MAXWELL TECHNOLOGIES INC, 10-K filed on 2/16/2018
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2017
Feb. 9, 2018
Jun. 30, 2017
Document and Entity Information [Abstract]
 
 
 
Entity Registrant Name
MAXWELL TECHNOLOGIES INC 
 
 
Entity Central Index Key
0000319815 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2017 
 
 
Amendment Flag
false 
 
 
Document Fiscal Year Focus
2017 
 
 
Document Fiscal Period Focus
FY 
 
 
Trading Symbol
mxwl 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Common Stock, Shares Outstanding
 
37,217,666 
 
Entity Public Float
 
 
$ 213,640,239 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Current assets:
 
 
Cash and cash equivalents
$ 50,122 
$ 25,359 
Trade and other accounts receivable, net of allowance for doubtful accounts of $36 and $26 as of December 31, 2017 and 2016, respectively
31,643 
20,441 
Inventories
32,228 
32,248 
Prepaid expenses and other current assets
2,983 
4,407 
Total current assets
116,976 
82,455 
Property and equipment, net
28,044 
26,120 
Intangible assets, net
11,715 
0 
Goodwill
36,061 
22,799 
Pension asset
11,712 
8,887 
Other non-current assets
871 
613 
Total assets
205,379 
140,874 
Current liabilities:
 
 
Accounts payable and accrued liabilities
32,758 
19,181 
Accrued employee compensation
9,070 
6,152 
Deferred revenue and customer deposits
6,669 
3,967 
Short-term borrowings and current portion of long-term debt
33 
40 
Total current liabilities
48,530 
29,340 
Deferred tax liability, long-term
8,762 
8,580 
Long-term debt, excluding current portion
35,124 
43 
Defined benefit plan liability
3,942 
0 
Other long-term liabilities
2,920 
2,089 
Total liabilities
99,278 
40,052 
Commitments and contingencies (Note 13 and Note 15)
   
   
Stockholders’ equity:
 
 
Common stock, $0.10 par value per share, 80,000,000 shares authorized at December 31, 2017 and 2016; 37,199,519 and 32,135,029 shares issued and outstanding at December, 2017 and 2016, respectively
3,717 
3,210 
Additional paid-in capital
337,541 
296,316 
Accumulated deficit
(247,233)
(204,104)
Accumulated other comprehensive income
12,076 
5,400 
Total stockholders’ equity
106,101 
100,822 
Total liabilities and stockholders’ equity
$ 205,379 
$ 140,874 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Statement of Financial Position [Abstract]
 
 
Trade and other accounts receivable, allowance for doubtful accounts
$ 36 
$ 26 
Common stock, par value
$ 0.10 
$ 0.10 
Common stock, shares authorized
80,000,000 
80,000,000 
Common stock, shares issued
37,199,519 
32,135,029 
Common stock, shares outstanding
37,199,519 
32,135,029 
Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Income Statement [Abstract]
 
 
 
Revenue
$ 130,368 1
$ 121,244 1
$ 167,372 1
Cost of revenue
101,573 
88,274 
116,410 
Gross profit
28,795 
32,970 
50,962 
Operating expenses:
 
 
 
Selling, general and administrative
45,818 
36,281 
40,758 
Research and development
18,351 
20,889 
24,697 
Restructuring and exit costs
2,282 
297 
2,512 
Impairment of assets
240 
1,389 
0 
Total operating expenses
66,691 
58,856 
67,967 
Loss from operations
(37,896)
(25,886)
(17,005)
Gain on sale of product line
0 
(6,657)
0 
Interest expense, net
1,355 
248 
284 
Other income
(85)
(133)
0 
Foreign currency exchange loss, net
306 
216 
441 
Loss before income taxes
(39,472)
(19,560)
(17,730)
Income tax provision
3,657 
4,145 
4,603 
Net loss
$ (43,129)
$ (23,705)
$ (22,333)
Net loss per share:
 
 
 
Basic and diluted
$ (1.22)
$ (0.74)
$ (0.73)
Weighted average common shares outstanding:
 
 
 
Basic and diluted
35,480 
31,870 
30,716 
Consolidated Statements of Comprehensive Loss (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
 
 
 
Net loss
$ (43,129)
$ (23,705)
$ (22,333)
Other comprehensive income (loss), net of tax:
 
 
 
Foreign currency translation adjustment
5,131 
(2,107)
1,574 
Defined benefit plans, net of tax:
 
 
 
Actuarial gain (loss) on benefit obligations and plan assets, net of tax provision of $401 and $603 and tax benefit of $531 for the years ended December 31, 2017, 2016 and 2015, respectively
1,424 
2,298 
(1,862)
Amortization of deferred loss, net of tax provision of $48 and $10 for the years ended December 31, 2016 and 2015, respectively
0 
195 
35 
Amortization of prior service cost, net of tax provision of $30, $30 and $30 for the years ended December 31, 2017, 2016 and 2015, respectively
121 
120 
106 
Settlements and plan changes, net of tax provision of $91 for the year ended December 31, 2015
0 
0 
318 
Other comprehensive income, net of tax
6,676 
506 
171 
Comprehensive loss
$ (36,453)
$ (23,199)
$ (22,162)
Consolidated Statements of Comprehensive Loss (Parenthetical) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
 
 
 
tax provision (benefit) for actuarial (gain) loss
$ 401 
$ 603 
$ (531)
tax provision for amortization of deferred loss
0 
48 
10 
tax provision for amortization of prior service cost
30 
30 
30 
tax provision for settlements and plan changes
$ 0 
$ 0 
$ 91 
Consolidated Statements of Stockholders' Equity (USD $)
In Thousands, unless otherwise specified
Total
Common Stock
Additional Paid-in Capital
Accumulated Deficit
Accumulated Other Comprehensive Income
Beginning balance at Dec. 31, 2014
$ 126,953 
$ 2,982 
$ 277,314 
$ (158,066)
$ 4,723 
Beginning balance, shares at Dec. 31, 2014
 
29,846 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
Common stock issued under employee benefit plans, shares
 
142 
 
 
 
Common stock issued under employee benefit plans
875 
14 
861 
 
 
Share-based compensation, shares
 
80 
 
 
 
Share-based compensation
3,946 
8 
3,938 
 
 
Proceeds from issuance of common stock, net, shares
 
1,831 
 
 
 
Proceeds from issuance of common stock, net
9,564 
183 
9,381 
 
 
Cancellation of restricted shares, shares
 
(117)
 
 
 
Cancellation of restricted shares
0 
(11)
11 
 
 
Issuance of common stock for acquisiton
0 
 
 
 
 
Net loss
(22,333)
 
 
(22,333)
 
Foreign currency translation adjustments
1,574 
 
 
 
1,574 
Pension adjustment, net of tax provision (benefit)
(1,403)
 
 
 
(1,403)
Ending balance at Dec. 31, 2015
119,176 
3,176 
291,505 
(180,399)
4,894 
Ending balance, shares at Dec. 31, 2015
 
31,782 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
Common stock issued under employee benefit plans, shares
 
180 
 
 
 
Common stock issued under employee benefit plans
841 
18 
823 
 
 
Share-based compensation, shares
 
225 
 
 
 
Share-based compensation
4,004 
21 
3,983 
 
 
Proceeds from issuance of common stock, net, shares
 
1,830 
 
 
 
Cancellation of restricted shares, shares
 
(52)
 
 
 
Cancellation of restricted shares
0 
(5)
5 
 
 
Issuance of common stock for acquisiton
0 
 
 
 
 
Net loss
(23,705)
 
 
(23,705)
 
Foreign currency translation adjustments
(2,107)
 
 
 
(2,107)
Pension adjustment, net of tax provision (benefit)
2,613 
 
 
 
2,613 
Ending balance at Dec. 31, 2016
100,822 
3,210 
296,316 
(204,104)
5,400 
Ending balance, shares at Dec. 31, 2016
 
32,135 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
Common stock issued under employee benefit plans, shares
 
78 
 
 
 
Common stock issued under employee benefit plans
326 
7 
319 
 
 
Share-based compensation, shares
 
536 
 
 
 
Share-based compensation
5,945 
54 
5,891 
 
 
Cancellation of restricted shares, shares
 
(10)
 
 
 
Cancellation of restricted shares
(13)
0 
(13)
 
 
Issuance of common stock for bonuses and director fees, shares
 
314 
 
 
 
Issuance of common stock for bonuses and director fees
1,803 
31 
1,772 
 
 
Issuance of common stock for acquisition, shares
 
4,147 
 
 
 
Issuance of common stock for acquisiton
25,294 
415 
24,879 
 
 
Equity component of convertible senior notes issued
8,377 
 
8,377 
 
 
Net loss
(43,129)
 
 
(43,129)
 
Foreign currency translation adjustments
5,131 
 
 
 
5,131 
Pension adjustment, net of tax provision (benefit)
1,545 
 
 
 
1,545 
Ending balance at Dec. 31, 2017
$ 106,101 
$ 3,717 
$ 337,541 
$ (247,233)
$ 12,076 
Ending balance, shares at Dec. 31, 2017
 
37,200 
 
 
 
Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Statement of Stockholders' Equity [Abstract]
 
 
 
Tax provision (benefit) on pension adjustment
$ (431)
$ (681)
$ 400 
Consolidated Statements of Cash Flows (USD $)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Operating activities:
 
 
 
Net loss
$ (43,129,000)
$ (23,705,000)
$ (22,333,000)
Adjustments to reconcile net loss to net cash from operating activities:
 
 
 
Depreciation
8,771,000 
9,871,000 
11,385,000 
Amortization of intangible assets
809,000 
0 
166,000 
Non-cash interest expense
444,000 
0 
0 
Loss on lease due to restructuring
179,000 
87,000 
1,043,000 
Pension and defined benefit plan cost
770,000 
635,000 
412,000 
Stock-based compensation expense
9,037,000 
5,364,000 
3,946,000 
Gain on sale of property and equipment
(20,000)
(131,000)
0 
Impairment of property and equipment
240,000 
1,389,000 
0 
Gain on sale of product line
0 
(6,657,000)
0 
Unrealized loss (gain) on foreign currency exchange rates
(150,000)
63,000 
1,631,000 
Release of tax valuation allowance
0 
0 
(170,000)
Release of tax liability
0 
(1,518,000)
0 
Provision for (recovery of) allowance on accounts receivable
10,000 
(106,000)
281,000 
Losses on write downs of inventory
2,309,000 
397,000 
541,000 
Provision for warranties
303,000 
383,000 
1,327,000 
Changes in operating assets and liabilities:
 
 
 
Trade and other accounts receivable
(7,981,000)
20,085,000 
315,000 
Inventories
2,568,000 
(4,956,000)
5,251,000 
Prepaid expenses and other assets
477,000 
(372,000)
(35,000)
Pension asset
(1,067,000)
(584,000)
(650,000)
Accounts payable and accrued liabilities
8,842,000 
(14,884,000)
5,031,000 
Deferred revenue and customer deposits
2,356,000 
630,000 
2,362,000 
Accrued employee compensation
609,000 
(1,478,000)
(2,670,000)
Deferred tax liability
(154,000)
1,957,000 
2,017,000 
Defined benefit plan and other long-term liabilities
(229,000)
(827,000)
(470,000)
Net cash provided by (used in) operating activities
(15,006,000)
(14,357,000)
9,380,000 
Investing activities:
 
 
 
Purchases of property and equipment
(5,817,000)
(5,956,000)
(4,143,000)
Proceeds from sale of property and equipment
20,000 
133,000 
0 
Cash used in acquisition, net of cash acquired
(97,000)
0 
0 
Proceeds from sale of product line
1,500,000 
20,486,000 
0 
Net cash provided by (used in) investing activities
(4,394,000)
14,663,000 
(4,143,000)
Financing activities:
 
 
 
Principal payments on long-term debt and short-term borrowings
(32,000)
(45,000)
(18,845,000)
Proceeds from long-term debt and short-term borrowings, net of discount and issuance costs
42,991,000 
0 
3,040,000 
Proceeds from sale of common stock, net of offering costs
0 
0 
9,564,000 
Proceeds from issuance of common stock under equity compensation plans
326,000 
841,000 
875,000 
Net cash provided by (used in) financing activities
43,285,000 
796,000 
(5,366,000)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
878,000 
(525,000)
179,000 
Increase in cash, cash equivalents and restricted cash
24,763,000 
577,000 
50,000 
Cash, cash equivalents and restricted cash, beginning of period
25,359,000 
24,782,000 
24,732,000 
Cash, cash equivalents and restricted cash at end of year
50,122,000 
25,359,000 
24,782,000 
Cash paid for:
 
 
 
Interest
82,000 
75,000 
245,000 
Income taxes
2,306,000 
2,551,000 
3,475,000 
Supplemental schedule of noncash investing and financing activities:
 
 
 
Purchases of property and equipment included in accounts payable and accrued liabilities
1,633,000 
181,000 
345,000 
Common stock issued for acquisition of Nesscap
25,294,000 
0 
0 
Amounts in escrow related to sale of product line
$ 0 
$ 1,500,000 
$ 0 
Description of Business and Summary of Significant Accounting Policies
Description of Business and Summary of Significant Accounting Policies
Description of Business and Summary of Significant Accounting Policies
Description of Business
Maxwell Technologies, Inc. is a Delaware corporation originally incorporated under the name Maxwell Laboratories, Inc. in 1965. The Company made an initial public offering of common stock on the NASDAQ Stock Market in 1983, and changed its name to Maxwell Technologies, Inc. in 1996. The Company is headquartered in San Diego, California, and has three manufacturing facilities located in Rossens, Switzerland; Yongin, South Korea and Peoria, Arizona. In addition, the Company has two contract manufacturers located in China. Maxwell offers the following two product lines:
•
Energy Storage: The Company’s ultracapacitor products are energy storage devices that possess a unique combination of high power density, extremely long operational life and the ability to charge and discharge very rapidly. The Company’s ultracapacitor cells, multi-cell packs, modules and subsystems provide highly reliable energy storage and power delivery solutions for applications in multiple industries, including automotive, grid energy storage, wind, bus, industrial and truck. The Company’s lithium-ion capacitors are energy storage devices with the power characteristics of an ultracapacitor combined with the enhanced energy storage capacity approaching that of a battery and are uniquely designed to address a variety of applications in the rail, grid, and industrial markets where energy density and weight are differentiating factors.
•
High-Voltage Capacitors: The Company’s CONDIS® high-voltage capacitors are designed and manufactured to perform reliably for decades in all climates. These products include grading and coupling capacitors, electric voltage transformers and metering products that are used to ensure the safety and reliability of electric utility infrastructure and other applications involving transport, distribution and measurement of high-voltage electrical energy.
In addition to its two existing product lines, the Company has developed and transformed its patented, proprietary and fundamental dry electrode manufacturing technology that has historically been used to make ultracapacitors to create a new technology that can be applied to the manufacturing of batteries, which we believe can create significant performance and cost benefits as compared to today’s state of the art lithium-ion batteries.
In April 2017, the Company acquired substantially all of the assets and business of Nesscap Energy, Inc. (“Nesscap”), a developer and manufacturer of ultracapacitor products for use in transportation, renewable energy, industrial and consumer markets. The acquisition added complementary businesses to the Company’s operations and expanded the Company’s portfolio of ultracapacitor products.
In April 2016, the Company sold substantially all of the assets and liabilities of a third product line, radiation-hardened microelectronics. The Company’s radiation-hardened microelectronic products for satellites and spacecraft included single board computers and components, such as high-density memory and power modules.
The Company’s products are designed and manufactured to perform reliably for the life of the products and systems into which they are integrated. The Company achieves high reliability through the application of proprietary technologies and rigorously controlled design, development, manufacturing and test processes.
Financial Statement Presentation
The accompanying consolidated financial statements include the accounts of Maxwell Technologies, Inc. and its subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All intercompany transactions and account balances have been eliminated in consolidation.
Liquidity
On September 25, 2017, the Company issued $40.0 million of 5.50% Convertible Senior Notes due 2022 (the “Notes”). The Company received net proceeds, after deducting the initial purchaser’s discount and offering expenses payable by the Company, of approximately $37.3 million. The Notes bear interest at a rate of 5.50% per year, payable semi-annually in arrears on March 15 and September 15 of each year, commencing on March 15, 2018. On October 11, 2017, under a 30-day option that was exercised, the Company issued an additional $6.0 million aggregate principal amount of convertible senior notes under the same terms and received $5.7 million of net proceeds.
As of December 31, 2017, the Company had approximately $50.1 million in cash and cash equivalents, and working capital of $68.4 million. In July 2015, the Company entered into a loan agreement with East West Bank (“EWB”), whereby EWB made available to the Company a secured credit facility in the form of a revolving line of credit which is available up to a maximum of the lesser of: (a) $25.0 million; or (b) a certain percentage of domestic and foreign trade receivables. As of December 31, 2017, no amounts have been borrowed under this revolving line of credit and the amount available was $13.3 million. This facility is scheduled to expire in July 2018. Management believes the available cash balance will be sufficient to fund operations, obligations as they become due, and capital investments for at least the next twelve months.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. These estimates include, but are not limited to, assessing the collectability of accounts receivable, applied and unapplied production costs, production capacities, the usage and recoverability of inventories and long-lived assets, deferred income taxes, the incurrence of warranty obligations, the fair value of acquired tangible and intangible assets, impairment of goodwill and intangible assets, estimation of the cost to complete certain projects, estimation of pension and other defined benefit plan assets and liabilities, accruals for estimated losses for legal matters, and estimation of the value of stock-based compensation awards, including the probability that the performance criteria of restricted stock unit awards will be met.
Revenue Recognition
Revenue is derived primarily from the sale of manufactured products directly to customers. Product revenue is recognized, according to the guidelines of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) Numbers 101, Revenue Recognition in Financial Statements, and 104, Revenue Recognition, when all of the following criteria are met: (1) persuasive evidence of an arrangement exists (upon contract signing or receipt of an authorized purchase order from a customer); (2) title passes to the customer at either shipment from the Company’s facilities or receipt at the customer facility, depending on shipping terms; (3) customer payment is deemed fixed or determinable and free of contingencies or significant uncertainties; and (4) collectability is reasonably assured. This policy has been consistently applied from period to period.
A portion of our sales revenue is derived from sales to distributors. Distributor revenue is recognized when all of the criteria for revenue recognition are met, which is generally the time of shipment to the distributor; returns and credits are typically estimable and not significant. Certain distributor agreements of Nesscap Korea provide for significant rights of return and price adjustment; revenue related to these distributors is deferred until the period in which the distributor sells through the inventory to the end customer.
Revenue from production-type contracts, which represents less than five percent of total revenue, is recognized using the percentage of completion method. The degree of completion is determined based on costs incurred as a percentage of total costs anticipated, excluding costs that are not representative of progress to completion.
Total deferred revenue and customer deposits in the consolidated balance sheets as of December 31, 2017 and 2016 was $6.7 million and $4.0 million, respectively, and primarily relates to cash received under the localization agreement with CRRC-SRI, amounts received in advance in connection with a production-type contract for which revenue is recognized using the percentage of completion method, deferred revenue for distributors on the sell-through method of recognition, and customer advances.
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of cash in readily available checking and money market accounts. Cash equivalents consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments.
Accounts Receivable and Allowance for Doubtful Accounts
Trade receivables are stated at gross invoiced amount less an allowance for uncollectible accounts. The allowance for doubtful accounts reflects management’s best estimate of probable losses inherent in the accounts receivable balance. Management determines the allowance for doubtful accounts based on known troubled accounts, historical experience and other currently available evidence.
Inventories, net
Inventories are stated at the lower of cost (first-in first-out basis) or net realizable value. Finished goods and work-in-process inventory values include the cost of raw materials, labor and manufacturing overhead. Inventory when written down to net realizable value establishes a new cost basis and its value is not subsequently increased based upon changes in underlying facts and circumstances. The Company also makes adjustments to reduce the carrying amount of inventories for estimated excess or obsolete inventories. Factors influencing these adjustments include inventories on-hand compared with historical and estimated future sales for existing and new products and assumptions about the likelihood of obsolescence. Unabsorbed manufacturing costs are treated as expense in the period incurred.
Property and Equipment
Property and equipment are carried at cost and are depreciated using the straight-line method. Depreciation is provided over the estimated useful lives of the related assets (three to ten years). Leasehold improvements are depreciated over the shorter of their estimated useful life or the term of the lease. Leasehold improvements funded by landlords are recorded as property and equipment, which is depreciated over the shorter of the estimated useful life of the asset or the lease term, and deferred rent, which is amortized over the lease term. As of December 31, 2017 and 2016, the net book value of leasehold improvements funded by landlords was $1.4 million and $1.7 million, respectively. As of December 31, 2017 and 2016, the unamortized balance of deferred rent related to landlord funding of leasehold improvements was $1.4 million and $1.7 million, respectively, which is included in “accounts payable and accrued liabilities” and “other long-term liabilities” in the consolidated balance sheets.
Goodwill
Goodwill, which represents the excess of the cost of an acquired business over the net fair value assigned to its assets and liabilities, is not amortized. Instead, goodwill is assessed annually at the reporting unit level for impairment under the Intangibles—Goodwill and Other Topic of the FASB ASC. The Company has established December 31 as the annual impairment test date. In addition, the Company assesses goodwill in between annual test dates if an event occurs or circumstances change that could more likely than not reduce the fair value of a reporting unit below its carrying value. The Company first makes a qualitative assessment as to whether goodwill is impaired. If it is more likely than not that goodwill is impaired, the Company performs a quantitative impairment analysis to determine if goodwill is impaired. The Company may also determine to skip the qualitative assessment in any year and move directly to the quantitative test. The quantitative goodwill impairment analysis compares the reporting unit’s carrying amount to its fair value. Goodwill impairment is recorded for any excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. No impairments of goodwill were reported during the years ended December 31, 2017, 2016 and 2015. Also see Note 5, Goodwill and Intangible Assets, for further discussion of the Company’s goodwill impairment analysis.
Long-Lived Assets and Intangible Assets
The Company records intangible assets at their respective estimated fair values at the date of acquisition. Intangible assets are amortized based upon the pattern in which their economic benefit will be realized, or if this pattern cannot be reliably determined, using the straight-line method over their estimated useful lives of eight to fourteen years.
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets, including intangible assets, may not be recoverable. When such events occur, the Company compares the carrying amounts of the assets to their undiscounted expected future cash flows. If the Company determines that the carrying value of the asset is not recoverable, a permanent impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value. During the years ended December 31, 2017 and 2016, the Company recorded impairment charges of $0.2 million and $1.4 million, respectively. These impairment charges related to property and equipment which were no longer forecasted to be utilized during their remaining useful lives and for which the fair values approximated zero. No impairments of property and equipment were recorded during the year ended December 31 2015.
Warranty Obligation
The Company provides warranties on all product sales for terms ranging from one to eight years. The Company accrues for the estimated warranty costs at the time of sale based on historical warranty experience plus any known or expected changes in warranty exposure. As of December 31, 2017 and 2016, the accrued warranty liability included in “accounts payable and accrued liabilities” in the consolidated balance sheets was $1.4 million and $1.2 million, respectively.
Convertible Debt
Convertible notes are regarded as compound instruments, consisting of a liability component and an equity component. The component parts of compound instruments are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortized cost basis until extinguished upon conversion or at the instrument’s maturity date. The equity component is determined by deducting the amount of the liability component from the proceeds of the compound instrument as a whole. This is recognized as additional paid-in capital and included in equity, net of income tax effects, and is not subsequently remeasured. After initial measurement, the convertible notes are carried at amortized cost using the effective interest method.
Income Taxes
Deferred income taxes are provided on a liability method in accordance with the Income Taxes Topic of the FASB ASC, whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their reported amounts at each period end. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. The guidance also provides criteria for the recognition, measurement, presentation and disclosures of uncertain tax positions. A tax benefit from an uncertain tax position may be recognized if it is “more likely than not” that the position is sustainable based solely on its technical merits.
Concentration of Credit Risk
The Company maintains cash balances at various financial institutions primarily in California and Switzerland. In California, cash balances commonly exceed the $250,000 Federal Deposit Insurance Corporation insurance limit. In Switzerland, the banks where the Company has cash deposits are either government-owned, or in the case of cash deposited with non-government banks, deposits are insured up to 100,000 Swiss Francs. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to any significant credit risk with respect to such cash and cash equivalents.
Financial instruments, which subject the Company to potential concentrations of credit risk, consist principally of the Company’s accounts receivable. The Company’s accounts receivable result from product sales to customers in various industries and in various geographical areas, both domestic and foreign. The Company performs credit evaluations of its customers and generally requires no collateral. One customer, ABB Ltd., accounted for 12% of total revenue in 2017. Two customers accounted for 10% or more of total accounts receivable at December 31, 2017; Continental Automotive and ABB Ltd. accounted for 11% and 10% of accounts receivable, respectively. No customers accounted for 10% or more of total revenue during the year ended December 31, 2016 or 10% or more of total accounts receivable at December 31, 2016. One customer, Shenzhen Xinlikang Supply China Management Co. Ltd., accounted for 19% of total revenue in 2015.
Research and Development Expense
Research and development expenditures are expensed in the period incurred. Third-party funding of research and development expense under cost-sharing arrangements is recorded as an offset to research and development expense in the period the expenses are incurred. Research and development expense was $18.4 million, $20.9 million and $24.7 million, net of third-party funding under cost-sharing arrangements of $2.8 million, $1.2 million and $1.3 million, for the years ended December 31, 2017, 2016 and 2015, respectively. For the years ended December 31, 2017 and 2016, third-party funding under cost-sharing arrangements included $2.2 million and $0.6 million, respectively, related to a joint development agreement to fund the short-term costs of developing technologies for the automotive market.
Shipping and Handling Expense
The Company recognizes shipping and handling expenses as a component of cost of revenue.
Advertising Expense
Advertising costs are expensed in the period incurred. Advertising expense was $0.7 million, $0.7 million and $1.1 million for the years ended December 31, 2017, 2016 and 2015, respectively.
Foreign Currencies
The Company’s primary foreign currency exposure is related to its subsidiaries in Switzerland and Korea. The functional currency of the Swiss and Korean subsidiaries are the Swiss Franc and Korean Won, respectively. The Company’s Swiss subsidiary has Euro and local currency (Swiss Franc) revenue and operating expenses, and local currency loans. The Company’s Korean subsidiary has U.S. dollar, Euro and local currency (Korean Won) revenue and operating expenses. Changes in these currency exchange rates impact the reported U.S. dollar amount of revenue, expenses and debt. Assets and liabilities of the Swiss and Korean subsidiaries are translated at month-end exchange rates, and revenue, expenses, gains and losses are translated at rates of exchange that approximate the rate in effect at the time of the transaction. Any translation adjustments resulting from this process are presented separately as a component of accumulated other comprehensive income within stockholders’ equity in the consolidated balance sheets. Foreign currency transaction gains and losses on intercompany balances considered long term in nature are accounted for as translation adjustments within equity. All other foreign currency transaction gains and losses are reported in “foreign currency exchange loss, net” in the consolidated statements of operations.
Foreign Currency Derivative Instruments
The Company has historically used forward contracts to hedge certain monetary assets and liabilities, primarily receivables, payables, and cash balances, denominated in foreign currencies. The Company’s objective was to partially offset gains or losses resulting from these exposures with opposing gains or losses on the forward contracts, thereby reducing volatility of earnings created by these foreign currency exposures. During the year ended December 31, 2016, the Company ceased using foreign currency forward contracts to hedge foreign currency transaction exposure as management determined its foreign currency transaction exposure is no longer significant. In accordance with the Derivatives and Hedging Topic of the FASB ASC, the fair values of the forward contracts were estimated at each period end based on quoted market prices and were recorded as a net asset or liability on the consolidated balance sheets. These contracts were considered economic hedges but were not designated as hedges under the Derivatives and Hedging Topic of the FASB ASC, therefore, the change in the fair value of the instruments was recognized in the consolidated statements of operations and was recorded in “foreign currency exchange loss, net” in the consolidated statements of operations.
Business Combinations
The Company accounts for businesses it acquires in accordance with ASC Topic 805, Business Combinations, which allocates the fair value of the purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions. The Company may utilize third-party valuation specialists to assist the Company in the allocation. Initial purchase price allocations are subject to revision within the measurement period, not to exceed one year from the date of acquisition. Acquisition-related expenses and transaction costs associated with business combinations are expensed as incurred.
Restructuring and Exit Costs
Restructuring and exit costs involve employee-related termination costs, facility exit costs and other costs associated with restructuring activities. The Company accounts for charges resulting from operational restructuring actions in accordance with ASC Topic 420, Exit or Disposal Cost Obligations (“ASC 420”) and ASC Topic 712, Compensation-Nonretirement Postemployment Benefits (“ASC 712”).
The recognition of restructuring costs requires the Company to make certain assumptions related to the amounts of employee severance benefits, the time period over which leased facilities will remain vacant and expected sublease terms and discount rates. Estimates and assumptions are based on the best information available at the time the obligation arises. These estimates are reviewed and revised as facts and circumstances dictate; changes in these estimates could have a material effect on the amount accrued in the consolidated balance sheet.
Net Income or Loss per Share
In accordance with the Earnings Per Share Topic of the FASB ASC, basic net income or loss per share is calculated using the weighted average number of common shares outstanding during the period. Diluted net income per share includes the impact of additional common shares that would have been outstanding if potentially dilutive common shares were issued. Potentially dilutive securities are not considered in the calculation of diluted net loss per share, as their inclusion would be anti-dilutive.
The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data):
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
Numerator
 
