10-K/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________

FORM 10-K/A
Amendment No. 1

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2015
OR
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________to___________

Commission File Number: 0-318570

ALLIANCE FIBER OPTIC PRODUCTS, INC.
(Exact name of registrant as specified in its charter)

Delaware	77-0554122
(State or other jurisdiction of incorporation	(IRS Employer Identification No.)
or organization)

275 Gibraltar Drive, Sunnyvale, CA 94089
(Address of principal executive offices)

Issuer’s telephone number: (408) 736-6900

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, par value $0.001 per share	The Nasdaq Stock Market LLC
Series A Participating Preferred Stock Purchase Rights	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes [  ]        No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.   Yes [  ]        No [X]

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes [X]       No [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and disclosure will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and ”smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [  ]	Accelerated filer [X]	Non-accelerated filer [  ]	Smaller reporting company [  ]
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes [  ]        No [X]

The aggregate market value of the voting and non-voting common equity held by non-affiliates (based upon the closing sale price on The Nasdaq Global Market on June 30, 2015) was approximately $241,321,495. 

As of March 2, 2016 there were 15,788,585 shares of Common Stock, $0.001 per share par value, outstanding. 

DOCUMENTS INCORPORATED BY REFERENCE

None.

EXPLANATORY NOTE

Alliance Fiber Optic Products, Inc. is filing this Amendment No. 1, (the “Amended Report”), to our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the Securities and Exchange Commission, or the SEC, on March 11, 2016, (the “Original Report”) in order to add certain information required by the following items of Form 10-K:

Item	Description
ITEM 10	Directors, Executive Officers and Corporate Governance
ITEM 11.	Executive Compensation
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence
ITEM 14.	Principal Accounting Fees and Services

We hereby amend Items 10, 11, 12, 13 and 14 of Part III of our Original Report by deleting the text of such Items 10, 11, 12, 13 and 14 in their entirety and replacing them with the information provided below under the respective headings. The Amended Report does not affect any other items in our Original Report. As a result of this amendment, we are also filing as exhibits to this Amended Report the certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002. Because no financial statements are contained in this Amended Report, we are not including certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Except as otherwise expressly stated for the items amended in this Amended Report, this Amended Report continues to speak as of the date of the Original Report and we have not updated the disclosure contained herein to reflect events that have occurred since the filing of the Original Report. In addition, we have not updated the disclosure contained herein to reflect the impact of our proposed merger with a subsidiary of Corning Incorporated announced on April 7, 2016 on the compensation of our executive officers, including, without limitation, the vesting of equity awards. Accordingly, this Amended Report should be read in conjunction with our Original Report and our other filings made with the SEC subsequent to the filing of the Original Report.

All references to the “Company, “we”, “us”, or “our” mean Alliance Fiber Optic Products, Inc.

***

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ALLIANCE FIBER OPTIC PRODUCTS, INC.

TABLE OF CONTENTS

2015 FORM 10-K/A

			Page
PART III			2
	Item 10.	Directors, Executive Officers and Corporate Governance	2
	Item 11.	Executive Compensation	3
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	8
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	10
	Item 14.	Principal Accounting Fees and Services	14
PART IV			14
	Item 15.	Exhibits and Financial Statement Schedules	14
SIGNATURES			15
EXHIBIT INDEX			16

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors

The names of our directors, their ages as of March 30, 2016 and certain biographical information concerning the directors is set forth below.

CLASS I

Peter C. Chang, 58, has served as our Chairman of the Board, Chief Executive Officer and President since our formation in December 1995. From 1990 to 1995, Mr. Chang was Division Manager at Hon Hai Holding, a fiber optics company, and from 1988 to 1990 was a member of the technology staff at Lucent Bell Labs. Mr. Chang received a B.S. in Mechanical Engineering from National Taiwan University and an M.S. in Mechanical Engineering from Notre Dame University. We believe Mr. Chang’s qualifications to serve on our Board of Directors (the “Board”) include his extensive industry expertise and his experience as our Chief Executive Officer and President.

Richard Black, 82, has served as a director since April 2003. Since March 2002, Mr. Black has served as the Chairman and Chief Executive Officer, director and majority owner of ECRM, Inc., a worldwide supplier of electronic laser imaging devices for the publishing and graphic arts industries. He also serves as President and Chief Executive Officer of CRON-ECRM LLC, a joint venture company supplying electronic laser imaging devices to North America publishing industries. From August 1983 to March 2002, Mr. Black served as the Chairman and director of ECRM, Inc. He served as President of Oak Technology Inc., a semiconductor company, from January 1998 to March 1999, as Vice Chairman from March 1999 to August 2003 and as a director from 1988 to 2003. Until July 2010, Mr. Black served as the Chairman of the board of directors of GSI Group Inc., a manufacturer of laser systems and precision motion components, and he served on the GSI Board since 1999. Mr. Black also serves on the board of Applied Optoelectronics, Inc. (NASDAQ: AAOI) and boards of several private and non-profit companies. In addition, from 2002 to 2007, Mr. Black served on the board of directors of Altigen Communications, Inc., a manufacturer of VoIP telephone systems and unified communications systems. Mr. Black holds a B.S. in Engineering from Texas A&M University and an M.B.A. from Harvard University. We believe Mr. Black’s qualifications to serve on our Board include his operational and management expertise, his experience as both a director and chairman of the board of other public companies, and his finance skills.

CLASS II

Ray Sun, 64, has served as a director since November 2003. Mr. Sun served as Managing Director, Business Development and Venture Investment (greater China) of Applied Materials China, a semiconductor equipment company, from November 2001 to February 2009. He has been retired since February 2009. Mr. Sun served as a representative of the Silicon Valley office for a Taiwanese venture firm, Global Investment Management Co. LTD., from October 1999 to November 2001. Mr. Sun has more than 20 years of executive management experience in the software, hardware and telecommunications industries. Mr. Sun received a B.S. in Industrial Engineering from Chung Yuan Christian University in Taiwan, and an M.S. in Industrial Engineering from Kansas State University. We believe Mr. Sun’s qualifications to serve on our Board include his business development and investment expertise and his experience in executive management for a broad array of technology-based businesses.

CLASS III

Gwong-Yih Lee, 61, has served as a director since August 2000. Since June 2014, Mr. Lee has served as Managing Director of TransLink Capital, a venture capital firm that leverages proprietary Asia insight to invest in U.S. start-up companies. Since July 2006, Mr. Lee has served as Chairman of CyberTAN Technology, Inc., a networking company listed on the Taiwan Stock Market. From July 2006 to July 2013, Mr. Lee served as Chief Executive officer of CyberTan Technology, Inc. From September 2005 to December 2012, Mr. Lee has served as the Founder and President and Chief Executive Officer of ApaceWave Technologies, Inc., a broadband wireless company. From September 1999 to January 2004, Mr. Lee served as Senior Director and General Manager at Cisco Systems, Inc. In March 1998, Mr. Lee established TransMedia Communications, a communication equipment company, and served as its President and Chief Executive Officer until September 1999, when TransMedia Communications was acquired by Cisco. Mr. Lee received a B.S. in Control Engineering from National Chiao-Tung University in Taiwan and an M.S. in Electrical Engineering from New York University. We believe Mr. Lee’s qualifications to serve on our Board include his experience running private technology companies and his managerial experience at Cisco and CyberTAN Technology.

2

James C. Yeh, 59, has served as a director since our formation in December 1995. Since April 2005, Mr. Yeh has served as Managing Director of Blazee International, an imaging processing applications company. In addition, since January 1991, Mr. Yeh has served as President of Matics Computer Systems, Inc., a personal computer systems and peripherals company. Mr. Yeh holds a B.S. in Mathematics from Tamkang University in Taiwan and an M.S. in Systems Science and Mathematics from Washington University in Saint Louis, Missouri. We believe Mr. Yeh’s qualifications to serve on our Board include his operational and management experience with technology companies.

Executive Officers

Certain information required by this item concerning executive officers is set forth in Part I of this Report under the caption “Executive Officers of the Registrant” and is incorporated herein by reference.

Section 16(a) Beneficial Ownership Reporting Compliance

Under the securities laws of the United States, the Company’s directors, executive officers and any persons holding more than 10% of the Company’s Common Stock are required to report their initial ownership of the Company’s Common Stock and any subsequent changes in that ownership to the SEC. Specific due dates for these reports have been established and the Company is required to identify in this Proxy Statement those persons who failed to timely file these reports. To the Company’s knowledge, based solely on a review of such reports furnished to the Company and written representations that no other reports were required during the fiscal year ended December 31, 2015, all Section 16(a) filing requirements applicable to its executive officers and directors were made in a timely manner during fiscal year 2015 except that Mr. Yeh filed a Form 4 on August 13, 2015 to report selling shares of common stock on July 30 and 31 and August 5, 2015 and, in addition, Mr. Yeh filed a Form 4 on November 16, 2015 to report selling shares of common stock for which he had voting and dispositive power on November 2, 3, 4, 5, 6 and 9, 2015.

Code of Ethics

The Company’s Board of Directors has adopted a Code of Ethics for all of its directors and officers. The Company’s Code of Ethics is available on the Company’s website at http://www.afop.com. To date, there have been no waivers under the Company’s Code of Ethics. The Company will post certain waivers to or amendments of its Code of Ethics, as required by applicable law, on the Company’s website at http://www.afop.com.

Item 11. Executive Compensation

COMPENSATION DISCUSSION AND ANALYSIS

Compensation Philosophy

Our philosophy is to provide compensation that attracts and retains our named executive officers, and motivates our executive officers to pursue our corporate objectives while encouraging the creation of long-term value for our stockholders. Our goal is to provide compensation to our executive officers that is competitive, rewards achievement of our business objectives, and aligns executive and stockholder interests through equity ownership. Compensation decisions for executive officers other than our Chief Executive Officer take into account the recommendations of our Chief Executive Officer because of his understanding of the performance of those executive officers. The components of executive officer compensation, base salary, bonus and equity-based compensation, are discussed below. We do not enter into employment or severance agreements with our executive officers as we do not believe these types of arrangements facilitate our compensation goals and objectives.

Elements of Executive Compensation

Base Salary.Base salaries provide our named executive officers with a fixed amount of consistent compensation and are an important motivating factor in attracting and retaining these individuals. Base salaries are reviewed and adjusted on a periodic basis. We do not apply specific formulas to determine adjustments to base salary. Decisions on base salary adjustments for executive officers other than the Chief Executive Officer are made with the Chief Executive Officer’s involvement. When reviewing base salaries, the scope of the named executive officer’s performance, individual contributions, responsibilities, experience and prior base salary level are considered. Other considerations include market information and the base salaries and other incentives paid to executive officers of other companies within the industry.

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Effective January 1, 2016, Mr. Hubbard’s salary was increased from $218,000 to $230,000. In making this adjustment, the factors described above were considered.

Bonus.Our philosophy is that a certain portion of executive officer compensation should be contingent upon the Company’s performance and an individual’s contribution to our success in meeting business objectives. The bonus potential of each executive officer is considered on a case-by-case basis, and takes into account recommendations the Chief Executive Officer for executive officers other than the Chief Executive Officer. Bonuses for 2015 were based on overall corporate performance and individual performance. Other considerations include market information and the compensation paid to executive officers of other companies within the industry. Final decisions on bonuses for executive officers other than the Chief Executive Officer are made with the Chief Executive Officer’s involvement.

In January 2016, Mr. Hubbard and Ms. Ho were paid bonuses of $100,000 and $6,000, respectively. In July 2015, Mr. Hubbard and Ms. Ho were awarded bonuses of $30,000 and $4,000, respectively. In January 2015, Mr. Hubbard and Ms. Ho were paid bonuses of $110,000 and $8,000, respectively. In making these awards, the factors described above were considered.

Equity-based Compensation. We provide equity-based incentive compensation to our executive officers through the grant of stock options and RSUs under our 2000 Stock Incentive Plan, which plan is administered by the Executive Compensation Committee of the Board. We believe that stock ownership by our executive officers aligns their interests with those of our stockholders and provides the executive officers with substantial motivation to manage our business in accordance with those interests. Accordingly, a considerable portion of an executive officer’s compensation in any year may consist of stock options and/or RSUs. Historically, we have not applied a formula to determine the size of individual equity-based awards granted to our named executive officers. When determining the size of an equity award to an executive officer, the executive officer’s and the Company’s performance, the executive officer’s role and responsibilities within the Company, the executive officer’s base salary and the size value, and vesting status of his or her existing equity awards, as well as equity awards to executive officers in similar positions throughout the industry are considered. For executive officers other than the Chief Executive Officer, equity awards take into account the recommendations of the Chief Executive Officer. Based upon these factors, the size of each equity award is set at a level we consider appropriate to create a meaningful incentive.

In April 2015, Mr. Hubbard was awarded 62,000 RSUs. The RSUs vest as to one-half on each of May 1, 2016 and 2017. In making this award, the factors described above were considered.

Chief Executive Officer Compensation

The compensation of the Chief Executive Officer is determined using the same criteria as for the other executive officers as discussed above. For 2015, Mr. Chang’s salary was set at $303,000, and he was awarded a $200,000 bonus in January 2015 and a $50,000 bonus in July 2015. Mr. Chang’s salary was increased to $313,000 effective January 1, 2016, and he was awarded a $200,000 bonus in January 2016.

In April 2015, Mr. Chang was awarded 240,000 RSUs. The RSUs vest in four annual installments on each of May 1, 2016, 2017, 2018 and 2019. All of Mr. Chang’s RSUs, including the unvested portions of RSU grants Mr. Chang was awarded in May 2011 and April 2013, vest in full in the event of a change of control or termination due to death or involuntary discharge.

Other Compensation

Our executive officers are eligible to participate in our 2000 Employee Stock Purchase Plan. Under the plan, participants may purchase shares of our Common Stock at a discount to the market price. The number of shares that may be purchased by each participant is limited by the terms of the plan and applicable tax laws. In addition, our executive officers may participate in our health programs, such as medical, dental and vision care coverage, and our 401(k) and life and disability insurance programs.

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Tax Deductibility of Compensation

Section 162(m) of the Internal Revenue Code of 1986 places a limit of $1,000,000 on the amount of compensation that we may deduct in any one year with respect to our Chief Executive Officer and each of the next three most highly compensated executive officers (excluding the chief financial officer). To maintain flexibility in compensating our executive officers in a manner designed to promote varying corporate goals, the Executive Compensation Committee has not adopted a policy requiring all executive compensation to be deductible.

Executive Compensation Committee Report

The following report of the Executive Compensation Committee shall not be deemed to be “soliciting material” or “filed” with the SEC or to be incorporated by reference into any other filing by Alliance Fiber Optic Products, Inc. under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we specifically incorporate it by reference into a document filed under those Acts.

The Executive Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth above with our management. Based on its review and those discussions, the Executive Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K, as amended, for the year ended December 31, 2015.

Executive Compensation Committee

Ray Sun, Chairman
Richard Black
Gwong-Yih Lee

Summary Compensation Table

The following table sets forth compensation information for the cash amounts and the value of other compensation paid to our Chief Executive Officer and our two other most highly compensated executive officers for the years indicated.

				Stock	All Other
			Bonus	Awards	Compensation
Name and Principal Position	Year	Salary ($)	($)(1)	($)(2)	($)(3)	Total ($)
Peter C. Chang	2015	302,692	250,000	2,210,400	2,290	2,765,382
President and Chief Executive Officer	2014	292,650	250,000	—	2,290	544,940
	2013	279,538	250,000	1,130,400	2,290	1,662,228
David A. Hubbard	2015	210,738	130,000	607,860	9,213	957,811
Executive Vice President,	2014	199,531	92,000	—	8,890	300,421
Sales and Marketing	2013	189,458	100,000	548,670	8,890	847,018
Anita K. Ho	2015	104,462	12,000	—	4,505	120,967
Acting Chief Financial Officer	2014	95,980	12,000	—	4,505	112,485
	2013	123,644	12,000	71,130	4,505	211,279

(1)	Consists of amounts earned in the fiscal year.
(2)	Amount represents grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification No. 718, Compensation—Stock Compensation (“ASC 718”). The actual value recognized by the individual is based on the market price of our Common Stock on the vesting dates and may be higher or lower.
(3)	Consists of Company contributions to the 401(k) of each individual, a monthly automobile allowance for Mr. Hubbard, and the value of insurance premiums paid by the Company.

