
• | attempt to redesign those products that contain the allegedly infringing IP; or |
• | pay damages for past infringement claims that are determined to be valid or which are arrived at in settlement of such litigation or threatened litigation. |
• | actual or anticipated fluctuations in our operating results; |
• | changes in or failure to meet expectations as to our future financial performance; |
• | changes in or failure to meet financial estimates of securities analysts; |
• | announcements by us or our competitors of technological innovations, design wins, contracts, standards, acquisitions or divestitures; |
• | Failure to realize the anticipated benefits of the acquisition of ViXS; |
• | the operating and stock price performance of other comparable companies; |
• | issuances or proposed issuances of equity, debt or other securities by us, or sales of securities by our security holders; and |
• | changes in market valuations of other technology companies. |
• | if the number of directors is fixed by the board at eight or more, our board of directors is divided into three classes serving staggered terms, which would make it more difficult for a group of shareholders to quickly replace a majority of directors; |
• | our board of directors is authorized, without prior shareholder approval, to create and issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to acquire us or to effect a change of control, commonly referred to as "blank check" preferred stock; |
• | members of our board of directors can be removed only for cause and at a meeting of shareholders called expressly for that purpose, by the vote of 75 percent of the votes then entitled to be cast for the election of directors; |
• | our board of directors may alter our bylaws without obtaining shareholder approval; and shareholders are required to provide advance notice for nominations for election to the board of directors or for proposing matters to be acted upon at a shareholder meeting; |
• | Oregon law permits our board to consider other factors beyond stockholder value in evaluating any acquisition offer (so-called "expanded constituency" provisions); and |
• | a supermajority (67%) vote of shareholders is required to approve certain fundamental transactions. |
Item 6. | Exhibits. |
3.1 | ||
3.2 | ||
3.3 | ||
10.1 | ||
10.2 | ||
10.3 | ||
31.1 | ||
31.2 | ||
32.1* | ||
32.2* | ||
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be "filed" for under the Securities Act of 1933, as amended (the “Securities Act”) or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing, except to the extent specifically stated in such filing. |
PIXELWORKS, INC. | ||
Dated: | May 10, 2019 | /s/ Steven L. Moore |
Steven L. Moore Vice President, Chief Financial Officer, Secretary and Treasurer (Duly Authorized Officer and Principal Accounting and Principal Financial Officer) |
1. | As-Is. Tenant accepts the Premises in as-is condition with the following work provided by the Landlord within 30 days of the effective date of the Base Rent Adjustment is Section 3 below, January 1, 2020: |
a. | Professionally shampoo the premises carpet. Landlord will professionally shampoo the premises carpet annually through the Term of the Lease. |
b. | Touch up paint within the Premises. |
2. | Section I, Term of Lease: This Section is hereby amended such that the current term of the Lease will continue through December 31, 2024, regardless of when the actual Commencement Date occurred. The definition of the term “Expiration Date” shall hereby mean and refer to December 31, 2024. |
3. | Section K, Base Rent Adjustment: Effective January 1, 2020, Section 1.1(K) of the Lease is hereby deleted and replaced with the following: |
4. | Section L, Base Year: The base year of the Lease is modified as follows: |
5. | Section O, Security Deposit: |
6. | Extension Option: Tenant shall have one (1) option to extend the lease for a three (3) year period. The rental rate for the option period shall be at fair market rates. Tenant shall notify Landlord of its intention to extend the lease no later than six (6) months prior to the end of the then-current lease term. All other terms and conditions in Section 5 of the First Amendment to Lease, dated July 1, 2013 will remain in effect. |
LANDLORD | TENANT | |
Kalberer Company | Pixelworks, Inc. | |
By: /s/ Patrick Gortmaker | By: /s/ Steven Moore | |
Its: President | Its: VP & CFO | |
Date: January 31, 2019 | Date: January 30, 2019 |
1. | I have reviewed this quarterly report on Form 10-Q of Pixelworks, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 10, 2019 | By: | /s/ Todd A. DeBonis |
Todd A. DeBonis | |||
President and Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Pixelworks, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 10, 2019 | By: | /s/ Steven L. Moore |
Steven L. Moore | |||
Vice President, Chief Financial | |||
Officer, Secretary and Treasurer (Principal Financial Officer) |
1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Todd A. DeBonis |
Todd A. DeBonis | |
President and Chief Executive Officer (Principal Executive Officer) | |
Date: | May 10, 2019 |
1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Steven L. Moore |
Steven L. Moore | |
Vice President, Chief Financial | |
Officer, Secretary and Treasurer (Principal Financial Officer) | |
Date: | May 10, 2019 |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
May 03, 2019 |
|
Entity Information [Line Items] | ||
Entity Registrant Name | Pixelworks, Inc. | |
Entity Central Index Key | 0001040161 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 37,543,369 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
||||||||||
Income Statement [Abstract] | |||||||||||
Revenue, net | $ 16,648 | $ 15,292 | |||||||||
Cost of revenue | [1] | 8,176 | 7,490 | ||||||||
Gross profit | 8,472 | 7,802 | |||||||||
Operating expenses: | |||||||||||
Research and development | [2] | 6,472 | 4,463 | ||||||||
Selling, general and administrative | [3] | 5,460 | 4,614 | ||||||||
Restructuring | 0 | 19 | |||||||||
Total operating expenses | 11,932 | 9,096 | |||||||||
Loss from operations | (3,460) | (1,294) | |||||||||
Gain on sale of patents | 3,905 | 0 | |||||||||
Interest income (expense) and other, net | [4] | (66) | 972 | ||||||||
Total other income, net | 3,839 | 972 | |||||||||
Income (loss) before income taxes | 379 | (322) | |||||||||
Provision for income taxes | 408 | 276 | |||||||||
Net loss | $ (29) | $ (598) | |||||||||
Net loss per share - basic and diluted | $ 0.00 | $ (0.02) | |||||||||
Weighted average shares outstanding - basic and diluted | 37,247 | 35,183 | |||||||||
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Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Stock-based compensation | $ (1,689) | $ (1,200) |
Amortization of acquired intangible assets | 382 | 399 |
Inventory step-up and backlog amortization | 12 | 122 |
Gain on debt extinguishment | 0 | 1,272 |
Discount accretion on convertible debt fair value | 0 | 69 |
Cost of revenue | ||
Stock-based compensation | 95 | 66 |
Inventory step-up and backlog amortization | 12 | 122 |
Cost of revenue | Acquired intangible assets | ||
Amortization of acquired intangible assets | 298 | 298 |
Research and development | ||
Stock-based compensation | 661 | 595 |