 
 
 
 
 
Net loss
 
$
(43,129
)
 
$
(23,705
)
 
$
(22,333
)
Denominator
 
 
 
 
 
 
Weighted average common shares outstanding, basic and diluted
 
35,480

 
31,870

 
30,716

Net loss per share
 
 
 
 
 
 
Basic and diluted
 
$
(1.22
)
 
$
(0.74
)
 
$
(0.73
)

The following table summarizes instruments that may be convertible into common shares that are not included in the denominator used in the diluted net loss per share calculation because to do so would be anti-dilutive (in thousands of shares):
 
 
2017
 
2016
 
2015
Outstanding options to purchase common stock
 
361

 
414

 
931

Unvested restricted stock awards
 
26

 
88

 
245

Unvested restricted stock unit awards
 
2,650

 
1,748

 
885

Employee stock purchase plan awards
 
38

 
—

 
10

Bonus and director fees to be paid in stock awards
 
477

 
265

 
—

Convertible senior notes
 
7,245

 
—

 
—

 
 
10,797

 
2,515

 
2,071


Stock-Based Compensation
The Company issues stock-based compensation awards to its employees and non-employee directors, including stock options, restricted stock, restricted stock units, and shares under an employee stock purchase plan. The Company records compensation expense for stock-based awards in accordance with the criteria set forth in the Stock Compensation Subtopic of the FASB ASC. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option grants. The determination of the fair value of stock options utilizing the Black-Scholes model is affected by the Company’s stock price and a number of assumptions, including expected volatility, expected term, risk-free interest rate and expected dividends.
The fair value of restricted stock awards (“RSAs”) and restricted stock unit awards (“RSUs”) with service-based or performance-based vesting is based on the closing market price of the Company’s common stock on the date of grant. Compensation expense equal to the fair value of each RSA or RSU is recognized ratably over the requisite service period. For RSUs with vesting contingent on Company performance conditions, the Company uses the requisite service period that is most likely to occur. The requisite service period is estimated based on the performance period as well as any time-based service requirements. If it is unlikely that a performance condition will be achieved, no compensation expense is recognized unless it is later determined that achievement of the performance condition is likely. Expense may be adjusted for changes in the expected outcomes of the related performance conditions, with the impact of such changes recognized as a cumulative adjustment in the consolidated statement of operations in the period in which the expectation changes.
In 2016 and 2017, the Company issued market-condition RSUs to certain members of executive management. Since the vesting of the market-condition RSUs is dependent on stock price performance, the fair values of these awards were estimated using a Monte-Carlo valuation model. The determination of the fair value of market-condition RSUs utilizing a Monte-Carlo valuation model was affected by the Company’s stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends.
In 2016, Company adopted a bonus plan that enabled participants to earn annual incentive bonuses based upon achievement of specified financial and strategic performance objectives. Under the terms of this plan, the Company has the ability to settle bonuses earned under the plan with common stock or fully vested RSUs. The Company settled the majority of bonuses earned under the 2016 plan in stock or fully vested RSUs during 2017. For the fiscal year 2017 performance period, the Company intends to settle the amounts earned under the bonus plan in fully vested RSUs in the first quarter of 2018. The stock-based compensation expense accrued under this bonus plan represents stock-settled debt per ASC 718 and ASC 480, as such, the Company has recorded a liability for bonuses expected to be paid in fully vested RSUs in “accrued employee compensation” in the Company’s consolidated balance sheets.
Stock-based compensation expense recognized in the consolidated statements of operations is based on equity awards ultimately expected to vest. The Company estimates forfeitures at the time of grant and revises forfeitures, if necessary, in subsequent periods with a cumulative catch up adjustment if actual forfeitures differ from those estimates. For market-condition awards, because the effect of the market-condition is reflected as an adjustment to the awards’ fair value at grant date, subsequent forfeitures due to the Company’s stock price performance do not result in a reversal of expense.
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. The standard provides companies with a single model for accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. In August 2015, the FASB issued ASU 2015-14, Deferral of the Effective Date, which defers the required adoption date of ASU 2014-09 by one year. As a result of the deferred effective date, ASU 2014-09 will be effective for the Company in its first quarter of fiscal 2018. Early adoption is permitted but not before the original effective date of the new standard of the first quarter of fiscal 2017. The following ASUs were subsequently issued by the FASB to clarify the implementation guidance in some areas and add practical expedients: In March 2016, ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations; in April 2016, ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing; in May 2016, ASU 2016-12, Revenue from Contracts with Customers: Narrow Scope Improvements and Practical Expedients; and in December 2016, ASU 2016-20, Technical Corrections and Improvements to Revenue from Contracts with Customers. The Company’s is currently finalizing its evaluation of standard product sales arrangements and has identified an adoption impact related to revenue from certain distributor agreements which was deferred until the period in which the distributor sells through the inventory to the end customer. In connection with the adoption of ASU 2014-09, the Company will change the recognition of sales to these distributors whereby revenue will be estimated and recognized in the period in which the Company transfers control of the product to the distributor; the adoption impact is not expected to be material. Other than this impact, the Company has not identified any expected impact on the timing and measurement of revenue for standard product sales arrangements from the adoption of the standard and the Company is currently formalizing its final conclusions. The Company is also formalizing its evaluation of the impact of adoption on non-product sales arrangements, which represent less than five percent of revenue. The Company has developed and used a comprehensive project plan to guide implementation of the new standard and is currently completing its assessment. The Company will adopt the new accounting standard using the modified retrospective transition method effective January 1, 2018.
In February 2016, the FASB issued ASU No. 2016-02, Leases. The standard requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in its balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The guidance in ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018. The Company’s initial evaluation of its current leases does not indicate that the adoption of this standard will have a material impact on its consolidated statements of operations. The Company expects that the adoption of the standard will have a material impact on its consolidated balance sheets for the recognition of certain operating leases as right-of-use assets and lease liabilities.
In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which changes the accounting for employee share-based payments, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. Under the new guidance, excess tax benefits associated with share-based payment awards will be recognized in the income statement when the awards vest or settle, rather than in stockholders’ equity. In addition, it will increase the number of shares an employer can withhold to cover income taxes on share-based payment awards and still qualify for the exemption to liability classification. The guidance was effective for the Company in the first quarter of 2017. The adoption of this standard resulted in the recognition of $10.0 million of gross deferred tax assets related to stock-based compensation and a corresponding increase in the Company’s valuation allowance. The Company has elected to account for forfeitures of share-based payments by estimating the number of awards expected to be forfeited at the time of grant and adjusting the estimate to reflect changes in expected vesting of shares.
In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows - Restricted Cash, which requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The guidance will be effective for the Company in its first quarter of fiscal 2018. Early adoption is permitted, including adoption in an interim period, but any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The new standard must be adopted retrospectively. The Company early adopted this standard in the fourth quarter of 2016. In accordance with the Company’s early adoption of ASU No. 2016-18, the retrospective restatement was limited to including restricted cash balances in the amount of $0.4 million in beginning cash, cash equivalents and restricted cash balances for the year ended December 31, 2016 in the consolidated statements of cash flows. The retrospective adoption did not impact reported net loss and does not otherwise have a material impact on the presentation of the overall financial statements.
In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other, which eliminates step two of the quantitative goodwill impairment test. Step two required determination of the implied fair value of a reporting unit, and then a comparison of this implied fair value with the carrying amount of goodwill for the reporting unit, in order to determine any goodwill impairment. Under the new guidance, an entity is only required to complete a one-step quantitative test, by comparing the fair value of a reporting unit with its carrying amount, and any goodwill impairment charge is determined by the amount by which the carrying amount exceeds the reporting unit’s fair value. However, the loss should not exceed the total amount of goodwill allocated to the reporting unit. The standard is effective for the Company in the first quarter of 2020, with early adoption permitted as of January 1, 2017, and is to be applied on a prospective basis. The adoption of the standard will not materially impact the Company's consolidated financial statements unless step one of the annual goodwill impairment test fails. The Company early adopted this standard on January 1, 2017 and the adoption did not have an effect on the Company’s consolidated financial statements.
In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the statement of operations. The new guidance requires entities to report the service cost component in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the statement of operations separately from the service cost component and outside the subtotal of loss from operations. ASU 2017-07 also provides that only the service cost component is eligible for capitalization. The standard is effective for the Company in the first quarter of 2018, with adoption to be applied on a retrospective basis. The Company’s 2017 and 2016 loss from operations, when restated, will increase $0.7 million and $0.5 million, respectively, due to the reclassification of the non-service cost components of net benefit cost which will be moved to a line below loss from operations. There is no impact to net loss or net loss per share in the Company’s consolidated statements of operations. The Company applied the practical expedient as the estimation basis for this reclassification.
In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting, which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions or award classification and would not be required if the changes are considered non-substantive. The amendments of this ASU are effective for the Company in the first quarter of 2018, with early adoption permitted. The adoption of ASU 2017-09 is not expected to have an impact on the Company’s consolidated financial statements.
In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities, which modifies the presentation and disclosure of hedging results. Further, it provides partial relief on the timing of certain aspects of hedge documentation and eliminates the requirement to recognize hedge ineffectiveness separately in income. The amendments in this ASU are effective for the Company in the first quarter of 2019. The Company does not expect this ASU to have a material impact on its consolidated financial statements.
Business Enterprise Information
The Company operates as a single operating segment. According to the FASB ASC Topic Disclosures about Segments of an Enterprise and Related Information, operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM is the Chief Executive Officer who evaluates the Company’s financial information and resources and assesses performance on a consolidated basis.
Revenue by product line and geographic area is presented below (in thousands):
 
 
Years ended December 31,
Revenue by product line:
 
2017
 
2016
 
2015
Ultracapacitors
 
$
87,709

 
$
71,491

 
$
114,525

High-voltage capacitors
 
42,659

 
45,177

 
41,718

Microelectronic products
 
—

 
4,576

 
11,129

Total
 
$
130,368

 
$
121,244

 
$
167,372

 
 
 
 
 
 
 
 
 
Years ended December 31,
Revenue from external customers located in(1):
 
2017
 
2016
 
2015
China
 
$
44,945

 
$
48,191

 
$
87,856

United States
 
13,874

 
12,041

 
20,836

Germany
 
16,287

 
12,854

 
13,972

Hungary
 
13,454

 
11,473

 
11,630

All other countries (2)
 
41,808

 
36,685

 
33,078

Total
 
$
130,368

 
$
121,244

 
$
167,372

_____________
 
 
 
 
 
 
(1)    Location is determined by shipment destination.
(2)    Revenue from external customers located in countries included in “All other countries” does not individually comprise more than 10% of total revenue for any of the years presented.
Long-lived assets by geographic location are as follows (in thousands):
 
 
As of December 31,
 
 
2017
 
2016
 
2015
United States
 
$
14,443

 
$
19,267

 
$
22,267

China
 
1,107

 
1,477

 
4,148

South Korea
 
4,398

 
—

 
—

Switzerland
 
8,096

 
5,376

 
6,021

Total
 
$
28,044

 
$
26,120

 
$
32,436

Balance Sheet Details
Balance Sheet Details
Balance Sheet Details (in thousands):
Inventories
 
 
December 31,
2017
 
December 31, 2016
Raw materials and purchased parts
 
$
12,675

 
$
12,210

Work-in-process
 
1,756

 
858

Finished goods
 
17,797

 
19,180

Total inventories
 
$
32,228

 
$
32,248


Warranty
Activity in the warranty reserve, which is included in “accounts payable and accrued liabilities” in the consolidated balance sheets, is as follows:
 
 
Years Ended December 31,
 
 
2017
 
2016
Beginning balance
 
$
1,213

 
$
1,288

Acquired liability from Nesscap
 
773

 
—

Product warranties issued
 
177

 
486

Settlement of warranties
 
(876
)
 
(458
)
Changes related to preexisting warranties
 
126

 
(103
)
Ending balance
 
$
1,413

 
$
1,213


Property and equipment, net
 
 
December 31,
 
 
2017
 
2016
Machinery, furniture and office equipment
 
$
67,963

 
$
62,583

Computer hardware and software
 
10,436

 
10,071

Leasehold improvements
 
21,599

 
20,320

Construction in progress
 
5,461

 
1,401

Property and equipment, gross
 
105,459

 
94,375

Less accumulated depreciation and amortization
 
(77,415
)
 
(68,255
)
Total property and equipment, net
 
$
28,044

 
$
26,120

 
 
 
 
 

Accounts payable and accrued liabilities
 
 
December 31,
 
 
2017
 
2016
Accounts payable
 
$
21,242

 
$
13,109

Income tax payable
 
1,737

 
1,066

Accrued warranty
 
1,413

 
1,213

Other accrued liabilities
 
8,366

 
3,793

Total accounts payable and accrued liabilities
 
$
32,758

 
$
19,181


Accumulated Other Comprehensive Income (Loss)
 
 
Foreign
Currency
Translation
Adjustment
 
Pension and Defined Benefit Plan
 
Accumulated
Other
Comprehensive
Income
 
Affected Line Items in the Statement of Operations
Balance as of December 31, 2016
 
$
7,826

 
$
(2,426
)
 
$
5,400

 
 
Other comprehensive income before reclassification
 
5,131

 
—

 
5,131

 
 
Amounts reclassified from accumulated other comprehensive income (loss)
 
—

 
1,545

 
1,545

 
Cost of Sales, Selling, General and Administrative and Research and Development Expense
Net other comprehensive income
 
5,131

 
1,545

 
6,676

 
 
Balance as of December 31, 2017
 
$
12,957

 
$
(881
)
 
$
12,076

 
 
Business Combination
Business Combination
Business Combination
On April 28, 2017, the Company acquired substantially all of the assets and business of Nesscap Energy, Inc. (“Nesscap”), a developer and manufacturer of ultracapacitor products for use in transportation, renewable energy, industrial and consumer markets, in exchange for the issuance of approximately 4.1 million shares of Maxwell common stock (the “Share Consideration”) and the assumption of certain liabilities pursuant to the terms of the previously announced Arrangement Agreement dated as of February 28, 2017 between Maxwell and Nesscap (the “ Nesscap Acquisition”). The value of the Share Consideration was approximately $25.3 million based on the closing price of the Company’s common stock on April 28, 2017. Additionally, per the Arrangement Agreement, the Company paid approximately $1.0 million of transaction taxes on behalf of the seller. The Nesscap Acquisition was effected by means of a court-approved statutory plan of arrangement and was approved by the requisite vote cast by shareholders of Nesscap at a special meeting of Nesscap’s shareholders held on April 24, 2017.
The Share Consideration represents approximately 11.3% of the outstanding shares of Maxwell, based on the number of shares of Maxwell common stock outstanding as of April 28, 2017.
The Nesscap Acquisition adds scale to the Company’s operations and expands the Company’s portfolio of ultracapacitor products.
The fair value of the purchase price consideration consisted of the following (in thousands):
Maxwell common stock
 
$
25,294

Settlement of seller’s transaction expenses
 
1,006

Total estimated purchase price
 
$
26,300


The acquisition has been accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under this method of accounting, the Company recorded the acquisition based on the fair value of the consideration given and the cash consideration paid. The Company allocated the acquisition consideration paid to the identifiable assets acquired and liabilities assumed based on their respective fair values at the date of completion of the acquisition. Any excess of the value of consideration paid over the aggregate fair value of those net assets has been recorded as goodwill, which is attributable to expected synergies from combining operations, the acquired workforce, as well as intangible assets which do not qualify for separate recognition. The Company has allocated the goodwill to a new reporting unit. The goodwill associated with the acquisition is not deductible for income tax purposes.
The fair values of net tangible assets and intangible assets acquired were based upon the Company's estimates and assumptions at the acquisition date. The following table summarizes the allocation of the assets acquired and liabilities assumed at the acquisition date (in thousands):
 
 
Fair Value
Cash and cash equivalents
 
$
909

Accounts receivable
 
2,545

Inventories
 
4,397

Prepaid expenses and other assets
 
764

Property and equipment
 
3,314

Intangible assets
 
11,800

Accounts payable, accrued compensation and other liabilities
 
(5,713
)
Employee severance obligation
 
(3,340
)
Total identifiable net assets
 
14,676

Goodwill
 
11,624

Total purchase price
 
$
26,300


The fair value of inventories acquired included an acquisition accounting fair market value step-up of $686,000. In the year ended December 31, 2017, the Company recognized $646,000 of the step-up as a component of cost of revenue for acquired inventory sold during the period. Included in inventory as of December 31, 2017, was $40,000 related to the remaining fair value step-up associated with the acquisition.
For the year ended December 31, 2017, acquisition-related costs of $1.9 million were included in selling, general, and administrative expenses in the Company's consolidated statements of operations.
The following table presents details of the identified intangible assets acquired through the Nesscap Acquisition (in thousands):
 
 
Estimated Useful Life (in years)
 
Fair Value
Customer relationships - institutional
 
14
 
$
3,200

Customer relationships - non-institutional
 
10
 
4,400

Trademarks and trade names
 
10
 
1,500

Developed technology
 
8
 
2,700

Total intangible assets
 
 
 
$
11,800


The fair value of the $11.8 million of identified intangible assets acquired in connection with the Nesscap Acquisition was estimated using an income approach. Under the income approach, an intangible asset's fair value is equal to the present value of future economic benefits to be derived from ownership of the asset. More specifically, the fair values of the customer relationship intangible assets were determined using the multi-period excess earnings method, which estimates an intangible asset’s value based on the present value of the incremental after-tax cash flows attributable only to the intangible asset. The fair values of the trademark and trade names and developed technology intangible assets were valued using the relief from royalty method, which is based on the principle that ownership of the intangible asset relieves the owner of the need to pay a royalty to another party in exchange for rights to use the asset.
The following unaudited pro forma financial information presents the combined results of operations for each of the periods presented, as if the Nesscap Acquisition had occurred at the beginning of fiscal year 2016 (in thousands, except per share amounts):
 
 
Years Ended December 31,
 
 
2017
 
2016
Net revenues
 
$
135,534

 
$
141,724

Net loss
 
(43,849
)
 
(28,701
)
Net loss per share:
 
 
 
 
Basic and diluted
 
(1.19
)
 
(0.80
)
Weighted average common shares outstanding:
 
 
 
 
Basic and diluted
 
36,809

 
36,017


The unaudited pro forma information has been adjusted to reflect the following:
•
Amortization expense for acquired intangibles and removal of Nesscap historical intangibles amortization
•
Removal of historical Nesscap interest expenses, gains and losses related to debt not acquired
•
Recognition of expense associated with the valuation of inventory acquired
The pro forma data is presented for illustrative purposes only and is not necessarily indicative of the consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of fiscal year 2016 or of the results of future operations of the combined business. The unaudited pro forma financial information does not reflect any operating efficiencies and cost saving that may be realized from the integration of the acquisition. For the year ended December 31, 2017, $17.3 million of revenue and $0.9 million of net loss included in the Company's consolidated statements of operations was related to Nesscap operations. The Company does not consider the 2017 revenue and net loss related to Nesscap operations to be indicative of the results of the Nesscap Acquisition due to integration activities since the acquisition date.
Also see Note 5, Goodwill and Intangible Assets, for further information on goodwill and intangible assets related to the Nesscap Acquisition.
Sale of Microelectronics Product Line
Sale of Microelectronics Product Line
Sale of Microelectronics Product Line
On April 27, 2016, the Company sold substantially all of the assets and liabilities comprising its microelectronics product line to Data Device Corporation, a privately-held Delaware corporation. The transaction purchase price was $21.0 million, subject to a working capital adjustment and a one year $1.5 million escrow holdback on the purchase price, which was received in May 2017.
The assets sold were primarily comprised of inventory, accounts receivable and property and equipment. The liabilities sold were comprised mainly of deferred revenue, accounts payable and other current liabilities. During the first quarter of 2016, the Company met the held for sale criteria in accordance with ASC Topic 380, Impairment or Disposal of Long Lived Assets, and the Company ceased depreciation on the property and equipment and classified the assets to be sold as held for sale. During the second quarter of 2016, all assets and liabilities formerly classified as held for sale were disposed of pursuant to the sale. The sale of the microelectronics product line did not represent a strategic shift that had a major effect on the Company’s operations and financial results. As such, the Company did not account for the disposition as a discontinued operation. During the year ended December 31, 2016, the Company recorded a gain of $6.7 million related to the sale of the microelectronics product line.
Goodwill and Intangible Assets
Goodwill
Goodwill and Intangible Assets
The Company performs an impairment test for goodwill annually according to the Intangibles—Goodwill and Other Topic of the FASB ASC. On January 1, 2017, the Company also early adopted ASU 2017 No. 2017-04, Intangibles - Goodwill and Other, which eliminates step two of the quantitative goodwill impairment test. The Company first makes a qualitative assessment of the likelihood of goodwill impairment and if it concludes that it is more likely than not that the carrying amount of a reporting unit is greater than its fair value, then it will be required to perform a quantitative impairment test. Otherwise, performing the impairment test is not required. Qualitative factors assessed at the reporting unit level include, but are not limited to, changes in industry and market structure, competitive environments, planned capacity and new product launches, cost factors such as raw material prices and financial performance of the reporting unit. The Company may also determine to skip the qualitative assessment in any year and move directly to the quantitative test.
The quantitative impairment test consists of estimating the fair value and comparing the estimated fair value with the carrying value of the reporting unit. Any goodwill impairment charge is determined by the amount by which the carrying amount exceeds the reporting unit’s fair value. However, the loss should not exceed the total amount of goodwill allocated to the reporting unit. The guidance requires goodwill to be reviewed annually at the same time every year or when an event occurs or circumstances change such that it is reasonably possible that an impairment may exist. The Company selected December 31 as its annual testing date.
In 2017, the Company performed a qualitative assessment of its reporting units which included an evaluation of changes in industry, market and macroeconomic conditions as well as consideration of each reporting unit’s financial performance and any significant trends. The Company’s qualitative assessment indicated that it was not more likely that not that goodwill is impaired. Further, the Company noted no significant negative trends or decreases in its long-range plan that would indicate a different result compared to its 2016 quantitative analysis of its ultracapacitor reporting unit.
In 2016, the Company assessed the qualitative factors for one of its two reporting units and concluded that it was more likely than not that its fair value exceeded its carrying value and therefore did not perform quantitative testing for the reporting unit. For its other reporting unit, the Company determined to skip the qualitative assessment and moved directly to the quantitative test. The Company utilized a discounted cash flow methodology to calculate the fair value of the reporting unit. Based on the fair value analysis, management concluded that fair value exceeded carrying value of the reporting unit and no additional quantitative testing was required. As a result of the Company’s annual assessments, no impairments were recorded during the years ended December 31, 2017, 2016 and 2015.
The change in the carrying amount of goodwill during 2016 and 2017 was as follows (in thousands):
Balance at December 31, 2015
$
23,635

Foreign currency translation adjustments
(545
)
Disposition of microelectronics product line
(291
)
Balance at December 31, 2016
22,799

Foreign currency translation adjustments
1,638

Goodwill from Nesscap Acquisition
11,624

Balance at December 31, 2017
$
36,061


The composition of intangible assets subject to amortization was as follows (in thousands):
 
 
As of December 31, 2017
 
 
Useful Life
(in years)
 
Gross Initial Carrying Value
 
Cumulative Foreign Currency Translation Adjustment
 
Accumulated Amortization
 
Net Carrying Value
Customer relationships - institutional
 
14
 
$
3,200

 
$
197

 
$
(156
)
 
$
3,241

Customer relationships - non-institutional
 
10
 
4,400

 
266

 
(304
)
 
4,362

Trademarks and trade names
 
10
 
1,500

 
90

 
(103
)
 
1,487

Developed technology
 
8
 
2,700

 
160

 
(235
)
 
2,625

Total intangible assets
 
 
 
$
11,800

 
$
713

 
$
(798
)
 
$
11,715


The useful life of intangible assets reflects the period the assets are expected to contribute directly or indirectly to future cash flows. Intangible assets are amortized over the useful lives of the assets utilizing the straight-line method, which is materially consistent with the pattern in which the expected benefits will be consumed, calculated using undiscounted cash flows.
For the year ended December 31, 2017, amortization expense of $0.2 million was recorded to “cost of revenue” and $0.6 million was recorded to “selling, general and administrative.” Estimated amortization expense for the years 2018 through 2021 is $1.2 million each year. The expected amortization expense is an estimate and actual amounts could differ due to additional intangible asset acquisitions, changes in foreign currency rates or impairment of intangible assets.
Restructuring and Exit Costs
Restructuring and Exit Costs
Restructuring and Exit Costs
2017 Restructuring Plans
In September 2017, the Company initiated a restructuring plan to optimize headcount in connection with the acquisition and integration of the assets and business of Nesscap, as well as to implement additional organizational efficiencies. Total charges for the September 2017 restructuring plan were approximately $1.2 million, all of which were incurred in 2017.
In February 2017, the Company implemented a comprehensive restructuring plan that included a wide range of organizational efficiency initiatives and other cost reduction opportunities. Total charges for the year ended December 31, 2017 for the February 2017 restructuring plan were approximately $0.9 million.
The Company accounts for charges resulting from restructuring and exit activities in accordance with ASC Topic 420, Exit or Disposal Cost Obligations (“ASC 420”), and ASC Topic 712, Compensation-Nonretirement Postemployment Benefits, for employee termination benefits to be paid in accordance with its ongoing employee termination benefit arrangement.
The charges related to both of the 2017 restructuring plans consist of employee severance costs and have been or will be paid in cash. The charges were recorded within “restructuring and exit costs” in the consolidated statements of operations.
The following table summarizes the changes in the liabilities for each of the 2017 restructuring plans, which are recorded in “accrued employee compensation” in the Company’s condensed consolidated balance sheet for the year ended December 31, 2017 (in thousands):
 
 
February 2017 Plan
 
September 2017 Plan
 
 
Employee Severance Costs
Restructuring plans liability as of December 31, 2016
 
$
—

 
$
—

Costs incurred
 
997

 
1,275

Amounts paid
 
(855
)
 
(431
)
Accruals released
 
(142
)
 
(27
)
Restructuring liability as of December 31, 2017
 
$
—

 
$
817


2015 Restructuring Plan
In 2015, the Company initiated a restructuring plan to consolidate U.S. manufacturing operations and to reduce headcount and operating expenses in order to align the Company’s cost structure with the current business forecast and to improve operational efficiency. The 2015 plan also included the disposition of the Company’s microelectronics product line which was completed in April 2016. With the exception of lease assumption revisions described below, the plan was completed in 2016. Total restructuring and exit costs for the 2015 plan were $3.0 million, which included $1.5 million in facilities costs related to the consolidation of manufacturing operations, $1.2 million in employee severance costs and $0.3 million in other exit costs. The Company also incurred $0.6 million in accelerated equipment depreciation expense related to the consolidation of manufacturing operations. Total cash expenditures, excluding lease payments, related to the 2015 restructuring plan activities were approximately $1.5 million.
In June 2015, the Company ceased use of approximately 60,000 square feet of its Peoria, AZ manufacturing facility, and determined this leased space would have no future economic benefit to the Company based on the current business forecast. As a result, in June 2015, the Company recorded a liability for the future rent obligation associated with this space, net of estimated sublease income, in accordance with ASC Topic 420. For the year ended December 31, 2015, the expense related to the exit of this leased space was $1.2 million, before tax, and was recorded as a component of total restructuring and exit costs. During the years ended December 31, 2017 and 2016, the Company recorded additional restructuring and exit costs of $0.2 million and $0.1 million, respectively, related to revisions to the sublease income assumption.
For the years ended December 31, 2017, 2016 and 2015, the Company recorded total charges related to its 2015 restructuring plan of $0.2 million, $0.3 million and $2.5 million, respectively, within “restructuring and exit costs” in the consolidated statements of operations. Additionally, for the years ended December 31, 2016 and 2015, the Company recorded $0.1 million and $0.4 million, respectively, of accelerated depreciation expense within “cost of revenue” in the consolidated statements of operations.
As of December 31, 2017, the Company’s consolidated balance sheet includes restructuring liability associated with lease obligation costs of $0.3 million in “accounts payable and accrued liabilities” and $0.4 million in “other long term liabilities.”
The following table summarizes restructuring and exit costs related to the 2015 restructuring plan for the years ended December 31, 2017, 2016 and 2015 (in thousands):
 
