ADTRAN INC, 10-Q filed on 8/3/2018
Quarterly Report
v3.10.0.1
Document and Entity Information - shares
6 Months Ended
Jun. 30, 2018
Jul. 20, 2018
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Jun. 30, 2018  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q2  
Trading Symbol ADTN  
Entity Registrant Name ADTRAN INC  
Entity Central Index Key 0000926282  
Current Fiscal Year End Date --12-31  
Entity Filer Category Large Accelerated Filer  
Entity Common Stock, Shares Outstanding   47,739,170
v3.10.0.1
Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Current Assets    
Cash and cash equivalents $ 100,319 $ 86,433
Short-term investments 6,069 16,129
Accounts receivable, less allowance for doubtful accounts of $— at June 30, 2018 and December 31, 2017 76,135 144,150
Other receivables 28,163 26,578
Inventory, net 120,537 122,542
Prepaid expenses and other current assets 9,464 17,282
Total Current Assets 340,687 413,114
Property, plant and equipment, net 82,910 85,079
Deferred tax assets, net 35,615 23,428
Goodwill 3,492 3,492
Other assets 32,429 13,725
Long-term investments 144,437 130,256
Total Assets 639,570 669,094
Current Liabilities    
Accounts payable 60,150 60,632
Unearned revenue 14,307 13,070
Accrued expenses 14,785 13,232
Accrued wages and benefits 14,913 15,948
Income tax payable 11,948 3,936
Total Current Liabilities 116,103 106,818
Non-current unearned revenue 3,639 4,556
Other non-current liabilities 34,601 34,209
Bonds payable 25,600 25,600
Total Liabilities 179,943 171,183
Commitments and contingencies (see Note 15)
Stockholders’ Equity    
Common stock, par value $0.01 per share; 200,000 shares authorized; 79,652 shares issued and 47,733 shares outstanding at June 30, 2018 and 79,652 shares issued and 48,485 shares outstanding at December 31, 2017 797 797
Additional paid-in capital 264,118 260,515
Accumulated other comprehensive loss (9,118) (3,295)
Retained earnings 897,586 922,178
Less treasury stock at cost: 31,919 and 31,167 shares at June 30, 2018 and December 31, 2017, respectively (693,756) (682,284)
Total Stockholders’ Equity 459,627 497,911
Total Liabilities and Stockholders’ Equity $ 639,570 $ 669,094
v3.10.0.1
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Jun. 30, 2018
Dec. 31, 2017
Statement Of Financial Position [Abstract]    
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 79,652,000 79,652,000
Common stock, shares outstanding 47,733,000 48,485,000
Treasury stock, shares 31,919,000 31,167,000
v3.10.0.1
Consolidated Statements of Income (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Sales        
Total Sales $ 128,048 $ 184,673 $ 248,854 $ 354,952
Cost of Sales        
Total Cost of Sales 78,052 100,047 159,125 196,617
Gross Profit 49,996 84,626 89,729 158,335
Selling, general and administrative expenses 32,080 34,706 65,611 69,495
Research and development expenses 30,729 33,557 63,578 65,528
Operating Income (Loss) (12,813) 16,363 (39,460) 23,312
Interest and dividend income 913 972 1,779 1,905
Interest expense (132) (137) (264) (278)
Net realized investment gain 990 1,390 893 1,860
Other expense, net (217) (719) (274) (585)
Gain on bargain purchase of a business     11,322  
Income (Loss) Before Provision for Income Taxes (11,259) 17,869 (26,004) 26,214
(Provision) benefit for income taxes 3,589 (5,468) 7,520 (7,162)
Net Income (Loss) $ (7,670) $ 12,401 $ (18,484) $ 19,052
Weighted average shares outstanding – basic 47,856 48,036 48,043 48,232
Weighted average shares outstanding – diluted 47,902 48,413 48,091 48,675
Earnings (loss) per common share – basic $ (0.16) $ 0.26 $ (0.38) $ 0.40
Earnings (loss) per common share – diluted (0.16) 0.26 (0.38) 0.39
Dividend per share $ 0.09 $ 0.09 $ 0.18 $ 0.18
Product [Member]        
Sales        
Total Sales $ 115,063 $ 155,543 $ 220,316 $ 299,140
Cost of Sales        
Total Cost of Sales 69,629 79,663 138,241 156,327
Service [Member]        
Sales        
Total Sales 12,985 29,130 28,538 55,812
Cost of Sales        
Total Cost of Sales $ 8,423 $ 20,384 $ 20,884 $ 40,290
v3.10.0.1
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Statement Of Income And Comprehensive Income [Abstract]        
Net Income (Loss) $ (7,670) $ 12,401 $ (18,484) $ 19,052
Other Comprehensive Income (Loss), net of tax        
Net unrealized gains (losses) on available-for-sale securities 104 373 (3,308) 1,708
Net unrealized losses on cash flow hedges   (417)   (338)
Defined benefit plan adjustments 5 86 67 141
Foreign currency translation (3,424) 2,619 (2,582) 3,861
Other Comprehensive Income (Loss), net of tax (3,315) 2,661 (5,823) 5,372
Comprehensive Income (Loss), net of tax $ (10,985) $ 15,062 $ (24,307) $ 24,424
v3.10.0.1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Cash flows from operating activities:    
Net Income (Loss) $ (18,484) $ 19,052
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Depreciation and amortization 7,526 8,377
Amortization of net premium on available-for-sale investments 20 238
Net realized gain on long-term investments (893) (1,860)
Net (gain) loss on disposal of property, plant and equipment 68 (11)
Gain on bargain purchase of a business (11,322)  
Stock-based compensation expense 3,603 3,739
Deferred income taxes (16,384) (2,772)
Changes in operating assets and liabilities:    
Accounts receivable, net 66,931 13,911
Other receivables 9 571
Inventory 2,063 (7,547)
Prepaid expenses and other assets 10,157 (9,853)
Accounts payable 683 (10,910)
Accrued expenses and other liabilities 2,008 (2,629)
Income tax payable 6,945 10,273
Net cash provided by operating activities 52,930 20,579
Cash flows from investing activities:    
Purchases of property, plant and equipment (4,183) (7,509)
Proceeds from disposals of property, plant and equipment   16
Proceeds from sales and maturities of available-for-sale investments 86,436 81,891
Purchases of available-for-sale investments (89,801) (65,140)
Acquisition of business (7,806)  
Net cash provided by (used in) investing activities (15,354) 9,258
Cash flows from financing activities:    
Proceeds from stock option exercises 369 1,722
Purchases of treasury stock (12,774) (17,311)
Dividend payments (8,679) (8,719)
Net cash used in financing activities (21,084) (24,308)
Net increase in cash and cash equivalents 16,492 5,529
Effect of exchange rate changes (2,606) 3,374
Cash and cash equivalents, beginning of period 86,433 79,895
Cash and cash equivalents, end of period 100,319 88,798
Supplemental disclosure of non-cash investing activities:    
Purchases of property, plant and equipment included in accounts payable $ 209 $ 454
v3.10.0.1
Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements of ADTRAN®, Inc. and its subsidiaries (ADTRAN) have been prepared pursuant to the rules and regulations for reporting on Quarterly Reports on Form 10-Q. Accordingly, certain information and notes required by generally accepted accounting principles for complete financial statements are not included herein. The December 31, 2017 Consolidated Balance Sheet is derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States.

In the opinion of management, all adjustments necessary to fairly state these interim statements have been recorded and are of a normal and recurring nature. The results of operations for an interim period are not necessarily indicative of the results for the full year. The interim statements should be read in conjunction with the financial statements and notes thereto included in ADTRAN’s Annual Report on Form 10-K for the year ended December 31, 2017, filed on February 23, 2018 with the SEC.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Our more significant estimates include the obsolete and excess inventory reserves, warranty reserves, customer rebates, determination of the deferred revenue components of multiple element sales agreements, estimated costs to complete obligations associated with deferred revenues, estimated income tax provision and income tax contingencies, the fair value of stock-based compensation, impairment of goodwill, valuation and estimated lives of intangible assets, estimated pension liability, fair value of investments, and the evaluation of other-than-temporary declines in the value of investments. Actual amounts could differ significantly from these estimates.

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). ASU 2016-02 requires an entity to recognize lease assets and lease liabilities on the balance sheet and to disclose key information about the entity's leasing arrangements. Subsequently, in July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, which clarified certain aspects of ASU 2016-02. ASU 2016-02 and ASU 2018-10 are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. A modified retrospective approach is required. We anticipate the adoption of these ASUs will have a material increase in the assets and liabilities of our consolidated balance sheets; however, we do not believe adoption will have a material effect on our results of operations. We believe the most significant effect relates to our accounting for operating leases for office space and equipment.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires the measurement and recognition of expected credit losses for financial instruments held at amortized cost. ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the effect ASU 2016-13 will have on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 simplifies the measurement of goodwill by eliminating step 2 of the goodwill impairment test. Under ASU 2017-04, entities will be required to compare the fair value of a reporting unit to its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 is effective for annual or interim impairment tests performed in fiscal years beginning after December 15, 2019, with early adoption permitted for annual or interim impairment tests performed on testing dates after January 1, 2017. The amendments should be applied prospectively. We are currently evaluating whether to early adopt ASU 2017-04, but we do not expect it will have a material effect on our consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. ASU 2017-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the effect ASU 2017-12 will have on our consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Comprehensive Income. ASU 2018-02 allows for an optional reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. ASU 2018-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. We are currently evaluating whether to reclassify stranded tax effects related to the Tax Cuts and Jobs Act of 2017, but we do not expect ASU 2018-02 will have a material effect on our consolidated financial statements.

During 2018, we adopted the following accounting standards, which had the following effects on our consolidated financial statements:

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. In August 2015, the FASB issued ASU 2015-14, which deferred the effective date of ASU 2014-09 to fiscal years beginning after December 31, 2017, and interim periods within those fiscal years, with early adoption permitted for reporting periods beginning after December 15, 2016. Subsequently, the FASB issued ASUs in 2016 containing implementation guidance related to ASU 2014-09, including: ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations; ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which is intended to clarify two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance; ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which contains certain provisions and practical expedients in response to identified implementation issues; and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, which is intended to clarify the Codification and/or to correct unintended application of guidance. ASU 2014-09 allows for either full retrospective or modified retrospective adoption. We adopted ASU 2014-09 and the related ASUs on January 1, 2018 using the modified retrospective method, which was applied to all contracts on the date of initial adoption.

These ASUs primarily affected our network implementation service revenue performance obligations and contract costs. We are using the “output method” to measure network implementation services progress, which 1) accelerates revenue recognition for certain performance obligations related to service revenue arrangements that were previously deferred until customer acceptance and 2) requires capitalization and amortization of the incremental costs of obtaining a contract as described below. 

 

In connection with the adoption of the new revenue standard, effective January 1, 2018, we adopted ASC 340-40, Other Assets and Deferred Costs – Contracts with Customers, with respect to capitalization and amortization of incremental costs of obtaining a contract. As a result, certain costs of obtaining a contract, including sales commissions, will be capitalized, as the guidance requires the capitalization of all incremental costs incurred to obtain a contract with a customer that it would not have incurred if the contract had not been obtained, provided the costs are recoverable. The primary effect was the capitalization of certain sales commissions for our extended maintenance and support contracts in excess of one year and amortization of those costs over the period that the related revenue is recognized.

The cumulative effect of the changes made to our Consolidated Balance Sheet on January 1, 2018 for the adoption of ASU 2014-09 and the related ASUs was as follows:

 

(In thousands)

 

Balance at December 31, 2017

 

 

Adjustments due to ASU 2014-09

 

 

Balance at January 1, 2018

 

Other receivables

 

$

26,578

 

 

 

374

 

 

$

26,952

 

Deferred tax assets, net

 

$

23,428

 

 

 

(96

)

 

$

23,332

 

Retained earnings

 

$

922,178

 

 

 

278

 

 

$

922,456

 

The effect of the adoption of ASU 2014-09 and the related ASUs on our financial statements was as follows:

 

 

 

For the three months ended June 30, 2018

 

(In thousands)

 

As Reported

 

 

Balances Without Adoption of ASC 606

 

 

Effect of Adoption of ASC 606

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

115,063

 

 

 

115,437

 

 

$

(374

)

Services

 

$

12,985

 

 

 

13,430

 

 

$

(445

)

Cost of Sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

69,629

 

 

 

70,003

 

 

$

(374

)

Services

 

$

8,423

 

 

 

8,772

 

 

$

(349

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before benefit for income taxes

 

$

(11,259

)

 

 

(11,163

)

 

$

(96

)

Benefit for income taxes

 

$

3,589

 

 

 

3,558

 

 

$

31

 

Net loss

 

$

(7,670

)

 

 

(7,605

)

 

$

(65

)

 

 

 

For the six months ended June 30, 2018

 

(In thousands)

 

As Reported

 

 

Balances Without Adoption of ASC 606

 

 

Effect of Adoption of ASC 606

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

220,316

 

 

 

220,876

 

 

$

(560

)

Services

 

$

28,538

 

 

 

28,130

 

 

$

408

 

Cost of Sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

138,241

 

 

 

138,726

 

 

$

(485

)

Services

 

$

20,884

 

 

 

20,697

 

 

$

187

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before benefit for income taxes

 

$

(26,004

)

 

 

(26,150

)

 

$

146

 

Benefit for income taxes

 

$

7,520

 

 

 

7,556

 

 

$

(36

)

Net loss

 

$

(18,484

)

 

 

(18,594

)

 

$

110

 

 

 

 

As of  June 30, 2018

 

(In thousands)

 

As Reported

 

 

Balances Without Adoption of ASC 606

 

 

Effect of Adoption of ASC 606

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Other receivables

 

$

28,163

 

 

 

28,164

 

 

$

(1

)

Inventory

 

$

120,537

 

 

 

120,426

 

 

$

111

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

Retained earnings

 

$

897,586

 

 

 

897,476

 

 

$

110

 

In January 2016, the FASB issued ASU 2016-01, Financial Instruments — Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. Subsequently, the FASB issued ASU 2018-03, Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which issued technical corrections and improvements intended to clarify certain aspects of ASU 2016-01. ASU 2016-01 was effective beginning January 1, 2018 and we now recognize any changes in the fair value of certain equity investments in net income as prescribed by the new standard rather than in other comprehensive income. We adopted ASU 2016-01 on January 1, 2018 using the modified retrospective method, which resulted in a $3.2 million reclassification of net unrealized gains from accumulated other comprehensive income to opening retained earnings. ASU 2018-03 is effective for us with the interim period beginning after June 15, 2018. We are currently evaluating the effect ASU 2018-03 will have on our consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ASU 2017-07 amends ASC 715, Compensation — Retirement Benefits, to require employers that present a measure of operating income in their statements of earnings to include only the service cost component of net periodic pension cost and net periodic postretirement benefit cost in operating expenses (together with other employee compensation costs). The other components of net benefit cost, including amortization of prior service cost/credit, and settlement and curtailment effects, are to be included in non-operating expenses. We adopted ASU 2017-07 on January 1, 2018. We retrospectively adopted the presentation of service cost separate from other components of net periodic pension costs. As a result, $0.1 million and $0.2 million have been reclassified from cost of sales, selling, general and administrative expenses, and research and development expense to other expense, net for the three and six months ended June 30, 2017, respectively.

v3.10.0.1
Business Combinations
6 Months Ended
Jun. 30, 2018
Business Combinations [Abstract]  
Business Combinations

2.  BUSINESS COMBINATIONS

 

On March 19, 2018, we acquired Sumitomo Electric Lightwave Corp.’s (SEL) North American EPON business and entered into a technology license and OEM supply agreement with Sumitomo Electric Industries, Ltd. (SEI). This acquisition establishes ADTRAN as the North American market leader for EPON solutions for the cable MSO industry and it will accelerate the MSO market’s adoption of our open, programmable and scalable architectures. This transaction was accounted for as a business combination. We have included the financial results of this acquisition in our consolidated financial statements since the date of acquisition. These revenues are included in the Access & Aggregation and Customer Devices categories within the Network Solutions reportable segment.

 

We recorded a bargain purchase gain of $11.3 million during the first quarter of 2018, net of income taxes, which is subject to customary working capital adjustments between the parties. The bargain purchase gain of $11.3 million represents the difference between the fair value of the net assets acquired over the cash paid. SEI, an OEM supplier based in Japan, is the global market leader in EPON. SEI’s Broadband Networks Division, through its SEL subsidiary, operated a North American EPON business that included sales, marketing, support, and region-specific engineering development. The North American EPON market is primarily driven by the Tier 1 cable MSO operators and has developed more slowly than anticipated. Through the transaction, SEI divested its North American EPON assets and established a relationship with ADTRAN. The transfer of these assets to ADTRAN, which included key customer relationships and a required assumption by ADTRAN of relatively low incremental expenses, along with the value of the technology license and OEM supply agreement, resulted in the bargain purchase gain. We have assessed the recognition and measurement of the assets acquired and liabilities assumed based on historical and forecasted data for future periods and we have concluded that our valuation procedures and resulting measures were appropriate.

 

The preliminary allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date is as follows:

 

(In thousands)

 

 

 

Assets

 

 

 

  Other receivables

$

104

 

  Inventory

 

510

 

  Property, plant and equipment

 

392

 

  Intangible assets

 

22,100

 

Total assets acquired

 

23,106

 

 

 

 

 

Liabilities

 

 

 

  Deferred income taxes

 

(3,978

)

Total liabilities assumed

 

(3,978

)

 

 

 

 

Total net assets

 

19,128

 

  Gain on bargain purchase of a business, net of tax

 

(11,322

)

Total purchase price

$

7,806

 

 

The actual revenue and net loss included in our Consolidated Statements of Income for the three months ended June 30, 2018 and the period March 19, 2018 to June 30, 2018 are as follows:

 

 

Three Months Ended

 

 

March 19, 2018 to

 

(In thousands)

June 30, 2018

 

 

June 30, 2018

 

Revenue

$

1,197

 

 

$

1,197

 

Net loss

$

(809

)

 

$

(886

)

 

The details of the acquired intangible assets are as follows:

 

(In thousands)

Value

 

 

Life (years)

 

Customer relationships

$

13,400

 

 

 

12.0

 

Licensed technology

 

5,900

 

 

 

9.0

 

Supplier relationship

 

2,800

 

 

 

2.0

 

Total

$

22,100

 

 

 

 

 

 

The following unaudited supplemental pro forma information presents the financial results as if the acquisition had occurred on January 1, 2017. This unaudited supplemental pro forma information does not purport to be indicative of what would have occurred had the acquisition been completed on January 1, 2017, nor is it indicative of any future results. Aside from revising the 2017 and 2018 net income for the effect of the bargain purchase gain, there were no material, non-recurring adjustments to this unaudited pro forma information.