Selling, general and administrative | ||
Stock-based compensation | 933 | 539 |
Amortization of acquired intangible assets | 84 | 101 |
Interest expense and other, net | ||
Gain on debt extinguishment | 0 | (1,272) |
Discount accretion on convertible debt fair value | $ 0 | $ 69 |
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Statement of Other Comprehensive Income [Abstract] | ||
Net loss | $ (29) | $ (598) |
Other comprehensive loss: | ||
Unrealized gain on available-for-sale securities | 4 | 0 |
Total comprehensive loss | $ (25) | $ (598) |
Basis of Presentation |
3 Months Ended |
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Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION Nature of Business Pixelworks designs, develops and markets visual display processing semiconductors, intellectual property cores, software and custom application specific integrated circuits ("ASIC") solutions for high-quality energy efficient video applications. In addition, we offer a suite of solutions for advanced media processing and the efficient delivery and streaming of video. We enable worldwide manufacturers to offer leading-edge consumer electronics and professional display products, as well as video delivery and streaming solutions for content service providers. Our core visual display processing technology intelligently processes digital images and video from a variety of sources and optimizes the content for a superior viewing experience. Pixelworks’ video coding technology reduces storage requirements, significantly reduces bandwidth constraint issues and converts content between multiple formats to enable seamless delivery of video, including over-the-air (OTA) streaming, while also maintaining end-to-end content security. The rapid growth in video-capable consumer devices, especially mobile, has increased the demand for visual display processing and video delivery technology in recent years. Our technologies can be applied to a wide range of devices from large-screen projectors to low-power mobile tablets, smartphones, high-quality video infrastructure equipment and streaming devices. Our products are architected and optimized for power, cost, bandwidth, and overall system performance, according to the requirements of the specific application. Our primary target markets include digital projection systems, tablets, smartphones, and OTA streaming devices. As of March 31, 2019, we had an intellectual property portfolio of 353 patents related to the visual display of digital image data. We focus our research and development efforts on developing video algorithms that improve quality, and architectures that reduce system power, cost, bandwidth and increase overall system performance and device functionality. We seek to expand our technology portfolio through internal development and co-development with business partners, and we continually evaluate acquisition opportunities and other ways to leverage our technology into other high-value markets. Pixelworks was founded in 1997 and is incorporated under the laws of the state of Oregon. On August 2, 2017, we acquired ViXS Systems, Inc., a corporation organized in Canada (“ViXS”). Condensed Consolidated Financial Statements The financial information included herein for the three month periods ended March 31, 2019 and 2018 is prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and is unaudited. Such information reflects all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary for a fair presentation of the Company's condensed consolidated financial statements for these interim periods. The financial information as of December 31, 2018 is derived from our audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2018, included in Item 8 of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 13, 2019, and should be read in conjunction with such consolidated financial statements. The results of operations for the three month period ended March 31, 2019 are not necessarily indicative of the results expected for future periods or for the entire fiscal year ending December 31, 2019. Recent Accounting Pronouncements In November 2018, the FASB issued Accounting Standards Update No. 2018-18, Collaborative Arrangements: Clarifying the Interaction Between Topic 808 and Topic 606 ("ASU 2018-18"). ASU 2018-18 requires transactions in collaborative arrangements to be accounted for under ASC 606 if the counter-party is a customer for a good or service (or bundle of goods and services) that is a distinct unit of account. The amendments also preclude entities from presenting consideration from transactions with a collaborator that is not a customer together with revenue recognized from contracts with customers. ASU 2018-18 is effective for fiscal years beginning after December 15, 2019, and interim periods in those fiscal years. We are currently assessing the impact of this update on our financial position, results of operations or cash flows. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASC 842"), which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model ("ROU") that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. We adopted the new standard on January 1, 2019 and used the effective date as our date of initial application under the modified retrospective approach. Under the effective date method, financial information and disclosures prior to January 1, 2019 are not required to be restated. We elected the “practical expedient package,” which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. We elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for all of our leases. The adoption of this standard had a material effect on our condensed consolidated balance sheets but did not have a material impact on our condensed consolidated statements of operations or cash flows. The most significant impact relates to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our office operating leases; and (2) providing significant new disclosures about our leasing activities. Upon adoption, we recognized operating lease liabilities of $6,847 based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. We also recognized ROU assets of $6,224 which represents the operating lease liability adjusted for accrued rent and cease-use liabilities. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect amounts reported in the financial statements and accompanying notes. Our significant estimates and judgments include those related to revenue recognition, valuation of excess and obsolete inventory, lives and recoverability of equipment and other long-lived assets, valuation of goodwill, valuation of share-based payments, income taxes, litigation and other contingencies. The actual results experienced could differ materially from our estimates. |
Balance Sheet Components |
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Components | BALANCE SHEET COMPONENTS Accounts Receivable, Net Accounts receivable are contract assets that arise from the performance of our performance obligation pursuant to our contracts with our customers and represent our unconditional right to payment for the satisfaction of our performance obligations. They are recorded at invoiced amount and do not bear interest when recorded or accrue interest when past due. Accounts receivable are stated net of an allowance for doubtful accounts, which is maintained for estimated losses that may result from the inability of our customers to make required payments. Accounts receivable consists of the following:
The following is the change in our allowance for doubtful accounts:
Inventories Inventories consist of finished goods and work-in-process, and are stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) or market (net realizable value). Inventories consist of the following:
Property and Equipment, Net Property and equipment consists of the following:
Acquired Intangible Assets, Net In connection with the acquisition of ViXS ("the Acquisition"), we recorded certain identifiable intangible assets. Acquired intangible assets resulting from this transaction were assigned to Pixelworks, Inc., and consist of the following:
Developed technology and customer relationships are amortized over a useful life of 3 to 5 years. Backlog was fully amortized as of September 30, 2018 and tradename was fully amortized as of March 31, 2019. Amortization expense for intangible assets was $382 and $399 for the three months ended March 31, 2019 and 2018, respectively, $298 was included in cost of revenue for both the three month periods ended March 31, 2019 and 2018 and $84 and $101 were included in selling, general and administrative for the three months ended March 31, 2019 and 2018, respectively, in the condensed consolidated statements of operations. As of March 31, 2019, future estimated amortization expense is as follows:
Acquired intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Conditions that would trigger an impairment assessment include, but are not limited to, past, current, or expected cash flow or operating losses associated with the asset. There were no such triggering events requiring an impairment assessment of other intangible assets during the three months ended March 31, 2019. Goodwill Goodwill resulted from the Acquisition, whereby we recorded goodwill of $18,407. Goodwill is not amortized; however, we review goodwill for impairment annually and whenever events or changes in circumstances indicate that the fair value of the reporting unit may be less than it's carrying value. Conditions that would trigger an impairment assessment include, but are not limited to, a significant adverse change in our business climate or a current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continued losses or adverse changes in legal factors, regulation or business environment. There were no such triggering events requiring a goodwill impairment assessment during the three months ended March 31, 2019. We perform our annual impairment assessment for goodwill on November 30 of each year. Accrued Liabilities and Current Portion of Long-Term Liabilities Accrued liabilities and current portion of long-term liabilities consist of the following:
Deferred revenues are contract liabilities that arise when cash payments are received or due in advance of the satisfaction of our performance obligations. Any increase in deferred revenues is driven by cash payments received or due in advance of satisfying our performance obligation pursuant to the contract with the customer. Any decrease in deferred revenues is due to the recognition of revenue related to satisfying our performance obligation. The changes in deferred revenue and the liability for warranty returns are as follows:
Short-Term Line of Credit On December 21, 2010, we entered into a Loan and Security Agreement with Silicon Valley Bank (the "Bank"), which was amended on December 14, 2012, December 4, 2013, December 18, 2015, December 15, 2016, July 21, 2017, December 21, 2017 and December 18, 2018 (as amended, the "Revolving Loan Agreement"). The Revolving Loan Agreement provides a secured working capital-based revolving line of credit (the "Revolving Line") in an aggregate amount of up to the lesser of (i) $10,000, or (ii) $1,000 plus 80% of eligible domestic accounts receivable and certain foreign accounts receivable. The Revolving Line has a maturity date of December 27, 2019. In addition, the Revolving Loan Agreement provides for non-formula advances of up to $10,000 which may be made solely during the last five business days of any fiscal month or quarter and which must be repaid by us on or before the fifth business day after the applicable fiscal month or quarter end. Due to their repayment terms, non-formula advances do not provide us with usable liquidity. The Revolving Loan Agreement, as amended, contains customary affirmative and negative covenants as well as customary events of default. The occurrence of an event of default could result in the acceleration of our obligations under the Revolving Loan Agreement, as amended, and an increase to the applicable interest rate, and would permit the Bank to exercise remedies with respect to its security interest. As of March 31, 2019, we were in compliance with all of the terms of the Revolving Loan Agreement, as amended. As of March 31, 2019 and December 31, 2018, we had no outstanding borrowings under the Revolving Line. |
Convertible Debt |
3 Months Ended |
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Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Debt | CONVERTIBLE DEBT As part of the Acquisition, we assumed secured convertible debt and as a result of the change in control of ViXS, the convertible debt holders had a right to put the debt to the Company. A majority of the holders agreed to waive their right to accelerate and to accept 0.04836 share of our common stock for each share of ViXS common stock the holder would have been entitled to receive upon the exercise of the conversion option. On January 12, 2018, the Company provided notice to the holders of the convertible debt of its election to redeem the convertible debt in full as of March 13, 2018. Subsequently, certain holders of the convertible debt elected to convert their convertible debt into shares of common stock of Pixelworks pursuant to the terms of the convertible debt. This resulted in the issuance of 435,353 shares of our common stock which was valued at an aggregate of $2,644. We paid an aggregate of CAD $2,875 (equivalent to $2,220 USD) to redeem the convertible debt of those holders who did not elect to convert their convertible debt. The extinguishment of the debt during the first quarter of 2018 resulted in a gain of $1,272 which is recorded in interest income (expense) and other, net within our condensed consolidated statement of operations. For the three months ended March 31, 2018, interest expense consisted of $66 related to the contractual rate of interest and $69 related to accretion of the discount. During the three months ended March 31, 2018, we recorded net foreign currency losses of approximately $(15) in other expense. Because the convertible debt was redeemed or paid in full as of March 31, 2018, there were no further expenses related to the convertible debt after that date. |
Marketable Securities and Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS Marketable Securities As of March 31, 2019 and December 31, 2018, all of our marketable securities are classified as available-for-sale and consist of the following:
