ADTRAN INC, 10-Q filed on 11/5/2019
Quarterly Report
v3.19.3
Document and Entity Information - shares
9 Months Ended
Sep. 30, 2019
Nov. 04, 2019
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2019  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q3  
Entity Registrant Name ADTRAN INC  
Trading Symbol ADTN  
Entity Central Index Key 0000926282  
Current Fiscal Year End Date --12-31  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Common Stock, Shares Outstanding   47,826,323
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Shell Company false  
Entity File Number 000-24612  
Entity Tax Identification Number 63-0918200  
Entity Address, Address Line One 901 Explorer Boulevard  
Entity Address, City or Town Huntsville  
Entity Address, State or Province AL  
Entity Address, Postal Zip Code 35806-2807  
City Area Code 256  
Local Phone Number 963-8000  
Entity Incorporation, State or Country Code DE  
Document Quarterly Report true  
Document Transition Report false  
Title of 12(b) Security Common Stock, Par Value $0.01 per share  
Security Exchange Name NASDAQ  
v3.19.3
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Current Assets    
Cash and cash equivalents $ 96,407 $ 105,504
Short-term investments 28,754 3,246
Accounts receivable, less allowance for doubtful accounts of $81 and $128 at September 30, 2019 and December 31, 2018, respectively 90,647 99,385
Other receivables 18,927 36,699
Inventory, net 104,941 99,848
Prepaid expenses and other current assets 10,327 10,744
Total Current Assets 350,003 355,426
Property, plant and equipment, net 73,384 80,635
Deferred tax assets, net 6,492 37,187
Goodwill 6,968 7,106
Intangibles, net 29,113 33,183
Other assets 23,283 5,668
Long-term investments 90,632 108,822
Total Assets 579,875 628,027
Current Liabilities    
Accounts payable 52,842 60,054
Bonds payable 25,600 1,000
Unearned revenue 14,022 17,940
Accrued expenses 15,697 11,746
Accrued wages and benefits 16,569 14,752
Income tax payable, net 3,420 12,518
Total Current Liabilities 128,150 118,010
Non-current unearned revenue 4,581 5,296
Other non-current liabilities 52,189 33,842
Bonds payable   24,600
Total Liabilities 184,920 181,748
Commitments and contingencies (see Note 16)
Stockholders’ Equity    
Common stock, par value $0.01 per share; 200,000 shares authorized; 79,652 shares issued and 47,826 shares outstanding at September 30, 2019 and 79,652 shares issued and 47,751 shares outstanding at December 31, 2018 797 797
Additional paid-in capital 272,854 267,670
Accumulated other comprehensive loss (16,506) (14,416)
Retained earnings 827,783 883,975
Treasury stock at cost: 31,826 and 31,901 shares at September 30, 2019 and December 31, 2018, respectively (689,973) (691,747)
Total Stockholders’ Equity 394,955 446,279
Total Liabilities and Stockholders’ Equity $ 579,875 $ 628,027
v3.19.3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Statement Of Financial Position [Abstract]    
Allowance for doubtful accounts $ 81 $ 128
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 47,826,000 47,751,000
Treasury stock, shares 31,826,000 31,901,000
v3.19.3
Condensed Consolidated Statements of Income (Loss) (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Sales        
Total Sales $ 114,092 $ 140,335 $ 414,274 $ 389,189
Cost of Sales        
Total Cost of Sales 67,761 81,887 242,316 241,012
Gross Profit 46,331 58,448 171,958 148,177
Selling, general and administrative expenses 30,912 30,750 99,663 96,361
Research and development expenses 31,835 29,877 95,546 93,455
Asset impairments 3,872   3,872  
Gain on contingency     (1,230)  
Operating Loss (20,288) (2,179) (25,893) (41,639)
Interest and dividend income 610 825 1,893 2,604
Interest expense (128) (134) (382) (398)
Net investment gain (loss) (216) 4,507 8,195 5,400
Other income (expense), net 1,616 201 2,266 (73)
Gain on bargain purchase of a business, net       11,322
Income (Loss) Before Income Taxes (18,406) 3,220 (13,921) (22,784)
Income tax (expense) benefit (27,717) 4,369 (27,437) 11,889
Net Income (Loss) $ (46,123) $ 7,589 $ (41,358) $ (10,895)
Weighted average shares outstanding – basic 47,824 47,710 47,803 47,927
Weighted average shares outstanding – diluted 47,824 47,834 47,803 47,927
Earnings (loss) per common share – basic $ (0.96) $ 0.16 $ (0.87) $ (0.23)
Earnings (loss) per common share – diluted $ (0.96) $ 0.16 $ (0.87) $ (0.23)
Network Solutions [Member]        
Sales        
Total Sales $ 94,018 $ 121,043 $ 359,007 $ 341,359
Cost of Sales        
Total Cost of Sales 56,444 69,943 207,353 208,184
Gross Profit 37,574 51,100 151,654 133,175
Services & Support [Member]        
Sales        
Total Sales 20,074 19,292 55,267 47,830
Cost of Sales        
Total Cost of Sales 11,317 11,944 34,963 32,828
Gross Profit $ 8,757 $ 7,348 $ 20,304 $ 15,002
v3.19.3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Statement Of Income And Comprehensive Income [Abstract]        
Net Income (Loss) $ (46,123) $ 7,589 $ (41,358) $ (10,895)
Other Comprehensive Loss, net of tax        
Net unrealized gains (losses) on available-for-sale securities (15) (32) 277 (3,340)
Defined benefit plan adjustments 90 37 361 104
Foreign currency translation (2,486) (451) (3,113) (3,033)
Other Comprehensive Loss, net of tax (2,411) (446) (2,475) (6,269)
Comprehensive Income (Loss), net of tax $ (48,534) $ 7,143 $ (43,833) $ (17,164)
v3.19.3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock [Member]
Additional Paid-In Capital [Member]
Retained Earnings [Member]
Treasury Stock [Member]
Accumulated Other Comprehensive Loss [Member]
Beginning Balance at Dec. 31, 2017 $ 497,911 $ 797 $ 260,515 $ 922,178 $ (682,284) $ (3,295)
Beginning Balance, Shares at Dec. 31, 2017   79,652        
Net income (loss) (10,814)     (10,814)    
Adoption of new accounting standards (See Note 1) 3,499     3,499    
Other comprehensive income (loss), net of tax (2,508)         (2,508)
Dividend payments ($0.09 per share) (4,367)     (4,367)    
Dividends accrued on unvested RSUs (2)     (2)    
Stock options exercised 369     (150) 519  
PSUs, RSUs and restricted stock vested       (733) 733  
Purchases of treasury stock (10,171)       (10,171)  
Stock-based compensation expense 1,819   1,819      
Ending Balance at Mar. 31, 2018 475,736 $ 797 262,334 909,611 (691,203) (5,803)
Ending Balance, Shares at Mar. 31, 2018   79,652        
Beginning Balance at Dec. 31, 2017 497,911 $ 797 260,515 922,178 (682,284) (3,295)
Beginning Balance, Shares at Dec. 31, 2017   79,652        
Net income (loss) (10,895)          
Other comprehensive income (loss), net of tax (6,269)          
Ending Balance at Sep. 30, 2018 463,601 $ 797 265,758 900,324 (693,714) (9,564)
Ending Balance, Shares at Sep. 30, 2018   79,652        
Beginning Balance at Mar. 31, 2018 475,736 $ 797 262,334 909,611 (691,203) (5,803)
Beginning Balance, Shares at Mar. 31, 2018   79,652        
Net income (loss) (7,670)     (7,670)    
Other comprehensive income (loss), net of tax (3,315)         (3,315)
Dividend payments ($0.09 per share) (4,312)     (4,312)    
Dividends accrued on unvested RSUs 7     7    
PSUs, RSUs and restricted stock vested       (49) 49  
Purchases of treasury stock (2,603)       (2,603)  
Stock-based compensation expense 1,784   1,784      
Ending Balance at Jun. 30, 2018 459,627 $ 797 264,118 897,587 (693,757) (9,118)
Ending Balance, Shares at Jun. 30, 2018   79,652        
Net income (loss) 7,589     7,589    
Other comprehensive income (loss), net of tax (446)         (446)
Dividend payments ($0.09 per share) (4,297)     (4,297)    
Dividends accrued on unvested RSUs (20)     (20)    
Stock options exercised 952     (385) 1,337  
PSUs, RSUs and restricted stock vested (32)     (150) 118  
Purchases of treasury stock (1,412)       (1,412)  
Stock-based compensation expense 1,640   1,640      
Ending Balance at Sep. 30, 2018 463,601 $ 797 265,758 900,324 (693,714) (9,564)
Ending Balance, Shares at Sep. 30, 2018   79,652        
Beginning Balance at Dec. 31, 2018 $ 446,279 $ 797 267,670 883,975 (691,747) (14,416)
Beginning Balance, Shares at Dec. 31, 2018 79,652 79,652        
Net income (loss) $ 770     770    
Adoption of new accounting standards (See Note 1) 4     (381)   385
Other comprehensive income (loss), net of tax (854)         (854)
Dividend payments ($0.09 per share) (4,301)     (4,301)    
Dividends accrued on unvested RSUs (18)     (18)    
PSUs, RSUs and restricted stock vested (8)     (865) 857  
Purchases of treasury stock (184)       (184)  
Stock-based compensation expense 1,859   1,859      
Ending Balance at Mar. 31, 2019 443,547 $ 797 269,529 879,180 (691,074) (14,885)
Ending Balance, Shares at Mar. 31, 2019   79,652        
Beginning Balance at Dec. 31, 2018 $ 446,279 $ 797 267,670 883,975 (691,747) (14,416)
Beginning Balance, Shares at Dec. 31, 2018 79,652 79,652        
Net income (loss) $ (41,358)          
Other comprehensive income (loss), net of tax (2,475)          
Ending Balance at Sep. 30, 2019 $ 394,955 $ 797 272,854 827,783 (689,973) (16,506)
Ending Balance, Shares at Sep. 30, 2019 79,652 79,652        
Beginning Balance at Mar. 31, 2019 $ 443,547 $ 797 269,529 879,180 (691,074) (14,885)
Beginning Balance, Shares at Mar. 31, 2019   79,652        
Net income (loss) 3,995     3,995    
Other comprehensive income (loss), net of tax 790         790
Dividend payments ($0.09 per share) (4,303)     (4,303)    
Dividends accrued on unvested RSUs (34)     (34)    
Stock options exercised 526     (208) 734  
Stock-based compensation expense 1,454   1,454      
Ending Balance at Jun. 30, 2019 445,975 $ 797 270,983 878,630 (690,340) (14,095)
Ending Balance, Shares at Jun. 30, 2019   79,652        
Net income (loss) (46,123)     (46,123)    
Other comprehensive income (loss), net of tax (2,411)         (2,411)
Dividend payments ($0.09 per share) (4,304)     (4,304)    
Dividends accrued on unvested RSUs 42     42    
PSUs, RSUs and restricted stock vested (95)     (462) 367  
Stock-based compensation expense 1,871   1,871      
Ending Balance at Sep. 30, 2019 $ 394,955 $ 797 $ 272,854 $ 827,783 $ (689,973) $ (16,506)
Ending Balance, Shares at Sep. 30, 2019 79,652 79,652        
v3.19.3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares
3 Months Ended
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Statement Of Stockholders Equity [Abstract]            
Dividend payments $ 0.09 $ 0.09 $ 0.09 $ 0.09 $ 0.09 $ 0.09
v3.19.3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Cash flows from operating activities:    
Net loss $ (41,358) $ (10,895)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization 13,315 11,952
Asset impairments 3,872  
Amortization of net premium (discount) on available-for-sale investments (86) (14)
Net gain on long-term investments (8,195) (5,400)
Net loss on disposal of property, plant and equipment 58 68
Gain on contingency (1,230)  
Gain on life insurance proceeds (1,000)  
Gain on bargain purchase of a business   (11,322)
Stock-based compensation expense 5,184 5,243
Deferred income taxes 30,421 (20,368)
Changes in operating assets and liabilities:    
Accounts receivable, net 7,603 41,166
Other receivables 17,645 (1,842)
Inventory, net (5,998) 16,543
Prepaid expenses and other assets (10,071) 8,722
Accounts payable, net (5,569) 5,223
Accrued expenses and other liabilities 10,564 156
Income tax payable (5,073) 9,461
Net cash provided by operating activities 10,082 48,693
Cash flows from investing activities:    
Purchases of property, plant and equipment (6,008) (5,695)
Proceeds from sales and maturities of debt and equity investments 38,561 116,757
Purchases of debt and equity investments (37,223) (115,271)
Life insurance proceeds received 1,000  
Acquisition of business 13 (7,806)
Net cash used in investing activities (3,657) (12,015)
Cash flows from financing activities:    
Proceeds from stock option exercises 526 1,321
Purchases of treasury stock (184) (14,185)
Dividend payments (12,908) (12,976)
Net cash used in financing activities (12,566) (25,840)
Net increase (decrease) in cash and cash equivalents (6,141) 10,838
Effect of exchange rate changes (2,956) (3,098)
Cash and cash equivalents, beginning of period 105,504 86,433
Cash and cash equivalents, end of period 96,407 94,173
Supplemental disclosure of non-cash investing activities:    
Purchases of property, plant and equipment included in accounts payable $ 135 $ 355
v3.19.3
Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2019
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of ADTRAN®, Inc. and its subsidiaries (“ADTRAN”, the “Company”, “we”, “our” or “us”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim financial information presented in Quarterly Reports on Form 10-Q. Accordingly, certain information and notes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements are not included herein. The December 31, 2018 Condensed Consolidated Balance Sheet is derived from audited financial statements, but does not include all disclosures required by GAAP.

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 financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in ADTRAN’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 28, 2019 (as amended on September 20, 2019, the “2018 Form 10-K”).

Use of Estimates

The preparation of financial statements in conformity with GAAP 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 excess and obsolete inventory reserves, warranty reserves, customer rebates, determination of the deferred and accrued revenue components of multiple performance obligations sales agreements, estimated costs to complete obligations associated with deferred and accrued revenue, 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.

During the three months ended June 30, 2019, the Company revised the methodology used in estimating its excess and obsolete inventory reserves. Under the revised methodology, we establish reserves for estimated excess and obsolete inventory equal to the difference between the cost of the inventory and the estimated net realizable value of the inventory based on historical usage, known trends, inventory age, and market conditions. When we dispose of excess and obsolete inventories, the related disposals are charged against the inventory reserves. See Note 8 for additional information.

Correction of Immaterial Misstatements

During the three months ended June 30, 2019, the Company determined that there was an immaterial misstatement of its excess and obsolete inventory reserves in its previously issued annual and interim financial statements. The Company corrected this misstatement by recognizing a $0.8 million out-of-period adjustment during the three months ended June 30, 2019, which increased its excess and obsolete inventory reserves and cost of goods sold for the period. For the six months ended June 30, 2019, the out-of-period adjustment was a cumulative $0.2 million reduction in the Company’s excess and obsolete inventory reserves and cost of goods sold. In addition, the Company determined that a $1.0 million cash inflow related to an insurance recovery was incorrectly classified as a cash flow from operations instead of a cash flow from investing activities within the unaudited Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2019. The Company has corrected this misstatement in the Unaudited Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2019 to correctly reflect the $1.0 million insurance recovery as a cash inflow from investing activities. Management has determined that these misstatements were not material to any of its previously issued financial statements and that correction of the misstatements is also not material to the current or estimated annual 2019 financial results on either a quantitative and qualitative basis.   

Recent Accounting Pronouncements Not Yet Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326 Financial Instruments – Credit Losses, that clarifies receivables arising from operating leases are not within the scope of the credit losses standard, but rather should be accounted for in accordance with the leases standard. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments–Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which clarifies the accounting for transfers between classifications of debt securities and clarifies that entities should include expected recoveries on financial assets in the calculation of the current expected credit loss allowance. In addition, renewal options that are not unconditionally cancelable should be considered in the determination of expected credit losses. In May 2019, the FASB issued ASU 2019-05, Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief, which amends ASU 2016-13 to allow companies, upon adoption, to elect the fair value option on financial instruments that were previously recorded at amortized cost if they meet certain criteria. All of these ASUs are 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 these ASUs 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 do not expect it will have a material effect on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which changes the fair value measurement disclosure requirements of ASC 820, Fair Value Measurement. The amendments in this ASU are the result of a broader disclosure project, Concepts Statement No. 8 — Conceptual Framework for Financial Reporting — Chapter 8 — Notes to Financial Statements, which the FASB finalized on August 28, 2018. The FASB used the guidance in the Concepts Statement to improve the effectiveness of ASC 820’s disclosure requirements. ASU 2018-13 provides users of financial statements with information about assets and liabilities measured at fair value in the statement of financial position or disclosed in the notes to the financial statements. More specifically, ASU 2018-13 requires disclosures about the valuation techniques and inputs that are used to arrive at measures of fair value, including judgments and assumptions that are made in determining fair value. In addition, ASU 2018-13 requires disclosures regarding the uncertainty in the fair value measurements as of the reporting date and how changes in fair value measurements affect performance and cash flows. ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We are currently evaluating the effect of ASU 2018-13, but do not expect it will have a material effect on our financial statement disclosures.

In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans, which makes changes to and clarifies the disclosure requirements related to defined benefit pension and other postretirement plans. ASU 2018-14 requires additional disclosures related to the reasons for significant gains and losses affecting the benefit obligation and an explanation of any other significant changes in the benefit obligation or plan assets that are not otherwise apparent in other disclosures required by ASC 715. ASU 2018-14 also clarifies the guidance in ASC 715 to require disclosure of the projected benefit obligation (“PBO”) and fair value of plan assets for pension plans with PBOs in excess of plan assets and the accumulated benefit obligation (“ABO”) and fair value of plan assets for pension plans with ABOs in excess of plan assets. ASU 2018-14 is effective for public business entities for fiscal years ending after December 15, 2020. We are currently evaluating the effect of ASU 2018-14, but do not expect it will have a material effect on our financial statement disclosures.

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.  ASU 2018-15 clarifies certain aspects of ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. Specifically, ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementations costs incurred to develop or obtain internal use software. ASU 2018-15 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 of ASU 2018-15, but do not expect it will have a material effect on our consolidated financial statements.

Recently Adopted Accounting Pronouncements

During 2019, we adopted the following accounting standards, which had the following impacts on our consolidated financial statements:

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires an entity to recognize right-of-use assets and lease liabilities on the balance sheet and to disclose key information about the entity’s leasing arrangements. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, which clarified certain aspects of ASU 2016-02, as well as ASU 2018-11, Leases (Topic 842), Targeted Improvements, which provided for an optional transition method allowing for the application of the legacy lease guidance, Leases (Topic 840), including its disclosure requirements, for the comparative periods presented in the year of adoption, with the cumulative effect of initially applying the new lease standard recognized as an adjustment to retained earnings as of the date of adoption. In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842) Codification Improvements, which removed the requirement for an entity to disclose in the interim periods after adoption, the effect of the change on income from continuing operations, net income, any other affected financial statement line item, and any affected per share amount. For lessors, the new leasing standard requires leases to be classified as sales-type, direct financing or operating leases. These criteria focus on the transfer of control of the underlying lease asset. This standard and related updates were effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.

 

The Company adopted the new standard on January 1, 2019, the effective date of our initial application, using the optional transition method. At that time, the Company elected to carry forward the legacy ASC 840 disclosures for comparative periods and, therefore, did not adjust the comparative period financial information prior to January 1, 2019. In addition, the Company elected the package of practical expedients which allows for companies to not reassess whether any expired or existing contracts are or contain leases, not reassess historical lease classifications for expired or existing contracts and not reassess initial direct costs for existing leases. Additionally, the Company elected the practical expedients which allow the use of hindsight when determining the lease term, the short-term lease recognition exemption and the option to not separate lease and non-lease components. The adoption of this standard resulted in the recognition of a right-of-use asset and corresponding right-of-use liability on our Condensed Consolidated Balance Sheet of $10.3 million as of January 1, 2019, primarily related to our operating leases for office space, automobiles and other equipment.  

 

As a lessee, the adoption of this standard did not have a material impact on our Condensed Consolidated Statement of Income or Statement of Cash Flows. See Note 12 for additional information.