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands)

 

2017

 

 

2018

 

 

2017

 

Pro forma revenue

 

$

187,987

 

 

$

250,114

 

 

$

358,679

 

Pro forma net income (loss)

 

$

11,628

 

 

$

(31,020

)

 

$

28,829

 

Pro forma earnings per share - basic

 

$

0.24

 

 

$

(0.65

)

 

$

0.60

 

Pro forma earnings per share - diluted

 

$

0.24

 

 

$

(0.65

)

 

$

0.59

 

 

For the three and six months ended June 30, 2018, we incurred acquisition and integration related expenses and amortization of acquired intangibles of $0.8 million and $1.0 million, respectively, related to this acquisition.

v3.10.0.1
Revenue
6 Months Ended
Jun. 30, 2018
Revenue From Contract With Customer [Abstract]  
Revenue

3. REVENUE

Revenue is measured based on the consideration we expect to receive in exchange for transferring goods or providing services to a customer and as performance obligations under the terms of the contract are satisfied. Generally, this occurs with the transfer of control of a product or service to the customer. For transactions where there are multiple performance obligations, we account for individual products and services separately if they are distinct (if a product or service is separately identifiable from other items and if a customer can benefit from it on its own or with other resources that are readily available to the customer). The consideration, including any discounts, is allocated between separate products and services based on their stand-alone selling prices. The stand-alone selling prices are determined based on the prices at which we sell the separate products and services and are allocated based on each item’s relative value to the total value of the products and services in the arrangement. For items that are not sold separately, we estimate stand-alone selling prices primarily using the “expected cost plus a margin” approach. Payment terms are typically 30 days. Shipping fees are recorded as revenue and the related cost is included in cost of sales. Sales, value-added, and other taxes collected concurrently with revenue-producing activities are excluded from revenue. Costs of obtaining a contract are capitalized and amortized over the period that the related revenue is recognized if greater than one year. We have elected to apply the practical expedient related to the incremental costs of obtaining contracts and recognize those costs as an expense when incurred if the amortization period of the assets is one year or less. These costs are included in selling, general and administrative expenses. Capitalized costs with an amortization period greater than one year were immaterial.

The following is a description of the principal activities from which we generate our revenue by reportable segment.

Network Solutions Segment

Network Solutions includes hardware products and next-generation virtualized solutions used in service provider or business networks, as well as prior generation products.

Hardware

The majority of the revenue from this segment is from hardware sales and is recognized when control is transferred to our customers, which is generally when we ship the products. Shipping terms are generally FOB shipping point. Revenue is recorded net of estimated discounts and rebates using the most likely amount. Customers are typically invoiced when control is transferred and revenue is recognized. Our products generally include assurance-based warranties of 90 days to five years for product defects, which are accrued at the time revenue is recognized.

In certain transactions, we are also the lessor in sales-type lease arrangements for network equipment that have terms of 18 months to five years. These arrangements typically include network equipment, network implementation services and maintenance services. Product revenue for these leases is generally recorded when we transfer control of the product to our customers. Revenue for network implementation and maintenance services is recognized as described below. Customers are typically invoiced and pay in equal installments over the lease term. In relation to these lease agreements, during the three months ended June 30, 2018 and 2017, we recognized revenue of $4.0 million and $5.2 million, respectively, and during the six months ended June 30, 2018 and 2017 we recognized revenue of $6.3 million and $7.0 million, respectively.

Services & Support Segment

To complement our Network Solutions segment, we offer a complete portfolio of maintenance, network implementation, solutions integration and managed services, which include hosted cloud services and subscription services.

Maintenance

Our maintenance service periods range from one month to five years. Customers are typically invoiced and pay for maintenance services at the beginning of the maintenance period. Payments received are recorded in current or non-current unearned revenue depending on the length of the service period. We recognize revenue for maintenance services on a straight-line basis over the maintenance period in services revenue as our customers benefit evenly throughout the contract term.

Network Implementation

We recognize revenue for network implementation, which primarily consists of engineering, execution and enablement services, at a point in time when each performance obligation is complete. If we have recognized revenue, but have not billed the customer, the right to consideration is recognized as a contract asset that is included in other receivables in the Consolidated Balance Sheet. The contract asset is transferred to accounts receivable when the completed performance obligation is invoiced to the customer.

 

As of June 30, 2018, we did not have any remaining performance obligations related to customer contracts that had an original expected duration of one year or more, other than maintenance services, which are satisfied over time.

 

The following table provides information about receivables, contract assets, and unearned revenue from contracts with customers:

 

(In thousands)

 

June 30, 2018

 

 

January 1, 2018

 

Accounts receivable

 

$

76,135

 

 

$

144,150

 

Contract assets

 

 

1,672

 

 

 

374

 

Unearned revenue

 

 

14,307

 

 

 

13,070

 

Non-current unearned revenue

 

 

3,639

 

 

 

4,556

 

 

The decrease in accounts receivable is due to the collection of customer specific payment terms that became due in the first quarter of 2018. The increase in the contract asset balance for the six months ended June 30, 2018 is primarily attributable to revenue recognized that has not yet been billed to the customer during the period. The increase in the unearned revenue balance as of June 30, 2018 is primarily attributable to cash payments received or due in advance of satisfying our performance obligations, offset by $7.1 million of revenues recognized that were included in the unearned revenue balance as of December 31, 2017.

 

The following table disaggregates our revenue by major source for the three months ended June 30, 2018:

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

75,222

 

 

$

9,520

 

 

$

84,742

 

Customer Devices

 

 

33,306

 

 

 

1,254

 

 

 

34,560

 

Traditional & Other Products

 

 

6,535

 

 

 

2,211

 

 

 

8,746

 

Total

 

$

115,063

 

 

$

12,985

 

 

$

128,048

 

 

The following table disaggregates our revenue by major source for the six months ended June 30, 2018:

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

144,607

 

 

$

21,815

 

 

$

166,422

 

Customer Devices

 

 

62,083

 

 

 

2,578

 

 

 

64,661

 

Traditional & Other Products

 

 

13,626

 

 

 

4,145

 

 

 

17,771

 

Total

 

$

220,316

 

 

$

28,538

 

 

$

248,854

 

 

v3.10.0.1
Income Taxes
6 Months Ended
Jun. 30, 2018
Income Tax Disclosure [Abstract]  
Income Taxes

4. INCOME TAXES

Our effective tax rate decreased from an expense of 27.3% in the six months ended June 30, 2017, to a benefit of 20.1%, excluding the tax effect of the bargain purchase gain, in the six months ended June 30, 2018. The decrease in the effective tax rate between the two periods is primarily attributable to the change in income and the effect of the U.S. Tax Cuts and Jobs Act, which was signed into law on December 22, 2017.

v3.10.0.1
Pension Benefit Plan
6 Months Ended
Jun. 30, 2018
Compensation And Retirement Disclosure [Abstract]  
Pension Benefit Plan

5. PENSION BENEFIT PLAN

We maintain a defined benefit pension plan covering employees in certain foreign countries.

The following table summarizes the components of net periodic pension cost for the three and six months ended June 30, 2018 and 2017:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Service cost

 

$

303

 

 

$

306

 

 

$

611

 

 

$

603

 

Interest cost

 

 

185

 

 

 

147

 

 

 

372

 

 

 

290

 

Expected return on plan assets

 

 

(394

)

 

 

(307

)

 

 

(793

)

 

 

(606

)

Amortization of actuarial losses

 

 

63

 

 

 

75

 

 

 

127

 

 

 

148

 

Net periodic pension cost

 

$

157

 

 

$

221

 

 

$

317

 

 

$

435

 

 

The components of net periodic pension cost other than the service cost component are included in the line item “Other expense, net” in the Consolidated Statements of Income.

 

v3.10.0.1
Stock-Based Compensation
6 Months Ended
Jun. 30, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock-Based Compensation

6. STOCK-BASED COMPENSATION

The following table summarizes the stock-based compensation expense related to stock options, performance stock units (PSUs), restricted stock units (RSUs) and restricted stock for the three and six months ended June 30, 2018 and 2017, which was recognized as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Stock-based compensation expense included in cost of sales

 

$

102

 

 

$

93

 

 

$

197

 

 

$

184

 

Selling, general and administrative expense

 

 

995

 

 

 

1,008

 

 

 

2,030

 

 

 

2,024

 

Research and development expense

 

 

687

 

 

 

755

 

 

 

1,376

 

 

 

1,531

 

Stock-based compensation expense included in operating expenses

 

 

1,682

 

 

 

1,763

 

 

 

3,406

 

 

 

3,555

 

Total stock-based compensation expense

 

 

1,784

 

 

 

1,856

 

 

 

3,603

 

 

 

3,739

 

Tax benefit for expense associated with non-qualified options, PSUs, RSUs and

   restricted stock

 

 

(340

)

 

 

(433

)

 

 

(724

)

 

 

(813

)

Total stock-based compensation expense, net of tax

 

$

1,444

 

 

$

1,423

 

 

$

2,879

 

 

$

2,926

 

 

Stock Options

The following table is a summary of our stock options outstanding as of December 31, 2017 and June 30, 2018 and the changes that occurred during the six months ended June 30, 2018:

 

(In thousands, except per share amounts)

 

Number of

Stock Options

 

 

Weighted Avg.

Exercise Price

 

 

Weighted Avg.

Remaining

Contractual

Life In Years

 

 

Aggregate

Intrinsic Value

 

Stock options outstanding, December 31, 2017

 

 

5,148

 

 

$

22.65

 

 

 

4.87

 

 

$

6,109

 

Stock options granted

 

 

 

 

$

 

 

 

 

 

 

 

 

 

Stock options exercised

 

 

(24

)

 

$

15.48

 

 

 

 

 

 

 

 

 

Stock options forfeited

 

 

(42

)

 

$

16.54

 

 

 

 

 

 

 

 

 

Stock options expired

 

 

(282

)

 

$

25.63

 

 

 

 

 

 

 

 

 

Stock options outstanding, June 30, 2018

 

 

4,800

 

 

$

22.56

 

 

 

4.39

 

 

$

 

Stock options vested and expected to vest, June 30, 2018

 

 

4,800

 

 

$

22.56

 

 

 

4.39

 

 

$

 

Stock options exercisable, June 30, 2018

 

 

4,063

 

 

$

23.67

 

 

 

3.90

 

 

$

 

 

The aggregate intrinsic values in the table above represent the total pre-tax intrinsic value (the difference between the closing price of our stock on the last trading day of the quarter and the exercise price, multiplied by the number of in-the-money stock options) that would have been received by the option holders had all option holders exercised their options on June 30, 2018. The aggregate intrinsic value will change based on the fair market value of our stock.

The total pre-tax intrinsic value of options exercised during the six months ended June 30, 2018 was $33 thousand. There were no options exercised during the three months ended June 30, 2018.

As of June 30, 2018, there was $1.9 million of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over an average remaining recognition period of 1.1 years.

The fair value of our stock options is estimated using the Black-Scholes model. The determination of the fair value of stock options on the date of grant using the Black-Scholes model is affected by our stock price, as well as assumptions regarding a number of complex and subjective variables that may have a significant impact on the fair value estimate.

There were no stock options granted during the three and six months ended June 30, 2018 or 2017.

 PSUs, RSUs and restricted stock

 

The following table is a summary of our PSUs, RSUs and restricted stock outstanding as of December 31, 2017 and the changes that occurred during the six months ended June 30, 2018:

 

(In thousands, except per share amounts)

 

Number of

Shares

 

 

Weighted Avg. Grant Date Fair Value

 

Unvested PSUs, RSUs and restricted stock outstanding, December 31, 2017

 

 

1,292

 

 

$

21.33

 

PSUs, RSUs and restricted stock granted

 

 

8

 

 

$

20.68

 

PSUs, RSUs and restricted stock vested

 

 

(7

)

 

$

19.99

 

PSUs, RSUs and restricted stock forfeited

 

 

(105

)

 

$

21.59

 

Unvested PSUs, RSUs and restricted stock outstanding, June 30, 2018

 

 

1,188

 

 

$

21.31

 

 

The fair value of our PSUs with market conditions is calculated using a Monte Carlo Simulation valuation method. The fair value of RSUs and restricted stock is equal to the closing price of our stock on the date of grant. During the first quarter of 2017, the Compensation Committee of the Board of Directors approved a PSU grant of 0.5 million shares that contain performance conditions. The fair value of these performance-based PSU awards was equal to the closing price of our stock on the date of grant.

As of June 30, 2018, there was $11.4 million of unrecognized compensation expense related to unvested market-based PSUs, RSUs and restricted stock, which is expected to be recognized over an average remaining recognition period of 2.7 years. In addition, there was $10.1 million of unrecognized compensation expense related to unvested performance-based PSUs, which will be recognized over the requisite service period of three years as the achievement of the performance objective becomes probable. For the three and six months ended June 30, 2018, no compensation expense was recognized related to these performance-based PSU awards.

v3.10.0.1
Investments
6 Months Ended
Jun. 30, 2018
Investments Debt And Equity Securities [Abstract]  
Investments

7. INVESTMENTS

Debt Securities and Other Investments

At June 30, 2018, we held the following debt securities and other investments, recorded at either fair value or cost:

 

 

 

Amortized

 

 

Gross Unrealized

 

 

Carrying

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Corporate bonds

 

$

35,896

 

 

$

27

 

 

$

(250

)

 

$

35,673

 

Municipal fixed-rate bonds

 

 

2,259

 

 

 

 

 

 

(38

)

 

 

2,221

 

Asset-backed bonds

 

 

10,355

 

 

 

1

 

 

 

(37

)

 

 

10,319

 

Mortgage/Agency-backed bonds

 

 

7,292

 

 

 

 

 

 

(85

)

 

 

7,207

 

U.S. government bonds

 

 

8,953

 

 

 

 

 

 

(104

)

 

 

8,849

 

Foreign government bonds

 

 

1,036

 

 

 

2

 

 

 

 

 

 

1,038

 

Available-for-sale debt securities held at fair value

 

$

65,791

 

 

$

30

 

 

$

(514

)

 

$

65,307

 

Restricted investment held at cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,700

 

Other investments held at cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

520

 

Total carrying value of available-for-sale investments

 

 

 

 

 

 

 

 

 

 

 

 

 

$

92,527

 

 

At December 31, 2017, we held the following debt securities and other investments, recorded at either fair value or cost:

 

 

 

Amortized

 

 

Gross Unrealized

 

 

Carrying

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Corporate bonds

 

$

32,654

 

 

$

44

 

 

$

(155

)

 

$

32,543

 

Municipal fixed-rate bonds

 

 

2,902

 

 

 

2

 

 

 

(22

)

 

 

2,882

 

Asset-backed bonds

 

 

6,545

 

 

 

1

 

 

 

(20

)

 

 

6,526

 

Mortgage/Agency-backed bonds

 

 

5,554

 

 

 

1

 

 

 

(46

)

 

 

5,509

 

U.S. government bonds

 

 

14,477

 

 

 

 

 

 

(174

)

 

 

14,303

 

Foreign government bonds

 

 

725

 

 

 

5

 

 

 

 

 

 

730

 

Available-for-sale debt securities held at fair value

 

$

62,857

 

 

$

53

 

 

$

(417

)

 

$

62,493

 

Restricted investment held at cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,800

 

Other investments held at cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

547

 

Total carrying value of available-for-sale investments

 

 

 

 

 

 

 

 

 

 

 

 

 

$

90,840

 

 

As of June 30, 2018, our debt securities had the following contractual maturities:

 

(In thousands)

 

Corporate

bonds

 

 

Municipal

fixed-rate

bonds

 

 

Asset-

backed

bonds

 

 

Mortgage /

Agency-

backed bonds

 

 

U.S. government

bonds

 

 

Foreign government bonds

 

Less than one year

 

$

1,500

 

 

$

490

 

 

$

4,079

 

 

$

 

 

$

 

 

$

 

One to two years

 

 

16,694

 

 

 

603

 

 

 

2,270

 

 

 

 

 

 

1,519

 

 

 

729

 

Two to three years

 

 

12,264

 

 

 

1,128

 

 

 

556

 

 

 

 

 

 

3,845

 

 

 

309

 

Three to five years

 

 

5,215

 

 

 

 

 

 

1,939

 

 

 

1,970

 

 

 

3,485

 

 

 

 

Five to ten years

 

 

 

 

 

 

 

 

 

 

 

588

 

 

 

 

 

 

 

More than ten years

 

 

 

 

 

 

 

 

1,475

 

 

 

4,649

 

 

 

 

 

 

 

Total

 

$

35,673

 

 

$

2,221

 

 

$

10,319

 

 

$

7,207

 

 

$

8,849

 

 

$

1,038

 

 

Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

 

Realized gains and losses on sales of debt securities are computed under the specific identification method. The following table presents gross realized gains and losses related to our debt securities:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Gross realized gains

 

$

25

 

 

$

33

 

 

$

25

 

 

$

57

 

Gross realized losses

 

$

(241

)

 

$

(113

)

 

$

(315

)

 

$

(152

)

Our investment policy provides limitations for issuer concentration, which limits, at the time of purchase, the concentration in any one issuer to 5% of the market value of our total investment portfolio.

At June 30, 2018, we held a $26.7 million restricted certificate of deposit that is carried at cost. This investment serves as a collateral deposit against the principal amount outstanding under loans made to ADTRAN pursuant to an Alabama State Industrial Development Authority revenue bond (the Bond), which totaled $26.7 million at June 30, 2018 and December 31, 2017. At June 30, 2018 and December 31, 2017, the estimated fair value of the Bond using a level 2 valuation technique was approximately $26.5 million and $26.7 million, respectively, based on a debt security with a comparable interest rate and maturity and a Standard and Poor’s credit rating of AAA. We have the right to set-off the balance of the Bond with the collateral deposit in order to reduce the balance of the indebtedness. The Bond matures on January 1, 2020, and bears interest at the rate of 2% per annum. In conjunction with this program, we are eligible to receive certain economic incentives from the state of Alabama that reduce the amount of payroll withholdings we are required to remit to the state for those employment positions that qualify under this program. We are required to make payments in the amounts necessary to pay the interest on the amounts currently outstanding. It is our intent to make annual principal payments in addition to the interest amounts that are due.

 

Marketable Equity Securities

 

Our marketable equity securities consist of publicly traded stocks or funds measured at fair value.

 

Prior to January 1, 2018, our marketable equity securities were classified as available-for-sale. Realized gains and losses on marketable equity securities were included in net realized investment gain (loss). Unrealized gains and losses were recognized in accumulated other comprehensive income, net of deferred taxes, on the balance sheet.

 

On January 1, 2018, we adopted ASU 2016-01, which requires us to measure all equity investments that do not result in consolidation and are not accounted for under the equity method at fair value, with any changes in fair value recognized in net realized investment gain (loss). Upon adoption, we reclassified $3.2 million of net unrealized gains related to marketable equity securities from accumulated other comprehensive income (loss) to opening retained earnings.

 

Realized and unrealized gains and losses for our marketable equity securities for the three and six months ended June 30, 2018 were as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands)

 

2018

 

 

2018

 

Realized gains (losses) on equity securities sold

 

$

(52

)

 

$

347

 

Unrealized gains (losses) on equity securities held

 

 

1,258

 

 

 

836

 

Total gain (loss) recognized, net

 

$

1,206

 

 

$

1,183

 

 

As of June 30, 2018 and 2017, gross unrealized losses related to individual investments in a continuous loss position for 12 months or longer were not significant.

 

We have categorized our cash equivalents and our investments held at fair value into a three-level fair value hierarchy based on the priority of the inputs to the valuation technique for the cash equivalents and investments as follows:  Level 1 - Values based on unadjusted quoted prices for identical assets or liabilities in an active market; Level 2 - Values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly; Level 3 - Values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs include information supplied by investees.