 
Employee Severance Costs
 
Lease Obligation Costs
 
Other Exit Costs
 
Total
Restructuring liability as of December 31, 2014
 
$
—

 
$
—

 
$
—

 
$
—

Costs incurred
 
1,439

 
1,208

 
—

 
2,647

Restructuring cash payments
 
(1,010
)
 
—

 
—

 
(1,010
)
Accruals released
 
(135
)
 
—

 
—

 
(135
)
Lease payments and accretion
 
—

 
(165
)
 
—

 
(165
)
Restructuring liability as of December 31, 2015
 
294

 
1,043

 
—

 
1,337

Costs incurred
 
67

 
86

 
298

 
451

Restructuring cash payments
 
(207
)
 
—

 
(246
)
 
(453
)
Accruals released
 
(154
)
 
—

 
—

 
(154
)
Lease payments and accretion
 
—

 
(327
)
 
(52
)
 
(379
)
Restructuring liability as of December 31, 2016
 
—

 
802

 
—

 
802

Costs incurred
 
—

 
179

 
—

 
179

Lease payments and accretion
 
—

 
(311
)
 
—

 
(311
)
Restructuring liability as of December 31, 2017
 
$
—

 
$
670

 
$
—

 
$
670

Debt and Credit Facilities
Credit Facilities
Debt and Credit Facilities
Convertible Senior Notes
On September 25, 2017 and October 11, 2017, the Company issued $40.0 million and $6.0 million, respectively, of 5.50% Convertible Senior Notes due 2022 (the “Notes”). The Company received net proceeds, after deducting the initial purchaser’s discount and offering expenses payable by the Company, of approximately $43.0 million. The Notes bear interest at a rate of 5.50% per year, payable semi-annually in arrears on March 15 and September 15 of each year, with payments commencing on March 15, 2018. The Notes mature on September 15, 2022, unless earlier purchased by the Company, redeemed, or converted.
The Notes are unsecured obligations of Maxwell and rank senior in right of payment to any of Maxwell’s subordinated indebtedness; equal in right of payment to all of Maxwell’s unsecured indebtedness that is not subordinated; effectively subordinated in right of payment to any of Maxwell’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally subordinated to all indebtedness and other liabilities (including trade payables) of Maxwell’s subsidiaries.
The Notes are convertible into cash, shares of the Company’s common stock, or a combination thereof, at the Company’s election, upon the satisfaction of specified conditions and during certain periods as described below. The initial conversion rate is 157.5101 shares of the Company’s common stock per $1,000 principal amount of Notes, representing an initial effective conversion price of $6.35 per share of common stock and premiums of 27% and 29% to the Company’s $5.00 and $4.94 stock prices at the September 25, 2017 and October 11, 2017 dates of issuance, respectively. The conversion rate may be subject to adjustment upon the occurrence of certain specified events as provided in the indenture governing the Notes, dated September 25, 2017 between the Company and Wilmington Trust, National Association, as trustee (the “Indenture”), but will not be adjusted for accrued but unpaid interest. As of December 31, 2017, the if-converted value of the Notes did not exceed the principal value of the Notes.
Prior to the close of business on the business day immediately preceding June 15, 2022, the Notes will be convertible at the option of holders only upon the satisfaction of specified conditions and during certain periods. Thereafter until the close of business on the business day immediately preceding maturity, the Notes will be convertible at the option of the holders at any time regardless of these conditions.
Upon the occurrence of certain fundamental changes involving the Company, holders of the Notes may require the Company to repurchase for cash all or part of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.
The Company may not redeem the Notes prior to September 20, 2020. The Company may redeem the Notes, at its option, in whole or in part on or after September 20, 2020 if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days
The Company considered the features embedded in the Notes, that is, the conversion feature, the Company's call feature, and the make-whole feature, and concluded that they are not required to be bifurcated and accounted for separately from the host debt instrument.
The Notes included an initial purchaser’s discount of $2.5 million, or 5.5%. This discount is recorded as an offset to the debt and is amortized over the expected life of the Notes using the effective interest method.
Upon conversion by the holders, the Company may elect to settle such conversion in shares of its common stock, cash, or a combination thereof. As a result of its cash conversion option, the Company segregated the liability component of the instrument from the equity component. The liability component was measured by estimating the fair value of a non-convertible debt instrument that is similar in its terms to the Notes. The calculation of the fair value of the debt component required the use of Level 3 inputs, including utilization of credit assumptions and high yield bond indices. Fair value was estimated using an income approach, through discounting future interest and principal payments due under the Notes at a discount rate of 12.0%, an interest rate equal to the estimated borrowing rate for similar non-convertible debt. The excess of the initial proceeds from the Notes over the estimated fair value of the liability component was $8.5 million and was recognized as a debt discount and recorded as an increase to additional paid-in capital, and will be amortized over the expected life of the Notes using the effective interest method. Amortization of the debt discount is recognized as non-cash interest expense.
The transaction costs of $0.5 million incurred in connection with the issuance of the Notes were allocated to the liability and equity components based on their relative fair values. Transaction costs allocated to the liability component are being amortized using the effective interest method and recognized as non-cash interest expense over the expected term of the Notes. Transaction costs allocated to the equity component of $0.1 million reduced the value of the equity component recognized in stockholders’ equity.
The initial purchaser debt discount, the equity component debt discount and the transaction costs allocated to the liability are being amortized over the contractual term to maturity of the Notes using an effective interest rate of 12.2%.
The carrying value of the Notes is as follows (in thousands):
 
 
As of December 31, 2017
Principal amount
 
$
46,000

Unamortized debt discount - equity component
 
(8,144
)
Unamortized debt discount - initial purchaser
 
(2,431
)
Unamortized transaction costs
 
(383
)
Net carrying value
 
$
35,042


Total interest expense related to the Notes is as follows (in thousands):
 
 
Year ended December 31, 2017
Cash interest expense
 
 
Coupon interest expense
 
$
661

Non-cash interest expense
 
 
Amortization of debt discount - equity component
 
330

Amortization of debt discount - initial purchaser
 
98

Amortization of transaction costs
 
16

Total interest expense
 
$
1,105


Revolving Line of Credit
In July 2015, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with East West Bank (“EWB”), whereby EWB made available to the Company a secured credit facility in the form of a revolving line of credit (the “Revolving Line of Credit”). The Revolving Line of Credit is available up to a maximum of the lesser of: (a) $25.0 million; or (b) a certain percentage of domestic and foreign trade receivables. As of December 31, 2017 the amount available under the Revolving Line of Credit was $13.3 million. In general, amounts borrowed under the Revolving Line of Credit are secured by a lien on all of the Company’s assets, including its intellectual property, as well as a pledge of 100% of its equity interests in Maxwell SA. The obligations under the Loan Agreement are also guaranteed directly by Maxwell SA. The Revolving Line of Credit will mature on July 3, 2018. In the event that the Company is in violation of the representations, warranties and covenants made in the Loan Agreement, including certain financial covenants set forth therein, the Company may not be able to utilize the Revolving Line of Credit or repayment of amounts owed pursuant to the Loan Agreement could be accelerated. The Company is currently in compliance with the financial covenants that it is required to meet during the term of the credit agreement including the minimum four-quarter rolling EBITDA, quarterly minimum quick ratio and monthly minimum cash requirements. On March 1, 2017, the Company entered into an amendment to the Loan Agreement to approve the acquisition of substantially all of the assets and business of Nesscap Energy, Inc., and to modify certain financial covenants.
Amounts borrowed under the Revolving Line of Credit bear interest, payable monthly. Such interest shall accrue based upon, at the Company’s election, subject to certain limitations, either the Prime Rate plus a margin ranging from 0% to 0.50% or the LIBOR Rate plus a margin ranging from 2.75% to 3.25%, the specific rate for each as determined based upon the Company’s leverage ratio from time to time.
The Company is required to pay an annual commitment fee of $125,000, and an unused commitment fee of the average daily unused amount of the Revolving Line of Credit, payable monthly, equal to a per annum rate in a range of 0.30% to 0.50%, as determined by the Company’s leverage ratio on the last day of the previous fiscal quarter. No amounts have been borrowed under the Revolving Line of Credit as of December 31, 2017.
Former Credit Facility
In December 2011, the Company obtained a secured credit facility in the form of a revolving line of credit (the “Former Revolving Line of Credit”) and an equipment term loan (the “Equipment Term Loan”) (together, the “Former Credit Facility”). Borrowings under the Former Credit Facility bore interest, payable monthly, at either (i) the bank’s prime rate or (ii) LIBOR plus 2.25%, at the Company’s option subject to certain limitations. The Equipment Term Loan was available to finance 80% of eligible equipment purchases made between April 1, 2011 and April 30, 2012. During this period, the Company borrowed $5.0 million under the Equipment Term Loan. The balance of the Equipment Term Loan was paid in full by the maturity date of April 30, 2015. Concurrently with entering into the Loan Agreement described above, in July 2015, the Company repaid all outstanding loans under the Former Revolving Line of Credit and the Former Credit Facility was terminated. The Company did not incur any early termination or prepayment penalties under the Former Credit Facility in connection with the above transactions.
Other Long-term Borrowings
Maxwell SA has various financing agreements for vehicles. These agreements are for up to an original three-year repayment period with interest rates ranging from 0.9% to 1.9%. At December 31, 2017 and 2016, $115,000 and $83,000, respectively, was outstanding under these agreements.
Fair Value Measurement
Fair Value Measurement
Fair Value Measurement
The Company records certain financial instruments at fair value in accordance with the Fair Value Measurements and Disclosures Topic of the FASB ASC. Historically, the financial instruments to which this topic applied were foreign currency forward contracts and pension assets. The fair value of foreign currency forward contracts was recorded as a liability or asset in the consolidated balance sheets. During the second quarter of 2016, the Company ceased using foreign currency forward contracts to hedge foreign currency exposure as management determined its foreign currency exposure is no longer significant. Therefore, no foreign currency forward contracts were outstanding as of December 31, 2017 or 2016. The fair value of derivative instruments was measured using models following quoted market prices in active markets for identical instruments, which is a Level 2 input under the fair value hierarchy of the Fair Value Measurements and Disclosures Topic of the FASB ASC. Also see Note 9, Foreign Currency Derivative Instruments, and Note 14, Pension and Other Postretirement Benefit Plans, of this Annual Report on Form 10-K, for further discussion of fair value measurements.
As of December 31, 2017, the fair value of the Company’s convertible senior notes issued in September and October 2017 is approximately $52.6 million, and was measured using Level 2 inputs. The carrying value of short-term and long-term borrowings approximates fair value because of the relative short maturity of these instruments and the interest rates the Company could currently obtain.
Foreign Currency Derivative Instruments
Foreign Currency Derivative Instruments
Foreign Currency Derivative Instruments
The Company has historically used forward contracts to hedge certain monetary assets and liabilities, primarily receivables, payables, and cash balances, denominated in foreign currencies. During the year ended December 31, 2016, the Company ceased using foreign currency forward contracts to hedge foreign currency exposure as management determined its foreign currency exposure is no longer significant. The change in fair value of these forward contracts represented a natural hedge as gains and losses on these instruments partially offset the changes in the fair value of the underlying monetary assets and liabilities due to movements in currency exchange rates. These forward contracts generally expired in one month. These contracts were considered economic hedges but were not designated as hedges under the Derivatives and Hedging Topic of the FASB ASC, therefore, the change in the fair value of the instruments was recognized each period in the consolidated statements of operations.
The net losses on foreign currency forward contracts included in “foreign currency exchange loss, net” in the consolidated statements of operations are as follows (in thousands):
 
 
Year Ended December 31,
 
 
2017
 
2016
 
2015
Total loss
 
$
—

 
$
(88
)
 
$
(720
)

The net losses on foreign currency derivative contracts were partially offset by net gains and losses on the underlying monetary assets and liabilities. The net foreign currency gains or losses on those underlying monetary assets and liabilities included in “foreign currency exchange loss, net” in the consolidated statements of operations are as follows (in thousands):
 
 
Year Ended December 31,
 
 
2017
 
2016
 
2015
Total gain (loss)
 
$
—

 
$
(37
)
 
$
179

Stock Plans
Stock Plans
Stock Plans
Equity Incentive Plans
The Company has two active share-based compensation plans as of December 31, 2017: the 2004 Employee Stock Purchase Plan (“ESPP”) and the 2013 Omnibus Equity Incentive Plan (the “Incentive Plan”), as approved by the stockholders. Under the Incentive Plan, incentive stock options, non-qualified stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) have been granted to employees and non-employee directors. Generally, these awards vest over periods of one to four years. In addition, equity awards have been issued to senior management where vesting of the award is tied to Company performance or market conditions. The Company’s policy is to issue new shares of its common stock upon the exercise of stock options, vesting of restricted stock units, granting of restricted stock awards or ESPP purchases.
The Company’s Incentive Plan currently provides for an equity incentive pool of 6,400,000 shares. Shares reserved for issuance are replenished by forfeited shares from the Incentive Plan. Additionally, equity awards forfeited under the Company’s former 2005 equity incentive plan and shares that were available under other predecessor plans are included in the total shares available for issuance under the Incentive Plan.
For the year ended December 31, 2017, the tax benefit associated with stock option exercises, restricted stock unit vesting, restricted stock grants, and disqualifying dispositions of both incentive stock options and stock issued under the Company’s ESPP, was approximately $4.2 million.
Stock Options
The Company grants stock options to its employees, executive management and directors on a discretionary basis. The following table summarizes total aggregate stock option activity for the year ended December 31, 2017 (in thousands, except for per share data):
 
 
Number of
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value
Balance at December 31, 2016
 
414

 
$
8.97

 
 
 
 
Granted
 
50

 
5.56

 
 
 
 
Cancelled
 
(103
)
 
10.56

 
 
 
 
Balance at December 31, 2017
 
361

 
$
8.05

 
5.72
 
$
67

Vested or expected to vest at December 31, 2017
 
354

 
$
8.09

 
5.68
 
$
65

Exercisable at December 31, 2017
 
220

 
$
9.20

 
4.39
 
$
30


The weighted-average grant date fair value of stock options granted during the years ended December 31, 2017 and 2015 was $2.97 and $3.34, respectively. No stock options were granted during the year ended December 31, 2016. The total intrinsic value of options exercised during the year ended December 31, 2015 was $16,000. There were no option exercises for the years ended December 31, 2017 and 2016.
The fair value of the stock options granted during the years ended December 31, 2017 and 2015 was estimated using the Black-Scholes valuation model using the following assumptions:
 
 
Years Ended December 31,
 
 
2017
 
2015
Expected dividends
 
—
%
 
—
%
Expected volatility range
 
58% to 59%

 
60% to 61%

Expected volatility weighted average
 
59
%
 
60
%
Risk-free interest rate
 
1.9
%
 
1.6
%
Expected life/term weighted average (in years)
 
5.5

 
4.9


The expected dividend yield is zero because the Company has never paid cash dividends and has no present intention to pay cash dividends. The expected term is based on the Company’s historical experience from previous stock option grants. Expected volatility is based on the historical volatility of the Company’s stock measured over a period commensurate with the expected option term. The Company does not consider implied volatility due to the low volume of publicly traded options in the Company’s stock. The risk-free interest rate is derived from the zero coupon rate on U.S. Treasury instruments with a term comparable to the option’s expected term.
As of December 31, 2017, there was $0.3 million of total unrecognized compensation cost related to stock options. The cost is expected to be recognized over a weighted average period of 1.1 years.
Restricted Stock Awards
During the year ended December 31, 2014, the Company ceased granting RSAs and began granting RSUs to employees and executive management as part of its annual equity incentive award program.
The following table summarizes RSA activity for the year ended December 31, 2017 (in thousands, except for per share data):
 
 
Shares
 
Weighted Average
Grant Date
Fair Value
Nonvested at December 31, 2016
 
88

 
$
13.37

Vested
 
(53
)
 
12.58

Forfeited
 
(9
)
 
14.57

Nonvested at December 31, 2017
 
26

 
$
14.57


No RSAs were granted during the years ended December 31, 2017, 2016 and 2015. The vest date fair value of RSAs vested in 2017, 2016 and 2015 was $0.3 million, $0.6 million and $1.2 million, respectively. As of December 31, 2017, there was $0.1 million of unrecognized compensation cost related to nonvested RSAs expected to be recognized over a weighted average period of 0.2 years.
Restricted Stock Units
Non-employee directors receive annual RSU awards, normally in February of each year, as partial consideration for their annual retainer compensation. These awards vest in full one year from the date of grant provided the non-employee director provides continued service. Additionally, new directors normally receive RSUs upon their election to the board. The Company also grants RSUs to employees as part of its annual equity incentive award program, with vesting typically in equal annual installments over four years of continuous service. Additionally, the Company grants performance-based restricted stock units (“PSUs”) to executives with vesting contingent on continued service and achievement of specified performance objectives or stock price performance. Each RSU represents the right to receive one unrestricted share of the Company’s common stock upon vesting.
The following table summarizes RSU activity for both service-based awards and performance-based awards for the year ended December 31, 2017 (in thousands, except for per share data):
 
 
Shares
 
Weighted Average
Grant Date
Fair Value
Nonvested at December 31, 2016
 
1,748

 
$
6.40

Granted
 
1,796

 
5.89

Released
 
(540
)
 
5.86

Forfeited
 
(354
)
 
6.45

Nonvested at December 31, 2017
 
2,650

 
$
6.16


The weighted average grant date fair value of RSUs granted, including PSUs, in the years ended December 31, 2017, 2016 and 2015 was $5.89, $6.00 and $7.02, respectively. The release date fair value of RSUs in the years ended December 31, 2017, 2016 and 2015 was $2.9 million, $1.3 million and $0.5 million, respectively. As of December 31, 2017, there was $8.3 million of unrecognized compensation cost related to nonvested RSU awards. The cost is expected to be recognized over a weighted average period of 2.2 years.
RSU activity included 158,000, 46,224 and 214,831 PSUs granted in the years ended December 31, 2017, 2016 and 2015 with a weighted average grant date fair value of $5.73, $5.08 and $7.18 per share, respectively, with vesting contingent upon specified Company performance conditions or objectives.
Additionally, for the year ended December 31, 2017, RSUs granted included 367,874 market-condition PSUs with a weighted average grant date fair value of $7.22. For the year ended December 31, 2016, RSUs granted included 313,460 market-condition PSUs with a weighted average grant date fair value of $7.76. The market-condition PSUs will be earned based on the level of the Company’s stock price performance against a determined market index over one, two and three-year performance periods. The market-condition PSUs have the potential to vest between 0% and 200% depending on the Company’s stock price performance and the recipients must remain employed through the end of each performance period in order to vest. No market-condition PSUs were granted during the year ended December 31, 2015. The fair value of market-condition PSUs granted was calculated using a Monte Carlo valuation model with the following assumptions:
 
 
Years Ended December 31,
 
 
2017
 
2016
Expected dividend yield
 
—
%
 
—
%
Expected volatility
 
53
%
 
62
%
Risk-free interest rate
 
1.55
%
 
1.07
%
Expected term (in years)
 
2.8

 
3.0

The following table summarizes the amount of compensation expense recognized for RSUs for the years ended December 31, 2017, 2016 and 2015 (in thousands):
 
 
Years Ended December 31,
RSU Type
 
2017
 
2016
 
2015
Service-based
 
$
3,268

 
$
2,243

 
$
1,362

Performance objectives
 
379

 
103

 
(28
)
Market-condition
 
1,539

 
869

 
128


 
$
5,186

 
$
3,215

 
$
1,462


Employee Stock Purchase Plan
In 2013, the Company amended and restated the 2004 Employee Stock Purchase Plan (“ESPP”). Pursuant to the ESPP, the aggregate number of shares of common stock which may be purchased shall not exceed 1,500,000 shares of common stock of the Company. For the years ended December 31, 2017, 2016 and 2015, 77,914, 111,832 and 145,733 shares, respectively, were purchased under the ESPP.
The ESPP permits substantially all employees to purchase common stock through payroll deductions, at 85% of the lower of the trading price of the stock at the beginning or at the end of each six-month offering period. The number of shares purchased is based on participants’ contributions made during the offering period.
The fair value of the “look back” option for ESPP shares issued during the offering period is estimated using the Black-Scholes valuation model for a call and a put option. The share price used for the model is a 15% discount on the stock price on the last trading day before the offering period; the number of shares to be purchased is based on employee contributions. The fair value of ESPP awards was calculated using the following weighted-average assumptions:
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
Expected dividends
 
—
%
 
—
%
 
—
%
Expected volatility
 
34
%
 
57
%
 
57
%
Risk-free interest rate
 
0.89
%
 
0.43
%
 
0.29
%
Expected life (in years)
 
0.45

 
0.5

 
0.5

Fair value per share
 
$
1.30

 
$
1.93

 
$
1.86


The intrinsic value of shares of the Company’s stock purchased pursuant to the ESPP for offering periods within the years ended December 31, 2017, 2016 and 2015 was $0.1 million, $0.1 million and $0.2 million, respectively.
Bonuses Settled in Stock
On January 15, 2016, the Compensation Committee of the Board of Directors of the Company adopted the Maxwell Technologies, Inc. Incentive Bonus Plan to enable participants to earn annual incentive bonuses based upon achievement of specified financial and strategic performance objectives. The Company may settle bonuses earned under the plan in either cash or stock, and currently intends to settle the majority of bonuses earned under the plan in stock. During the year ended December 31, 2017, the Company settled the bonuses earned under the plan for the 2016 performance period with 302,326 shares of fully vested common stock. The Company intends to settle bonuses earned under the plan for the fiscal year 2017 performance period with fully vested common stock of the Company in the first quarter of 2018.
The Company recorded $2.8 million and $1.4 million of stock compensation expense related to the bonus plan during the years ended December 31, 2017 and 2016, respectively.
Director Fees Settled in Stock
In 2017, the Board approved a deferred compensation program under which non-employee directors may make irrevocable elections to receive all or a portion of their cash-based non-employee director fees (including, as applicable, any annual retainer fee, committee fee and any other compensation payable with respect to their service as a member of the Board) in stock and to elect to defer receipt of those shares. In the event that a director makes such an election, the Company will grant fully vested RSUs in lieu of cash, with an initial value equal to the cash fees, which will be settled either in the year granted or at a future date elected by the respective non-employee director through the issuance of Maxwell common stock. In addition, non-employee directors may elect to defer settlement of the initial and annual RSU awards granted to them in connection with their service as a non-employee director. During the year ended December 31, 2017, the Company settled $164,000 of director fees earned in 2017 with 28,732 fully vested RSUs. The Company recorded $258,000 of stock compensation expense related to director fees to be settled in stock during the year ended December 31, 2017.
Stock-based Compensation Expense
Compensation cost for stock options, RSAs, RSUs, ESPP, bonuses and director fees is as follows (in thousands):
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
Stock options
 
$
237

 
$
171

 
$
232

Restricted stock awards
 
416

 
388

 
1,974

Restricted stock units
 
5,186

 
3,215

 
1,462

ESPP
 
114

 
231

 
278

Bonuses settled in stock
 
2,826

 
1,359

 
—

Director fees settled in stock
 
258

 
—

 
—

Total stock-based compensation expense
 
$
9,037

 
$
5,364

 
$
3,946

Stock-based compensation cost included in cost of revenue; selling, general and administrative expense; and research and development expense is as follows (in thousands): 
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
Cost of revenue
 
$
1,070

 
$
854

 
$
644

Selling, general and administrative
 
6,606

 
3,674

 
2,502

Research and development
 
1,361

 
836

 
800

Total stock-based compensation expense
 
$
9,037

 
$
5,364

 
$
3,946


Share Reservations
The following table summarizes the shares available for grant under the Company’s stock-based compensation plans as of December 31, 2017:
2013 Omnibus Equity Incentive Plan
3,138,321

2004 Employee Stock Purchase Plan
617,609

Total
3,755,930

Shelf Registration Statement
Shelf Registration Statement
Shelf Registration Statements
On November 9, 2017, the Company filed a shelf registration statement on Form S-3 with the SEC to, from time to time, sell up to an aggregate of $125 million of any combination of its common stock, warrants, debt securities or units. On November 16, 2017, the registration statement was declared effective by the SEC, which will allow the Company to access the capital markets for the three-year period following this effective date. As of December 31, 2017, no securities have been issued under the Company’s shelf registration statement. Net proceeds, terms and pricing of each offering of securities issued under the shelf registration statement will be determined at the time of such offerings.
On April 23, 2015, under a previous shelf registration statement effective June 30, 2014, the Company entered into an At-the-Market Equity Offering Sales Agreement (“Sales Agreement”) with Cowen and Company, LLC (“Cowen”) pursuant to which they could sell, up to an aggregate of $10.0 million in shares of common stock through Cowen, as sales agent. Under the Sales Agreement, the Company agreed to pay Cowen a commission equal to 3.0% of the gross proceeds from the sale of shares of our common stock. On June 11, 2015, the Company completed the sale of approximately $10.0 million of common stock and terminated the offering. Approximately 1.83 million shares were sold in the offering at an average share price of $5.46. The Company received net proceeds of $9.6 million after commissions and offering costs of $0.4 million.
Income Taxes
Income Taxes
Income Taxes
On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act. The legislation significantly changes U.S. tax law by, among other things, reducing the US federal corporate tax rate from 35% to 21%, implementing a territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. Pursuant to the SEC’s Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), given the amount and complexity of the changes in the tax law resulting from the tax legislation, the Company has not finalized the accounting for the income tax effects of the tax legislation. This includes the provisional amounts recorded related to the transition tax and the remeasurement of deferred taxes. The impact of the tax legislation may differ from this estimate, during the one-year measurement period due to, among other things, further refinement of the Company’s calculations, changes in interpretations and assumptions the Company has made, guidance that may be issued and actions the Company may take as a result of the tax legislation.
The Company has remeasured its U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The Company recorded a provisional decrease related to its deferred tax assets and liabilities of $34.7 million with a corresponding adjustment to its valuation allowance for the year ended December 31, 2017. However, we are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. As the Company’s deferred tax asset is offset by a full valuation allowance, this change in rates had no impact on the Company’s financial position or results of operations.
The one-time transition tax is based on the Company’s total post-1986 earnings and profits (“E&P”) that were previously deferred from U.S. income taxes. To determine the amount of the transition tax, the Company must determine, in addition to other factors, the amount of post-1986 E&P of its relevant subsidiaries. The Company recorded a provisional amount of additional U.S. taxable income of $8.4 million, which did not result in additional tax expense due to its net operating losses. However, the Company is continuing to gather additional information to more precisely compute the amount of the transition tax. As the Company has significant net operating losses, any change to this provisional amount would have no impact on the Company’s financial position or results of operations.
For financial reporting purposes, loss before income taxes includes the following components (in thousands):
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
United States
 
$
(49,167
)
 
$
(38,319
)
 
$
(35,074
)
Foreign
 
9,695

 
18,759

 
17,344

Total
 
$
(39,472
)
 
$
(19,560
)
 
$
(17,730
)

The provision for income taxes based on loss before income taxes is as follows (in thousands):
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
Federal:
 
 
 
 
 
 
Current
 
$
—

 
$
—

 
$
—

Deferred
 
18,646

 
(11,360
)
 
(4,297
)
 
 
18,646

 
(11,360
)
 
(4,297
)
State:
 
 
 
 
 
 
Current
 
5

 
7

 
6

Deferred
 
231

 
923

 
62

 
 
236

 
930

 
68

Foreign:
 
 
 
 
 
 
Current
 
3,155

 
3,742

 
4,930

Deferred
 
(1,418
)
 
561

 
8

 
 
1,737

 
4,303

 
4,938

(Decrease) increase in valuation allowance
 
(16,962
)
 
10,272

 
3,894

Tax provision
 
$
3,657

 
$
4,145

 
$
4,603


The provision for income taxes in the accompanying consolidated statements of operations differs from the amount calculated by applying the statutory income tax rate to loss before income taxes. The primary components of such difference are as follows (in thousands):
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
Taxes at federal statutory rate
 
$
(13,420
)
 
$
(6,650
)
 
$
(6,028
)
State taxes, net of federal benefit
 
(236
)
 
(208
)
 
(236
)
Effect of tax rate differential for foreign subsidiary
 
(1,646
)
 
(2,985
)
 
(2,641
)
Valuation allowance, including tax benefits of stock activity
 
(16,962
)
 
10,272

 
3,894

Tax rate change
 
34,732

 
—

 
—

Foreign taxes on unremitted earnings
 
—

 
1,204

 
2,085

Stock-based compensation
 
224

 
441

 
134

Foreign withholding taxes
 
295

 
260

 
180

Return to provision adjustments
 
(2,931
)
 