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Grants of Plan-based Awards – 2015

The following table sets forth number of shares of Common Stock underlying option awards were granted in 2015.

					All Other
		Estimated Future		All Other	Option
		Payouts Under	Estimated Future	Stock Awards:	Awards:	Exercise or	Grant Date
		Non-Equity	Payouts Under	Number of	Number of	Base Price	Fair Value
		Incentive Plan	Equity Incentive	Shares of	Securities	Securities	of Stock and
	Grant	Awards	Plan Awards	Stock or	Underlying	Underlying	Option
Name	Date	Maximum($)	Maximum($)	Units (#)	Options (#)	($/Sh)	Awards($)(1)
Peter C.
Chang
	04/02/2015	—	—	240,000	—	—	4,176,000
David A.
Hubbard
	04/02/2015	—	—	62,000	—	—	1,078,800

(1)        The amount reflects the aggregate grant date fair value of the awards computed in accordance with ASC 718, rather than the amounts paid to or realized by the named individual. There can be no assurance that awards will vest or will be exercised (in which case no value will be realized by the individual), or that the value upon exercise will approximate the aggregate grant date fair value. None of our named executive officers forfeited any awards in 2015.

Outstanding Equity Awards at Fiscal Year-End – 2015

The following table presents certain information concerning equity awards held by our named executive officers as of December 31, 2015.

	Option Awards				Stock Awards
	Number of	Number of
	Securities	Securities
	Underlying	Underlying
	Unexercised	Unexercised
	Options	Options	Option	Option	Number of Shares or Units		Market Value of Shares That
	Exercisable	Unexercisable	Exercise	Expiration	of Stock That Have Not		Have Not
Name	(#)	(#)	Price($)	Date	Vested(#)		Vested($)(1)
Peter C. Chang	—	—	—	—	360,000	(2)	5,457,600
David A. Hubbard	—	—	—	—	62,000	(3)	939,920
Anita K. Ho	—	—	—	—	—		—

(1)	Market value is based on the closing price of our Common Stock on December 31, 2015.
(2)	This includes: (i) RSUs granted on May 6, 2011 that vest over five years at a rate of 20 percent per year on each of May 1, 2012, 2013, 2014, 2015 and 2016; (ii) RSUs were granted on April 19, 2013 that vest over three years at a rate of one-third per year on each of May 1, 2014, 2015 and 2016; and (iii) RSUs were granted on April 2, 2015 that vest over four years at a rate of 25 percent per year on each of May 1, 2016, 2017, 2018 and 2019. The RSUs vest in full in the event of a change of control or termination due to death or involuntary discharge.
(3)	The RSUs were granted on April 2, 2015 and vest over two years at a rate of 50 percent per year on each of May 1, 2016 and 2017.

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Option Exercises and Stock Vested - 2015

	Option Awards		Stock Awards
	Number of Shares	Value Realized	Number of Shares	Value Realized
	Acquired on	on	Acquired on	on
Name	Exercise (#)	Exercise ($)	Vesting (#)	Vesting ($)(1)
Peter C. Chang	—	—	120,000	2,210,400
David A. Hubbard	—	—	33,000	607,860
Anita K. Ho	—	—	3,000	55,260

(1)       Value realized is based on the fair market value of our Common Stock on the date of vesting.

Potential Payments Upon Termination or Change-in-Control

Other than the RSUs granted to Peter C. Chang, which vest in full in the event of a change in control, the Company has not entered into any contract, agreement or arrangement or adopted any plan that provides for payments to a named executive officer at, following, or in connection with any termination or change in control that are not available to all employees.

Compensation Risk Assessment

In connection with its review of employee compensation and the compensation process, the Company has concluded that risks arising from its compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

2015 Director Compensation

The following table sets forth cash amounts and the value of other compensation earned by the Company’s non-employee directors during 2015:

	Fees Earned or	Option Awards
Name	Paid in Cash ($)	($)(1)(2)	Total ($)
Richard Black	32,000	220,320	252,320
Gwong-Yih Lee	16,000	163,320	179,320
Ray Sun	24,000	163,320	187,320
James Yeh	24,000	163,320	187,320

(1)	Amounts represent grant date fair value computed in accordance with ASC 718. The actual value recognized by the individual is based on the market price of our Common Stock on the vesting dates and may be higher or lower than the amounts reflected herein. See the notes to our consolidated financial statements for a discussion of the assumptions made in determining these values.
(2)	The following table sets forth the aggregate number of shares of Common Stock underlying option awards outstanding at December 31, 2015:

Name	Number of Shares
Richard Black	36,000
Gwong-Yih Lee	24,000
Ray Sun	30,000
James Yeh	21,000

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Effective January 1, 2015, the Company’s non-employee directors receive an annual cash retainer of $16,000 for service on the Board and any committees other than the Audit Committee. The Chairman of the Audit Committee also receives an annual cash retainer of $16,000 and each member of the Audit Committee other than the Chairman also receives an annual cash retainer of $8,000 for service on the Audit Committee. All retainers are payable quarterly.

Directors who are not employees receive an initial grant of an option to purchase 12,000 shares of Common Stock at the fair market value of the Common Stock on the date of grant, which vests ratably over 36 months. This initial grant is made on the first business day following election to the Board. On the first business day following the third anniversary of a director’s election to the Board, each non-employee director is entitled to receive an option to purchase 12,000 shares of Common Stock at the fair market value of the Common Stock on the date of grant, which option vests ratably over 36 months. The options granted to our outside directors have a per share exercise price equal to 100% of the fair market value of the underlying shares on the date of grant, have a term of 10 years and automatically become fully vested in the event of a change in control.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of March 28, 2016, as to shares of our Common Stock beneficially owned by: (1) each person who is known by the Company to beneficially own more than 5% of its Common Stock, (2) each of our directors, (3) each of our executive officers named in the Summary Compensation Table, and (4) all of our directors and executive officers as a group. Ownership information is based upon information furnished by the respective individuals or entities, as the case may be. Unless otherwise noted below, the address of each beneficial owner is c/o Alliance Fiber Optic Products, Inc., 275 Gibraltar Drive, Sunnyvale, California 94089. The percentage of Common Stock beneficially owned is based on 15,791,585 shares of Common Stock outstanding as of March 28, 2016. In addition, shares issuable pursuant to options which may be exercised and RSUs which vest within 60 days of March 28, 2016 are deemed to be issued and outstanding and have been treated as outstanding in calculating the percentage ownership of those individuals possessing such interest, but not for any other individuals. Thus, the number of shares considered to be outstanding for purposes of this table may vary depending on the individual’s particular circumstances.

	Number of
	Shares of
	Common	Percentage of
	Stock	Common Stock
	Beneficially	Beneficially
Name and Address of Beneficial Owner (1)	Owned	Owned
Directors and Named Executive Officers:
Peter C. Chang (2)	1,454,640	9.21%
Richard Black (3)	52,000	*
Gwong-Yih Lee (4)	22,000	*
Ray Sun (5)	20,000	*
James C. Yeh (6)	231,000	1.46
David A. Hubbard (7)	63,954	*
5% Stockholder:
Foxconn Holding Limited (8)	2,170,000	13.74%
All Directors and Executive Officers as a group (6 persons) (9)	1,843,594	11.47

* Represents less than 1%.

(1)	To the Company’s knowledge, except as otherwise disclosed, the persons named in the table have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the notes to this table.
(2)	Includes 16,000 shares held in the name of Mr. Chang’s minor children, 1,158,640 shares held in the name of the Chang Family LLC and 100,000 shares held in the name of the Peter and Mary Chang Foundation, of which Mr. Chang and his wife, Mary C. Chen, are the Managing Members. Also includes 180,000 shares underlying RSUs that vest within 60 days of March 28, 2016.

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(3)	Includes options to purchase 16,000 shares of Common Stock exercisable within 60 days of March 28, 2016.
(4)	Includes 8,000 shares held in the name of the Lee Trust. Mr. Lee and his wife, Angela Lee, as trustees, have dispositive and voting power for the shares held by the Lee Trust. Also includes options to purchase 14,000 shares of Common Stock that are exercisable within 60 days of March 28, 2016.
(5)	Includes options to purchase 20,000 shares of Common Stock that are exercisable within 60 days of March 28, 2016.
(6)	Includes 220,000 shares held in the name of Matics Computer Systems, Inc., over which Mr. Yeh has voting and dispositive power. Also includes options to purchase 11,000 shares of Common Stock that are exercisable within 60 days of March 28, 2016.
(7)	Includes 31,000 shares underlying RSUs that vest within 60 days of March 28, 2016.
(8)	According to a Schedule 13G filed jointly on February 16, 2016 for the year ended December 31, 2015 by Hon Hai and Foxconn, each entity has shared voting and dispositive power over the shares. Foxconn is a subsidiary of Hon Hai. Hon Hai disclaims beneficial ownership of these shares. The principal business address for Hon Hai and Foxconn is 2 Tsu Yu Street, Tu Cheng City, Taipei Hsien, Taiwan, R.O.C. According to information provided by Hon Hai, the board of directors of Foxconn has dispositive power for the shares and has delegated voting power to Mr. The-Tsai Huang and Ms. Chiu-Lian Huang. As of the Record Date, and based on information filed with the Securities and Exchange Commission in March 2016, Foxconn and Hon Hai held 2,170,000 shares of Common Stock.
(9)	Includes options to purchase 61,000 shares of Common Stock that are exercisable within 60 days of March 28, 2016 and 211,000 shares underlying RSUs that vest within 60 days of March 28, 2016.

9

Equity Compensation Plan Information

Set forth in the table below is certain information regarding the Company’s equity compensation plans as of December 31, 2015:

					Number of securities
					remaining available for
	Number of securities to		Weighted-average		future issuance under
	be issued upon exercise		exercise price of		equity compensation
	of outstanding options,		outstanding options,		plans (excluding securities
	units and rights		units and rights		reflected in column (a))
Plan category	(a)		(b)		(c)
Equity compensation plans
approved by security holders	1,019,600	(1)	$	9.71	696,184	(2)
Equity compensation plans not
approved by security holders	—			—	—
Total	1,019,600		$	9.71	696,184

(1) Includes 571,600 shares issuable upon exercise of outstanding options and 448,000 shares issuable pursuant to unvested RSUs granted under the Stock Incentive Plan.

(2) Includes:

(i) 487,824 shares reserved for issuance under the Stock Incentive Plan. The number of shares reserved for issuance under the plan may be increased on the first day of the Company’s fiscal year by the lesser of 680,000 shares, 5% of the fully diluted outstanding shares of the Company’s common stock on that date or a lesser amount determined by the Board.

(ii) 208,360 shares reserved for issuance under the ESPP. The ESPP permits eligible employees to contribute up to 20% of cash compensation up to 1,000 shares maximum toward the semi-annual purchase of the Company’s common stock. The purchase price per share is 85% of the fair market value on the last trading day prior to the beginning of the six-month period at which an eligible employee is enrolled; or the fair market value on the last trading day of the month in which the six-month period expired, whichever is lower.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Certain Relationships and Related Transactions

It is our policy that all employees, officers and directors must avoid any activity that is or has the appearance of conflicting with the interests of the Company. This policy is included in our Code of Conduct and Business Ethics. We monitor related party transactions for potential conflict of interest situations on an ongoing basis and all such transactions relating to executive officers and directors must be approved by the independent and disinterested members of the Board or an independent and disinterested committee of the Board.

According to share ownership numbers contained in a Form 4 filed with the SEC in March 2016, Foxconn Holding Limited (“Foxconn”) and Hon Hai Precision Industry Co., Ltd. (“Hon Hai”) held 13.73% of our Common Stock based on the number of shares outstanding on the Record Date. In the normal course of business, we sell products to and purchase raw materials from Hon Hai, who is the parent company of Foxconn. These transactions were made at prices and terms consistent with transactions with unrelated third parties. For fiscal 2015, sales of products to Hon Hai were $0.04 million, purchases of raw materials from Hon Hai were $2.0 million and $0.3 million were due to Hon Hai. No amounts were due from Hon Hai at December 31, 2015.

10

Board Structure, Independence, Meetings and Committees

Our Board believes that having a combined Chairman of the Board and Chief Executive Officer is the most effective leadership structure for the Company at this time. The Board believes that Mr. Chang is the director best situated to identify strategic opportunities and focus the activities of the Board due to his full-time commitment to our business and his company-specific experience. The Board also believes that the combined role of Chairman and Chief Executive Officer promotes effective execution of strategic imperatives and facilitates information flow between management and the Board.

The Board held eight meetings during 2015. All directors attended 100% of the aggregate number of meetings of the Board and of the committees on which each such director serves. The independent directors meet in regularly scheduled executive sessions at meetings of the Board without the participation of the Chief Executive Officer or the other members of management. In 2015, one director attended the annual meeting. We do not have a policy requiring directors to attend our annual meetings.

The Board has determined that, except for Mr. Chang, all of the members of the Board are “independent directors” within the meaning of Rule 5605 of The NASDAQ Stock Market and the rules of the SEC. Mr. Chang is not considered independent because he is employed by the Company as its President and Chief Executive Officer. For all of the non-employee directors, the Board considered their relationship and transactions with the Company as directors and as securityholders of the Company.

The Board is actively involved in the oversight of risks that could affect our business and operations, while management is responsible for day-to-day risk management. The Board administers this oversight function directly through the Board as a whole, as well as through the Audit and Nominating and Corporate Governance committees of the Board.

The Board has appointed an Executive Compensation Committee, an AuditCommittee and a Nominating and Corporate Governance Committee. The Board has approved a charter for each of these committees. Copies of the charters of the Audit Committee, Nominating and Corporate Governance Committee and Executive Compensation Committee are available through our website at www.afop.com. The Board has also appointed a Non-Executive Compensation Committee.

Executive Compensation Committee
Number of Members:	Three
Members:	Mr. Sun (Chairman)
	Mr. Black
	Mr. Lee
Number of Meetings:	Two
Functions:	The Executive Compensation Committee’s primary functions are to assist the Board in meeting its responsibilities with regard to oversight and determination of executive compensation and to review and make recommendations to the Board with respect to major compensation plans, policies and programs of the Company. Other specific duties and responsibilities of the Executive Compensation Committee are to review and approve the compensation for the Chief Executive Officer and other executive officers of the Company, establish and modify the terms and conditions of employment of the Chief Executive Officer and other executive officers of the Company and administer the Company’s stock plans and other compensation plans.

11

Audit Committee

Number of Members:	Three
Members:	Mr. Black (Chairman)
	Mr. Sun
	Mr. Yeh
Number of Meetings:	Four
Functions:	The Audit Committee’s primary functions are to assist the Board of Directors in fulfilling its oversight responsibilities relating to the Company’s financial statements, system of internal controls, and auditing, accounting and financial reporting processes. Other specific duties and responsibilities of the Audit Committee are to appoint, compensate, evaluate and, when appropriate, replace the Company’s independent auditors; review and pre-approve audit and permissible non-audit services; review the scope of the annual audit; monitor the independent auditors’ relationship with the Company; and meet with the independent auditors and management to discuss and review the Company’s financial statements, internal controls, and auditing, accounting and financial reporting processes. Mr. Black is the Audit Committee financial expert.
Nominating and Corporate Governance Committee
Number of Members:	Three
Members:	Mr. Black (Chairman)
	Mr. Sun
	Mr. Yeh
Number of Meetings:	One
Functions:	The Nominating and Corporate Governance Committee’s primary functions are to identify qualified individuals to become members of the Board and determine the composition of the Board and its committees. Other specific duties and responsibilities are to recommend nominees to fill vacancies on the Board, review suggestions for candidates for membership on the Board, and monitor compliance with Board and Board committee membership criteria.

Non-Executive Compensation Committee

Mr. Chang currently serves as the sole member of the Non-Executive Compensation Committee. The Non-Executive Compensation Committee is a secondary committee responsible for granting and issuing awards under the 2000 Stock Incentive Plan, as amended and restated, to eligible employees, other than to members of the Board, to individuals designated by the Board as “Section 16 officers,” and to employees who hold the title of Vice President or above.

Director Nominations

The Board nominates a class of directors for election at each annual meeting of stockholders and elects new directors to fill vacancies when they arise. The Nominating and Corporate Governance Committee has the responsibility to identify, evaluate, recruit and recommend qualified candidates to the Board for nomination or election.