 

 

 

Fair Value Measurements at June 30, 2018 Using

 

(In thousands)

 

Fair Value

 

 

Quoted Prices

in Active

Market for

Identical

Assets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant Unobservable Inputs

(Level 3)

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

2,008

 

 

$

2,008

 

 

$

 

 

$

 

Foreign government securities

 

 

350

 

 

 

 

 

 

350

 

 

 

 

Cash equivalents

 

 

2,358

 

 

 

2,008

 

 

 

350

 

 

 

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

35,673

 

 

 

 

 

 

35,673

 

 

 

 

Municipal fixed-rate bonds

 

 

2,221

 

 

 

 

 

 

2,221

 

 

 

 

Asset-backed bonds

 

 

10,319

 

 

 

 

 

 

10,319

 

 

 

 

Mortgage/Agency-backed bonds

 

 

7,207

 

 

 

 

 

 

7,207

 

 

 

 

U.S. government bonds

 

 

8,849

 

 

 

8,849

 

 

 

 

 

 

 

Foreign government bonds

 

 

1,038

 

 

 

 

 

 

1,038

 

 

 

 

Marketable equity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities – various industries

 

 

37,600

 

 

 

37,600

 

 

 

 

 

 

 

Deferred compensation plan assets

 

 

20,379

 

 

 

20,379

 

 

 

 

 

 

 

Available-for-sale securities

 

 

123,286

 

 

 

66,828

 

 

 

56,458

 

 

 

 

Total

 

$

125,644

 

 

$

68,836

 

 

$

56,808

 

 

$

 

 

 

 

Fair Value Measurements at December 31, 2017 Using

 

(In thousands)

 

Fair Value

 

 

Quoted Prices

in Active

Market for

Identical

Assets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant Unobservable Inputs

(Level 3)

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

5,851

 

 

$

5,851

 

 

$

 

 

$

 

Commercial paper

 

 

3,999

 

 

 

 

 

 

3,999

 

 

 

 

Cash equivalents

 

 

9,850

 

 

 

5,851

 

 

 

3,999

 

 

 

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

32,543

 

 

 

 

 

 

32,543

 

 

 

 

Municipal fixed-rate bonds

 

 

2,882

 

 

 

 

 

 

2,882

 

 

 

 

Asset-backed bonds

 

 

6,526

 

 

 

 

 

 

6,526

 

 

 

 

Mortgage/Agency-backed bonds

 

 

5,509

 

 

 

 

 

 

5,509

 

 

 

 

U.S. government bonds

 

 

14,303

 

 

 

14,303

 

 

 

 

 

 

 

Foreign government bonds

 

 

730

 

 

 

 

 

 

730

 

 

 

 

Marketable equity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities – various industries

 

 

35,662

 

 

 

35,662

 

 

 

 

 

 

 

Deferred compensation plan assets

 

 

19,883

 

 

 

19,883

 

 

 

 

 

 

 

Available-for-sale securities

 

 

118,038

 

 

 

69,848

 

 

 

48,190

 

 

 

 

Total

 

$

127,888

 

 

$

75,699

 

 

$

52,189

 

 

$

 

 

The fair value of our Level 2 securities is calculated using a weighted average market price for each security. Market prices are obtained from a variety of industry standard data providers, security master files from large financial institutions, and other third-party sources. These multiple market prices are used as inputs into a distribution-curve-based algorithm to determine the daily market value of each security.

v3.10.0.1
Derivative Instruments and Hedging Activities
6 Months Ended
Jun. 30, 2018
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities

8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

We participate in foreign exchange forward contracts in connection with the management of exposure to fluctuations in foreign exchange rates.

 

Cash Flow Hedges

Our cash flow hedging activities utilize foreign exchange forward contracts to reduce the risk that movements in exchange rates will adversely affect the net cash flows resulting from the planned purchase of products from foreign suppliers. Purchases of U.S. denominated inventory by our European subsidiary represent our primary exposure. Changes in the fair value of derivatives designated as cash flow hedges are not recognized in current operating results, but are recorded in accumulated other comprehensive income.  Amounts related to cash flow hedges are reclassified from accumulated other comprehensive income when the underlying hedged item impacts earnings. This reclassification is recorded in cost of sales, the same line item of the Consolidated Statements of Income at which the effects of the hedged item are recorded.

 

Undesignated Hedges

We have certain customers and suppliers who are invoiced or pay in a non-functional currency. Changes in the monetary exchange rates may adversely affect our results of operations and financial condition, as outstanding non-functional balances are revalued to the functional currency through profit and loss. When appropriate, we utilize foreign exchange forward contracts to help manage the volatility relating to these valuation exposures. All changes in the fair value of our derivative instruments that do not qualify for or are not designated for hedged accounting transactions are recognized as other expense, net in the Consolidated Statements of Income.

We do not hold or issue derivative instruments for trading or other speculative purposes. Our derivative instruments are recorded in the Consolidated Balance Sheets at their fair values. Our derivative instruments are not subject to master netting arrangements and are not offset in the Consolidated Balance Sheets.

As of June 30, 2018, we had no foreign exchange forward contracts.

The changes in the fair values of our derivative instruments recorded in the Consolidated Statements of Income during the three and six months ended June 30, 2018 and 2017 were as follows:

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

Income Statement

 

June 30,

 

 

June 30,

 

(In thousands)

 

Location

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Derivatives Not Designated as Hedging Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

Other expense, net

 

$

 

 

$

(451

)

 

$

13

 

 

$

(485

)

 

The changes in our derivatives designated as hedging instruments recorded in other comprehensive income (OCI) and reclassified to income, net of tax, during the three and six months ended June 30, 2018 and 2017, were as follows:

 

 

 

Amount of Gains (Losses) Recognized in

 

 

 

 

Amount of Gains (Losses) Reclassified

 

 

 

OCI on Derivatives

 

 

 

 

from AOCI into Income

 

 

 

Three Months Ended

 

 

Location of Gains

 

Three Months Ended

 

 

 

June 30,

 

 

(Losses) Reclassified

 

June 30,

 

(In thousands)

 

2018

 

 

2017

 

 

from AOCI into Income

 

2018

 

 

2017

 

Derivatives Designated as Hedging Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

$

 

 

$

(571

)

 

Cost of Sales

 

$

 

 

$

(154

)

 

 

 

Amount of Gains (Losses) Recognized in

 

 

 

 

Amount of Gains (Losses) Reclassified

 

 

 

OCI on Derivatives

 

 

 

 

from AOCI into Income

 

 

 

Six Months Ended

 

 

Location of Gains

 

Six Months Ended

 

 

 

June 30,

 

 

(Losses) Reclassified

 

June 30,

 

(In thousands)

 

2018

 

 

2017

 

 

from AOCI into Income

 

2018

 

 

2017

 

Derivatives Designated as Hedging Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

$

 

 

$

(492

)

 

Cost of Sales

 

$

 

 

$

(154

)

 

v3.10.0.1
Inventory
6 Months Ended
Jun. 30, 2018
Inventory Disclosure [Abstract]  
Inventory

9. INVENTORY

At June 30, 2018 and December 31, 2017, inventory consisted of the following:

 

 

 

June 30,

 

 

December 31,

 

(In thousands)

 

2018

 

 

2017

 

Raw materials

 

$

50,844

 

 

$

44,185

 

Work in process

 

 

1,985

 

 

 

1,939

 

Finished goods

 

 

67,708

 

 

 

76,418

 

Total

 

$

120,537

 

 

$

122,542

 

 

We establish reserves for estimated excess, obsolete, or unmarketable inventory equal to the difference between the cost of the inventory and the estimated fair value of the inventory based upon assumptions about future demand and market conditions. At June 30, 2018 and December 31, 2017, raw materials reserves totaled $17.5 million and $15.0 million, respectively, and finished goods inventory reserves totaled $9.7 million and $8.3 million, respectively.

 

v3.10.0.1
Goodwill and Intangible Assets
6 Months Ended
Jun. 30, 2018
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets

 


10. GOODWILL AND INTANGIBLE ASSETS

Goodwill, all of which relates to our acquisition of Bluesocket, Inc., was $3.5 million at June 30, 2018 and December 31, 2017, of which $3.1 million and $0.4 million is allocated to our Network Solutions and Services & Support reportable segments, respectively.

We evaluate the carrying value of goodwill during the fourth quarter of each year and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. We have elected to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit to which the goodwill is assigned is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step impairment test. If we determine that it is more likely than not that its fair value is less than its carrying amount, then the two-step impairment test will be performed. Based on the results of our qualitative assessment in 2017, we concluded that it was not necessary to perform the two-step impairment test. There have been no impairment losses recognized since the acquisition in 2011.

Intangible assets are included in other assets in the accompanying Consolidated Balance Sheets and include intangibles acquired in conjunction with our acquisitions of Bluesocket, Inc. on August 4, 2011, the NSN BBA business on May 4, 2012, CommScope’s active fiber access business on September 13, 2016 and Sumitomo Electric Lightwave Corp.’s North American EPON business and technology license and OEM supply agreement with Sumitomo Electric Industries, Ltd. on March 19, 2018.

The following table presents our intangible assets as of June 30, 2018 and December 31, 2017. Fully amortized intangible assets have been removed from prior year balances for comparability.

 

(In thousands)

 

June 30, 2018

 

 

December 31, 2017

 

 

 

Gross

Value

 

 

Accumulated Amortization

 

 

Net Value

 

 

Gross

Value

 

 

Accumulated Amortization

 

 

Net Value

 

Customer relationships

 

$

20,752

 

 

$

(4,781

)

 

$

15,971

 

 

$

7,474

 

 

$

(4,283

)

 

$

3,191

 

Licensed technology

 

 

5,900

 

 

 

(191

)

 

 

5,709

 

 

 

 

 

 

 

 

 

 

Developed technology

 

 

5,452

 

 

 

(4,772

)

 

 

680

 

 

 

5,524

 

 

 

(4,663

)

 

 

861

 

Supplier relationship

 

 

2,800

 

 

 

(408

)

 

 

2,392

 

 

 

 

 

 

 

 

 

 

Intellectual property

 

 

930

 

 

 

(919

)

 

 

11

 

 

 

930

 

 

 

(852

)

 

 

78

 

Patent

 

 

500

 

 

 

(123

)

 

 

377

 

 

 

500

 

 

 

(89

)

 

 

411

 

Non-compete

 

 

200

 

 

 

(159

)

 

 

41

 

 

 

200

 

 

 

(115

)

 

 

85

 

Trade names

 

 

100

 

 

 

(90

)

 

 

10

 

 

 

100

 

 

 

(65

)

 

 

35

 

Total

 

$

36,634

 

 

$

(11,443

)

 

$

25,191

 

 

$

14,728

 

 

$

(10,067

)

 

$

4,661

 

 

Amortization expense, all of which relates to business acquisitions, was $1.0 million and $1.1 million for the three months ended June 30, 2018 and 2017, respectively, and $1.5 million and $1.9 million for the six months ended June 30, 2018 and 2017, respectively.

As of June 30, 2018, the estimated future amortization expense of our intangible assets is as follows:

 

(In thousands)

 

Amount

 

Remainder of 2018

 

$

1,785

 

2019

 

 

3,542

 

2020

 

 

2,659

 

2021

 

 

2,365

 

2022

 

 

2,352

 

Thereafter

 

 

12,488

 

Total

 

$

25,191

 

 

v3.10.0.1
Stockholders' Equity
6 Months Ended
Jun. 30, 2018
Equity [Abstract]  
Stockholders' Equity

11. STOCKHOLDERS’ EQUITY

A summary of the changes in stockholders’ equity for the six months ended June 30, 2018 is as follows:

 

(In thousands)

 

Stockholders’ Equity

 

Balance, December 31, 2017

 

$

497,911

 

Net income (loss)

 

 

(18,484

)

Dividend payments

 

 

(8,679

)

Dividends accrued for unvested restricted stock units

 

 

5

 

Net unrealized gains (losses) on available-for-sale securities (net of tax)

 

 

(3,308

)

Defined benefit plan adjustments (net of tax)

 

 

67

 

Foreign currency translation adjustment

 

 

(2,582

)

Proceeds from stock option exercises

 

 

369

 

Purchase of treasury stock

 

 

(12,774

)

Adoption of new accounting standards (see Note 1)

 

 

3,499

 

Stock-based compensation expense

 

 

3,603

 

Balance, June 30, 2018

 

$

459,627

 

 

Stock Repurchase Program

Since 1997, our Board of Directors has approved multiple share repurchase programs that have authorized open market repurchase transactions of up to 50.0 million shares of our common stock that are implemented through open market or private purchases from time to time as conditions warrant. During the six months ended June 30, 2018, we repurchased 0.8 million shares of our common stock at an average price of $15.72 per share. As of June 30, 2018, we have the authority to purchase an additional 2.7 million shares of our common stock under the current plans approved by the Board of Directors.

Stock Option Exercises

We issued 24 thousand shares of treasury stock during the six months ended June 30, 2018 to accommodate employee stock option exercises. The stock options had exercise prices ranging from $15.29 to $18.97. We received proceeds totaling $0.4 million from the exercise of these stock options during the six months ended June 30, 2018.

Dividend Payments

During the six months ended June 30, 2018, we paid cash dividends as follows (in thousands except per share amounts):

 

Record Date

 

Payment Date

 

Per Share Amount

 

 

Total Dividend Paid

 

January 31, 2018

 

February 14, 2018

 

$

0.09

 

 

$

4,367

 

May 2, 2018

 

May 16, 2018

 

$

0.09

 

 

$

4,312

 

 

Other Comprehensive Income

Other comprehensive income consists of unrealized gains (losses) on available-for-sale debt securities; unrealized gains (losses) on cash flow hedges; reclassification adjustments for amounts included in net income related to impairments of available-for-sale debt securities, realized gains (losses) on available-for-sale debt securities, realized gains (losses) on cash flow hedges, and amortization of actuarial gains (losses) related to our defined benefit plan; defined benefit plan adjustments; and foreign currency translation adjustments.

The following tables present the changes in accumulated other comprehensive income (loss), net of tax, by component for the three months ended June 30, 2018 and 2017:

 

 

 

Three Months Ended June 30, 2018

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

Total

 

Beginning balance

 

$

(845

)

 

$

(4,224

)

 

$

(734

)

 

$

(5,803

)

Other comprehensive income (loss) before

   reclassifications

 

 

(82

)

 

 

 

 

 

(3,424

)

 

 

(3,506

)

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

186

 

 

 

5

 

 

 

 

 

 

191

 

Net current period other comprehensive income (loss)

 

 

104

 

 

 

5

 

 

 

(3,424

)

 

 

(3,315

)

Ending balance

 

$

(741

)

 

$

(4,219

)

 

$

(4,158

)

 

$

(9,118

)

 

 

 

 

Three Months Ended June 30, 2017

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Unrealized Gains (Losses) on Cash Flow Hedges

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

Total

 

Beginning balance

 

$

1,739

 

 

$

79

 

 

$

(4,962

)

 

$

(6,333

)

 

$

(9,477

)

Other comprehensive income (loss) before

   reclassifications

 

 

1,222

 

 

 

(571

)

 

 

 

 

 

2,619

 

 

 

3,270

 

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

(849

)

 

 

154

 

 

 

86

 

 

 

 

 

 

(609

)

Net current period other comprehensive income (loss)

 

 

373

 

 

 

(417

)

 

 

86

 

 

 

2,619

 

 

 

2,661

 

Ending balance

 

$

2,112

 

 

$

(338

)

 

$

(4,876

)

 

$

(3,714

)

 

$

(6,816

)

 

The following tables present the changes in accumulated other comprehensive income (loss), net of tax, by component for the six months ended June 30, 2018 and 2017:

 

 

 

Six Months Ended June 30, 2018

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

Total

 

Beginning balance

 

$

2,567

 

 

$

(4,286

)

 

$

(1,576

)

 

$

(3,295

)

Other comprehensive income (loss) before

   reclassifications

 

 

(339

)

 

 

 

 

 

(2,582

)

 

 

(2,921

)

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

251

 

 

 

67

 

 

 

 

 

 

318

 

Amounts reclassified to retained earnings (1)

 

 

(3,220

)

 

 

 

 

 

 

 

 

(3,220

)

Net current period other comprehensive income (loss)

 

 

(3,308

)

 

 

67

 

 

 

(2,582

)

 

 

(5,823

)

Ending balance

 

$

(741

)

 

$

(4,219

)

 

$

(4,158

)

 

$

(9,118

)

 

 

(1)

With the adoption of ASU 2016-01, the unrealized gains on our equity investments were reclassified to retained earnings. See Note 1 for more information.

 

 

 

Six Months Ended June 30, 2017

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Unrealized Gains (Losses) on Cash Flow Hedges

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

Total

 

Beginning balance

 

$

404

 

 

$

 

 

$

(5,017

)

 

$

(7,575

)

 

$

(12,188

)

Other comprehensive income (loss) before

   reclassifications

 

 

2,842

 

 

 

(492

)

 

 

 

 

 

3,861

 

 

 

6,211

 

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

(1,134

)

 

 

154

 

 

 

141

 

 

 

 

 

 

(839

)

Net current period other comprehensive income (loss)

 

 

1,708

 

 

 

(338

)

 

 

141

 

 

 

3,861

 

 

 

5,372

 

Ending balance

 

$

2,112

 

 

$

(338

)

 

$

(4,876

)

 

$

(3,714

)

 

$

(6,816

)

 

The following tables present the details of reclassifications out of accumulated other comprehensive income (loss) for the three months ended June 30, 2018 and 2017:

 

(In thousands)

 

Three Months Ended June 30, 2018

Details about Accumulated Other Comprehensive Income (Loss) Components

 

Amount

Reclassified

from

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Affected Line Item in the

Statement Where Net

Income Is Presented

Unrealized gains (losses) on available-for-sale securities:

 

 

 

 

 

 

Net realized gain (loss) on sales of securities

 

$

(251

)

 

Net realized investment gain

Defined benefit plan adjustments – actuarial losses

 

 

(7

)

 

(1)

Total reclassifications for the period, before tax

 

 

(258

)

 

 

Tax (expense) benefit

 

 

67

 

 

 

Total reclassifications for the period, net of tax

 

$

(191

)

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5 of Notes to Consolidated Financial Statements.

 

(In thousands)

 

Three Months Ended June 30, 2017

Details about Accumulated Other Comprehensive Income (Loss) Components

 

Amount

Reclassified

from

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Affected Line Item in the

Statement Where Net

Income Is Presented

Unrealized gains (losses) on available-for-sale securities:

 

 

 

 

 

 

Net realized gain (loss) on sales of securities

 

$

1,393

 

 

Net realized investment gain

Impairment expense

 

 

(2

)

 

Net realized investment gain

Net losses on derivatives designated as hedging instruments

 

 

(154

)

 

Cost of sales

Defined benefit plan adjustments – actuarial losses

 

 

(124

)

 

(1)

Total reclassifications for the period, before tax

 

 

1,113

 

 

 

Tax (expense) benefit

 

 

(504

)

 

 

Total reclassifications for the period, net of tax

 

$

609

 

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5 of Notes to Consolidated Financial Statements.

 


The following tables present the details of reclassifications out of accumulated other comprehensive income (loss) for the six months ended June 30, 2018 and 2017:

 

(In thousands)

 

Six Months Ended June 30, 2018

Details about Accumulated Other Comprehensive Income (Loss) Components

 

Amount

Reclassified

from

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Affected Line Item in the

Statement Where Net

Income Is Presented

Unrealized gains (losses) on available-for-sale securities:

 

 

 

 

 

 

Net realized gain (loss) on sales of securities

 

$

(324

)

 

Net realized investment gain

Defined benefit plan adjustments – actuarial losses

 

 

(97

)

 

(1)

Total reclassifications for the period, before tax

 

 

(421

)

 

 

Tax (expense) benefit

 

 

103

 

 

 

Total reclassifications for the period, net of tax

 

$

(318

)

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5 of Notes to Consolidated Financial Statements.