Unrealized holding gains and losses are recorded in accumulated other comprehensive income, a component of shareholders’ equity, in the condensed consolidated balance sheets. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Three levels of inputs may be used to measure fair value:
The following table presents information about our assets measured at fair value on a recurring basis in the condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018:
We primarily use the market approach to determine the fair value of our financial assets. The fair value of our current assets and liabilities, including accounts receivable and accounts payable approximates the carrying value due to the short-term nature of these balances. We have currently chosen not to elect the fair value option for any items that are not already required to be measured at fair value in accordance with U.S. GAAP. |
Restructurings |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructurings | RESTRUCTURINGS In September 2017, in connection with the Acquisition, we executed a restructuring plan to secure significant synergies between ViXS and Pixelworks. The plan included an approximately 15% reduction in workforce, primarily in the area of development, however, it also impacted administration and sales. Total restructuring expense included in our statement of operations for the three month periods ended March 31, 2019 and 2018 is comprised of the following:
During the three months ended March 31, 2019, we did not incur any restructuring expenses. During the three months ended March 31, 2018, we recorded $19 in restructuring expense related to the September 2017 restructuring plan. The following is a rollforward of the accrued liabilities related to restructuring for the three month period ended March 31, 2019:
The adjustment to accrued costs related to restructuring was due to adjusting the ROU asset associated with cease-use liabilities upon the adoption of ASC 842 and did not result in any adjustment to restructuring expense. |
Research and Development |
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Mar. 31, 2019 | |
Research and Development [Abstract] | |
Research and Development | RESEARCH AND DEVELOPMENT During the first quarter of 2017, we entered into a best efforts co-development agreement (the "Co-Development Agreement") with a customer to defray a portion of the research and development expenses that would be incurred in connection with our development of an integrated circuit product to be sold exclusively to the customer. Under the Co-Development Agreement, we retain ownership of any modifications or improvements to our pre-existing intellectual property and may use such improvements in products sold to other customers. Under the Co-development Agreement, $4,000 was payable by the customer within 60 days of the date of the agreement and two additional payments of $2,000 were each payable upon completion of certain development milestones. As amounts became due and payable, they were offset against research and development expense on a pro rata basis. We recognized offsets to research and development expense of $4,000 related to the Co-development Agreement during each of 2018 and 2017. All milestones under the Co-development Agreement were completed as of December 31, 2018. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASES On January 1, 2019, we adopted the new requirements of ASC 842, under the modified retrospective approach, using the effective date method. Under the effective date method, financial information and disclosures prior to January 1, 2019 are not required to be restated. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Operating lease ROU assets also exclude lease incentives received. For purposes of calculating operating lease liabilities, lease terms may be deemed to include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. We have operating leases for office buildings and one vehicle. Our leases have remaining lease terms of 1 year to 6 years. Supplemental information related to lease expense and valuation of the ROU assets and lease liabilities was as follows:
Future minimum lease payments under non-cancellable leases as of March 31, 2019 were as follows:
As of March 31, 2019, the Company had no operating lease liabilities that had not commenced. As required, the following disclosure is provided for periods prior to adoption of ASC 842. Minimum lease commitments as of December 31, 2018 that had initial or remaining lease terms in excess of one year were as follows:
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Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | REVENUE Revenue is recognized when control of the promised good or service is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Our principal revenue generating activities consist of the following: Product Sales - We sell integrated circuit products, also known as “chips” or “ICs”, based upon a customer purchase order, which includes a fixed price per unit. We have elected to account for shipping and handling as activities to fulfill the promise to transfer the goods, and not evaluate whether these activities are promised services to the customer. We generally satisfy our single performance obligation upon shipment of the goods to the customer and recognize revenue at a point in time upon shipment of the underlying product. Our shipments are subject to limited return rights subject to our limited warranty for our products sold. In addition, we may provide other credits to certain customers pursuant to price protection and stock rotation rights, all of which are considered variable consideration when estimating the amount of revenue to recognize. We use the “most likely amount” method to determine the amount of consideration to which we are entitled. Our estimate of variable consideration is reassessed at the end of each reporting period based on changes in facts and circumstances. Historically, returns and credits have not been material. Engineering Services - We enter into contracts for professional engineering services that include software development and customization. We identify each performance obligation in our engineering services agreements (“ESAs”) at contract inception. The ESA generally includes project deliverables specified by the customer. The performance obligations in the ESA are generally combined into one deliverable, with the pricing for services stated at a fixed amount. Services provided under the ESA generally result in the transfer of control over time. We recognize revenue on ESAs based on the proportion of labor hours expended to the total hours expected to complete the contract performance obligation. ESAs could include substantive customer acceptance provisions. In ESAs that include substantive customer acceptance provisions, we recognize revenue upon customer acceptance. License Revenue - On occasion, we derive revenue from the license of our internally developed intellectual property ("IP"). IP licensing agreements that we enter into generally provide licensees the right to incorporate our IP components in their products with terms and conditions that vary by licensee. Fees under these agreements generally include license fees relating to our IP and support service fees, resulting in two performance obligations. We evaluate each performance obligation, which generally results in the transfer of control at a point in time for the license fee and over time for support services. Other - From time-to-time, we enter into arrangements for other revenue generating activities, such as providing technical support services to customers through technical support agreements. In each circumstance, we evaluate such arrangements for our performance obligations which generally results in the transfer of control for such services over time. Historically, such arrangements have not been material to our operating results. The following table provides information about disaggregated revenue based on the preceding categories for the three months ended March 31, 2019 and 2018:
For segment information, including revenue by geographic region, see "Note 12: Segment Information". Our contract balances include accounts receivable, deferred revenue and our liability for warranty returns. For information concerning these contract balances, see "Note 2: Balance Sheet Components". Payment terms and conditions for goods and services provided vary by contract; however, payment is generally required within 30 to 60 days of invoicing. We have not identified any material costs incurred associated with obtaining a contract with a customer which would meet the criteria to be capitalized, therefore, these costs are expensed as incurred. The aggregate amount of the transaction price allocated to unsatisfied performance obligations with an original expected duration of greater than one year is $360, which we expect to recognize ratably over three years. |
Interest Income (Expense) and Other, Net |
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Interest Income (Expense) and Other, Net | INTEREST INCOME (EXPENSE) AND OTHER, NET Interest income (expense) and other, consists of the following:
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Income Taxes |
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Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Incomes Taxes | INCOME TAXES The provision for income taxes during the 2019 and 2018 periods is primarily comprised of current and deferred tax expense in profitable cost-plus foreign jurisdictions, accruals for tax contingencies in foreign jurisdictions and benefits for the reversal of previously recorded foreign tax contingencies due to the expiration of the applicable statutes of limitation. We recorded a benefit for the reversal of previously recorded foreign tax contingencies of $31 and $0 during the first three months of 2019 and 2018, respectively. As we do not believe that it is more likely than not that we will realize a benefit from our U.S. net deferred tax assets, including our U.S. net operating losses, we continue to provide a full valuation allowance against essentially all of those assets, therefore, we do not incur significant U.S. income tax expense or benefit. We have not recorded a valuation allowance against our other foreign net deferred tax assets, with the exception of Canada, as we believe that it is more likely than not that we will realize a benefit from those assets. As of March 31, 2019 and December 31, 2018, the amount of our uncertain tax positions was a liability of $1,669 and $1,661, respectively, as well as a contra deferred tax asset of $1,039 and $925, respectively. A number of years may elapse before an uncertain tax position is resolved by settlement or statute of limitation. Settlement of any particular position could require the use of cash. If the uncertain tax positions we have accrued for are sustained by the taxing authorities in our favor, the reduction of the liability will reduce our effective tax rate. We reasonably expect reductions in the liability for unrecognized tax benefits and interest and penalties of approximately $110 within the next twelve months due to the expiration of statutes of limitation in foreign jurisdictions. We recognize interest and penalties related to uncertain tax positions in income tax expense in our condensed consolidated statements of operations. |
Earnings Per Share |
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Earnings Per Share | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data):
The following shares were excluded from the calculation of diluted net loss per share as their effect would have been anti-dilutive (in thousands):
Potentially dilutive common shares from employee equity incentive plans are determined by applying the treasury stock method to the assumed exercise of outstanding stock options, the assumed vesting of outstanding restricted stock units, and the assumed issuance of common stock under the employee stock purchase plan. |
Segment Information |
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Segment Information | SEGMENT INFORMATION We function as a single operating segment: the design and development of integrated circuits for use in electronic display devices. The majority of our assets are located in the United States. Geographic Information Revenue by geographic region, is as follows:
Significant Customers The percentage of revenue attributable to our distributors, top five end customers, and individual distributors or end customers that represented 10% or more of revenue in at least one of the periods presented, is as follows:
The following accounts represented 10% or more of total accounts receivable in at least one of the periods presented:
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Risks and Uncertainties |
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Mar. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties | RISKS AND UNCERTAINTIES Concentration of Suppliers We do not own or operate a semiconductor fabrication facility and do not have the resources to manufacture our products internally. We rely on a limited number of foundries and assembly and test vendors to produce all of our wafers and for completion of finished products. We do not have any long-term agreements with any of these suppliers. In light of these dependencies, it is reasonably possible that failure to perform by one of these suppliers could have a severe impact on our results of operations. Additionally, the concentration of these vendors within Taiwan and the People’s Republic of China increases our risk of supply disruption due to natural disasters, economic instability, political unrest or other regional disturbances. Risk of Technological Change The markets in which we compete, or seek to compete, are subject to rapid technological change, frequent new product introductions, changing customer requirements for new products and features, and evolving industry standards. The introduction of new technologies and the emergence of new industry standards could render our products less desirable or obsolete, which could harm our business. Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash equivalents and accounts receivable. We limit our exposure to credit risk associated with cash equivalent balances by holding our funds in high quality, highly liquid money market accounts. We limit our exposure to credit risk associated with accounts receivable by carefully evaluating creditworthiness before offering terms to customers. |
Commitments and Contingencies |