12

The Board has an objective that its membership is composed of experienced and dedicated individuals with a diversity of backgrounds, perspectives and skills. The Nominating and Corporate Governance Committee will select candidates for director based on their character, judgment, diversity of experience, business acumen, and ability to act on behalf of all stockholders. The Nominating and Corporate Governance Committee believes that nominees for director should have experience, such as experience in management or accounting and finance, or industry and technology knowledge, that may be useful to the Company and the Board, high personal and professional ethics, and the willingness and ability to devote sufficient time to effectively carry out his or her duties as a director. While diversity is among the qualifications that may be considered, the Committee does not have a formal diversity policy. The Nominating and Corporate Governance Committee believes it is appropriate for at least one, and, preferably, multiple, members of the Board to meet the criteria for an “audit committee financial expert” as defined by SEC rules, and for a majority of the members of the Board to meet the definition of “independent director” under the rules of The NASDAQ Stock Market. The Nominating and Corporate Governance Committee also believes it is appropriate for certain key members of the Company’s management to participate as members of the Board.

Prior to each annual meeting of stockholders, the Nominating and Corporate Governance Committee identifies nominees first by evaluating the current directors whose term will expire at the annual meeting and who are willing to continue in service. These candidates are evaluated based on the criteria described above, including as demonstrated by the candidate’s prior service as a director, and the needs of the Board with respect to the particular talents and experience of its directors. In the event that a director does not wish to continue in service, the Nominating and Corporate Governance Committee determines not to re-nominate the director, or a vacancy is created on the Board as a result of a resignation, an increase in the size of the Board or other event, the Committee will consider various candidates for Board membership, including those suggested by the Committee members, by other Board members, by any executive search firm engaged by the Committee and by stockholders. A stockholder who wishes to suggest a prospective nominee for the Board should notify the Secretary of the Company or any member of the Committee in writing with any supporting material the stockholder considers appropriate.

In addition, the Company’s Bylaws contain provisions that address the process by which a stockholder may nominate an individual to stand for election to the Board at the Company’s Annual Meeting of Stockholders. In order to nominate a candidate for director, a stockholder must give timely notice in writing to the Secretary of the Company and otherwise comply with the provisions of the Company’s Bylaws. To be timely, the Company’s Bylaws provide that the Company must have received the stockholder’s notice no less than 60 days nor more than 90 days prior to the scheduled date of the meeting. However, if notice or prior public disclosure of the date of the annual meeting is given or made to stockholders less than 75 days prior to the meeting date, the Company must receive the stockholder’s notice by the earlier of (i) the close of business on the 15th day after the earlier of the day the Company mailed notice of the annual meeting date or provided public disclosure of the meeting date and (ii) two days prior to the scheduled date of the annual meeting. Information required by the Bylaws to be in the notice include the name and contact information for the candidate and the person making the nomination and other information about the nominee that must be disclosed in proxy solicitations under Section 14 of the Securities Exchange Act of 1934 and the related rules and regulations under that Section.

Stockholder nominations must be made in accordance with the procedures outlined in, and include the information required by, the Company’s Bylaws and must be addressed to: Secretary, Alliance Fiber Optic Products, Inc., 275 Gibraltar Drive, Sunnyvale, California 94089. You can obtain a copy of the Company’s Bylaws by writing to the Secretary at this address.

Stockholder Communications with the Board of Directors

If you wish to communicate with the Board, you may send your communication in writing to: Secretary, Alliance Fiber Optic Products, Inc., 275 Gibraltar Drive, Sunnyvale, California 94089. You must include your name and address in the written communication and indicate whether you are a stockholder of the Company. The Secretary will review any communication received from a stockholder, and all material communications from stockholders will be forwarded to the appropriate director or directors or committee of the Board based on the subject matter.

13

Item 14. Principal Accounting Fees and Services

The following table presents fees for professional audit services rendered by Marcum LLP for the audit of our financial statements for 2015 and 2014. No fees were billed for other services.

	Year Ended December 31,
	2015		2014
Audit Fees	$	485,680	$	365,932
Audit-Related Fees		—		—
Tax Fees		—		—
All Other Fees		—		—
Total	$	485,680	$	365,932

Pre-Approval Policies and Procedures

It is the Company’s policy that all audit and non-audit services to be performed by the Company’s registered public accountants be approved in advance by the Audit Committee. The Audit Committee pre-approved 100% of the audit fees incurred in the year ended December 31, 2015.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this report:

(1) Exhibits

See the Exhibit Index, which follows the signature pages of this report and is incorporated herein by reference.

14

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ALLIANCE FIBER OPTIC PRODUCTS, INC.
Date: May 2, 2016
	By	/s/ Peter C. Chang
		Peter C. Chang
		President and Chief Executive Officer

15

EXHIBIT INDEX

Exhibit
Number		Description of Document
	31.1*	Rule 13a–14(a) Certification of Chief Executive Officer.
	31.2*	Rule 13a–14(a) Certification of Acting Chief Financial Officer.
	101.INS	XBRL Taxonomy Instance Document
	101.SCH	XBRL Taxonomy Schema Document
	101.PRE	XBRL Taxonomy Presentation Linkbase Document
	101.LAB	XBRL Taxonomy Label Linkbase Document
	101.CAL	XBRL Taxonomy Calculation Linkbase Document
	101.DEF	XBRL Taxonomy Definition Linkbase document

____________________

* Filed herewith.

16

EX-31.1

Exhibit 31.1

Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

CERTIFICATION

I, Peter C. Chang, certify that:

1. I have reviewed this Amendment No. 1 to the annual report on Form 10-K of Alliance Fiber Optic Products, 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. [Intentionally Omitted];

4. [Intentionally Omitted]; and

5. [Intentionally Omitted].

Date: May 2, 2016
By	/s/ Peter C. Chang
Peter C. Chang
Chief Executive Officer (Principal Executive Officer)

17

EX-31.2

Exhibit 31.2

Certification of the Acting Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

CERTIFICATION

I, Anita K. Ho, certify that:

1. I have reviewed this Amendment No. 1 to the annual report on Form 10-K of Alliance Fiber Optic Products, 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. [Intentionally Omitted];

4. [Intentionally Omitted]; and

5. [Intentionally Omitted].

Date: May 2, 2016
By	/s/ Anita K. Ho
Anita K. Ho
Acting Chief Financial Officer (Principal Accounting Officer)

18

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2015	Mar. 03, 2016	Jun. 30, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	ALLIANCE FIBER OPTIC PRODUCTS INC
Entity Central Index Key	0001122342
Document Type	10-K
Document Period End Date	Dec. 31, 2015
Amendment Flag	true
Amendment Description	Alliance Fiber Optic Products, Inc. is filing this Amendment No. 1, (the “Amended Report”), to our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the Securities and Exchange Commission, or the SEC, on March 11, 2016, (the “Original Report”) in order to add certain information required by the following items of Form 10-K: Item Description ITEM 10. Directors, Executive Officers and Corporate Governance ITEM 11. Executive Compensation ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ITEM 13. Certain Relationships and Related Transactions, and Director Independence ITEM 14. Principal Accounting Fees and Services We hereby amend Items 10, 11, 12, 13 and 14 of Part III of our Original Report by deleting the text of such Items 10, 11, 12, 13 and 14 in their entirety and replacing them with the information provided below under the respective headings. The Amended Report does not affect any other items in our Original Report. As a result of this amendment, we are also filing as exhibits to this Amended Report the certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002. Because no financial statements are contained in this Amended Report, we are not including certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Except as otherwise expressly stated for the items amended in this Amended Report, this Amended Report continues to speak as of the date of the Original Report and we have not updated the disclosure contained herein to reflect events that have occurred since the filing of the Original Report. In addition, we have not updated the disclosure contained herein to reflect the impact of our proposed merger with a subsidiary of Corning Incorporate announced on April 7, 2016 on the compensation of our executive officers, including, without limitation, the vesting of equity awards. Accordingly, this Amended R
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 241,321,495
Entity Common Stock, Shares Outstanding		15,788,585
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Trading Symbol	AFOP

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 6,157	$ 22,723
Short-term investments	17,831	31,857
Accounts receivable, net	12,547	10,806
Inventories, net	10,919	9,305
Deferred tax asset, net	3,848	3,690
Prepaid expenses and other current assets	2,121	2,077
Total current assets	53,423	80,458
Long-term investments	10,821	10,635
Property and equipment, net	16,183	13,868
Other assets	206	212
Total assets	80,633	105,173
Current liabilities:
Accounts payable	6,059	9,236
Accrued expenses and other current liabilities	9,510	8,699
Total current liabilities	15,569	17,935
Long-term liabilities:	2,194	978
Total liabilities	$ 17,763	$ 18,913
Commitments and contingencies (Note 10)
Stockholders' equity:
Preferred stock, par value $0.001: 5,000,000 shares authorized; no shares issued and outstanding at December 31, 2015 and 2014, respectively
Common stock, par value $0.001: 100,000,000 shares authorized; 15,786,785 and 17,942,595 shares issued and outstanding at December 31, 2015 and 2014, respectively	$ 16	$ 18
Additional paid-in-capital	76,462	111,622
Accumulated deficit	(13,779)	(26,817)
Accumulated other comprehensive income	171	1,437
Total stockholders' equity	62,870	86,260
Total liabilities and stockholders' equity	$ 80,633	$ 105,173

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2015	Dec. 31, 2014
Consolidated Balance Sheets [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	15,786,785	17,942,595
Common stock, shares outstanding	15,786,785	17,942,595

XML

Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Consolidated Statements of Income and Comprehensive Income [Abstract]
Revenues	$ 81,189	$ 85,987	$ 76,070
Cost of revenues	48,154	51,770	46,952
Gross profit	33,035	34,217	29,118
Operating expenses:
Research and development	4,411	4,340	3,702
Selling, marketing and administrative	9,430	8,274	8,315
Total operating expenses	13,841	12,614	12,017
Income from operations	19,194	21,603	17,101
Interest and other income, net	623	769	708
Income before benefit (provision) for income taxes	19,817	22,372	17,809
Benefit (provision) for income taxes	(6,779)	(7,864)	999
Net income	13,038	14,508	18,808
Foreign currency translation adjustments	(1,275)	(961)	(392)
Net unrealized gain (loss) on investments available for sale	9	(15)	10
Comprehensive income	$ 11,772	$ 13,532	$ 18,426
Net income per share:
Basic	$ 0.74	$ 0.78	$ 1.06
Diluted	$ 0.73	$ 0.77	$ 1.02
Shares used in computing net income per share:
Basic	17,648	18,488	17,785
Diluted	17,945	18,935	18,481

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities:
Net income	$ 13,038	$ 14,508	$ 18,808
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,731	2,799	2,175
Stock based compensation	2,936	2,160	1,917
Loss on disposal of property and equipment	8	3	107
Provision for (recovery of) inventory valuation	38	(30)	(84)
Deferred tax assets	(158)	2,346	(2,334)
Changes in assets and liabilities:
Accounts receivable	(1,300)	760	(3,520)
Inventories	(2,066)	1,355	(3,613)
Prepaid expenses and other current assets	(609)	(332)	(579)
Other assets	(1)	(14)	51
Accounts payable	(2,830)	(2,421)	5,066
Accrued expenses and other current liabilities	725	1,565	3,019
Long-term liabilities	1,554	378	(16)
Net cash provided by operating activities	14,066	23,077	20,997
Cash flows from investing activities:
Purchase of short-term investments	(57,752)	(35,438)	(21,492)
Proceeds from sales and maturities of short-term investments	71,055	31,643	21,908
Purchase of long-term investments	(186)	(182)	(179)
Purchase of property and equipment	(5,587)	(3,980)	(7,830)
Net cash provided by (used in) investing activities	7,530	(7,957)	(7,593)
Cash flows from financing activities:
Proceeds from issuance of common stock under ESPP	673	661	521
Proceeds from the exercise of stock options	669	607	5,239
Tax payments related to net share settlements of RSUs	732	501	(1,326)
Repurchase of common stock	$ (40,172)	(9,676)	(873)
Payment of dividends		(2,700)	(2,761)
Net cash (used in) provided by financing activities	$ (38,098)	(10,607)	800
Effect of exchange rate changes on cash and cash equivalents	(64)	(393)	(394)
Net (decrease) increase in cash and cash equivalents	(16,566)	4,120	13,810
Cash and cash equivalents at beginning of year	22,723	18,603	4,793
Cash and cash equivalents at end of year	6,157	22,723	18,603
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$ (3,385)	$ (1,092)	$ (433)

XML

Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Deferred Stock-based Compensation [Member]	Retained Earnings (Accumulated Deficit) [Member]	Accumulated Other Comprehensive Income/(Loss) [Member]
Balance at Dec. 31, 2012	$ 60,031	$ 18	$ 109,485	$ 2,406	$ (54,672)	$ 2,794
Balance, shares at Dec. 31, 2012		17,265
Deferred stock-based compensation	1,917			1,917
Issuance of stock on exercise of options and RSUs	3,913		$ 5,239	$ (1,326)
Issuance of stock on exercise of options and RSUs, shares		1,210
Issuance of stock purchased through ESPP	521		$ 521
Issuance of stock purchased through ESPP, shares		92
Issuance of cash dividends	(2,761)				$ (2,761)
Repurchase of common stock	(873)		$ (873)
Repurchase of common stock, shares		(159)
Net income	18,808				$ 18,808
Other comprehensive loss	(382)					$ (382)
Balance at Dec. 31, 2013	81,174	$ 18	$ 114,372	$ 2,997	$ (38,625)	$ 2,412
Balance, shares at Dec. 31, 2013		18,408
Deferred stock-based compensation	2,160			2,160
Issuance of stock on exercise of options and RSUs	1,108		$ 2,491	$ (1,383)
Issuance of stock on exercise of options and RSUs, shares		224
Issuance of stock purchased through ESPP	661		$ 661
Issuance of stock purchased through ESPP, shares		51
Issuance of cash dividends	(2,700)				$ (2,700)
Repurchase of common stock	(9,676)		$ (9,676)
Repurchase of common stock, shares		(740)
Net income	14,508				$ 14,508
Other comprehensive loss	(975)					$ (975)
Balance at Dec. 31, 2014	86,260	$ 18	$ 107,848	$ 3,774	$ (26,817)	$ 1,437
Balance, shares at Dec. 31, 2014		17,943
Deferred stock-based compensation	2,936			2,936
Issuance of stock on exercise of options and RSUs	1,401		$ 4,293	$ (2,892)
Issuance of stock on exercise of options and RSUs, shares		295
Issuance of stock purchased through ESPP	673		673
Issuance of stock purchased through ESPP, shares		60
Repurchase of common stock	(40,172)	$ (2)	$ (40,170)
Repurchase of common stock, shares		(2,511)
Net income	13,038				$ 13,038
Other comprehensive loss	(1,266)					$ (1,266)
Balance at Dec. 31, 2015	$ 62,870	$ 16	$ 72,644	$ 3,818	$ (13,779)	$ 171
Balance, shares at Dec. 31, 2015		15,787

XML

The Company and summary of significant accounting policies

12 Months Ended

Dec. 31, 2015

The Company and summary of significant accounting policies [Abstract]

The Company and summary of significant accounting policies

1. The Company and summary of significant accounting policies

The Company

Alliance Fiber Optic Products, Inc. (the “Company”) was incorporated in California on December 12, 1995 and reincorporated in Delaware on October 19, 2000. The Company designs, manufactures and markets fiber optic components for communications equipment manufacturers. The Company's headquarters are located in Sunnyvale, California, and it has operations in Taiwan and China.

Use of estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates involve those required in the assessment of the allowances for sales returns, doubtful accounts, potential excess or obsolete inventory, the valuation of stock-based compensation and the valuation of deferred tax assets. Actual results could differ from those estimates.

Basis of presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation.

Foreign currency translation

The Company's operations through foreign subsidiaries use the local currency as their functional currency. All assets and liabilities of the subsidiaries are translated at rates of exchange as of the balance sheet date. Revenues and expenses are translated at the average rate of exchange for the period. Gains and losses resulting from foreign currency translation are recorded as a separate component of other comprehensive income in stockholders' equity. Foreign currency transaction gains and losses are recorded in interest and other income and have not been material.