 

(In thousands)

 

Six Months Ended June 30, 2017

Details about Accumulated Other Comprehensive Income (Loss) Components

 

Amount

Reclassified

from

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Affected Line Item in the

Statement Where Net

Income Is Presented

Unrealized gains (losses) on available-for-

   sale securities:

 

 

 

 

 

 

Net realized gain (loss) on sales of securities

 

$

1,965

 

 

Net realized investment gain

Impairment expense

 

 

(105

)

 

Net realized investment gain

Net losses on derivatives designated as hedging instruments

 

 

(154

)

 

Cost of sales

Defined benefit plan adjustments – actuarial

   losses

 

 

(204

)

 

(1)

Total reclassifications for the period, before

   tax

 

 

1,502

 

 

 

Tax (expense) benefit

 

 

(663

)

 

 

Total reclassifications for the period, net

   of tax

 

$

839

 

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5 of Notes to Consolidated Financial Statements.

 

The following table presents the tax effects related to the change in each component of other comprehensive income (loss) for the three months ended June 30, 2018 and 2017: 

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

Unrealized gains (losses) on available-for-sale

   securities

 

$

(111

)

 

$

29

 

 

$

(82

)

 

$

2,003

 

 

$

(781

)

 

$

1,222

 

Unrealized gains (losses) on cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

(571

)

 

 

 

 

 

(571

)

Reclassification adjustment for amounts related to

   available-for-sale investments included in net

   income

 

 

251

 

 

 

(65

)

 

 

186

 

 

 

(1,391

)

 

 

542

 

 

 

(849

)

Reclassification adjustment for amounts related to

   cash flow hedges included in net income

 

 

 

 

 

 

 

 

 

 

 

154

 

 

 

 

 

 

154

 

Reclassification adjustment for amounts related to

   defined benefit plan adjustments included in net

   income

 

 

7

 

 

 

(2

)

 

 

5

 

 

 

124

 

 

 

(38

)

 

 

86

 

Foreign currency translation adjustment

 

 

(3,424

)

 

 

 

 

 

(3,424

)

 

 

2,619

 

 

 

 

 

 

2,619

 

Total Other Comprehensive Income (Loss)

 

$

(3,277

)

 

$

(38

)

 

$

(3,315

)

 

$

2,938

 

 

$

(277

)

 

$

2,661

 

 

The following table presents the tax effects related to the change in each component of other comprehensive income for the six months ended June 30, 2018 and 2017:

 

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

Unrealized gains (losses) on available-for-sale

   securities

 

$

(458

)

 

$

119

 

 

$

(339

)

 

$

4,659

 

 

$

(1,817

)

 

$

2,842

 

Unrealized gains (losses) on cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

(492

)

 

 

 

 

 

(492

)

Reclassification adjustment for amounts related to

   available-for-sale investments included in net

   income

 

 

324

 

 

 

(73

)

 

 

251

 

 

 

(1,860

)

 

 

726

 

 

 

(1,134

)

Reclassification adjustment for amounts reclassed

   to retained earnings related to the adoption of

   ASU 2016-01

 

 

(3,220

)

 

 

 

 

 

(3,220

)

 

 

 

 

 

 

 

 

 

Reclassification adjustment for amounts related to

   cash flow hedges included in net income

 

 

 

 

 

 

 

 

 

 

 

154

 

 

 

 

 

 

154

 

Reclassification adjustment for amounts related to

   defined benefit plan adjustments included in net

   income

 

 

97

 

 

 

(30

)

 

 

67

 

 

 

204

 

 

 

(63

)

 

 

141

 

Foreign currency translation adjustment

 

 

(2,582

)

 

 

 

 

 

(2,582

)

 

 

3,861

 

 

 

 

 

 

3,861

 

Total Other Comprehensive Income (Loss)

 

$

(5,839

)

 

$

16

 

 

$

(5,823

)

 

$

6,526

 

 

$

(1,154

)

 

$

5,372

 

 

v3.10.0.1
Earnings Per Share
6 Months Ended
Jun. 30, 2018
Earnings Per Share [Abstract]  
Earnings Per Share

12. EARNINGS PER SHARE

A summary of the calculation of basic and diluted earnings per share for the three and six months ended June 30, 2018 and 2017 is as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands, except per share amounts)

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(7,670

)

 

$

12,401

 

 

$

(18,484

)

 

$

19,052

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares – basic

 

 

47,856

 

 

 

48,036

 

 

 

48,043

 

 

 

48,232

 

Effect of dilutive securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

 

 

 

 

279

 

 

 

8

 

 

 

348

 

PSUs, RSUs and restricted stock

 

 

46

 

 

 

98

 

 

 

40

 

 

 

95

 

Weighted average number of shares – diluted

 

 

47,902

 

 

 

48,413

 

 

 

48,091

 

 

 

48,675

 

Net income (loss) per share – basic

 

$

(0.16

)

 

$

0.26

 

 

$

(0.38

)

 

$

0.40

 

Net income (loss) per share – diluted

 

$

(0.16

)

 

$

0.26

 

 

$

(0.38

)

 

$

0.39

 

 

Anti-dilutive options to purchase common stock outstanding were excluded from the above calculations. Anti-dilutive options totaled 5.0 million and 4.1 million for the three months ended June 30, 2018 and 2017, respectively, and 4.8 million and 4.1 million for the six months ended June 30, 2018 and 2017.

v3.10.0.1
Segment Information
6 Months Ended
Jun. 30, 2018
Segment Reporting [Abstract]  
Segment Information

13. SEGMENT INFORMATION

We operate in two reportable segments: (1) Network Solutions and (2) Services & Support. Network Solutions includes hardware products and next-generation virtualized solutions used in service provider or business networks, as well as prior-generation products. Services & Support includes our suite of ProCloud® managed services, network installation, engineering and maintenance services, and fee-based technical support and equipment repair/replacement plans.

We evaluate the performance of our segments based on gross profit; therefore, selling, general and administrative expenses, research and development expenses, interest and dividend income, interest expense, net realized investment gain/loss, other income/expense and provision for taxes are reported on a company-wide, functional basis only. There are no inter-segment revenues.

The following table presents information about the reported sales and gross profit of our reportable segments for the three and six months ended June 30, 2018 and 2017. We do not produce asset information by reportable segment; therefore, it is not reported.

 

 

 

Three Months Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

(In thousands)

 

Sales

 

 

Gross Profit

 

 

Sales

 

 

Gross Profit

 

Network Solutions

 

$

115,063

 

 

$

45,434

 

 

$

155,543

 

 

$

75,880

 

Services & Support

 

 

12,985

 

 

 

4,562

 

 

 

29,130

 

 

 

8,746

 

Total

 

$

128,048

 

 

$

49,996

 

 

$

184,673

 

 

$

84,626

 

 

 

 

Six Months Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

(In thousands)

 

Sales

 

 

Gross Profit

 

 

Sales

 

 

Gross Profit

 

Network Solutions

 

$

220,316

 

 

$

82,075

 

 

$

299,140

 

 

$

142,813

 

Services & Support

 

 

28,538

 

 

 

7,654

 

 

 

55,812

 

 

 

15,522

 

Total

 

$

248,854

 

 

$

89,729

 

 

$

354,952

 

 

$

158,335

 

 

Sales by Category

 

In addition to our reporting segments, we also report revenue for the following three categories – Access & Aggregation, Customer Devices, and Traditional & Other Products.

The table below presents sales information by category for the three and six months ended June 30, 2018 and 2017:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Access & Aggregation

 

$

84,742

 

 

$

138,639

 

 

$

166,422

 

 

$

258,782

 

Customer Devices

 

 

34,560

 

 

 

33,833

 

 

 

64,661

 

 

 

70,101

 

Traditional & Other Products

 

 

8,746

 

 

 

12,201

 

 

 

17,771

 

 

 

26,069

 

Total

 

$

128,048

 

 

$

184,673

 

 

$

248,854

 

 

$

354,952

 

 

v3.10.0.1
Liability for Warranty Returns
6 Months Ended
Jun. 30, 2018
Product Warranties Disclosures [Abstract]  
Liability for Warranty Returns

14. LIABILITY FOR WARRANTY RETURNS

Our products generally include warranties of 90 days to five years for product defects. We accrue for warranty returns at the time revenue is recognized based on our estimate of the cost to repair or replace the defective products. We engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our component suppliers. Our products continue to become more complex in both size and functionality as many of our product offerings migrate from line card applications to total systems. The increasing complexity of our products will cause warranty incidences, when they arise, to be more costly. Our estimates regarding future warranty obligations may change due to product failure rates, material usage, and other rework costs incurred in correcting a product failure. In addition, from time to time, specific warranty accruals may be recorded if unforeseen problems arise. Should our actual experience relative to these factors be worse than our estimates, we will be required to record additional warranty expense. Alternatively, if we provide for more reserves than we require, we will reverse a portion of such provisions in future periods. The liability for warranty obligations totaled $10.1 million and $9.7 million at June 30, 2018 and December 31, 2017, respectively. During the three months ended March 31, 2017, we recorded a receivable and a reduction in warranty expense related to a settlement with a third party supplier for a defective component, the impact of which is reflected in the table below. These liabilities are included in accrued expenses in the accompanying Consolidated Balance Sheets.

 

A summary of warranty expense and write-off activity for the three and six months ended June 30, 2018 and 2017 is as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Balance at beginning of period

 

$

9,687

 

 

$

8,988

 

 

$

9,724

 

 

$

8,548

 

Plus: Amounts charged to cost and expenses

 

 

4,860

 

 

 

3,055

 

 

 

6,683

 

 

 

2,314

 

Less: Deductions

 

 

(4,436

)

 

 

(2,863

)

 

 

(6,296

)

 

 

(1,682

)

Balance at end of period

 

$

10,111

 

 

$

9,180

 

 

$

10,111

 

 

$

9,180

 

 

v3.10.0.1
Commitments and Contingencies
6 Months Ended
Jun. 30, 2018
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

15. COMMITMENTS AND CONTINGENCIES

In the ordinary course of business, we may be subject to various legal proceedings and claims, including employment disputes, patent claims, disputes over contract agreements and other commercial disputes. In some cases, claimants seek damages or other relief, such as royalty payments related to patents, which, if granted, could require significant expenditures. Although the outcome of any claim or litigation can never be certain, it is our opinion that the outcome of all contingencies of which we are currently aware will not materially affect our business, operations, financial condition or cash flows.

We have committed to invest up to an aggregate of $7.9 million in two private equity funds, and we have contributed $8.4 million as of June 30, 2018, of which $7.7 million has been applied to these commitments.

v3.10.0.1
Subsequent Events
6 Months Ended
Jun. 30, 2018
Subsequent Events [Abstract]  
Subsequent Events

16. SUBSEQUENT EVENTS

On July 17, 2018, we announced that our Board of Directors declared a quarterly cash dividend of $0.09 per common share to be paid to stockholders of record at the close of business on August 1, 2018. The payment date will be August 15, 2018. The quarterly dividend payment will be approximately $4.3 million. In July 2003, our Board of Directors elected to begin declaring quarterly dividends on our common stock considering the tax treatment of dividends and adequate levels of Company liquidity.

 

 

v3.10.0.1
Summary of Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements of ADTRAN®, Inc. and its subsidiaries (ADTRAN) have been prepared pursuant to the rules and regulations for reporting on Quarterly Reports on Form 10-Q. Accordingly, certain information and notes required by generally accepted accounting principles for complete financial statements are not included herein. The December 31, 2017 Consolidated Balance Sheet is derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States.

In the opinion of management, all adjustments necessary to fairly state these interim statements have been recorded and are of a normal and recurring nature. The results of operations for an interim period are not necessarily indicative of the results for the full year. The interim statements should be read in conjunction with the financial statements and notes thereto included in ADTRAN’s Annual Report on Form 10-K for the year ended December 31, 2017, filed on February 23, 2018 with the SEC.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Our more significant estimates include the obsolete and excess inventory reserves, warranty reserves, customer rebates, determination of the deferred revenue components of multiple element sales agreements, estimated costs to complete obligations associated with deferred revenues, estimated income tax provision and income tax contingencies, the fair value of stock-based compensation, impairment of goodwill, valuation and estimated lives of intangible assets, estimated pension liability, fair value of investments, and the evaluation of other-than-temporary declines in the value of investments. Actual amounts could differ significantly from these estimates.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). ASU 2016-02 requires an entity to recognize lease assets and lease liabilities on the balance sheet and to disclose key information about the entity's leasing arrangements. Subsequently, in July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, which clarified certain aspects of ASU 2016-02. ASU 2016-02 and ASU 2018-10 are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. A modified retrospective approach is required. We anticipate the adoption of these ASUs will have a material increase in the assets and liabilities of our consolidated balance sheets; however, we do not believe adoption will have a material effect on our results of operations. We believe the most significant effect relates to our accounting for operating leases for office space and equipment.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires the measurement and recognition of expected credit losses for financial instruments held at amortized cost. ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the effect ASU 2016-13 will have on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 simplifies the measurement of goodwill by eliminating step 2 of the goodwill impairment test. Under ASU 2017-04, entities will be required to compare the fair value of a reporting unit to its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 is effective for annual or interim impairment tests performed in fiscal years beginning after December 15, 2019, with early adoption permitted for annual or interim impairment tests performed on testing dates after January 1, 2017. The amendments should be applied prospectively. We are currently evaluating whether to early adopt ASU 2017-04, but we do not expect it will have a material effect on our consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. ASU 2017-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the effect ASU 2017-12 will have on our consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Comprehensive Income. ASU 2018-02 allows for an optional reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. ASU 2018-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. We are currently evaluating whether to reclassify stranded tax effects related to the Tax Cuts and Jobs Act of 2017, but we do not expect ASU 2018-02 will have a material effect on our consolidated financial statements.

During 2018, we adopted the following accounting standards, which had the following effects on our consolidated financial statements:

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. In August 2015, the FASB issued ASU 2015-14, which deferred the effective date of ASU 2014-09 to fiscal years beginning after December 31, 2017, and interim periods within those fiscal years, with early adoption permitted for reporting periods beginning after December 15, 2016. Subsequently, the FASB issued ASUs in 2016 containing implementation guidance related to ASU 2014-09, including: ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations; ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which is intended to clarify two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance; ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which contains certain provisions and practical expedients in response to identified implementation issues; and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, which is intended to clarify the Codification and/or to correct unintended application of guidance. ASU 2014-09 allows for either full retrospective or modified retrospective adoption. We adopted ASU 2014-09 and the related ASUs on January 1, 2018 using the modified retrospective method, which was applied to all contracts on the date of initial adoption.

These ASUs primarily affected our network implementation service revenue performance obligations and contract costs. We are using the “output method” to measure network implementation services progress, which 1) accelerates revenue recognition for certain performance obligations related to service revenue arrangements that were previously deferred until customer acceptance and 2) requires capitalization and amortization of the incremental costs of obtaining a contract as described below. 

 

In connection with the adoption of the new revenue standard, effective January 1, 2018, we adopted ASC 340-40, Other Assets and Deferred Costs – Contracts with Customers, with respect to capitalization and amortization of incremental costs of obtaining a contract. As a result, certain costs of obtaining a contract, including sales commissions, will be capitalized, as the guidance requires the capitalization of all incremental costs incurred to obtain a contract with a customer that it would not have incurred if the contract had not been obtained, provided the costs are recoverable. The primary effect was the capitalization of certain sales commissions for our extended maintenance and support contracts in excess of one year and amortization of those costs over the period that the related revenue is recognized.

The cumulative effect of the changes made to our Consolidated Balance Sheet on January 1, 2018 for the adoption of ASU 2014-09 and the related ASUs was as follows:

 

(In thousands)

 

Balance at December 31, 2017

 

 

Adjustments due to ASU 2014-09

 

 

Balance at January 1, 2018

 

Other receivables

 

$

26,578

 

 

 

374

 

 

$

26,952

 

Deferred tax assets, net

 

$

23,428

 

 

 

(96

)

 

$

23,332

 

Retained earnings

 

$

922,178

 

 

 

278

 

 

$

922,456

 

The effect of the adoption of ASU 2014-09 and the related ASUs on our financial statements was as follows:

 

 

 

For the three months ended June 30, 2018

 

(In thousands)

 

As Reported

 

 

Balances Without Adoption of ASC 606

 

 

Effect of Adoption of ASC 606

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

115,063

 

 

 

115,437

 

 

$

(374

)

Services

 

$

12,985

 

 

 

13,430

 

 

$

(445

)

Cost of Sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

69,629

 

 

 

70,003

 

 

$

(374

)

Services

 

$

8,423

 

 

 

8,772

 

 

$

(349

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before benefit for income taxes

 

$

(11,259

)

 

 

(11,163

)

 

$

(96

)

Benefit for income taxes

 

$

3,589

 

 

 

3,558

 

 

$

31

 

Net loss

 

$

(7,670

)

 

 

(7,605

)

 

$

(65

)

 

 

 

For the six months ended June 30, 2018

 

(In thousands)

 

As Reported

 

 

Balances Without Adoption of ASC 606

 

 

Effect of Adoption of ASC 606

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

220,316

 

 

 

220,876

 

 

$

(560

)

Services

 

$

28,538

 

 

 

28,130

 

 

$

408

 

Cost of Sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

138,241

 

 

 

138,726

 

 

$

(485

)

Services

 

$

20,884

 

 

 

20,697

 

 

$

187

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before benefit for income taxes

 

$

(26,004

)

 

 

(26,150

)

 

$

146

 

Benefit for income taxes

 

$

7,520

 

 

 

7,556

 

 

$

(36

)

Net loss

 

$

(18,484

)

 

 

(18,594

)

 

$

110

 

 

 

 

As of  June 30, 2018

 

(In thousands)

 

As Reported

 

 

Balances Without Adoption of ASC 606

 

 

Effect of Adoption of ASC 606

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Other receivables

 

$

28,163

 

 

 

28,164

 

 

$

(1

)

Inventory

 

$

120,537

 

 

 

120,426

 

 

$

111

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

Retained earnings

 

$

897,586

 

 

 

897,476

 

 

$

110

 

In January 2016, the FASB issued ASU 2016-01, Financial Instruments — Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. Subsequently, the FASB issued ASU 2018-03, Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which issued technical corrections and improvements intended to clarify certain aspects of ASU 2016-01. ASU 2016-01 was effective beginning January 1, 2018 and we now recognize any changes in the fair value of certain equity investments in net income as prescribed by the new standard rather than in other comprehensive income. We adopted ASU 2016-01 on January 1, 2018 using the modified retrospective method, which resulted in a $3.2 million reclassification of net unrealized gains from accumulated other comprehensive income to opening retained earnings. ASU 2018-03 is effective for us with the interim period beginning after June 15, 2018. We are currently evaluating the effect ASU 2018-03 will have on our consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ASU 2017-07 amends ASC 715, Compensation — Retirement Benefits, to require employers that present a measure of operating income in their statements of earnings to include only the service cost component of net periodic pension cost and net periodic postretirement benefit cost in operating expenses (together with other employee compensation costs). The other components of net benefit cost, including amortization of prior service cost/credit, and settlement and curtailment effects, are to be included in non-operating expenses. We adopted ASU 2017-07 on January 1, 2018. We retrospectively adopted the presentation of service cost separate from other components of net periodic pension costs. As a result, $0.1 million and $0.2 million have been reclassified from cost of sales, selling, general and administrative expenses, and research and development expense to other expense, net for the three and six months ended June 30, 2017, respectively.

v3.10.0.1
Summary of Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
Schedule of Cumulative Effect of Changes made to Consolidated Balance Sheet

The cumulative effect of the changes made to our Consolidated Balance Sheet on January 1, 2018 for the adoption of ASU 2014-09 and the related ASUs was as follows:

 

(In thousands)

 

Balance at December 31, 2017

 

 

Adjustments due to ASU 2014-09

 

 

Balance at January 1, 2018

 

Other receivables

 

$

26,578

 

 

 

374

 

 

$

26,952

 

Deferred tax assets, net

 

$

23,428

 

 

 

(96

)

 

$

23,332

 

Retained earnings

 

$

922,178

 

 