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Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Indemnifications Certain of our agreements include indemnification provisions for claims from third-parties relating to our intellectual property. It is not possible for us to predict the maximum potential amount of future payments or indemnification costs under these or similar agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. We have not made any payments under these agreements in the past, and as of March 31, 2019, we have not incurred any material liabilities arising from these indemnification obligations. In the future, however, such obligations could materially impact our results of operations. Legal Proceedings We are subject to legal matters that arise from time to time in the ordinary course of our business. Although we currently believe that resolving such matters, individually or in the aggregate, will not have a material adverse effect on our financial position, our results of operations, or our cash flows, these matters are subject to inherent uncertainties and our view of these matters may change in the future. Other Contractual Obligation As part of the Acquisition, we acquired debt associated with an agreement with the Government of Canada called Technology Partnerships Canada ("TPC"). As part of the TPC agreement, ViXS Systems Inc. was provided funding to assist in research and development expenses of which a portion was later required to be repaid because the conditions for repayment were met. The scheduled payments are made on a quarterly basis and end in January 2024. As of March 31, 2019, $467 is included in accrued liabilities and current portion of long-term liabilities in our consolidated balance sheet and $541 is included in long-term liabilities, net of current portion in our consolidated balance sheet. |
Basis of Presentation (Policies) |
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Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Consolidated Financial Statements | Condensed Consolidated Financial Statements The financial information included herein for the three month periods ended March 31, 2019 and 2018 is prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and is unaudited. Such information reflects all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary for a fair presentation of the Company's condensed consolidated financial statements for these interim periods. The financial information as of December 31, 2018 is derived from our audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2018, included in Item 8 of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 13, 2019, and should be read in conjunction with such consolidated financial statements. The results of operations for the three month period ended March 31, 2019 are not necessarily indicative of the results expected for future periods or for the entire fiscal year ending December 31, 2019. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2018, the FASB issued Accounting Standards Update No. 2018-18, Collaborative Arrangements: Clarifying the Interaction Between Topic 808 and Topic 606 ("ASU 2018-18"). ASU 2018-18 requires transactions in collaborative arrangements to be accounted for under ASC 606 if the counter-party is a customer for a good or service (or bundle of goods and services) that is a distinct unit of account. The amendments also preclude entities from presenting consideration from transactions with a collaborator that is not a customer together with revenue recognized from contracts with customers. ASU 2018-18 is effective for fiscal years beginning after December 15, 2019, and interim periods in those fiscal years. We are currently assessing the impact of this update on our financial position, results of operations or cash flows. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASC 842"), which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model ("ROU") that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. We adopted the new standard on January 1, 2019 and used the effective date as our date of initial application under the modified retrospective approach. Under the effective date method, financial information and disclosures prior to January 1, 2019 are not required to be restated. We elected the “practical expedient package,” which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. We elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for all of our leases. The adoption of this standard had a material effect on our condensed consolidated balance sheets but did not have a material impact on our condensed consolidated statements of operations or cash flows. The most significant impact relates to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our office operating leases; and (2) providing significant new disclosures about our leasing activities. Upon adoption, we recognized operating lease liabilities of $6,847 based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. We also recognized ROU assets of $6,224 which represents the operating lease liability adjusted for accrued rent and cease-use liabilities. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect amounts reported in the financial statements and accompanying notes. Our significant estimates and judgments include those related to revenue recognition, valuation of excess and obsolete inventory, lives and recoverability of equipment and other long-lived assets, valuation of goodwill, valuation of share-based payments, income taxes, litigation and other contingencies. The actual results experienced could differ materially from our estimates. |
Receivables, Policy | Accounts receivable are contract assets that arise from the performance of our performance obligation pursuant to our contracts with our customers and represent our unconditional right to payment for the satisfaction of our performance obligations. They are recorded at invoiced amount and do not bear interest when recorded or accrue interest when past due. Accounts receivable are stated net of an allowance for doubtful accounts, which is maintained for estimated losses that may result from the inability of our customers to make required payments. |
Inventory, Policy | Inventories consist of finished goods and work-in-process, and are stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) or market (net realizable value). |
Co-Development Arrangements, Policy | As amounts became due and payable, they were offset against research and development expense on a pro rata basis. |
Balance Sheet Components (Tables) |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable, Net | Accounts receivable consists of the following:
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Allowance for Doubtful Accounts | The following is the change in our allowance for doubtful accounts:
|
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Inventories | Inventories consist of the following:
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Property and Equipment, Net | Property and equipment consists of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired Intangible Assets, Net | Acquired intangible assets resulting from this transaction were assigned to Pixelworks, Inc., and consist of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Amortization Expense | As of March 31, 2019, future estimated amortization expense is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities and Current Portion of Long-Term Liabilities | Accrued liabilities and current portion of long-term liabilities consist of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Revenue & Liability for Warranty Returns | The changes in deferred revenue and the liability for warranty returns are as follows:
|
Marketable Securities and Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring and Nonrecurring Basis | As of March 31, 2019 and December 31, 2018, all of our marketable securities are classified as available-for-sale and consist of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents information about our assets measured at fair value on a recurring basis in the condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018:
|
Restructurings (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Expense by Components | Total restructuring expense included in our statement of operations for the three month periods ended March 31, 2019 and 2018 is comprised of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Restructuring Liabilities | The following is a rollforward of the accrued liabilities related to restructuring for the three month period ended March 31, 2019:
|
Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Information Related to Leases | Supplemental information related to lease expense and valuation of the ROU assets and lease liabilities was as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Payments Under Non-cancellable Leases | Future minimum lease payments under non-cancellable leases as of March 31, 2019 were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Lease Payments Under Previous Guidance | December 31, 2018 that had initial or remaining lease terms in excess of one year were as follows:
|
Revenue (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table provides information about disaggregated revenue based on the preceding categories for the three months ended March 31, 2019 and 2018:
|
Interest Income (Expense) and Other, Net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Income (Expense) and Other, net | Interest income (expense) and other, consists of the following:
|
Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | The following shares were excluded from the calculation of diluted net loss per share as their effect would have been anti-dilutive (in thousands):
|
Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue by Geographic Region | Revenue by geographic region, is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue from Significant Customers | The percentage of revenue attributable to our distributors, top five end customers, and individual distributors or end customers that represented 10% or more of revenue in at least one of the periods presented, is as follows:
|
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Schedule of Accounts Receivable Percentage from Significant Customers | The following accounts represented 10% or more of total accounts receivable in at least one of the periods presented:
|
Basis of Presentation (Details) |
Mar. 31, 2019
patent
|
---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of patents held | 353 |
Balance Sheet Components - Accounts Receivable (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Accounts Receivable, Net [Abstract] | ||||
Accounts receivable, gross | $ 5,891 | $ 7,003 | ||
Less: allowance for doubtful accounts | (38) | (21) | $ (45) | $ (47) |
Accounts receivable, net | $ 5,853 | $ 6,982 |
Balance Sheet Components - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance at beginning of period | $ 21 | $ 47 |
Additions charged (reductions credited) | 17 | (2) |
Balance at end of period | $ 38 | $ 45 |
Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Balance Sheet Related Disclosures [Abstract] | ||
Finished goods | $ 1,578 | $ 1,577 |
Work-in-process | 1,440 | 1,377 |
Inventories | $ 3,018 | $ 2,954 |
Balance Sheet Components - Property Plant and Equipment (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Balance Sheet Related Disclosures [Abstract] | ||
Gross carrying amount | $ 23,019 | $ 22,882 |
Less: accumulated depreciation and amortization | (17,610) | (16,731) |
Property and equipment, net | $ 5,409 | $ 6,151 |
Balance Sheet Components - Future Amortization Expense (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Balance Sheet Related Disclosures [Abstract] | ||
2019 | $ 1,123 | |
2020 | 1,496 | |
2021 | 1,117 | |
2022 | 90 | |
Acquired intangible assets, net | $ 3,826 | $ 4,208 |
Balance Sheet Components - Goodwill (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
Aug. 02, 2017 |
---|---|---|---|
Goodwill [Line Items] | |||
Goodwill | $ 18,407 | $ 18,407 | |
ViXS Systems, Inc. | |||
Goodwill [Line Items] | |||
Goodwill | $ 18,407 |
Balance Sheet Components - Accrued Liabilities and Current Portion of Long-Term Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Balance Sheet Related Disclosures [Abstract] | ||||
Accrued interest payable | $ 3,205 | $ 3,079 | ||
Accrued payroll and related liabilities | 2,809 | 4,428 | ||
Accrued royalties | 2,757 | 2,791 | ||
Operating lease liabilities, current | 2,213 | 0 | ||
Current portion of accrued liabilities for asset financings | 607 | 748 | ||
Deferred revenue | 186 | 96 | $ 342 | $ 418 |
Liability for warranty returns | 13 | 13 | $ 15 | $ 17 |
Accrued costs related to restructuring | 0 | 200 | ||
Other | 1,990 | 3,468 | ||
Accrued liabilities and current portion of long-term liabilities | $ 13,780 | $ 14,823 |
Balance Sheet Components - Deferred Revenue & Liability for Warranty Returns (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Deferred Revenue [Abstract] | ||
Balance at beginning of period | $ 96 | $ 418 |
Revenue deferred | 275 | 270 |
Revenue recognized | (185) | (346) |
Balance at end of period | 186 | 342 |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | 13 | 17 |
Charge-offs | 0 | (4) |
Provision | 0 | 2 |
Balance at end of period | $ 13 | $ 15 |
Balance Sheet Components - Short-Term Line of Credit (Narrative) (Details) - USD ($) |
Mar. 31, 2019 |
Dec. 31, 2018 |
Dec. 18, 2018 |
---|---|---|---|
Balance Sheet Related Disclosures [Abstract] | |||
Maximum borrowing capacity | $ 10,000,000 | ||
Line of credit facility, component of calculation for maximum borrowing amount under formula advances | $ 1,000,000 | ||
Line of credit facility maximum borrowing capacity limited by eligible AR | 80.00% | ||
Line of credit facility, maximum borrowing capacity under non-formula advances | $ 10,000,000 | ||
Short term line of credit | $ 0 | $ 0 |
Convertible Debt - Additional Information (Details) $ in Thousands, $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Jan. 12, 2018
USD ($)
shares
|
Jan. 12, 2018
CAD ($)
shares
|
Aug. 02, 2017
shares
|
Mar. 31, 2019
USD ($)
|
Mar. 31, 2018
USD ($)
|
|
Debt Instrument [Line Items] | |||||
Value of debt converted into shares | $ 0 | $ 2,644 | |||
Gain on debt extinguishment | 0 | 1,272 | |||
Discount accretion on convertible debt fair value | $ 0 | 69 | |||
Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Converted instrument, shares issued | shares | 435,353 | 435,353 | |||