As a lessor, the adoption of this standard did not have a material impact on the Company’s Condensed Consolidated Balance Sheet, Condensed Consolidated Statement of Income or Condensed Consolidated Statement of Cash Flows. Prior to and after adoption, all of our leases in which we are the lessor were classified as sales-type leases.  

In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, which shortened the amortization period for the premium on certain purchased callable debt securities to the earliest call date. ASU 2017-08 was effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018. The amendments were required to be applied through a modified-retrospective transition approach that required a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company adopted ASU 2017-08 on January 1, 2019, and the adoption of this standard did not 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 expanded and refined hedge accounting for both financial and non-financial risk components, aligned the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and included certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness.  In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting, which permits the OIS rate based on SOFR as a U.S. benchmark interest rate. Both ASU 2017-12 and ASU 2018-16 were effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted ASU 2017-12 on January 1, 2019, and the adoption of this standard did not have a material effect on our consolidated financial statements as we did not have any hedging instruments as of the date of adoption.

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 allowed 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 was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted ASU 2018-02 on January 1, 2019, and upon adoption reclassified $0.4 million of stranded tax effects created by rate changes related to the Tax Cuts and Jobs Act of 2017 to retained earnings. See Note 13 for additional information.

v3.19.3
Business Combinations
9 Months Ended
Sep. 30, 2019
Business Combinations [Abstract]  
Business Combinations

2.  BUSINESS COMBINATIONS

On November 30, 2018, we acquired SmartRG, Inc. (“SmartRG”), a provider of carrier-class, open connected home platforms and cloud services for broadband service providers in exchange for cash consideration. 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. The revenue from the SmartRG portfolio is included in the Subscriber Solutions & Experience category within the Network Solutions and Services & Support reportable segments.  

Contingent liabilities with a fair value totaling $1.2 million were recognized at the acquisition date, the payments of which were dependent upon SmartRG achieving future revenue, EBIT or customer purchase order milestones during the first half of 2019. The required milestones were not achieved and, therefore, we recognized a gain of $1.2 million upon the reversal of these liabilities during the second quarter of 2019.

An escrow in the amount of $2.8 million was set up at the acquisition date to fund post-closing working capital settlements and to satisfy indemnity obligations to the Company arising from any inaccuracy or breach of representations, warranties, covenants, agreements or obligations of the sellers. The escrow is subject to arbitration with final settlement expected during the fourth quarter of 2020. The minimum and maximum potential release of funds to the sellers ranges from zero to $2.8 million.  

We recorded goodwill of $3.5 million as a result of this acquisition, which represents the excess of the purchase price over the fair value of net assets acquired. We assessed the recognition and measurement of the assets acquired and liabilities assumed based on historical and forecasted data for future periods and concluded that our valuation procedures and resulting measures were appropriate.

 

The final allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date for SmartRG are as follows:

 

(In thousands)

 

 

 

 

Assets

 

 

 

 

  Tangible assets acquired

 

$

8,594

 

  Intangible assets

 

 

9,960

 

  Goodwill

 

 

3,476

 

Total assets acquired

 

 

22,030

 

Liabilities

 

 

 

 

  Liabilities assumed

 

 

(6,001

)

Total liabilities assumed

 

 

(6,001

)

Total purchase price

 

$

16,029

 

 

The details of the acquired intangible assets from the SmartRG acquisition are as follows:

 

(In thousands)

Value

 

 

Life (in years)

Developed technology

$

7,400

 

 

7

Customer relationships

 

1,790

 

 

3

Licensing agreements

 

560

 

 

5 – 10

Trade name

 

210

 

 

3

Total

$

9,960

 

 

 

 

For the three and nine months ended September 30, 2019, we incurred acquisition and integration related expenses and amortization of acquired intangibles of $0.5 million and $1.7 million, respectively, related to the SmartRG acquisition. No acquisition-related expenses were incurred during the three and nine months ended September 30, 2018 related to the SmartRG acquisition.

On March 19, 2018, we acquired Sumitomo Electric Lightwave Corp.’s North American EPON business and entered into a technology license and OEM supply agreement with Sumitomo Electric Industries, Ltd. 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. This revenue is included in the Access & Aggregation and Subscriber Solutions & Experience categories within the Network Solutions reportable segment.

 

We recorded a bargain purchase gain, net of income taxes, of $11.3 million during the first quarter of 2018, which represents the difference between the fair value of the net assets acquired over the cash paid. We assessed the recognition and measurement of the assets acquired and liabilities assumed based on historical and forecasted data for future periods and concluded that our valuation procedures and resulting measures were appropriate.

 

The following unaudited supplemental pro forma information presents the financial results of the Company for the nine months ended September 30, 2018 as if the acquisition of the Sumitomo EPON business had occurred on January 1, 2018. 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, 2018, nor is it indicative of any future results. There were no material, non-recurring adjustments to this unaudited pro forma information.

 

 

Nine Months Ended

 

(In thousands)

September 30, 2018

 

Pro forma revenue

$

390,449

 

Pro forma net loss

$

(23,431

)

 

v3.19.3
Revenue
9 Months Ended
Sep. 30, 2019
Revenue From Contract With Customer [Abstract]  
Revenue

3. REVENUE

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 software-defined next-generation virtualized solutions used in service provider or business networks, as well as prior generation products. The majority of the revenue from this segment is from hardware sales. In certain transactions, we are also the lessor in sales-type lease arrangements for network equipment. These arrangements typically include network equipment, network implementation services and maintenance services. Network implementation services and maintenance services are included in the Services & Support segment discussed below. See Note 12 for additional information.

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.    

Sales by Category

 

In addition to our reporting segments, we also report revenue in the following three categories – Access & Aggregation, Subscriber Solutions & Experience and Traditional & Other Products.  

 

The following table disaggregates our revenue by reportable segment and revenue category for the three months ended September 30, 2019 and 2018:

 

 

 

Three Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

48,902

 

 

$

16,212

 

 

$

65,114

 

 

$

76,046

 

 

$

15,855

 

 

$

91,901

 

Subscriber Solutions & Experience(1)

 

 

40,382

 

 

 

2,094

 

 

 

42,476

 

 

 

37,313

 

 

 

1,239

 

 

 

38,552

 

Traditional & Other Products

 

 

4,734

 

 

 

1,768

 

 

 

6,502

 

 

 

7,684

 

 

 

2,198

 

 

 

9,882

 

Total

 

$

94,018

 

 

$

20,074

 

 

$

114,092

 

 

$

121,043

 

 

$

19,292

 

 

$

140,335

 

 

 

(1)

Subscriber Solutions & Experience was formerly reported as Customer Devices. With the increasing focus on enhancing the customer experience for both our business and consumer broadband customers and the addition of SmartRG during the fourth quarter of 2018, Subscriber Solutions & Experience more accurately represents this revenue category.

The following table disaggregates our revenue by reportable segment and revenue category for the nine months ended September 30, 2019 and 2018:

 

 

 

Nine Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

230,837

 

 

$

43,476

 

 

$

274,313

 

 

$

220,653

 

 

$

37,670

 

 

$

258,323

 

Subscriber Solutions & Experience(1)

 

 

113,545

 

 

 

6,186

 

 

 

119,731

 

 

 

99,396

 

 

 

3,817

 

 

 

103,213

 

Traditional & Other Products

 

 

14,625

 

 

 

5,605

 

 

 

20,230

 

 

 

21,310

 

 

 

6,343

 

 

 

27,653

 

Total

 

$

359,007

 

 

$

55,267

 

 

$

414,274

 

 

$

341,359

 

 

$

47,830

 

 

$

389,189

 

 

 

(1)

Subscriber Solutions & Experience was formerly reported as Customer Devices. With the increasing focus on enhancing the customer experience for both our business and consumer broadband customers and the addition of SmartRG during the fourth quarter of 2018, Subscriber Solutions & Experience more accurately represents this revenue category.

 

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. 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). As of September 30, 2019, we did not have any significant 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)

 

September 30, 2019

 

 

December 31, 2018

 

Accounts receivable, net

 

$

90,647

 

 

$

99,385

 

Contract assets(1)

 

$

2,434

 

 

$

3,766

 

Unearned revenue

 

$

14,022

 

 

$

17,940

 

Non-current unearned revenue

 

$

4,581

 

 

$

5,296

 

 

 

(1)

Included in other receivables on the Condensed Consolidated Balance Sheet.

 

Of the outstanding unearned revenue balance at December 31, 2018, $1.2 million and $11.7 million was recognized as revenue during the three and nine months ended September 30, 2019, respectively.

v3.19.3
Income Taxes
9 Months Ended
Sep. 30, 2019
Income Tax Disclosure [Abstract]  
Income Taxes

4. INCOME TAXES

Our effective tax rate increased from a benefit of 34.9%, excluding the tax effect of the bargain purchase gain, in the nine months ended September 30, 2018, to an expense of 197.1% in the nine months ended September 30, 2019. The increase in the effective tax rate between the two periods was primarily driven by the establishment of a valuation allowance against our domestic deferred tax assets in the amount of $37.1 million during the three months ended September 30, 2019, offset by a 9.38% rate reduction related to a transfer pricing study completed during the second quarter of 2019 that resulted in the assignment of operating expenditures to specific company locations, and the effective income tax rates among the respective jurisdictions.

 

As of September 30, 2019, the Company had deferred tax assets totaling $49.4 million. As of September 30, 2019, a valuation allowance totaling $42.9 million has been established against our deferred tax assets. Of this amount, $37.1 million was established during the third quarter of 2019 relating to our domestic deferred tax assets. The remaining $5.8 million that was established in prior periods relates to state research and development credit carryforwards, and foreign net operating loss and research and development credit carryforwards, where we lack sufficient activity to realize those deferred tax assets. The remaining $6.5 million in deferred tax assets not offset by a valuation allowance are located in various foreign jurisdictions where the Company believes it is more likely than not we will realize these deferred tax assets.  

Supplemental balance sheet information related to deferred tax assets is as follows:

 

 

 

September 30, 2019

 

(In thousands)

 

Deferred Tax Assets

 

 

Valuation Allowance

 

 

Deferred Tax Assets, net

 

Domestic

 

$

40,496

 

 

$

(40,496

)

 

$

 

International

 

 

8,909

 

 

 

(2,417

)

 

 

6,492

 

Total

 

$

49,405

 

 

$

(42,913

)

 

$

6,492

 

The Company continually reviews the adequacy of our valuation allowance and recognizes the benefits of deferred tax assets only as the reassessment indicates that it is more likely than not that the deferred tax assets will be realized in accordance with ASC 740, Income Taxes. Due to our recent decrease in revenue and profitability for the third quarter of 2019, management’s current expectations for revenue for the remainder of 2019, and all other positive and negative objective evidence considered as part of our analysis, our ability to consider other subjective evidence such as projections for future growth is limited when evaluating whether our deferred tax assets will be realized. As such, the Company is no longer able to conclude that it is more likely than not that our domestic deferred tax assets will be realized. The amount of the deferred tax assets considered realizable, however, could be adjusted in future periods in the event sufficient evidence is present to support a conclusion that it is more likely than not that all or a portion of our domestic deferred tax assets will be realized.

v3.19.3
Pension Benefit Plan
9 Months Ended
Sep. 30, 2019
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 nine months ended September 30, 2019 and 2018:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Service cost

 

$

366

 

 

$

294

 

 

$

1,109

 

 

$

905

 

Interest cost

 

 

158

 

 

 

179

 

 

 

479

 

 

 

551

 

Expected return on plan assets

 

 

(346

)

 

 

(381

)

 

 

(1,049

)

 

 

(1,174

)

Amortization of actuarial losses

 

 

198

 

 

 

61

 

 

 

600

 

 

 

188

 

Net periodic pension cost

 

$

376

 

 

$

153

 

 

$

1,139

 

 

$

470

 

 

The components of net periodic pension cost, other than the service cost component, are included in other income (expense), net in the Condensed Consolidated Statements of Income. Service cost are included in cost of sales, selling, general and administrative expenses and research and development expenses in the Condensed Consolidated Statements of Income.

v3.19.3
Stock-Based Compensation
9 Months Ended
Sep. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock-Based Compensation

6. STOCK-BASED COMPENSATION

The following table summarizes stock-based compensation expense related to stock options, performance stock units (“PSUs”), restricted stock units (“RSUs”) and restricted stock for the three and nine months ended September 30, 2019 and 2018:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Stock-based compensation expense included in cost of sales

 

$

83

 

 

$

101

 

 

$

272

 

 

$

298

 

Selling, general and administrative expense

 

 

1,142

 

 

 

894

 

 

 

2,867

 

 

 

2,924

 

Research and development expense

 

 

646

 

 

 

645

 

 

 

2,045

 

 

 

2,021

 

Stock-based compensation expense included in operating expenses

 

 

1,788

 

 

 

1,539

 

 

 

4,912

 

 

 

4,945

 

Total stock-based compensation expense

 

 

1,871

 

 

 

1,640

 

 

 

5,184

 

 

 

5,243

 

Tax benefit for expense associated with stock options, PSUs, RSUs and restricted stock

 

 

(446

)

 

 

(292

)

 

 

(1,235

)

 

 

(1,016

)

Total stock-based compensation expense, net of tax

 

$

1,425

 

 

$

1,348

 

 

$

3,949

 

 

$

4,227

 

Stock Options

The following table is a summary of our stock options outstanding as of December 31, 2018 and September 30, 2019, and the changes that occurred during the nine months ended September 30, 2019:

 

 

 

Number of

Stock Options

(in thousands)

 

 

Weighted Avg.

Exercise Price

(per share)

 

 

Weighted Avg.

Remaining

Contractual

Life

(in years)

 

 

Aggregate

Intrinsic Value

(in thousands)

 

Stock options outstanding, December 31, 2018

 

 

4,382

 

 

$

22.91

 

 

 

4.10

 

 

$

 

Stock options exercised

 

 

(34

)

 

$

15.53

 

 

 

 

 

 

 

 

 

Stock options forfeited

 

 

(28

)

 

$

15.53

 

 

 

 

 

 

 

 

 

Stock options expired

 

 

(183

)

 

$

24.41

 

 

 

 

 

 

 

 

 

Stock options outstanding, September 30, 2019

 

 

4,137

 

 

$

22.96

 

 

 

3.27

 

 

$

 

Stock options exercisable, September 30, 2019

 

 

3,915

 

 

$

23.39

 

 

 

3.11

 

 

$

 

At September 30, 2019, total unrecognized compensation expense related to non-vested stock options was approximately $0.1 million, which is expected to be recognized over an average remaining recognition period of 0.3 years. Unrecognized compensation expense will be adjusted for actual forfeitures.

 

All of the options above were issued at exercise prices that approximated fair market value at the date of grant. 

The aggregate intrinsic value of stock options represents the total pre-tax intrinsic value (the difference between ADTRAN’s closing stock price on the last trading day of the quarter and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2019. The amount of aggregate intrinsic value will change based on the fair market value of ADTRAN’s stock and was zero as of September 30, 2019. The total pre-tax intrinsic value of options exercised during the nine months ended September 30, 2019 was $0.1 million.  

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. These variables include, but are not limited to, the volatility of our stock price and employee exercise behaviors.

There were no stock options granted during the three and nine months ended September 30, 2019 and 2018.

PSUs, RSUs and Restricted Stock

 

The following table is a summary of our PSUs, RSUs and restricted stock outstanding as of December 31, 2018 and September 30, 2019 and the changes that occurred during the nine months ended September 30, 2019.

 

 

 

Number of

Shares

(in thousands)

 

 

Weighted Avg. Grant Date Fair Value

(per share)

 

Unvested PSUs, RSUs and restricted stock outstanding, December 31, 2018

 

 

1,570

 

 

$

18.52

 

PSUs, RSUs and restricted stock granted

 

 

63

 

 

$

12.81

 

PSUs, RSUs and restricted stock vested

 

 

(22

)

 

$

17.13

 

PSUs, RSUs and restricted stock forfeited

 

 

(175

)

 

$

18.69

 

Unvested PSUs, RSUs and restricted stock outstanding, September 30, 2019

 

 

1,436

 

 

$

18.27

 

 

The fair value of our PSUs with market and performance 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 business day immediately preceding the grant date.  

At September 30, 2019, total unrecognized compensation expense related to the non-vested portion of market-based PSUs, RSUs and restricted stock was approximately $11.6 million, which is expected to be recognized over an average remaining recognition period of 2.4 years. In addition, there was $8.2 million of unrecognized compensation expense related to unvested 2017 performance-based PSUs, which will be recognized over the remaining requisite service period of 0.3 years if achievement of the performance obligation becomes probable. For the three and nine months ended September 30, 2019 and 2018, no compensation expense was recognized related to these 2017 performance-based PSUs. Unrecognized compensation expense will be adjusted for actual forfeitures.


At September 30, 2019, 2.7  million shares were available for issuance under shareholder-approved equity plans in connection with the grant and exercise of stock options, PSUs, RSUs or restricted stock.

v3.19.3
Investments
9 Months Ended
Sep. 30, 2019
Investments Debt And Equity Securities [Abstract]  
Investments

7. INVESTMENTS

Debt Securities and Other Investments

At September 30, 2019, we held the following debt securities and other investments, recorded at fair value:

 

 

 

Amortized

 

 

Gross Unrealized

 

 

Fair

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Corporate bonds

 

$

10,733

 

 

$

95

 

 

$

 

 

$

10,828

 

Municipal fixed-rate bonds

 

 

931

 

 

 

 

 

 

(1

)

 

 

930

 

Asset-backed bonds

 

 

7,222

 

 

 

35

 

 

 

(2

)

 

 

7,255

 

Mortgage/Agency-backed bonds

 

 

7,366

 

 

 

29

 

 

 

(7

)

 

 

7,388

 

U.S. government bonds

 

 

9,160

 

 

 

4

 

 

 

(21

)

 

 

9,143

 

Foreign government bonds

 

 

372

 

 

 

 

 

 

(3

)

 

 

369

 

Available-for-sale debt securities held at fair value

 

$

35,784

 

 

$

163

 

 

$

(34

)

 

$

35,913

 

 

At December 31, 2018, we held the following debt securities and other investments, recorded at fair value:

 

 

 

Amortized

 

 

Gross Unrealized

 

 

Fair

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Corporate bonds

 

$

20,777

 

 

$

19

 

 

$

(112

)

 

$

20,684

 

Municipal fixed-rate bonds

 

 

1,339

 

 

 

 

 

 

(26

)

 

 

1,313

 

Asset-backed bonds

 

 

5,230

 

 

 

5

 

 

 

(14

)

 

 

5,221

 

Mortgage/Agency-backed bonds

 

 

3,833

 

 

 

2

 

 

 

(44

)

 

 

3,791

 

U.S. government bonds

 

 

9,271

 

 

 

1

 

 

 

(66

)

 

 

9,206

 

Foreign government bonds

 

 

592

 

 

 

 

 

 

(8

)

 

 

584

 

Available-for-sale debt securities held at fair value

 

$

41,042

 

 

$

27

 

 

$

(270

)

 

$

40,799

 

 

As of September 30, 2019, 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

 

$

3,154

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

One to two years

 

 

4,316

 

 

 

930

 

 

 

941

 

 

 

215

 

 

 

 

 

 

 

Two to three years

 

 

3,068

 

 

 

 

 

 

2,475

 

 

 

1,072

 

 

 

7,528

 

 

 

 

Three to five years

 

 

290

 

 

 

 

 

 

1,593

 

 

 

920

 

 

 

1,615

 

 

 

369

 

Five to ten years

 

 

 

 

 

 

 

 

1,666

 

 

 

680

 

 

 

 

 

 

 

More than ten years

 

 

 

 

 

 

 

 

580

 

 

 

4,501

 

 

 

 

 

 

 

Total

 

$

10,828

 

 

$

930

 

 

$

7,255

 

 

$

7,388

 

 

$

9,143

 

 

$

369

 

Actual maturities may differ from contractual maturities as 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

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Gross realized gains on debt securities

 

$

36

 

 

$

24

 

 

$

85

 

 

$

49

 

Gross realized losses on debt securities

 

 

(7

)

 

 

(50

)

 

 

(40

)

 

 

(365

)

Total gain (loss) recognized, net

 

$

29

 

 

$

(26

)

 

$

45

 

 

$

(316

)

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 September 30, 2019, we held a $25.6 million restricted certificate of deposit that is carried at cost and matures on January 8, 2020. 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 $25.6 million at September 30, 2019 and December 31, 2018. At September 30, 2019 and December 31, 2018, the estimated fair value of the Bond using a level 2 valuation technique was approximately $25.6 million and $25.4 million, respectively, based on a debt security with a comparable interest rate and maturity and a Standard and Poor’s credit rating of AA+. We have the right to offset 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. We have made annual principal payments in addition to the interest amounts that are due. The restricted funds held as collateral against the outstanding principal amount of the Bond will be used to pay the outstanding principal and interest upon the Bond’s maturity.