 

278

 

 

$

922,456

 

 

Summary of Effect of Adoption of ASU 2014-09 and Related ASUs

The effect of the adoption of ASU 2014-09 and the related ASUs on our financial statements was as follows:

 

 

 

For the three months ended June 30, 2018

 

(In thousands)

 

As Reported

 

 

Balances Without Adoption of ASC 606

 

 

Effect of Adoption of ASC 606

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

115,063

 

 

 

115,437

 

 

$

(374

)

Services

 

$

12,985

 

 

 

13,430

 

 

$

(445

)

Cost of Sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

69,629

 

 

 

70,003

 

 

$

(374

)

Services

 

$

8,423

 

 

 

8,772

 

 

$

(349

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before benefit for income taxes

 

$

(11,259

)

 

 

(11,163

)

 

$

(96

)

Benefit for income taxes

 

$

3,589

 

 

 

3,558

 

 

$

31

 

Net loss

 

$

(7,670

)

 

 

(7,605

)

 

$

(65

)

 

 

 

For the six months ended June 30, 2018

 

(In thousands)

 

As Reported

 

 

Balances Without Adoption of ASC 606

 

 

Effect of Adoption of ASC 606

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

220,316

 

 

 

220,876

 

 

$

(560

)

Services

 

$

28,538

 

 

 

28,130

 

 

$

408

 

Cost of Sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

138,241

 

 

 

138,726

 

 

$

(485

)

Services

 

$

20,884

 

 

 

20,697

 

 

$

187

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before benefit for income taxes

 

$

(26,004

)

 

 

(26,150

)

 

$

146

 

Benefit for income taxes

 

$

7,520

 

 

 

7,556

 

 

$

(36

)

Net loss

 

$

(18,484

)

 

 

(18,594

)

 

$

110

 

 

 

 

As of  June 30, 2018

 

(In thousands)

 

As Reported

 

 

Balances Without Adoption of ASC 606

 

 

Effect of Adoption of ASC 606

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Other receivables

 

$

28,163

 

 

 

28,164

 

 

$

(1

)

Inventory

 

$

120,537

 

 

 

120,426

 

 

$

111

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

Retained earnings

 

$

897,586

 

 

 

897,476

 

 

$

110

 

 

v3.10.0.1
Business Combinations (Tables)
6 Months Ended
Jun. 30, 2018
Business Combinations [Abstract]  
Preliminary Allocation of the Purchase Price to the Estimated Fair Value of the Assets Acquired and Liabilities Assumed

The preliminary allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date is as follows:

 

(In thousands)

 

 

 

Assets

 

 

 

  Other receivables

$

104

 

  Inventory

 

510

 

  Property, plant and equipment

 

392

 

  Intangible assets

 

22,100

 

Total assets acquired

 

23,106

 

 

 

 

 

Liabilities

 

 

 

  Deferred income taxes

 

(3,978

)

Total liabilities assumed

 

(3,978

)

 

 

 

 

Total net assets

 

19,128

 

  Gain on bargain purchase of a business, net of tax

 

(11,322

)

Total purchase price

$

7,806

 

 

Summary of Actual Revenue and Net Loss Included in Consolidated Statements of Income

The actual revenue and net loss included in our Consolidated Statements of Income for the three months ended June 30, 2018 and the period March 19, 2018 to June 30, 2018 are as follows:

 

 

Three Months Ended

 

 

March 19, 2018 to

 

(In thousands)

June 30, 2018

 

 

June 30, 2018

 

Revenue

$

1,197

 

 

$

1,197

 

Net loss

$

(809

)

 

$

(886

)

 

Details of the Acquired Intangible Assets

The details of the acquired intangible assets are as follows:

 

(In thousands)

Value

 

 

Life (years)

 

Customer relationships

$

13,400

 

 

 

12.0

 

Licensed technology

 

5,900

 

 

 

9.0

 

Supplier relationship

 

2,800

 

 

 

2.0

 

Total

$

22,100

 

 

 

 

 

 

Summary of Unaudited Supplemental Pro Forma Information

The following unaudited supplemental pro forma information presents the financial results as if the acquisition had occurred on January 1, 2017. This unaudited supplemental pro forma information does not purport to be indicative of what would have occurred had the acquisition been completed on January 1, 2017, nor is it indicative of any future results. Aside from revising the 2017 and 2018 net income for the effect of the bargain purchase gain, there were no material, non-recurring adjustments to this unaudited pro forma information.

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands)

 

2017

 

 

2018

 

 

2017

 

Pro forma revenue

 

$

187,987

 

 

$

250,114

 

 

$

358,679

 

Pro forma net income (loss)

 

$

11,628

 

 

$

(31,020

)

 

$

28,829

 

Pro forma earnings per share - basic

 

$

0.24

 

 

$

(0.65

)

 

$

0.60

 

Pro forma earnings per share - diluted

 

$

0.24

 

 

$

(0.65

)

 

$

0.59

 

 

v3.10.0.1
Revenue (Tables)
6 Months Ended
Jun. 30, 2018
Revenue From Contract With Customer [Abstract]  
Information about Receivables, Contract Assets, and Unearned Revenue from Contracts with Customers

The following table provides information about receivables, contract assets, and unearned revenue from contracts with customers:

 

(In thousands)

 

June 30, 2018

 

 

January 1, 2018

 

Accounts receivable

 

$

76,135

 

 

$

144,150

 

Contract assets

 

 

1,672

 

 

 

374

 

Unearned revenue

 

 

14,307

 

 

 

13,070

 

Non-current unearned revenue

 

 

3,639

 

 

 

4,556

 

 

Disaggregate of Revenue by Major Source

The following table disaggregates our revenue by major source for the three months ended June 30, 2018:

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

75,222

 

 

$

9,520

 

 

$

84,742

 

Customer Devices

 

 

33,306

 

 

 

1,254

 

 

 

34,560

 

Traditional & Other Products

 

 

6,535

 

 

 

2,211

 

 

 

8,746

 

Total

 

$

115,063

 

 

$

12,985

 

 

$

128,048

 

The following table disaggregates our revenue by major source for the six months ended June 30, 2018:

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

144,607

 

 

$

21,815

 

 

$

166,422

 

Customer Devices

 

 

62,083

 

 

 

2,578

 

 

 

64,661

 

Traditional & Other Products

 

 

13,626

 

 

 

4,145

 

 

 

17,771

 

Total

 

$

220,316

 

 

$

28,538

 

 

$

248,854

 

 

v3.10.0.1
Pension Benefit Plan (Tables)
6 Months Ended
Jun. 30, 2018
Compensation And Retirement Disclosure [Abstract]  
Summarization of Components of Net Periodic Pension Cost

The following table summarizes the components of net periodic pension cost for the three and six months ended June 30, 2018 and 2017:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Service cost

 

$

303

 

 

$

306

 

 

$

611

 

 

$

603

 

Interest cost

 

 

185

 

 

 

147

 

 

 

372

 

 

 

290

 

Expected return on plan assets

 

 

(394

)

 

 

(307

)

 

 

(793

)

 

 

(606

)

Amortization of actuarial losses

 

 

63

 

 

 

75

 

 

 

127

 

 

 

148

 

Net periodic pension cost

 

$

157

 

 

$

221

 

 

$

317

 

 

$

435

 

 

The components of net periodic pension cost other than the service cost component are included in the line item “Other expense, net” in the Consolidated Statements of Income.

 

v3.10.0.1
Stock-Based Compensation (Tables)
6 Months Ended
Jun. 30, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock-Based Compensation Expense Related to Stock Options, Performance Stock Units (PSUs), Restricted Stock Units (RSUs) and Restricted Stock

The following table summarizes the stock-based compensation expense related to stock options, performance stock units (PSUs), restricted stock units (RSUs) and restricted stock for the three and six months ended June 30, 2018 and 2017, which was recognized as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Stock-based compensation expense included in cost of sales

 

$

102

 

 

$

93

 

 

$

197

 

 

$

184

 

Selling, general and administrative expense

 

 

995

 

 

 

1,008

 

 

 

2,030

 

 

 

2,024

 

Research and development expense

 

 

687

 

 

 

755

 

 

 

1,376

 

 

 

1,531

 

Stock-based compensation expense included in operating expenses

 

 

1,682

 

 

 

1,763

 

 

 

3,406

 

 

 

3,555

 

Total stock-based compensation expense

 

 

1,784

 

 

 

1,856

 

 

 

3,603

 

 

 

3,739

 

Tax benefit for expense associated with non-qualified options, PSUs, RSUs and

   restricted stock

 

 

(340

)

 

 

(433

)

 

 

(724

)

 

 

(813

)

Total stock-based compensation expense, net of tax

 

$

1,444

 

 

$

1,423

 

 

$

2,879

 

 

$

2,926

 

 

Summary of Stock Options Outstanding

The following table is a summary of our stock options outstanding as of December 31, 2017 and June 30, 2018 and the changes that occurred during the six months ended June 30, 2018:

 

(In thousands, except per share amounts)

 

Number of

Stock Options

 

 

Weighted Avg.

Exercise Price

 

 

Weighted Avg.

Remaining

Contractual

Life In Years

 

 

Aggregate

Intrinsic Value

 

Stock options outstanding, December 31, 2017

 

 

5,148

 

 

$

22.65

 

 

 

4.87

 

 

$

6,109

 

Stock options granted

 

 

 

 

$

 

 

 

 

 

 

 

 

 

Stock options exercised

 

 

(24

)

 

$

15.48

 

 

 

 

 

 

 

 

 

Stock options forfeited

 

 

(42

)

 

$

16.54

 

 

 

 

 

 

 

 

 

Stock options expired

 

 

(282

)

 

$

25.63

 

 

 

 

 

 

 

 

 

Stock options outstanding, June 30, 2018

 

 

4,800

 

 

$

22.56

 

 

 

4.39

 

 

$

 

Stock options vested and expected to vest, June 30, 2018

 

 

4,800

 

 

$

22.56

 

 

 

4.39

 

 

$

 

Stock options exercisable, June 30, 2018

 

 

4,063

 

 

$

23.67

 

 

 

3.90

 

 

$

 

 

Summary of PSUs, RSUs and Restricted Stock Outstanding

The following table is a summary of our PSUs, RSUs and restricted stock outstanding as of December 31, 2017 and the changes that occurred during the six months ended June 30, 2018:

 

(In thousands, except per share amounts)

 

Number of

Shares

 

 

Weighted Avg. Grant Date Fair Value

 

Unvested PSUs, RSUs and restricted stock outstanding, December 31, 2017

 

 

1,292

 

 

$

21.33

 

PSUs, RSUs and restricted stock granted

 

 

8

 

 

$

20.68

 

PSUs, RSUs and restricted stock vested

 

 

(7

)

 

$

19.99

 

PSUs, RSUs and restricted stock forfeited

 

 

(105

)

 

$

21.59

 

Unvested PSUs, RSUs and restricted stock outstanding, June 30, 2018

 

 

1,188

 

 

$

21.31

 

 

v3.10.0.1
Investments (Tables)
6 Months Ended
Jun. 30, 2018
Investments Debt And Equity Securities [Abstract]  
Debt Securities and Other Investments, Recorded at Either Fair Value or Cost

Debt Securities and Other Investments

At June 30, 2018, we held the following debt securities and other investments, recorded at either fair value or cost:

 

 

 

Amortized

 

 

Gross Unrealized

 

 

Carrying

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Corporate bonds

 

$

35,896

 

 

$

27

 

 

$

(250

)

 

$

35,673

 

Municipal fixed-rate bonds

 

 

2,259

 

 

 

 

 

 

(38

)

 

 

2,221

 

Asset-backed bonds

 

 

10,355

 

 

 

1

 

 

 

(37

)

 

 

10,319

 

Mortgage/Agency-backed bonds

 

 

7,292

 

 

 

 

 

 

(85

)

 

 

7,207

 

U.S. government bonds

 

 

8,953

 

 

 

 

 

 

(104

)

 

 

8,849

 

Foreign government bonds

 

 

1,036

 

 

 

2

 

 

 

 

 

 

1,038

 

Available-for-sale debt securities held at fair value

 

$

65,791

 

 

$

30

 

 

$

(514

)

 

$

65,307

 

Restricted investment held at cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,700

 

Other investments held at cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

520

 

Total carrying value of available-for-sale investments

 

 

 

 

 

 

 

 

 

 

 

 

 

$

92,527

 

 

At December 31, 2017, we held the following debt securities and other investments, recorded at either fair value or cost:

 

 

 

Amortized

 

 

Gross Unrealized

 

 

Carrying

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Corporate bonds

 

$

32,654

 

 

$

44

 

 

$

(155

)

 

$

32,543

 

Municipal fixed-rate bonds

 

 

2,902

 

 

 

2

 

 

 

(22

)

 

 

2,882

 

Asset-backed bonds

 

 

6,545

 

 

 

1

 

 

 

(20

)

 

 

6,526

 

Mortgage/Agency-backed bonds

 

 

5,554

 

 

 

1

 

 

 

(46

)

 

 

5,509

 

U.S. government bonds

 

 

14,477

 

 

 

 

 

 

(174

)

 

 

14,303

 

Foreign government bonds

 

 

725

 

 

 

5

 

 

 

 

 

 

730

 

Available-for-sale debt securities held at fair value

 

$

62,857

 

 

$

53

 

 

$

(417

)

 

$

62,493

 

Restricted investment held at cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,800

 

Other investments held at cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

547

 

Total carrying value of available-for-sale investments

 

 

 

 

 

 

 

 

 

 

 

 

 

$

90,840

 

 

Contractual Maturities of Debt Securities

As of June 30, 2018, our debt securities had the following contractual maturities:

 

(In thousands)

 

Corporate

bonds

 

 

Municipal

fixed-rate

bonds

 

 

Asset-

backed

bonds

 

 

Mortgage /

Agency-

backed bonds

 

 

U.S. government

bonds

 

 

Foreign government bonds

 

Less than one year

 

$

1,500

 

 

$

490

 

 

$

4,079

 

 

$

 

 

$

 

 

$

 

One to two years

 

 

16,694

 

 

 

603

 

 

 

2,270

 

 

 

 

 

 

1,519

 

 

 

729

 

Two to three years

 

 

12,264

 

 

 

1,128

 

 

 

556

 

 

 

 

 

 

3,845

 

 

 

309

 

Three to five years

 

 

5,215

 

 

 

 

 

 

1,939

 

 

 

1,970

 

 

 

3,485

 

 

 

 

Five to ten years

 

 

 

 

 

 

 

 

 

 

 

588

 

 

 

 

 

 

 

More than ten years

 

 

 

 

 

 

 

 

1,475

 

 

 

4,649

 

 

 

 

 

 

 

Total

 

$

35,673

 

 

$

2,221

 

 

$

10,319

 

 

$

7,207

 

 

$

8,849

 

 

$

1,038

 

 

Gross Realized Gains and Losses on Sale of Debt Securities

The following table presents gross realized gains and losses related to our debt securities:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Gross realized gains

 

$

25

 

 

$

33

 

 

$

25

 

 

$

57

 

Gross realized losses

 

$

(241

)

 

$

(113

)

 

$

(315

)

 

$

(152

)

 

Realized and Unrealized Gains and Losses for Marketable Equity Securities

Realized and unrealized gains and losses for our marketable equity securities for the three and six months ended June 30, 2018 were as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands)

 

2018

 

 

2018

 

Realized gains (losses) on equity securities sold

 

$

(52

)

 

$

347

 

Unrealized gains (losses) on equity securities held

 

 

1,258

 

 

 

836

 

Total gain (loss) recognized, net

 

$

1,206

 

 

$

1,183

 

 

Fair Value Measurements of Cash Equivalents and Investments

We have categorized our cash equivalents and our investments held at fair value into a three-level fair value hierarchy based on the priority of the inputs to the valuation technique for the cash equivalents and investments as follows:  Level 1 - Values based on unadjusted quoted prices for identical assets or liabilities in an active market; Level 2 - Values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly; Level 3 - Values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs include information supplied by investees.

 

 

 

Fair Value Measurements at June 30, 2018 Using

 

(In thousands)

 

Fair Value

 

 

Quoted Prices

in Active

Market for

Identical

Assets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant Unobservable Inputs

(Level 3)

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

2,008

 

 

$

2,008

 

 

$

 

 

$

 

Foreign government securities

 

 

350

 

 

 

 

 

 

350

 

 

 

 

Cash equivalents

 

 

2,358

 

 

 

2,008

 

 

 

350

 

 

 

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

35,673

 

 

 

 

 

 

35,673

 

 

 

 

Municipal fixed-rate bonds

 

 

2,221

 

 

 

 

 

 

2,221

 

 

 

 

Asset-backed bonds

 

 

10,319

 

 

 

 

 

 

10,319

 

 

 

 

Mortgage/Agency-backed bonds

 

 

7,207

 

 

 

 

 

 

7,207

 

 

 

 

U.S. government bonds

 

 

8,849

 

 

 

8,849

 

 

 

 

 

 

 

Foreign government bonds

 

 

1,038

 

 

 

 

 

 

1,038

 

 

 

 

Marketable equity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities – various industries

 

 

37,600

 

 

 

37,600

 

 

 

 

 

 

 

Deferred compensation plan assets

 

 

20,379

 

 

 

20,379

 

 

 

 

 

 

 

Available-for-sale securities

 

 

123,286

 

 

 

66,828

 

 

 

56,458

 

 

 

 

Total

 

$

125,644

 

 

$

68,836

 

 

$

56,808

 

 

$

 

 

 

 

Fair Value Measurements at December 31, 2017 Using

 

(In thousands)

 

Fair Value

 

 

Quoted Prices

in Active

Market for

Identical

Assets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant Unobservable Inputs

(Level 3)

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

5,851

 

 

$

5,851

 

 

$

 

 

$

 

Commercial paper

 

 

3,999

 

 

 

 

 

 

3,999

 

 

 

 

Cash equivalents

 

 

9,850

 

 

 

5,851

 

 

 

3,999

 

 

 

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

32,543

 

 

 

 

 

 

32,543

 

 

 

 

Municipal fixed-rate bonds

 

 

2,882

 

 

 

 

 

 

2,882

 

 

 

 

Asset-backed bonds

 

 

6,526

 

 

 

 

 

 

6,526

 

 

 

 

Mortgage/Agency-backed bonds

 

 

5,509

 

 

 

 

 

 

5,509

 

 

 

 

U.S. government bonds

 

 

14,303

 

 

 

14,303

 

 

 

 

 

 

 

Foreign government bonds

 

 

730

 

 

 

 

 

 

730

 

 

 

 

Marketable equity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities – various industries

 

 

35,662

 

 

 

35,662

 

 

 

 

 

 

 

Deferred compensation plan assets

 

 

19,883

 

 

 

19,883

 

 

 

 

 

 

 

Available-for-sale securities

 

 

118,038

 

 

 

69,848

 

 

 

48,190

 

 

 

 

Total

 

$

127,888

 

 

$

75,699

 

 

$

52,189

 

 

$

 

 

v3.10.0.1
Derivative Instruments and Hedging Activities (Tables)
6 Months Ended
Jun. 30, 2018
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Schedule of Changes in Fair Values of Derivative Instruments Recorded in Consolidated Statements of Income

The changes in the fair values of our derivative instruments recorded in the Consolidated Statements of Income during the three and six months ended June 30, 2018 and 2017 were as follows:

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

Income Statement

 

June 30,

 

 

June 30,

 

(In thousands)

 

Location

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Derivatives Not Designated as Hedging Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

Other expense, net

 

$

 

 

$

(451

)

 

$

13

 

 

$

(485

)

 

Schedule of Changes in Derivatives Designated Hedging Instruments Recorded in Other Comprehensive Income (OCI) and Reclassified to Income, Net of Tax

The changes in our derivatives designated as hedging instruments recorded in other comprehensive income (OCI) and reclassified to income, net of tax, during the three and six months ended June 30, 2018 and 2017, were as follows:

 

 

 

Amount of Gains (Losses) Recognized in

 

 

 

 

Amount of Gains (Losses) Reclassified

 

 

 

OCI on Derivatives

 

 

 

 

from AOCI into Income

 

 

 

Three Months Ended

 

 

Location of Gains

 

Three Months Ended

 

 

 

June 30,

 

 

(Losses) Reclassified

 

June 30,

 

(In thousands)

 

2018

 

 

2017

 

 

from AOCI into Income

 

2018

 

 

2017

 

Derivatives Designated as Hedging Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

$

 

 

$

(571

)

 

Cost of Sales

 

$

 

 

$

(154

)

 

 

 

Amount of Gains (Losses) Recognized in

 

 

 

 

Amount of Gains (Losses) Reclassified

 

 

 

OCI on Derivatives

 

 

 

 

from AOCI into Income

 

 

 

Six Months Ended

 

 

Location of Gains

 

Six Months Ended

 

 

 

June 30,

 

 

(Losses) Reclassified

 

June 30,

 

(In thousands)

 

2018

 

 

2017

 

 

from AOCI into Income

 

2018

 

 

2017

 

Derivatives Designated as Hedging Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

$

 

 

$

(492

)

 

Cost of Sales

 

$

 

 

$

(154

)

 

v3.10.0.1
Inventory (Tables)
6 Months Ended
Jun. 30, 2018
Inventory Disclosure [Abstract]  
Components of Inventory

At June 30, 2018 and December 31, 2017, inventory consisted of the following:

 

 

 

June 30,

 

 

December 31,

 

(In thousands)

 

2018

 

 

2017

 

Raw materials

 

$

50,844

 

 

$

44,185

 

Work in process

 

 

1,985

 

 

 

1,939

 

Finished goods

 

 

67,708

 

 

 

76,418

 

Total

 

$

120,537

 

 

$

122,542

 

 

v3.10.0.1
Goodwill and Intangible Assets (Tables)
6 Months Ended
Jun. 30, 2018
Goodwill And Intangible Assets Disclosure [Abstract]  
Summary of Intangible Assets

The following table presents our intangible assets as of June 30, 2018 and December 31, 2017. Fully amortized intangible assets have been removed from prior year balances for comparability.