1,062

 
1,131

Subpart F income inclusion
 
2,998

 
906

 
5,914

SEC settlement penalty
 
959

 
—

 
—

Business combination
 
(1,914
)
 
—

 
—

Other
 
1,558

 
(157
)
 
170

Tax provision
 
$
3,657

 
$
4,145

 
$
4,603


The Company has established a valuation allowance against its U.S. federal and state deferred tax assets due to the uncertainty surrounding the realization of such assets as evidenced by the cumulative losses from operations through December 31, 2017. Management periodically evaluates the recoverability of the deferred tax assets. At such time as it is determined that it is more likely than not that deferred assets are realizable, the valuation allowance will be reduced accordingly and recorded as a tax benefit. The Company has recorded a valuation allowance of $61.4 million as of December 31, 2017 to reflect the estimated amount of deferred tax assets that may not be realized. The Company decreased its valuation allowance by $17.0 million for the year ended December 31, 2017.
At December 31, 2017, the Company has federal and state net operating loss carryforwards of approximately $219.0 million and $37.7 million, respectively. The federal tax loss carryforwards will begin to expire in 2020 and the state tax loss carryforwards will begin to expire in 2018. In addition, the Company has research and development and other tax credit carryforwards for federal and state income tax purposes as of December 31, 2017 of $7.0 million and $9.0 million, respectively. The federal credits will begin to expire in 2019 unless utilized and the state credits have an indefinite life. Pursuant to Internal Revenue Code Sections 382 and 383, use of the Company’s federal net operating loss and credit carryforwards may be limited upon a cumulative change in ownership of more than 50% within a three-year period.
The Company was granted a tax holiday in Switzerland, which was effective as of January 1, 2012 for up to 10 years. The tax holiday was conditioned upon the Company meeting certain employment and investment thresholds. As of January 1, 2017, the Company was no longer eligible for the tax holiday due to not meeting the employment threshold. The impact of the tax holiday decreased foreign taxes by $0.6 million and $0.7 million for 2016 and 2015, respectively. The benefit of the tax holiday on net loss per diluted share was $0.02 for both 2016 and 2015. On January 16th, 2018, the Company was granted a new tax holiday in Switzerland, which was retroactively effective as of January 1, 2017 with a term through December 31, 2021. The new tax holiday is conditioned upon the Company meeting certain investment thresholds. The retroactive effect of the tax holiday will be recorded in the first quarter of 2018, in accordance with the enacted date of the new tax holiday.
The Company records U.S. income taxes on the undistributed earnings of foreign subsidiaries unless the subsidiaries’ earnings are considered indefinitely reinvested outside of the U.S. As of December 31, 2017, the Company has recorded a $4.9 million deferred tax liability for Swiss withholding taxes associated with $97.6 million of undistributed earnings of its Swiss subsidiary that are no longer considered indefinitely reinvested. In the event that the Company repatriates these funds, this withholding tax would become payable to the Swiss government. During the years ended December 31, 2017, 2016 and 2015, income tax expense associated with undistributed earnings of its Swiss subsidiary that are no longer considered indefinitely reinvested was $0, $1.2 million and $2.1 million, respectively. As of December 31, 2017, there were $11.8 million of undistributed earnings considered indefinitely reinvested. Determination of the amount of any unrecognized deferred income tax liability on the excess of the financial reporting basis over the tax basis of investments in foreign subsidiaries is not practicable because of the complexities of the hypothetical calculation.
Items that give rise to significant portions of the deferred tax accounts are as follows (in thousands):
 
 
December 31,
 
 
2017
 
2016
Deferred tax assets:
 
 
 
 
Tax loss carryforwards
 
$
50,183

 
$
62,994

Tax credit carryforwards
 
792

 
19

Uniform capitalization, contract and inventory related reserves
 
805

 
598

Accrued vacation
 
301

 
514

Stock-based compensation
 
2,029

 
2,130

Capitalized research and development
 
3,043

 
5,532

Tax basis depreciation less book depreciation
 
1,523

 
1,661

Intangible assets
 
—

 
1,354

Deferred revenue
 
175

 
33

Accrued foreign taxes
 
1,044

 
1,263

Other
 
2,369

 
2,523

Total
 
62,264

 
78,621

Deferred tax liabilities:
 
 
 
 
Inventory deduction
 
(587
)
 
(369
)
Pension assets
 
(1,326
)
 
(1,733
)
Allowance for doubtful accounts
 
(534
)
 
(677
)
Withholding tax on undistributed earnings of foreign subsidiary
 
(4,879
)
 
(4,879
)
Unrealized gains and losses
 
(351
)
 
(733
)
Intangible assets
 
(1,514
)
 
—

Total
 
(9,191
)
 
(8,391
)
Net deferred tax assets before valuation allowance
 
53,073

 
70,230

Valuation allowance
 
(61,403
)
 
(78,366
)
Net deferred tax liabilities
 
$
(8,330
)
 
$
(8,136
)

As of both December 31, 2017 and 2016, deferred tax assets of $0.4 million were included in other non-current assets in the consolidated balance sheets.
The Company accounts for uncertain tax benefits in accordance with the provisions of section 740-10 of the Accounting for Uncertainty in Income Taxes Topic of the FASB ASC. Of the total unrecognized tax benefits at December 31, 2017, approximately $16.0 million was recorded as a reduction to deferred tax assets, which caused a corresponding reduction in the Company’s valuation allowance of $16.0 million. To the extent unrecognized tax benefits are recognized at a time when a valuation allowance does not exist, the recognition of the $16.0 million tax benefit would reduce the effective tax rate. The Company does not anticipate that the amount of unrecognized tax benefits as of December 31, 2017 will change materially within the 12-month period following December 31, 2017.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Balance at December 31, 2015
$
14,014

Increase in current period positions
1,596

Increase in prior period positions
116

Decrease in prior period positions
(147
)
Balance at December 31, 2016
15,579

Increase in current period positions
1,081

Decrease in prior period positions
(518
)
Balance at December 31, 2017
$
16,142


The Company recognizes interest and penalties as a component of income tax expense. Interest and penalties for the years ended December 31, 2017, 2016 and 2015 were $29,000, $148,000 and $119,000, respectively.
The Company’s U.S. federal income tax returns for tax years subsequent to 2014 are subject to examination by the Internal Revenue Service and its state income tax returns subsequent to 2013 are subject to examination by state tax authorities. The Company’s foreign tax returns subsequent to 2012 are subject to examination by the foreign tax authorities.
Net operating losses from years for which the statute of limitations has expired (2014 and prior for federal and 2013 and prior for state) could be adjusted in the event that the taxing jurisdictions challenge the amounts of net operating loss carryforwards from such years.
Leases
Leases
Leases
Rental expense amounted to $4.3 million, $4.1 million and $5.0 million for the years ended December 31, 2017, 2016 and 2015, respectively, and was incurred primarily for facility leases. Future annual minimum rental commitments as of December 31, 2017 are as follows (in thousands):
Fiscal Years
 
2018
$
3,824

2019
3,850

2020
3,099

2021
2,124

2022
2,202

Thereafter
4,033

Total
$
19,132

Pension and Other Postretirement Benefit Plans
Pension and Other Postretirement Benefit Plans
Pension and Other Postretirement Benefit Plans
Maxwell SA Pension Plan
The Compensation—Retirement Benefits Subtopic of the FASB ASC requires balance sheet recognition of the total over funded or underfunded status of pension and postretirement benefit plans. Under the guidance, actuarial gains and losses, prior service costs or credits, and any remaining transition assets or obligations that have not been recognized under previous accounting standards must be recognized as a component of accumulated other comprehensive income (loss) within stockholders’ equity, net of tax effects, until they are amortized as a component of net periodic benefit cost (income).
The Company’s plan is regulated by the Swiss Government and is funded by the employees and the Company. The pension benefit is based on compensation, length of service and credited investment earnings. The plan guarantees both a minimum rate of return as well as minimum annuity purchase rates. The Company’s funding policy with respect to the pension plan is to contribute the amount required by Swiss law, using the required percentage applied to the employee’s compensation. In addition, participating employees are required to contribute to the pension plan. The Company made pension contributions of $0.6 million in each of the years ended December 31, 2017, 2016 and 2015; approximately 45% of the total contributions to the plan each year are made by the employees. This plan has a measurement date of December 31. The Company does not have any rights to the assets of the plan other than the right to offset the liabilities of the plan.
The net pension asset increased from $8.9 million to $11.7 million during the year ended December 31, 2017. The increase in plan assets was primarily due to a higher return on plan assets than expected and higher than expected withdrawal and mortality experience during the year. The accumulated benefit obligation was $29.9 million and $28.9 million as of December 31, 2017 and 2016, respectively. The increase in the benefit obligation was primarily due to a lower amount of benefits paid during the year than new obligations incurred. The plan is fully funded and continues to be in a surplus condition.
The following table reflects changes in the pension benefit obligation and plan assets for the years ended December 31, 2017 and 2016 (in thousands):
 
 
Years ended December 31,
 
 
2017
 
2016
Change in benefit obligation:
 
 
 
 
Benefit obligation at beginning of year
 
$
30,257

 
$
33,153

Service cost
 
982

 
1,171

Interest cost
 
230

 
246

Plan participant contributions
 
527

 
509

Benefits paid
 
(1,729
)
 
(1,570
)
Actuarial (gain) loss
 
119

 
(2,425
)
Effect of foreign currency translation
 
1,330

 
(827
)
Projected benefit obligation at end of year
 
31,716

 
30,257

Changes in plan assets:
 
 
 
 
Fair value of plan assets at beginning of year
 
39,144

 
39,002

Actual return on plan assets
 
3,131

 
1,657

Company contributions
 
615

 
596

Plan participant contributions
 
527

 
509

Benefits paid
 
(1,729
)
 
(1,570
)
Effect of foreign currency translation
 
1,740

 
(1,050
)
Fair value of plan assets at end of year
 
43,428

 
39,144

Funded status at end of year
 
$
11,712

 
$
8,887


Amounts recognized in the consolidated balance sheets consist of (in thousands):
 
 
As of December 31,
 
 
2017
 
2016
Net long-term pension asset
 
$
11,712

 
$
8,887

 
 
 
 
 
Accumulated other comprehensive loss consists of the following:
 
 
 
 
Net prior service cost
 
782

 
779

Net loss
 
1,391

 
3,113

Accumulated other comprehensive loss before taxes
 
$
2,173

 
$
3,892


The components of net periodic pension cost and other amounts recognized in other comprehensive income (loss) before taxes are as follows (in thousands):
 
 
Years ended December 31,
 
 
2017
 
2016
 
2015
Components of net periodic pension cost:
 
 
 
 
 
 
Service cost
 
$
982

 
$
1,171

 
$
958

Interest cost
 
230

 
246

 
332

Expected return on plan assets
 
(1,009
)
 
(1,175
)
 
(1,551
)
Prior service cost amortization
 
151

 
150

 
136

Deferred loss amortization
 
—

 
243

 
45

Settlement cost
 
—

 
—

 
492

Net periodic pension cost
 
$
354

 
$
635

 
$
412

Other amounts recognized in other comprehensive income (loss) before income taxes are as follows:
 
 
 
 
 
 
Prior service cost amortization
 
$
(151
)
 
$
(150
)
 
$
(136
)
(Gain) loss on value of plan assets
 
(2,118
)
 
(476
)
 
1,131

Actuarial (gain) loss on benefit obligation
 
119

 
(2,425
)
 
1,262

Plan change
 
—

 
—

 
83

Settlement
 
—

 
—

 
(492
)
Deferred loss amortization
 
—

 
(243
)
 
(45
)
Total (income) loss recognized in other comprehensive income, before taxes
 
$
(2,150
)
 
$
(3,294
)
 
$
1,803

Total (income) recognized in net periodic pension cost and other comprehensive income, before taxes
 
$
(1,796
)
 
$
(2,659
)
 
$
2,215


Assumptions used to determine the benefit obligation and net periodic pension cost are as follows:
 
 
Years ended December 31,
 
 
2017
 
2016
Weighted-average assumptions used to determine benefit obligation:
 
 
 
 
Discount rate
 
0.75
%
 
0.75
%
Rate of compensation increase
 
2.00
%
 
2.00
%
Measurement date
 
11/30/2017

 
11/30/2016

Weighted-average assumptions used to determine net periodic pension cost:
 
 
 
 
Discount rate
 
0.75
%
 
0.75
%
Expected long-term return on plan assets
 
2.50
%
 
3.00
%
Rate of compensation increase
 
2.00
%
 
2.50
%
 
 
 
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
 
 
 
 
Equity securities
 
33
%
 
29
%
Debt securities
 
21
%
 
23
%
Real estate investment funds
 
39
%
 
43
%
Other
 
7
%
 
5
%
Total
 
100
%
 
100
%

The pension plan’s overall strategy and investment policy is managed by the board of the plan. The overall long-term rate is based on the target asset allocation of 14% Swiss bonds, 10% non-Swiss hedged bonds, 10% Swiss equities, 15% global equities, 5% emerging market equities, 4% alternative investments, 40% Swiss real estate and 2% cash and equivalents.
The 2018 expected future long-term rate of return is estimated to be 3.00%, which is based on historical asset rates of return for each asset allocation classification of (0.69)% for Swiss bonds, (0.43)% for non-Swiss hedged bonds, 3.50% for Swiss equities, 5.38% for global equities, 5.79% for emerging market equities, 2.52% for alternative investments, 2.54% for Swiss real estate and 0.27% for cash and equivalents. The 2017 expected long-term rate of return was 2.50% and was based on the historical asset rates of return of (1.11)% for Swiss bonds, (1.20)% for non-Swiss hedged bonds, 3.00% for Swiss equities, 4.80% for global equities, 5.00% for emerging market equities, 1.80% for alternative investments, 2.10% for real estate and (0.20)% for cash and equivalents.
Expected amortization during the year ending December 31, 2018 is as follows (in thousands):
 
 
 
Amortization of net prior service costs
$
97


The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands):
2018
$
1,349

2019
1,316

2020
1,256

2021
1,294

2022
1,452

Years 2023 through 2027
7,094

Total
$
13,761


The Company expects to contribute approximately $0.6 million to the pension plan in 2018.
Investment objectives:
The primary investment goal of the pension plan is to achieve a total annualized return sufficient to fund its obligations over the long-term. The investments are evaluated, compared and benchmarked to plans with similar investment strategies. The plan also attempts to minimize risk by not having any single security or class of securities with a disproportionate impact on the plan. As a guideline, assets are diversified by asset classes (equity, fixed income/bonds, and alternative investments).
The fair values of the plans assets at December 31, 2017 and 2016, by asset category, are as follows (in thousands):
 
 
 
 
Fair Value Measurements at
 
 
 
 
December 31, 2017
 
 
Total
 
Active
Market
Prices
(Level 1)
 
Significant
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash held in Swiss Franc, Euro and USD
 
$
1,670

 
$
1,670

 
$
—

 
$
—

Equity securities
 
15,487

 
14,364

 
1,123

 
—

Fixed income / Bond securities:
 
9,235

 
9,235

 
—

 
—

Other assets (accounts receivable, assets at real estate management company)
 
29

 
—

 
29

 
—

Investments measured at net asset value (1)
 
17,007

 
 
 
 
 
 
Net assets of pension plan
 
$
43,428

 
$
25,269

 
$
1,152

 
$
—


 
 
 
 
Fair Value Measurements at
 
 
 
 
December 31, 2016
 
 
Total
 
Active
Market
Prices
(Level 1)
 
Significant
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash held in Swiss Franc, Euro and USD
 
$
705

 
$
705

 
$
—

 
$
—

Equity securities
 
12,534

 
11,481

 
1,053

 
—

Fixed income / Bond securities:
 
8,842

 
8,842

 
—

 
—

Other assets (accounts receivable, assets at real estate management company)
 
29

 
—

 
29

 
—

Investments measured at net asset value (1)
 
17,034

 
 
 
 
 
 
Net assets of pension plan
 
$
39,144

 
$
21,028

 
$
1,082

 
$
—


(1)    Investments measured at net asset value represent real estate investment funds that are measured at fair value using the net asset value per share (or its equivalent) practical expedient and therefore have not been categorized in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the total plan assets disclosed above.
Fair Value of Assets
Level 1: Observable inputs such as quoted prices in active markets for identical assets.
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
Korea Defined Benefit Plan
In connection with the Nesscap Acquisition on April 28, 2017, the Company assumed the defined benefit plan liability related to Nesscap Korea’s employees. Pursuant to the Labor Standards Act of Korea, employees and most executive officers with one or more years of service are entitled to lump sum separation benefits upon the termination of their employment based on their length of service and rate of pay.
The following table reflects changes in the defined benefit plan obligation for the period from acquisition to December 31, 2017 (in thousands):
 
 
April 29, 2017 through December 31,
 
 
2017
Change in benefit obligation:
 
 
Benefit obligation on April 28, 2017
 
$
3,360

Service cost
 
361

Interest cost
 
55

Benefits paid
 
(212
)
Actuarial loss
 
174

Effect of foreign currency translation
 
228

Projected benefit obligation at end of year
 
3,966

Fair value of plan assets
 
24

Unfunded status at end of year
 
3,942


Amounts recognized in the consolidated balance sheets consist of (in thousands):
 
 
As of December 31,
 
 
2017
Net defined benefit plan liability
 
$
3,942

 
 
 
Accumulated other comprehensive loss includes the following:
 
 
Actuarial loss before taxes
 
$
174


The components of net periodic pension cost and other amounts recognized in other comprehensive income (loss) before taxes are as follows (in thousands):
 
 
May 1, 2017 through December 31,
 
 
2017
Components of net periodic defined benefit plan cost:
 
 
Service cost
 
$
361

Interest cost
 
55

Net periodic defined benefit plan cost
 
$
416

Other amounts recognized in other comprehensive income (loss) before income taxes are as follows:
 
 
Actuarial loss on benefit obligation
 
$
174

Total loss recognized in other comprehensive income, before taxes
 
174

Total loss recognized in net periodic defined benefit plan cost and other comprehensive income, before taxes
 
$
590


Assumptions used to determine the benefit obligation and net periodic defined benefit plan cost are as follows:
 
 
May 1, 2017 through December 31,
 
 
2017
Discount rate
 
2.98
%
Rate of compensation increase
 
6.11
%

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands):
2018
$
332

2019
332

2020
370

2021
338

2022
265

Years 2023 through 2027
1,237

Total
$
2,874


In compliance with local labor law, the Company is required to make contributions for foreign line workers. Employer contributions of $6,000 were paid during the period from acquisition to December 31, 2017. The Company expects to make contributions of approximately $8,000 in 2018.
U.S. Plan
The Company has a postretirement benefit plan covering its employees in the United States. Substantially all U.S. employees are eligible to elect coverage under a contributory employee savings plan which provides for Company matching contributions based on one-half of employee contributions up to certain plan limits. The Company’s matching contributions under this plan totaled $0.5 million, $0.5 million and $0.6 million for the years ended December 31, 2017, 2016 and 2015, respectively.
Legal Proceedings
Legal Proceedings
Legal Proceedings
Although the Company expects to incur legal fees in connection with the below legal proceedings, the Company is unable to estimate the amount of such legal fees and therefore, such fees will be expensed in the period the legal services are performed.
FCPA Matter
In January 2011, the Company reached settlements with the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Department of Justice (“DOJ”) with respect to charges asserted by the SEC and DOJ relating to the anti-bribery, books and records, internal controls, and disclosure provisions of the U.S. Foreign Corrupt Practices Act (“FCPA”) and other securities laws violations. The Company paid the monetary penalties under these settlements in installments such that all monetary penalties were paid in full by January 2013. With respect to the DOJ charges, a judgment of dismissal was issued in the U.S. District Court for the Southern District of California on March 28, 2014.
On October 15, 2013, the Company received an informal notice from the DOJ that an indictment against the former Senior Vice President and General Manager of its Swiss subsidiary had been filed in the United States District Court for the Southern District of California. The indictment is against the individual, a former officer, and not against the Company and the Company does not foresee that further penalties or fines could be assessed against it as a corporate entity for this matter. However, the Company may be required throughout the term of the action to advance the legal fees and costs incurred by the individual defendant and to incur other financial obligations. While the Company maintains directors’ and officers’ insurance policies which are intended to cover legal expenses related to its indemnification obligations in situations such as these, the Company cannot determine if and to what extent the insurance policy will cover the ongoing legal fees for this matter. Accordingly, the legal fees that may be incurred by the Company in defending this former officer could have a material impact on its financial condition and results of operation.
Swiss Bribery Matter
In August 2013, the Company’s Swiss subsidiary was served with a search warrant from the Swiss federal prosecutor’s office. At the end of the search, the Swiss federal prosecutor presented the Company with a listing of the materials gathered by the representatives and then removed the materials from its premises for keeping at the prosecutor’s office. Based upon the Company’s exposure to the case, the Company believes this action to be related to the same or similar facts and circumstances as the FCPA action previously settled with the SEC and the DOJ. During initial discussions, the Swiss prosecutor has acknowledged both the existence of the Company’s deferred prosecution agreement with the DOJ and its cooperation efforts thereunder, both of which should have a positive impact on discussions going forward. Additionally, other than the activities previously reviewed in conjunction with the SEC and DOJ matters under the FCPA, the Company has no reason to believe that additional facts or circumstances are under review by the Swiss authorities. To date, the Swiss prosecutor has not issued its formal decision as to whether the charges will be brought against individuals or the Company or whether the proceeding will be abandoned. At this time, the Company continues to cooperate with the Swiss prosecutor and while there continues to be no resolution of this matter, the Company has re-assessed the probable outcome of the matter and accrued an insignificant amount in our financial statements for the fourth quarter of 2017. However, a more adverse result, such as the incurrence of more excessive fines in accordance with Swiss bribery laws, could occur and have a material adverse impact on the Company’s financial condition and results of operation.
Government Investigations
In early 2013, the Company voluntarily provided information to the SEC and the United States Attorney’s Office for the Southern District of California related to its announcement that it intended to file restated financial statements for fiscal years 2011 and 2012. On June 11, 2015 and June 16, 2016, the Company received subpoenas from the SEC requesting certain documents related to, among other things, the facts and circumstances surrounding the restated financial statements. The Company has provided documents and information to the SEC in response to the subpoenas. In September 2016, the Company entered into a tolling agreement effective for the period beginning on September 12, 2016, and running through June 30, 2017, with the SEC related to these matters. In June 2017, the Company entered into an amended and restated version of this tolling agreement effective for the period beginning on September 12, 2016, and running through October 31, 2017. In November 2017, the Company entered into an amended and restated version of this tolling agreement effective for the period beginning on September 12, 2016, and running through December 22, 2017. In December 2017, the Company entered into another amended and restated version of this tolling agreement effective for the period beginning on September 12, 2016, and running through March 2, 2018. The Company is cooperating with the investigation and recently made an offer of settlement to resolve the matter, which is subject to approval by the SEC Commissioners. The proposed settlement would be entered into by the Company without admitting or denying the SEC’s findings and would resolve alleged violations of certain anti-fraud and books and records provisions of the federal securities laws and related rules. Under the terms of the proposed settlement, the Company would pay $2.8 million in a civil penalty and agree not to commit or cause any violations of certain anti-fraud and books and records provisions of the federal securities laws and related rules. In the third quarter of 2017, the Company has made a corresponding accrual for the settlement amount as an operating expense in its financial statements.
Unaudited Quarterly Financial Information
Unaudited Quarterly Financial Information
Unaudited Quarterly Financial Information
 
 
Quarter Ended
 
 
 
 
March 31
 
 
 
June 30
 
 
 
September 30
 
 
 
December 31
 
 
 
 
(in thousands except per share data)
 
 
Year Ended December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$
26,686

 
 
 
$
37,103

 
 
 
$
35,816

 
 
 
$
30,763

 
 
Gross profit
 
6,191

 
 
 
7,827

 
 
 
7,396

 
 
 
7,381

 
 
Net income (loss)
 
(10,399
)
 
(a)
 
(10,118
)
 
(b)
 
(13,860
)
 
(c)
 
(8,752
)
 
(d)
Basic and diluted net loss per share
 
$
(0.32
)
 
 
 
$
(0.28
)
 
 
 
$
(0.37
)
 
 
 
$
(0.24
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
March 31
 
 
 
June 30
 
 
 
September 30
 
 
 
December 31
 
 
 
 
(in thousands except per share data)
 
 
Year Ended December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$
35,203

 
 
 
$
34,135

 
 
 
$
25,506

 
 
 
$
26,400

 
 
Gross profit
 
9,653

 
 
 
9,981

 
 
 
7,628

 
 
 
5,708

 
 
Net income (loss)
 
(6,848
)
 
(e)
 
2,167

 
(f)
 
(6,855
)
 
(g)
 
(12,169
)
 
(h)
Basic and diluted net income (loss) per share
 
$
(0.22
)
 
 
 
$
0.07

 
 
 
$
(0.21
)
 
 
 
$
(0.38
)
 
 
_____________________
(a)
Includes restructuring and exit costs of $1.0 million and non-cash expense for stock-based compensation of $1.5 million.
(b)
Includes acquisition related expense of $1.8 million and non-cash expense for stock-based compensation of $2.3 million.
(c)
Includes restructuring and exit costs of $1.3 million, SEC and FCPA legal and settlement costs of $3.0 million and non-cash expense for stock-based compensation of $2.8 million.
(d)
Includes non-cash expense for stock-based compensation of $2.5 million.
(e)
Includes non-cash expense for stock-based compensation of $1.2 million.
(f)
Includes gain on sale of product line of $6.7 million, release of tax liability of $1.5 million and non-cash expense for stock-based compensation of $1.5 million.
(g)
Includes non-cash expense for stock-based compensation of $1.1 million.
(h)
Includes impairment of assets of $1.2 million, non-cash deferred tax expense of $1.2 million in connection with the probable repatriation of a portion of the unremitted earnings of a foreign subsidiary and non-cash expense for stock-based compensation of $1.6 million.
Schedule II - Valuation and Qualifying Accounts
Schedule II Valuation and Qualifying Accounts
Schedule II
Valuation and Qualifying Accounts (in thousands)

 
 
Balance at the
Beginning of
the Year ($)
 
Charged to
Expense ($)
 
Acquisitions/
Transfers
and
Other ($)
 
Write-offs
Net of
Recoveries ($)
 
Balance at
the End of
the Year ($)
Allowance for Doubtful Accounts:
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
143

 
304

 
1

 
(196
)
 
252

December 31, 2016
 
252

 
(106
)
 
—

 
(120
)
 