Marketable Equity Securities

 

Our marketable equity securities consist of publicly traded stock, funds and certain other investments measured at fair value or cost (where appropriate).

 

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 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 retained earnings.

 

ASU 2016-01 also provides a measurement alternative for equity investments that do not have a readily determinable fair value in which investments can be recorded at cost less impairment, if any, adjusted for observable price changes for an identical or similar investment. We elected to record our equity investment that does not have a readily determinable fair value using the measurement alternative method. As of December 31, 2018, the Company had a note receivable of approximately $4.3 million, which was included in other receivables on the Condensed Consolidated Balance Sheet. During the three months ended March 31, 2019, this amount was repaid and reissued in the form of debt and equity. Approximately $3.4 million was issued as an equity investment, which represented a non-cash investing activity. The carrying value of this investment under the measurement alternative was $3.4 million as of September 30, 2019. The remaining amount, approximately $0.9 million, was converted into a new note receivable, which is included in other receivables on the Condensed Consolidated Balance Sheet and represents a non-cash operating activity.

Realized and unrealized gains and losses for our marketable equity securities for the three and nine months ended September 30, 2019 and 2018 were as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Realized gains (losses) on equity securities sold

 

$

(20

)

 

$

1,240

 

 

$

(83

)

 

$

1,587

 

Unrealized gains (losses) on equity securities held

 

 

(225

)

 

 

3,293

 

 

 

8,233

 

 

 

4,129

 

Total gain (loss) recognized, net

 

$

(245

)

 

$

4,533

 

 

$

8,150

 

 

$

5,716

 

 

As of September 30, 2019 and 2018, gross unrealized losses related to individual investments in a continuous loss position for twelve months or longer were not material.

 

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 September 30, 2019 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

 

$

1,817

 

 

$

1,817

 

 

$

 

 

$

 

Commercial paper

 

 

1,295

 

 

 

 

 

 

1,295

 

 

 

 

Cash equivalents

 

 

3,112

 

 

 

1,817

 

 

 

1,295

 

 

 

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

10,828

 

 

 

 

 

 

10,828

 

 

 

 

Municipal fixed-rate bonds

 

 

930

 

 

 

 

 

 

930

 

 

 

 

Asset-backed bonds

 

 

7,255

 

 

 

 

 

 

7,255

 

 

 

 

Mortgage/Agency-backed bonds

 

 

7,388

 

 

 

 

 

 

7,388

 

 

 

 

U.S. government bonds

 

 

9,143

 

 

 

9,143

 

 

 

 

 

 

 

Foreign government bonds

 

 

369

 

 

 

 

 

 

369

 

 

 

 

Marketable equity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities – various industries

 

 

32,543

 

 

 

32,543

 

 

 

 

 

 

 

Equity in escrow

 

 

165

 

 

 

165

 

 

 

 

 

 

 

Deferred compensation plan assets

 

 

20,580

 

 

 

20,580

 

 

 

 

 

 

 

Total debt and equity securities at fair value

 

 

89,201

 

 

 

62,431

 

 

 

26,770

 

 

 

 

Total

 

$

92,313

 

 

$

64,248

 

 

$

28,065

 

 

$

 

 

 

 

 

 

 

 

Fair Value Measurements at December 31, 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

 

$

1,554

 

 

$

1,554

 

 

$

 

 

$

 

Cash equivalents

 

 

1,554

 

 

 

1,554

 

 

 

 

 

 

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

20,684

 

 

 

 

 

 

20,684

 

 

 

 

Municipal fixed-rate bonds

 

 

1,313

 

 

 

 

 

 

1,313

 

 

 

 

Asset-backed bonds

 

 

5,221

 

 

 

 

 

 

5,221

 

 

 

 

Mortgage/Agency-backed bonds

 

 

3,791

 

 

 

 

 

 

3,791

 

 

 

 

U.S. government bonds

 

 

9,206

 

 

 

9,206

 

 

 

 

 

 

 

Foreign government bonds

 

 

584

 

 

 

 

 

 

584

 

 

 

 

Marketable equity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities – various industries

 

 

26,763

 

 

 

26,763

 

 

 

 

 

 

 

Equity in escrow

 

 

253

 

 

 

253

 

 

 

 

 

 

 

Deferred compensation plan assets

 

 

18,256

 

 

 

18,256

 

 

 

 

 

 

 

Total debt and equity securities at fair value

 

 

86,071

 

 

 

54,478

 

 

 

31,593

 

 

 

 

Total

 

$

87,625

 

 

$

56,032

 

 

$

31,593

 

 

$

 

 

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, 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.  

v3.19.3
Inventory
9 Months Ended
Sep. 30, 2019
Inventory Disclosure [Abstract]  
Inventory

8. INVENTORY

At September 30, 2019 and December 31, 2018, inventory consisted of the following:

 

 

 

September 30,

 

 

December 31,

 

(In thousands)

 

2019

 

 

2018

 

Raw materials

 

$

39,133

 

 

$

45,333

 

Work in process

 

 

1,083

 

 

 

1,638

 

Finished goods

 

 

64,725

 

 

 

52,877

 

Total

 

$

104,941

 

 

$

99,848

 

 

Inventory reserves are established for estimated excess and obsolete inventory equal to the difference between the cost of the inventory and the estimated net realizable value of the inventory based on historical usage, known trends, inventory age, and market conditions. At September 30, 2019 and December 31, 2018, our inventory reserve was $32.0 million and $30.0 million, respectively.

 

v3.19.3
Property, Plant and Equipment
9 Months Ended
Sep. 30, 2019
Property Plant And Equipment [Abstract]  
Property, Plant and Equipment

9. PROPERTY, PLANT AND EQUIPMENT

At September 30, 2019 and December 31, 2018, property, plant and equipment consisted of the following:

 

 

 

September 30,

 

 

December 31,

 

(In thousands)

 

2019

 

 

2018

 

Land

 

$

4,575

 

 

$

4,575

 

Building and land improvements

 

 

34,634

 

 

 

34,379

 

Building

 

 

68,247

 

 

 

68,183

 

Furniture and fixtures

 

 

19,878

 

 

 

19,831

 

Computer hardware and software

 

 

72,390

 

 

 

92,071

 

Engineering and other equipment

 

 

129,479

 

 

 

127,060

 

Total Property, Plant and Equipment

 

 

329,203

 

 

 

346,099

 

Less accumulated depreciation

 

 

(255,819

)

 

 

(265,464

)

Total Property, Plant and Equipment, net

 

$

73,384

 

 

$

80,635

 

 

Depreciation expense was $3.1 million for the three months ended September 30, 2019 and 2018 and was $9.3 million and $9.5 million for the nine months ended September 30, 2019 and 2018, respectively, which is recorded in cost of sales, selling, general and administrative expenses and research and development expenses in the Condensed Consolidated Statements of Income.

 

We review long-lived assets used in operations for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the undiscounted cash flows estimated to be generated by the asset are less than the asset’s carrying value. During the three and nine months ended September 30, 2019, the Company recognized impairment charges of $3.9 million related to the abandonment of certain information technology projects in which we had previously capitalized costs related to these projects. The impairment charges were determined based on actual costs incurred as part of the projects.

v3.19.3
Goodwill
9 Months Ended
Sep. 30, 2019
Goodwill Disclosure [Abstract]  
Goodwill

10. GOODWILL

Goodwill, all of which relates to our acquisitions of Bluesocket, Inc. in 2011 and SmartRG in 2018, was $7.0 million and $7.1 million at September 30, 2019 and December 31, 2018, respectively, of which $6.6 million and $0.4 million was allocated to our Network Solutions and Services & Support reportable segments, respectively, as of September 30, 2019, and of which $6.7 million and $0.4 million was allocated to our Network Solutions and Services & Support reportable segments, respectively, as of December 31, 2018. Goodwill related to our SmartRG acquisition was reduced by $0.1 million during the nine months ended September 30, 2019 as a result of a measurement period adjustment.

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 the fourth quarter of 2018, we concluded that it was not necessary to perform the two-step impairment test. No events or circumstances occurred during the nine months ended September 30, 2019 that would more likely than not reduce the fair value of goodwill below its carrying value.

v3.19.3
Intangible Assets
9 Months Ended
Sep. 30, 2019
Intangible Assets Net Excluding Goodwill [Abstract]  
Intangible Assets

11. INTANGIBLE ASSETS

Intangible assets include those acquired in conjunction with several acquisitions since 2011, with the most recent being SmartRG, Inc. in November 2018.

The following table presents our intangible assets as of September 30, 2019 and December 31, 2018:

 

 

 

September 30, 2019

 

 

December 31, 2018

 

(In thousands)

 

Gross

Value

 

 

Accumulated Amortization

 

 

Net Value

 

 

Gross

Value

 

 

Accumulated Amortization

 

 

Net Value

 

Customer relationships

 

$

22,235

 

 

$

(6,671

)

 

$

15,564

 

 

$

22,455

 

 

$

(5,380

)

 

$

17,075

 

Developed technology

 

 

10,170

 

 

 

(3,094

)

 

 

7,076

 

 

 

12,801

 

 

 

(4,867

)

 

 

7,934

 

Licensed technology

 

 

5,900

 

 

 

(1,011

)

 

 

4,889

 

 

 

5,900

 

 

 

(520

)

 

 

5,380

 

Supplier relationships

 

 

2,800

 

 

 

(2,158

)

 

 

642

 

 

 

2,800

 

 

 

(1,108

)

 

 

1,692

 

Licensing agreements

 

 

560

 

 

 

(61

)

 

 

499

 

 

 

560

 

 

 

(5

)

 

 

555

 

Patents

 

 

500

 

 

 

(209

)

 

 

291

 

 

 

500

 

 

 

(157

)

 

 

343

 

Trade names

 

 

310

 

 

 

(158

)

 

 

152

 

 

 

310

 

 

 

(106

)

 

 

204

 

Total

 

$

42,475

 

 

$

(13,362

)

 

$

29,113

 

 

$

45,326

 

 

$

(12,143

)

 

$

33,183

 

 

Amortization expense was $1.3 million and $0.9 million for the three months ended September 30, 2019 and 2018, respectively, and $4.0 million and $2.4 million for the nine months ended September 30, 2019 and 2018, respectively.

As of September 30, 2019, estimated future amortization expense of our intangible assets was as follows:

 

(In thousands)

 

Amount

 

Remainder of 2019

 

$

1,329

 

2020

 

 

4,436

 

2021

 

 

4,088

 

2022

 

 

3,464

 

2023

 

 

3,313

 

Thereafter

 

 

12,483

 

Total

 

$

29,113

 

 

v3.19.3
Leases
9 Months Ended
Sep. 30, 2019
Leases [Abstract]  
Leases

12. LEASES

Operating Leases

 

We have operating leases for office space, automobiles, and various other equipment in the United States and in certain international locations in which we do business. We also have other contracts, such as manufacturing agreements and service agreements, which we reviewed to determine if they contain any embedded leases. We specifically reviewed these other contracts to determine whether we have the right to substantially all of the economic benefit from the use of any specified assets or the right to direct the use of any specified assets, either of which would indicate the existence of a lease.

As of September 30, 2019, our operating leases have remaining lease terms of two months to six years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within three months. For those leases that are reasonably assured to be renewed, we have included the option to extend as part of our right of use asset and lease liability. Leases with an initial term of 12 months or less are not recorded on the balance sheet and lease expense for these leases is recognized on a straight-line basis over the lease term. Lease expense related to these short-term leases was $0.1 million and $0.3 million for the three and nine months ended September 30, 2019, respectively, and is included in cost of sales, selling, general and administrative expenses and research and development expenses in the Condensed Consolidated Statements of Income. Lease expense related to variable lease payments that do not depend on an index or rate, such as real estate taxes and insurance reimbursements, was $0.3 million and $0.7 million for the three and nine months ended September 30, 2019. For lease agreements entered into or reassessed after the adoption of Topic 842, we elected to not separate lease and non-lease components. None of our lease agreements contain any material residual value guarantees or material restrictive covenants.

Supplemental balance sheet information related to operating leases is as follows:

 

 

 

 

 

September 30,

 

 

January 1,

 

(In thousands)

 

Classification

 

2019

 

 

2019 (1)

 

Assets

 

 

 

 

 

 

 

 

 

 

Operating lease asset

 

Other assets

 

$

18,529

 

 

$

10,322

 

Total lease assets

 

 

 

$

18,529

 

 

$

10,322

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

Current operating lease liability

 

Accrued expenses

 

$

3,063

 

 

$

2,948

 

Non-current operating lease liability

 

Other non-current liabilities

 

 

15,659

 

 

 

7,374

 

Total lease liability

 

 

 

$

18,722

 

 

$

10,322

 

 

 

(1)

Reflects the adoption of the new lease accounting standard on January 1, 2019.

 

The components of lease expense included in the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2019 were as follows:

 

(in thousands)

 

Three Months Ended

September 30, 2019

 

 

Nine Months Ended

September 30, 2019

 

Selling, general and administrative expenses

 

$

352

 

 

$

1,050

 

Research and development expenses

 

 

847

 

 

 

1,731

 

Cost of sales

 

 

16

 

 

 

49

 

Total operating lease expense

 

$

1,215

 

 

$

2,830

 

As of September 30, 2019, operating lease liabilities included on the Condensed Consolidated Balance Sheet by future maturity were as follows:

 

(In thousands)

 

Amount

 

Remainder of 2019

 

$

1,044

 

2020

 

 

3,417

 

2021

 

 

3,071

 

2022

 

 

2,672

 

2023

 

 

2,350

 

Thereafter

 

 

8,258

 

Total lease payments

 

 

20,812

 

Less: Interest

 

 

(2,090

)

Present value of lease liabilities

 

$

18,722

 

Future operating lease payments include $7.6 million related to options to extend lease terms that are reasonably certain of being exercised. There are no legally binding leases that have not yet commenced.  

As of December 31, 2018, future minimum rental payments under non-cancelable operating leases, including renewals determined to be reasonably assured as of December 31, 2018, with original maturities of greater than 12 months, were as follows:

(In thousands)

 

Amount (1)

 

2019

 

$

3,873

 

2020

 

 

3,580

 

2021

 

 

2,771

 

2022

 

 

2,053

 

2023

 

 

1,317

 

Thereafter

 

 

762

 

Total

 

$

14,356

 

 

(1)

Certain renewal options were subsequently determined to not be reasonably assured of renewal upon the Company’s adoption of the new lease accounting standard on January 1, 2019.

 

Our leases do not provide an implicit borrowing rate and therefore we use an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We used the incremental borrowing rate on January 1, 2019, for operating leases that commenced on or prior to that date. The incremental borrowing rate was determined on a portfolio basis by grouping leases with similar terms as well as grouping leases based on a U.S. dollar or Euro functional currency.  The actual rate is then determined based on a credit spread over LIBOR as well as the Bloomberg Curve Matrix for the U.S. Communications section. The following table provides information about our weighted average lease terms and weighted average discount rates as of September 30, 2019:

 

 

 

September 30, 2019

 

Weighted average remaining lease term (years)

 

 

 

 

     Operating leases with USD functional currency

 

 

8.4

 

     Operating leases with Euro functional currency

 

 

4.6

 

Weighted average discount rate

 

 

 

 

     Operating leases with USD functional currency

 

 

3.22

%

     Operating leases with Euro functional currency

 

 

1.84

%

Supplemental cash flow information related to operating leases is as follows:

 

 

Nine Months Ended

 

(In thousands)

 

September 30, 2019

 

Cash paid for amounts included in the measurement of operating lease assets / liabilities

 

 

 

 

     Cash used in operating activities related to operating leases

 

$

(775

)

 

 

 

 

 

Right-of-use assets obtained in exchange for lease obligations

 

$

21,418

 

Sales-Type Leases

We are the lessor in sales-type lease arrangements for network equipment, which have initial terms of up to five years. Our sales-type lease arrangements contain either a provision whereby the network equipment reverts back to us upon the expiration of the lease or a provision that allows the lessee to purchase the network equipment at a bargain purchase amount. In addition, our sales-type lease arrangements do not contain any residual value guarantees or material restrictive covenants. The allocation of the consideration between lease and non-lease components is determined by standalone sales price by component. The net investment in sales-type leases consists of lease receivables less unearned income. Collectability of sales-type leases is evaluated periodically at an individual customer level. At September 30, 2019 and December 31, 2018, we had no allowance for credit losses for our net investment in sales-type leases. As of September 30, 2019 and December 31, 2018, the components of the net investment in sales-type leases were as follows:

 

 

September 30,

 

 

December 31,

 

(In thousands)

 

2019

 

 

2018

 

Current minimum lease payments receivable(1)

 

$

3,643

 

 

$

11,339

 

Non-current minimum lease payments receivable(2)

 

 

1,073

 

 

 

1,670

 

Total minimum lease payments receivable

 

 

4,716

 

 

 

13,009

 

Less: Current unearned revenue

 

 

445

 

 

 

631

 

Less: Non-current unearned revenue

 

 

210

 

 

 

473

 

Net investment in sales-type leases

 

$

4,061

 

 

$

11,905

 

 

 

(1)

Included in other receivables on the Condensed Consolidated Balance Sheet.

 

(2)

Included in other assets on the Condensed Consolidated Balance Sheet.

 

The components of sales-type lease gross profit recognized at the lease commencement date and interest and dividend income, included in the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2019, were as follows:

 

 

Three Months Ended

 

 

Nine Months Ended

 

(In thousands)

 

September 30, 2019

 

 

September 30, 2019

 

Sales - Network Solutions

 

$

47

 

 

$

1,668

 

Cost of sales - Network Solutions

 

 

25

 

 

 

660

 

Gross profit

 

$

22

 

 

$

1,008

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

$

92

 

 

$

278

 

 

As of September 30, 2019, future minimum lease payments to be received from sales-type leases were as follows:

(In thousands)

 

Amount

 

Remainder of 2019

 

$

2,700

 

2020

 

 

1,162

 

2021

 

 

542

 

2022

 

 

225

 

2023

 

 

83

 

Thereafter

 

 

4

 

Total

 

$

4,716

 

 

v3.19.3
Stockholders' Equity
9 Months Ended
Sep. 30, 2019
Equity [Abstract]  
Stockholders' Equity

13. STOCKHOLDERS’ EQUITY

 

Stock Repurchase Program

Since 1997, our Board of Directors has approved multiple share repurchase programs that have authorized repurchases of our common stock, which are implemented through open market or private purchases from time to time as conditions warrant. During the nine months ended September 30, 2019, we repurchased 13,000 shares of our common stock at an average price of $14.06 per share. As of September 30, 2019, we had the authority to purchase an additional 2.5 million shares of our common stock under the current authorization of up to 5.0 million shares.

Other Comprehensive Income (Loss)

The following tables present the changes in accumulated other comprehensive income (loss), net of tax, by component for the three months ended September 30, 2019 and 2018:

 

 

 

Three Months Ended September 30, 2019

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

ASU 2018-02 Adoption (1)

 

 

Total

 

As of June 30, 2019

 

$

(271

)

 

$

(7,770

)

 

$

(6,439

)

 

$

385

 

 

$

(14,095

)

Other comprehensive loss before

   reclassifications

 

 

(39

)

 

 

 

 

 

(2,486

)

 

 

 

 

 

(2,525

)

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

24

 

 

 

90

 

 

 

 

 

 

 

 

 

114

 

Net current period other comprehensive income (loss)

 

 

(15

)

 

 

90

 

 

 

(2,486

)

 

 

 

 

 

(2,411

)

As of September 30, 2019

 

$

(286

)

 

$

(7,680

)

 

$

(8,925

)

 

$

385

 

 

$

(16,506

)

 

 

(1)

With the adoption of ASU 2018-02 on January 1, 2019, stranded tax effects related to the Tax Cuts and Jobs Act of 2017 were reclassified to retained earnings. See Note 1. 