 

(In thousands)

 

June 30, 2018

 

 

December 31, 2017

 

 

 

Gross

Value

 

 

Accumulated Amortization

 

 

Net Value

 

 

Gross

Value

 

 

Accumulated Amortization

 

 

Net Value

 

Customer relationships

 

$

20,752

 

 

$

(4,781

)

 

$

15,971

 

 

$

7,474

 

 

$

(4,283

)

 

$

3,191

 

Licensed technology

 

 

5,900

 

 

 

(191

)

 

 

5,709

 

 

 

 

 

 

 

 

 

 

Developed technology

 

 

5,452

 

 

 

(4,772

)

 

 

680

 

 

 

5,524

 

 

 

(4,663

)

 

 

861

 

Supplier relationship

 

 

2,800

 

 

 

(408

)

 

 

2,392

 

 

 

 

 

 

 

 

 

 

Intellectual property

 

 

930

 

 

 

(919

)

 

 

11

 

 

 

930

 

 

 

(852

)

 

 

78

 

Patent

 

 

500

 

 

 

(123

)

 

 

377

 

 

 

500

 

 

 

(89

)

 

 

411

 

Non-compete

 

 

200

 

 

 

(159

)

 

 

41

 

 

 

200

 

 

 

(115

)

 

 

85

 

Trade names

 

 

100

 

 

 

(90

)

 

 

10

 

 

 

100

 

 

 

(65

)

 

 

35

 

Total

 

$

36,634

 

 

$

(11,443

)

 

$

25,191

 

 

$

14,728

 

 

$

(10,067

)

 

$

4,661

 

 

Estimated Future Amortization Expense Related to Intangible Assets

As of June 30, 2018, the estimated future amortization expense of our intangible assets is as follows:

 

(In thousands)

 

Amount

 

Remainder of 2018

 

$

1,785

 

2019

 

 

3,542

 

2020

 

 

2,659

 

2021

 

 

2,365

 

2022

 

 

2,352

 

Thereafter

 

 

12,488

 

Total

 

$

25,191

 

 

v3.10.0.1
Stockholders' Equity (Tables)
6 Months Ended
Jun. 30, 2018
Equity [Abstract]  
Summary of Changes in Stockholders' Equity

A summary of the changes in stockholders’ equity for the six months ended June 30, 2018 is as follows:

 

(In thousands)

 

Stockholders’ Equity

 

Balance, December 31, 2017

 

$

497,911

 

Net income (loss)

 

 

(18,484

)

Dividend payments

 

 

(8,679

)

Dividends accrued for unvested restricted stock units

 

 

5

 

Net unrealized gains (losses) on available-for-sale securities (net of tax)

 

 

(3,308

)

Defined benefit plan adjustments (net of tax)

 

 

67

 

Foreign currency translation adjustment

 

 

(2,582

)

Proceeds from stock option exercises

 

 

369

 

Purchase of treasury stock

 

 

(12,774

)

Adoption of new accounting standards (see Note 1)

 

 

3,499

 

Stock-based compensation expense

 

 

3,603

 

Balance, June 30, 2018

 

$

459,627

 

 

Cash Dividends

During the six months ended June 30, 2018, we paid cash dividends as follows (in thousands except per share amounts):

 

Record Date

 

Payment Date

 

Per Share Amount

 

 

Total Dividend Paid

 

January 31, 2018

 

February 14, 2018

 

$

0.09

 

 

$

4,367

 

May 2, 2018

 

May 16, 2018

 

$

0.09

 

 

$

4,312

 

 

Changes in Accumulated Other Comprehensive Income (Loss), Net of Tax by Component

The following tables present the changes in accumulated other comprehensive income (loss), net of tax, by component for the three months ended June 30, 2018 and 2017:

 

 

 

Three Months Ended June 30, 2018

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

Total

 

Beginning balance

 

$

(845

)

 

$

(4,224

)

 

$

(734

)

 

$

(5,803

)

Other comprehensive income (loss) before

   reclassifications

 

 

(82

)

 

 

 

 

 

(3,424

)

 

 

(3,506

)

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

186

 

 

 

5

 

 

 

 

 

 

191

 

Net current period other comprehensive income (loss)

 

 

104

 

 

 

5

 

 

 

(3,424

)

 

 

(3,315

)

Ending balance

 

$

(741

)

 

$

(4,219

)

 

$

(4,158

)

 

$

(9,118

)

 

 

 

 

Three Months Ended June 30, 2017

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Unrealized Gains (Losses) on Cash Flow Hedges

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

Total

 

Beginning balance

 

$

1,739

 

 

$

79

 

 

$

(4,962

)

 

$

(6,333

)

 

$

(9,477

)

Other comprehensive income (loss) before

   reclassifications

 

 

1,222

 

 

 

(571

)

 

 

 

 

 

2,619

 

 

 

3,270

 

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

(849

)

 

 

154

 

 

 

86

 

 

 

 

 

 

(609

)

Net current period other comprehensive income (loss)

 

 

373

 

 

 

(417

)

 

 

86

 

 

 

2,619

 

 

 

2,661

 

Ending balance

 

$

2,112

 

 

$

(338

)

 

$

(4,876

)

 

$

(3,714

)

 

$

(6,816

)

 

The following tables present the changes in accumulated other comprehensive income (loss), net of tax, by component for the six months ended June 30, 2018 and 2017:

 

 

 

Six Months Ended June 30, 2018

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

Total

 

Beginning balance

 

$

2,567

 

 

$

(4,286

)

 

$

(1,576

)

 

$

(3,295

)

Other comprehensive income (loss) before

   reclassifications

 

 

(339

)

 

 

 

 

 

(2,582

)

 

 

(2,921

)

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

251

 

 

 

67

 

 

 

 

 

 

318

 

Amounts reclassified to retained earnings (1)

 

 

(3,220

)

 

 

 

 

 

 

 

 

(3,220

)

Net current period other comprehensive income (loss)

 

 

(3,308

)

 

 

67

 

 

 

(2,582

)

 

 

(5,823

)

Ending balance

 

$

(741

)

 

$

(4,219

)

 

$

(4,158

)

 

$

(9,118

)

 

 

(1)

With the adoption of ASU 2016-01, the unrealized gains on our equity investments were reclassified to retained earnings. See Note 1 for more information.

 

 

 

Six Months Ended June 30, 2017

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Unrealized Gains (Losses) on Cash Flow Hedges

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

Total

 

Beginning balance

 

$

404

 

 

$

 

 

$

(5,017

)

 

$

(7,575

)

 

$

(12,188

)

Other comprehensive income (loss) before

   reclassifications

 

 

2,842

 

 

 

(492

)

 

 

 

 

 

3,861

 

 

 

6,211

 

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

(1,134

)

 

 

154

 

 

 

141

 

 

 

 

 

 

(839

)

Net current period other comprehensive income (loss)

 

 

1,708

 

 

 

(338

)

 

 

141

 

 

 

3,861

 

 

 

5,372

 

Ending balance

 

$

2,112

 

 

$

(338

)

 

$

(4,876

)

 

$

(3,714

)

 

$

(6,816

)

 

Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

The following tables present the details of reclassifications out of accumulated other comprehensive income (loss) for the three months ended June 30, 2018 and 2017:

 

(In thousands)

 

Three Months Ended June 30, 2018

Details about Accumulated Other Comprehensive Income (Loss) Components

 

Amount

Reclassified

from

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Affected Line Item in the

Statement Where Net

Income Is Presented

Unrealized gains (losses) on available-for-sale securities:

 

 

 

 

 

 

Net realized gain (loss) on sales of securities

 

$

(251

)

 

Net realized investment gain

Defined benefit plan adjustments – actuarial losses

 

 

(7

)

 

(1)

Total reclassifications for the period, before tax

 

 

(258

)

 

 

Tax (expense) benefit

 

 

67

 

 

 

Total reclassifications for the period, net of tax

 

$

(191

)

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5 of Notes to Consolidated Financial Statements.

 

(In thousands)

 

Three Months Ended June 30, 2017

Details about Accumulated Other Comprehensive Income (Loss) Components

 

Amount

Reclassified

from

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Affected Line Item in the

Statement Where Net

Income Is Presented

Unrealized gains (losses) on available-for-sale securities:

 

 

 

 

 

 

Net realized gain (loss) on sales of securities

 

$

1,393

 

 

Net realized investment gain

Impairment expense

 

 

(2

)

 

Net realized investment gain

Net losses on derivatives designated as hedging instruments

 

 

(154

)

 

Cost of sales

Defined benefit plan adjustments – actuarial losses

 

 

(124

)

 

(1)

Total reclassifications for the period, before tax

 

 

1,113

 

 

 

Tax (expense) benefit

 

 

(504

)

 

 

Total reclassifications for the period, net of tax

 

$

609

 

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5 of Notes to Consolidated Financial Statements.

 


The following tables present the details of reclassifications out of accumulated other comprehensive income (loss) for the six months ended June 30, 2018 and 2017:

 

(In thousands)

 

Six Months Ended June 30, 2018

Details about Accumulated Other Comprehensive Income (Loss) Components

 

Amount

Reclassified

from

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Affected Line Item in the

Statement Where Net

Income Is Presented

Unrealized gains (losses) on available-for-sale securities:

 

 

 

 

 

 

Net realized gain (loss) on sales of securities

 

$

(324

)

 

Net realized investment gain

Defined benefit plan adjustments – actuarial losses

 

 

(97

)

 

(1)

Total reclassifications for the period, before tax

 

 

(421

)

 

 

Tax (expense) benefit

 

 

103

 

 

 

Total reclassifications for the period, net of tax

 

$

(318

)

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5 of Notes to Consolidated Financial Statements.

 

(In thousands)

 

Six Months Ended June 30, 2017

Details about Accumulated Other Comprehensive Income (Loss) Components

 

Amount

Reclassified

from

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Affected Line Item in the

Statement Where Net

Income Is Presented

Unrealized gains (losses) on available-for-

   sale securities:

 

 

 

 

 

 

Net realized gain (loss) on sales of securities

 

$

1,965

 

 

Net realized investment gain

Impairment expense

 

 

(105

)

 

Net realized investment gain

Net losses on derivatives designated as hedging instruments

 

 

(154

)

 

Cost of sales

Defined benefit plan adjustments – actuarial

   losses

 

 

(204

)

 

(1)

Total reclassifications for the period, before

   tax

 

 

1,502

 

 

 

Tax (expense) benefit

 

 

(663

)

 

 

Total reclassifications for the period, net

   of tax

 

$

839

 

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5 of Notes to Consolidated Financial Statements.

 

Other Comprehensive Income (Loss)

The following table presents the tax effects related to the change in each component of other comprehensive income (loss) for the three months ended June 30, 2018 and 2017: 

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

Unrealized gains (losses) on available-for-sale

   securities

 

$

(111

)

 

$

29

 

 

$

(82

)

 

$

2,003

 

 

$

(781

)

 

$

1,222

 

Unrealized gains (losses) on cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

(571

)

 

 

 

 

 

(571

)

Reclassification adjustment for amounts related to

   available-for-sale investments included in net

   income

 

 

251

 

 

 

(65

)

 

 

186

 

 

 

(1,391

)

 

 

542

 

 

 

(849

)

Reclassification adjustment for amounts related to

   cash flow hedges included in net income

 

 

 

 

 

 

 

 

 

 

 

154

 

 

 

 

 

 

154

 

Reclassification adjustment for amounts related to

   defined benefit plan adjustments included in net

   income

 

 

7

 

 

 

(2

)

 

 

5

 

 

 

124

 

 

 

(38

)

 

 

86

 

Foreign currency translation adjustment

 

 

(3,424

)

 

 

 

 

 

(3,424

)

 

 

2,619

 

 

 

 

 

 

2,619

 

Total Other Comprehensive Income (Loss)

 

$

(3,277

)

 

$

(38

)

 

$

(3,315

)

 

$

2,938

 

 

$

(277

)

 

$

2,661

 

 

The following table presents the tax effects related to the change in each component of other comprehensive income for the six months ended June 30, 2018 and 2017:

 

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

Unrealized gains (losses) on available-for-sale

   securities

 

$

(458

)

 

$

119

 

 

$

(339

)

 

$

4,659

 

 

$

(1,817

)

 

$

2,842

 

Unrealized gains (losses) on cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

(492

)

 

 

 

 

 

(492

)

Reclassification adjustment for amounts related to

   available-for-sale investments included in net

   income

 

 

324

 

 

 

(73

)

 

 

251

 

 

 

(1,860

)

 

 

726

 

 

 

(1,134

)

Reclassification adjustment for amounts reclassed

   to retained earnings related to the adoption of

   ASU 2016-01

 

 

(3,220

)

 

 

 

 

 

(3,220

)

 

 

 

 

 

 

 

 

 

Reclassification adjustment for amounts related to

   cash flow hedges included in net income

 

 

 

 

 

 

 

 

 

 

 

154

 

 

 

 

 

 

154

 

Reclassification adjustment for amounts related to

   defined benefit plan adjustments included in net

   income

 

 

97

 

 

 

(30

)

 

 

67

 

 

 

204

 

 

 

(63

)

 

 

141

 

Foreign currency translation adjustment

 

 

(2,582

)

 

 

 

 

 

(2,582

)

 

 

3,861

 

 

 

 

 

 

3,861

 

Total Other Comprehensive Income (Loss)

 

$

(5,839

)

 

$

16

 

 

$

(5,823

)

 

$

6,526

 

 

$

(1,154

)

 

$

5,372

 

 

v3.10.0.1
Earnings Per Share (Tables)
6 Months Ended
Jun. 30, 2018
Earnings Per Share [Abstract]  
Summary of Calculation of Basic and Diluted Earnings Per Share

A summary of the calculation of basic and diluted earnings per share for the three and six months ended June 30, 2018 and 2017 is as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands, except per share amounts)

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(7,670

)

 

$

12,401

 

 

$

(18,484

)

 

$

19,052

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares – basic

 

 

47,856

 

 

 

48,036

 

 

 

48,043

 

 

 

48,232

 

Effect of dilutive securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

 

 

 

 

279

 

 

 

8

 

 

 

348

 

PSUs, RSUs and restricted stock

 

 

46

 

 

 

98

 

 

 

40

 

 

 

95

 

Weighted average number of shares – diluted

 

 

47,902

 

 

 

48,413

 

 

 

48,091

 

 

 

48,675

 

Net income (loss) per share – basic

 

$

(0.16

)

 

$

0.26

 

 

$

(0.38

)

 

$

0.40

 

Net income (loss) per share – diluted

 

$

(0.16

)

 

$

0.26

 

 

$

(0.38

)

 

$

0.39

 

 

v3.10.0.1
Segment Information (Tables)
6 Months Ended
Jun. 30, 2018
Segment Reporting [Abstract]  
Sales and Gross Profit of Reportable Segments

The following table presents information about the reported sales and gross profit of our reportable segments for the three and six months ended June 30, 2018 and 2017. We do not produce asset information by reportable segment; therefore, it is not reported.