Cash, cash equivalents, short-term and long-term investments

The Company considers all highly liquid instruments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of cash deposited in money market, certificate of deposit, and checking accounts.

The Company accounts for its investments under the provisions of Accounting Standards Codification (“ASC”) 320 “Investments - Debt and Equity Securities.” Investments in highly liquid financial instruments with remaining maturities greater than three months and maturities of less than one year are classified as short-term investments. Financial instruments with remaining maturities greater than one year are classified as long-term investments. All investments are classified as available-for-sale and are reported at fair value using the specific identification method with net unrealized gain/(loss) reported, net of tax as other comprehensive gain/(loss) in stockholders' equity. The fair value of the Company's available-for-sale securities are based on quoted market prices or other methodologies for those investments with no quoted market prices at the balance sheet dates.

The Company's financial instruments also include accounts receivable, accounts payable and are carried at cost, which approximates the fair value of these instruments.

Fair value of financial instruments

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management's estimate of assumptions that market participants would use in pricing the asset or liability.

The Company's valuation techniques used to measure the fair value of money market funds and certain marketable equity securities were derived from quoted prices in active markets for identical assets or liabilities.

In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. The Company has not elected the fair value option for any eligible financial instruments.

Allowance for doubtful accounts

The Company performs periodic credit evaluations of its customers' financial condition. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability or unwillingness of customers to make required payments. When the Company becomes aware that a specific customer is unable to meet its financial obligations, for example, as a result of bankruptcy or deterioration in the customer's operating results or financial position, the Company records a specific allowance to reflect the level of credit risk in the customer's outstanding receivable balance. The Company is not able to predict changes in the financial condition of customers, and if circumstances related to customers deteriorate, estimates of the recoverability of trade receivables could be materially affected and the Company may be required to record additional allowances. Alternatively, if the Company provides more allowances than the Company needs, the Company may reverse a portion of such provisions in future periods based on actual collection experience. In addition, the Company records additional allowances based on historical sales returns as explained under the revenue recognition section.

Inventories, net

Inventories are stated at the lower of cost or market, with cost being determined using standard cost, which approximates actual cost on a first-in, first-out basis. Market value is determined as the lower of replacement cost or net realizable value. We regularly review our inventories for obsolescence and reserves are established when necessary. Provisions are made for excess and obsolete inventory based on historical usage and management's estimates of future demand. Inventory reserves, once established, are only reversed upon sale or disposition of related inventory. Inventory reserves were $1.4 million, $2.4 million and $2.4 million as of December 31, 2015, 2014 and 2013, respectively.

Property and equipment, net

Property and equipment is stated at cost less accumulated depreciation and impairment charges. Depreciation is computed using the straight-line method based on estimated useful lives of 25 years for buildings, two to 10 years for machinery and equipment and five years for furniture and fixtures. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the estimated life of the assets, generally two to four years, or the lease term. Depreciation and amortization expenses were $2.7 million, $2.8 million and $2.2 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Impairment of Long-lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value based on fair market values.

Revenue recognition

The Company recognizes revenue upon shipment of its products to its customers, provided that the Company has received a purchase order, the price is fixed, collection of the resulting receivable is reasonably assured and transfer of title and risk of loss has occurred. Subsequent to the sale of its products, the Company has no obligation to provide any modification or customization upgrades, enhancements or post contract customer support.

Allowances are provided for estimated returns. A provision for estimated sales return allowances is recorded at the time revenue is recognized based on historical returns, current economic trends and changes in customer demand. Such allowances are adjusted periodically to reflect actual and anticipated experience. Such adjustments, which are recorded against revenue in the period, have generally not been material. The Company accrued $0.07 million, $0.08 million and $0.06 million for warranty reserves as of December 31, 2015, 2014 and 2013, respectively.

Shipping and handling expenses

Shipping and handling expenses are included in cost of revenue.

Research and development expenses

Research and development costs are charged to expense as incurred.

Advertising expenses

Advertising costs are charged to expense as incurred and have not been material in 2015, 2014 and 2013.

Sales taxes

The Company accounts for taxes charged to its customers and collected on behalf of taxing authorities on a net basis.

Income taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.

The Company applies ASC 740 which utilizes a two-step approach wherein a tax benefit is recognized if a position is more-likely-than-not to be sustained. The amount of the benefit is then measured to be the highest tax benefit that is greater than 50% likely to be realized. The Company has elected to include interest and penalties related to its tax contingencies in income tax expense. The Company files a U.S. federal tax return and returns with the State of California and the State of Georgia. The Company has determined that its major tax jurisdictions are the United States, California, Georgia, Taiwan and China.

The Company follows the provisions of ASC 740-10-25, Income Taxes: Recognition ("ASC 740-10-25"). The total amount of unrecognized tax benefits as of December 31, 2015, 2014 and 2013 were $1.1 million, $1.1 million and $0.7 million respectively. The Company does not anticipate any significant change to its unrecognized tax positions over the next 12 months. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate were $0.7 million, $0.7 million and $0.3 million as of December 31, 2015, 2014 and 2013, respectively. The increases in unrecognized tax benefits during the years ended December 31, 2015 and 2014 were mainly due to the increase in additional state income tax liabilities. The increase in unrecognized tax benefits during the year ended December 31, 2013 was mainly due to the increase in the valuation of the Company's research credit for federal and state income taxes purposes.

A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits for the years ended December 31, 2015 and 2014 are as follows:

Balance at December 31, 2013	$	683
Additions for tax positions of the prior year		280
Additions for tax positions of the current year		117
Balance at December 31, 2014	$	1,080
Additions for tax positions of the current year		10
Reductions for tax positions of the prior year		(18	)
Balance at December 31, 2015	$	1,072

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes. During the years ended December 31, 2015, 2014 and 2013, the Company recognized approximately $0.2 million, $0.1 million and $0.1 million, respectively, for interest and penalties.

Deferred tax assets pertaining to windfall tax benefits on the exercise of share awards and the corresponding credit to additional paid-in capital are recorded if the related tax deduction reduces tax payable. The Company has elected the “with-and-without approach excluding indirect tax effects” regarding ordering of windfall tax benefits to determine whether the windfall tax benefit reduced taxes payable in the current year. Under this approach, the windfall tax benefits would be recognized in additional paid-in capital only if an incremental tax benefit is realized after considering all other tax benefits presently available to the Company without considering available income tax credits. The Company's deferred tax assets as of December 31, 2015, 2014 and 2013 do not include $0.7 million, $0.6 million and $1.8 million, respectively, of excess tax benefits from employee stock option exercises and vested RSUs that are a component of its net operating loss carryovers. Stockholders' equity will be increased by the same amount if and when such excess tax benefits are ultimately realized.

The Company files income tax returns in the United States (federal), Taiwan, China and in various state and local jurisdictions. The Company is no longer subject to federal income tax examinations by tax authorities for years prior to 2012, California State and China income tax examination by tax authorities for years prior to 2011, and Taiwan income tax examinations by tax authorities for years prior to 2009. The Company is not currently under examination by any federal, state or local jurisdiction. It is not anticipated that unrecognized tax benefits will significantly change in the next twelve months.

Stock-based compensation

The Company estimates the fair value of the share-based payment awards on the date of grant using an option pricing model. The value of awards that are ultimately expected to vest is recognized as an expense over the requisite employee service period.

Comprehensive income

Comprehensive income is defined as the change in equity of a company from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Accumulated other comprehensive income consists of cumulative translation adjustments and unrealized gains on short-term investments and is disclosed in the consolidated statements of stockholders' equity.

Recent accounting pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, "Leases (Topic 842)". The amendments under this pronouncement will change the way all leases with a duration of one year of more are treated. Under this guidance, lessees will be required to capitalize virtually all leases on the balance sheet as a right-of-use asset and an associated financing lease liability or capital lease liability. The right-of-use asset represents the lessee's right to use, or control the use of, a specified asset for the specified lease term. The lease liability represents the lessee's obligation to make lease payments arising from the lease, measured on a discounted basis. Based on certain characteristics, leases are classified as financing leases or operating leases. Financing lease liabilities, those that contain provisions similar to capitalized leases, are amortized like capital leases are under current accounting, as amortization expense and interest expense in the statement of operations. Operating lease liabilities are amortized on a straight-line basis over the life of the lease as lease expense in the statement of operations. This update is effective for annual reporting periods, and interim periods within those reporting periods, beginning after December 15, 2018. The Company is currently evaluating the impact this standard will have on its policies and procedures pertaining to its existing and future lease arrangements, disclosure requirements and on its consolidated financial statements.

     In July 2015, FASB issued new accounting guidance on simplifying the measurement of inventory which requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Prior to the issuance of the standard, inventory was measured at the lower of cost or market (where market was defined as replacement cost, with a ceiling of net realizable value and floor of net realizable value less a normal profit margin). The accounting guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2016. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements.

     In January 2015, the FASB issued guidance which eliminates the concept of extraordinary items in an entity's income statement. The changes in ASU 2015-01 are effective for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements.

     In August 2014, FASB issued a new accounting standard which requires management to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern for each annual and interim reporting period and to provide related footnote disclosures in certain circumstances. The accounting standard is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements.

     In May 2014, the FASB issued a new financial accounting standard which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance. The accounting standard is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is not permitted. The Company is currently evaluating the impact of this accounting standard on its consolidated financial statements.

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Stockholders' Equity

12 Months Ended

Dec. 31, 2015

Stockholders' Equity [Abstract]

Stockholders' Equity

2. Stockholders' Equity 

Preferred Stock. The Company is authorized to issue 5,000,000 shares of preferred stock, none of which was outstanding as of December 31, 2015. The Board of Directors may determine the rights, preferences and privileges of any preferred stock issued in the future.

Common Stock. On November 1, 2013, the Company amended its Amended and Restated Certificate of Incorporation to increase the number of shares of common stock authorized for issuance from 20,000,000 to 100,000,000.

On August 30, 2013, the Company effected a 2-for-1 split of its outstanding common stock, pursuant to previously obtained stockholder authorization. The number of authorized shares of common stock was not changed. The stock split increased the Company's issued and outstanding shares of common stock as of August 30, 2013 from approximately 9,061,568 shares to approximately 18,123,136 shares. All share and per share numbers reflect the split and were applied on a retroactive basis.

Stock Repurchase Programs. On August 24, 2015, the Company announced a program to repurchase up to $25.0 million worth of the Company's outstanding common stock. On November 20, 2015, the Company increased the program to repurchase up to $35 million of the Company's common stock. Repurchases under the program may be made in open market and privately negotiated transactions in compliance with Securities and Exchange Commission Rule 10b-18, subject to market conditions, applicable legal requirements and other factors. The Company is not required to repurchase any amount of common stock in any period and the program may be modified or suspended at any time. The duration of the repurchase program is open-ended. For the year ended December 31, 2015, an aggregate of 2,196,632 shares of common stock had been repurchased under the program.

     On October 29, 2014, the Company announced a program to repurchase up to $15 million worth of the Company's outstanding common stock. For the years ended December 31, 2015 and 2014, an aggregate of 313,478 and 740,190 shares of common stock, respectively, had been repurchased under the October 2014 stock repurchase program.

     On November 30, 2011, the Company announced a program to repurchase up to $6 million worth of the Company's outstanding common stock. For the years ended December 31, 2015 and 2013, an aggregate of 1,081 and 158,798 shares of common stock, respectively, had been repurchased under the November 2011 stock repurchase program.

     Dividends. On November 14, 2014, the Company announced it had declared a cash dividend of $0.15 per share, which was payable on December 24, 2014 to holders of record on December 8, 2014. On November 7, 2013, the Company announced it had declared a cash dividend of $0.15 per share, which was payable on December 23, 2013 to holders of record on December 6, 2013. The Company did not declare a cash dividend in 2015.

Stockholder Rights Plan. On March 10, 2011, the Board of Directors entered into an Amended and Restated Rights Agreement (the “Restated Rights Plan”), which amended and restated the original rights agreement dated as of May 29, 2001 (the “Original Agreement”). In connection with the adoption of the Original Agreement, one preferred stock purchase right (a “Right”) was distributed for each outstanding share of common stock. Since the occurrence of a one-for-five reverse split of the common stock at the close of business on August 7, 2010, five Rights had been associated with each outstanding share of common stock. The Restated Rights Plan restores the initial one Right per share of common stock ratio of the Original Agreement, but is also subject to adjustment as provided in the Restated Rights Plan. Rights continue to be attached to all outstanding shares of common stock, and no separate Rights certificates have been distributed.

Rights will separate from the common stock and a "Distribution Date" will occur upon the earliest of the following: (i) a public announcement that a person, entity or group of affiliated or associated persons and/or entities (an "Acquiring Person") has acquired, or obtained the right to acquire, beneficial ownership of fifteen percent (15%) or more of the outstanding shares of common stock (other than (A) as a result of repurchases of stock by the Company or certain inadvertent actions by institutional or certain other stockholders, (B) the Company, any subsidiary of the Company or any employee benefit plan of the Company or any subsidiary, (C) Foxconn Holding Limited (which owned in excess of fifteen percent (15%) of the outstanding shares of common stock when the Original Agreement was implemented), so long as such entity, together with its affiliated or associated persons and/or entities, does not increase its beneficial ownership by more than one percent (1%) of the outstanding shares of common stock above the percentage held in May 2001 (or such lesser percentage as may result following any transfer of securities after such date until Foxconn beneficially owns less than fifteen percent (15%) of the outstanding shares of common stock)) and (D) certain other instances set forth in the Restated Rights Plan); or (ii) ten (10) business days (unless such date is extended by the Board of Directors) following the commencement of a tender offer or exchange offer which would result in any person, entity or group of affiliated or associated persons and/or entities becoming an Acquiring Person (unless such tender offer or exchange offer is a Permitted Offer as defined in the Restated Rights Plan). As soon as practicable following the Distribution Date, separate certificates evidencing the Rights ("Rights Certificates") will be mailed to holders of record of the common stock as of the close of business on the Distribution Date, and the separate Rights Certificates alone will evidence the Rights

     The Rights are not exercisable until the Distribution Date. The Rights will expire on the earliest of (i) May 29, 2021, (ii) consummation of a merger transaction with a person, entity or group who (x) acquired common stock pursuant to a Permitted Offer and (y) is offering in the merger the same price per share and form of consideration paid in the Permitted Offer or (iii) redemption or exchange of the Rights by the Company as described in the Amended Rights Plan.

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Stock-based Compensation

12 Months Ended

Dec. 31, 2015

Stock-based Compensation [Abstract]

Stock-based Compensation

3. Stock-based Compensation 

ASC 718 - Compensation - Stock Compensation, requires companies to record compensation expense for stock options measured at fair value on the date of grant, using an option pricing model. The Company adopted the Black Scholes valuation model for stock options granted and stock purchased pursuant to the ESPP after June 30, 2010.

Fair value for stock options was estimated at the date of grant using the Black-Scholes option pricing model, with the following weighted average assumptions:

	Years Ended December 31,
	2015	2014	2013
Risk-free interest rate	0.96%	1.02%	0.49%
Time to maturity (in years)	3	4	4
Annualized volatility	57.59%	69.67%	30.30%
Expected dividend rate	0.00%	1.20%	0.98%

In November 2000, the Company adopted the 2000 Stock Incentive Plan (the “Stock Incentive Plan”) under which 300,000 shares of common stock were reserved for issuance to eligible employees, directors and consultants upon exercise of stock options and stock purchase rights. On October 21, 2013, the stockholders approved an increase by 900,000 in the number of shares of common stock available for issuance under the Stock Incentive Plan. The number of shares reserved for issuance under the Company's 2000 Stock Incentive Plan may be increased on the first day of the Company's fiscal year by the lesser of 680,000 shares, 5% of the fully diluted outstanding shares of the Company's common stock on that date or a lesser amount determined by the Company's Board of Directors. There was no increase on January 1, 2015, because the Board determined there were enough shares available for issuance in 2015 pursuant to the Plan. Stock options, restricted stock, restricted stock units (“RSUs”) or stock appreciation rights may be awarded under the 2000 Stock Incentive Plan.

The plan was amended and restated in 2010 to, among other things, extend the term under which awards may be granted under the plan until March 17, 2020, eliminate a 10 million share ceiling on the aggregate number of shares of common stock that may be issued under the plan, and to include certain qualifying performance criteria and annual award limits so that awards granted under the plan qualify as “performance-based compensation" under the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended.