 

 

 

Three Months Ended September 30, 2018

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

Total

 

As of June 30, 2018

 

$

(741

)

 

$

(4,219

)

 

$

(4,158

)

 

$

(9,118

)

Other comprehensive income (loss) before

   reclassifications

 

 

1,208

 

 

 

 

 

 

(451

)

 

 

757

 

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

(1,240

)

 

 

37

 

 

 

 

 

 

(1,203

)

Net current period other comprehensive income (loss)

 

 

(32

)

 

 

37

 

 

 

(451

)

 

 

(446

)

As of September 30, 2018

 

$

(773

)

 

$

(4,182

)

 

$

(4,609

)

 

$

(9,564

)

The following tables present the changes in accumulated other comprehensive income (loss), net of tax, by component for the nine months ended September 30, 2019 and 2018:

 

 

 

Nine Months Ended September 30, 2019

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

ASU 2018-02 Adoption(1)

 

 

Total

 

As of December 31, 2018

 

$

(563

)

 

$

(8,041

)

 

$

(5,812

)

 

$

 

 

$

(14,416

)

Other comprehensive income (loss) before

   reclassifications

 

 

372

 

 

 

 

 

 

(3,113

)

 

 

 

 

 

(2,741

)

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

(95

)

 

 

361

 

 

 

 

 

 

 

 

 

266

 

Amounts reclassified to retained earnings (1)

 

 

 

 

 

 

 

 

 

 

 

385

 

 

 

385

 

Net current period other comprehensive income (loss)

 

 

277

 

 

 

361

 

 

 

(3,113

)

 

 

385

 

 

 

(2,090

)

As of September 30, 2019

 

$

(286

)

 

$

(7,680

)

 

$

(8,925

)

 

$

385

 

 

$

(16,506

)

 

(1)

With the adoption of ASU 2018-02 on January 1, 2019, stranded tax effects related to the Tax Cuts and Jobs Act of 2017 were reclassified to retained earnings. See Note 1.

 

 

 

Nine Months Ended September 30, 2018

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

Total

 

As of December 31, 2017

 

$

2,567

 

 

$

(4,286

)

 

$

(1,576

)

 

$

(3,295

)

Other comprehensive income (loss) before

   reclassifications

 

 

869

 

 

 

 

 

 

(3,033

)

 

 

(2,164

)

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

(989

)

 

 

104

 

 

 

 

 

 

(885

)

Amounts reclassified to retained earnings (1)

 

 

(3,220

)

 

 

 

 

 

 

 

 

(3,220

)

Net current period other comprehensive income (loss)

 

 

(3,340

)

 

 

104

 

 

 

(3,033

)

 

 

(6,269

)

As of September 30, 2018

 

$

(773

)

 

$

(4,182

)

 

$

(4,609

)

 

$

(9,564

)

 

(1)

With the Company’s adoption of ASU 2016-01 on January 1, 2018, unrealized gains on our equity investments were reclassified to retained earnings. See Note 7.

The following tables present the details of reclassifications out of accumulated other comprehensive income (loss) for the three months ended September 30, 2019 and 2018:

 

 

 

Three Months Ended September 30, 2019

(In thousands)

 

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 losses on sales of securities

 

$

(32

)

 

Net investment gain

Defined benefit plan adjustments – actuarial losses

 

 

(130

)

 

(1)

Total reclassifications for the period, before tax

 

 

(162

)

 

 

Tax benefit

 

 

48

 

 

 

Total reclassifications for the period, net of tax

 

$

(114

)

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5.

 

 

 

 

Three Months Ended September 30, 2018

(In thousands)

 

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 gains on sales of securities

 

$

1,676

 

 

Net investment gain

Defined benefit plan adjustments – actuarial losses

 

 

(54

)

 

(1)

Total reclassifications for the period, before tax

 

 

1,622

 

 

 

Tax expense

 

 

(419

)

 

 

Total reclassifications for the period, net of tax

 

$

1,203

 

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5.

 

The following tables present the details of reclassifications out of accumulated other comprehensive income (loss) for the nine months ended September 30, 2019 and 2018:

 

 

 

Nine Months Ended September 30, 2019

(In thousands)

 

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 gains on sales of securities

 

$

128

 

 

Net investment gain

Defined benefit plan adjustments – actuarial losses

 

 

(523

)

 

(1)

Total reclassifications for the period, before tax

 

 

(395

)

 

 

Tax benefit

 

 

129

 

 

 

Total reclassifications for the period, net of tax

 

$

(266

)

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5.

 

 

 

Nine Months Ended September 30, 2018

(In thousands)

 

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 gains on sales of securities

 

$

1,352

 

 

Net investment gain

Defined benefit plan adjustments – actuarial losses

 

 

(151

)

 

(1)

Total reclassifications for the period, before tax

 

 

1,201

 

 

 

Tax expense

 

 

(316

)

 

 

Total reclassifications for the period, net of tax

 

$

885

 

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5.

 

The following table presents the tax effects related to the change in each component of other comprehensive income (loss) for the three months ended September 30, 2019 and 2018: 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

Unrealized gain (loss) on available-for-sale

   securities

 

$

(53

)

 

$

14

 

 

$

(39

)

 

$

1,632

 

 

$

(424

)

 

$

1,208

 

Reclassification adjustment for amounts related to

   available-for-sale investments included in net

   income (loss)

 

 

32

 

 

 

(8

)

 

 

24

 

 

 

(1,676

)

 

 

436

 

 

 

(1,240

)

Reclassification adjustment for amounts related to

   defined benefit plan adjustments included in net

   income (loss)

 

 

130

 

 

 

(40

)

 

 

90

 

 

 

54

 

 

 

(17

)

 

 

37

 

Foreign currency translation adjustment

 

 

(2,486

)

 

 

 

 

 

(2,486

)

 

 

(451

)

 

 

 

 

 

(451

)

Total Other Comprehensive Loss

 

$

(2,377

)

 

$

(34

)

 

$

(2,411

)

 

$

(441

)

 

$

(5

)

 

$

(446

)

 

The following table presents the tax effects related to the change in each component of other comprehensive income (loss) for the nine months ended September 30, 2019 and 2018:

 

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

Unrealized gain (loss) on available-for-sale

   securities

 

$

503

 

 

$

(131

)

 

$

372

 

 

$

1,174

 

 

$

(305

)

 

$

869

 

Reclassification adjustment for amounts related to

   available-for-sale investments included in net

   income (loss)

 

 

(128

)

 

 

33

 

 

 

(95

)

 

 

(1,352

)

 

 

363

 

 

 

(989

)

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

   defined benefit plan adjustments included in net

   income (loss)

 

 

523

 

 

 

(162

)

 

 

361

 

 

 

151

 

 

 

(47

)

 

 

104

 

Foreign currency translation adjustment

 

 

(3,113

)

 

 

 

 

 

(3,113

)

 

 

(3,033

)

 

 

 

 

 

(3,033

)

Total Other Comprehensive Income (Loss)

 

$

(2,215

)

 

$

(260

)

 

$

(2,475

)

 

$

(6,280

)

 

$

11

 

 

$

(6,269

)

 

v3.19.3
Earnings (Loss) Per Share
9 Months Ended
Sep. 30, 2019
Earnings Per Share [Abstract]  
Earnings (Loss) Per Share

14. EARNINGS (LOSS) PER SHARE

A summary of the calculation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2019 and 2018 is as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands, except per share amounts)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(46,123

)

 

$

7,589

 

 

$

(41,358

)

 

$

(10,895

)

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares – basic

 

 

47,824

 

 

 

47,710

 

 

 

47,803

 

 

 

47,927

 

Effect of dilutive securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

 

 

 

 

27

 

 

 

 

 

 

 

PSUs, RSUs and restricted stock

 

 

 

 

 

97

 

 

 

 

 

 

 

Weighted average number of shares – diluted

 

 

47,824

 

 

 

47,834

 

 

 

47,803

 

 

 

47,927

 

Earnings (loss) per share – basic

 

$

(0.96

)

 

$

0.16

 

 

$

(0.87

)

 

$

(0.23

)

Earnings (loss) per share – diluted

 

$

(0.96

)

 

$

0.16

 

 

$

(0.87

)

 

$

(0.23

)

 

For the three months ended September 30, 2018, 1.8 million stock options were outstanding but were not included in the computation of diluted earnings per share. These stock options were excluded because their exercise prices were greater than the average market price of the common shares, during the quarter, therefore making them anti-dilutive under the treasury stock method.

 

As a result of the net loss for the three months ended September 30, 2019, and for the nine months ended September 30, 2019 and 2018, 4.1 million, 3.0 million and 2.3 million, respectively, shares of unvested stock options, PSUs, RSUs and restricted stock were excluded from the calculation of diluted EPS due to their anti-dilutive effect.

v3.19.3
Segment Information
9 Months Ended
Sep. 30, 2019
Segment Reporting [Abstract]  
Segment Information

15. SEGMENT INFORMATION

We operate in two reportable segments: (1) Network Solutions and (2) Services & Support. Network Solutions includes hardware products and software defined 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 investment gain (loss), other income (expense) and (provision) benefit for income taxes are reported on a company-wide, functional basis only. There is no inter-segment revenue.

The following table presents information about the sales and gross profit of our reportable segments for the three and nine months ended September 30, 2019 and 2018. We do not produce asset information by reportable segment; therefore, it is not reported.

 

 

 

Three Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

(In thousands)

 

Sales

 

 

Gross Profit

 

 

Sales

 

 

Gross Profit

 

Network Solutions

 

$

94,018

 

 

$

37,574

 

 

$

121,043

 

 

$

51,100

 

Services & Support

 

 

20,074

 

 

 

8,757

 

 

 

19,292

 

 

 

7,348

 

Total

 

$

114,092

 

 

$

46,331

 

 

$

140,335

 

 

$

58,448

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

(In thousands)

 

Sales

 

 

Gross Profit

 

 

Sales

 

 

Gross Profit

 

Network Solutions

 

$

359,007

 

 

$

151,654

 

 

$

341,359

 

 

$

133,175

 

Services & Support

 

 

55,267

 

 

 

20,304

 

 

 

47,830

 

 

 

15,002

 

Total

 

$

414,274

 

 

$

171,958

 

 

$

389,189

 

 

$

148,177

 

 

Sales by Category

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

The table below presents sales information by category for the three and nine months ended September 30, 2019 and 2018:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Access & Aggregation

 

$

65,114

 

 

$

91,901

 

 

$

274,313

 

 

$

258,323

 

Subscriber Solutions & Experience

 

 

42,476

 

 

 

38,552

 

 

 

119,731

 

 

 

103,213

 

Traditional & Other Products

 

 

6,502

 

 

 

9,882

 

 

 

20,230

 

 

 

27,653

 

Total

 

$

114,092

 

 

$

140,335

 

 

$

414,274

 

 

$

389,189

 

 

The following table represents sales information by geographic area for the three and nine months ended September 30, 2019 and 2018: 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

United States

 

$

83,144

 

 

$

83,730

 

 

$

230,960

 

 

$

214,039

 

International

 

 

30,948

 

 

 

56,605

 

 

 

183,314

 

 

 

175,150

 

Total

 

$

114,092

 

 

$

140,335

 

 

$

414,274

 

 

$

389,189

 

 

v3.19.3
Liability for Warranty Returns
9 Months Ended
Sep. 30, 2019
Product Warranties Disclosures [Abstract]  
Liability for Warranty Returns

16. 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 $8.7 million and $8.6 million at September 30, 2019 and December 31, 2018, respectively, which amounts are included in accrued expenses in the accompanying Condensed Consolidated Balance Sheets. During the three months ended September 30, 2018, we had a reversal of prior provisions, the impact of which is reflected in the table below.

 

A reconciliation of the beginning and ending warranty accrual for the three and nine months ended September 30, 2019 and 2018 is as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Balance at beginning of period

 

$

8,972

 

 

$

10,111

 

 

$

8,623

 

 

$

9,724

 

Plus: Amounts charged to cost and expenses

 

 

816

 

 

 

(34

)

 

 

3,796

 

 

 

6,649

 

Less: Deductions

 

 

(1,131

)

 

 

(1,053

)

 

 

(3,762

)

 

 

(7,349

)

Balance at end of period

 

$

8,657

 

 

$

9,024

 

 

$

8,657

 

 

$

9,024

 

 

v3.19.3
Commitments and Contingencies
9 Months Ended
Sep. 30, 2019
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

17. COMMITMENTS AND CONTINGENCIES

Securities Class Action Lawsuit

On October 17, 2019, a purported stockholder class action lawsuit, captioned Burbridge v. ADTRAN, Inc. et al., Docket No. 19-cv-09619, was filed in the United States District Court for the Southern District of New York against the Company, two of its current executive officers and one of its former executive officers.  The complaint alleges violations of federal securities laws and seeks unspecified compensatory damages on behalf of purported purchasers of ADTRAN securities between February 28, 2019 and October 9, 2019.  The lawsuit claims that the defendants made materially false and misleading statements regarding, and/or failed to disclose material adverse facts about, the Company’s business, operations and prospects, specifically relating to the Company’s internal control over financial reporting, excess and obsolete inventory reserves, financial results and shipments from a Latin American customer.  Investors in ADTRAN securities have until December 16, 2019 to move the court to serve as lead plaintiff in this action.  We disagree with the claims made in the complaint and intend to vigorously defend against this lawsuit.  At this time, we are unable to predict the outcome of or estimate the possible loss or range of loss, if any, associated with this lawsuit.

Other Legal Matters

In addition to the litigation described above, from time to time we are subject to or otherwise involved in various lawsuits, claims, investigations and legal proceedings that arise out of or are incidental to the conduct of our business (collectively, “Legal Matters”), including those relating to employment matters, patent rights, regulatory compliance matters, stockholder claims, and contractual and other commercial disputes.  Such Legal Matters, even if not meritorious, could result in the expenditure of significant financial and managerial resources.  Additionally, an unfavorable outcome in a legal matter, including in a patent dispute, could require the Company to pay damages, entitle claimants to other relief, such as royalties, or could prevent the Company from selling some of its products in certain jurisdictions.  While the Company cannot predict with certainty the results of the Legal Matters in which it is currently involved, the Company does not expect that the ultimate outcome of such Legal Matters will individually or in the aggregate have a material adverse effect on its business, results of operations, financial condition or cash flows.

Investment Commitment

We have committed to invest up to an aggregate of $7.9 million in two private equity funds, of which $7.7 million has been applied as of September 30, 2019.

v3.19.3
Restructuring
9 Months Ended
Sep. 30, 2019
Restructuring And Related Activities [Abstract]  
Restructuring

18. RESTRUCTURING

In October 2019, the Company announced its plans to reduce its operating expenses, including global restructuring. During the three and nine months ended September 30, 2019, the Company incurred approximately $1.1 million and $1.9 million, respectively, related to these plans.

In February 2019, we announced the restructuring of certain of our workforce predominantly in Germany, which included the closure of our office location in Munich, Germany accompanied by relocation or severance benefits for the affected employees. We also offered voluntary early retirement to certain other employees, which was announced in March 2019.  The restructuring is expected to be completed in the fourth quarter of 2019.

In January 2018, we announced an early retirement incentive program for employees that met certain requirements. The cumulative amount incurred during the year ended December 31, 2018 related to this restructuring program was $7.3 million, of which $0.3 million and $7.2 million was incurred during the three and nine months ended September 30, 2018, respectively. We do not expect to incur any additional expenses related to this restructuring program.

A reconciliation of the beginning and ending restructuring liability, which is included in accrued wages and benefits in the Condensed Consolidated Balance Sheets, is as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

(In thousands)

 

September 30, 2019

 

 

September 30, 2019

 

Balance at beginning of period

 

$

2,655

 

 

$

185

 

Plus: Amounts charged to cost and expense

 

 

1,195

 

 

 

4,658

 

Less: Amounts paid

 

 

(252

)

 

 

(1,245

)

Balance at end of period

 

$

3,598

 

 

$

3,598

 

 

The components of restructuring expense in the Condensed Consolidated Statements of Income are as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Selling, general and administrative expenses

 

$

531

 

 

$

261

 

 

$

2,078

 

 

$

2,661

 

Research and development expenses

 

 

602

 

 

 

 

 

 

1,833

 

 

 

1,814

 

Cost of sales

 

 

62

 

 

 

 

 

 

747

 

 

 

2,761

 

Total restructuring expenses

 

$

1,195

 

 

$

261

 

 

$

4,658

 

 

$

7,236

 

 

The following table represents the components of restructuring expense by geographic area for the three and nine months ended September 30, 2019 and 2018:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Domestic

 

$

1,116

 

 

$

256

 

 

$

1,941

 

 

$

7,096

 

International

 

 

79

 

 

 

5

 

 

 

2,717

 

 

 

140

 

Total restructuring expenses

 

$

1,195

 

 

$

261

 

 

$

4,658

 

 

$

7,236

 

 

v3.19.3
Subsequent Events
9 Months Ended
Sep. 30, 2019
Subsequent Events [Abstract]  
Subsequent Events

19. SUBSEQUENT EVENTS

On October 30, 2019, we announced that our Board of Directors declared a quarterly cash dividend of $0.09 per common share to be paid to the Company’s stockholders of record as of the close of business on November 14, 2019. The payment date will be December 2, 2019 in the aggregate amount of approximately $4.3 million.

 

v3.19.3
Summary of Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2019
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of ADTRAN®, Inc. and its subsidiaries (“ADTRAN”, the “Company”, “we”, “our” or “us”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim financial information presented in Quarterly Reports on Form 10-Q. Accordingly, certain information and notes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements are not included herein. The December 31, 2018 Condensed Consolidated Balance Sheet is derived from audited financial statements, but does not include all disclosures required by GAAP.

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 financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in ADTRAN’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 28, 2019 (as amended on September 20, 2019, the “2018 Form 10-K”).

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP 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 excess and obsolete inventory reserves, warranty reserves, customer rebates, determination of the deferred and accrued revenue components of multiple performance obligations sales agreements, estimated costs to complete obligations associated with deferred and accrued revenue, 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.

During the three months ended June 30, 2019, the Company revised the methodology used in estimating its excess and obsolete inventory reserves. Under the revised methodology, we establish reserves for estimated excess and obsolete inventory equal to the difference between the cost of the inventory and the estimated net realizable value of the inventory based on historical usage, known trends, inventory age, and market conditions. When we dispose of excess and obsolete inventories, the related disposals are charged against the inventory reserves. See Note 8 for additional information.

Correction of Immaterial Misstatements

Correction of Immaterial Misstatements

During the three months ended June 30, 2019, the Company determined that there was an immaterial misstatement of its excess and obsolete inventory reserves in its previously issued annual and interim financial statements. The Company corrected this misstatement by recognizing a $0.8 million out-of-period adjustment during the three months ended June 30, 2019, which increased its excess and obsolete inventory reserves and cost of goods sold for the period. For the six months ended June 30, 2019, the out-of-period adjustment was a cumulative $0.2 million reduction in the Company’s excess and obsolete inventory reserves and cost of goods sold. In addition, the Company determined that a $1.0 million cash inflow related to an insurance recovery was incorrectly classified as a cash flow from operations instead of a cash flow from investing activities within the unaudited Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2019. The Company has corrected this misstatement in the Unaudited Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2019 to correctly reflect the $1.0 million insurance recovery as a cash inflow from investing activities. Management has determined that these misstatements were not material to any of its previously issued financial statements and that correction of the misstatements is also not material to the current or estimated annual 2019 financial results on either a quantitative and qualitative basis.   