 

 

 

Three Months Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

(In thousands)

 

Sales

 

 

Gross Profit

 

 

Sales

 

 

Gross Profit

 

Network Solutions

 

$

115,063

 

 

$

45,434

 

 

$

155,543

 

 

$

75,880

 

Services & Support

 

 

12,985

 

 

 

4,562

 

 

 

29,130

 

 

 

8,746

 

Total

 

$

128,048

 

 

$

49,996

 

 

$

184,673

 

 

$

84,626

 

 

 

 

Six Months Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

(In thousands)

 

Sales

 

 

Gross Profit

 

 

Sales

 

 

Gross Profit

 

Network Solutions

 

$

220,316

 

 

$

82,075

 

 

$

299,140

 

 

$

142,813

 

Services & Support

 

 

28,538

 

 

 

7,654

 

 

 

55,812

 

 

 

15,522

 

Total

 

$

248,854

 

 

$

89,729

 

 

$

354,952

 

 

$

158,335

 

 

Sales Information by Category

The table below presents sales information by category for the three and six months ended June 30, 2018 and 2017:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Access & Aggregation

 

$

84,742

 

 

$

138,639

 

 

$

166,422

 

 

$

258,782

 

Customer Devices

 

 

34,560

 

 

 

33,833

 

 

 

64,661

 

 

 

70,101

 

Traditional & Other Products

 

 

8,746

 

 

 

12,201

 

 

 

17,771

 

 

 

26,069

 

Total

 

$

128,048

 

 

$

184,673

 

 

$

248,854

 

 

$

354,952

 

 

v3.10.0.1
Liability for Warranty Returns (Tables)
6 Months Ended
Jun. 30, 2018
Product Warranties Disclosures [Abstract]  
Summary of Warranty Expense and Write-Off Activity

A summary of warranty expense and write-off activity for the three and six months ended June 30, 2018 and 2017 is as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands)

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Balance at beginning of period

 

$

9,687

 

 

$

8,988

 

 

$

9,724

 

 

$

8,548

 

Plus: Amounts charged to cost and expenses

 

 

4,860

 

 

 

3,055

 

 

 

6,683

 

 

 

2,314

 

Less: Deductions

 

 

(4,436

)

 

 

(2,863

)

 

 

(6,296

)

 

 

(1,682

)

Balance at end of period

 

$

10,111

 

 

$

9,180

 

 

$

10,111

 

 

$

9,180

 

 