     Under the Stock Incentive Plan, participants may be granted RSUs, representing an unfunded, unsecured right to receive common stock on the date specified in the recipient's award. The RSUs granted under the plan generally vest over a term of two to five years. The Company recognizes compensation expense on a straight-line basis over the applicable vesting term of the award.

     During the year ended December 31, 2011, the Company granted 546,000 RSUs with a total grant-date fair value of $2.5 million. The resulting compensation expense recorded in the years ended December 31, 2014 and 2013 was approximately $0.4 million and $0.4 million, respectively. At December 31, 2015, there was $0.1 million of unrecognized compensation expense related to RSUs, which is expected to be realized over one year.

     During the year ended December 31, 2013, the Company granted 342,000 RSUs with a total grant-date fair value of $2.3 million. The resulting compensation expense recorded in the year ended December 31, 2015 and 2014 was approximately $0.5 million and $0.8 million, respectively. At December 31, 2015, there was $0.1 million of unrecognized compensation expense related to RSUs, which is expected to be realized over one year.

     During the year ended December 31, 2015, the Company granted 302,000 RSUs with a total grant-date fair value of $5.3 million. The resulting compensation expense recorded in the year ended December 31, 2015 was approximately $1.1 million. At December 31, 2015, there was $4.2 million of unrecognized compensation expense related to RSUs, of which $0.7 million is expected to be realized over two years and $3.5 million is expected to be realized over four years.

     Options granted under the Stock Incentive Plan generally vest over four years and are exercisable for not more than ten years. However, most options granted in the past four years have been fully vested at the time of grant.

     The following information relates to stock option activity for the year ended December 31, 2015:

					Weighted
			Weighted		Average
			Average		Remaining	Aggregate
			Exercise		Contractual	Intrinsic
Options	Shares		Price		Life	Value
Outstanding at December 31, 2014	693,100		$	9.08
Granted	58,000			14.74
Exercised	(101,100	)		6.62
Forfeited	(78,400	)		11.88
Outstanding at December 31, 2015	571,600		$	9.71	7.75 Years	$	3,154,415
Vested and expected to vest at December 31, 2015	496,428		$	9.60	7.69 Years	$	2,796,239
Exercisable at December 31, 2015	164,167		$	6.95	6.27 Years	$	1,356,896

     The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price on the last trading day of the fourth quarter of fiscal 2015 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2015. This amount changes based on the fair market value of the Company's common stock. The total intrinsic value of options exercised for the years ended December 31, 2015, 2014 and 2013 was $1.1 million, $1.3 million and $12.8 million, respectively.

     Options to purchase 58,000 shares of common stock were granted during the year ended December 31, 2015. At December 31, 2015, there was $1.6 million of unrecognized compensation expense related to stock options, all of which is expected to be realized over four years.

     The dividend rate was 0% and 0.15% for the years ended December 31, 2015 and 2014, respectively.

     Information relating to stock options outstanding at December 31, 2015 is as follows:

			Options Outstanding		Options Exercisable
				Weighted
				Average	Weighted					Weighted
Range of			Number	Remaining	Average			Number	Average
Exercise			Outstanding	Contractual	Exercise			Exercisable	Exercise
Price			As of 12/31/15	Term	Price			As of 12/31/15	Price
	$3.88 -	$4.80	111,700	6.22		$	4.28	85,000		$	4.41
	$5.05 -	$6.03	22,500	1.46		$	5.32	22,500		$	5.32
	$6.87 -	$6.87	96,000	7.29		$	6.87	13,800		$	6.87
	$8.17 -	$12.32	82,000	8.51		$	11.22	600		$	8.17
	$12.50 -	$12.50	201,400	8.19		$	12.50	37,600		$	12.50
	$13.61 -	$18.36	58,000	11.25		$	14.74	4,667		$	16.32
			571,600	7.75		$	9.71	164,167		$	6.95

     Options exercisable as of December 31, 2015 and 2014 were 164,167 and 118,161 at an average exercise price of $6.95 and $4.75 per share, respectively.

     There were 487,824 shares available for future issuance under the Stock Incentive Plan as of December 31, 2015.

Employee Stock Purchase Plan

     In November 2000, the Company adopted its ESPP. The Company reserved 600,000 shares of common stock for issuance under the ESPP. The ESPP was amended and restated in 2010. On April 29, 2011, the stockholders approved an increase by 600,000 in the number of shares of common stock available for issuance. On the first day of January of each year beginning January 1, 2001 through December 31, 2010, additional shares of common stock were reserved for issuance under the ESPP as determined by the Board of Directors. The ESPP limited the annual increase to the lesser of 1% of the Company's issued and outstanding common stock or 400,000 shares. The ESPP provides eligible employees with the opportunity to acquire shares of common stock at a price of 85% of the lower of the fair market value of the common stock on the first day of the offering period or the last day of the offering period, whichever is lower. The ESPP is structured as a qualified employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended. However, the ESPP is not intended to be a qualified pension, profit sharing or stock bonus plan under Section 401(a) of the 1986 Code and is not subject to the provisions of the Employee Retirement Security Act of 1974. The Board may amend, suspend, or terminate the Plan at any time without notice. A total of 59,781 and 50,759 shares were issued under the ESPP in 2015 and 2014, respectively.

     There were 208,360 shares available for future issuance under the ESPP as of December 31, 2015.

     The following information relates to the ESPP:

	2015		2014		2013
Weighted average fair value per share of shares purchased	$	11.26	$	13.01	$	5.66
Total compensation expense for ESPP	$	324,250	$	461,980	$	409,079
Total amount of cash received from the purchase of stock through ESPP	$	672,899	$	660,621	$	521,308
Total intrinsic value of ESPP stock purchased at December 31	$	233,381	$	75,892	$	863,120

     The following table summarizes employee stock-based compensation expense resulting from stock options, RSUs, and the ESPP (in thousands):

	Years Ended December 31,
	2015		2014		2013
Included in cost of revenue	$	513	$	491	$	373
Included in operating expenses:
Research and development		196		234		232
Sales, marketing and administrative		2,227		1,435		1,312
Total		2,423		1,669		1,544
Total stock-based compensation expenses	$	2,936	$	2,160	$	1,917

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Net Income per Share

12 Months Ended

Dec. 31, 2015

Net Income Per Share [Abstract]

Net Income Per Share

4. Net Income per Share

     Basic net income per share is computed by dividing net income for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing the net income for the period by the combination of dilutive common share equivalents, comprised of shares issuable under the Company's stock-based compensation plans, and the weighted average number of common shares outstanding during the period.

     The following table sets forth the computation of basic and diluted net income per share for the years indicated (in thousands, except per share amounts):

	Years Ended December 31,
	2015		2014		2013
Numerator:
Net income	$	13,038	$	14,508	$	18,808
Denominator:
Shares used in computing net income per share:
Weighted average of common shares outstanding
Basic		17,648		18,488		17,785
Diluted		17,945		18,935		18,481
Net income per share:
Basic	$	0.74	$	0.78	$	1.06
Diluted	$	0.73	$	0.77	$	1.02

As of December 31, 2015, options to purchase 12,000 shares were excluded from the computation of diluted net income per share as the effect would have been anti-dilutive.

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Balance Sheet Components

12 Months Ended

Dec. 31, 2015

Balance Sheet Components [Abstract]

Balance Sheet Components

5. Balance Sheet Components (in thousands)

	December 31,
	2015			2014
Cash and cash equivalents:
Cash	$	5,876		$	18,653
Money market instruments and funds		281			4,070
	$	6,157		$	22,723
Accounts receivable, net:
Accounts receivable	$	12,668		$	10,927
Less: Allowance for doubtful accounts and sales returns		(121	)		(121	)
	$	12,547		$	10,806
Allowance for doubtful accounts and sales returns:
Balance at beginning of year	$	121		$	121
Utilized		-			-
Balance at end of year	$	121		$	121
Inventories:
Finished goods	$	3,958		$	3,191
Work-in-process		4,705			3,430
Raw materials		3,667			5,052
	$	12,330		$	11,673
Inventory reserves:
Finished goods	$	520		$	647
Work-in-process		296			460
Raw materials	$	595		$	1,261
	$	1,411		$	2,368
Accrued expenses and other current liabilities:
Compensation costs	$	4,325		$	5,016
Professional fees		24			55
Outside commissions		146			143
Royalties		82			135
ESPP		147			138
Deferred rent		29			33
Warranty		70			82
Operating related (Taiwan and China)		483			417
Income tax		2,888			2,204
Stock buyback		851			-
Other		465			476
	$	9,510		$	8,699
Long-term liabilities:
Income tax payable	$	1,581		$	376
Accrued pension liability (Taiwan)		613			602
	$	2,194		$	978
Accumulated other comprehensive Income:
Cumulative translation adjustments	$	172		$	1,447
Unrealized loss on short-term investments		(1	)		(10	)
	$	171		$	1,437

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Property and Equipment, Net

12 Months Ended

Dec. 31, 2015

Property and Equipment, Net [Abstract]

Property and Equipment, Net

6. Property and Equipment, Net

	December 31,
(in thousands)	2015			2014
Machinery and equipment	$	22,116		$	20,315
Furniture and fixtures		883			686
Leasehold improvements		4,373			2,655
Building and equipment prepayments		4,283			3,804
	$	31,655		$	27,460
Less: Accumulated depreciation and amortization		(15,472	)		(13,592	)
Total property and equipment, net	$	16,183		$	13,868

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Income Taxes

12 Months Ended

Dec. 31, 2015

Income Taxes [Abstract]

Income Taxes

7. Income Taxes

The components of income before income taxes are as follows (in thousands):

	Years Ended December 31,
	2015		2014		2013
Income subject to domestic income taxes only	$	1,569	$	8,608	$	17,645
Income subject to foreign income taxes only		18,248		13,764		164
	$	19,817	$	22,372	$	17,809

The income tax provision (benefit) is composed of the following (in thousands):

	Years Ended December 31,
Current:	2015			2014		2013
Federal	$	1,323		$	2,663	$	382
State		171			75		1
Foreign		5,484			2,403		953
		6,978			5,141		1,336
Deferred:
Federal		(36	)		1,891		(1,450	)
State		(25	)		763		(232	)
Foreign		(138	)		69		(653	)
		(199	)		2,723		(2,335	)
Total provision (benefit) for income taxes	$	6,779		$	7,864	$	(999	)

Deferred tax assets and liabilities consist of the following (in thousands):

	Years Ended December 31,
	2015			2014			2013
Deferred tax assets - current:
Net operating loss carryforwards	$	744		$	620		$	3,501
Windfall tax benefit carryforwards		(744	)		(620	)		(580	)
Federal/State credit carryforwards		2,692			2,536			2,260
Depreciation and amortization		146			24			6
Stock compensation		650			326			-
Accrued liabilities and allowances		1,098			1,508			1,532
Unrecognized tax benefits		(738	)		(704	)		(683	)
Total deferred tax assets	$	3,848		$	3,690		$	6,036

The following is a reconciliation of the effective tax rates and the United States statutory federal income tax rate:

	Years Ended December 31,
	2015		2014		2013
Tax at federal statutory rate	34.0	%	34.0	%	34.0	%
State, net of federal benefit	4.5		5.8		5.8
Effect of permanent differences	(1.8	)	3.8		1.1
Stock and deferred compensation	1.1		0.9		(7.2	)
Net operating loss carryover	0.4		5.6		-
Foreign tax differential	(9.3	)	(13.1	)	0.1
Minimum tax	-		0.6		1.7
Income tax credits	(1.3	)	(1.9	)	(0.9	)
Valuation allowance	-		-		(47.4	)
Stock compensation windfall	7.0		2.1		2.3
Other	(0.3	)	(2.6	)	4.9
Provision (benefit) for taxes	34.3	%	35.2	%	(5.6	)%

The Company's effective tax rates in comparison to the U.S. statutory rates in 2015 and 2014 reflect differentials between the U.S. statutory rate and the foreign tax rates applied to the earnings of the Company's foreign subsidiaries. The foreign tax differential accounted for a 9.3% and 13.1% decrease in the Company's effective tax rates in 2015 and 2014, respectively. The Company's effective tax rate was below the U.S. statutory rate in 2013 mainly because of the tax benefit arising from a reduction in the valuation allowance. The valuation allowance accounted for a 47.4% decrease in the Company's effective tax rate in 2013. The net operating loss carryforward that resulted in 0.4% and 5.6% of increase in the Company's effective tax rate in 2015 and 2014, respectively, was related to true-ups and amended prior years' returns. The Company is subject to income tax in both the United States and various foreign jurisdictions. The effective tax rate is also affected by the taxable earnings in foreign jurisdictions with various different statutory tax rates. The Company reviews its expected annual effective income tax rates and makes changes on a quarterly basis as necessary based on certain factors such as forecasted annual operating income and valuation of deferred tax assets.

As of December 31, 2015, the Company has a net operating loss carryforward of approximately $1.0 million for federal and $6.9 million for state income tax purposes. If not utilized, these carryforwards will begin to expire after 2025 for federal and after 2018 for state purposes.

As of December 31, 2015, the Company has research credit carryforwards of approximately $1.4 million and $1.0 million for federal and state income tax purposes, respectively. If not utilized, the federal carryforwards will expire in various amounts beginning in 2019. The California tax credits can be carried forward indefinitely.

Internal Revenue Code Section 382 limits the use of net operating loss and tax credit carryforwards in certain situations where changes occur in the stock ownership of a company. In the event the Company has had a change in ownership, utilization of the carryforwards could be restricted. The Company has concluded no change in stock ownership has occurred during 2015.

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Concentrations of Certain Risks

12 Months Ended

Dec. 31, 2015

Concentrations of Certain Risks [Abstract]

Concentrations of Certain Risks

8. Concentrations of Certain Risks 

     Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents, short-term and long-term investments and accounts receivable. The Company limits the amount of deposits in any one financial institution and any one financial instrument. The Company invests its excess cash principally in certificates of deposit, debt instruments issued by high-credit quality financial institutions and corporations and money market accounts with financial institutions in the United States.

     The Company performs periodic credit evaluations of its customers' financial condition, and limits the amount of credit extended when deemed necessary, but generally does not require collateral.

     One customer accounted for 15.1% and 26.9% of the Company's accounts receivable at December 31, 2015 and 2014, respectively.

     One customer accounted for 31.0%, 39.6% and 35.3% of revenues in the year ended December 31, 2015, 2014 and 2013, respectively.

     Certain components used in manufacturing the Company's products have relatively few alternative sources of supply, and establishing additional or replacement suppliers for such components may not be accomplished quickly.

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Geographic Segment Information

12 Months Ended

Dec. 31, 2015

Geographic Segment Information [Abstract]

Geographic Segment Information

9. Geographic Segment Information

The Company operates in a single industry segment. This industry segment is characterized by rapid technological change and significant competition.

The following is a summary of the Company's revenues generated by geographic segments, revenues generated by product lines and identifiable assets located in these segments (in thousands):

	Years Ended December 31,
	2015		2014		2013
Revenues
North America	$	45,033	$	52,101	$	42,815
Europe		17,513		18,102		15,604
Asia		18,643		15,784		17,651
	$	81,189	$	85,987	$	76,070
	Years Ended December 31,
		2015		2014		2013
Revenues
Connectivity Products	$	61,282	$	64,791	$	57,660
Optical Passive Products		19,907		21,196		18,410
	$	81,189	$	85,987	$	76,070

	Years Ended December 31,
	2015		2014
Property and Equipment, net
United States	$	191	$	185
Taiwan		9,016		8,568
China		6,976		5,115
	$	16,183	$	13,868

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies [Abstract]

Commitments and Contingencies

10. Commitments and Contingencies

Litigation

From time to time, the Company may be involved in litigation in the normal course of business. As of the date of these financial statements, the Company is not aware of any material legal proceedings pending or threatened against the Company.

Off-Balance Sheet Arrangements

The Company had no off-balance sheet arrangements as of December 31, 2015 or 2014, respectively.

Indemnification and Product Warranty

The Company indemnifies certain customers, suppliers and subcontractors for attorney fees and damages and costs awarded against these parties in certain circumstances in which products are alleged to infringe third party intellectual property rights, including patents, trade secrets, trademarks or copyrights. In all cases, there are limits on and exceptions to the potential liability for indemnification relating to intellectual property infringement claims. The Company cannot estimate the amount of potential future payments, if any, that it might be required to make as a result of these agreements. As of December 31, 2015, the Company has not paid any claim or been required to defend any action related to indemnification obligations, and accordingly, the Company has not accrued any amounts for such indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations.