26

December 31, 2017
 
26

 
10

 
—

 
—

 
36

Description of Business and Summary of Significant Accounting Policies (Policies)
Financial Statement Presentation 
Financial Statement Presentation
The accompanying consolidated financial statements include the accounts of Maxwell Technologies, Inc. and its subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All intercompany transactions and account balances have been eliminated in consolidation.
Use of Estimates 
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. These estimates include, but are not limited to, assessing the collectability of accounts receivable, applied and unapplied production costs, production capacities, the usage and recoverability of inventories and long-lived assets, deferred income taxes, the incurrence of warranty obligations, the fair value of acquired tangible and intangible assets, impairment of goodwill and intangible assets, estimation of the cost to complete certain projects, estimation of pension and other defined benefit plan assets and liabilities, accruals for estimated losses for legal matters, and estimation of the value of stock-based compensation awards, including the probability that the performance criteria of restricted stock unit awards will be met.
Revenue Recognition 
Revenue Recognition
Revenue is derived primarily from the sale of manufactured products directly to customers. Product revenue is recognized, according to the guidelines of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) Numbers 101, Revenue Recognition in Financial Statements, and 104, Revenue Recognition, when all of the following criteria are met: (1) persuasive evidence of an arrangement exists (upon contract signing or receipt of an authorized purchase order from a customer); (2) title passes to the customer at either shipment from the Company’s facilities or receipt at the customer facility, depending on shipping terms; (3) customer payment is deemed fixed or determinable and free of contingencies or significant uncertainties; and (4) collectability is reasonably assured. This policy has been consistently applied from period to period.
A portion of our sales revenue is derived from sales to distributors. Distributor revenue is recognized when all of the criteria for revenue recognition are met, which is generally the time of shipment to the distributor; returns and credits are typically estimable and not significant. Certain distributor agreements of Nesscap Korea provide for significant rights of return and price adjustment; revenue related to these distributors is deferred until the period in which the distributor sells through the inventory to the end customer.
Revenue from production-type contracts, which represents less than five percent of total revenue, is recognized using the percentage of completion method. The degree of completion is determined based on costs incurred as a percentage of total costs anticipated, excluding costs that are not representative of progress to completion.
Total deferred revenue and customer deposits in the consolidated balance sheets as of December 31, 2017 and 2016 was $6.7 million and $4.0 million, respectively, and primarily relates to cash received under the localization agreement with CRRC-SRI, amounts received in advance in connection with a production-type contract for which revenue is recognized using the percentage of completion method, deferred revenue for distributors on the sell-through method of recognition, and customer advances.
Cash and Cash Equivalents 
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of cash in readily available checking and money market accounts. Cash equivalents consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments.
Accounts Receivable and Allowance for Doubtful Accounts 
Accounts Receivable and Allowance for Doubtful Accounts
Trade receivables are stated at gross invoiced amount less an allowance for uncollectible accounts. The allowance for doubtful accounts reflects management’s best estimate of probable losses inherent in the accounts receivable balance. Management determines the allowance for doubtful accounts based on known troubled accounts, historical experience and other currently available evidence.
Inventories 
Inventories, net
Inventories are stated at the lower of cost (first-in first-out basis) or net realizable value. Finished goods and work-in-process inventory values include the cost of raw materials, labor and manufacturing overhead. Inventory when written down to net realizable value establishes a new cost basis and its value is not subsequently increased based upon changes in underlying facts and circumstances. The Company also makes adjustments to reduce the carrying amount of inventories for estimated excess or obsolete inventories. Factors influencing these adjustments include inventories on-hand compared with historical and estimated future sales for existing and new products and assumptions about the likelihood of obsolescence. Unabsorbed manufacturing costs are treated as expense in the period incurred.
Property and Equipment 
Property and Equipment
Property and equipment are carried at cost and are depreciated using the straight-line method. Depreciation is provided over the estimated useful lives of the related assets (three to ten years). Leasehold improvements are depreciated over the shorter of their estimated useful life or the term of the lease. Leasehold improvements funded by landlords are recorded as property and equipment, which is depreciated over the shorter of the estimated useful life of the asset or the lease term, and deferred rent, which is amortized over the lease term. As of December 31, 2017 and 2016, the net book value of leasehold improvements funded by landlords was $1.4 million and $1.7 million, respectively. As of December 31, 2017 and 2016, the unamortized balance of deferred rent related to landlord funding of leasehold improvements was $1.4 million and $1.7 million, respectively, which is included in “accounts payable and accrued liabilities” and “other long-term liabilities” in the consolidated balance sheets.
Goodwill 
Goodwill
Goodwill, which represents the excess of the cost of an acquired business over the net fair value assigned to its assets and liabilities, is not amortized. Instead, goodwill is assessed annually at the reporting unit level for impairment under the Intangibles—Goodwill and Other Topic of the FASB ASC. The Company has established December 31 as the annual impairment test date. In addition, the Company assesses goodwill in between annual test dates if an event occurs or circumstances change that could more likely than not reduce the fair value of a reporting unit below its carrying value. The Company first makes a qualitative assessment as to whether goodwill is impaired. If it is more likely than not that goodwill is impaired, the Company performs a quantitative impairment analysis to determine if goodwill is impaired. The Company may also determine to skip the qualitative assessment in any year and move directly to the quantitative test. The quantitative goodwill impairment analysis compares the reporting unit’s carrying amount to its fair value. Goodwill impairment is recorded for any excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. No impairments of goodwill were reported during the years ended December 31, 2017, 2016 and 2015. Also see Note 5, Goodwill and Intangible Assets, for further discussion of the Company’s goodwill impairment analysis.
The Company performs an impairment test for goodwill annually according to the Intangibles—Goodwill and Other Topic of the FASB ASC. On January 1, 2017, the Company also early adopted ASU 2017 No. 2017-04, Intangibles - Goodwill and Other, which eliminates step two of the quantitative goodwill impairment test. The Company first makes a qualitative assessment of the likelihood of goodwill impairment and if it concludes that it is more likely than not that the carrying amount of a reporting unit is greater than its fair value, then it will be required to perform a quantitative impairment test. Otherwise, performing the impairment test is not required. Qualitative factors assessed at the reporting unit level include, but are not limited to, changes in industry and market structure, competitive environments, planned capacity and new product launches, cost factors such as raw material prices and financial performance of the reporting unit. The Company may also determine to skip the qualitative assessment in any year and move directly to the quantitative test.
The quantitative impairment test consists of estimating the fair value and comparing the estimated fair value with the carrying value of the reporting unit. Any goodwill impairment charge is determined by the amount by which the carrying amount exceeds the reporting unit’s fair value. However, the loss should not exceed the total amount of goodwill allocated to the reporting unit. The guidance requires goodwill to be reviewed annually at the same time every year or when an event occurs or circumstances change such that it is reasonably possible that an impairment may exist. The Company selected December 31 as its annual testing date.
In 2017, the Company performed a qualitative assessment of its reporting units which included an evaluation of changes in industry, market and macroeconomic conditions as well as consideration of each reporting unit’s financial performance and any significant trends. The Company’s qualitative assessment indicated that it was not more likely that not that goodwill is impaired. Further, the Company noted no significant negative trends or decreases in its long-range plan that would indicate a different result compared to its 2016 quantitative analysis of its ultracapacitor reporting unit.
In 2016, the Company assessed the qualitative factors for one of its two reporting units and concluded that it was more likely than not that its fair value exceeded its carrying value and therefore did not perform quantitative testing for the reporting unit. For its other reporting unit, the Company determined to skip the qualitative assessment and moved directly to the quantitative test. The Company utilized a discounted cash flow methodology to calculate the fair value of the reporting unit. Based on the fair value analysis, management concluded that fair value exceeded carrying value of the reporting unit and no additional quantitative testing was required. As a result of the Company’s annual assessments, no impairments were recorded during the years ended December 31, 2017, 2016 and 2015
Impairment of Long-Lived Assets 
Long-Lived Assets and Intangible Assets
The Company records intangible assets at their respective estimated fair values at the date of acquisition. Intangible assets are amortized based upon the pattern in which their economic benefit will be realized, or if this pattern cannot be reliably determined, using the straight-line method over their estimated useful lives of eight to fourteen years.
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets, including intangible assets, may not be recoverable. When such events occur, the Company compares the carrying amounts of the assets to their undiscounted expected future cash flows. If the Company determines that the carrying value of the asset is not recoverable, a permanent impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value.
Warranty Obligation 
Warranty Obligation
The Company provides warranties on all product sales for terms ranging from one to eight years. The Company accrues for the estimated warranty costs at the time of sale based on historical warranty experience plus any known or expected changes in warranty exposure.
Income Tax 
Income Taxes
Deferred income taxes are provided on a liability method in accordance with the Income Taxes Topic of the FASB ASC, whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their reported amounts at each period end. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. The guidance also provides criteria for the recognition, measurement, presentation and disclosures of uncertain tax positions. A tax benefit from an uncertain tax position may be recognized if it is “more likely than not” that the position is sustainable based solely on its technical merits.
Concentration of Credit Risk 
Concentration of Credit Risk
The Company maintains cash balances at various financial institutions primarily in California and Switzerland. In California, cash balances commonly exceed the $250,000 Federal Deposit Insurance Corporation insurance limit. In Switzerland, the banks where the Company has cash deposits are either government-owned, or in the case of cash deposited with non-government banks, deposits are insured up to 100,000 Swiss Francs. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to any significant credit risk with respect to such cash and cash equivalents.
Financial instruments, which subject the Company to potential concentrations of credit risk, consist principally of the Company’s accounts receivable. The Company’s accounts receivable result from product sales to customers in various industries and in various geographical areas, both domestic and foreign. The Company performs credit evaluations of its customers and generally requires no collateral.
Research and Development Expense 
Research and Development Expense
Research and development expenditures are expensed in the period incurred. Third-party funding of research and development expense under cost-sharing arrangements is recorded as an offset to research and development expense in the period the expenses are incurred.
Shipping and Handling Expense 
Shipping and Handling Expense
The Company recognizes shipping and handling expenses as a component of cost of revenue.
Advertising Expenses 
Advertising Expense
Advertising costs are expensed in the period incurred.
Foreign Currencies 
Foreign Currencies
The Company’s primary foreign currency exposure is related to its subsidiaries in Switzerland and Korea. The functional currency of the Swiss and Korean subsidiaries are the Swiss Franc and Korean Won, respectively. The Company’s Swiss subsidiary has Euro and local currency (Swiss Franc) revenue and operating expenses, and local currency loans. The Company’s Korean subsidiary has U.S. dollar, Euro and local currency (Korean Won) revenue and operating expenses. Changes in these currency exchange rates impact the reported U.S. dollar amount of revenue, expenses and debt. Assets and liabilities of the Swiss and Korean subsidiaries are translated at month-end exchange rates, and revenue, expenses, gains and losses are translated at rates of exchange that approximate the rate in effect at the time of the transaction. Any translation adjustments resulting from this process are presented separately as a component of accumulated other comprehensive income within stockholders’ equity in the consolidated balance sheets. Foreign currency transaction gains and losses on intercompany balances considered long term in nature are accounted for as translation adjustments within equity. All other foreign currency transaction gains and losses are reported in “foreign currency exchange loss, net” in the consolidated statements of operations.
Foreign Currency Derivatives Instruments 
Foreign Currency Derivative Instruments
The Company has historically used forward contracts to hedge certain monetary assets and liabilities, primarily receivables, payables, and cash balances, denominated in foreign currencies. The Company’s objective was to partially offset gains or losses resulting from these exposures with opposing gains or losses on the forward contracts, thereby reducing volatility of earnings created by these foreign currency exposures. During the year ended December 31, 2016, the Company ceased using foreign currency forward contracts to hedge foreign currency transaction exposure as management determined its foreign currency transaction exposure is no longer significant. In accordance with the Derivatives and Hedging Topic of the FASB ASC, the fair values of the forward contracts were estimated at each period end based on quoted market prices and were recorded as a net asset or liability on the consolidated balance sheets. These contracts were considered economic hedges but were not designated as hedges under the Derivatives and Hedging Topic of the FASB ASC, therefore, the change in the fair value of the instruments was recognized in the consolidated statements of operations and was recorded in “foreign currency exchange loss, net” in the consolidated statements of operations.
Net Income (Loss) per Share 
Net Income or Loss per Share
In accordance with the Earnings Per Share Topic of the FASB ASC, basic net income or loss per share is calculated using the weighted average number of common shares outstanding during the period. Diluted net income per share includes the impact of additional common shares that would have been outstanding if potentially dilutive common shares were issued. Potentially dilutive securities are not considered in the calculation of diluted net loss per share, as their inclusion would be anti-dilutive.
Stock-Based Compensation 
Stock-Based Compensation
The Company issues stock-based compensation awards to its employees and non-employee directors, including stock options, restricted stock, restricted stock units, and shares under an employee stock purchase plan. The Company records compensation expense for stock-based awards in accordance with the criteria set forth in the Stock Compensation Subtopic of the FASB ASC. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option grants. The determination of the fair value of stock options utilizing the Black-Scholes model is affected by the Company’s stock price and a number of assumptions, including expected volatility, expected term, risk-free interest rate and expected dividends.
The fair value of restricted stock awards (“RSAs”) and restricted stock unit awards (“RSUs”) with service-based or performance-based vesting is based on the closing market price of the Company’s common stock on the date of grant. Compensation expense equal to the fair value of each RSA or RSU is recognized ratably over the requisite service period. For RSUs with vesting contingent on Company performance conditions, the Company uses the requisite service period that is most likely to occur. The requisite service period is estimated based on the performance period as well as any time-based service requirements. If it is unlikely that a performance condition will be achieved, no compensation expense is recognized unless it is later determined that achievement of the performance condition is likely. Expense may be adjusted for changes in the expected outcomes of the related performance conditions, with the impact of such changes recognized as a cumulative adjustment in the consolidated statement of operations in the period in which the expectation changes.
In 2016 and 2017, the Company issued market-condition RSUs to certain members of executive management. Since the vesting of the market-condition RSUs is dependent on stock price performance, the fair values of these awards were estimated using a Monte-Carlo valuation model. The determination of the fair value of market-condition RSUs utilizing a Monte-Carlo valuation model was affected by the Company’s stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends.
In 2016, Company adopted a bonus plan that enabled participants to earn annual incentive bonuses based upon achievement of specified financial and strategic performance objectives. Under the terms of this plan, the Company has the ability to settle bonuses earned under the plan with common stock or fully vested RSUs. The Company settled the majority of bonuses earned under the 2016 plan in stock or fully vested RSUs during 2017. For the fiscal year 2017 performance period, the Company intends to settle the amounts earned under the bonus plan in fully vested RSUs in the first quarter of 2018. The stock-based compensation expense accrued under this bonus plan represents stock-settled debt per ASC 718 and ASC 480, as such, the Company has recorded a liability for bonuses expected to be paid in fully vested RSUs in “accrued employee compensation” in the Company’s consolidated balance sheets.
Stock-based compensation expense recognized in the consolidated statements of operations is based on equity awards ultimately expected to vest. The Company estimates forfeitures at the time of grant and revises forfeitures, if necessary, in subsequent periods with a cumulative catch up adjustment if actual forfeitures differ from those estimates. For market-condition awards, because the effect of the market-condition is reflected as an adjustment to the awards’ fair value at grant date, subsequent forfeitures due to the Company’s stock price performance do not result in a reversal of expense.
Recent Accounting Pronouncements 
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. The standard provides companies with a single model for accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. In August 2015, the FASB issued ASU 2015-14, Deferral of the Effective Date, which defers the required adoption date of ASU 2014-09 by one year. As a result of the deferred effective date, ASU 2014-09 will be effective for the Company in its first quarter of fiscal 2018. Early adoption is permitted but not before the original effective date of the new standard of the first quarter of fiscal 2017. The following ASUs were subsequently issued by the FASB to clarify the implementation guidance in some areas and add practical expedients: In March 2016, ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations; in April 2016, ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing; in May 2016, ASU 2016-12, Revenue from Contracts with Customers: Narrow Scope Improvements and Practical Expedients; and in December 2016, ASU 2016-20, Technical Corrections and Improvements to Revenue from Contracts with Customers. The Company’s is currently finalizing its evaluation of standard product sales arrangements and has identified an adoption impact related to revenue from certain distributor agreements which was deferred until the period in which the distributor sells through the inventory to the end customer. In connection with the adoption of ASU 2014-09, the Company will change the recognition of sales to these distributors whereby revenue will be estimated and recognized in the period in which the Company transfers control of the product to the distributor; the adoption impact is not expected to be material. Other than this impact, the Company has not identified any expected impact on the timing and measurement of revenue for standard product sales arrangements from the adoption of the standard and the Company is currently formalizing its final conclusions. The Company is also formalizing its evaluation of the impact of adoption on non-product sales arrangements, which represent less than five percent of revenue. The Company has developed and used a comprehensive project plan to guide implementation of the new standard and is currently completing its assessment. The Company will adopt the new accounting standard using the modified retrospective transition method effective January 1, 2018.
In February 2016, the FASB issued ASU No. 2016-02, Leases. The standard requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in its balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The guidance in ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018. The Company’s initial evaluation of its current leases does not indicate that the adoption of this standard will have a material impact on its consolidated statements of operations. The Company expects that the adoption of the standard will have a material impact on its consolidated balance sheets for the recognition of certain operating leases as right-of-use assets and lease liabilities.
In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which changes the accounting for employee share-based payments, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. Under the new guidance, excess tax benefits associated with share-based payment awards will be recognized in the income statement when the awards vest or settle, rather than in stockholders’ equity. In addition, it will increase the number of shares an employer can withhold to cover income taxes on share-based payment awards and still qualify for the exemption to liability classification. The guidance was effective for the Company in the first quarter of 2017. The adoption of this standard resulted in the recognition of $10.0 million of gross deferred tax assets related to stock-based compensation and a corresponding increase in the Company’s valuation allowance. The Company has elected to account for forfeitures of share-based payments by estimating the number of awards expected to be forfeited at the time of grant and adjusting the estimate to reflect changes in expected vesting of shares.
In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows - Restricted Cash, which requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The guidance will be effective for the Company in its first quarter of fiscal 2018. Early adoption is permitted, including adoption in an interim period, but any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The new standard must be adopted retrospectively. The Company early adopted this standard in the fourth quarter of 2016. In accordance with the Company’s early adoption of ASU No. 2016-18, the retrospective restatement was limited to including restricted cash balances in the amount of $0.4 million in beginning cash, cash equivalents and restricted cash balances for the year ended December 31, 2016 in the consolidated statements of cash flows. The retrospective adoption did not impact reported net loss and does not otherwise have a material impact on the presentation of the overall financial statements.
In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other, which eliminates step two of the quantitative goodwill impairment test. Step two required determination of the implied fair value of a reporting unit, and then a comparison of this implied fair value with the carrying amount of goodwill for the reporting unit, in order to determine any goodwill impairment. Under the new guidance, an entity is only required to complete a one-step quantitative test, by comparing the fair value of a reporting unit with its carrying amount, and any goodwill impairment charge is determined by the amount by which the carrying amount exceeds the reporting unit’s fair value. However, the loss should not exceed the total amount of goodwill allocated to the reporting unit. The standard is effective for the Company in the first quarter of 2020, with early adoption permitted as of January 1, 2017, and is to be applied on a prospective basis. The adoption of the standard will not materially impact the Company's consolidated financial statements unless step one of the annual goodwill impairment test fails. The Company early adopted this standard on January 1, 2017 and the adoption did not have an effect on the Company’s consolidated financial statements.
In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the statement of operations. The new guidance requires entities to report the service cost component in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the statement of operations separately from the service cost component and outside the subtotal of loss from operations. ASU 2017-07 also provides that only the service cost component is eligible for capitalization. The standard is effective for the Company in the first quarter of 2018, with adoption to be applied on a retrospective basis. The Company’s 2017 and 2016 loss from operations, when restated, will increase $0.7 million and $0.5 million, respectively, due to the reclassification of the non-service cost components of net benefit cost which will be moved to a line below loss from operations. There is no impact to net loss or net loss per share in the Company’s consolidated statements of operations. The Company applied the practical expedient as the estimation basis for this reclassification.
In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation: Scope of Modification Accounting, which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions or award classification and would not be required if the changes are considered non-substantive. The amendments of this ASU are effective for the Company in the first quarter of 2018, with early adoption permitted. The adoption of ASU 2017-09 is not expected to have an impact on the Company’s consolidated financial statements.
In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities, which modifies the presentation and disclosure of hedging results. Further, it provides partial relief on the timing of certain aspects of hedge documentation and eliminates the requirement to recognize hedge ineffectiveness separately in income. The amendments in this ASU are effective for the Company in the first quarter of 2019. The Company does not expect this ASU to have a material impact on its consolidated financial statements.
Business Enterprise Information 
Business Enterprise Information
The Company operates as a single operating segment. According to the FASB ASC Topic Disclosures about Segments of an Enterprise and Related Information, operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM is the Chief Executive Officer who evaluates the Company’s financial information and resources and assesses performance on a consolidated basis.
Fair Value Measurement 
Fair Value Measurement
The Company records certain financial instruments at fair value in accordance with the Fair Value Measurements and Disclosures Topic of the FASB ASC. Historically, the financial instruments to which this topic applied were foreign currency forward contracts and pension assets. The fair value of foreign currency forward contracts was recorded as a liability or asset in the consolidated balance sheets. During the second quarter of 2016, the Company ceased using foreign currency forward contracts to hedge foreign currency exposure as management determined its foreign currency exposure is no longer significant. Therefore, no foreign currency forward contracts were outstanding as of December 31, 2017 or 2016. The fair value of derivative instruments was measured using models following quoted market prices in active markets for identical instruments, which is a Level 2 input under the fair value hierarchy of the Fair Value Measurements and Disclosures Topic of the FASB ASC. Also see Note 9, Foreign Currency Derivative Instruments, and Note 14, Pension and Other Postretirement Benefit Plans, of this Annual Report on Form 10-K, for further discussion of fair value measurements.
As of December 31, 2017, the fair value of the Company’s convertible senior notes issued in September and October 2017 is approximately $52.6 million, and was measured using Level 2 inputs. The carrying value of short-term and long-term borrowings approximates fair value because of the relative short maturity of these instruments and the interest rates the Company could currently obtain.
Description of Business and Summary of Significant Accounting Policies (Tables)
Schedule of computation of basic and diluted net income (loss) per share 
The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data):
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
Numerator
 
 
 
 
 
 
Net loss
 
$
(43,129
)
 
$
(23,705
)
 
$
(22,333
)
Denominator
 
 
 
 
 
 
Weighted average common shares outstanding, basic and diluted
 
35,480

 
31,870

 
30,716

Net loss per share
 
 
 
 
 
 
Basic and diluted
 
$
(1.22
)
 
$
(0.74
)
 
$
(0.73
)
Schedule of anti-dilutive shares 
The following table summarizes instruments that may be convertible into common shares that are not included in the denominator used in the diluted net loss per share calculation because to do so would be anti-dilutive (in thousands of shares):
 
 
2017
 
2016
 
2015
Outstanding options to purchase common stock
 
361

 
414

 
931

Unvested restricted stock awards
 
26

 
88

 
245

Unvested restricted stock unit awards
 
2,650

 
1,748

 
885

Employee stock purchase plan awards
 
38

 
—

 
10

Bonus and director fees to be paid in stock awards
 
477

 
265

 
—

Convertible senior notes
 
7,245

 
—

 
—

 
 
10,797

 
2,515

 
2,071

Revenues by product line and geographic area 
Revenue by product line and geographic area is presented below (in thousands):
 
 
Years ended December 31,
Revenue by product line:
 
2017
 
2016
 
2015
Ultracapacitors
 
$
87,709

 
$
71,491

 
$
114,525

High-voltage capacitors
 
42,659

 
45,177

 
41,718

Microelectronic products
 
—

 
4,576

 
11,129

Total
 
$
130,368

 
$
121,244

 
$
167,372

 
 
 
 
 
 
 
 
 
Years ended December 31,
Revenue from external customers located in(1):
 
2017
 
2016
 
2015
China
 
$
44,945

 
$
48,191

 
$
87,856

United States
 
13,874

 
12,041

 
20,836

Germany
 
16,287

 
12,854

 
13,972

Hungary
 
13,454

 
11,473

 
11,630

All other countries (2)
 
41,808

 
36,685

 
33,078

Total
 
$
130,368

 
$
121,244

 
$
167,372

_____________
 
 
 
 
 
 
(1)    Location is determined by shipment destination.
(2)    Revenue from external customers located in countries included in “All other countries” does not individually comprise more than 10% of total revenue for any of the years presented.
Long-lived assets by geographic location 
Long-lived assets by geographic location are as follows (in thousands):
 
 
As of December 31,
 
 
2017
 
2016
 
2015
United States
 
$
14,443

 
$
19,267

 
$
22,267

China
 
1,107

 
1,477

 
4,148

South Korea
 
4,398

 
—

 
—

Switzerland
 
8,096

 
5,376

 
6,021

Total
 
$
28,044

 
$
26,120

 
$
32,436

Balance Sheet Details (Tables)
Schedule of inventories 
 
 
December 31,
2017
 
December 31, 2016
Raw materials and purchased parts
 
$
12,675

 
$
12,210

Work-in-process
 
1,756

 
858

Finished goods
 
17,797

 
19,180

Total inventories
 
$
32,228

 
$
32,248

Schedule of product warranty liability 
Activity in the warranty reserve, which is included in “accounts payable and accrued liabilities” in the consolidated balance sheets, is as follows:
 
 
Years Ended December 31,
 
 
2017
 
2016
Beginning balance
 
$
1,213

 
$
1,288

Acquired liability from Nesscap
 
773

 
—

Product warranties issued
 
177

 
486

Settlement of warranties
 
(876
)
 
(458
)
Changes related to preexisting warranties
 
126

 
(103
)
Ending balance
 
$
1,413

 
$
1,213

Schedule of property, plant and equipment, net 
 
 
December 31,
 
 
2017
 
2016
Machinery, furniture and office equipment
 
$
67,963

 
$
62,583

Computer hardware and software
 
10,436

 
10,071

Leasehold improvements
 
21,599

 
20,320

Construction in progress
 
5,461

 
1,401

Property and equipment, gross
 
105,459

 
94,375

Less accumulated depreciation and amortization
 
(77,415
)
 
(68,255
)
Total property and equipment, net
 
$
28,044

 
$
26,120

 
 
 
 
 
Schedule of accounts payable and accrued liabilities 
 
 
December 31,
 
 
2017
 
2016
Accounts payable
 
$
21,242

 
$
13,109

Income tax payable
 
1,737

 
1,066

Accrued warranty
 
1,413

 
1,213

Other accrued liabilities
 
8,366

 
3,793

Total accounts payable and accrued liabilities
 
$
32,758

 
$
19,181

Schedule of accumulated other comprehensive income 
 
 
Foreign
Currency
Translation
Adjustment
 
Pension and Defined Benefit Plan
 
Accumulated
Other
Comprehensive
Income
 
Affected Line Items in the Statement of Operations
Balance as of December 31, 2016
 
$
7,826

 
$
(2,426
)
 
$
5,400

 
 
Other comprehensive income before reclassification
 
5,131

 
—

 
5,131

 
 
Amounts reclassified from accumulated other comprehensive income (loss)
 
—

 
1,545

 
1,545

 
Cost of Sales, Selling, General and Administrative and Research and Development Expense
Net other comprehensive income
 
5,131

 
1,545

 
6,676

 
 
Balance as of December 31, 2017
 
$
12,957

 
$
(881
)
 
$
12,076

 
 
Business Combination (Tables)
Schedule of fair value of purchase price consideration 
The fair value of the purchase price consideration consisted of the following (in thousands):
Maxwell common stock
 
$
25,294

Settlement of seller’s transaction expenses
 
1,006

Total estimated purchase price
 
$
26,300

Schedule of purchase price allocation 
The fair values of net tangible assets and intangible assets acquired were based upon the Company's estimates and assumptions at the acquisition date. The following table summarizes the allocation of the assets acquired and liabilities assumed at the acquisition date (in thousands):
 
 
Fair Value
Cash and cash equivalents
 
$
909

Accounts receivable
 
2,545

Inventories
 
4,397

Prepaid expenses and other assets
 
764

Property and equipment
 
3,314

Intangible assets
 
11,800

Accounts payable, accrued compensation and other liabilities
 
(5,713
)
Employee severance obligation
 
(3,340
)
Total identifiable net assets
 
14,676

Goodwill
 
11,624

Total purchase price
 
$
26,300

Schedule of intangible assets acquired 
The following table presents details of the identified intangible assets acquired through the Nesscap Acquisition (in thousands):
 
 
Estimated Useful Life (in years)
 
Fair Value
Customer relationships - institutional
 
14
 
$
3,200

Customer relationships - non-institutional
 
10
 
4,400

Trademarks and trade names
 
10
 
1,500

Developed technology
 
8
 
2,700

Total intangible assets
 
 
 
$
11,800

Schedule of pro forma financial information 
The following unaudited pro forma financial information presents the combined results of operations for each of the periods presented, as if the Nesscap Acquisition had occurred at the beginning of fiscal year 2016 (in thousands, except per share amounts):
 
 
Years Ended December 31,
 
 
2017
 
2016
Net revenues
 
$
135,534

 
$
141,724

Net loss
 
(43,849
)
 
(28,701
)
Net loss per share:
 
 
 
 
Basic and diluted
 
(1.19
)
 
(0.80
)
Weighted average common shares outstanding:
 
 
 
 
Basic and diluted
 
36,809

 
36,017

Goodwill and Intangible Assets (Tables)
Change in the carrying amount of goodwill 
The change in the carrying amount of goodwill during 2016 and 2017 was as follows (in thousands):
Balance at December 31, 2015
$
23,635

Foreign currency translation adjustments
(545
)
Disposition of microelectronics product line
(291
)
Balance at December 31, 2016
22,799

Foreign currency translation adjustments
1,638

Goodwill from Nesscap Acquisition
11,624

Balance at December 31, 2017
$
36,061

Schedule of intangible assets 
The composition of intangible assets subject to amortization was as follows (in thousands):
 
 
As of December 31, 2017
 
 
Useful Life
(in years)
 
Gross Initial Carrying Value
 
Cumulative Foreign Currency Translation Adjustment
 
Accumulated Amortization
 
Net Carrying Value
Customer relationships - institutional
 
14
 
$
3,200

 
$
197

 
$
(156
)
 
$
3,241

Customer relationships - non-institutional
 
10
 
4,400

 
266

 
(304
)
 
4,362

Trademarks and trade names
 
10
 
1,500

 
90

 
(103
)
 
1,487

Developed technology
 
8
 
2,700

 
160

 
(235
)
 
2,625

Total intangible assets
 
 
 
$
11,800

 
$
713

 
$
(798
)
 
$
11,715

Restructuring and Exit Costs (Tables)
Restructuring and exit costs
The following table summarizes the changes in the liabilities for each of the 2017 restructuring plans, which are recorded in “accrued employee compensation” in the Company’s condensed consolidated balance sheet for the year ended December 31, 2017 (in thousands):
 