v3.10.0.1
Summary of Significant Accounting Policies - Schedule of Cumulative Effect of Changes made to Consolidated Balance Sheet (Detail) - USD ($)
$ in Thousands
Jun. 30, 2018
Jan. 01, 2018
Dec. 31, 2017
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]      
Other receivables $ 28,163   $ 26,578
Deferred tax assets, net 35,615   23,428
Retained earnings 897,586   $ 922,178
ASU 2014-09 [member]      
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]      
Other receivables   $ 26,952  
Deferred tax assets, net   23,332  
Retained earnings   922,456  
ASU 2014-09 [member] | Adjustments Due to ASU 2014-09 [Member]      
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]      
Other receivables (1) 374  
Deferred tax assets, net   (96)  
Retained earnings $ 110 $ 278  
v3.10.0.1
Summary of Significant Accounting Policies - Summary of Effect of Adoption of ASU 2014-09 and Related ASUs (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Jan. 01, 2018
Dec. 31, 2017
Sales            
Sales $ 128,048 $ 184,673 $ 248,854 $ 354,952    
Cost of Sales            
Cost of Sales 78,052 100,047 159,125 196,617    
Loss before benefit for income taxes (11,259) 17,869 (26,004) 26,214    
(Provision) benefit for income taxes 3,589 (5,468) 7,520 (7,162)    
Net Income (Loss) (7,670) 12,401 (18,484) 19,052    
ASSETS            
Other receivables 28,163   28,163     $ 26,578
Inventory 120,537   120,537     122,542
Equity            
Retained earnings 897,586   897,586     $ 922,178
Product [Member]            
Sales            
Sales 115,063 155,543 220,316 299,140    
Cost of Sales            
Cost of Sales 69,629 79,663 138,241 156,327    
Service [Member]            
Sales            
Sales 12,985 29,130 28,538 55,812    
Cost of Sales            
Cost of Sales 8,423 $ 20,384 20,884 $ 40,290    
ASU 2014-09 [member]            
ASSETS            
Other receivables         $ 26,952  
Equity            
Retained earnings         922,456  
ASU 2014-09 [member] | Balances Without Adoption of ASC 606 [Member]            
Cost of Sales            
Loss before benefit for income taxes (11,163)   (26,150)      
(Provision) benefit for income taxes 3,558   7,556      
Net Income (Loss) (7,605)   (18,594)      
ASSETS            
Other receivables 28,164   28,164      
Inventory 120,426   120,426      
Equity            
Retained earnings 897,476   897,476      
ASU 2014-09 [member] | Effect of Adoption of ASC 606            
Cost of Sales            
Loss before benefit for income taxes (96)   146      
(Provision) benefit for income taxes 31   (36)      
Net Income (Loss) (65)   110      
ASSETS            
Other receivables (1)   (1)   374  
Inventory 111   111      
Equity            
Retained earnings 110   110   $ 278  
ASU 2014-09 [member] | Product [Member] | Balances Without Adoption of ASC 606 [Member]            
Sales            
Sales 115,437   220,876      
Cost of Sales            
Cost of Sales 70,003   138,726      
ASU 2014-09 [member] | Product [Member] | Effect of Adoption of ASC 606            
Sales            
Sales (374)   (560)      
Cost of Sales            
Cost of Sales (374)   (485)      
ASU 2014-09 [member] | Service [Member] | Balances Without Adoption of ASC 606 [Member]            
Sales            
Sales 13,430   28,130      
Cost of Sales            
Cost of Sales 8,772   20,697      
ASU 2014-09 [member] | Service [Member] | Effect of Adoption of ASC 606            
Sales            
Sales (445)   408      
Cost of Sales            
Cost of Sales $ (349)   $ 187      
v3.10.0.1
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2017
Jan. 01, 2018
ASU 2016-01 [Member]      
Summary Of Significant Accounting Policy [Line Items]      
Reclassification of net unrealized gains from accumulated other comprehensive income to opening retained earnings     $ 3.2
ASU 2017-07 [Member]      
Summary Of Significant Accounting Policy [Line Items]      
Reclassified from cost of sales, selling, general and administrative expenses, and research and development expense to other expense, net $ 0.1 $ 0.2  
v3.10.0.1
Business Combinations - Additional Information (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Mar. 19, 2018
Jun. 30, 2018
Mar. 31, 2018
Jun. 30, 2018
Business Acquisition [Line Items]        
Bargain purchase gain net of income taxes       $ 11,322
Sumitomo Electric Lightwave Corp.'s North American EPON Business [Member]        
Business Acquisition [Line Items]        
Date of acquisition       Mar. 19, 2018
Business acquisition, description       On March 19, 2018, we acquired Sumitomo Electric Lightwave Corp.’s (SEL) North American EPON business and entered into a technology license and OEM supply agreement with Sumitomo Electric Industries, Ltd. (SEI). This acquisition establishes ADTRAN as the North American market leader for EPON solutions for the cable MSO industry and it will accelerate the MSO market’s adoption of our open, programmable and scalable architectures.
Bargain purchase gain net of income taxes $ 11,322   $ 11,300  
Acquisition and integration related expenses and amortization of acquired intangibles   $ 800   $ 1,000
v3.10.0.1
Business Combinations - Preliminary Allocation of the Purchase Price to the Estimated Fair Value of the Assets Acquired and Liabilities Assumed(Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Mar. 19, 2018
Mar. 31, 2018
Jun. 30, 2018
Liabilities      
Gain on bargain purchase of a business, net of tax     $ (11,322)
Total purchase price     $ 7,806
Sumitomo Electric Lightwave Corp.'s North American EPON Business [Member]      
Assets      
Other receivables $ 104    
Inventory 510    
Property, plant and equipment 392    
Intangible assets 22,100    
Total assets acquired 23,106    
Liabilities      
Deferred income taxes (3,978)    
Total liabilities assumed (3,978)    
Total net assets 19,128    
Gain on bargain purchase of a business, net of tax (11,322) $ (11,300)  
Total purchase price $ 7,806    
v3.10.0.1
Business Combinations - Summary of Actual Revenue and Net Loss Included in Consolidated Statements of Income (Detail) - Sumitomo Electric Lightwave Corp.'s North American EPON Business [Member] - USD ($)
$ in Thousands
3 Months Ended
Jun. 30, 2018
Jun. 30, 2018
Business Acquisition [Line Items]    
Revenue $ 1,197 $ 1,197
Net loss $ (886) $ (809)
v3.10.0.1
Business Combinations - Details of the Acquired Intangible Assets (Detail) - Sumitomo Electric Lightwave Corp.'s North American EPON Business [Member]
$ in Thousands
Mar. 19, 2018
USD ($)
Business Acquisition [Line Items]  
Total, Value $ 22,100
Customer Relationships [Member]  
Business Acquisition [Line Items]  
Total, Value $ 13,400
Life (years) 12 years
Licensed Technology [Member]  
Business Acquisition [Line Items]  
Total, Value $ 5,900
Life (years) 9 years
Supplier Relationship [Member]  
Business Acquisition [Line Items]  
Total, Value $ 2,800
Life (years) 2 years
v3.10.0.1
Business Combinations - Summary of Unaudited Supplemental Pro Forma Information (Detail) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Business Combinations [Abstract]      
Pro forma revenue $ 187,987 $ 250,114 $ 358,679
Pro forma net income (loss) $ 11,628 $ (31,020) $ 28,829
Pro forma earnings per share - basic $ 0.24 $ (0.65) $ 0.60
Pro forma earnings per share - diluted $ 0.24 $ (0.65) $ 0.59
v3.10.0.1
Revenue - Additional Information (Detail) - USD ($)
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Revenue [Line Items]          
Period of assurance-based warranty for product defects     90 days to five years    
Remaining performance obligations $ 0   $ 0    
Revenue recognized that was included in unearned revenue         $ 7,100,000
Lease Agreements [Member]          
Revenue [Line Items]          
Recognized revenue $ 4,000,000 $ 5,200,000 $ 6,300,000 $ 7,000,000  
Minimum [Member]          
Revenue [Line Items]          
Lessor sales type lease arrangement terms for network equipments     18 months    
Maintenance service periods     1 month    
Maximum [Member]          
Revenue [Line Items]          
Lessor sales type lease arrangement terms for network equipments     5 years    
Maintenance service periods     5 years    
v3.10.0.1
Revenue - Information about Receivables, Contract Assets, and Unearned Revenue from Contracts with Customers (Detail) - USD ($)
$ in Thousands
Jun. 30, 2018
Jan. 01, 2018
Dec. 31, 2017
Revenue From Contract With Customer [Abstract]      
Accounts receivable $ 76,135 $ 144,150 $ 144,150
Contract assets 1,672 374  
Unearned revenue 14,307 13,070  
Non-current unearned revenue $ 3,639 $ 4,556  
v3.10.0.1
Revenue - Disaggregate of Revenue by Major Source (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Disaggregation Of Revenue [Line Items]        
Revenue $ 128,048 $ 184,673 $ 248,854 $ 354,952
Access & Aggregation [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 84,742   166,422  
Customer Devices [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 34,560 33,833 64,661 70,101
Traditional & Other Products [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 8,746 12,201 17,771 26,069
Network Solutions [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 115,063 155,543 220,316 299,140
Network Solutions [Member] | Access & Aggregation [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 75,222   144,607  
Network Solutions [Member] | Customer Devices [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 33,306   62,083  
Network Solutions [Member] | Traditional & Other Products [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 6,535   13,626  
Services & Support [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 12,985 $ 29,130 28,538 $ 55,812
Services & Support [Member] | Access & Aggregation [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 9,520   21,815  
Services & Support [Member] | Customer Devices [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 1,254   2,578  
Services & Support [Member] | Traditional & Other Products [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue $ 2,211   $ 4,145  
v3.10.0.1
Income Taxes - Additional Information (Detail)
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Income Tax Disclosure [Abstract]    
Effective tax rate expense (benefit) (20.10%) 27.30%
v3.10.0.1
Pension Benefit Plan - Summarization of Components of Net Periodic Pension Cost (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Compensation And Retirement Disclosure [Abstract]        
Service cost $ 303 $ 306 $ 611 $ 603
Interest cost 185 147 372 290
Expected return on plan assets (394) (307) (793) (606)
Amortization of actuarial losses 63 75 127 148
Net periodic pension cost $ 157 $ 221 $ 317 $ 435
v3.10.0.1
Stock-Based Compensation - Stock-Based Compensation Expense Related to Stock Options, Performance Stock Units (PSUs), Restricted Stock Units (RSUs) and Restricted Stock (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Total stock-based compensation expense $ 1,784 $ 1,856 $ 3,603 $ 3,739
Tax benefit for expense associated with non-qualified options, PSUs, RSUs and restricted stock (340) (433) (724) (813)
Total stock-based compensation expense, net of tax 1,444 1,423 2,879 2,926
Stock-based Compensation Expense Included in Cost of Sales [Member]        
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Total stock-based compensation expense 102 93 197 184
Selling, General and Administrative Expense [Member]        
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Total stock-based compensation expense 995 1,008 2,030 2,024
Research and Development Expense [Member]        
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Total stock-based compensation expense 687 755 1,376 1,531
Stock-based Compensation Expense Included in Operating Expenses [Member]        
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Total stock-based compensation expense $ 1,682 $ 1,763 $ 3,406 $ 3,555
v3.10.0.1
Stock-Based Compensation - Summary of Stock Options Outstanding (Detail) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]          
Number of Stock Options, Stock options outstanding, Beginning Balance     5,148,000    
Number of Stock Options, Stock options granted 0 0 0 0  
Number of Stock Options, Stock options exercised 0   (24,000)    
Number of Stock Options, Stock options forfeited     (42,000)    
Number of Stock Options, Stock options expired     (282,000)    
Number of Stock Options, Stock options outstanding, Ending Balance 4,800,000   4,800,000   5,148,000
Number of Stock Options, Stock options vested and expected to vest 4,800,000   4,800,000    
Number of Stock Options, Stock options exercisable 4,063,000   4,063,000    
Weighted Avg. Exercise Price, Stock options outstanding, Beginning Balance     $ 22.65    
Weighted Avg. Exercise Price, Stock options exercised     15.48    
Weighted Avg. Exercise Price, Stock options forfeited     16.54    
Weighted Avg. Exercise Price, Stock options expired     25.63    
Weighted Avg. Exercise Price, Stock options outstanding, Ending Balance $ 22.56   22.56   $ 22.65
Weighted Avg. Exercise Price, Stock options vested and expected to vest 22.56   22.56    
Weighted Avg. Exercise Price, Stock options exercisable $ 23.67   $ 23.67    
Weighted Avg. Remaining Contractual Life In Years, Stock options outstanding     4 years 4 months 20 days   4 years 10 months 13 days
Weighted Avg. Remaining Contractual Life In Years, Stock options vested and expected to vest     4 years 4 months 20 days    
Weighted Avg. Remaining Contractual Life In Years, Stock options exercisable     3 years 10 months 24 days    
Aggregate Intrinsic Value, Stock options outstanding         $ 6,109
v3.10.0.1
Stock-Based Compensation (Stock Options) - Additional Information (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Total pre-tax intrinsic value of options exercised     $ 33  
Number of Options, exercised 0   24,000  
Number of Stock options, granted 0 0 0 0
Unvested Stock Options [Member]        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Unrecognized compensation expense related to stock options $ 1,900   $ 1,900  
Recognition period of unvested compensation expense     1 year 1 month 6 days  
v3.10.0.1
Stock-Based Compensation - Summary of PSUs, RSUs and Restricted Stock Outstanding (Detail)
shares in Thousands
6 Months Ended
Jun. 30, 2018
$ / shares
shares
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Number of Shares, Unvested PSUs, RSUs and restricted stock outstanding, beginning balance | shares 1,292
Number of Shares, PSUs, RSUs and restricted stock granted | shares 8
Number of Shares, PSUs, RSUs and restricted stock vested | shares (7)
Number of Shares, PSUs, RSUs and restricted stock forfeited | shares (105)
Number of Shares, Unvested PSUs, RSUs and restricted stock outstanding, ending balance | shares 1,188
Weighted Avg. Grant Date Fair Value, Unvested PSUs, RSUs and restricted stock outstanding, Beginning Balance | $ / shares $ 21.33
Weighted Avg. Grant Date Fair Value, PSUs, RSUs and restricted stock granted | $ / shares 20.68
Weighted Avg. Grant Date Fair Value, PSUs, RSUs and restricted stock vested | $ / shares 19.99
Weighted Avg. Grant Date Fair Value, PSUs, RSUs and restricted stock forfeited | $ / shares 21.59
Weighted Avg. Grant Date Fair Value, Unvested PSUs, RSUs and restricted stock outstanding, Ending Balance | $ / shares $ 21.31
v3.10.0.1
Stock-Based Compensation (PSUs, RSUs and Restricted Stock) - Additional Information (Detail) - USD ($)
shares in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Mar. 31, 2017
Jun. 30, 2018
Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
PSU shares grant approved by board of directors       8  
Stock-based compensation expense $ 1,784,000 $ 1,856,000   $ 3,603,000 $ 3,739,000
Performance Stock Units (PSUs) [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
PSU shares grant approved by board of directors     500    
Market-Based PSUs, RSUs and Restricted Stock [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Unrecognized compensation expense related to other than options 11,400,000     $ 11,400,000  
Recognition period of unvested compensation expense       2 years 8 months 12 days  
Performance-Based PSUs [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Unrecognized compensation expense related to other than options 10,100,000     $ 10,100,000  
Recognition period of unvested compensation expense       3 years  
Performance-Based PSU Awards [Member]          
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]          
Stock-based compensation expense $ 0     $ 0  
v3.10.0.1
Investments - Debt Securities and Other Investments, Recorded at Either Fair Value or Cost (Detail) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost $ 65,791 $ 62,857
Gross Unrealized Gains 30 53
Gross Unrealized Losses (514) (417)
Available-for-sale debt securities, Carrying Value 65,307 62,493
Restricted investment held at cost 26,700 27,800
Other investments held at cost 520 547
Total carrying value of available-for-sale investments 92,527 90,840
Corporate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 35,896 32,654
Gross Unrealized Gains 27 44
Gross Unrealized Losses (250) (155)
Available-for-sale debt securities, Carrying Value 35,673 32,543
Municipal Fixed-Rate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 2,259 2,902
Gross Unrealized Gains   2
Gross Unrealized Losses (38) (22)
Available-for-sale debt securities, Carrying Value 2,221 2,882
Asset-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 10,355 6,545
Gross Unrealized Gains 1 1
Gross Unrealized Losses (37) (20)
Available-for-sale debt securities, Carrying Value 10,319 6,526
Mortgage/Agency-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 7,292 5,554
Gross Unrealized Gains   1
Gross Unrealized Losses (85) (46)
Available-for-sale debt securities, Carrying Value 7,207 5,509
U.S. Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 8,953 14,477
Gross Unrealized Losses (104) (174)
Available-for-sale debt securities, Carrying Value 8,849 14,303
Foreign Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 1,036 725
Gross Unrealized Gains 2 5
Available-for-sale debt securities, Carrying Value $ 1,038 $ 730
v3.10.0.1
Investments - Contractual Maturities of Debt Securities (Detail) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities, Fair Value/Carrying Value $ 65,307 $ 62,493
Corporate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Less than one year 1,500  
One to two years 16,694  
Two to three years 12,264  
Three to five years 5,215  
Available-for-sale debt securities, Fair Value/Carrying Value 35,673 32,543
Municipal Fixed-Rate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Less than one year 490  
One to two years 603  
Two to three years 1,128  
Available-for-sale debt securities, Fair Value/Carrying Value 2,221 2,882
Asset-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Less than one year 4,079  
One to two years 2,270  
Two to three years 556  
Three to five years 1,939  
More than ten years 1,475  
Available-for-sale debt securities, Fair Value/Carrying Value 10,319 6,526
Mortgage/Agency-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Three to five years 1,970  
Five to ten years 588  
More than ten years 4,649  
Available-for-sale debt securities, Fair Value/Carrying Value 7,207 5,509
U.S. Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
One to two years 1,519  
Two to three years 3,845  
Three to five years 3,485  
Available-for-sale debt securities, Fair Value/Carrying Value 8,849 14,303
Foreign Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
One to two years 729  
Two to three years 309  
Available-for-sale debt securities, Fair Value/Carrying Value $ 1,038 $ 730
v3.10.0.1
Investments - Gross Realized Gains and Losses on Sale of Debt Securities (Detail) - Debt Securities [Member] - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Schedule of Available-for-sale Securities [Line Items]        
Gross realized gains $ 25 $ 33 $ 25 $ 57
Gross realized losses $ (241) $ (113) $ (315) $ (152)
v3.10.0.1
Investments - Additional Information (Detail) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2018
Jan. 01, 2018
Dec. 31, 2017
Schedule of Investments [Line Items]      
Restricted certificate of deposit held $ 26,700   $ 27,800
ASU 2016-01 [Member]      
Schedule of Investments [Line Items]      
Reclassification of net unrealized gains of marketable equity securities from AOCI to retained earnings   $ 3,200  
Alabama State Industrial Development Authority [Member]      
Schedule of Investments [Line Items]      
Maturity date of bond Jan. 01, 2020    
Percentage of interest on bond 2.00%    
Alabama State Industrial Development Authority [Member] | Taxable Revenue Bond [Member]      
Schedule of Investments [Line Items]      
Collateral deposit against outstanding principal amount $ 26,700   26,700
Alabama State Industrial Development Authority [Member] | Taxable Revenue Bond [Member] | Significant Other Observable Inputs (Level 2) [Member]      
Schedule of Investments [Line Items]      
Estimated fair value of bond $ 26,500   $ 26,700
Investment [Member] | Issuer Concentration [Member] | Market Value of Total Investment Portfolio [Member]      
Schedule of Investments [Line Items]      
Investment concentration risk percentage 5.00%    
v3.10.0.1
Investments - Realized and Unrealized Gains and Losses for Marketable Equity Securities (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Schedule of Available-for-sale Securities [Line Items]        
Net realized investment gain $ 990 $ 1,390 $ 893 $ 1,860
Equity Securities [Member]        
Schedule of Available-for-sale Securities [Line Items]        
Net realized investment gain (52)   347  
Unrealized gains (losses) on equity securities held 1,258   836  
Total gain (loss) recognized, net $ 1,206   $ 1,183  
v3.10.0.1
Investments - Fair Value Measurements of Cash Equivalents and Investments (Detail) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities $ 65,307 $ 62,493
Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents 2,358 9,850
Available-for-sale securities 123,286 118,038
Total 125,644 127,888
Fair Value, Measurements [Member] | Quoted Prices in Active Market for Identical Assets (Level 1) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents 2,008 5,851
Available-for-sale securities 66,828 69,848
Total 68,836 75,699
Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents 350 3,999
Available-for-sale securities 56,458 48,190
Total 56,808 52,189
Money Market Funds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents 2,008 5,851
Money Market Funds [Member] | Fair Value, Measurements [Member] | Quoted Prices in Active Market for Identical Assets (Level 1) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents 2,008 5,851
Corporate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 35,673 32,543
Corporate Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 35,673 32,543
Corporate Bonds [Member] | Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 35,673 32,543
Foreign Government Securities [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents 350  
Foreign Government Securities [Member] | Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents 350  
Municipal Fixed-Rate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 2,221 2,882
Municipal Fixed-Rate Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 2,221 2,882
Municipal Fixed-Rate Bonds [Member] | Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 2,221 2,882
Commercial Paper [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents   3,999
Commercial Paper [Member] | Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents   3,999
Asset-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 10,319 6,526
Asset-Backed Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 10,319 6,526
Asset-Backed Bonds [Member] | Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 10,319 6,526
Mortgage/Agency-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 7,207 5,509
Mortgage/Agency-Backed Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 7,207 5,509
Mortgage/Agency-Backed Bonds [Member] | Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 7,207 5,509
U.S. Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 8,849 14,303
U.S. Government Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 8,849 14,303
U.S. Government Bonds [Member] | Fair Value, Measurements [Member] | Quoted Prices in Active Market for Identical Assets (Level 1) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 8,849 14,303
Foreign Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 1,038 730
Foreign Government Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 1,038 730
Foreign Government Bonds [Member] | Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 1,038 730
Marketable Equity Securities - Various Industries [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 37,600 35,662
Marketable Equity Securities - Various Industries [Member] | Fair Value, Measurements [Member] | Quoted Prices in Active Market for Identical Assets (Level 1) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 37,600 35,662
Deferred Compensation Plan Assets [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 20,379 19,883
Deferred Compensation Plan Assets [Member] | Fair Value, Measurements [Member] | Quoted Prices in Active Market for Identical Assets (Level 1) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities $ 20,379 $ 19,883
v3.10.0.1
Derivative Instruments and Hedging Activities - Additional Information (Detail)
Jun. 30, 2018
USD ($)
Foreign Exchange Forward Contracts [Member]  
Derivative [Line Items]  
Derivative instruments, amount $ 0
v3.10.0.1
Derivative Instruments and Hedging Activities - Schedule of Changes in Fair Values of Derivative Instruments Recorded in Consolidated Statements of Income (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Foreign Exchange Contracts [Member] | Other Expense, Net [Member]      
Derivatives Not Designated as Hedging Instruments:      
Derivative instrument, gain or loss $ (451) $ 13 $ (485)
v3.10.0.1
Derivative Instruments and Hedging Activities - Schedule of Changes in Derivatives Designated Hedging Instruments Recorded in Other Comprehensive Income (OCI) and Reclassified to Income, Net of Tax (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2017
Derivative [Line Items]    
Amount of Gains (Losses) Recognized in OCI on Derivatives $ (571) $ (492)
Foreign Exchange Contracts [Member] | Derivatives Designated as Hedging Instruments [Member]    
Derivative [Line Items]    
Amount of Gains (Losses) Recognized in OCI on Derivatives (571) (492)
Foreign Exchange Contracts [Member] | Derivatives Designated as Hedging Instruments [Member] | Cost of Sales [Member]    
Derivative [Line Items]    
Amount of Gains (Losses) Reclassified from AOCI into Income $ (154) $ (154)
v3.10.0.1
Inventory - Components of Inventory (Detail) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Inventory Disclosure [Abstract]    
Raw materials $ 50,844 $ 44,185
Work in process 1,985 1,939
Finished goods 67,708 76,418
Total $ 120,537 $ 122,542
v3.10.0.1
Inventory - Additional Information (Detail) - USD ($)
$ in Millions
Jun. 30, 2018
Dec. 31, 2017
Raw Materials [Member]    
Inventory [Line Items]    
Inventory valuation reserves $ 17.5 $ 15.0
Finished Goods [Member]    
Inventory [Line Items]    
Inventory valuation reserves $ 9.7 $ 8.3
v3.10.0.1
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($)
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Goodwill [Line Items]          
Goodwill, relates to acquisition     $ 3,500,000   $ 3,500,000
Impairment losses     0    
Amortization expense $ 1,000,000 $ 1,100,000 1,500,000 $ 1,900,000  
Network Solutions [Member]          
Goodwill [Line Items]          
Goodwill, relates to acquisition     3,100,000    
Services & Support [Member]          
Goodwill [Line Items]          
Goodwill, relates to acquisition     $ 400,000    
v3.10.0.1
Goodwill and Intangible Assets - Summary of Intangible Assets (Detail) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Goodwill [Line Items]    
Gross Value $ 36,634 $ 14,728
Accumulated Amortization (11,443) (10,067)
Net Value 25,191 4,661
Customer Relationships [Member]    
Goodwill [Line Items]    
Gross Value 20,752 7,474
Accumulated Amortization (4,781) (4,283)
Net Value 15,971 3,191
Licensed Technology [Member]    
Goodwill [Line Items]    
Gross Value 5,900  
Accumulated Amortization (191)  
Net Value 5,709  
Developed Technology [Member]    
Goodwill [Line Items]    
Gross Value 5,452 5,524
Accumulated Amortization (4,772) (4,663)
Net Value 680 861
Intellectual Property [Member]    
Goodwill [Line Items]    
Gross Value 930 930
Accumulated Amortization (919) (852)
Net Value 11 78
Supplier Relationship [Member]    
Goodwill [Line Items]    
Gross Value 2,800  
Accumulated Amortization (408)  
Net Value 2,392  
Trade Names [Member]    
Goodwill [Line Items]    
Gross Value 100 100
Accumulated Amortization (90) (65)
Net Value 10 35
Patent [Member]    
Goodwill [Line Items]    
Gross Value 500 500
Accumulated Amortization (123) (89)
Net Value 377 411
Non-compete [Member]    
Goodwill [Line Items]    
Gross Value 200 200
Accumulated Amortization (159) (115)
Net Value $ 41 $ 85
v3.10.0.1
Goodwill and Intangible Assets - Estimated Future Amortization Expense Related to Intangible Assets (Detail) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Goodwill And Intangible Assets Disclosure [Abstract]    
Remainder of 2018 $ 1,785  
2019 3,542  
2020 2,659  
2021 2,365  
2022 2,352  
Thereafter 12,488  
Net Value $ 25,191 $ 4,661
v3.10.0.1
Stockholders' Equity - Summary of Changes in Stockholders' Equity (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Equity [Abstract]        
Beginning Balance     $ 497,911  
Net Income (Loss) $ (7,670) $ 12,401 (18,484) $ 19,052
Dividend payments     (8,679)  
Dividends accrued for unvested restricted stock units     5  
Net unrealized gains (losses) on available-for-sale securities 104 373 (3,308) 1,708
Defined benefit plan adjustments (net of tax) 5 86 67 141
Foreign currency translation adjustment (3,424) $ 2,619 (2,582) 3,861
Proceeds from stock option exercises     369 $ 1,722
Purchase of treasury stock     (12,774)  
Adoption of new accounting standards (see Note 1)     3,499  
Stock-based compensation expense     3,603  
Ending Balance $ 459,627   $ 459,627  
v3.10.0.1
Stockholders' Equity - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2018
Jun. 30, 2017
Equity [Abstract]      
Maximum shares authorized for repurchase, prior and new announcements and total after new announcement 50,000,000 50,000,000  
Stock repurchased, shares   800,000  
Shares repurchased, average price per share   $ 15.72  
Additional shares authorized for purchase 2,700,000 2,700,000  
Number of Options, exercised 0 24,000  
Exercise price of stock options, lower range limit   $ 15.29  
Exercise price of stock options, upper range limit   $ 18.97  
Proceeds from stock option exercises   $ 369 $ 1,722
v3.10.0.1
Stockholders' Equity - Cash Dividends (Detail) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dividends Payable [Line Items]        
Per Share Amount $ 0.09 $ 0.09 $ 0.18 $ 0.18
Total Dividend Paid     $ 8,679 $ 8,719
Cash Dividends Paid in February [Member]        
Dividends Payable [Line Items]        
Record Date     Jan. 31, 2018  
Payment Date     Feb. 14, 2018  
Per Share Amount     $ 0.09  
Total Dividend Paid     $ 4,367  
Cash Dividends Paid in May [Member]        
Dividends Payable [Line Items]        
Record Date     May 02, 2018  
Payment Date     May 16, 2018  
Per Share Amount     $ 0.09  
Total Dividend Paid     $ 4,312  
v3.10.0.1
Stockholders' Equity - Changes in Accumulated Other Comprehensive Income (Loss), Net of Tax by Component (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance     $ 497,911  
Other comprehensive income (loss) before reclassifications $ (3,506) $ 3,270 (2,921) $ 6,211
Amounts reclassified from accumulated other comprehensive income (loss) 191 (609) 318 (839)
Amounts reclassified to retained earnings     (3,220)  
Other Comprehensive Income (Loss), net of tax (3,315) 2,661 (5,823) 5,372
Ending Balance 459,627   459,627  
Unrealized Gains (Losses) on Available-for-Sale Securities [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance (845) 1,739 2,567 404
Other comprehensive income (loss) before reclassifications (82) 1,222 (339) 2,842
Amounts reclassified from accumulated other comprehensive income (loss) 186 (849) 251 (1,134)
Amounts reclassified to retained earnings     (3,220)  
Other Comprehensive Income (Loss), net of tax 104 373 (3,308) 1,708
Ending Balance (741) 2,112 (741) 2,112
Unrealized Gains (Losses) on Cash Flow Hedges [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance   79    
Other comprehensive income (loss) before reclassifications   (571)   (492)
Amounts reclassified from accumulated other comprehensive income (loss)   154   154
Other Comprehensive Income (Loss), net of tax   (417)   (338)
Ending Balance   (338)   (338)
Defined Benefit Plan Adjustments [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance (4,224) (4,962) (4,286) (5,017)
Amounts reclassified from accumulated other comprehensive income (loss) 5 86 67 141
Other Comprehensive Income (Loss), net of tax 5 86 67 141
Ending Balance (4,219) (4,876) (4,219) (4,876)
Foreign Currency Adjustments [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance (734) (6,333) (1,576) (7,575)
Other comprehensive income (loss) before reclassifications (3,424) 2,619 (2,582) 3,861
Other Comprehensive Income (Loss), net of tax (3,424) 2,619 (2,582) 3,861
Ending Balance (4,158) (3,714) (4,158) (3,714)
Accumulated Other Comprehensive Income [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance (5,803) (9,477) (3,295) (12,188)
Ending Balance $ (9,118) $ (6,816) $ (9,118) $ (6,816)
v3.10.0.1
Stockholders' Equity - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Cost of sales $ (78,052) $ (100,047) $ (159,125) $ (196,617)
Income (Loss) Before Provision for Income Taxes (11,259) 17,869 (26,004) 26,214
Tax (expense) benefit 3,589 (5,468) 7,520 (7,162)
Total reclassifications for the period, net of tax (7,670) 12,401 (18,484) 19,052
Reclassification Out of Accumulated Other Comprehensive Income (Loss) [Member]        
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Defined benefit plan adjustments – actuarial losses (7) (124) (97) (204)
Income (Loss) Before Provision for Income Taxes (258) 1,113 (421) 1,502
Tax (expense) benefit 67 (504) 103 (663)
Total reclassifications for the period, net of tax (191) 609 (318) 839
Unrealized Gains (Losses) on Available-for-Sale Securities [Member] | Reclassification Out of Accumulated Other Comprehensive Income (Loss) [Member]        
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Net realized investment gain $ (251) 1,393 $ (324) 1,965
Impairment Expense [Member] | Reclassification Out of Accumulated Other Comprehensive Income (Loss) [Member]        
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Net realized investment gain   (2)   (105)
Net Losses on Derivatives Designated as Hedging Instruments [Member] | Reclassification Out of Accumulated Other Comprehensive Income (Loss) [Member]        
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items]        
Cost of sales   $ (154)   $ (154)
v3.10.0.1
Stockholders' Equity - Tax Effects Related to the Change in Each Component of Other Comprehensive Income (Loss) (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Equity [Abstract]        
Unrealized gains (losses) on available-for-sale securities, Before-Tax Amount $ (111) $ 2,003 $ (458) $ 4,659
Unrealized gains (losses) on available-for-sale securities, Tax (Expense) Benefit 29 (781) 119 (1,817)
Unrealized gains (losses) on available-for-sale securities, Net-of-Tax Amount (82) 1,222 (339) 2,842
Unrealized gains (losses) on cash flow hedges, Before-Tax Amount   (571)   (492)
Unrealized gains (losses) on cash flow hedges, Net-of-Tax Amount   (571)   (492)
Reclassification adjustment for amounts related to available-for-sale investments included in net income, Before-Tax Amount 251 (1,391) 324 (1,860)
Reclassification adjustment for amounts related to available-for-sale investments included in net income, Tax (Expense) Benefit (65) 542 (73) 726
Reclassification adjustment for amounts related to available-for-sale investments included in net income, Net-of-Tax Amount 186 (849) 251 (1,134)
Reclassification adjustment for amounts reclassed to retained earnings related to the adoption of ASU 2016-01, Before-Tax Amount     (3,220)  
Reclassification adjustment for amounts reclassed to retained earnings related to the adoption of ASU 2016-01, Net-of-Tax Amount     (3,220)  
Reclassification adjustment for amounts related to cash flow hedges included in net income, Before-Tax Amount   154   154
Reclassification adjustment for amounts related to cash flow hedges included in net income, Net-of-Tax Amount   154   154
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net income, Before-Tax Amount 7 124 97 204
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net income, Tax (Expense) Benefit (2) (38) (30) (63)
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net income, Net-of-Tax Amount 5 86 67 141
Foreign currency translation adjustment, Before-Tax Amount (3,424) 2,619 (2,582) 3,861
Foreign currency translation adjustment, Net-of-Tax Amount (3,424) 2,619 (2,582) 3,861
Total Other Comprehensive Income (Loss), Before-Tax Amount (3,277) 2,938 (5,839) 6,526
Total Other Comprehensive Income (Loss), Tax (Expense) Benefit (38) (277) 16 (1,154)
Other Comprehensive Income (Loss), net of tax $ (3,315) $ 2,661 $ (5,823) $ 5,372
v3.10.0.1
Earnings Per Share - Summary of Calculation of Basic and Diluted Earnings Per Share (Detail) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Numerator        
Net Income (Loss) $ (7,670) $ 12,401 $ (18,484) $ 19,052
Denominator        
Weighted average number of shares – basic 47,856 48,036 48,043 48,232
Effect of dilutive securities        
Stock options   279 8 348
PSUs, RSUs and restricted stock 46 98 40 95
Weighted average number of shares – diluted 47,902 48,413 48,091 48,675
Net income (loss) per share – basic $ (0.16) $ 0.26 $ (0.38) $ 0.40
Net income (loss) per share – diluted $ (0.16) $ 0.26 $ (0.38) $ 0.39
v3.10.0.1
Earnings Per Share - Additional Information (Detail) - shares
shares in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Earnings Per Share [Abstract]        
Anti-dilutive options, Total 5.0 4.1 4.8 4.1
v3.10.0.1
Segment Information - Additional Information (Detail)
6 Months Ended
Jun. 30, 2018
Segment
Category
Segment Reporting [Abstract]  
Number of reportable segments | Segment 2
Number of categories | Category 3
v3.10.0.1
Segment Information - Sales and Gross Profit of Reportable Segments (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Segment Reporting Information [Line Items]        
Sales $ 128,048 $ 184,673 $ 248,854 $ 354,952
Gross Profit 49,996 84,626 89,729 158,335
Network Solutions [Member]        
Segment Reporting Information [Line Items]        
Sales 115,063 155,543 220,316 299,140
Gross Profit 45,434 75,880 82,075 142,813
Services & Support [Member]        
Segment Reporting Information [Line Items]        
Sales 12,985 29,130 28,538 55,812
Gross Profit $ 4,562 $ 8,746 $ 7,654 $ 15,522
v3.10.0.1
Segment Information - Sales Information by Category (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Revenue from External Customer [Line Items]        
Sales $ 128,048 $ 184,673 $ 248,854 $ 354,952
Access & Aggregation [Member]        
Revenue from External Customer [Line Items]        
Sales 84,742 138,639 166,422 258,782
Customer Devices [Member]        
Revenue from External Customer [Line Items]        
Sales 34,560 33,833 64,661 70,101
Traditional & Other Products [Member]        
Revenue from External Customer [Line Items]        
Sales $ 8,746 $ 12,201 $ 17,771 $ 26,069
v3.10.0.1
Liability for Warranty Returns - Additional Information (Detail) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Product Warranties Disclosures [Abstract]            
Period of assurance-based warranty for product defects 90 days to five years          
Liability for warranty obligations $ 10,111 $ 9,687 $ 9,724 $ 9,180 $ 8,988 $ 8,548
v3.10.0.1
Liability for Warranty Returns - Summary of Warranty Expense and Write-Off Activity (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Product Warranties Disclosures [Abstract]        
Balance at beginning of period $ 9,687 $ 8,988 $ 9,724 $ 8,548
Plus: Amounts charged to cost and expenses 4,860 3,055 6,683 2,314
Less: Deductions (4,436) (2,863) (6,296) (1,682)
Balance at end of period $ 10,111 $ 9,180 $ 10,111 $ 9,180
v3.10.0.1
Commitments and Contingencies - Additional Information (Detail)
$ in Millions
Jun. 30, 2018
USD ($)
EquityUnit
Contingencies And Commitments [Line Items]  
Number of private equity funds | EquityUnit 2
Commitments towards private equity funds $ 7.7
Investment Commitments [Member]  
Contingencies And Commitments [Line Items]  
Aggregate investment committed in private equity funds 7.9
Private Equity Funds [Member]  
Contingencies And Commitments [Line Items]  
Contribution to private equity funds $ 8.4
v3.10.0.1
Subsequent Events - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Millions
Jul. 17, 2018
Aug. 15, 2018
Scenario Forecast [Member]    
Subsequent Event [Line Items]    
Quarterly dividend payable subsequent to balance sheet date   $ 4.3
Subsequent Events [Member]    
Subsequent Event [Line Items]    
Dividend declaration date Jul. 17, 2018  
Common stock dividends per share declared $ 0.09  
Dividend record date Aug. 01, 2018  
Dividend payment date Aug. 15, 2018