     The Company generally warrants products against defects in materials and workmanship and non-conformance to specifications for varying lengths of time. If there is a material increase in customer claims compared with historical experience, or if costs of servicing warranty claims are greater than expected, the Company may record a charge against cost of revenues. The Company accrued $0.07 million, $0.08 million and $0.06 million warranty reserves as of December 31, 2015, 2014 and 2013, respectively.

Operating Leases 

     The Company leases certain office space under long-term operating leases expiring at various dates through 2019. Total rent expense under these operating leases was approximately $0.9 million for the year ended December 31, 2015 and $0.7 million for each of the years ended December 31, 2014 and 2013.

Total future minimum lease payments under operating leases as of December 31, 2015 are summarized below (in thousands):

Years ending December 31,
2016	$	1,048
2017		655
2018		428
2019		376
Total	$	2,507

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Related Party Transactions

12 Months Ended

Dec. 31, 2015

Related Party Transactions [Abstract]

Related Party Transactions

11. Related Party Transactions

As of December 31, 2015, and based on information filed with the Securities and Exchange Commission in February 2016, Foxconn Holding Limited (“Foxconn”) and Hon Hai Precision Industry Co. Ltd. (“Hon Hai”) held 15% of the Company's common stock. In the normal course of business, the Company sells products to and purchases raw materials from Hon Hai, who is the parent company of Foxconn. These transactions were made at prices and terms consistent with those of unrelated third parties.

Sales of products to Hon Hai were $0.04 million, $0.07 million and $0.01 million in the years ended December 31, 2015, 2014 and 2013, respectively. No amounts were due from Hon Hai at December 31, 2015. Amounts due from Hon Hai were $0.05 million and $0.01 million at December 31, 2014 and 2013, respectively.

Purchases of raw materials from Hon Hai were $2.0 million, $1.8 million and $1.5 million in the years ended December 31, 2015, 2014 and 2013 respectively. Amounts due to Hon Hai were $0.3 million, $0.4 million and $0.3 million at December 31, 2015, 2014 and 2013, respectively.

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Fair Value of Financial instruments

12 Months Ended

Dec. 31, 2015

Fair Value of Financial instruments [Abstract]

Fair Value of Financial instruments

12. Fair Value of Financial instruments

U.S. GAAP defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact a purchase or sale and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability.

The Company uses a fair value hierarchy established by U.S. GAAP that established a three-tiered fair value hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable to prioritize inputs used to measure fair value. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is available and significant to the fair value measurement. Those tiers are defined as follows:

Level 1 —	inputs are quoted prices in active markets for identical assets or liabilities.
Level 2 —	inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.
Level 3 —	inputs are unobservable and shall be used to the extent that observable inputs are not available in the overall fair value measurement.

The following table represents the fair value hierarchy for the Company's financial assets (investments) measured at fair value on a recurring basis at December 31, 2015 and December 31, 2014 (in thousands):

	Fair Value Measurements at
	Reporting Date Using
			Quoted Prices			Significant
			in Active			Other			Significant
	Balance at		Markets for			Observable			Unobservable
	December 31,		Identical Assets			Inputs			Inputs
	2015		(Level 1)			(Level 2)			(Level 3)
Cash equivalents:
Money market mutual funds	$	281	$	281		$	-	$		-
Marketable Securities:
Time deposits		12,825		12,825			-			-
Corporate bonds		5,006		-			5,006			-
Long-term investments:
Time deposits		10,821		10,821			-			-
Total	$	28,933	$	23,927		$	5,006	$		-
	Fair Value Measurements at
	Reporting Date Using
			Quoted Prices			Significant
			in Active			Other			Significant
	Balance at		Markets for			Observable			Unobservable
	December 31,		Identical Assets			Inputs			Inputs
		2014		(Level 1	)		(Level 2)			(Level 3	)
Cash equivalents:
Money market mutual funds	$	4,070	$	4,070		$	-	$		-
Marketable Securities:
Time deposits		21,782		21,782			-			-
Corporate bonds		10,075		-			10,075			-
Long-term investments:
Time deposits		10,635		10,635			-			-
Total	$	46,562	$	36,487		$	10,075	$		-

As of December 31, 2015 and 2014, the Company held investments in corporate bonds, certificates of deposit, and money market securities. The Company's cash and cash equivalents consist of investments with original maturities of 90 days or less from the date of purchase. The Company's short-term investments consist of corporate bonds and certificates of deposit with original maturities of 91 days or more from the date of purchase. The Company's long-term investments are comprised of certificates of deposit with original maturities of 365 days or more from the date of purchase.

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Selected Quarterly Data

12 Months Ended

Dec. 31, 2015

Selected Quarterly Data [Abstract]

Selected Quarterly Data

13. Selected Quarterly Data (Unaudited)

The following table presents summary unaudited quarterly financial data (in thousands, except per share data):

	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
2015
Revenues, net	$	21,663	$	25,045	$	18,060	$	16,421
Gross profit		8,792		10,495		7,097		6,651
Net income		3,558		5,040		3,653		787
Net income per share - basic		0.20		0.28		0.20		0.05
Net income per share - diluted		0.19		0.27		0.20		0.05
2014
Revenues, net	$	24,882	$	24,199	$	18,096	$	18,810
Gross profit		9,914		9,695		7,139		7,469
Net income		5,015		3,782		4,303		1,408
Net income per share - basic		0.27		0.20		0.23		0.08
Net income per share - diluted		0.26		0.20		0.23		0.08

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The Company and summary of significant accounting policies (Policies)

12 Months Ended

Dec. 31, 2015

The Company and summary of significant accounting policies [Abstract]

Use of estimates

Use of estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates involve those required in the assessment of the allowances for sales returns, doubtful accounts, potential excess or obsolete inventory, the valuation of stock-based compensation and the valuation of deferred tax assets. Actual results could differ from those estimates.

Basis of presentation

Basis of presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation.

Foreign currency translation

Foreign currency translation

The Company's operations through foreign subsidiaries use the local currency as their functional currency. All assets and liabilities of the subsidiaries are translated at rates of exchange as of the balance sheet date. Revenues and expenses are translated at the average rate of exchange for the period. Gains and losses resulting from foreign currency translation are recorded as a separate component of other comprehensive income in stockholders' equity. Foreign currency transaction gains and losses are recorded in interest and other income and have not been material.

Cash, cash equivalents, short-term and long-term investments

Cash, cash equivalents, short-term and long-term investments

The Company considers all highly liquid instruments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of cash deposited in money market, certificate of deposit, and checking accounts.

The Company accounts for its investments under the provisions of Accounting Standards Codification (“ASC”) 320 “Investments - Debt and Equity Securities.” Investments in highly liquid financial instruments with remaining maturities greater than three months and maturities of less than one year are classified as short-term investments. Financial instruments with remaining maturities greater than one year are classified as long-term investments. All investments are classified as available-for-sale and are reported at fair value using the specific identification method with net unrealized gain/(loss) reported, net of tax as other comprehensive gain/(loss) in stockholders' equity. The fair value of the Company's available-for-sale securities are based on quoted market prices or other methodologies for those investments with no quoted market prices at the balance sheet dates.

The Company's financial instruments also include accounts receivable, accounts payable and are carried at cost, which approximates the fair value of these instruments.

Fair value of financial instruments

Fair value of financial instruments

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management's estimate of assumptions that market participants would use in pricing the asset or liability.

The Company's valuation techniques used to measure the fair value of money market funds and certain marketable equity securities were derived from quoted prices in active markets for identical assets or liabilities.

In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. The Company has not elected the fair value option for any eligible financial instruments.

Allowance for doubtful accounts

Allowance for doubtful accounts

The Company performs periodic credit evaluations of its customers' financial condition. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability or unwillingness of customers to make required payments. When the Company becomes aware that a specific customer is unable to meet its financial obligations, for example, as a result of bankruptcy or deterioration in the customer's operating results or financial position, the Company records a specific allowance to reflect the level of credit risk in the customer's outstanding receivable balance. The Company is not able to predict changes in the financial condition of customers, and if circumstances related to customers deteriorate, estimates of the recoverability of trade receivables could be materially affected and the Company may be required to record additional allowances. Alternatively, if the Company provides more allowances than the Company needs, the Company may reverse a portion of such provisions in future periods based on actual collection experience. In addition, the Company records additional allowances based on historical sales returns as explained under the revenue recognition section.

Inventories, net

Inventories, net

Inventories are stated at the lower of cost or market, with cost being determined using standard cost, which approximates actual cost on a first-in, first-out basis. Market value is determined as the lower of replacement cost or net realizable value. We regularly review our inventories for obsolescence and reserves are established when necessary. Provisions are made for excess and obsolete inventory based on historical usage and management's estimates of future demand. Inventory reserves, once established, are only reversed upon sale or disposition of related inventory. Inventory reserves were $1.4 million, $2.4 million and $2.4 million as of December 31, 2015, 2014 and 2013, respectively.

Property and equipment

Property and equipment, net

Property and equipment is stated at cost less accumulated depreciation and impairment charges. Depreciation is computed using the straight-line method based on estimated useful lives of 25 years for buildings, two to 10 years for machinery and equipment and five years for furniture and fixtures. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the estimated life of the assets, generally two to four years, or the lease term. Depreciation and amortization expenses were $2.7 million, $2.8 million and $2.2 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Impairment of Long-lived Assets

Impairment of Long-lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value based on fair market values.

Revenue recognition

Revenue recognition

The Company recognizes revenue upon shipment of its products to its customers, provided that the Company has received a purchase order, the price is fixed, collection of the resulting receivable is reasonably assured and transfer of title and risk of loss has occurred. Subsequent to the sale of its products, the Company has no obligation to provide any modification or customization upgrades, enhancements or post contract customer support.

Allowances are provided for estimated returns. A provision for estimated sales return allowances is recorded at the time revenue is recognized based on historical returns, current economic trends and changes in customer demand. Such allowances are adjusted periodically to reflect actual and anticipated experience. Such adjustments, which are recorded against revenue in the period, have generally not been material. The Company accrued $0.07 million, $0.08 million and $0.06 million for warranty reserves as of December 31, 2015, 2014 and 2013, respectively.

Shipping and handling expenses

Shipping and handling expenses

Shipping and handling expenses are included in cost of revenue.

Research and development expenses

Research and development expenses

Research and development costs are charged to expense as incurred.

Advertising expenses

Advertising expenses

Advertising costs are charged to expense as incurred and have not been material in 2015, 2014 and 2013.

Sales taxes

Sales taxes

The Company accounts for taxes charged to its customers and collected on behalf of taxing authorities on a net basis.

Income taxes

Income taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.

The Company applies ASC 740 which utilizes a two-step approach wherein a tax benefit is recognized if a position is more-likely-than-not to be sustained. The amount of the benefit is then measured to be the highest tax benefit that is greater than 50% likely to be realized. The Company has elected to include interest and penalties related to its tax contingencies in income tax expense. The Company files a U.S. federal tax return and returns with the State of California and the State of Georgia. The Company has determined that its major tax jurisdictions are the United States, California, Georgia, Taiwan and China.

The Company follows the provisions of ASC 740-10-25, Income Taxes: Recognition ("ASC 740-10-25"). The total amount of unrecognized tax benefits as of December 31, 2015, 2014 and 2013 were $1.1 million, $1.1 million and $0.7 million respectively. The Company does not anticipate any significant change to its unrecognized tax positions over the next 12 months. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate were $0.7 million, $0.7 million and $0.3 million as of December 31, 2015, 2014 and 2013, respectively. The increases in unrecognized tax benefits during the years ended December 31, 2015 and 2014 were mainly due to the increase in additional state income tax liabilities. The increase in unrecognized tax benefits during the year ended December 31, 2013 was mainly due to the increase in the valuation of the Company's research credit for federal and state income taxes purposes.

A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits for the years ended December 31, 2015 and 2014 are as follows:

Balance at December 31, 2013	$	683
Additions for tax positions of the prior year		280
Additions for tax positions of the current year		117
Balance at December 31, 2014	$	1,080
Additions for tax positions of the current year		10
Reductions for tax positions of the prior year		(18	)
Balance at December 31, 2015	$	1,072

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in the provision for income taxes. During the years ended December 31, 2015, 2014 and 2013, the Company recognized approximately $0.2 million, $0.1 million and $0.1 million, respectively, for interest and penalties.

Deferred tax assets pertaining to windfall tax benefits on the exercise of share awards and the corresponding credit to additional paid-in capital are recorded if the related tax deduction reduces tax payable. The Company has elected the “with-and-without approach excluding indirect tax effects” regarding ordering of windfall tax benefits to determine whether the windfall tax benefit reduced taxes payable in the current year. Under this approach, the windfall tax benefits would be recognized in additional paid-in capital only if an incremental tax benefit is realized after considering all other tax benefits presently available to the Company without considering available income tax credits. The Company's deferred tax assets as of December 31, 2015, 2014 and 2013 do not include $0.7 million, $0.6 million and $1.8 million, respectively, of excess tax benefits from employee stock option exercises and vested RSUs that are a component of its net operating loss carryovers. Stockholders' equity will be increased by the same amount if and when such excess tax benefits are ultimately realized.

The Company files income tax returns in the United States (federal), Taiwan, China and in various state and local jurisdictions. The Company is no longer subject to federal income tax examinations by tax authorities for years prior to 2012, California State and China income tax examination by tax authorities for years prior to 2011, and Taiwan income tax examinations by tax authorities for years prior to 2009. The Company is not currently under examination by any federal, state or local jurisdiction. It is not anticipated that unrecognized tax benefits will significantly change in the next twelve months.

Stock-based compensation

Stock-based compensation

The Company estimates the fair value of the share-based payment awards on the date of grant using an option pricing model. The value of awards that are ultimately expected to vest is recognized as an expense over the requisite employee service period.

Comprehensive income

Comprehensive income

Comprehensive income is defined as the change in equity of a company from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Accumulated other comprehensive income consists of cumulative translation adjustments and unrealized gains on short-term investments and is disclosed in the consolidated statements of stockholders' equity.

Recent accounting pronouncements

Recent accounting pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, "Leases (Topic 842)". The amendments under this pronouncement will change the way all leases with a duration of one year of more are treated. Under this guidance, lessees will be required to capitalize virtually all leases on the balance sheet as a right-of-use asset and an associated financing lease liability or capital lease liability. The right-of-use asset represents the lessee's right to use, or control the use of, a specified asset for the specified lease term. The lease liability represents the lessee's obligation to make lease payments arising from the lease, measured on a discounted basis. Based on certain characteristics, leases are classified as financing leases or operating leases. Financing lease liabilities, those that contain provisions similar to capitalized leases, are amortized like capital leases are under current accounting, as amortization expense and interest expense in the statement of operations. Operating lease liabilities are amortized on a straight-line basis over the life of the lease as lease expense in the statement of operations. This update is effective for annual reporting periods, and interim periods within those reporting periods, beginning after December 15, 2018. The Company is currently evaluating the impact this standard will have on its policies and procedures pertaining to its existing and future lease arrangements, disclosure requirements and on its consolidated financial statements.

     In July 2015, FASB issued new accounting guidance on simplifying the measurement of inventory which requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Prior to the issuance of the standard, inventory was measured at the lower of cost or market (where market was defined as replacement cost, with a ceiling of net realizable value and floor of net realizable value less a normal profit margin). The accounting guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2016. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements.

     In January 2015, the FASB issued guidance which eliminates the concept of extraordinary items in an entity's income statement. The changes in ASU 2015-01 are effective for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements.

     In August 2014, FASB issued a new accounting standard which requires management to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern for each annual and interim reporting period and to provide related footnote disclosures in certain circumstances. The accounting standard is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements.

     In May 2014, the FASB issued a new financial accounting standard which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance. The accounting standard is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is not permitted. The Company is currently evaluating the impact of this accounting standard on its consolidated financial statements.