Recent Accounting Pronouncements Not Yet Adopted

Recent Accounting Pronouncements Not Yet Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326 Financial Instruments – Credit Losses, that clarifies receivables arising from operating leases are not within the scope of the credit losses standard, but rather should be accounted for in accordance with the leases standard. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments–Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which clarifies the accounting for transfers between classifications of debt securities and clarifies that entities should include expected recoveries on financial assets in the calculation of the current expected credit loss allowance. In addition, renewal options that are not unconditionally cancelable should be considered in the determination of expected credit losses. In May 2019, the FASB issued ASU 2019-05, Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief, which amends ASU 2016-13 to allow companies, upon adoption, to elect the fair value option on financial instruments that were previously recorded at amortized cost if they meet certain criteria. All of these ASUs are 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 these ASUs 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 do not expect it will have a material effect on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which changes the fair value measurement disclosure requirements of ASC 820, Fair Value Measurement. The amendments in this ASU are the result of a broader disclosure project, Concepts Statement No. 8 — Conceptual Framework for Financial Reporting — Chapter 8 — Notes to Financial Statements, which the FASB finalized on August 28, 2018. The FASB used the guidance in the Concepts Statement to improve the effectiveness of ASC 820’s disclosure requirements. ASU 2018-13 provides users of financial statements with information about assets and liabilities measured at fair value in the statement of financial position or disclosed in the notes to the financial statements. More specifically, ASU 2018-13 requires disclosures about the valuation techniques and inputs that are used to arrive at measures of fair value, including judgments and assumptions that are made in determining fair value. In addition, ASU 2018-13 requires disclosures regarding the uncertainty in the fair value measurements as of the reporting date and how changes in fair value measurements affect performance and cash flows. ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We are currently evaluating the effect of ASU 2018-13, but do not expect it will have a material effect on our financial statement disclosures.

In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans, which makes changes to and clarifies the disclosure requirements related to defined benefit pension and other postretirement plans. ASU 2018-14 requires additional disclosures related to the reasons for significant gains and losses affecting the benefit obligation and an explanation of any other significant changes in the benefit obligation or plan assets that are not otherwise apparent in other disclosures required by ASC 715. ASU 2018-14 also clarifies the guidance in ASC 715 to require disclosure of the projected benefit obligation (“PBO”) and fair value of plan assets for pension plans with PBOs in excess of plan assets and the accumulated benefit obligation (“ABO”) and fair value of plan assets for pension plans with ABOs in excess of plan assets. ASU 2018-14 is effective for public business entities for fiscal years ending after December 15, 2020. We are currently evaluating the effect of ASU 2018-14, but do not expect it will have a material effect on our financial statement disclosures.

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.  ASU 2018-15 clarifies certain aspects of ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. Specifically, ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementations costs incurred to develop or obtain internal use software. ASU 2018-15 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 of ASU 2018-15, but do not expect it will have a material effect on our consolidated financial statements.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

During 2019, we adopted the following accounting standards, which had the following impacts on our consolidated financial statements:

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires an entity to recognize right-of-use assets and lease liabilities on the balance sheet and to disclose key information about the entity’s leasing arrangements. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, which clarified certain aspects of ASU 2016-02, as well as ASU 2018-11, Leases (Topic 842), Targeted Improvements, which provided for an optional transition method allowing for the application of the legacy lease guidance, Leases (Topic 840), including its disclosure requirements, for the comparative periods presented in the year of adoption, with the cumulative effect of initially applying the new lease standard recognized as an adjustment to retained earnings as of the date of adoption. In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842) Codification Improvements, which removed the requirement for an entity to disclose in the interim periods after adoption, the effect of the change on income from continuing operations, net income, any other affected financial statement line item, and any affected per share amount. For lessors, the new leasing standard requires leases to be classified as sales-type, direct financing or operating leases. These criteria focus on the transfer of control of the underlying lease asset. This standard and related updates were effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.

 

The Company adopted the new standard on January 1, 2019, the effective date of our initial application, using the optional transition method. At that time, the Company elected to carry forward the legacy ASC 840 disclosures for comparative periods and, therefore, did not adjust the comparative period financial information prior to January 1, 2019. In addition, the Company elected the package of practical expedients which allows for companies to not reassess whether any expired or existing contracts are or contain leases, not reassess historical lease classifications for expired or existing contracts and not reassess initial direct costs for existing leases. Additionally, the Company elected the practical expedients which allow the use of hindsight when determining the lease term, the short-term lease recognition exemption and the option to not separate lease and non-lease components. The adoption of this standard resulted in the recognition of a right-of-use asset and corresponding right-of-use liability on our Condensed Consolidated Balance Sheet of $10.3 million as of January 1, 2019, primarily related to our operating leases for office space, automobiles and other equipment.  

 

As a lessee, the adoption of this standard did not have a material impact on our Condensed Consolidated Statement of Income or Statement of Cash Flows. See Note 12 for additional information.

As a lessor, the adoption of this standard did not have a material impact on the Company’s Condensed Consolidated Balance Sheet, Condensed Consolidated Statement of Income or Condensed Consolidated Statement of Cash Flows. Prior to and after adoption, all of our leases in which we are the lessor were classified as sales-type leases.  

In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, which shortened the amortization period for the premium on certain purchased callable debt securities to the earliest call date. ASU 2017-08 was effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018. The amendments were required to be applied through a modified-retrospective transition approach that required a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company adopted ASU 2017-08 on January 1, 2019, and the adoption of this standard did not 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 expanded and refined hedge accounting for both financial and non-financial risk components, aligned the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and included certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness.  In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting, which permits the OIS rate based on SOFR as a U.S. benchmark interest rate. Both ASU 2017-12 and ASU 2018-16 were effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted ASU 2017-12 on January 1, 2019, and the adoption of this standard did not have a material effect on our consolidated financial statements as we did not have any hedging instruments as of the date of adoption.

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 allowed 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 was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted ASU 2018-02 on January 1, 2019, and upon adoption reclassified $0.4 million of stranded tax effects created by rate changes related to the Tax Cuts and Jobs Act of 2017 to retained earnings. See Note 13 for additional information.

v3.19.3
Business Combinations (Tables)
9 Months Ended
Sep. 30, 2019
Business Combinations [Abstract]  
Final Allocation of the Purchase Price to the Estimated Fair Value of the Assets Acquired and Liabilities Assumed The final allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date for SmartRG are as follows:

 

(In thousands)

 

 

 

 

Assets

 

 

 

 

  Tangible assets acquired

 

$

8,594

 

  Intangible assets

 

 

9,960

 

  Goodwill

 

 

3,476

 

Total assets acquired

 

 

22,030

 

Liabilities

 

 

 

 

  Liabilities assumed

 

 

(6,001

)

Total liabilities assumed

 

 

(6,001

)

Total purchase price

 

$

16,029

 

 

Details of the Acquired Intangible Assets

The details of the acquired intangible assets from the SmartRG acquisition are as follows:

 

(In thousands)

Value

 

 

Life (in years)

Developed technology

$

7,400

 

 

7

Customer relationships

 

1,790

 

 

3

Licensing agreements

 

560

 

 

5 – 10

Trade name

 

210

 

 

3

Total

$

9,960

 

 

 

Summary of Unaudited Supplemental Pro Forma Information

The following unaudited supplemental pro forma information presents the financial results of the Company for the nine months ended September 30, 2018 as if the acquisition of the Sumitomo EPON business had occurred on January 1, 2018. 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, 2018, nor is it indicative of any future results. There were no material, non-recurring adjustments to this unaudited pro forma information.

 

 

Nine Months Ended

 

(In thousands)

September 30, 2018

 

Pro forma revenue

$

390,449

 

Pro forma net loss

$

(23,431

)

 

v3.19.3
Revenue (Tables)
9 Months Ended
Sep. 30, 2019
Revenue From Contract With Customer [Abstract]  
Disaggregate of Revenue by Reportable Segment and Revenue Category

The following table disaggregates our revenue by reportable segment and revenue category for the three months ended September 30, 2019 and 2018:

 

 

 

Three Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

48,902

 

 

$

16,212

 

 

$

65,114

 

 

$

76,046

 

 

$

15,855

 

 

$

91,901

 

Subscriber Solutions & Experience(1)

 

 

40,382

 

 

 

2,094

 

 

 

42,476

 

 

 

37,313

 

 

 

1,239

 

 

 

38,552

 

Traditional & Other Products

 

 

4,734

 

 

 

1,768

 

 

 

6,502

 

 

 

7,684

 

 

 

2,198

 

 

 

9,882

 

Total

 

$

94,018

 

 

$

20,074

 

 

$

114,092

 

 

$

121,043

 

 

$

19,292

 

 

$

140,335

 

 

 

(1)

Subscriber Solutions & Experience was formerly reported as Customer Devices. With the increasing focus on enhancing the customer experience for both our business and consumer broadband customers and the addition of SmartRG during the fourth quarter of 2018, Subscriber Solutions & Experience more accurately represents this revenue category.

The following table disaggregates our revenue by reportable segment and revenue category for the nine months ended September 30, 2019 and 2018:

 

 

 

Nine Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

230,837

 

 

$

43,476

 

 

$

274,313

 

 

$

220,653

 

 

$

37,670

 

 

$

258,323

 

Subscriber Solutions & Experience(1)

 

 

113,545

 

 

 

6,186

 

 

 

119,731

 

 

 

99,396

 

 

 

3,817

 

 

 

103,213

 

Traditional & Other Products

 

 

14,625

 

 

 

5,605

 

 

 

20,230

 

 

 

21,310

 

 

 

6,343

 

 

 

27,653

 

Total

 

$

359,007

 

 

$

55,267

 

 

$

414,274

 

 

$

341,359

 

 

$

47,830

 

 

$

389,189

 

 

 

(1)

Subscriber Solutions & Experience was formerly reported as Customer Devices. With the increasing focus on enhancing the customer experience for both our business and consumer broadband customers and the addition of SmartRG during the fourth quarter of 2018, Subscriber Solutions & Experience more accurately represents this revenue category.

The table below presents sales information by category for the three and nine months ended September 30, 2019 and 2018:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Access & Aggregation

 

$

65,114

 

 

$

91,901

 

 

$

274,313

 

 

$

258,323

 

Subscriber Solutions & Experience

 

 

42,476

 

 

 

38,552

 

 

 

119,731

 

 

 

103,213

 

Traditional & Other Products

 

 

6,502

 

 

 

9,882

 

 

 

20,230

 

 

 

27,653

 

Total

 

$

114,092

 

 

$

140,335

 

 

$

414,274

 

 

$

389,189

 

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)

 

September 30, 2019

 

 

December 31, 2018

 

Accounts receivable, net

 

$

90,647

 

 

$

99,385

 

Contract assets(1)

 

$

2,434

 

 

$

3,766

 

Unearned revenue

 

$

14,022

 

 

$

17,940

 

Non-current unearned revenue

 

$

4,581

 

 

$

5,296

 

 

 

(1)

Included in other receivables on the Condensed Consolidated Balance Sheet.

v3.19.3
Income Taxes (Tables)
9 Months Ended
Sep. 30, 2019
Income Tax Disclosure [Abstract]  
Summary of Supplemental Balance Sheet Information Related to Deferred Tax Assets

Supplemental balance sheet information related to deferred tax assets is as follows:

 

 

 

September 30, 2019

 

(In thousands)

 

Deferred Tax Assets

 

 

Valuation Allowance

 

 

Deferred Tax Assets, net

 

Domestic

 

$

40,496

 

 

$

(40,496

)

 

$

 

International

 

 

8,909

 

 

 

(2,417

)

 

 

6,492

 

Total

 

$

49,405

 

 

$

(42,913

)

 

$

6,492

 

v3.19.3
Pension Benefit Plan (Tables)
9 Months Ended
Sep. 30, 2019
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 nine months ended September 30, 2019 and 2018:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Service cost

 

$

366

 

 

$

294

 

 

$

1,109

 

 

$

905

 

Interest cost

 

 

158

 

 

 

179

 

 

 

479

 

 

 

551

 

Expected return on plan assets

 

 

(346

)

 

 

(381

)

 

 

(1,049

)

 

 

(1,174

)

Amortization of actuarial losses

 

 

198

 

 

 

61

 

 

 

600

 

 

 

188

 

Net periodic pension cost

 

$

376

 

 

$

153

 

 

$

1,139

 

 

$

470

 

v3.19.3
Stock-Based Compensation (Tables)
9 Months Ended
Sep. 30, 2019
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 stock-based compensation expense related to stock options, performance stock units (“PSUs”), restricted stock units (“RSUs”) and restricted stock for the three and nine months ended September 30, 2019 and 2018:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Stock-based compensation expense included in cost of sales

 

$

83

 

 

$

101

 

 

$

272

 

 

$

298

 

Selling, general and administrative expense

 

 

1,142

 

 

 

894

 

 

 

2,867

 

 

 

2,924

 

Research and development expense

 

 

646

 

 

 

645

 

 

 

2,045

 

 

 

2,021

 

Stock-based compensation expense included in operating expenses

 

 

1,788

 

 

 

1,539

 

 

 

4,912

 

 

 

4,945

 

Total stock-based compensation expense

 

 

1,871

 

 

 

1,640

 

 

 

5,184

 

 

 

5,243

 

Tax benefit for expense associated with stock options, PSUs, RSUs and restricted stock

 

 

(446

)

 

 

(292

)

 

 

(1,235

)

 

 

(1,016

)

Total stock-based compensation expense, net of tax

 

$

1,425

 

 

$

1,348

 

 

$

3,949

 

 

$

4,227

 

Summary of Stock Options Outstanding

The following table is a summary of our stock options outstanding as of December 31, 2018 and September 30, 2019, and the changes that occurred during the nine months ended September 30, 2019:

 

 

 

Number of

Stock Options

(in thousands)

 

 

Weighted Avg.

Exercise Price

(per share)

 

 

Weighted Avg.

Remaining

Contractual

Life

(in years)

 

 

Aggregate

Intrinsic Value

(in thousands)

 

Stock options outstanding, December 31, 2018

 

 

4,382

 

 

$

22.91

 

 

 

4.10

 

 

$

 

Stock options exercised

 

 

(34

)

 

$

15.53

 

 

 

 

 

 

 

 

 

Stock options forfeited

 

 

(28

)

 

$

15.53

 

 

 

 

 

 

 

 

 

Stock options expired

 

 

(183

)

 

$

24.41

 

 

 

 

 

 

 

 

 

Stock options outstanding, September 30, 2019

 

 

4,137

 

 

$

22.96

 

 

 

3.27

 

 

$

 

Stock options exercisable, September 30, 2019

 

 

3,915

 

 

$

23.39

 

 

 

3.11

 

 

$

 

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, 2018 and September 30, 2019 and the changes that occurred during the nine months ended September 30, 2019.

 

 

 

Number of

Shares

(in thousands)

 

 

Weighted Avg. Grant Date Fair Value

(per share)

 

Unvested PSUs, RSUs and restricted stock outstanding, December 31, 2018

 

 

1,570

 

 

$

18.52

 

PSUs, RSUs and restricted stock granted

 

 

63

 

 

$

12.81

 

PSUs, RSUs and restricted stock vested

 

 

(22

)

 

$

17.13

 

PSUs, RSUs and restricted stock forfeited

 

 

(175

)

 

$

18.69

 

Unvested PSUs, RSUs and restricted stock outstanding, September 30, 2019

 

 

1,436

 

 

$

18.27

 

 

v3.19.3
Investments (Tables)
9 Months Ended
Sep. 30, 2019
Investments Debt And Equity Securities [Abstract]  
Debt Securities and Other Investments, Recorded at Fair Value

Debt Securities and Other Investments

At September 30, 2019, we held the following debt securities and other investments, recorded at fair value:

 

 

 

Amortized

 

 

Gross Unrealized

 

 

Fair

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Corporate bonds

 

$

10,733

 

 

$

95

 

 

$

 

 

$

10,828

 

Municipal fixed-rate bonds

 

 

931

 

 

 

 

 

 

(1

)

 

 

930

 

Asset-backed bonds

 

 

7,222

 

 

 

35

 

 

 

(2

)

 

 

7,255

 

Mortgage/Agency-backed bonds

 

 

7,366

 

 

 

29

 

 

 

(7

)

 

 

7,388

 

U.S. government bonds

 

 

9,160

 

 

 

4

 

 

 

(21

)

 

 

9,143

 

Foreign government bonds

 

 

372

 

 

 

 

 

 

(3

)

 

 

369

 

Available-for-sale debt securities held at fair value

 

$

35,784

 

 

$

163

 

 

$

(34

)

 

$

35,913

 

 

At December 31, 2018, we held the following debt securities and other investments, recorded at fair value:

 

 

 

Amortized

 

 

Gross Unrealized

 

 

Fair

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Corporate bonds

 

$

20,777

 

 

$

19

 

 

$

(112

)

 

$

20,684

 

Municipal fixed-rate bonds

 

 

1,339

 

 

 

 

 

 

(26

)

 

 

1,313

 

Asset-backed bonds

 

 

5,230

 

 

 

5

 

 

 

(14

)

 

 

5,221

 

Mortgage/Agency-backed bonds

 

 

3,833

 

 

 

2

 

 

 

(44

)

 

 

3,791

 

U.S. government bonds

 

 

9,271

 

 

 

1

 

 

 

(66

)

 

 

9,206

 

Foreign government bonds

 

 

592

 

 

 

 

 

 

(8

)

 

 

584

 

Available-for-sale debt securities held at fair value

 

$

41,042

 

 

$

27

 

 

$

(270

)

 

$

40,799

 

 

Contractual Maturities of Debt Securities

As of September 30, 2019, 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

 

$

3,154

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

One to two years

 

 

4,316

 

 

 

930

 

 

 

941

 

 

 

215

 

 

 

 

 

 

 

Two to three years

 

 

3,068

 

 

 

 

 

 

2,475

 

 

 

1,072

 

 

 

7,528

 

 

 

 

Three to five years

 

 

290

 

 

 

 

 

 

1,593

 

 

 

920

 

 

 

1,615

 

 

 

369

 

Five to ten years

 

 

 

 

 

 

 

 

1,666

 

 

 

680

 

 

 

 

 

 

 

More than ten years

 

 

 

 

 

 

 

 

580

 

 

 

4,501

 

 

 

 

 

 

 

Total

 

$

10,828

 

 

$

930

 

 

$

7,255

 

 

$

7,388

 

 

$

9,143

 

 

$

369

 

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

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Gross realized gains on debt securities

 

$

36

 

 

$

24

 

 

$

85

 

 

$

49

 

Gross realized losses on debt securities

 

 

(7

)

 

 

(50

)

 

 

(40

)

 

 

(365

)

Total gain (loss) recognized, net

 

$

29

 

 

$

(26

)

 

$

45

 

 

$

(316

)

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 nine months ended September 30, 2019 and 2018 were as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Realized gains (losses) on equity securities sold

 

$

(20

)

 

$

1,240

 

 

$

(83

)

 

$

1,587

 

Unrealized gains (losses) on equity securities held

 

 

(225

)

 

 

3,293

 

 

 

8,233

 

 

 

4,129

 

Total gain (loss) recognized, net

 

$

(245

)

 

$

4,533

 

 

$

8,150

 

 

$

5,716

 

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 September 30, 2019 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

 

$

1,817

 

 

$

1,817

 

 

$

 

 

$

 

Commercial paper

 

 

1,295

 

 

 

 

 

 

1,295

 

 

 

 

Cash equivalents

 

 

3,112

 

 

 

1,817

 

 

 

1,295

 

 

 

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

10,828

 

 

 

 

 

 

10,828

 

 

 

 

Municipal fixed-rate bonds

 

 

930

 

 

 

 

 

 

930

 

 

 

 

Asset-backed bonds

 

 

7,255

 

 

 

 

 

 

7,255

 

 

 

 

Mortgage/Agency-backed bonds

 

 

7,388

 

 

 

 

 

 

7,388

 

 

 

 

U.S. government bonds

 

 

9,143

 

 

 

9,143

 

 

 

 

 

 

 

Foreign government bonds

 

 

369

 

 

 

 

 

 

369

 

 

 

 

Marketable equity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities – various industries

 

 

32,543

 

 

 

32,543

 

 

 

 

 

 

 

Equity in escrow

 

 

165

 

 

 

165

 

 

 

 

 

 

 

Deferred compensation plan assets

 

 

20,580

 

 

 

20,580

 

 

 

 

 

 

 

Total debt and equity securities at fair value

 

 

89,201

 

 

 

62,431

 

 

 

26,770

 

 

 

 

Total

 

$

92,313

 

 

$

64,248

 

 

$

28,065

 

 

$

 

 

 

 

 

 

 

 

Fair Value Measurements at December 31, 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

 

$

1,554

 

 

$

1,554

 

 

$

 

 

$

 

Cash equivalents

 

 

1,554

 

 

 

1,554

 

 

 

 

 

 

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

20,684

 

 

 

 

 

 

20,684

 

 

 

 

Municipal fixed-rate bonds

 