 
February 2017 Plan
 
September 2017 Plan
 
 
Employee Severance Costs
Restructuring plans liability as of December 31, 2016
 
$
—

 
$
—

Costs incurred
 
997

 
1,275

Amounts paid
 
(855
)
 
(431
)
Accruals released
 
(142
)
 
(27
)
Restructuring liability as of December 31, 2017
 
$
—

 
$
817

The following table summarizes restructuring and exit costs related to the 2015 restructuring plan for the years ended December 31, 2017, 2016 and 2015 (in thousands):
 
 
Employee Severance Costs
 
Lease Obligation Costs
 
Other Exit Costs
 
Total
Restructuring liability as of December 31, 2014
 
$
—

 
$
—

 
$
—

 
$
—

Costs incurred
 
1,439

 
1,208

 
—

 
2,647

Restructuring cash payments
 
(1,010
)
 
—

 
—

 
(1,010
)
Accruals released
 
(135
)
 
—

 
—

 
(135
)
Lease payments and accretion
 
—

 
(165
)
 
—

 
(165
)
Restructuring liability as of December 31, 2015
 
294

 
1,043

 
—

 
1,337

Costs incurred
 
67

 
86

 
298

 
451

Restructuring cash payments
 
(207
)
 
—

 
(246
)
 
(453
)
Accruals released
 
(154
)
 
—

 
—

 
(154
)
Lease payments and accretion
 
—

 
(327
)
 
(52
)
 
(379
)
Restructuring liability as of December 31, 2016
 
—

 
802

 
—

 
802

Costs incurred
 
—

 
179

 
—

 
179

Lease payments and accretion
 
—

 
(311
)
 
—

 
(311
)
Restructuring liability as of December 31, 2017
 
$
—

 
$
670

 
$
—

 
$
670

Debt and Credit Facilities (Tables)
Schedule of carrying values of the Notes 
The carrying value of the Notes is as follows (in thousands):
 
 
As of December 31, 2017
Principal amount
 
$
46,000

Unamortized debt discount - equity component
 
(8,144
)
Unamortized debt discount - initial purchaser
 
(2,431
)
Unamortized transaction costs
 
(383
)
Net carrying value
 
$
35,042

Schedule of convertible debt interest expense 
Total interest expense related to the Notes is as follows (in thousands):
 
 
Year ended December 31, 2017
Cash interest expense
 
 
Coupon interest expense
 
$
661

Non-cash interest expense
 
 
Amortization of debt discount - equity component
 
330

Amortization of debt discount - initial purchaser
 
98

Amortization of transaction costs
 
16

Total interest expense
 
$
1,105

Foreign Currency Derivative Instruments (Tables)
Schedule of gains (losses) on foreign currency forward contracts 
The net losses on foreign currency forward contracts included in “foreign currency exchange loss, net” in the consolidated statements of operations are as follows (in thousands):
 
 
Year Ended December 31,
 
 
2017
 
2016
 
2015
Total loss
 
$
—

 
$
(88
)
 
$
(720
)
Schedule of foreign currency gains (losses) on underlying assets and liabilities 
The net foreign currency gains or losses on those underlying monetary assets and liabilities included in “foreign currency exchange loss, net” in the consolidated statements of operations are as follows (in thousands):
 
 
Year Ended December 31,
 
 
2017
 
2016
 
2015
Total gain (loss)
 
$
—

 
$
(37
)
 
$
179

Stock Plans (Tables)
Stock Options Activity 
The following table summarizes total aggregate stock option activity for the year ended December 31, 2017 (in thousands, except for per share data):
 
 
Number of
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value
Balance at December 31, 2016
 
414

 
$
8.97

 
 
 
 
Granted
 
50

 
5.56

 
 
 
 
Cancelled
 
(103
)
 
10.56

 
 
 
 
Balance at December 31, 2017
 
361

 
$
8.05

 
5.72
 
$
67

Vested or expected to vest at December 31, 2017
 
354

 
$
8.09

 
5.68
 
$
65

Exercisable at December 31, 2017
 
220

 
$
9.20

 
4.39
 
$
30

Stock Options, Valuation Assumptions 
The fair value of the stock options granted during the years ended December 31, 2017 and 2015 was estimated using the Black-Scholes valuation model using the following assumptions:
 
 
Years Ended December 31,
 
 
2017
 
2015
Expected dividends
 
—
%
 
—
%
Expected volatility range
 
58% to 59%

 
60% to 61%

Expected volatility weighted average
 
59
%
 
60
%
Risk-free interest rate
 
1.9
%
 
1.6
%
Expected life/term weighted average (in years)
 
5.5

 
4.9

Nonvested Restricted Stock Units Activity 
The following table summarizes RSU activity for both service-based awards and performance-based awards for the year ended December 31, 2017 (in thousands, except for per share data):
 
 
Shares
 
Weighted Average
Grant Date
Fair Value
Nonvested at December 31, 2016
 
1,748

 
$
6.40

Granted
 
1,796

 
5.89

Released
 
(540
)
 
5.86

Forfeited
 
(354
)
 
6.45

Nonvested at December 31, 2017
 
2,650

 
$
6.16

Stock-based Compensation Expense Allocation 
Compensation cost for stock options, RSAs, RSUs, ESPP, bonuses and director fees is as follows (in thousands):
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
Stock options
 
$
237

 
$
171

 
$
232

Restricted stock awards
 
416

 
388

 
1,974

Restricted stock units
 
5,186

 
3,215

 
1,462

ESPP
 
114

 
231

 
278

Bonuses settled in stock
 
2,826

 
1,359

 
—

Director fees settled in stock
 
258

 
—

 
—

Total stock-based compensation expense
 
$
9,037

 
$
5,364

 
$
3,946

Stock-based compensation cost included in cost of revenue; selling, general and administrative expense; and research and development expense is as follows (in thousands): 
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
Cost of revenue
 
$
1,070

 
$
854

 
$
644

Selling, general and administrative
 
6,606

 
3,674

 
2,502

Research and development
 
1,361

 
836

 
800

Total stock-based compensation expense
 
$
9,037

 
$
5,364

 
$
3,946

Employee Stock Purchase Plan, Valuation Assumptions 
The fair value of ESPP awards was calculated using the following weighted-average assumptions:
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
Expected dividends
 
—
%
 
—
%
 
—
%
Expected volatility
 
34
%
 
57
%
 
57
%
Risk-free interest rate
 
0.89
%
 
0.43
%
 
0.29
%
Expected life (in years)
 
0.45

 
0.5

 
0.5

Fair value per share
 
$
1.30

 
$
1.93

 
$
1.86

Schedule of Stock Plan Shares Reserved for Future Issuance 
The following table summarizes the shares available for grant under the Company’s stock-based compensation plans as of December 31, 2017:
2013 Omnibus Equity Incentive Plan
3,138,321

2004 Employee Stock Purchase Plan
617,609

Total
3,755,930

Nonvested Restricted Stock Shares Activity 
The following table summarizes RSA activity for the year ended December 31, 2017 (in thousands, except for per share data):
 
 
Shares
 
Weighted Average
Grant Date
Fair Value
Nonvested at December 31, 2016
 
88

 
$
13.37

Vested
 
(53
)
 
12.58

Forfeited
 
(9
)
 
14.57

Nonvested at December 31, 2017
 
26

 
$
14.57

Schedule of Share-based Payment Award, Market-condition PSUs, Valuation Assumptions [Table Text Block] 
The fair value of market-condition PSUs granted was calculated using a Monte Carlo valuation model with the following assumptions:
 
 
Years Ended December 31,
 
 
2017
 
2016
Expected dividend yield
 
—
%
 
—
%
Expected volatility
 
53
%
 
62
%
Risk-free interest rate
 
1.55
%
 
1.07
%
Expected term (in years)
 
2.8

 
3.0

Stock-based Compensation Expense Allocation 
The following table summarizes the amount of compensation expense recognized for RSUs for the years ended December 31, 2017, 2016 and 2015 (in thousands):
 
 
Years Ended December 31,
RSU Type
 
2017
 
2016
 
2015
Service-based
 
$
3,268

 
$
2,243

 
$
1,362

Performance objectives
 
379

 
103

 
(28
)
Market-condition
 
1,539

 
869

 
128


 
$
5,186

 
$
3,215

 
$
1,462

Income Taxes (Tables)
Income (loss) before income tax, domestic and foreign 
For financial reporting purposes, loss before income taxes includes the following components (in thousands):
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
United States
 
$
(49,167
)
 
$
(38,319
)
 
$
(35,074
)
Foreign
 
9,695

 
18,759

 
17,344

Total
 
$
(39,472
)
 
$
(19,560
)
 
$
(17,730
)
Components of income tax expense (benefit) 
The provision for income taxes based on loss before income taxes is as follows (in thousands):
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
Federal:
 
 
 
 
 
 
Current
 
$
—

 
$
—

 
$
—

Deferred
 
18,646

 
(11,360
)
 
(4,297
)
 
 
18,646

 
(11,360
)
 
(4,297
)
State:
 
 
 
 
 
 
Current
 
5

 
7

 
6

Deferred
 
231

 
923

 
62

 
 
236

 
930

 
68

Foreign:
 
 
 
 
 
 
Current
 
3,155

 
3,742

 
4,930

Deferred
 
(1,418
)
 
561

 
8

 
 
1,737

 
4,303

 
4,938

(Decrease) increase in valuation allowance
 
(16,962
)
 
10,272

 
3,894

Tax provision
 
$
3,657

 
$
4,145

 
$
4,603

Tax rate reconciliation 
The primary components of such difference are as follows (in thousands):
 
 
Years Ended December 31,
 
 
2017
 
2016
 
2015
Taxes at federal statutory rate
 
$
(13,420
)
 
$
(6,650
)
 
$
(6,028
)
State taxes, net of federal benefit
 
(236
)
 
(208
)
 
(236
)
Effect of tax rate differential for foreign subsidiary
 
(1,646
)
 
(2,985
)
 
(2,641
)
Valuation allowance, including tax benefits of stock activity
 
(16,962
)
 
10,272

 
3,894

Tax rate change
 
34,732

 
—

 
—

Foreign taxes on unremitted earnings
 
—

 
1,204

 
2,085

Stock-based compensation
 
224

 
441

 
134

Foreign withholding taxes
 
295

 
260

 
180

Return to provision adjustments
 
(2,931
)
 
1,062

 
1,131

Subpart F income inclusion
 
2,998

 
906

 
5,914

SEC settlement penalty
 
959

 
—

 
—

Business combination
 
(1,914
)
 
—

 
—

Other
 
1,558

 
(157
)
 
170

Tax provision
 
$
3,657

 
$
4,145

 
$
4,603

Deferred tax assets and liabilities 
Items that give rise to significant portions of the deferred tax accounts are as follows (in thousands):
 
 
December 31,
 
 
2017
 
2016
Deferred tax assets:
 
 
 
 
Tax loss carryforwards
 
$
50,183

 
$
62,994

Tax credit carryforwards
 
792

 
19

Uniform capitalization, contract and inventory related reserves
 
805

 
598

Accrued vacation
 
301

 
514

Stock-based compensation
 
2,029

 
2,130

Capitalized research and development
 
3,043

 
5,532

Tax basis depreciation less book depreciation
 
1,523

 
1,661

Intangible assets
 
—

 
1,354

Deferred revenue
 
175

 
33

Accrued foreign taxes
 
1,044

 
1,263

Other
 
2,369

 
2,523

Total
 
62,264

 
78,621

Deferred tax liabilities:
 
 
 
 
Inventory deduction
 
(587
)
 
(369
)
Pension assets
 
(1,326
)
 
(1,733
)
Allowance for doubtful accounts
 
(534
)
 
(677
)
Withholding tax on undistributed earnings of foreign subsidiary
 
(4,879
)
 
(4,879
)
Unrealized gains and losses
 
(351
)
 
(733
)
Intangible assets
 
(1,514
)
 
—

Total
 
(9,191
)
 
(8,391
)
Net deferred tax assets before valuation allowance
 
53,073

 
70,230

Valuation allowance
 
(61,403
)
 
(78,366
)
Net deferred tax liabilities
 
$
(8,330
)
 
$
(8,136
)
Unrecognized tax benefits rollforward 
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Balance at December 31, 2015
$
14,014

Increase in current period positions
1,596

Increase in prior period positions
116

Decrease in prior period positions
(147
)
Balance at December 31, 2016
15,579

Increase in current period positions
1,081

Decrease in prior period positions
(518
)
Balance at December 31, 2017
$
16,142

Leases (Tables)
Future annual minimum rental commitments
Future annual minimum rental commitments as of December 31, 2017 are as follows (in thousands):
Fiscal Years
 
2018
$
3,824

2019
3,850

2020
3,099

2021
2,124

2022
2,202

Thereafter
4,033

Total
$
19,132

Pension and Other Postretirement Benefit Plans (Tables)
Changes in projected benefit obligations, fair value of plan assets, and funded status of plan 
The following table reflects changes in the pension benefit obligation and plan assets for the years ended December 31, 2017 and 2016 (in thousands):
 
 
Years ended December 31,
 
 
2017
 
2016
Change in benefit obligation:
 
 
 
 
Benefit obligation at beginning of year
 
$
30,257

 
$
33,153

Service cost
 
982

 
1,171

Interest cost
 
230

 
246

Plan participant contributions
 
527

 
509

Benefits paid
 
(1,729
)
 
(1,570
)
Actuarial (gain) loss
 
119

 
(2,425
)
Effect of foreign currency translation
 
1,330

 
(827
)
Projected benefit obligation at end of year
 
31,716

 
30,257

Changes in plan assets:
 
 
 
 
Fair value of plan assets at beginning of year
 
39,144

 
39,002

Actual return on plan assets
 
3,131

 
1,657

Company contributions
 
615

 
596

Plan participant contributions
 
527

 
509

Benefits paid
 
(1,729
)
 
(1,570
)
Effect of foreign currency translation
 
1,740

 
(1,050
)
Fair value of plan assets at end of year
 
43,428

 
39,144

Funded status at end of year
 
$
11,712

 
$
8,887

Amounts recognized in balance sheet 
Amounts recognized in the consolidated balance sheets consist of (in thousands):
 
 
As of December 31,
 
 
2017
 
2016
Net long-term pension asset
 
$
11,712

 
$
8,887

 
 
 
 
 
Accumulated other comprehensive loss consists of the following:
 
 
 
 
Net prior service cost
 
782

 
779

Net loss
 
1,391

 
3,113

Accumulated other comprehensive loss before taxes
 
$
2,173

 
$
3,892

Net benefit cost and amounts recognized in other comprehensive income (loss) 
The components of net periodic pension cost and other amounts recognized in other comprehensive income (loss) before taxes are as follows (in thousands):
 
 
Years ended December 31,
 
 
2017
 
2016
 
2015
Components of net periodic pension cost:
 
 
 
 
 
 
Service cost
 
$
982

 
$
1,171

 
$
958

Interest cost
 
230

 
246

 
332

Expected return on plan assets
 
(1,009
)
 
(1,175
)
 
(1,551
)
Prior service cost amortization
 
151

 
150

 
136

Deferred loss amortization
 
—

 
243

 
45

Settlement cost
 
—

 
—

 
492

Net periodic pension cost
 
$
354

 
$
635

 
$
412

Other amounts recognized in other comprehensive income (loss) before income taxes are as follows:
 
 
 
 
 
 
Prior service cost amortization
 
$
(151
)
 
$
(150
)
 
$
(136
)
(Gain) loss on value of plan assets
 
(2,118
)
 
(476
)
 
1,131

Actuarial (gain) loss on benefit obligation
 
119

 
(2,425
)
 
1,262

Plan change
 
—

 
—

 
83

Settlement
 
—

 
—

 
(492
)
Deferred loss amortization
 
—

 
(243
)
 
(45
)
Total (income) loss recognized in other comprehensive income, before taxes
 
$
(2,150
)
 
$
(3,294
)
 
$
1,803

Total (income) recognized in net periodic pension cost and other comprehensive income, before taxes
 
$
(1,796
)
 
$
(2,659
)
 
$
2,215

Assumptions used to determine the benefit obligation and net periodic benefit cost 
Assumptions used to determine the benefit obligation and net periodic pension cost are as follows:
 
 
Years ended December 31,
 
 
2017
 
2016
Weighted-average assumptions used to determine benefit obligation:
 
 
 
 
Discount rate
 
0.75
%
 
0.75
%
Rate of compensation increase
 
2.00
%
 
2.00
%
Measurement date
 
11/30/2017

 
11/30/2016

Weighted-average assumptions used to determine net periodic pension cost:
 
 
 
 
Discount rate
 
0.75
%
 
0.75
%
Expected long-term return on plan assets
 
2.50
%
 
3.00
%
Rate of compensation increase
 
2.00
%
 
2.50
%
 
 
 
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
 
 
 
 
Equity securities
 
33
%
 
29
%
Debt securities
 
21
%
 
23
%
Real estate investment funds
 
39
%
 
43
%
Other
 
7
%
 
5
%
Total
 
100
%
 
100
%
Net prior service costs amortization expense for next fiscal year 
Expected amortization during the year ending December 31, 2018 is as follows (in thousands):
 
 
 
Amortization of net prior service costs
$
97

Expected benefit payments 
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands):
2018
$
1,349

2019
1,316

2020
1,256

2021
1,294

2022
1,452

Years 2023 through 2027
7,094

Total
$
13,761

Fair values of the plans assets 
The fair values of the plans assets at December 31, 2017 and 2016, by asset category, are as follows (in thousands):
 
 
 
 
Fair Value Measurements at
 
 
 
 
December 31, 2017
 
 
Total
 
Active
Market
Prices
(Level 1)
 
Significant
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash held in Swiss Franc, Euro and USD
 
$
1,670

 
$
1,670

 
$
—

 
$
—

Equity securities
 
15,487

 
14,364

 
1,123

 
—

Fixed income / Bond securities:
 
9,235

 
9,235

 
—

 
—

Other assets (accounts receivable, assets at real estate management company)
 
29

 
—

 
29

 
—

Investments measured at net asset value (1)
 
17,007

 
 
 
 
 
 
Net assets of pension plan
 
$
43,428

 
$
25,269

 
$
1,152

 
$
—


 
 
 
 
Fair Value Measurements at
 
 
 
 
December 31, 2016
 
 
Total
 
Active
Market
Prices
(Level 1)
 
Significant
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash held in Swiss Franc, Euro and USD
 
$
705

 
$
705

 
$
—

 
$
—

Equity securities
 
12,534

 
11,481

 
1,053

 
—

Fixed income / Bond securities:
 
8,842

 
8,842

 
—

 
—

Other assets (accounts receivable, assets at real estate management company)
 
29

 
—

 
29

 
—

Investments measured at net asset value (1)
 
17,034

 
 
 
 
 
 
Net assets of pension plan
 
$
39,144

 
$
21,028

 
$
1,082

 
$
—


(1)    Investments measured at net asset value represent real estate investment funds that are measured at fair value using the net asset value per share (or its equivalent) practical expedient and therefore have not been categorized in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the total plan assets disclosed above.
Changes in projected benefit obligations, fair value of plan assets, and funded status of plan 
The following table reflects changes in the defined benefit plan obligation for the period from acquisition to December 31, 2017 (in thousands):
 
 
April 29, 2017 through December 31,
 
 
2017
Change in benefit obligation:
 
 
Benefit obligation on April 28, 2017
 
$
3,360

Service cost
 
361

Interest cost
 
55

Benefits paid
 
(212
)
Actuarial loss
 
174

Effect of foreign currency translation
 
228

Projected benefit obligation at end of year
 
3,966

Fair value of plan assets
 
24

Unfunded status at end of year
 
3,942

Amounts recognized in balance sheet 
Amounts recognized in the consolidated balance sheets consist of (in thousands):
 
 
As of December 31,
 
 
2017
Net defined benefit plan liability
 
$
3,942

 
 
 
Accumulated other comprehensive loss includes the following:
 
 
Actuarial loss before taxes
 
$
174

Net benefit cost and amounts recognized in other comprehensive income (loss) 
 
 
As of December 31,
 
 
2017
Net defined benefit plan liability
 
$
3,942

 
 
 
Accumulated other comprehensive loss includes the following:
 
 
Actuarial loss before taxes
 
$
174


The components of net periodic pension cost and other amounts recognized in other comprehensive income (loss) before taxes are as follows (in thousands):
 
 
May 1, 2017 through December 31,
 
 
2017
Components of net periodic defined benefit plan cost:
 
 
Service cost
 
$
361

Interest cost
 
55

Net periodic defined benefit plan cost
 
$
416

Other amounts recognized in other comprehensive income (loss) before income taxes are as follows:
 
 
Actuarial loss on benefit obligation
 
$
174

Total loss recognized in other comprehensive income, before taxes
 
174

Total loss recognized in net periodic defined benefit plan cost and other comprehensive income, before taxes
 
$
590

Assumptions used to determine the benefit obligation and net periodic benefit cost 
Assumptions used to determine the benefit obligation and net periodic defined benefit plan cost are as follows:
 
 
May 1, 2017 through December 31,
 
 
2017
Discount rate
 
2.98
%
Rate of compensation increase
 
6.11
%
Expected benefit payments 
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands):
2018
$
332

2019
332

2020
370

2021
338

2022
265

Years 2023 through 2027
1,237

Total
$
2,874

Unaudited Quarterly Financial Information (Tables)
Unaudited quarterly results of operations
 
 
Quarter Ended
 
 
 
 
March 31
 
 
 
June 30
 
 
 
September 30
 
 
 
December 31
 
 
 
 
(in thousands except per share data)
 
 
Year Ended December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$
26,686

 
 
 
$
37,103

 
 
 
$
35,816

 
 
 
$
30,763

 
 
Gross profit
 
6,191

 
 
 
7,827

 
 
 
7,396

 
 
 
7,381

 
 
Net income (loss)
 
(10,399
)
 
(a)
 
(10,118
)
 
(b)
 
(13,860
)
 
(c)
 
(8,752
)
 
(d)
Basic and diluted net loss per share
 
$
(0.32
)
 
 
 
$
(0.28
)
 
 
 
$
(0.37
)
 
 
 
$
(0.24
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
March 31
 
 
 
June 30
 
 
 
September 30
 
 
 
December 31
 
 
 
 
(in thousands except per share data)
 
 
Year Ended December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$
35,203

 
 
 
$
34,135

 
 
 
$
25,506

 
 
 
$
26,400

 
 
Gross profit
 
9,653

 
 
 
9,981

 
 
 
7,628

 
 
 
5,708

 
 
Net income (loss)
 
(6,848
)
 
(e)
 
2,167

 
(f)
 
(6,855
)
 
(g)
 
(12,169
)
 
(h)
Basic and diluted net income (loss) per share
 
$
(0.22
)
 
 
 
$
0.07

 
 
 
$
(0.21
)
 
 
 
$
(0.38
)
 
 
_____________________
(a)
Includes restructuring and exit costs of $1.0 million and non-cash expense for stock-based compensation of $1.5 million.
(b)
Includes acquisition related expense of $1.8 million and non-cash expense for stock-based compensation of $2.3 million.
(c)
Includes restructuring and exit costs of $1.3 million, SEC and FCPA legal and settlement costs of $3.0 million and non-cash expense for stock-based compensation of $2.8 million.
(d)
Includes non-cash expense for stock-based compensation of $2.5 million.
(e)
Includes non-cash expense for stock-based compensation of $1.2 million.
(f)
Includes gain on sale of product line of $6.7 million, release of tax liability of $1.5 million and non-cash expense for stock-based compensation of $1.5 million.
(g)
Includes non-cash expense for stock-based compensation of $1.1 million.
(h)
Includes impairment of assets of $1.2 million, non-cash deferred tax expense of $1.2 million in connection with the probable repatriation of a portion of the unremitted earnings of a foreign subsidiary and non-cash expense for stock-based compensation of $1.6 million.
Description of Business and Summary of Significant Accounting Policies (Textual) (Details)
3 Months Ended 12 Months Ended 12 Months Ended 0 Months Ended
Dec. 31, 2016
USD ($)
Dec. 31, 2017
USD ($)
manufacturing_location
Dec. 31, 2016
USD ($)
Dec. 31, 2015
USD ($)
Dec. 31, 2017
CHF
Dec. 31, 2014
USD ($)
Mar. 31, 2017
Accounting Standards Update 2016-09, Excess Tax Benefit Component
USD ($)
Dec. 31, 2016
Accounting Standards Update 2016-18
USD ($)
Dec. 31, 2017
Accounting Standards Update 2017-07
USD ($)
Dec. 31, 2016
Accounting Standards Update 2017-07
USD ($)
Dec. 31, 2017
Joint Development Agreement for Technologies for Automotive Market
USD ($)
Dec. 31, 2016
Joint Development Agreement for Technologies for Automotive Market
USD ($)
Dec. 31, 2017
Minimum
Dec. 31, 2017
Maximum
Dec. 31, 2017
High Reliability
product_line
Dec. 31, 2017
China
contract_manufacturer
Oct. 11, 2017
Convertible Senior Notes due 2022
USD ($)
Sep. 25, 2017
Convertible Senior Notes due 2022
USD ($)
Dec. 31, 2017
Convertible Senior Notes due 2022
USD ($)
Oct. 11, 2017
Convertible Senior Notes due 2022
USD ($)
Sep. 25, 2017
Convertible Senior Notes due 2022
USD ($)
Description of Business and Summary of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Convertible Senior Notes due 2022, aggregate principal
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 46,000,000 
$ 6,000,000 
$ 40,000,000 
Interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.50% 
 
5.50% 
Proceeds from long-term debt, net of discount and issuance costs
 
42,991,000 
0 
3,040,000 
 
 
 
 
 
 
 
 
 
 
 
 
5,700,000 
37,300,000 
 
 
 
Manufacturing locations
 
3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of contract manufacturers
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 
 
 
 
 
 
Number of product lines
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 
 
 
 
 
 
 
Cash and cash equivalents
25,359,000 
50,122,000 
25,359,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Working capital
 
68,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total deferred revenue and customer deposits
3,967,000 
6,669,000 
3,967,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Estimated useful lives of property and equipment
 
 
 
 
 
 
 
 
 
 
 
 
3 years 
10 years 
 
 
 
 
 
 
 
Leasehold improvements funded by landlords
1,700,000 
1,400,000 
1,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred rent related to leasehold improvements funding by landlords
1,700,000 
1,400,000 
1,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill impairment
 
0 
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Estimated Useful Life (in years)
 
 
 
 
 
 
 
 
 
 
 
 
8 years 
14 years 
 
 
 
 
 
 
 
Impairment of assets
1,200,000 
240,000 
1,389,000 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Standard product warranty, term, minimum
 
1 year 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Standard product warranty, term, maximum
 
8 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued warranty
1,213,000 
1,413,000 
1,213,000 
1,288,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FDIC insurance limit
 
250,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Switzerland non-government financial institutions insured amount
 
 
 
 
100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Research and development expense
 
18,351,000 
20,889,000 
24,697,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Third party funding offset
 
2,800,000 
1,200,000 
1,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash consideration under joint development agreement
 
 
 
 
 
 
 
 
 
 
2,200,000 
600,000 
 
 
 
 
 
 
 
 
 
Advertising expense
 
700,000 
700,000 
1,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recognition of deferred tax assets
 
 
 
 
 
 
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash, beginning of period
25,359,000 
50,122,000 
25,359,000 
24,782,000 
 
24,732,000 
 
400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Valuation allowance
78,366,000 
61,403,000 
78,366,000 
 
 
 
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from operations
 
$ 37,896,000 
$ 25,886,000 
$ 17,005,000 
 
 
 
 
$ 700,000 
$ 500,000 
 
 
 
 
 
 
 
 
 
 
 
Description of Business and Summary of Significant Accounting Policies (Concentration of Credit Risk) (Details) (Customer Concentration Risk)
12 Months Ended
Dec. 31, 2017
customer
Dec. 31, 2016
customer
Dec. 31, 2015
customer
Sales [Member]
 
 
 
Concentration Risk [Line Items]
 
 
 
Number of customers over 10% or Sales and AR
1 
0 
1 
Sales [Member] |
ABB Ltd [Member]
 
 
 
Concentration Risk [Line Items]
 
 
 
Major customer, percentage of sales
12.00% 
 
 
Sales [Member] |
Shenzhen Xinlikang
 
 
 
Concentration Risk [Line Items]
 
 
 
Major customer, percentage of sales
 
 
19.00% 
Accounts Receivable
 
 
 
Concentration Risk [Line Items]
 
 
 
Number of customers over 10% or Sales and AR
2 
0 
 
Accounts Receivable |
Continental Automotive [Member]
 
 
 
Concentration Risk [Line Items]
 
 
 
Major customer, percentage of sales
11.00% 
 
 
Accounts Receivable |
ABB Ltd [Member]
 
 
 
Concentration Risk [Line Items]
 
 
 