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The Company and summary of significant accounting policies (Tables)

12 Months Ended

Dec. 31, 2015

The Company and summary of significant accounting policies [Abstract]

Reconciliation of Unrecognized Tax Benefits

Balance at December 31, 2013	$	683
Additions for tax positions of the prior year		280
Additions for tax positions of the current year		117
Balance at December 31, 2014	$	1,080
Additions for tax positions of the current year		10
Reductions for tax positions of the prior year		(18	)
Balance at December 31, 2015	$	1,072

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Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2015

Stock-based Compensation [Abstract]

Schedule of Weighted Average Assumptions

	Years Ended December 31,
	2015	2014	2013
Risk-free interest rate	0.96%	1.02%	0.49%
Time to maturity (in years)	3	4	4
Annualized volatility	57.59%	69.67%	30.30%
Expected dividend rate	0.00%	1.20%	0.98%

Schedule of Stock Options Activity

					Weighted
			Weighted		Average
			Average		Remaining	Aggregate
			Exercise		Contractual	Intrinsic
Options	Shares		Price		Life	Value
Outstanding at December 31, 2014	693,100		$	9.08
Granted	58,000			14.74
Exercised	(101,100	)		6.62
Forfeited	(78,400	)		11.88
Outstanding at December 31, 2015	571,600		$	9.71	7.75 Years	$	3,154,415
Vested and expected to vest at December 31, 2015	496,428		$	9.60	7.69 Years	$	2,796,239
Exercisable at December 31, 2015	164,167		$	6.95	6.27 Years	$	1,356,896

Schedule of Information Relating to Stock Options Outstanding

			Options Outstanding		Options Exercisable
				Weighted
				Average	Weighted					Weighted
Range of			Number	Remaining	Average			Number	Average
Exercise			Outstanding	Contractual	Exercise			Exercisable	Exercise
Price			As of 12/31/15	Term	Price			As of 12/31/15	Price
	$3.88 -	$4.80	111,700	6.22		$	4.28	85,000		$	4.41
	$5.05 -	$6.03	22,500	1.46		$	5.32	22,500		$	5.32
	$6.87 -	$6.87	96,000	7.29		$	6.87	13,800		$	6.87
	$8.17 -	$12.32	82,000	8.51		$	11.22	600		$	8.17
	$12.50 -	$12.50	201,400	8.19		$	12.50	37,600		$	12.50
	$13.61 -	$18.36	58,000	11.25		$	14.74	4,667		$	16.32
			571,600	7.75		$	9.71	164,167		$	6.95

Schedule of Information relating to the ESPP

	2015		2014		2013
Weighted average fair value per share of shares purchased	$	11.26	$	13.01	$	5.66
Total compensation expense for ESPP	$	324,250	$	461,980	$	409,079
Total amount of cash received from the purchase of stock through ESPP	$	672,899	$	660,621	$	521,308
Total intrinsic value of ESPP stock purchased at December 31	$	233,381	$	75,892	$	863,120

Schedule of Employee Stock-Based Compensation Expense

	Years Ended December 31,
	2015		2014		2013
Included in cost of revenue	$	513	$	491	$	373
Included in operating expenses:
Research and development		196		234		232
Sales, marketing and administrative		2,227		1,435		1,312
Total		2,423		1,669		1,544
Total stock-based compensation expenses	$	2,936	$	2,160	$	1,917

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Net Income per Share (Tables)

12 Months Ended

Dec. 31, 2015

Net Income Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Income Per Share

	Years Ended December 31,
	2015		2014		2013
Numerator:
Net income	$	13,038	$	14,508	$	18,808
Denominator:
Shares used in computing net income per share:
Weighted average of common shares outstanding
Basic		17,648		18,488		17,785
Diluted		17,945		18,935		18,481
Net income per share:
Basic	$	0.74	$	0.78	$	1.06
Diluted	$	0.73	$	0.77	$	1.02

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Balance Sheet Components (Tables)

12 Months Ended

Dec. 31, 2015

Balance Sheet Components [Abstract]

Schedule of Balance Sheet Components

	December 31,
	2015			2014
Cash and cash equivalents:
Cash	$	5,876		$	18,653
Money market instruments and funds		281			4,070
	$	6,157		$	22,723
Accounts receivable, net:
Accounts receivable	$	12,668		$	10,927
Less: Allowance for doubtful accounts and sales returns		(121	)		(121	)
	$	12,547		$	10,806
Allowance for doubtful accounts and sales returns:
Balance at beginning of year	$	121		$	121
Utilized		-			-
Balance at end of year	$	121		$	121
Inventories:
Finished goods	$	3,958		$	3,191
Work-in-process		4,705			3,430
Raw materials		3,667			5,052
	$	12,330		$	11,673
Inventory reserves:
Finished goods	$	520		$	647
Work-in-process		296			460
Raw materials	$	595		$	1,261
	$	1,411		$	2,368
Accrued expenses and other current liabilities:
Compensation costs	$	4,325		$	5,016
Professional fees		24			55
Outside commissions		146			143
Royalties		82			135
ESPP		147			138
Deferred rent		29			33
Warranty		70			82
Operating related (Taiwan and China)		483			417
Income tax		2,888			2,204
Stock buyback		851			-
Other		465			476
	$	9,510		$	8,699
Long-term liabilities:
Income tax payable	$	1,581		$	376
Accrued pension liability (Taiwan)		613			602
	$	2,194		$	978
Accumulated other comprehensive Income:
Cumulative translation adjustments	$	172		$	1,447
Unrealized loss on short-term investments		(1	)		(10	)
	$	171		$	1,437

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Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2015

Property and Equipment, Net [Abstract]

Schedule of Property and Equipment, Net

	December 31,
(in thousands)	2015			2014
Machinery and equipment	$	22,116		$	20,315
Furniture and fixtures		883			686
Leasehold improvements		4,373			2,655
Building and equipment prepayments		4,283			3,804
	$	31,655		$	27,460
Less: Accumulated depreciation and amortization		(15,472	)		(13,592	)
Total property and equipment, net	$	16,183		$	13,868

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Taxes [Abstract]

Schedule of Components of Income (Loss) before Income Taxes

	Years Ended December 31,
	2015		2014		2013
Income subject to domestic income taxes only	$	1,569	$	8,608	$	17,645
Income subject to foreign income taxes only		18,248		13,764		164
	$	19,817	$	22,372	$	17,809

Schedule of Income Tax Provision (Benefit)

	Years Ended December 31,
Current:	2015			2014		2013
Federal	$	1,323		$	2,663	$	382
State		171			75		1
Foreign		5,484			2,403		953
		6,978			5,141		1,336
Deferred:
Federal		(36	)		1,891		(1,450	)
State		(25	)		763		(232	)
Foreign		(138	)		69		(653	)
		(199	)		2,723		(2,335	)
Total provision (benefit) for income taxes	$	6,779		$	7,864	$	(999	)

Schedule of Deferred Tax Assets

	Years Ended December 31,
	2015			2014			2013
Deferred tax assets - current:
Net operating loss carryforwards	$	744		$	620		$	3,501
Windfall tax benefit carryforwards		(744	)		(620	)		(580	)
Federal/State credit carryforwards		2,692			2,536			2,260
Depreciation and amortization		146			24			6
Stock compensation		650			326			-
Accrued liabilities and allowances		1,098			1,508			1,532
Unrecognized tax benefits		(738	)		(704	)		(683	)
Total deferred tax assets	$	3,848		$	3,690		$	6,036

Reconciliation of Effective Tax Rates and Statutory Federal Income Tax Rate

	Years Ended December 31,
	2015		2014		2013
Tax at federal statutory rate	34.0	%	34.0	%	34.0	%
State, net of federal benefit	4.5		5.8		5.8
Effect of permanent differences	(1.8	)	3.8		1.1
Stock and deferred compensation	1.1		0.9		(7.2	)
Net operating loss carryover	0.4		5.6		-
Foreign tax differential	(9.3	)	(13.1	)	0.1
Minimum tax	-		0.6		1.7
Income tax credits	(1.3	)	(1.9	)	(0.9	)
Valuation allowance	-		-		(47.4	)
Stock compensation windfall	7.0		2.1		2.3
Other	(0.3	)	(2.6	)	4.9
Provision (benefit) for taxes	34.3	%	35.2	%	(5.6	)%

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Geographic Segment Information (Tables)

12 Months Ended

Dec. 31, 2015

Geographic Segment Information [Abstract]

Schedule of Segment Reporting Information

	Years Ended December 31,
	2015		2014		2013
Revenues
North America	$	45,033	$	52,101	$	42,815
Europe		17,513		18,102		15,604
Asia		18,643		15,784		17,651
	$	81,189	$	85,987	$	76,070
	Years Ended December 31,
		2015		2014		2013
Revenues
Connectivity Products	$	61,282	$	64,791	$	57,660
Optical Passive Products		19,907		21,196		18,410
	$	81,189	$	85,987	$	76,070

	Years Ended December 31,
	2015		2014
Property and Equipment, net
United States	$	191	$	185
Taiwan		9,016		8,568
China		6,976		5,115
	$	16,183	$	13,868

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies [Abstract]

Schedule of Aggregate Future Minimum Facility Lease Payments

Total future minimum lease payments under operating leases as of December 31, 2015 are summarized below (in thousands):

Years ending December 31,
2016	$	1,048
2017		655
2018		428
2019		376
Total	$	2,507

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Fair Value of Financial instruments (Tables)

12 Months Ended

Dec. 31, 2015

Fair Value of Financial instruments [Abstract]

Schedule of Financial Assets at Fair Value

	Fair Value Measurements at
	Reporting Date Using
			Quoted Prices			Significant
			in Active			Other			Significant
	Balance at		Markets for			Observable			Unobservable
	December 31,		Identical Assets			Inputs			Inputs
	2015		(Level 1)			(Level 2)			(Level 3)
Cash equivalents:
Money market mutual funds	$	281	$	281		$	-	$		-
Marketable Securities:
Time deposits		12,825		12,825			-			-
Corporate bonds		5,006		-			5,006			-
Long-term investments:
Time deposits		10,821		10,821			-			-
Total	$	28,933	$	23,927		$	5,006	$		-
	Fair Value Measurements at
	Reporting Date Using
			Quoted Prices			Significant
			in Active			Other			Significant
	Balance at		Markets for			Observable			Unobservable
	December 31,		Identical Assets			Inputs			Inputs
		2014		(Level 1	)		(Level 2)			(Level 3	)
Cash equivalents:
Money market mutual funds	$	4,070	$	4,070		$	-	$		-
Marketable Securities:
Time deposits		21,782		21,782			-			-
Corporate bonds		10,075		-			10,075			-
Long-term investments:
Time deposits		10,635		10,635			-			-
Total	$	46,562	$	36,487		$	10,075	$		-

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Selected Quarterly Data (Tables)

12 Months Ended

Dec. 31, 2015

Selected Quarterly Data [Abstract]

Schedule of Selected Quarterly Data

	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
2015
Revenues, net	$	21,663	$	25,045	$	18,060	$	16,421
Gross profit		8,792		10,495		7,097		6,651
Net income		3,558		5,040		3,653		787
Net income per share - basic		0.20		0.28		0.20		0.05
Net income per share - diluted		0.19		0.27		0.20		0.05
2014
Revenues, net	$	24,882	$	24,199	$	18,096	$	18,810
Gross profit		9,914		9,695		7,139		7,469
Net income		5,015		3,782		4,303		1,408
Net income per share - basic		0.27		0.20		0.23		0.08
Net income per share - diluted		0.26		0.20		0.23		0.08

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The Company and summary of significant accounting policies (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Inventories
Inventory reserves	$ 1,411	$ 2,368	$ 2,400
Property and equipment
Depreciation and amortization	2,731	2,799	2,175
Revenue recognition
Accrued warranty reserves	70	80	60
Income taxes
Unrecognized tax benefit that, if recognized, would affect the effective tax rate	700	700	300
Reconciliation of Unrecognized Tax Benefits:
Beginning balance	1,080	683
Additions for tax positions of the prior year		280
Additions for tax positions of the current year	10	117
Reductions for tax positions of the prior year	(18)
Ending balance	1,072	1,080	683
Expense for interest and penalties	200	100	100
Deferred tax asset not recognized, excess tax benefits from employee stock option exercises	$ 700	$ 600	$ 1,800
Buildings [Member]
Property and equipment
Estimated useful life	25 years
Machinery and Equipment [Member] | Minimum [Member]
Property and equipment
Estimated useful life	2 years
Machinery and Equipment [Member] | Maximum [Member]
Property and equipment
Estimated useful life	10 years
Furniture and Fixtures [Member]
Property and equipment
Estimated useful life	5 years
Leasehold Improvements [Member] | Minimum [Member]
Property and equipment
Estimated useful life	2 years
Leasehold Improvements [Member] | Maximum [Member]
Property and equipment
Estimated useful life	4 years

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Stockholders' Equity (Details) $ / shares in Units, $ in Millions				12 Months Ended
	Nov. 14, 2014 $ / shares	Nov. 07, 2013 $ / shares	Aug. 30, 2013 shares	Dec. 31, 2015 USD ($) shares	Dec. 31, 2014 shares	Dec. 31, 2013 shares	Aug. 24, 2015 USD ($)	Aug. 29, 2013 shares
Class of Stock [Line Items]
Preferred stock, shares authorized				5,000,000	5,000,000
Preferred stock, shares outstanding				0	0
Common stock, shares authorized				100,000,000	100,000,000	20,000,000
Stock split, conversion ratio			2
Common stock, shares issued			18,123,136	15,786,785	17,942,595
Common stock, shares outstanding			18,123,136	15,786,785	17,942,595
Dividends declared, per share | $ / shares	$ 0.15	$ 0.15
Beneficial Ownership Of Outstanding Shares				15.00%
2014 October Program [Member]
Class of Stock [Line Items]
Stock Repurchase Program, Authorized Amount (in dollars) | $				$ 15.0
Shares repurchased during period				313,478	740,190
November 2011 Program [Member]
Class of Stock [Line Items]
Stock Repurchase Program, Authorized Amount (in dollars) | $				$ 6.0
Shares repurchased during period				1,081		158,798
August 2015 Program [Member]
Class of Stock [Line Items]
Stock Repurchase Program, Authorized Amount (in dollars) | $				$ 35.0			$ 25.0
Shares repurchased during period				2,196,632
Scenario, Previously Reported [Member]
Class of Stock [Line Items]
Common stock, shares issued								9,061,568
Common stock, shares outstanding								9,061,568
Foxconn Holding Limited [Member]
Class of Stock [Line Items]
Beneficial Ownership Of Outstanding Shares				15.00%
Affiliate or Associates and Entities [Member]
Class of Stock [Line Items]
Beneficial Ownership Of Outstanding Shares				1.00%

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Stock-based Compensation (Schedule of Weighted Average Assumptions) (Details) - Employee Stock Option [Member]	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	0.96%	1.02%	0.49%
Time to maturity (in years)	3 years	4 years	4 years
Annualized volatility	57.59%	69.67%	30.30%
Expected dividend rate	0.00%	1.20%	0.98%

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Stock-based Compensation (Narrative) (Details) - USD ($)			12 Months Ended
	Oct. 21, 2013	Apr. 29, 2011	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2011	Nov. 30, 2000
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance						10,000,000	300,000
Stock incentive plan, additional shares authorized	900,000
Compensation expense			$ 2,936,000	$ 2,160,000	$ 1,917,000
Scenario, Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock incentive plan, additional shares authorized			680,000
Increase to number of shares reserved for issuance as a percentage of outstanding shares			5.00%
Restricted Stock Units (RSUs) [Member] | 2011 Grant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted						546,000
Grant-date fair value of units granted						$ 2,500,000
Compensation expense				400,000	$ 400,000
Unrecognized compensation cost			$ 100,000
Unrecognized compensation cost, recognition period			1 year
Restricted Stock Units (RSUs) [Member] | 2013 Grant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted					342,000
Grant-date fair value of units granted					$ 2,300,000
Compensation expense			$ 500,000	800,000
Unrecognized compensation cost			$ 100,000
Unrecognized compensation cost, recognition period			1 year
Restricted Stock Units (RSUs) [Member] | 2015 Grant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted			302,000
Grant-date fair value of units granted			$ 5,300,000
Compensation expense			1,100,000
Unrecognized compensation cost			4,200,000
Unrecognized compensation cost, realized over two years			700,000
Unrecognized compensation cost, realized over four years			$ 3,500,000
Restricted Stock Units (RSUs) [Member] | Vesting Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			2 years
Restricted Stock Units (RSUs) [Member] | Vesting Tranche Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			5 years
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			4 years
Plan duration			10 years
Intrinsic value of options exercised			$ 1,100,000	$ 1,300,000	12,800,000
Dividend rate			0.00%	0.15%
Options exercisable			164,167	118,161
Options exercisable, average exercise price			$ 6.95	$ 4.75
Shares available for future issuance			487,824
Options granted in period			58,000
Unrecognized compensation cost			$ 1,600,000
Unrecognized compensation cost, recognition period			4 years
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance							600,000
Stock incentive plan, additional shares authorized		600,000
Shares available for future issuance			208,360
Common stock purchase price, percentage of fair market value			85.00%
Shares issued under ESPP			59,781	50,759
Compensation expense			$ 324,250	$ 461,980	$ 409,079
Employee Stock Purchase Plan [Member] | Scenario, Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock incentive plan, additional shares authorized			400,000
Increase to number of shares reserved for issuance as a percentage of outstanding shares			1.00%