 

1,313

 

 

 

 

 

 

1,313

 

 

 

 

Asset-backed bonds

 

 

5,221

 

 

 

 

 

 

5,221

 

 

 

 

Mortgage/Agency-backed bonds

 

 

3,791

 

 

 

 

 

 

3,791

 

 

 

 

U.S. government bonds

 

 

9,206

 

 

 

9,206

 

 

 

 

 

 

 

Foreign government bonds

 

 

584

 

 

 

 

 

 

584

 

 

 

 

Marketable equity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities – various industries

 

 

26,763

 

 

 

26,763

 

 

 

 

 

 

 

Equity in escrow

 

 

253

 

 

 

253

 

 

 

 

 

 

 

Deferred compensation plan assets

 

 

18,256

 

 

 

18,256

 

 

 

 

 

 

 

Total debt and equity securities at fair value

 

 

86,071

 

 

 

54,478

 

 

 

31,593

 

 

 

 

Total

 

$

87,625

 

 

$

56,032

 

 

$

31,593

 

 

$

 

 

v3.19.3
Inventory (Tables)
9 Months Ended
Sep. 30, 2019
Inventory Disclosure [Abstract]  
Components of Inventory

At September 30, 2019 and December 31, 2018, inventory consisted of the following:

 

 

 

September 30,

 

 

December 31,

 

(In thousands)

 

2019

 

 

2018

 

Raw materials

 

$

39,133

 

 

$

45,333

 

Work in process

 

 

1,083

 

 

 

1,638

 

Finished goods

 

 

64,725

 

 

 

52,877

 

Total

 

$

104,941

 

 

$

99,848

 

 

v3.19.3
Property, Plant and Equipment (Tables)
9 Months Ended
Sep. 30, 2019
Property Plant And Equipment [Abstract]  
Property, Plant and Equipment

At September 30, 2019 and December 31, 2018, property, plant and equipment consisted of the following:

 

 

 

September 30,

 

 

December 31,

 

(In thousands)

 

2019

 

 

2018

 

Land

 

$

4,575

 

 

$

4,575

 

Building and land improvements

 

 

34,634

 

 

 

34,379

 

Building

 

 

68,247

 

 

 

68,183

 

Furniture and fixtures

 

 

19,878

 

 

 

19,831

 

Computer hardware and software

 

 

72,390

 

 

 

92,071

 

Engineering and other equipment

 

 

129,479

 

 

 

127,060

 

Total Property, Plant and Equipment

 

 

329,203

 

 

 

346,099

 

Less accumulated depreciation

 

 

(255,819

)

 

 

(265,464

)

Total Property, Plant and Equipment, net

 

$

73,384

 

 

$

80,635

 

v3.19.3
Intangible Assets (Tables)
9 Months Ended
Sep. 30, 2019
Intangible Assets Net Excluding Goodwill [Abstract]  
Summary of Intangible Assets

The following table presents our intangible assets as of September 30, 2019 and December 31, 2018:

 

 

 

September 30, 2019

 

 

December 31, 2018

 

(In thousands)

 

Gross

Value

 

 

Accumulated Amortization

 

 

Net Value

 

 

Gross

Value

 

 

Accumulated Amortization

 

 

Net Value

 

Customer relationships

 

$

22,235

 

 

$

(6,671

)

 

$

15,564

 

 

$

22,455

 

 

$

(5,380

)

 

$

17,075

 

Developed technology

 

 

10,170

 

 

 

(3,094

)

 

 

7,076

 

 

 

12,801

 

 

 

(4,867

)

 

 

7,934

 

Licensed technology

 

 

5,900

 

 

 

(1,011

)

 

 

4,889

 

 

 

5,900

 

 

 

(520

)

 

 

5,380

 

Supplier relationships

 

 

2,800

 

 

 

(2,158

)

 

 

642

 

 

 

2,800

 

 

 

(1,108

)

 

 

1,692

 

Licensing agreements

 

 

560

 

 

 

(61

)

 

 

499

 

 

 

560

 

 

 

(5

)

 

 

555

 

Patents

 

 

500

 

 

 

(209

)

 

 

291

 

 

 

500

 

 

 

(157

)

 

 

343

 

Trade names

 

 

310

 

 

 

(158

)

 

 

152

 

 

 

310

 

 

 

(106

)

 

 

204

 

Total

 

$

42,475

 

 

$

(13,362

)

 

$

29,113

 

 

$

45,326

 

 

$

(12,143

)

 

$

33,183

 

 

Estimated Future Amortization Expense Related to Intangible Assets

As of September 30, 2019, estimated future amortization expense of our intangible assets was as follows:

 

(In thousands)

 

Amount

 

Remainder of 2019

 

$

1,329

 

2020

 

 

4,436

 

2021

 

 

4,088

 

2022

 

 

3,464

 

2023

 

 

3,313

 

Thereafter

 

 

12,483

 

Total

 

$

29,113

 

 

v3.19.3
Leases (Tables)
9 Months Ended
Sep. 30, 2019
Leases [Abstract]  
Schedule of Supplemental Balance Sheet Information Related to Operating Leases

Supplemental balance sheet information related to operating leases is as follows:

 

 

 

 

 

September 30,

 

 

January 1,

 

(In thousands)

 

Classification

 

2019

 

 

2019 (1)

 

Assets

 

 

 

 

 

 

 

 

 

 

Operating lease asset

 

Other assets

 

$

18,529

 

 

$

10,322

 

Total lease assets

 

 

 

$

18,529

 

 

$

10,322

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

Current operating lease liability

 

Accrued expenses

 

$

3,063

 

 

$

2,948

 

Non-current operating lease liability

 

Other non-current liabilities

 

 

15,659

 

 

 

7,374

 

Total lease liability

 

 

 

$

18,722

 

 

$

10,322

 

 

 

(1)

Reflects the adoption of the new lease accounting standard on January 1, 2019.

 

Components of Lease Expense included in Condensed Consolidated Statement of Income

The components of lease expense included in the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2019 were as follows:

 

(in thousands)

 

Three Months Ended

September 30, 2019

 

 

Nine Months Ended

September 30, 2019

 

Selling, general and administrative expenses

 

$

352

 

 

$

1,050

 

Research and development expenses

 

 

847

 

 

 

1,731

 

Cost of sales

 

 

16

 

 

 

49

 

Total operating lease expense

 

$

1,215

 

 

$

2,830

 

Schedule of Maturity of Operating Lease Liabilities

As of September 30, 2019, operating lease liabilities included on the Condensed Consolidated Balance Sheet by future maturity were as follows:

 

(In thousands)

 

Amount

 

Remainder of 2019

 

$

1,044

 

2020

 

 

3,417

 

2021

 

 

3,071

 

2022

 

 

2,672

 

2023

 

 

2,350

 

Thereafter

 

 

8,258

 

Total lease payments

 

 

20,812

 

Less: Interest

 

 

(2,090

)

Present value of lease liabilities

 

$

18,722

 

Future Minimum Rental Payments under Non-Cancelable Operating Leases, Including Renewals Determined to be Reasonably Assured, with Original Maturities of Greater than 12 Months

As of December 31, 2018, future minimum rental payments under non-cancelable operating leases, including renewals determined to be reasonably assured as of December 31, 2018, with original maturities of greater than 12 months, were as follows:

(In thousands)

 

Amount (1)

 

2019

 

$

3,873

 

2020

 

 

3,580

 

2021

 

 

2,771

 

2022

 

 

2,053

 

2023

 

 

1,317

 

Thereafter

 

 

762

 

Total

 

$

14,356

 

 

(1)

Certain renewal options were subsequently determined to not be reasonably assured of renewal upon the Company’s adoption of the new lease accounting standard on January 1, 2019.

Schedule of Weighted Average Remaining Lease Terms and Weighted Average Discount Rates The following table provides information about our weighted average lease terms and weighted average discount rates as of September 30, 2019:

 

 

 

September 30, 2019

 

Weighted average remaining lease term (years)

 

 

 

 

     Operating leases with USD functional currency

 

 

8.4

 

     Operating leases with Euro functional currency

 

 

4.6

 

Weighted average discount rate

 

 

 

 

     Operating leases with USD functional currency

 

 

3.22

%

     Operating leases with Euro functional currency

 

 

1.84

%

Schedule of Supplemental Cash Flow Information Related to Operating Leases

Supplemental cash flow information related to operating leases is as follows:

 

 

Nine Months Ended

 

(In thousands)

 

September 30, 2019

 

Cash paid for amounts included in the measurement of operating lease assets / liabilities

 

 

 

 

     Cash used in operating activities related to operating leases

 

$

(775

)

 

 

 

 

 

Right-of-use assets obtained in exchange for lease obligations

 

$

21,418

 

Components of Net Investment in Sales-Type Leases As of September 30, 2019 and December 31, 2018, the components of the net investment in sales-type leases were as follows:

 

 

September 30,

 

 

December 31,

 

(In thousands)

 

2019

 

 

2018

 

Current minimum lease payments receivable(1)

 

$

3,643

 

 

$

11,339

 

Non-current minimum lease payments receivable(2)

 

 

1,073

 

 

 

1,670

 

Total minimum lease payments receivable

 

 

4,716

 

 

 

13,009

 

Less: Current unearned revenue

 

 

445

 

 

 

631

 

Less: Non-current unearned revenue

 

 

210

 

 

 

473

 

Net investment in sales-type leases

 

$

4,061

 

 

$

11,905

 

 

 

(1)

Included in other receivables on the Condensed Consolidated Balance Sheet.

 

(2)

Included in other assets on the Condensed Consolidated Balance Sheet.

 

Schedule of Components of Sales-type Lease Gross Profit and Interest and Dividend Income Included in Condensed Consolidated Statements of Income

The components of sales-type lease gross profit recognized at the lease commencement date and interest and dividend income, included in the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2019, were as follows:

 

 

Three Months Ended

 

 

Nine Months Ended

 

(In thousands)

 

September 30, 2019

 

 

September 30, 2019

 

Sales - Network Solutions

 

$

47

 

 

$

1,668

 

Cost of sales - Network Solutions

 

 

25

 

 

 

660

 

Gross profit

 

$

22

 

 

$

1,008

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

$

92

 

 

$

278

 

 

Schedule of Future Minimum Lease Payments to be Received from Sales-Type Leases

As of September 30, 2019, future minimum lease payments to be received from sales-type leases were as follows:

(In thousands)

 

Amount

 

Remainder of 2019

 

$

2,700

 

2020

 

 

1,162

 

2021

 

 

542

 

2022

 

 

225

 

2023

 

 

83

 

Thereafter

 

 

4

 

Total

 

$

4,716

 

 

v3.19.3
Stockholders' Equity (Tables)
9 Months Ended
Sep. 30, 2019
Equity [Abstract]  
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 September 30, 2019 and 2018:

 

 

 

Three Months Ended September 30, 2019

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

ASU 2018-02 Adoption (1)

 

 

Total

 

As of June 30, 2019

 

$

(271

)

 

$

(7,770

)

 

$

(6,439

)

 

$

385

 

 

$

(14,095

)

Other comprehensive loss before

   reclassifications

 

 

(39

)

 

 

 

 

 

(2,486

)

 

 

 

 

 

(2,525

)

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

24

 

 

 

90

 

 

 

 

 

 

 

 

 

114

 

Net current period other comprehensive income (loss)

 

 

(15

)

 

 

90

 

 

 

(2,486

)

 

 

 

 

 

(2,411

)

As of September 30, 2019

 

$

(286

)

 

$

(7,680

)

 

$

(8,925

)

 

$

385

 

 

$

(16,506

)

 

 

(1)

With the adoption of ASU 2018-02 on January 1, 2019, stranded tax effects related to the Tax Cuts and Jobs Act of 2017 were reclassified to retained earnings. See Note 1. 

 

 

 

Three Months Ended September 30, 2018

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

Total

 

As of June 30, 2018

 

$

(741

)

 

$

(4,219

)

 

$

(4,158

)

 

$

(9,118

)

Other comprehensive income (loss) before

   reclassifications

 

 

1,208

 

 

 

 

 

 

(451

)

 

 

757

 

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

(1,240

)

 

 

37

 

 

 

 

 

 

(1,203

)

Net current period other comprehensive income (loss)

 

 

(32

)

 

 

37

 

 

 

(451

)

 

 

(446

)

As of September 30, 2018

 

$

(773

)

 

$

(4,182

)

 

$

(4,609

)

 

$

(9,564

)

The following tables present the changes in accumulated other comprehensive income (loss), net of tax, by component for the nine months ended September 30, 2019 and 2018:

 

 

 

Nine Months Ended September 30, 2019

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

ASU 2018-02 Adoption(1)

 

 

Total

 

As of December 31, 2018

 

$

(563

)

 

$

(8,041

)

 

$

(5,812

)

 

$

 

 

$

(14,416

)

Other comprehensive income (loss) before

   reclassifications

 

 

372

 

 

 

 

 

 

(3,113

)

 

 

 

 

 

(2,741

)

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

(95

)

 

 

361

 

 

 

 

 

 

 

 

 

266

 

Amounts reclassified to retained earnings (1)

 

 

 

 

 

 

 

 

 

 

 

385

 

 

 

385

 

Net current period other comprehensive income (loss)

 

 

277

 

 

 

361

 

 

 

(3,113

)

 

 

385

 

 

 

(2,090

)

As of September 30, 2019

 

$

(286

)

 

$

(7,680

)

 

$

(8,925

)

 

$

385

 

 

$

(16,506

)

 

(1)

With the adoption of ASU 2018-02 on January 1, 2019, stranded tax effects related to the Tax Cuts and Jobs Act of 2017 were reclassified to retained earnings. See Note 1.

 

 

 

Nine Months Ended September 30, 2018

 

(In thousands)

 

Unrealized

Gains

(Losses)

on

Available-

for-Sale

Securities

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

Total

 

As of December 31, 2017

 

$

2,567

 

 

$

(4,286

)

 

$

(1,576

)

 

$

(3,295

)

Other comprehensive income (loss) before

   reclassifications

 

 

869

 

 

 

 

 

 

(3,033

)

 

 

(2,164

)

Amounts reclassified from accumulated other

   comprehensive income (loss)

 

 

(989

)

 

 

104

 

 

 

 

 

 

(885

)

Amounts reclassified to retained earnings (1)

 

 

(3,220

)

 

 

 

 

 

 

 

 

(3,220

)

Net current period other comprehensive income (loss)

 

 

(3,340

)

 

 

104

 

 

 

(3,033

)

 

 

(6,269

)

As of September 30, 2018

 

$

(773

)

 

$

(4,182

)

 

$

(4,609

)

 

$

(9,564

)

 

(1)

With the Company’s adoption of ASU 2016-01 on January 1, 2018, unrealized gains on our equity investments were reclassified to retained earnings. See Note 7.

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 September 30, 2019 and 2018:

 

 

 

Three Months Ended September 30, 2019

(In thousands)

 

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 losses on sales of securities

 

$

(32

)

 

Net investment gain

Defined benefit plan adjustments – actuarial losses

 

 

(130

)

 

(1)

Total reclassifications for the period, before tax

 

 

(162

)

 

 

Tax benefit

 

 

48

 

 

 

Total reclassifications for the period, net of tax

 

$

(114

)

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5.

 

 

 

 

Three Months Ended September 30, 2018

(In thousands)

 

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 gains on sales of securities

 

$

1,676

 

 

Net investment gain

Defined benefit plan adjustments – actuarial losses

 

 

(54

)

 

(1)

Total reclassifications for the period, before tax

 

 

1,622

 

 

 

Tax expense

 

 

(419

)

 

 

Total reclassifications for the period, net of tax

 

$

1,203

 

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5.

 

The following tables present the details of reclassifications out of accumulated other comprehensive income (loss) for the nine months ended September 30, 2019 and 2018:

 

 

 

Nine Months Ended September 30, 2019

(In thousands)

 

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 gains on sales of securities

 

$

128

 

 

Net investment gain

Defined benefit plan adjustments – actuarial losses

 

 

(523

)

 

(1)

Total reclassifications for the period, before tax

 

 

(395

)

 

 

Tax benefit

 

 

129

 

 

 

Total reclassifications for the period, net of tax

 

$

(266

)

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5.

 

 

 

Nine Months Ended September 30, 2018

(In thousands)

 

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 gains on sales of securities

 

$

1,352

 

 

Net investment gain

Defined benefit plan adjustments – actuarial losses

 

 

(151

)

 

(1)

Total reclassifications for the period, before tax

 

 

1,201

 

 

 

Tax expense

 

 

(316

)

 

 

Total reclassifications for the period, net of tax

 

$

885

 

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 5.

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 September 30, 2019 and 2018: 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

Unrealized gain (loss) on available-for-sale

   securities

 

$

(53

)

 

$

14

 

 

$

(39

)

 

$

1,632

 

 

$

(424

)

 

$

1,208

 

Reclassification adjustment for amounts related to

   available-for-sale investments included in net

   income (loss)

 

 

32

 

 

 

(8

)

 

 

24

 

 

 

(1,676

)

 

 

436

 

 

 

(1,240

)

Reclassification adjustment for amounts related to

   defined benefit plan adjustments included in net

   income (loss)

 

 

130

 

 

 

(40

)

 

 

90

 

 

 

54

 

 

 

(17

)

 

 

37

 

Foreign currency translation adjustment

 

 

(2,486

)

 

 

 

 

 

(2,486

)

 

 

(451

)

 

 

 

 

 

(451

)

Total Other Comprehensive Loss

 

$

(2,377

)

 

$

(34

)

 

$

(2,411

)

 

$

(441

)

 

$

(5

)

 

$

(446

)

 

The following table presents the tax effects related to the change in each component of other comprehensive income (loss) for the nine months ended September 30, 2019 and 2018:

 

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

Unrealized gain (loss) on available-for-sale

   securities

 

$

503

 

 

$

(131

)

 

$

372

 

 

$

1,174

 

 

$

(305

)

 

$

869

 

Reclassification adjustment for amounts related to

   available-for-sale investments included in net

   income (loss)

 

 

(128

)

 

 

33

 

 

 

(95

)

 

 

(1,352

)

 

 

363

 

 

 

(989

)

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

   defined benefit plan adjustments included in net

   income (loss)

 

 

523

 

 

 

(162

)

 

 

361

 

 

 

151

 

 

 

(47

)

 

 

104

 

Foreign currency translation adjustment

 

 

(3,113

)

 

 

 

 

 

(3,113

)

 

 

(3,033

)

 

 

 

 

 

(3,033

)

Total Other Comprehensive Income (Loss)

 

$

(2,215

)

 

$

(260

)

 

$

(2,475

)

 

$

(6,280

)

 

$

11

 

 

$

(6,269

)

v3.19.3
Earnings (Loss) Per Share (Tables)
9 Months Ended
Sep. 30, 2019
Earnings Per Share [Abstract]  
Summary of Calculation of Basic and Diluted Earnings (Loss) Per Share

A summary of the calculation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2019 and 2018 is as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands, except per share amounts)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(46,123

)

 

$

7,589

 

 

$

(41,358

)

 

$

(10,895

)

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares – basic

 

 

47,824

 

 

 

47,710

 

 

 

47,803

 

 

 

47,927

 

Effect of dilutive securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

 

 

 

 

27

 

 

 

 

 

 

 

PSUs, RSUs and restricted stock

 

 

 

 

 

97

 

 

 

 

 

 

 

Weighted average number of shares – diluted

 

 

47,824

 

 

 

47,834

 

 

 

47,803

 

 

 

47,927

 

Earnings (loss) per share – basic

 

$

(0.96

)

 

$

0.16

 

 

$

(0.87

)

 

$

(0.23

)

Earnings (loss) per share – diluted

 

$

(0.96

)

 

$

0.16

 

 

$

(0.87

)

 

$

(0.23

)

v3.19.3
Segment Information (Tables)
9 Months Ended
Sep. 30, 2019
Segment Reporting [Abstract]  
Sales and Gross Profit of Reportable Segments

The following table presents information about the sales and gross profit of our reportable segments for the three and nine months ended September 30, 2019 and 2018. We do not produce asset information by reportable segment; therefore, it is not reported.