Major customer, percentage of sales
10.00% 
 
 
Description of Business and Summary of Significant Accounting Policies (Computation of basic and diluted net income (loss) per share) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Schedule of computation of basic and diluted net income (loss) per share
 
 
 
 
 
 
 
 
 
 
 
Net loss
$ (8,752)1
$ (13,860)2
$ (10,118)3
$ (10,399)4
$ (12,169)5
$ (6,855)6
$ 2,167 7
$ (6,848)8
$ (43,129)
$ (23,705)
$ (22,333)
Weighted average common shares outstanding, basic and diluted
 
 
 
 
 
 
 
 
35,480 
31,870 
30,716 
Net loss per share:
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted
$ (0.24)
$ (0.37)
$ (0.28)
$ (0.32)
$ (0.38)
$ (0.21)
$ 0.07 
$ (0.22)
$ (1.22)
$ (0.74)
$ (0.73)
Description of Business and Summary of Significant Accounting Policies (Antidilutive securities excluded from computation of earnings per share) (Details)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Anti-dilutive, shares
10,797 
2,515 
2,071 
Outstanding options to purchase common stock
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Anti-dilutive, shares
361 
414 
931 
Unvested restricted stock awards
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Anti-dilutive, shares
26 
88 
245 
Unvested restricted stock unit awards
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Anti-dilutive, shares
2,650 
1,748 
885 
Employee stock purchase plan awards
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Anti-dilutive, shares
38 
0 
10 
Bonus and director fees to be paid in stock awards
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Anti-dilutive, shares
477 
265 
0 
Convertible senior notes
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Anti-dilutive, shares
7,245 
0 
0 
Description of Business and Summary of Significant Accounting Policies (Revenues by product line and geographic area) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
$ 30,763 
$ 35,816 
$ 37,103 
$ 26,686 
$ 26,400 
$ 25,506 
$ 34,135 
$ 35,203 
$ 130,368 1
$ 121,244 1
$ 167,372 1
China
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
44,945 1
48,191 1
87,856 1
United States
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
13,874 1
12,041 1
20,836 1
Germany
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
16,287 1
12,854 1
13,972 1
HUNGARY
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
13,454 1
11,473 1
11,630 1
All other countries
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
41,808 1 2
36,685 1 2
33,078 1 2
Ultracapacitors
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
87,709 
71,491 
114,525 
High-voltage capacitors
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
42,659 
45,177 
41,718 
Microelectronic products
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
$ 0 
$ 4,576 
$ 11,129 
Description of Business and Summary of Significant Accounting Policies (Long-lived assets by geographic location) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Long-Lived Assets [Line Items]
 
 
 
Total
$ 28,044 
$ 26,120 
$ 32,436 
United States
 
 
 
Long-Lived Assets [Line Items]
 
 
 
Total
14,443 
19,267 
22,267 
China
 
 
 
Long-Lived Assets [Line Items]
 
 
 
Total
1,107 
1,477 
4,148 
KOREA, REPUBLIC OF
 
 
 
Long-Lived Assets [Line Items]
 
 
 
Total
4,398 
0 
0 
Switzerland
 
 
 
Long-Lived Assets [Line Items]
 
 
 
Total
$ 8,096 
$ 5,376 
$ 6,021 
Balance Sheet Details (Schedule of Inventories) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Balance Sheet Related Disclosures [Abstract]
 
 
Raw materials and purchased parts
$ 12,675 
$ 12,210 
Work-in-process
1,756 
858 
Finished goods
17,797 
19,180 
Total inventories
$ 32,228 
$ 32,248 
Balance Sheet Details (Schedule of Product Warranty Liability) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Movement in Standard Product Warranty Accrual [Roll Forward]
 
 
 
Beginning balance
$ 1,413 
$ 1,213 
$ 1,288 
Acquired liability from Nesscap
773 
0 
 
Product warranties issued
177 
486 
 
Settlement of warranties
(876)
(458)
 
Changes related to preexisting warranties
126 
(103)
 
Ending balance
$ 1,413 
$ 1,213 
$ 1,288 
Balance Sheet Details (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
$ 105,459 
$ 94,375 
Less accumulated depreciation and amortization
(77,415)
(68,255)
Total property and equipment, net
28,044 
26,120 
Machinery and Equipment [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
67,963 
62,583 
Computer Hardware and Software [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
10,436 
10,071 
Leasehold Improvements [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
21,599 
20,320 
Construction in Progress [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
$ 5,461 
$ 1,401 
Balance Sheet Details (Schedule of Accounts Payable and Accrued Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Balance Sheet Related Disclosures [Abstract]
 
 
 
Accounts payable
$ 21,242 
$ 13,109 
 
Income tax payable
1,737 
1,066 
 
Accrued warranty
1,413 
1,213 
1,288 
Other accrued liabilities
8,366 
3,793 
 
Total accounts payable and accrued liabilities
$ 32,758 
$ 19,181 
 
Balance Sheet Details (Schedule of Accumulated Other Comprehensive Income) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended 12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2017
Accumulated Other Comprehensive Income
Dec. 31, 2015
Accumulated Other Comprehensive Income
Dec. 31, 2014
Accumulated Other Comprehensive Income
Dec. 31, 2017
Foreign Currency Translation Adjustment
Dec. 31, 2017
Pension and Defined Benefit Plan
AOCI Attributable to Parent, Net of Tax [Roll Forward]
 
 
 
 
 
 
 
 
 
Beginning balance
$ 106,101 
$ 100,822 
$ 119,176 
$ 126,953 
$ 5,400 
$ 4,894 
$ 4,723 
$ 7,826 
$ (2,426)
Other comprehensive income before reclassification
 
 
 
 
5,131 
 
 
5,131 
0 
Amounts reclassified from accumulated other comprehensive income (loss)
 
 
 
 
1,545 
 
 
0 
1,545 
Net other comprehensive income
 
 
 
 
6,676 
 
 
5,131 
1,545 
Ending balance
$ 106,101 
$ 100,822 
$ 119,176 
$ 126,953 
$ 12,076 
$ 4,894 
$ 4,723 
$ 12,957 
$ (881)
Business Combination (Details Textual) (USD $)
Share data in Millions, unless otherwise specified
0 Months Ended 3 Months Ended 0 Months Ended 12 Months Ended 12 Months Ended 0 Months Ended
Apr. 28, 2017
Jun. 30, 2017
Apr. 28, 2017
Nesscap
Dec. 31, 2017
Nesscap
Apr. 28, 2017
Nesscap
Dec. 31, 2017
Nesscap
Fair Value Adjustment to Inventory
Apr. 28, 2017
Nesscap
Fair Value Adjustment to Inventory
Apr. 28, 2017
Common Stock
Nesscap
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
Value of share consideration
 
 
$ 25,294,000 
 
 
 
 
$ 4,100,000 
Number of shares issued
 
 
 
 
 
 
 
25.3 
Amount of payment
1,000,000 
 
1,006,000 
 
 
 
 
 
Percentage of outstanding shares
 
 
 
 
 
 
 
11.30% 
Fair market value step-up
 
 
 
 
 
40,000 
686,000 
 
Component of cost of revenue
 
 
 
 
 
646,000 
 
 
Acquisition related costs
 
1,800,000 
 
1,900,000 
 
 
 
 
Fair value of intangible assets acquired
 
 
 
 
11,800,000 
 
 
 
Amount of revenue
 
 
 
17,300,000 
 
 
 
 
Amount of net loss
 
 
 
$ 900,000 
 
 
 
 
Business Combination (Schedule of Fair Value of Purchase Price Consideration) (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended
Apr. 28, 2017
Business Acquisition [Line Items]
 
Settlement of seller’s transaction expenses
$ 1,000 
Nesscap
 
Business Acquisition [Line Items]
 
Maxwell common stock
25,294 
Settlement of seller’s transaction expenses
1,006 
Total estimated purchase price
$ 26,300 
Business Combination (Schedule of Purchase Price Allocation) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Apr. 28, 2017
Nesscap
Business Acquisition [Line Items]
 
 
 
 
Cash and cash equivalents
 
 
 
$ 909 
Accounts receivable
 
 
 
2,545 
Inventories
 
 
 
4,397 
Prepaid expenses and other assets
 
 
 
764 
Property and equipment
 
 
 
3,314 
Intangible assets
 
 
 
11,800 
Accounts payable, accrued compensation and other liabilities
 
 
 
(5,713)
Employee severance obligation
 
 
 
(3,340)
Total identifiable net assets
 
 
 
14,676 
Goodwill
36,061 
22,799 
23,635 
11,624 
Total purchase price
 
 
 
$ 26,300 
Business Combination (Schedule of Intangible Assets Acquired) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended
Dec. 31, 2017
Dec. 31, 2017
Customer relationships - institutional
Dec. 31, 2017
Customer relationships - non-institutional
Dec. 31, 2017
Trademarks and trade names
Dec. 31, 2017
Developed technology
Apr. 28, 2017
Nesscap
Apr. 28, 2017
Nesscap
Customer relationships - institutional
Apr. 28, 2017
Nesscap
Customer relationships - institutional
Apr. 28, 2017
Nesscap
Customer relationships - non-institutional
Apr. 28, 2017
Nesscap
Customer relationships - non-institutional
Apr. 28, 2017
Nesscap
Trademarks and trade names
Apr. 28, 2017
Nesscap
Trademarks and trade names
Apr. 28, 2017
Nesscap
Developed technology
Apr. 28, 2017
Nesscap
Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Estimated Useful Life (in years)
 
14 years 
10 years 
10 years 
8 years 
 
14 years 
 
10 years 
 
10 years 
 
8 years 
 
Fair Value
$ 11,800 
$ 3,200 
$ 4,400 
$ 1,500 
$ 2,700 
$ 11,800 
 
$ 3,200 
 
$ 4,400 
 
$ 1,500 
 
$ 2,700 
Business Combination (Schedule of Pro Forma Information) (Details) (Nesscap, USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Nesscap
 
 
Business Acquisition [Line Items]
 
 
Net revenues
$ 135,534 
$ 141,724 
Net loss
$ (43,849)
$ (28,701)
Business Acquisition, Pro Forma Information [Abstract]
 
 
Basic and diluted (in dollars per share)
$ (1.19)
$ (0.80)
Business Acquisition, Pro Forma Information, Weighted Average Common Shares Outstanding [Abstract]
 
 
Basic and diluted (in shares)
36,809 
36,017 
Sale of Microelectronics Product Line (Details) (USD $)
3 Months Ended 12 Months Ended
Jun. 30, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2016
Microelectronics Product Line
Disposal Group, Disposed of by Sale, Not Discontinued Operations
Apr. 27, 2016
Microelectronics Product Line
Disposal Group, Disposed of by Sale, Not Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups [Line Items]
 
 
 
 
 
 
Sale of microelectronics product line, transaction purchase price
 
 
 
 
 
$ 21,000,000 
Sale of microelectronics product line, escrow holdback
 
 
 
 
 
1,500,000 
Gain on sale of product line
$ 6,700,000 
$ 0 
$ 6,657,000 
$ 0 
$ 6,700,000 
 
Goodwill and Intangible Assets (Textual) (Details) (USD $)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
 
 
 
Goodwill impairment
$ 0 
$ 0 
$ 0 
Amortization of Intangible Assets
809,000 
0 
166,000 
Finite-Lived Intangible Assets, Amortization Expense, Year Two
1,200,000 
 
 
Finite-Lived Intangible Assets, Amortization Expense, Year Three
1,200,000 
 
 
Finite-Lived Intangible Assets, Amortization Expense, Year Four
1,200,000 
 
 
Finite-Lived Intangible Assets, Amortization Expense, Year Five
1,200,000 
 
 
Cost of revenue
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization of Intangible Assets
200,000 
 
 
Selling, General and Administrative Expenses [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization of Intangible Assets
$ 600,000 
 
 
Goodwill and Intangible Assets (Goodwill rollforward) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
Balance, beginning of period
$ 22,799 
$ 23,635 
Foreign currency translation adjustments
1,638 
(545)
Disposition of microelectronics product line
 
(291)
Goodwill from Nesscap Acquisition
11,624 
 
Balance, end of period
$ 36,061 
$ 22,799 
Goodwill and Intangible Assets (Schedule of Intangible Assets) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Acquired Finite-Lived Intangible Assets [Line Items]
 
Fair Value
$ 11,800 
Finite Lived Intangible Assets, Foreign Currency Translation Gain (Loss)
713 
Finite-Lived Intangible Assets, Accumulated Amortization
(798)
Finite-Lived Intangible Assets, Net
11,715 
Customer relationships - institutional
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
Estimated Useful Life (in years)
14 years 
Fair Value
3,200 
Finite Lived Intangible Assets, Foreign Currency Translation Gain (Loss)
197 
Finite-Lived Intangible Assets, Accumulated Amortization
(156)
Finite-Lived Intangible Assets, Net
3,241 
Customer relationships - non-institutional
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
Estimated Useful Life (in years)
10 years 
Fair Value
4,400 
Finite Lived Intangible Assets, Foreign Currency Translation Gain (Loss)
266 
Finite-Lived Intangible Assets, Accumulated Amortization
(304)
Finite-Lived Intangible Assets, Net
4,362 
Trademarks and trade names
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
Estimated Useful Life (in years)
10 years 
Fair Value
1,500 
Finite Lived Intangible Assets, Foreign Currency Translation Gain (Loss)
90 
Finite-Lived Intangible Assets, Accumulated Amortization
(103)
Finite-Lived Intangible Assets, Net
1,487 
Developed technology
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
Estimated Useful Life (in years)
8 years 
Fair Value
2,700 
Finite Lived Intangible Assets, Foreign Currency Translation Gain (Loss)
160 
Finite-Lived Intangible Assets, Accumulated Amortization
(235)
Finite-Lived Intangible Assets, Net
$ 2,625 
Restructuring and Exit Costs (Narrative) (Details) (USD $)
3 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 15 Months Ended 18 Months Ended 12 Months Ended 15 Months Ended 12 Months Ended 15 Months Ended 12 Months Ended 15 Months Ended 12 Months Ended
Sep. 30, 2017
Mar. 31, 2017
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2017
September 2017 Plan
Dec. 31, 2016
September 2017 Plan
Dec. 31, 2017
February 2017 Plan
Dec. 31, 2016
February 2017 Plan
Dec. 31, 2017
Consolidation of US Manufacturing Operations
Dec. 31, 2016
Consolidation of US Manufacturing Operations
Dec. 31, 2015
Consolidation of US Manufacturing Operations
Jun. 30, 2016
Consolidation of US Manufacturing Operations
Sep. 30, 2016
Consolidation of US Manufacturing Operations
Dec. 31, 2014
Consolidation of US Manufacturing Operations
Dec. 31, 2017
Consolidation of US Manufacturing Operations
Facility Closing
Dec. 31, 2016
Consolidation of US Manufacturing Operations
Facility Closing
Dec. 31, 2015
Consolidation of US Manufacturing Operations
Facility Closing
Jun. 30, 2016
Consolidation of US Manufacturing Operations
Facility Closing
Jun. 30, 2015
Consolidation of US Manufacturing Operations
Facility Closing
sqft
Dec. 31, 2014
Consolidation of US Manufacturing Operations
Facility Closing
Dec. 31, 2017
Consolidation of US Manufacturing Operations
Facility Closing
Accounts Payable and Accrued Liabilities
Dec. 31, 2017
Consolidation of US Manufacturing Operations
Facility Closing
Other Noncurrent Liabilities
Dec. 31, 2017
Consolidation of US Manufacturing Operations
Employee Severance Costs
Dec. 31, 2016
Consolidation of US Manufacturing Operations
Employee Severance Costs
Dec. 31, 2015
Consolidation of US Manufacturing Operations
Employee Severance Costs
Jun. 30, 2016
Consolidation of US Manufacturing Operations
Employee Severance Costs
Dec. 31, 2014
Consolidation of US Manufacturing Operations
Employee Severance Costs
Dec. 31, 2017
Consolidation of US Manufacturing Operations
Other Exit Costs
Dec. 31, 2016
Consolidation of US Manufacturing Operations
Other Exit Costs
Dec. 31, 2015
Consolidation of US Manufacturing Operations
Other Exit Costs
Jun. 30, 2016
Consolidation of US Manufacturing Operations
Other Exit Costs
Dec. 31, 2014
Consolidation of US Manufacturing Operations
Other Exit Costs
Dec. 31, 2017
Restructuring Charges [Member]
September 2017 Plan
Dec. 31, 2017
Restructuring Charges [Member]
February 2017 Plan
Dec. 31, 2017
Restructuring Charges [Member]
Consolidation of US Manufacturing Operations
Dec. 31, 2016
Restructuring Charges [Member]
Consolidation of US Manufacturing Operations
Dec. 31, 2015
Restructuring Charges [Member]
Consolidation of US Manufacturing Operations
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring and exit costs
$ 1,300,000 
$ 1,000,000 
$ 2,282,000 
$ 297,000 
$ 2,512,000 
$ 1,275,000 
 
$ 997,000 
 
$ 179,000 
$ 451,000 
$ 2,647,000 
$ 3,000,000 
 
 
$ 200,000 
$ 100,000 
$ 1,200,000 
$ 1,500,000 
 
 
 
 
$ 0 
$ 67,000 
$ 1,439,000 
$ 1,200,000 
 
$ 0 
$ 298,000 
$ 0 
$ 300,000 
 
$ 1,200,000 
$ 900,000 
$ 200,000 
$ 300,000 
$ 2,500,000 
Accelerated depreciation expense
 
 
 
 
 
 
 
 
 
 
100,000 
400,000 
600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount paid in restructuring expenses
 
 
 
 
 
431,000 
 
855,000 
 
 
453,000 
1,010,000 
 
1,500,000 
 
 
0 
0 
 
 
 
 
 
 
207,000 
1,010,000 
 
 
 
246,000 
0 
 
 
 
 
 
 
 
Square feet of manufacturing facility
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
60,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring liability
 
 
 
 
 
$ 817,000 
$ 0 
$ 0 
$ 0 
$ 670,000 
$ 802,000 
$ 1,337,000 
 
 
$ 0 
$ 670,000 
$ 802,000 
$ 1,043,000 
 
 
$ 0 
$ 300,000 
$ 400,000 
$ 0 
$ 0 
$ 294,000 
 
$ 0 
$ 0 
$ 0 
$ 0 
 
$ 0 
 
 
 
 
 
Restructuring and Exit Costs (Summary of Restructuring Liability by Plan) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Sep. 30, 2017
Mar. 31, 2017
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Restructuring Reserve [Roll Forward]
 
 
 
 
 
Costs incurred
$ 1,300 
$ 1,000 
$ 2,282 
$ 297 
$ 2,512 
February 2017 Plan
 
 
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
 
 
Restructuring liability
 
0 
0 
 
 
Costs incurred
 
 
997 
 
 
Restructuring cash payments
 
 
(855)
 
 
Accruals released
 
 
(142)
 
 
Restructuring liability
 
 
0 
 
 
September 2017 Plan
 
 
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
 
 
Restructuring liability
 
0 
0 
 
 
Costs incurred
 
 
1,275 
 
 
Restructuring cash payments
 
 
(431)
 
 
Accruals released
 
 
(27)
 
 
Restructuring liability
 
 
$ 817 
 
 
Restructuring and Exit Costs (Schedule of Restructuring and Exit Costs) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended 15 Months Ended 18 Months Ended 12 Months Ended 15 Months Ended 12 Months Ended 15 Months Ended 12 Months Ended 15 Months Ended
Sep. 30, 2017
Mar. 31, 2017
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2017
Consolidation of US Manufacturing Operations
Dec. 31, 2016
Consolidation of US Manufacturing Operations
Dec. 31, 2015
Consolidation of US Manufacturing Operations
Jun. 30, 2016
Consolidation of US Manufacturing Operations
Sep. 30, 2016
Consolidation of US Manufacturing Operations
Dec. 31, 2017
Consolidation of US Manufacturing Operations
Employee Severance Costs
Dec. 31, 2016
Consolidation of US Manufacturing Operations
Employee Severance Costs
Dec. 31, 2015
Consolidation of US Manufacturing Operations
Employee Severance Costs
Jun. 30, 2016
Consolidation of US Manufacturing Operations
Employee Severance Costs
Dec. 31, 2017
Consolidation of US Manufacturing Operations
Lease Obligation Costs
Dec. 31, 2016
Consolidation of US Manufacturing Operations
Lease Obligation Costs
Dec. 31, 2015
Consolidation of US Manufacturing Operations
Lease Obligation Costs
Jun. 30, 2016
Consolidation of US Manufacturing Operations
Lease Obligation Costs
Dec. 31, 2017
Consolidation of US Manufacturing Operations
Other Exit Costs
Dec. 31, 2016
Consolidation of US Manufacturing Operations
Other Exit Costs
Dec. 31, 2015
Consolidation of US Manufacturing Operations
Other Exit Costs
Jun. 30, 2016
Consolidation of US Manufacturing Operations
Other Exit Costs
Restructuring Reserve [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring liability
 
 
 
 
 
$ 802 
$ 1,337 
$ 0 
 
 
$ 0 
$ 294 
$ 0 
 
$ 802 
$ 1,043 
$ 0 
 
$ 0 
$ 0 
$ 0 
 
Costs incurred
1,300 
1,000 
2,282 
297 
2,512 
179 
451 
2,647 
3,000 
 
0 
67 
1,439 
1,200 
200 
100 
1,200 
1,500 
0 
298 
0 
300 
Restructuring cash payments
 
 
 
 
 
 
(453)
(1,010)
 
(1,500)
 
(207)
(1,010)
 
 
0 
0 
 
 
(246)
0 
 
Accruals released
 
 
 
 
 
 
(154)
(135)
 
 
 
(154)
(135)
 
 
0 
0 
 
 
0 
0 
 
Lease payments and accretion
 
 
 
 
 
(311)
(379)
(165)
 
 
0 
0 
0 
 
(311)
(327)
(165)
 
0 
(52)
0 
 
Restructuring liability
 
 
 
 
 
$ 670 
$ 802 
$ 1,337 
 
 
$ 0 
$ 0 
$ 294 
 
$ 670 
$ 802 
$ 1,043 
 
$ 0 
$ 0 
$ 0 
 
Debt and Credit Facilities (Details Textual) (USD $)
12 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 24 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Convertible Senior Notes due 2022
Dec. 31, 2017
Convertible Senior Notes due 2022
Oct. 11, 2017
Convertible Senior Notes due 2022
Sep. 25, 2017
Convertible Senior Notes due 2022
Dec. 31, 2017
Maxwell SA auto leases
Financing Agreements
Vehicles
Dec. 31, 2017
Vehicle Financing Agreement
Dec. 31, 2016
Vehicle Financing Agreement
Dec. 31, 2017
Vehicle Financing Agreement
Minimum
Dec. 31, 2017
Vehicle Financing Agreement
Maximum
Dec. 31, 2011
Revolving Credit Facility
LIBOR
Dec. 31, 2011
Secured Debt
Equipment Term Loan
Dec. 31, 2017
East West Bank
Revolving Credit Facility
Dec. 31, 2017
East West Bank
Revolving Credit Facility
Minimum
Dec. 31, 2017
East West Bank
Revolving Credit Facility
Maximum
Dec. 31, 2017
East West Bank
Revolving Credit Facility
Prime Rate
Minimum
Dec. 31, 2017
East West Bank
Revolving Credit Facility
Prime Rate
Maximum
Dec. 31, 2017
East West Bank
Revolving Credit Facility
LIBOR
Minimum
Dec. 31, 2017
East West Bank
Revolving Credit Facility
LIBOR
Maximum
Sep. 15, 2022
Scenario, Forecast
Convertible Senior Notes due 2022
D
Credit Facilities [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Convertible Senior Notes due 2022, aggregate principal
 
 
$ 46,000,000 
$ 6,000,000 
$ 40,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate
 
 
5.50% 
 
5.50% 
 
 
 
0.90% 
1.90% 
 
 
 
 
 
 
 
 
 
 
Proceeds received
 
 
43,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Conversion ratio
 
157.5101 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Conversion price
 
 
 
 
$ 6.35 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Conversion premium, percent
 
 
 
29.00% 
27.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock price (in dollars per share)
 
 
 
$ 4.94 
$ 5.00 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Convertible price threshold percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
130.00% 
Convertible threshold trading days
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20 
Initial purchaser's discount
 
 
2,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Initial purchaser's discount, percent
 
 
5.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discount rate
 
12.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount over estimated fair value of the liability component
8,377,000 
 
8,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transaction costs
 
 
500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transaction costs allocated to equity
 
100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective interest rate
 
 
12.20% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving line of credit
 
 
 
 
 
 
 
 
 
 
 
 
25,000,000.0 
 
 
 
 
 
 
 
Amount available revolving credit facility
 
 
 
 
 
 
 
 
 
 
 
 
13,300,000 
 
 
 
 
 
 
 
Percentage of equity interests pledged
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
Debt instrument, variable rate
 
 
 
 
 
 
 
 
 
 
2.25% 
 
 
 
 
0.00% 
0.50% 
2.75% 
3.25% 
 
Annual commitment fee
 
 
 
 
 
 
 
 
 
 
 
 
125,000 
 
 
 
 
 
 
 
Unused commitment fee, percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
0.30% 
0.50% 
 
 
 
 
 
Proceeds from Lines of Credit
 
 
 
 
 
 
 
 
 
 
 
 
0 
 
 
 
 
 
 
 
Eligible equipment purchase, percentage
 
 
 
 
 
 
 
 
 
 
 
80.00% 
 
 
 
 
 
 
 
 
Debt instrument, amount borrowed
 
 
 
 
 
 
 
 
 
 
 
5,000,000 
 
 
 
 
 
 
 
 
Repayment period
 
 
 
 
 
3 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings outstanding under vehicle financing agreements
 
 
 
 
 
 
$ 115,000 
$ 83,000 
 
 
 
 
 
 
 
 
 
 
 
 
Debt and Credit Facilities (Schedule of Carrying Value of the Notes) (Details) (Convertible Senior Notes due 2022, USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Oct. 11, 2017
Sep. 25, 2017
Convertible Senior Notes due 2022
 
 
 
Debt Instrument [Line Items]
 
 
 
Principal amount
$ 46,000 
$ 6,000 
$ 40,000 
Unamortized debt discount - equity component
(8,144)
 
 
Unamortized debt discount - initial purchaser
(2,431)
 
 
Unamortized transaction costs
(383)
 
 
Net carrying value
$ 35,042 
 
 
Debt and Credit Facilities (Schedule of Convertible Debt Interest Expense) (Details) (Convertible Senior Notes due 2022, USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Convertible Senior Notes due 2022
 
Debt Instrument [Line Items]
 
Coupon interest expense
$ 661 
Amortization of debt discount - equity component
330 
Amortization of debt discount - initial purchaser
98 
Amortization of transaction costs
16 
Total interest expense
$ 1,105 
Fair Value Measurement (Details) (USD $)
Dec. 31, 2017
Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Foreign currency forward contracts outstanding
$ 0 
$ 0 
Convertible Senior Notes due 2022 |
Significant Observable Inputs (Level 2)
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value of convertible senior notes issued
$ 52,600,000 
 
Foreign Currency Derivative Instruments (Gains and losses on foreign currency forward contracts) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Foreign Currency Derivatives [Abstract]
 
 
 
Total loss
$ 0 
$ (88)
$ (720)
Foreign Currency Derivative Instruments (Gains and losses on foreign currency derivative contracts partially offset by net gains and losses on underlying monetary assets) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Foreign Currency Derivatives [Abstract]
 
 
 
Total gain (loss)
$ 0 
$ (37)
$ 179 
Stock Plans (Textual) (Details) (USD $)
6 Months Ended 12 Months Ended
Jun. 30, 2014
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Number of active share-based compensation plans
 
2 
 
 
Tax benefit associated with stock option exercises
 
$ 4,200,000 
 
 
Weighted average grant date fair value of stock options granted
 
$ 2.97 
 
$ 3.34 
Granted
 
50,000 
0 
 
Total intrinsic value of options exercised
 
 
16,000 
 
Number of stock options exercised
 
0 
0 
 
Minimum
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Period of option vesting
 
1 year 
 
 
Maximum
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Period of option vesting
 
4 years 
 
 
Employee Stock Option
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Total unrecognized compensation cost adjusted for estimated forfeitures
 
300,000 
 
 
Unrecognized compensation cost, weighted average recognition period
 
1 year 1 month 
 
 
Unvested restricted stock awards
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Service-based share awards vest date fair value
 
300,000 
600,000 
1,200,000 
Amount of unrecognized compensation cost
 
100,000 
 
 
Unrecognized compensation cost, weighted average recognition period
 
2 months 
 
 
Number of shares granted
 
0 
 
 
Unvested restricted stock unit awards
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Period of option vesting
 