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Stock-based Compensation (Schedule of Stock Option Activity) (Details) - Employee Stock Option [Member] - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Shares
Outstanding, beginning balance	693,100
Granted	58,000
Exercised	(101,100)
Forfeited	(78,400)
Outstanding, ending balance	571,600
Vested and expected to vest, end of period	496,428
Exercisable, end of period	164,167	118,161
Weighted Average Exercise Price
Outstanding, beginning balance	$ 9.08
Granted	14.74
Exercised	6.62
Forfeited	11.88
Outstanding, ending balance	9.71
Vested and expected to vest, end of period	9.60
Exercisable, end of period	$ 6.95	$ 4.75
Weighted Average Remaining Contractual Life
Outstanding, ending balance	7 years 9 months
Vested and expected to vest, end of period	7 years 8 months 8 days
Exercisable, end of period	6 years 3 months 7 days
Aggregate Intrinsic Value
Outstanding, ending balance	$ 3,154,415
Vested and expected to vest, end of period	2,796,239
Exercisable, end of period	$ 1,356,896

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Stock-based Compensation (Schedule of Information Relating to Stock Options Outstanding) (Details)	12 Months Ended
	Dec. 31, 2015 $ / shares shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Number Outstanding | shares	571,600
Options Outstanding, Weighted Average Remaining Contractual Term	7 years 9 months
Options Outstanding, Weighted Average Exercise Price	$ 9.71
Options Exercisable, Number Exercisable | shares	164,167
Options Exercisable, Weighted Average Exercise Price	$ 6.95
Exercise Price Range One [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Price Minimum	3.88
Range of Exercise Price Maximum	$ 4.80
Options Outstanding, Number Outstanding | shares	111,700
Options Outstanding, Weighted Average Remaining Contractual Term	6 years 2 months 19 days
Options Outstanding, Weighted Average Exercise Price	$ 4.28
Options Exercisable, Number Exercisable | shares	85,000
Options Exercisable, Weighted Average Exercise Price	$ 4.41
Exercise Price Range Two [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Price Minimum	5.05
Range of Exercise Price Maximum	$ 6.03
Options Outstanding, Number Outstanding | shares	22,500
Options Outstanding, Weighted Average Remaining Contractual Term	1 year 5 months 16 days
Options Outstanding, Weighted Average Exercise Price	$ 5.32
Options Exercisable, Number Exercisable | shares	22,500
Options Exercisable, Weighted Average Exercise Price	$ 5.32
Exercise Price Range Three [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Price Minimum	6.87
Range of Exercise Price Maximum	$ 6.87
Options Outstanding, Number Outstanding | shares	96,000
Options Outstanding, Weighted Average Remaining Contractual Term	7 years 3 months 14 days
Options Outstanding, Weighted Average Exercise Price	$ 6.87
Options Exercisable, Number Exercisable | shares	13,800
Options Exercisable, Weighted Average Exercise Price	$ 6.87
Exercise Price Range Four [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Price Minimum	8.17
Range of Exercise Price Maximum	$ 12.32
Options Outstanding, Number Outstanding | shares	82,000
Options Outstanding, Weighted Average Remaining Contractual Term	8 years 6 months 4 days
Options Outstanding, Weighted Average Exercise Price	$ 11.22
Options Exercisable, Number Exercisable | shares	600
Options Exercisable, Weighted Average Exercise Price	$ 8.17
Exercise Price Range Five [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Price Minimum	12.50
Range of Exercise Price Maximum	$ 12.50
Options Outstanding, Number Outstanding | shares	201,400
Options Outstanding, Weighted Average Remaining Contractual Term	8 years 2 months 8 days
Options Outstanding, Weighted Average Exercise Price	$ 12.50
Options Exercisable, Number Exercisable | shares	37,600
Options Exercisable, Weighted Average Exercise Price	$ 12.50
Exercise Price Range Six [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Price Minimum	13.61
Range of Exercise Price Maximum	$ 18.36
Options Outstanding, Number Outstanding | shares	58,000
Options Outstanding, Weighted Average Remaining Contractual Term	11 years 3 months
Options Outstanding, Weighted Average Exercise Price	$ 14.74
Options Exercisable, Number Exercisable | shares	4,667
Options Exercisable, Weighted Average Exercise Price	$ 16.32

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Stock-based Compensation (Schedule of Information Relating to ESPP) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total compensation expense for ESPP	$ 2,936,000	$ 2,160,000	$ 1,917,000
Total amount of cash received from the purchase of stock through ESPP	$ 673,000	$ 661,000	$ 521,000
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average fair value per share of shares purchased	$ 11.26	$ 13.01	$ 5.66
Total compensation expense for ESPP	$ 324,250	$ 461,980	$ 409,079
Total amount of cash received from the purchase of stock through ESPP	672,899	660,621	521,308
Total intrinsic value of ESPP stock purchased at December 31st	$ 233,381	$ 75,892	$ 863,120

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Stock-based Compensation (Schedule of Employee Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 2,936	$ 2,160	$ 1,917
Cost of Revenue [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	513	491	373
Research and Development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	196	234	232
Sales, Marketing and Administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	2,227	1,435	1,312
Operating Expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 2,423	$ 1,669	$ 1,544

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Net Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Numerator:
Net income									$ 13,038	$ 14,508	$ 18,808
Weighted average of common shares outstanding
Basic									17,648,000	18,488,000	17,785,000
Diluted									17,945,000	18,935,000	18,481,000
Net income per share:
Basic	$ 0.05	$ 0.20	$ 0.28	$ 0.20	$ 0.08	$ 0.23	$ 0.20	$ 0.27	$ 0.74	$ 0.78	$ 1.06
Diluted	$ 0.05	$ 0.20	$ 0.27	$ 0.19	$ 0.08	$ 0.23	$ 0.20	$ 0.26	$ 0.73	$ 0.77	$ 1.02
Securities excluded from computation of diluted net income per share as the effect would have been anti-dilutive:
Options to purchase common stock									12,000

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Balance Sheet Components (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash and cash equivalents:
Cash			$ 5,876	$ 18,653
Money market instruments and funds			281	4,070
Cash and Cash Equivalents, At Carrying Value			6,157	22,723	$ 18,603	$ 4,793
Accounts receivable, net:
Accounts receivable			12,668	10,927
Less: Allowance for doubtful accounts and sales returns	$ (121)	$ (121)	(121)	(121)	(121)
Accounts Receivable, Net, Current			12,547	10,806
Allowance for doubtful accounts and sales returns:
Balance at beginning of year	$ 121	$ 121
Utilized
Balance at end of year	$ 121	$ 121
Inventories:
Finished goods			3,958	3,191
Work-in-process			4,705	3,430
Raw materials			3,667	5,052
Inventories			12,330	11,673
Inventory reserves:
Inventory reserves			1,411	2,368	$ 2,400
Accrued expenses and other current liabilities:
Compensation costs			4,325	5,016
Professional fees			24	55
Outside commissions			146	143
Royalties			82	135
ESPP			147	138
Deferred rent			29	33
Warranty			70	82
Operating related (Taiwan and China)			483	417
Income tax			2,888	$ 2,204
Stock buyback			851
Other			465	$ 476
Accrued Liabilities, Current, Total			9,510	8,699
Long-term liabilities:
Income tax payable			1,581	376
Accrued pension liability (Taiwan)			613	602
Liabilities, Noncurrent, Total			2,194	978
Accumulated other comprehensive Income:
Cumulative translation adjustments			172	1,447
Unrealized loss on short-term investments			(1)	(10)
Accumulated Other Comprehensive Income (Loss), Net Of Tax			171	1,437
Finished Goods [Member]
Inventory reserves:
Inventory reserves			520	647
Work-In-Process [Member]
Inventory reserves:
Inventory reserves			296	460
Raw Materials [Member]
Inventory reserves:
Inventory reserves			$ 595	$ 1,261

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Property and Equipment, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Property and Equipment	$ 31,655	$ 27,460
Less: Accumulated depreciation and amortization	(15,472)	(13,592)
Total property and equipment, net	16,183	13,868
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and Equipment	22,116	20,315
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and Equipment	883	686
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and Equipment	4,373	2,655
Building and Equipment Prepayments [Member]
Property, Plant and Equipment [Line Items]
Property and Equipment	$ 4,283	$ 3,804

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Income Taxes (Schedule of Components of Income (Loss) before Income Taxes) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Taxes [Abstract]
Income subject to domestic income taxes only	$ 1,569	$ 8,608	$ 17,645
Income subject to foreign income taxes only	18,248	13,764	164
Income before benefit (provision) for income taxes	$ 19,817	$ 22,372	$ 17,809

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Income Taxes (Schedule of Income Tax Provision (Benefit)) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Current:
Federal	$ 1,323	$ 2,663	$ 382
State	171	75	1
Foreign	5,484	2,403	953
Current Income Tax Expense (Benefit)	6,978	5,141	1,336
Deferred:
Federal	(36)	1,891	(1,450)
State	(25)	763	(232)
Foreign	(138)	69	(653)
Deferred Income Tax Expense (Benefit)	(199)	2,723	(2,335)
Total benefit (provision) for income taxes	$ 6,779	$ 7,864	$ (999)

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Income Taxes (Schedule of Deferred Tax Assets) (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Deferred tax assets - current:
Net operating loss carryforwards	$ 744	$ 620	$ 3,501
Windfall tax benefit carryforwards	(744)	(620)	(580)
Federal/State credit carryforwards	2,692	2,536	2,260
Depreciation and amortization	146	24	$ 6
Stock compensation	650	326
Accrued liabilities and allowances	1,098	1,508	$ 1,532
Unrecognized tax benefits	(738)	(704)	(683)
Net deferred tax assets	$ 3,848	$ 3,690	$ 6,036

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Income Taxes (Reconciliation of Effective Tax Rates and Statutory Federal Income Tax Rate) (Details)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Taxes [Abstract]
Tax at federal statutory rate	34.00%	34.00%	34.00%
State, net of federal benefit	4.50%	5.80%	5.80%
Effect of permanent differences	(1.80%)	3.80%	1.10%
Stock and deferred compensation	1.10%	0.90%	(7.20%)
Net operating loss carryover	0.40%	5.60%
Foreign tax differential	(9.30%)	(13.10%)	0.10%
Minimum tax		0.60%	1.70%
Income tax credits	(1.30%)	(1.90%)	(0.90%)
Valuation allowance			(47.40%)
Stock compensation windfall	7.00%	2.10%	2.30%
Other	(0.30%)	(2.60%)	4.90%
Provision (benefit) for taxes	34.30%	35.20%	(5.60%)

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Income Taxes (Narrative) (Details) $ in Millions	12 Months Ended
	Dec. 31, 2015 USD ($)
Internal Revenue Service (IRS) [Member]
Operating Loss Carryforwards [Line Items]
Operating Loss Carryforwards	$ 1.0
Net operating loss carryforwards, expiration date	Dec. 31, 2025
Tax Credit Carryforward, Amount	$ 1.4
Research credit carryforwards , expiration date	Jan. 01, 2019
State and Local Jurisdiction [Member]
Operating Loss Carryforwards [Line Items]
Operating Loss Carryforwards	$ 6.9
Net operating loss carryforwards, expiration date	Dec. 31, 2018
Tax Credit Carryforward, Amount	$ 1.0

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Concentrations of Certain Risks (Details) - Customer A [Member]	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Accounts Receivable [Member] | Credit Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	15.10%	26.90%
Sales [Member] | Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	31.00%	39.60%	35.30%

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Geographic Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenues
Revenues	$ 16,421	$ 18,060	$ 25,045	$ 21,663	$ 18,810	$ 18,096	$ 24,199	$ 24,882	$ 81,189	$ 85,987	$ 76,070
Property and Equipment, net
Property and Equipment, net	16,183				13,868				16,183	13,868
North America [Member]
Revenues
Revenues									45,033	52,101	42,815
Europe [Member]
Revenues
Revenues									17,513	18,102	15,604
Asia [Member]
Revenues
Revenues									18,643	15,784	17,651
United States [Member]
Property and Equipment, net
Property and Equipment, net	191				185				191	185
Taiwan [Member]
Property and Equipment, net
Property and Equipment, net	9,016				8,568				9,016	8,568
China [Member]
Property and Equipment, net
Property and Equipment, net	$ 6,976				$ 5,115				6,976	5,115
Connectivity Products [Member]
Revenues
Revenues									61,282	64,791	57,660
Optical Passive Products [Member]
Revenues
Revenues									$ 19,907	$ 21,196	$ 18,410

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Commitments and Contingencies (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Indemnification and Product Warranty:
Accrued warranty reserves	$ 70	$ 80	$ 60
Operating Leases:
Total rent expense	900	$ 700	$ 700
2016	1,048
2017	655
2018	428
2019	376
Total	$ 2,507

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Related Party Transactions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Ownership percentage	15.00%
Hon Hai Precision Industry Co. Ltd. [Member]
Related Party Transaction [Line Items]
Net sales to related party	$ 40	$ 70	$ 10
Purchases of raw materials from related party	$ 2,000	1,800	1,500
Amounts due from related party		50	10
Amounts due to related party	$ 300	$ 400	$ 300

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Fair Value of Financial instruments (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 281	$ 4,070
Total	28,933	46,562
Short-Term Time Deposits [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	12,825	21,782
Corporate Bond Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	5,006	10,075
Long-Term Time Deposits [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	10,821	10,635
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	281	4,070
Total	23,927	36,487
Fair Value, Inputs, Level 1 [Member] | Short-Term Time Deposits [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	$ 12,825	$ 21,782
Fair Value, Inputs, Level 1 [Member] | Corporate Bond Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments
Fair Value, Inputs, Level 1 [Member] | Long-Term Time Deposits [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	$ 10,821	$ 10,635
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents
Total	$ 5,006	$ 10,075
Fair Value, Inputs, Level 2 [Member] | Short-Term Time Deposits [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments
Fair Value, Inputs, Level 2 [Member] | Corporate Bond Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	$ 5,006	$ 10,075
Fair Value, Inputs, Level 2 [Member] | Long-Term Time Deposits [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents
Total
Fair Value, Inputs, Level 3 [Member] | Short-Term Time Deposits [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments
Fair Value, Inputs, Level 3 [Member] | Corporate Bond Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments
Fair Value, Inputs, Level 3 [Member] | Long-Term Time Deposits [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments

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Selected Quarterly Data (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Selected Quarterly Data [Abstract]
Revenues, net	$ 16,421	$ 18,060	$ 25,045	$ 21,663	$ 18,810	$ 18,096	$ 24,199	$ 24,882	$ 81,189	$ 85,987	$ 76,070
Gross profit	6,651	7,097	10,495	8,792	7,469	7,139	9,695	9,914	33,035	34,217	29,118
Net income	$ 787	$ 3,653	$ 5,040	$ 3,558	$ 1,408	$ 4,303	$ 3,782	$ 5,015	$ 13,038	$ 14,508	$ 18,808
Net income per share - basic	$ 0.05	$ 0.20	$ 0.28	$ 0.20	$ 0.08	$ 0.23	$ 0.20	$ 0.27	$ 0.74	$ 0.78	$ 1.06
Net income per share - diluted	$ 0.05	$ 0.20	$ 0.27	$ 0.19	$ 0.08	$ 0.23	$ 0.20	$ 0.26	$ 0.73	$ 0.77	$ 1.02