 

 

 

Three Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

(In thousands)

 

Sales

 

 

Gross Profit

 

 

Sales

 

 

Gross Profit

 

Network Solutions

 

$

94,018

 

 

$

37,574

 

 

$

121,043

 

 

$

51,100

 

Services & Support

 

 

20,074

 

 

 

8,757

 

 

 

19,292

 

 

 

7,348

 

Total

 

$

114,092

 

 

$

46,331

 

 

$

140,335

 

 

$

58,448

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

(In thousands)

 

Sales

 

 

Gross Profit

 

 

Sales

 

 

Gross Profit

 

Network Solutions

 

$

359,007

 

 

$

151,654

 

 

$

341,359

 

 

$

133,175

 

Services & Support

 

 

55,267

 

 

 

20,304

 

 

 

47,830

 

 

 

15,002

 

Total

 

$

414,274

 

 

$

171,958

 

 

$

389,189

 

 

$

148,177

 

 

Disaggregate of Revenue by Reportable Segment and Revenue Category

The following table disaggregates our revenue by reportable segment and revenue category for the three months ended September 30, 2019 and 2018:

 

 

 

Three Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

48,902

 

 

$

16,212

 

 

$

65,114

 

 

$

76,046

 

 

$

15,855

 

 

$

91,901

 

Subscriber Solutions & Experience(1)

 

 

40,382

 

 

 

2,094

 

 

 

42,476

 

 

 

37,313

 

 

 

1,239

 

 

 

38,552

 

Traditional & Other Products

 

 

4,734

 

 

 

1,768

 

 

 

6,502

 

 

 

7,684

 

 

 

2,198

 

 

 

9,882

 

Total

 

$

94,018

 

 

$

20,074

 

 

$

114,092

 

 

$

121,043

 

 

$

19,292

 

 

$

140,335

 

 

 

(1)

Subscriber Solutions & Experience was formerly reported as Customer Devices. With the increasing focus on enhancing the customer experience for both our business and consumer broadband customers and the addition of SmartRG during the fourth quarter of 2018, Subscriber Solutions & Experience more accurately represents this revenue category.

The following table disaggregates our revenue by reportable segment and revenue category for the nine months ended September 30, 2019 and 2018:

 

 

 

Nine Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

230,837

 

 

$

43,476

 

 

$

274,313

 

 

$

220,653

 

 

$

37,670

 

 

$

258,323

 

Subscriber Solutions & Experience(1)

 

 

113,545

 

 

 

6,186

 

 

 

119,731

 

 

 

99,396

 

 

 

3,817

 

 

 

103,213

 

Traditional & Other Products

 

 

14,625

 

 

 

5,605

 

 

 

20,230

 

 

 

21,310

 

 

 

6,343

 

 

 

27,653

 

Total

 

$

359,007

 

 

$

55,267

 

 

$

414,274

 

 

$

341,359

 

 

$

47,830

 

 

$

389,189

 

 

 

(1)

Subscriber Solutions & Experience was formerly reported as Customer Devices. With the increasing focus on enhancing the customer experience for both our business and consumer broadband customers and the addition of SmartRG during the fourth quarter of 2018, Subscriber Solutions & Experience more accurately represents this revenue category.

The table below presents sales information by category for the three and nine months ended September 30, 2019 and 2018:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Access & Aggregation

 

$

65,114

 

 

$

91,901

 

 

$

274,313

 

 

$

258,323

 

Subscriber Solutions & Experience

 

 

42,476

 

 

 

38,552

 

 

 

119,731

 

 

 

103,213

 

Traditional & Other Products

 

 

6,502

 

 

 

9,882

 

 

 

20,230

 

 

 

27,653

 

Total

 

$

114,092

 

 

$

140,335

 

 

$

414,274

 

 

$

389,189

 

Sales Information by Geographic Area

The following table represents sales information by geographic area for the three and nine months ended September 30, 2019 and 2018: 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

United States

 

$

83,144

 

 

$

83,730

 

 

$

230,960

 

 

$

214,039

 

International

 

 

30,948

 

 

 

56,605

 

 

 

183,314

 

 

 

175,150

 

Total

 

$

114,092

 

 

$

140,335

 

 

$

414,274

 

 

$

389,189

 

v3.19.3
Liability for Warranty Returns (Tables)
9 Months Ended
Sep. 30, 2019
Product Warranties Disclosures [Abstract]  
Reconciliation of Beginning and Ending Warranty Accrual

 

A reconciliation of the beginning and ending warranty accrual for the three and nine months ended September 30, 2019 and 2018 is as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Balance at beginning of period

 

$

8,972

 

 

$

10,111

 

 

$

8,623

 

 

$

9,724

 

Plus: Amounts charged to cost and expenses

 

 

816

 

 

 

(34

)

 

 

3,796

 

 

 

6,649

 

Less: Deductions

 

 

(1,131

)

 

 

(1,053

)

 

 

(3,762

)

 

 

(7,349

)

Balance at end of period

 

$

8,657

 

 

$

9,024

 

 

$

8,657

 

 

$

9,024

 

 

v3.19.3
Restructuring (Tables)
9 Months Ended
Sep. 30, 2019
Restructuring And Related Activities [Abstract]  
Schedule of Reconciliation of Restructuring Liability

A reconciliation of the beginning and ending restructuring liability, which is included in accrued wages and benefits in the Condensed Consolidated Balance Sheets, is as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

(In thousands)

 

September 30, 2019

 

 

September 30, 2019

 

Balance at beginning of period

 

$

2,655

 

 

$

185

 

Plus: Amounts charged to cost and expense

 

 

1,195

 

 

 

4,658

 

Less: Amounts paid

 

 

(252

)

 

 

(1,245

)

Balance at end of period

 

$

3,598

 

 

$

3,598

 

 

Schedule of Components of Restructuring Expense

The components of restructuring expense in the Condensed Consolidated Statements of Income are as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Selling, general and administrative expenses

 

$

531

 

 

$

261

 

 

$

2,078

 

 

$

2,661

 

Research and development expenses

 

 

602

 

 

 

 

 

 

1,833

 

 

 

1,814

 

Cost of sales

 

 

62

 

 

 

 

 

 

747

 

 

 

2,761

 

Total restructuring expenses

 

$

1,195

 

 

$

261

 

 

$

4,658

 

 

$

7,236

 

 

The following table represents the components of restructuring expense by geographic area for the three and nine months ended September 30, 2019 and 2018:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Domestic

 

$

1,116

 

 

$

256

 

 

$

1,941

 

 

$

7,096

 

International

 

 

79

 

 

 

5

 

 

 

2,717

 

 

 

140

 

Total restructuring expenses

 

$

1,195

 

 

$

261

 

 

$

4,658

 

 

$

7,236

 

 