Value of debt converted into shares | $ 2,644 | ||||
Repayments of convertible debt | $ 2,220 | $ 2,875 | |||
Gain on debt extinguishment | 1,272 | ||||
Convertible Debt | 10% convertible notes | |||||
Debt Instrument [Line Items] | |||||
Interest expense, debt | 66 | ||||
Discount accretion on convertible debt fair value | 69 | ||||
Foreign currency transaction gain (loss) | $ (15) | ||||
ViXS Systems, Inc. | |||||
Debt Instrument [Line Items] | |||||
Shares issued per acquired share (in shares) | shares | 0.04836 |
Marketable Securities and Fair Value Measurements - Schedule of Short Term Marketable Securities (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | $ 6,562 | $ 6,071 |
Unrealized Gain (Loss) | 4 | (2) |
Fair Value | 6,566 | 6,069 |
Corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 2,740 | 3,238 |
Unrealized Gain (Loss) | 3 | (2) |
Fair Value | 2,743 | 3,236 |
Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 1,983 | 992 |
Unrealized Gain (Loss) | 0 | 0 |
Fair Value | 1,983 | 992 |
U.S. government treasury bills | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost | 1,839 | 1,841 |
Unrealized Gain (Loss) | 1 | 0 |
Fair Value | $ 1,840 | $ 1,841 |
Restructurings (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
2017 Restructuring Plan | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring expense | $ 19 |
Restructurings - Components of Restructuring Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring expense | $ 0 | $ 19 |
Operating expenses — restructuring: | ||
Restructuring Cost and Reserve [Line Items] | ||
Employee severance and benefits | $ 0 | $ 19 |
Restructurings - Restructuring Reserve Rollforward (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Balance as of December 31, 2018 | $ 360 |
Adjustment | (360) |
Balance as of March 31, 2019 | 0 |
Facility closure and consolidations | |
Restructuring Reserve [Roll Forward] | |
Balance as of December 31, 2018 | 360 |
Adjustment | (360) |
Balance as of March 31, 2019 | $ 0 |
Research and Development (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Research and Development [Abstract] | |
Amount receivable as of date of development agreement | $ 4,000 |
Amounts payable upon completion of milestones | 2,000 |
Research and development benefit recognized | $ 4,000 |
Leases - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms on operating leases | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms on operating leases | 6 years |
Leases - Supplemental information related to leases (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Leases [Abstract] | |
Operating lease cost: | $ 629 |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 674 |
Weighted average remaining lease term (in years): | 3 years 8 months 16 days |
Weighted average discount rate: | 5.75% |
Leases - Future minimum lease payments under noncancellable leases (Details) $ in Millions |
Mar. 31, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
Nine months ending December 31, 2019 | $ 1,847 |
Years ending December 31: | |
2020 | 1,878 |
2021 | 1,215 |
2022 | 756 |
2023 | 624 |
Thereafter | 513 |
Total operating lease payments | 6,833 |
Less imputed interest | (720) |
Total operating lease liabilities | $ 6,113 |
Leases - Future minimum lease payments under previous guidance (Details) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Leases [Abstract] | |
2019 | $ 1,856 |
2020 | 1,039 |
2021 | 708 |
2022 | 539 |
2023 | 492 |
2024 | $ 378 |
Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Revenue from External Customer [Line Items] | ||
Revenues | $ 16,648 | $ 15,292 |
IC sales | ||
Revenue from External Customer [Line Items] | ||
Revenues | 15,074 | 14,556 |
Engineering services, license and other | ||
Revenue from External Customer [Line Items] | ||
Revenues | $ 1,574 | $ 736 |
Revenue - Narrative (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Revenue from Contract with Customer [Abstract] | |
Unsatisfied performance obligations | $ 360 |
Expected timing of satisfaction of performance obligations | which we expect to recognize ratably over three years |
Interest Income (Expense) and Other, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|||
Other Income and Expenses [Abstract] | ||||
Interest expense | $ (166) | $ (288) | ||
Interest income | 100 | 57 | ||
Gain on debt extinguishment | 0 | 1,272 | ||
Discount accretion on convertible debt fair value | 0 | (69) | ||
Total interest income (expense) and other, net | [1] | $ (66) | $ 972 | |
|
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Income Tax Disclosure [Abstract] | |||
Reversal of uncertain tax positions | $ 31 | $ 0 | |
Liability for uncertain tax positions | 1,669 | $ 1,661 | |
Reduction to deferred tax assets | 1,039 | $ 925 | |
Estimated decrease in total gross unrecognized tax benefits as a result of resolutions of global tax examinations and expiration of applicable statutes of limitations, including interest and penalties | $ 110 |
Earnings Per Share - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Earnings Per Share [Abstract] | ||
Net loss | $ (29) | $ (598) |
Weighted average shares outstanding - basic and diluted | 37,247 | 35,183 |
Net loss per share - basic and diluted | $ 0.00 | $ (0.02) |
Earnings Per Share - Antidilutive Effect on Weighted Average Shares (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Employee equity incentive plans | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3,265 | 3,423 |
Segment Information - Geographic Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Revenue, net | $ 16,648 | $ 15,292 |
Japan | ||
Revenue, net | 13,461 | 13,344 |
China | ||
Revenue, net | 1,862 | 927 |
United States | ||
Revenue, net | 714 | 590 |
Taiwan | ||
Revenue, net | 518 | 170 |
Korea | ||
Revenue, net | 60 | 211 |
Europe | ||
Revenue, net | $ 33 | $ 50 |
Segment Information - Revenue by Major Customer (Details) - Revenue, net |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
||||
All distributors | |||||
Revenue, Major Customer | |||||
Percentage of revenue | 27.00% | 37.00% | |||
Distributor A | |||||
Revenue, Major Customer | |||||
Percentage of revenue | 22.00% | 22.00% | |||
Top five end customers | |||||
Revenue, Major Customer | |||||
Percentage of revenue | [1] | 82.00% | 80.00% | ||
End customer A | |||||
Revenue, Major Customer | |||||
Percentage of revenue | [1] | 56.00% | 53.00% | ||
End customer B | |||||
Revenue, Major Customer | |||||
Percentage of revenue | [1] | 16.00% | 7.00% | ||
|
Segment Information - Accounts Receivable by Major Customer (Details) - Accounts Receivable |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Account X | ||
Segment Reporting Information | ||
Percentage of accounts receivable | 52.00% | 34.00% |
Account Y | ||
Segment Reporting Information | ||
Percentage of accounts receivable | 23.00% | 54.00% |
Commitments and Contingencies (Details) - ViXS Systems, Inc. - Research And Development Expense Payment $ in Thousands |
Mar. 31, 2019
USD ($)
|
---|---|
Accrued Liabilities And Current Portion Of Long Term Debt | |
Other Commitments [Line Items] | |
Other Commitment | $ 467 |
Long-term Debt | |
Other Commitments [Line Items] | |
Other Commitment | $ 541 |
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