1 year 
 
 
Fair value per unit
$ 7.02 
$ 5.89 
$ 6.00 
 
Service-based share awards vest date fair value
 
2,900,000 
1,300,000 
500,000 
Amount of unrecognized compensation cost
 
8,300,000 
 
 
Unrecognized compensation cost, weighted average recognition period
 
2 years 2 months 
 
 
Number of shares granted
 
1,796,000 
 
 
Number of unrestricted shares of common stock received upon vesting
 
1 
 
 
Unvested restricted stock unit awards |
Service-based
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Period of option vesting
 
4 years 
 
 
Unvested restricted stock unit awards |
Performance objectives
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Fair value per unit
 
$ 5.73 
$ 5.08 
$ 7.18 
Number of shares granted
 
158,000 
46,224 
214,831 
Unvested restricted stock unit awards |
Market-condition
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Fair value per unit
 
$ 7.22 
$ 7.76 
 
Number of shares granted
 
367,874 
313,460 
0 
Unvested restricted stock unit awards |
Market-condition |
Minimum
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Potential vesting percentage
 
0.00% 
 
 
Unvested restricted stock unit awards |
Market-condition |
Maximum
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Potential vesting percentage
 
200.00% 
 
 
Market Condition Restricted Stock Units (RSUs) |
Share-based Compensation Award, Tranche One
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Period of option vesting
 
1 year 
 
 
Market Condition Restricted Stock Units (RSUs) |
Share-based Compensation Award, Tranche Two
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Period of option vesting
 
2 years 
 
 
Market Condition Restricted Stock Units (RSUs) |
Share-based Compensation Award, Tranche Three
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Period of option vesting
 
3 years 
 
 
Employee stock purchase plan awards
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Number of shares included in equity incentive pool
 
1,500,000 
 
 
Fair value per unit
 
$ 1.30 
$ 1.93 
$ 1.86 
Number of shares issued during period
 
77,914 
111,832 
145,733 
Percentage of trading price of stock
 
85.00% 
 
 
Offering period under ESPP
 
6 months 
 
 
Percentage discount on the stock price
 
15.00% 
 
 
Intrinsic value of stock purchased pursuant to ESPP
 
100,000 
100,000 
200,000 
Incentive Plan
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Number of shares included in equity incentive pool
 
6,400,000 
 
 
Deferred Compensation, Share-based Payments [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Deferred Compensation Arrangement with Individual, Compensation Expense
 
2,800,000 
1,400,000 
 
Annual Incentive Bonuses, 2016 Performance Period [Member] |
Deferred Compensation, Share-based Payments [Member] |
Stock Compensation Plan [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Deferred Compensation Arrangement with Individual, Shares Issued
 
302,326 
 
 
Director [Member] |
Deferred Compensation, Share-based Payments [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Deferred Compensation Arrangement with Individual, Shares Issued
 
28,732 
 
 
Deferred Compensation Arrangement with Individual, Compensation Expense
 
258,000 
 
 
Deferred Compensation Arrangement with Individual, Fair Value of Shares Issued
 
$ 164,000 
 
 
Stock Plans (Stock Option Activity) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Number of Shares
 
 
Balance at December 31, 2016
414,000 
 
Granted
50,000 
0 
Cancelled
(103,000)
 
Balance at December 31, 2017
361,000 
414,000 
Vested or expected to vest at December 31, 2017
354,000 
 
Exercisable at December 31, 2017
220,000 
 
Weighted Average Exercise Price
 
 
Balance at December 31, 2016
$ 8.97 
 
Granted
$ 5.56 
 
Cancelled
$ 10.56 
 
Balance at December 31, 2017
$ 8.05 
$ 8.97 
Vested or expected to vest at December 31, 2017
$ 8.09 
 
Exercisable at December 31, 2017
$ 9.20 
 
Additional Disclosures
 
 
Balance at period end, Weighted Average Remaining Contractual Term (in years)
5 years 8 months 20 days 
 
Balance at period end, Aggregate Intrinsic Value
$ 67 
 
Vested or expected to vest, Weighted Average Contractual Term (in years)
5 years 8 months 5 days 
 
Vested or expected to vest, Aggregate Intrinsic Value
65 
 
Exercisable, Weighted Average Contractual Term (in years)
4 years 4 months 20 days 
 
Exercisable, Aggregate Intrinsic Value
$ 30 
 
Stock Plans (Fair Value of Awards Weighted-Average Assumptions) (Details) (Employee Stock Option)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2015
Employee Stock Option
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Expected dividends
0.00% 
0.00% 
Expected volatility, minimum
58.00% 
60.00% 
Expected volatility, maximum
59.00% 
61.00% 
Expected volatility weighted average
59.00% 
60.00% 
Risk-free interest rate
1.90% 
1.60% 
Expected life (in years)
5 years 6 months 
4 years 10 months 15 days 
Stock Plans (Restricted Stock Award Activity) (Details) (Unvested restricted stock awards, USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Unvested restricted stock awards
 
Shares
 
Nonvested at December 31, 2016
88 
Vested
(53)
Forfeited
(9)
Nonvested at December 31, 2017
26 
Weighted Average Grant Date Fair Value
 
Nonvested at December 31, 2016
$ 13.37 
Vested
$ 12.58 
Forfeited
$ 14.57 
Nonvested at December 31, 2017
$ 14.57 
Stock Plans (Restricted Stock Unit Awards Activity) (Details) (Unvested restricted stock unit awards, USD $)
6 Months Ended 12 Months Ended
Jun. 30, 2014
Dec. 31, 2017
Dec. 31, 2016
Unvested restricted stock unit awards
 
 
 
Shares
 
 
 
Nonvested at December 31, 2016
 
1,748,000 
 
Granted
 
1,796,000 
 
Released
 
(540,000)
 
Forfeited
 
(354,000)
 
Nonvested at December 31, 2017
 
2,650,000 
1,748,000 
Weighted Average Grant Date Fair Value
 
 
 
Nonvested at December 31, 2016
 
$ 6.40 
 
Granted
$ 7.02 
$ 5.89 
$ 6.00 
Released
 
$ 5.86 
 
Forfeited
 
$ 6.45 
 
Nonvested at December 31, 2017
 
$ 6.16 
$ 6.40 
Stock Plans (Stock-based Compensation Expense) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
$ 9,037 
$ 5,364 
$ 3,946 
Cost of revenue
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
1,070 
854 
644 
Selling, general and administrative
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
6,606 
3,674 
2,502 
Research and development
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
1,361 
836 
800 
Employee Stock Option
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
237 
171 
232 
Unvested restricted stock unit awards
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
5,186 
3,215 
1,462 
Unvested restricted stock unit awards |
Service-based
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
3,268 
2,243 
1,362 
Unvested restricted stock unit awards |
Performance objectives
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
379 
103 
(28)
Unvested restricted stock unit awards |
Market-condition
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
1,539 
869 
128 
Unvested restricted stock awards
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
416 
388 
1,974 
Employee Stock Purchase Plan
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
114 
231 
278 
Bonus and director fees to be paid in stock awards
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
2,826 
1,359 
0 
Director Fee Stock [Member]
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
$ 258 
$ 0 
$ 0 
Stock Plans (Market-Condition PSU Award Fair Value Assumptions) (Details) (PSUs, Market Condition Restricted Stock Units (RSUs))
12 Months Ended
Dec. 31, 2017
Dec. 31, 2015
PSUs |
Market Condition Restricted Stock Units (RSUs)
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Expected dividends
0.00% 
0.00% 
Expected volatility
53.00% 
62.00% 
Risk-free interest rate
1.55% 
1.07% 
Expected life (in years)
2 years 10 months 
3 years 
Stock Plans (Fair Value of "Look Back" Option for ESPP Weighted-Average Assumptions) (Details) (Employee Stock Purchase Plan, USD $)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Employee Stock Purchase Plan
 
 
 
Schedule of stock options and employee stock purchase plan weighted-average assumptions
 
 
 
Expected dividends
0.00% 
0.00% 
0.00% 
Expected volatility
34.00% 
57.00% 
57.00% 
Risk-free interest rate
0.89% 
0.43% 
0.29% 
Expected life (in years)
5 months 12 days 
6 months 
6 months 
Fair value per unit
$ 1.30 
$ 1.93 
$ 1.86 
Stock Plans (Reservation of Shares for Issuance) (Details)
Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Total reservation of shares under stock compensation plans
3,755,930 
2013 Omnibus Equity Incentive Plan
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Total reservation of shares under stock compensation plans
3,138,321 
2004 Employee Stock Purchase Plan
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Total reservation of shares under stock compensation plans
617,609 
Shelf Registration Statement (Textual) (Details) (USD $)
Share data in Thousands, except Per Share data, unless otherwise specified
12 Months Ended 12 Months Ended 0 Months Ended 2 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Nov. 16, 2017
Dec. 31, 2016
Common Stock
Dec. 31, 2015
Common Stock
Apr. 23, 2015
Cowen and Company
Equity Offering Sales Agreement under Shelf Registration Statement
Jun. 11, 2015
Cowen and Company
Equity Offering Sales Agreement under Shelf Registration Statement
Jun. 11, 2015
Cowen and Company
Equity Offering Sales Agreement under Shelf Registration Statement
Weighted Average
Stock Offering [Line Items]
 
 
 
 
 
 
 
 
 
Aggregate amount of common stock
 
 
 
$ 125,000,000 
 
 
 
 
 
Aggregate shares of common stock
 
 
 
 
 
 
10,000,000 
 
 
Sales commission percentage
 
 
 
 
 
 
3.00% 
 
 
Proceeds from issuance of common stock, net
 
 
9,564,000 
 
 
183,000 
 
10,000,000 
 
Proceeds from issuance of common stock, net, shares
 
 
 
 
1,830 
1,831 
 
 
 
Average price per share
 
 
 
 
 
 
 
 
$ 5.46 
Proceeds from sale of common stock, net of offering costs
0 
0 
9,564,000 
 
 
 
 
9,600,000 
 
Offering costs
 
 
 
 
 
 
 
$ 400,000 
 
Income Taxes - Income (Loss) Before Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Income Tax Disclosure [Abstract]
 
 
 
United States
$ (49,167)
$ (38,319)
$ (35,074)
Foreign
9,695 
18,759 
17,344 
Loss before income taxes
$ (39,472)
$ (19,560)
$ (17,730)
Income Taxes Income Taxes (Textual) (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Income Taxes [Line Items]
 
 
 
 
Provisional decrease to deferred tax assets and liabilities
 
$ 34,700,000 
 
 
Adjustment to valuation allowance
 
34,700,000 
 
 
Provisional amount of additional U.S. taxable income
 
8,400,000 
 
 
Valuation allowance
78,366,000 
61,403,000 
78,366,000 
 
Release of tax valuation allowance
 
17,000,000 
 
 
Net operating loss carryforwards, federal
 
219,000,000 
 
 
Net operating loss carryforwards, state
 
37,700,000 
 
 
Decrease in foreign tax
 
 
600,000 
700,000 
Benefit of the tax holiday on net income per share (diluted)
 
 
$ 0.02 
$ 0.02 
Deferred tax liability, undistributed foreign earnings
4,879,000 
4,879,000 
4,879,000 
 
Unremitted earnings of a foreign subsidiary no longer considered indefinitely reinvested
 
97,600,000 
 
 
Foreign taxes on unremitted earnings
1,200,000 
0 
1,204,000 
2,100,000 
Unremitted earnings from foreign subsidiaries
 
11,800,000.0 
 
 
Deferred tax assets included in non-current assets
400,000 
400,000 
400,000 
 
Unrecognized tax benefits, reduction in deferred tax assets
 
16,000,000 
 
 
Unrecognized tax benefits, reduction to valuation allowance related to reduction in deferred tax assets
 
16,000,000 
 
 
Interest and penalties
 
29,000 
148,000 
119,000 
Federal
 
 
 
 
Income Taxes [Line Items]
 
 
 
 
Tax credit carryforwards, research and development
 
7,000,000 
 
 
State
 
 
 
 
Income Taxes [Line Items]
 
 
 
 
Tax credit carryforwards, research and development
 
$ 9,000,000 
 
 
Income Taxes - Income Taxes Provision (Benefit) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Income Tax Disclosure [Abstract]
 
 
 
Federal, current
$ 0 
$ 0 
$ 0 
Federal, deferred
18,646 
(11,360)
(4,297)
Federal, total
18,646 
(11,360)
(4,297)
State, current
5 
7 
6 
State, deferred
231 
923 
62 
State, total
236 
930 
68 
Foreign, current
3,155 
3,742 
4,930 
Foreign, deferred
(1,418)
561 
8 
Foreign, total
1,737 
4,303 
4,938 
Valuation allowance
(16,962)
10,272 
3,894 
Tax provision
$ 3,657 
$ 4,145 
$ 4,603 
Income Taxes - Reconciliation (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Income Tax Disclosure [Abstract]
 
 
 
 
Taxes at federal statutory rate
 
$ (13,420)
$ (6,650)
$ (6,028)
State taxes, net of federal benefit
 
(236)
(208)
(236)
Effect of tax rate differential for foreign subsidiary
 
(1,646)
(2,985)
(2,641)
Valuation allowance, including tax benefits of stock activity
 
(16,962)
10,272 
3,894 
Tax rate change
 
34,732 
0 
0 
Foreign taxes on unremitted earnings
1,200 
0 
1,204 
2,100 
Stock-based compensation
 
224 
441 
134 
Foreign withholding taxes
 
295 
260 
180 
Return to provision adjustments
 
(2,931)
1,062 
1,131 
Subpart F income inclusion
 
2,998 
906 
5,914 
SEC settlement penalty
 
959 
0 
0 
Business combination
 
(1,914)
0 
0 
Other
 
1,558 
(157)
170 
Tax provision
 
$ 3,657 
$ 4,145 
$ 4,603 
Income Taxes - Deferred Tax Assets and Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Deferred tax assets:
 
 
Tax loss carryforwards
$ 50,183 
$ 62,994 
Tax credit carryforwards
792 
19 
Uniform capitalization, contract and inventory related reserves
805 
598 
Accrued vacation
301 
514 
Stock-based compensation
2,029 
2,130 
Capitalized research and development
3,043 
5,532 
Tax basis depreciation less book depreciation
1,523 
1,661 
Intangible assets
0 
1,354 
Deferred revenue
175 
33 
Accrued foreign taxes
1,044 
1,263 
Other
2,369 
2,523 
Total
62,264 
78,621 
Deferred tax liabilities:
 
 
Inventory deduction
(587)
(369)
Pension assets
(1,326)
(1,733)
Allowance for doubtful accounts
(534)
(677)
Withholding tax on undistributed earnings of foreign subsidiary
(4,879)
(4,879)
Unrealized gains and losses
(351)
(733)
Intangible assets
(1,514)
0 
Total
(9,191)
(8,391)
Net deferred tax assets before valuation allowance
53,073 
70,230 
Valuation allowance
(61,403)
(78,366)
Net deferred tax liabilities
$ (8,330)
$ (8,136)
Income Taxes - Reconciliation of Unrecognized Tax Benefit (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
Beginning Balance
$ 15,579 
$ 14,014 
Increase in current period positions
1,081 
1,596 
Increase in prior period positions
 
116 
Decrease in prior period positions
(518)
(147)
Ending Balance
$ 16,142 
$ 15,579 
Leases (Future annual minimum rental commitments) (Details) (USD $)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Leases [Abstract]
 
 
 
Rental expense
$ 4,300,000 
$ 4,100,000 
$ 5,000,000 
Future annual minimum rental commitments
 
 
 
2018
3,824,000 
 
 
2019
3,850,000 
 
 
2020
3,099,000 
 
 
2021
2,124,000 
 
 
2022
2,202,000 
 
 
Thereafter
4,033,000 
 
 
Total
$ 19,132,000 
 
 
Pension and Other Postretirement Benefit Plans (Textual) (Details) (USD $)
8 Months Ended 12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2017
Domestic Plan
Dec. 31, 2016
Domestic Plan
Dec. 31, 2015
Domestic Plan
Dec. 31, 2017
Swiss Pension Plan
Dec. 31, 2016
Swiss Pension Plan
Dec. 31, 2017
Korea Defined Benefit Plan
Dec. 31, 2017
Postemployment Retirement Benefits
Domestic Plan
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
 
 
 
 
 
Employer contributions
$ 6,000 
 
 
 
 
$ 615,000 
$ 596,000 
 
 
Percentage of total contributions made by employees
 
 
 
 
 
45.00% 
 
 
 
Pension asset
11,712,000 
8,887,000 
 
 
 
 
 
 
 
Accumulated benefit obligation
 
 
 
 
 
29,900,000 
28,900,000 
 
 
Estimated future employer contributions in 2018
8,000 
 
 
 
 
600,000 
 
 
 
Service period (in years)
 
 
 
 
 
 
 
1 year 
 
Company matching contribution percentage
 
 
 
 
 
 
 
 
50.00% 
Matching contribution, contributory employee savings plan, amount
 
 
$ 500,000 
$ 500,000 
$ 600,000 
 
 
 
 
Pension and Other Postretirement Benefit Plans (Changes in the pension benefit obligation and plan assets) (Details) (USD $)
In Thousands, unless otherwise specified
8 Months Ended 12 Months Ended 8 Months Ended
Dec. 31, 2017
Dec. 31, 2017
Swiss Pension Plan
Dec. 31, 2016
Swiss Pension Plan
Dec. 31, 2015
Swiss Pension Plan
Dec. 31, 2017
Korea Defined Benefit Plan
Dec. 31, 2017
Korea Defined Benefit Plan
Change in benefit obligation:
 
 
 
 
 
 
Benefit obligation at beginning of year
 
$ 30,257 
$ 33,153 
 
 
$ 3,360 
Service cost
 
982 
1,171 
958 
361 
361 
Interest cost
 
230 
246 
332 
55 
55 
Plan participant contributions
 
527 
509 
 
 
 
Benefits paid
 
(1,729)
(1,570)
 
 
(212)
Actuarial (gain) loss
 
119 
(2,425)
 
 
174 
Effect of foreign currency translation
 
1,330 
(827)
 
 
228 
Projected benefit obligation at end of year
 
31,716 
30,257 
33,153 
3,966 
3,966 
Changes in plan assets:
 
 
 
 
 
 
Fair value of plan assets at beginning of year
 
39,144 
39,002 
 
 
 
Actual return on plan assets
 
3,131 
1,657 
 
 
 
Company contributions
6 
615 
596 
 
 
 
Plan participant contributions
 
527 
509 
 
 
 
Benefits paid
 
(1,729)
(1,570)
 
 
 
Effect of foreign currency translation
 
1,740 
(1,050)
 
 
 
Fair value of plan assets at end of year
 
43,428 
39,144 
39,002 
24 
24 
Funded status at end of year
 
$ (11,712)
$ (8,887)
 
$ 3,942 
$ 3,942 
Pension and Other Postretirement Benefit Plans (Amounts recognized in balance sheet) (Details) (Swiss Pension Plan, USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Swiss Pension Plan
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net long-term pension asset
$ 11,712 
$ 8,887 
 
Accumulated other comprehensive loss consists of the following:
 
 
 
Net prior service cost
782 
779 
 
Net loss
1,391 
3,113 
 
Accumulated other comprehensive loss before taxes
2,173 
3,892 
 
Actuarial loss before taxes
$ 119 
$ (2,425)
$ 1,262 
Pension and Other Postretirement Benefit Plans (Net periodic pension cost (income) and other amounts recognized in other comprehensive income (loss) before taxes) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended 8 Months Ended 12 Months Ended
Dec. 31, 2017
Swiss Pension Plan
Dec. 31, 2016
Swiss Pension Plan
Dec. 31, 2015
Swiss Pension Plan
Dec. 31, 2017
Korea Defined Benefit Plan
Dec. 31, 2017
Korea Defined Benefit Plan
Dec. 31, 2017
Korea Defined Benefit Plan
Components of net periodic pension cost:
 
 
 
 
 
 
Service cost
$ 982 
$ 1,171 
$ 958 
$ 361 
$ 361 
 
Interest cost
230 
246 
332 
55 
55 
 
Expected return on plan assets
(1,009)
(1,175)
(1,551)
 
 
 
Prior service cost amortization
151 
150 
136 
 
 
 
Deferred loss amortization
0 
243 
45 
 
 
 
Settlement cost
0 
0 
492 
 
 
 
Net periodic pension cost
354 
635 
412 
416 
 
 
Other amounts recognized in other comprehensive income (loss) before income taxes are as follows:
 
 
 
 
 
 
Prior service cost amortization
(151)
(150)
(136)
 
 
 
(Gain) loss on value of plan assets
(2,118)
(476)
1,131 
 
 
 
Actuarial loss before taxes
119 
(2,425)
1,262 
(174)
 
174 
Plan change
0 
0 
83 
 
 
 
Settlement
0 
0 
(492)
 
 
 
Deferred loss amortization
0 
(243)
(45)
 
 
 
Total (income) loss recognized in other comprehensive income, before taxes
(2,150)
(3,294)
1,803 
174 
 
 
Total (income) recognized in net periodic pension cost and other comprehensive income, before taxes
$ (1,796)
$ (2,659)
$ 2,215 
$ 590 
 
 
Pension and Other Postretirement Benefit Plans (Assumptions used to determine the benefit obligation and net periodic benefit cost) (Details)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Swiss Pension Plan
 
 
Weighted-average assumptions used to determine benefit obligation:
 
 
Discount rate
0.75% 
0.75% 
Rate of compensation increase
2.00% 
2.00% 
Weighted-average assumptions used to determine net periodic pension cost:
 
 
Discount rate
0.75% 
0.75% 
Expected long-term return on plan assets
2.50% 
3.00% 
Rate of compensation increase
2.00% 
2.50% 
Percentage of the fair value of total plan assets held in each major category of plan assets:
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
100.00% 
100.00% 
Swiss Pension Plan |
Equity securities
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
33.00% 
29.00% 
Swiss Pension Plan |
Debt securities
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
21.00% 
23.00% 
Swiss Pension Plan |
Real estate investment funds
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
39.00% 
43.00% 
Swiss Pension Plan |
Other
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
7.00% 
5.00% 
Korea Defined Benefit Plan
 
 
Weighted-average assumptions used to determine benefit obligation:
 
 
Discount rate
2.98% 
 
Rate of compensation increase
6.11% 
 
Pension and Other Postretirement Benefit Plans (Plan assets) (Details) (Swiss Pension Plan)
Dec. 31, 2017
Dec. 31, 2016
Defined Benefit Plan Disclosure [Line Items]
 
 
Expected future long-term rate of return on plan assets, percent
3.00% 
2.50% 
Swiss Bonds
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
14.00% 
 
Historical asset rates of return (percentage)
(0.69%)
(1.11%)
Non Swiss Hedged Bonds
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
10.00% 
 
Swiss Equities
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
10.00% 
 
Historical asset rates of return (percentage)
3.50% 
3.00% 
Global Equities
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
15.00% 
 
Hedged Foreign Bonds
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Historical asset rates of return (percentage)
(0.43%)
(1.20%)
Real Estate
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
40.00% 
 
Historical asset rates of return (percentage)
2.54% 
2.10% 
Unhedged Global Equities
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Historical asset rates of return (percentage)
5.38% 
4.80% 
Emerging Market Equities
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
5.00% 
 
Historical asset rates of return (percentage)
5.79% 
5.00% 
Alternative Investments
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
4.00% 
 
Historical asset rates of return (percentage)
2.52% 
1.80% 
Cash held in Swiss Franc, Euro and USD
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
2.00% 
 
Historical asset rates of return (percentage)
0.27% 
(0.20%)
Pension and Other Postretirement Benefit Plans (Fair values of the plans assets) (Details) (Swiss Pension Plan, USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
$ 43,428 
$ 39,144 
$ 39,002 
Active Market Prices (Level 1)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
25,269 
21,028 
 
Significant Observable Inputs (Level 2)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
1,152 
1,082 
 
Significant Unobservable Inputs (Level 3)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
0 
0 
 
Cash held in Swiss Franc, Euro and USD
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
1,670 
705 
 
Cash held in Swiss Franc, Euro and USD |
Active Market Prices (Level 1)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
1,670 
705 
 
Cash held in Swiss Franc, Euro and USD |
Significant Observable Inputs (Level 2)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
0 
0 
 
Cash held in Swiss Franc, Euro and USD |
Significant Unobservable Inputs (Level 3)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
0 
0 
 
Equity securities
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
15,487 
12,534 
 
Equity securities |
Active Market Prices (Level 1)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
14,364 
11,481 
 
Equity securities |
Significant Observable Inputs (Level 2)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
1,123 
1,053 
 
Equity securities |
Significant Unobservable Inputs (Level 3)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
0 
0 
 
Fixed income / Bond securities:
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
9,235 
8,842 
 
Fixed income / Bond securities: |
Active Market Prices (Level 1)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
9,235 
8,842 
 
Fixed income / Bond securities: |
Significant Observable Inputs (Level 2)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
0 
0 
 
Fixed income / Bond securities: |
Significant Unobservable Inputs (Level 3)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
0 
0 
 
Other assets (accounts receivable, assets at real estate management company)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
29 
29 
 
Other assets (accounts receivable, assets at real estate management company) |
Active Market Prices (Level 1)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
0 
0 
 
Other assets (accounts receivable, assets at real estate management company) |
Significant Observable Inputs (Level 2)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
29 
29 
 
Other assets (accounts receivable, assets at real estate management company) |
Significant Unobservable Inputs (Level 3)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
0 
0 
 
Investments measured at net asset value
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
$ 17,007 1
$ 17,034 1
 
Pension and Other Postretirement Benefit Plans (Expected benefit payments) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Swiss Pension Plan
 
Defined Benefit Plan Disclosure [Line Items]
 
2018
$ 1,349 
2019
1,316 
2020
1,256 
2021
1,294 
2022
1,452 
Years 2023 through 2027
7,094 
Total
13,761 
Korea Defined Benefit Plan
 
Defined Benefit Plan Disclosure [Line Items]
 
2018
332 
2019
332 
2020
370 
2021
338 
2022
265 
Years 2023 through 2027
1,237 
Total
$ 2,874 
Pension and Other Postretirement Benefit Plans (Contributory employee savings plan) (Details) (Domestic Plan, USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Domestic Plan
 
 
 
Defined Contribution Plan Disclosure [Line Items]
 
 
 
Matching contribution, contributory employee savings plan, amount
$ 0.5 
$ 0.5 
$ 0.6 
Unaudited Quarterly Financial Information (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Operating Income (Loss) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 30,763,000 
$ 35,816,000 
$ 37,103,000 
$ 26,686,000 
$ 26,400,000 
$ 25,506,000 
$ 34,135,000 
$ 35,203,000 
$ 130,368,000 1
$ 121,244,000 1
$ 167,372,000 1
Gross profit
7,381,000 
7,396,000 
7,827,000 
6,191,000 
5,708,000 
7,628,000 
9,981,000 
9,653,000 
28,795,000 
32,970,000 
50,962,000 
Net loss
(8,752,000)2
(13,860,000)3
(10,118,000)4
(10,399,000)5
(12,169,000)6
(6,855,000)7
2,167,000 8
(6,848,000)9
(43,129,000)
(23,705,000)
(22,333,000)
Basic and diluted net (loss) income per share
$ (0.24)
$ (0.37)
$ (0.28)
$ (0.32)
$ (0.38)
$ (0.21)
$ 0.07 
$ (0.22)
$ (1.22)
$ (0.74)
$ (0.73)
Stock-based compensation expense
2,500,000 
2,800,000 
2,300,000 
1,500,000 
1,600,000 
1,100,000 
1,500,000 
1,200,000 
9,037,000 
5,364,000 
3,946,000 
Acquisition related costs
 
 
1,800,000 
 
 
 
 
 
 
 
 
Gain on sale of product line
 
 
 
 
 
 
6,700,000 
 
0 
6,657,000 
0 
Release of tax liability
 
 
 
 
 
 
1,500,000 
 
0 
(1,518,000)
0 
Impairment of assets
 
 
 
 
1,200,000 
 
 
 
240,000 
1,389,000 
0 
Foreign taxes on unremitted earnings
 
 
 
 
1,200,000 
 
 
 
0 
1,204,000 
2,100,000 
Restructuring and exit costs
 
1,300,000 
 
1,000,000 
 
 
 
 
2,282,000 
297,000 
2,512,000 
SEC and FCPA legal and settlement costs
 
$ 3,000,000 
 
 
 
 
 
 
 
 
 
Schedule II - Valuation and Qualifying Accounts (Details) (Allowance for Doubtful Accounts:, USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Allowance for Doubtful Accounts:
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at the Beginning of the Year ($)
$ 26 
$ 252 
$ 143 
Charged to Expense ($)
10 
(106)
304 
Acquisitions/ Transfers and Other ($)
0 
0 
1 
Write-offs Net of Recoveries ($)
0 
(120)
(196)
Balance at the End of the Year ($)
$ 36 
$ 26 
$ 252