v3.19.3
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended 9 Months Ended
Jan. 01, 2019
Jun. 30, 2019
Mar. 31, 2019
Jun. 30, 2019
Sep. 30, 2019
Summary Of Significant Accounting Policy [Line Items]          
Life insurance proceeds received         $ 1,000
Operating lease, right-of-use asset $ 10,322       18,529
Operating lease, right-of-use liability 10,322       $ 18,722
ASU 2018-02 [Member]          
Summary Of Significant Accounting Policy [Line Items]          
Reclassification of tax effects related to adoption ASU $ 400        
Errors in Operating Activity [Member]          
Summary Of Significant Accounting Policy [Line Items]          
Amount of revision     $ 1,000    
Out-of-Period Adjustment [Member]          
Summary Of Significant Accounting Policy [Line Items]          
Increase (decrease) in cost of goods sold   $ 800   $ (200)  
Increase (decrease) in excess and obsolete inventory reserve   $ 800   $ (200)  
v3.19.3
Business Combinations - Additional Information (Detail) - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Nov. 30, 2018
Sep. 30, 2019
Jun. 30, 2019
Sep. 30, 2018
Mar. 31, 2018
Sep. 30, 2019
Sep. 30, 2018
Dec. 31, 2018
Business Acquisition [Line Items]                
Gain on contingency           $ 1,230,000    
Goodwill           $ 7,000,000.0   $ 7,100,000
Bargain purchase gain net of income taxes             $ 11,322,000  
SmartRG Inc [Member]                
Business Acquisition [Line Items]                
Date of acquisition           Nov. 30, 2018    
Business acquisition, description           On November 30, 2018, we acquired SmartRG, Inc. (“SmartRG”), a provider of carrier-class, open connected home platforms and cloud services for broadband service providers in exchange for cash consideration. 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. The revenue from the SmartRG portfolio is included in the Subscriber Solutions & Experience category within the Network Solutions and Services & Support reportable segments.    
Business combination, contingent consideration, liability $ 1,200,000              
Gain on contingency     $ 1,200,000          
Business combination escrow amount 2,800,000              
Goodwill           $ 3,500,000    
Acquisition and integration related expenses and amortization of acquired intangibles   $ 500,000   $ 0   $ 1,700,000 $ 0  
SmartRG Inc [Member] | Minimum [Member]                
Business Acquisition [Line Items]                
Business combination potential release of funds 0              
SmartRG Inc [Member] | Maximum [Member]                
Business Acquisition [Line Items]                
Business combination potential release of funds $ 2,800,000              
Sumitomo [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 North American EPON business and entered into a technology license and OEM supply agreement with Sumitomo Electric Industries, Ltd.    
Bargain purchase gain net of income taxes         $ 11,300,000      
v3.19.3
Business Combinations - Final Allocation of the Purchase Price to the Estimated Fair Value of the Assets Acquired and Liabilities Assumed (Detail) - USD ($)
$ in Thousands
Nov. 30, 2018
Sep. 30, 2019
Dec. 31, 2018
Assets      
Goodwill   $ 6,968 $ 7,106
SmartRG Inc [Member]      
Assets      
Tangible assets acquired $ 8,594    
Intangible assets 9,960    
Goodwill 3,476    
Total assets acquired 22,030    
Liabilities      
Liabilities assumed (6,001)    
Total liabilities assumed (6,001)    
Total purchase price $ 16,029    
v3.19.3
Business Combinations - Details of the Acquired Intangible Assets (Detail) - SmartRG Inc [Member]
$ in Thousands
Nov. 30, 2018
USD ($)
Business Acquisition [Line Items]  
Total, Value $ 9,960
Developed Technology [Member]  
Business Acquisition [Line Items]  
Total, Value $ 7,400
Life (in years) 7 years
Customer Relationships [Member]  
Business Acquisition [Line Items]  
Total, Value $ 1,790
Life (in years) 3 years
Licensing Agreements [Member]  
Business Acquisition [Line Items]  
Total, Value $ 560
Trade Name [Member]  
Business Acquisition [Line Items]  
Total, Value $ 210
Life (in years) 3 years
Licensing Agreements [Member] | Minimum [Member]  
Business Acquisition [Line Items]  
Life (in years) 5 years
Licensing Agreements [Member] | Maximum [Member]  
Business Acquisition [Line Items]  
Life (in years) 10 years
v3.19.3
Business Combinations - Summary of Unaudited Supplemental Pro Forma Information (Detail) - Sumitomo [Member]
$ in Thousands
9 Months Ended
Sep. 30, 2018
USD ($)
Business Acquisition [Line Items]  
Pro forma revenue $ 390,449
Pro forma net loss $ (23,431)
v3.19.3
Revenue - Additional Information (Detail)
3 Months Ended 9 Months Ended
Sep. 30, 2019
USD ($)
Sep. 30, 2019
USD ($)
Category
Revenue From Contract With Customer [Abstract]    
Number of categories | Category   3
Remaining performance obligations $ 0 $ 0
Recognized revenue $ 1,200,000 $ 11,700,000
v3.19.3
Revenue - Disaggregate of Revenue by Reportable Segment and Revenue Category (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Disaggregation Of Revenue [Line Items]        
Revenue $ 114,092 $ 140,335 $ 414,274 $ 389,189
Access & Aggregation [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 65,114 91,901 274,313 258,323
Subscriber Solutions & Experience [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 42,476 38,552 119,731 103,213
Traditional & Other Products [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 6,502 9,882 20,230 27,653
Network Solutions [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 94,018 121,043 359,007 341,359
Network Solutions [Member] | Access & Aggregation [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 48,902 76,046 230,837 220,653
Network Solutions [Member] | Subscriber Solutions & Experience [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 40,382 37,313 113,545 99,396
Network Solutions [Member] | Traditional & Other Products [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 4,734 7,684 14,625 21,310
Services & Support [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 20,074 19,292 55,267 47,830
Services & Support [Member] | Access & Aggregation [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 16,212 15,855 43,476 37,670
Services & Support [Member] | Subscriber Solutions & Experience [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 2,094 1,239 6,186 3,817
Services & Support [Member] | Traditional & Other Products [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue $ 1,768 $ 2,198 $ 5,605 $ 6,343
v3.19.3
Revenue - Information about Receivables, Contract Assets, and Unearned Revenue from Contracts with Customers (Detail) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Revenue From Contract With Customer [Abstract]    
Accounts receivable, net $ 90,647 $ 99,385
Contract assets 2,434 3,766
Unearned revenue 14,022 17,940
Non-current unearned revenue $ 4,581 $ 5,296
v3.19.3
Income Taxes - Additional Information (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2019
Sep. 30, 2018
Income Tax Disclosure [Line Items]      
Effective tax rate expense (benefit)   197.10% 34.90%
Effective tax rate reduction related to transfer pricing study   9.38%  
Deferred tax assets, gross $ 49,405 $ 49,405  
Valuation allowance established against deferred tax assets 42,913 42,913  
Deferred tax assets, state research and development credits 5,800 5,800  
Deferred tax assets 6,492 6,492  
Domestic [Member]      
Income Tax Disclosure [Line Items]      
Valuation allowance established against deferred tax assets 37,100    
Deferred tax assets, gross 40,496 40,496  
Valuation allowance established against deferred tax assets $ 40,496 $ 40,496  
v3.19.3
Income Taxes - Summary of Supplemental Balance Sheet Information Related to Deferred Tax Assets (Detail)
$ in Thousands
Sep. 30, 2019
USD ($)
Operating Loss Carryforwards [Line Items]  
Deferred Tax Assets $ 49,405
Valuation Allowance (42,913)
Deferred Tax Assets, net 6,492
Domestic [Member]  
Operating Loss Carryforwards [Line Items]  
Deferred Tax Assets 40,496
Valuation Allowance (40,496)
International [Member]  
Operating Loss Carryforwards [Line Items]  
Deferred Tax Assets 8,909
Valuation Allowance (2,417)
Deferred Tax Assets, net $ 6,492
v3.19.3
Pension Benefit Plan - Summarization of Components of Net Periodic Pension Cost (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Compensation And Retirement Disclosure [Abstract]        
Service cost $ 366 $ 294 $ 1,109 $ 905
Interest cost 158 179 479 551
Expected return on plan assets (346) (381) (1,049) (1,174)
Amortization of actuarial losses 198 61 600 188
Net periodic pension cost $ 376 $ 153 $ 1,139 $ 470
v3.19.3
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 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Total stock-based compensation expense $ 1,871 $ 1,640 $ 5,184 $ 5,243
Tax benefit for expense associated with stock options, PSUs, RSUs and restricted stock (446) (292) (1,235) (1,016)
Total stock-based compensation expense, net of tax 1,425 1,348 3,949 4,227
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 83 101 272 298
Selling, General and Administrative Expense [Member]        
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Total stock-based compensation expense 1,142 894 2,867 2,924
Research and Development Expense [Member]        
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Total stock-based compensation expense 646 645 2,045 2,021
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 $ 1,788 $ 1,539 $ 4,912 $ 4,945
v3.19.3
Stock-Based Compensation - Summary of Stock Options Outstanding (Detail) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
9 Months Ended 12 Months Ended
Sep. 30, 2019
Dec. 31, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]    
Number of Stock Options, Stock options outstanding, Beginning Balance 4,382  
Number of Stock Options, Stock options exercised (34)  
Number of Stock Options, Stock options forfeited (28)  
Number of Stock Options, Stock options expired (183)  
Number of Stock Options, Stock options outstanding, Ending Balance 4,137 4,382
Number of Stock Options, Stock options exercisable 3,915  
Weighted Avg. Exercise Price, Stock options outstanding, Beginning Balance $ 22.91  
Weighted Avg. Exercise Price, Stock options exercised 15.53  
Weighted Avg. Exercise Price, Stock options forfeited 15.53  
Weighted Avg. Exercise Price, Stock options expired 24.41  
Weighted Avg. Exercise Price, Stock options outstanding, Ending Balance 22.96 $ 22.91
Weighted Avg. Exercise Price, Stock options exercisable $ 23.39  
Weighted Avg. Remaining Contractual Life In Years, Stock options outstanding 3 years 3 months 7 days 4 years 1 month 6 days
Weighted Avg. Remaining Contractual Life In Years, Stock options exercisable 3 years 1 month 9 days  
Aggregate Intrinsic Value, Stock options outstanding $ 0  
v3.19.3
Stock-Based Compensation (Stock Options) - Additional Information (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Aggregate intrinsic value based on fair market value $ 0   $ 0  
Total pre-tax intrinsic value of options exercised     $ 100  
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 $ 100   $ 100  
Recognition period of unvested compensation expense     3 months 18 days  
v3.19.3
Stock-Based Compensation - Summary of PSUs, RSUs and Restricted Stock Outstanding (Detail)
shares in Thousands
9 Months Ended
Sep. 30, 2019
$ / shares
shares
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Number of Shares, Unvested PSUs, RSUs and restricted stock outstanding, beginning balance | shares 1,570
Number of Shares, PSUs, RSUs and restricted stock granted | shares 63
Number of Shares, PSUs, RSUs and restricted stock vested | shares (22)
Number of Shares, PSUs, RSUs and restricted stock forfeited | shares (175)
Number of Shares, Unvested PSUs, RSUs and restricted stock outstanding, ending balance | shares 1,436
Weighted Avg. Grant Date Fair Value, Unvested PSUs, RSUs and restricted stock outstanding, Beginning Balance | $ / shares $ 18.52
Weighted Avg. Grant Date Fair Value, PSUs, RSUs and restricted stock granted | $ / shares 12.81
Weighted Avg. Grant Date Fair Value, PSUs, RSUs and restricted stock vested | $ / shares 17.13
Weighted Avg. Grant Date Fair Value, PSUs, RSUs and restricted stock forfeited | $ / shares 18.69
Weighted Avg. Grant Date Fair Value, Unvested PSUs, RSUs and restricted stock outstanding, Ending Balance | $ / shares $ 18.27
v3.19.3
Stock-Based Compensation (PSUs, RSUs and Restricted Stock) - Additional Information (Detail) - USD ($)
shares in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Stock-based compensation expense $ 1,871,000 $ 1,640,000 $ 5,184,000 $ 5,243,000
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 11,600,000   $ 11,600,000  
Recognition period of unvested compensation expense     2 years 4 months 24 days  
Performance-Based PSUs [Member]        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Unrecognized compensation expense related to other than options 8,200,000   $ 8,200,000  
Recognition period of unvested compensation expense     3 months 18 days  
Stock-based compensation expense $ 0 $ 0 $ 0 $ 0
Stock Options, PSUs, RSUs or Restricted Stock [Member]        
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]        
Options available for issuance under shareholders-approved equity plan 2.7   2.7  
v3.19.3
Investments - Debt Securities and Other Investments, Recorded at Fair Value (Detail) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost $ 35,784 $ 41,042
Gross Unrealized Gains 163 27
Gross Unrealized Losses (34) (270)
Fair Value 35,913 40,799
Corporate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 10,733 20,777
Gross Unrealized Gains 95 19
Gross Unrealized Losses   (112)
Fair Value 10,828 20,684
Municipal Fixed-Rate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 931 1,339
Gross Unrealized Losses (1) (26)
Fair Value 930 1,313
Asset-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 7,222 5,230
Gross Unrealized Gains 35 5
Gross Unrealized Losses (2) (14)
Fair Value 7,255 5,221
Mortgage/Agency-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 7,366 3,833
Gross Unrealized Gains 29 2
Gross Unrealized Losses (7) (44)
Fair Value 7,388 3,791
U.S. Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 9,160 9,271
Gross Unrealized Gains 4 1
Gross Unrealized Losses (21) (66)
Fair Value 9,143 9,206
Foreign Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 372 592
Gross Unrealized Losses (3) (8)
Fair Value $ 369 $ 584
v3.19.3
Investments - Contractual Maturities of Debt Securities (Detail) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities, Fair Value/Carrying Value $ 35,913 $ 40,799
Corporate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Less than one year 3,154  
One to two years 4,316  
Two to three years 3,068  
Three to five years 290  
Available-for-sale debt securities, Fair Value/Carrying Value 10,828 20,684
Municipal Fixed-Rate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
One to two years 930  
Available-for-sale debt securities, Fair Value/Carrying Value 930 1,313
Asset-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
One to two years 941  
Two to three years 2,475  
Three to five years 1,593  
Five to ten years 1,666  
More than ten years 580  
Available-for-sale debt securities, Fair Value/Carrying Value 7,255 5,221
Mortgage/Agency-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
One to two years 215  
Two to three years 1,072  
Three to five years 920  
Five to ten years 680  
More than ten years 4,501  
Available-for-sale debt securities, Fair Value/Carrying Value 7,388 3,791
U.S. Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Two to three years 7,528  
Three to five years 1,615  
Available-for-sale debt securities, Fair Value/Carrying Value 9,143 9,206
Foreign Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Three to five years 369  
Available-for-sale debt securities, Fair Value/Carrying Value $ 369 $ 584
v3.19.3
Investments - Gross Realized Gains and Losses on Sale of Debt Securities (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Investments Debt And Equity Securities [Abstract]        
Gross realized gains on debt securities $ 36 $ 24 $ 85 $ 49
Gross realized losses on debt securities (7) (50) (40) (365)
Total gain (loss) recognized, net $ 29 $ (26) $ 45 $ (316)
v3.19.3
Investments - Additional Information (Detail) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Mar. 31, 2019
Sep. 30, 2019
Dec. 31, 2018
Jan. 01, 2018
Schedule of Investments [Line Items]        
Restricted certificate of deposit held   $ 25.6    
Restricted certificate of deposit held, maturity date   Jan. 08, 2020    
Transfer to investments $ 3.4      
Carrying value   $ 3.4    
Other Receivables [Member]        
Schedule of Investments [Line Items]        
Note receivable   $ 0.9 $ 4.3  
ASU 2016-01 [Member]        
Schedule of Investments [Line Items]        
Reclassification of net unrealized gains of marketable equity securities from AOCI to retained earnings       $ 3.2
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   $ 25.6 25.6  
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   $ 25.6 $ 25.4  
Investment [Member] | Issuer Concentration [Member] | Market Value of Total Investment Portfolio [Member]        
Schedule of Investments [Line Items]        
Investment concentration risk percentage   5.00%    
v3.19.3
Investments - Realized and Unrealized Gains and Losses for Marketable Equity Securities (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Investments Debt And Equity Securities [Abstract]        
Realized gains (losses) on equity securities sold $ (20) $ 1,240 $ (83) $ 1,587
Unrealized gains (losses) on equity securities held (225) 3,293 8,233 4,129
Total gain (loss) recognized, net $ (245) $ 4,533 $ 8,150 $ 5,716
v3.19.3
Investments - Fair Value Measurements of Cash Equivalents and Investments (Detail) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities $ 35,913 $ 40,799
Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents 3,112 1,554
Total debt and equity securities at fair value 89,201 86,071
Total 92,313 87,625
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 1,817 1,554
Total debt and equity securities at fair value 62,431 54,478
Total 64,248 56,032
Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents 1,295  
Total debt and equity securities at fair value 26,770 31,593
Total 28,065 31,593
Money Market Funds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents 1,817 1,554
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 1,817 1,554
Corporate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 10,828 20,684
Corporate Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 10,828 20,684
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 10,828 20,684
Commercial Paper | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents 1,295  
Commercial Paper | Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents 1,295  
Municipal Fixed-Rate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 930 1,313
Municipal Fixed-Rate Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 930 1,313
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 930 1,313
Asset-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 7,255 5,221
Asset-Backed Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 7,255 5,221
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 7,255 5,221
Mortgage/Agency-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 7,388 3,791
Mortgage/Agency-Backed Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 7,388 3,791
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 7,388 3,791
U.S. Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 9,143 9,206
U.S. Government Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 9,143 9,206
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 9,143 9,206
Foreign Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 369 584
Foreign Government Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 369 584
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 369 584
Marketable Equity Securities - Various Industries [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Marketable equity securities 32,543 26,763
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]    
Marketable equity securities 32,543 26,763
Deferred Compensation Plan Assets [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Marketable equity securities 20,580 18,256
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]    
Marketable equity securities 20,580 18,256
Equity in Escrow [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Marketable equity securities 165 253
Equity in Escrow [Member] | Fair Value, Measurements [Member] | Quoted Prices in Active Market for Identical Assets (Level 1) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Marketable equity securities $ 165 $ 253
v3.19.3
Inventory - Components of Inventory (Detail) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Inventory Disclosure [Abstract]    
Raw materials $ 39,133 $ 45,333
Work in process 1,083 1,638
Finished goods 64,725 52,877
Total $ 104,941 $ 99,848
v3.19.3
Inventory - Additional Information (Detail) - USD ($)
$ in Millions
Sep. 30, 2019
Dec. 31, 2018
Inventory Disclosure [Abstract]    
Inventory valuation reserves $ 32.0 $ 30.0
v3.19.3
Property, Plant and Equipment - Property, Plant and Equipment (Detail) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Property Plant And Equipment [Abstract]    
Land $ 4,575 $ 4,575
Building and land improvements 34,634 34,379
Building 68,247 68,183
Furniture and fixtures 19,878 19,831
Computer hardware and software 72,390 92,071
Engineering and other equipment 129,479 127,060
Total Property, Plant and Equipment 329,203 346,099
Less accumulated depreciation (255,819) (265,464)
Total Property, Plant and Equipment, net $ 73,384 $ 80,635
v3.19.3
Property, Plant and Equipment - Additional Information (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Property Plant And Equipment [Abstract]        
Depreciation $ 3,100 $ 3,100 $ 9,300 $ 9,500
Asset impairments $ 3,872   $ 3,872  
v3.19.3
Goodwill - Additional Information (Detail) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2019
Sep. 30, 2019
Dec. 31, 2018
Goodwill [Line Items]      
Goodwill, relates to acquisition   $ 7.0 $ 7.1
SmartRG Inc [Member]      
Goodwill [Line Items]      
Goodwill, relates to acquisition   3.5  
Goodwill, reduced amount relates to acquisition   0.1  
Network Solutions [Member]      
Goodwill [Line Items]      
Goodwill, relates to acquisition $ 6.6 6.6 6.7
Services & Support [Member]      
Goodwill [Line Items]      
Goodwill, relates to acquisition $ 0.4 $ 0.4 $ 0.4
v3.19.3
Intangible Assets - Summary of Intangible Assets (Detail) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Finite Lived Intangible Assets [Line Items]    
Gross Value $ 42,475 $ 45,326
Accumulated Amortization (13,362) (12,143)
Net Value 29,113 33,183
Customer Relationships [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value 22,235 22,455
Accumulated Amortization (6,671) (5,380)
Net Value 15,564 17,075
Developed Technology [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value 10,170 12,801
Accumulated Amortization (3,094) (4,867)
Net Value 7,076 7,934
Licensed Technology [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value 5,900 5,900
Accumulated Amortization (1,011) (520)
Net Value 4,889 5,380
Supplier Relationships [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value 2,800 2,800
Accumulated Amortization (2,158) (1,108)
Net Value 642 1,692
Licensing Agreements [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value 560 560
Accumulated Amortization (61) (5)
Net Value 499 555
Patent [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value 500 500
Accumulated Amortization (209) (157)
Net Value 291 343
Trade Names [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value 310 310
Accumulated Amortization (158) (106)
Net Value $ 152 $ 204
v3.19.3
Intangible Assets - Additional Information (Detail) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Intangible Assets Net Excluding Goodwill [Abstract]        
Amortization expense $ 1.3 $ 0.9 $ 4.0 $ 2.4
v3.19.3
Intangible Assets - Estimated Future Amortization Expense Related to Intangible Assets (Detail) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Finite Lived Intangible Assets Future Amortization Expense [Abstract]    
Remainder of 2019 $ 1,329  
2020 4,436  
2021 4,088  
2022 3,464  
2023 3,313  
Thereafter 12,483  
Net Value $ 29,113 $ 33,183
v3.19.3
Leases - Additional Information (Detail) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2019
Dec. 31, 2018
Lessor and Lessee Lease Description [Line Items]      
Operating lease, option to extend, existence   true  
Operating lease, option to terminate, existence   true  
Short-term lease cost $ 100,000 $ 300,000  
Variable lease cost 300,000 700,000  
Future operating lease payments 20,812,000 20,812,000 $ 7,600,000
Allowance for credit losses for our investment in sales type leases $ 0 $ 0 $ 0
Minimum [Member]      
Lessor and Lessee Lease Description [Line Items]      
Operating lease, remaining lease terms   2 months  
Operating lease, options to terminate term   3 months  
Maximum [Member]      
Lessor and Lessee Lease Description [Line Items]      
Operating lease, remaining lease terms   6 years  
Operating lease, renewal term 5 years 5 years  
Lessor sales type lease arrangement terms for network equipments   5 years  
v3.19.3
Leases - Schedule of Supplemental Balance Sheet Information Related to Operating Leases (Details) - USD ($)
$ in Thousands
Sep. 30, 2019
Jan. 01, 2019
ASSETS    
Operating lease asset $ 18,529 $ 10,322
Operating lease, right-of-use asset, statement of financial position [extensible list] us-gaap:OtherAssetsNoncurrent us-gaap:OtherAssetsNoncurrent
Liabilities    
Current operating lease liability $ 3,063 $ 2,948
Operating lease, liability, current, statement of financial position [extensible list] us-gaap:AccruedLiabilitiesCurrent us-gaap:AccruedLiabilitiesCurrent
Non-current operating lease liability $ 15,659 $ 7,374
Operating lease, liability, noncurrent, statement of financial position [extensible list] us-gaap:OtherLiabilitiesNoncurrent us-gaap:OtherLiabilitiesNoncurrent
Total lease liability $ 18,722 $ 10,322
v3.19.3
Leases - Components of Lease Expense included in Condensed Consolidated Statement of Income (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2019
Lessor Lease Description [Line Items]    
Total operating lease expense $ 1,215 $ 2,830
Selling, General and Administrative Expenses [Member]    
Lessor Lease Description [Line Items]    
Total operating lease expense 352 1,050
Research and Development Expenses [Member]    
Lessor Lease Description [Line Items]    
Total operating lease expense 847 1,731
Stock-based Compensation Expense Included in Cost of Sales [Member]    
Lessor Lease Description [Line Items]    
Total operating lease expense $ 16 $ 49
v3.19.3
Leases - Schedule of Maturity of Operating Lease Liabilities (Detail) - USD ($)
$ in Thousands
Sep. 30, 2019
Jan. 01, 2019
Dec. 31, 2018
Operating Lease Liabilities Payments Due [Abstract]      
Remainder of 2019 $ 1,044    
2020 3,417    
2021 3,071    
2022 2,672    
2023 2,350    
Thereafter 8,258    
Total lease payments 20,812   $ 7,600
Less: Interest (2,090)    
Operating lease, right-of-use liability $ 18,722 $ 10,322  
v3.19.3
Leases - Future Minimum Rental Payments under Non-Cancelable Operating Leases, Including Renewals Determined to be Reasonably Assured, with Original Maturities of Greater than 12 Months (Detail)
$ in Thousands
Dec. 31, 2018
USD ($)
Operating Leases Future Minimum Payments Due [Abstract]  
2019 $ 3,873
2020 3,580
2021 2,771
2022 2,053
2023 1,317
Thereafter 762
Total $ 14,356
v3.19.3
Leases - Schedule of Weighted Average Remaining Lease Terms and Weighted Average Discount Rates (Detail)
Sep. 30, 2019
USD  
Weighted average remaining lease term (years)  
Operating leases with functional currency 8 years 4 months 24 days
Weighted average discount rate  
Operating leases with functional currency 3.22%
Euro  
Weighted average remaining lease term (years)  
Operating leases with functional currency 4 years 7 months 6 days
Weighted average discount rate  
Operating leases with functional currency 1.84%
v3.19.3
Leases - Schedule of Supplemental Cash Flow Information Related to Operating Leases (Detail)
$ in Thousands
9 Months Ended
Sep. 30, 2019
USD ($)
Cash paid for amounts included in the measurement of operating lease assets / liabilities  
Cash used in operating activities related to operating leases $ (775)
Right-of-use assets obtained in exchange for lease obligations $ 21,418
v3.19.3
Leases - Components of Net Investment in Sales-Type Leases (Detail) - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Sales Type Leases Net Investment In Leases [Abstract]    
Current minimum lease payments receivable $ 3,643 $ 11,339
Non-current minimum lease payments receivable 1,073 1,670
Total minimum lease payments receivable 4,716 13,009
Less: Current unearned revenue 445 631
Less: Non-current unearned revenue 210 473
Net investment in sales-type leases $ 4,061 $ 11,905
v3.19.3
Leases - Schedule of Components of Sales-type Lease Gross Profit and Interest and Dividend Income Included in Condensed Consolidated Statements of Income (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2019
Sales [Member] | Network Solutions [Member]    
Lessor Lease Description [Line Items]    
Sales type leases $ 47 $ 1,668
Stock-based Compensation Expense Included in Cost of Sales [Member] | Network Solutions [Member]    
Lessor Lease Description [Line Items]    
Sales type leases 25 660
Gross Profit [Member]    
Lessor Lease Description [Line Items]    
Sales type leases 22 1,008
Interest and Dividend Income [Member]    
Lessor Lease Description [Line Items]    
Sales type leases $ 92 $ 278
v3.19.3
Leases - Schedule of Future Minimum Lease Payments to be Received from Sales-Type Leases (Detail)
$ in Thousands
Sep. 30, 2019
USD ($)
Sales Type And Direct Financing Leases Lease Receivable Fiscal Year Maturity [Abstract]  
Remainder of 2019 $ 2,700
2020 1,162
2021 542
2022 225
2023 83
Thereafter 4
Total $ 4,716
v3.19.3
Stockholders' Equity - Additional Information (Detail)
9 Months Ended
Sep. 30, 2019
$ / shares
shares
Equity [Abstract]  
Stock repurchased, shares 13,000,000
Shares repurchased, average price per share | $ / shares $ 14.06
Additional shares authorized for purchase 2,500,000
Maximum shares authorized for repurchase, prior and new announcements and total after new announcement 5,000,000.0
v3.19.3
Stockholders' Equity - Changes in Accumulated Other Comprehensive Income (Loss), Net of Tax by Component (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance $ 445,975 $ 459,627 $ 446,279 $ 497,911
Other comprehensive income (loss) before reclassifications (2,525) 757 (2,741) (2,164)
Amounts reclassified from accumulated other comprehensive income (loss) 114 (1,203) 266 (885)
Amounts reclassified to retained earnings     385 (3,220)
Net current period other comprehensive income (loss) (2,411) (446) (2,090) (6,269)
Ending Balance 394,955 463,601 394,955 463,601
ASU 2018-02 [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance 385      
Amounts reclassified to retained earnings     385  
Net current period other comprehensive income (loss)     385  
Ending Balance 385   385  
Unrealized Gains (Losses) on Available-for-Sale Securities [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance (271) (741) (563) 2,567
Other comprehensive income (loss) before reclassifications (39) 1,208 372 869
Amounts reclassified from accumulated other comprehensive income (loss) 24 (1,240) (95) (989)
Amounts reclassified to retained earnings       (3,220)
Net current period other comprehensive income (loss) (15) (32) 277 (3,340)
Ending Balance (286) (773) (286) (773)
Defined Benefit Plan Adjustments [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance (7,770) (4,219) (8,041) (4,286)
Amounts reclassified from accumulated other comprehensive income (loss) 90 37 361 104
Net current period other comprehensive income (loss) 90 37 361 104
Ending Balance (7,680) (4,182) (7,680) (4,182)
Foreign Currency Adjustments [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance (6,439) (4,158) (5,812) (1,576)
Other comprehensive income (loss) before reclassifications (2,486) (451) (3,113) (3,033)
Net current period other comprehensive income (loss) (2,486) (451) (3,113) (3,033)
Ending Balance (8,925) (4,609) (8,925) (4,609)
Accumulated Other Comprehensive Income [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Beginning Balance (14,095) (9,118) (14,416) (3,295)
Ending Balance $ (16,506) $ (9,564) $ (16,506) $ (9,564)
v3.19.3
Stockholders' Equity - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Sep. 30, 2019
Sep. 30, 2018
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items]                
Cost of sales $ (67,761)     $ (81,887)     $ (242,316) $ (241,012)
Income (Loss) Before Income Taxes (18,406)     3,220     (13,921) (22,784)
Tax benefit (expense) (27,717)     4,369     (27,437) 11,889
Net Income (Loss) (46,123) $ 3,995 $ 770 7,589 $ (7,670) $ (10,814) (41,358) (10,895)
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 (130)     (54)     (523) (151)
Income (Loss) Before Income Taxes (162)     1,622     (395) 1,201
Tax benefit (expense) 48     (419)     129 (316)
Net Income (Loss) (114)     1,203     (266) 885
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 investment gain $ (32)     $ 1,676     $ 128 $ 1,352
v3.19.3
Stockholders' Equity - Tax Effects Related to the Change in Each Component of Other Comprehensive Income (Loss) (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Sep. 30, 2019
Sep. 30, 2018
Equity [Abstract]                
Unrealized gain (loss) on available-for-sale securities, Before-Tax Amount $ (53)     $ 1,632     $ 503 $ 1,174
Unrealized gain (loss) on available-for-sale securities, Tax (Expense) Benefit 14     (424)     (131) (305)
Unrealized gain (loss) on available-for-sale securities, Net-of-Tax Amount (39)     1,208     372 869
Reclassification adjustment for amounts related to available-for-sale investments included in net income (loss), Before-Tax Amount 32     (1,676)     (128) (1,352)
Reclassification adjustment for amounts related to available-for-sale investments included in net income (loss), Tax (Expense) Benefit (8)     436     33 363
Reclassification adjustment for amounts related to available-for-sale investments included in net income (loss), Net-of-Tax Amount 24     (1,240)     (95) (989)
Reclassification adjustment for amounts reclassed to retained earnings related of the adoption of ASU 2016-01, Before-Tax Amount               (3,220)
Reclassification adjustment for amounts reclassed to retained earnings related of the adoption of ASU 2016-01, Net-of-Tax Amount               (3,220)
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net income (loss), Before-Tax Amount 130     54     523 151
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net income (loss), Tax (Expense) Benefit (40)     (17)     (162) (47)
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net income (loss), Net-of-Tax Amount 90     37     361 104
Foreign currency translation adjustment, Before-Tax Amount (2,486)     (451)     (3,113) (3,033)
Foreign currency translation adjustment, Net-of-Tax Amount (2,486)     (451)     (3,113) (3,033)
Total Other Comprehensive Income (Loss), Before-Tax Amount (2,377)     (441)     (2,215) (6,280)
Total Other Comprehensive Income (Loss), Tax (Expense) Benefit (34)     (5)     (260) 11
Other Comprehensive Loss, net of tax $ (2,411) $ 790 $ (854) $ (446) $ (3,315) $ (2,508) $ (2,475) $ (6,269)
v3.19.3
Earnings (Loss) Per Share - Summary of Calculation of Basic and Diluted Earnings (Loss) Per Share (Detail) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Sep. 30, 2019
Sep. 30, 2018
Numerator                
Net Income (Loss) $ (46,123) $ 3,995 $ 770 $ 7,589 $ (7,670) $ (10,814) $ (41,358) $ (10,895)
Denominator                
Weighted average number of shares – basic 47,824     47,710     47,803 47,927
Effect of dilutive securities                
Stock options       27        
PSUs, RSUs and restricted stock       97        
Weighted average number of shares – diluted 47,824     47,834     47,803 47,927
Earnings (loss) per share – basic $ (0.96)     $ 0.16     $ (0.87) $ (0.23)
Earnings (loss) per share – diluted $ (0.96)     $ 0.16     $ (0.87) $ (0.23)
v3.19.3
Earnings (Loss) Per Share - Additional Information (Detail) - shares
shares in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]        
Anti-dilutive effect excluded calculation of diluted earnings per share   1.8    
Unvested Stock Options, PSUs, RSUs and Restricted Stock [Member]        
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]        
Anti-dilutive effect excluded calculation of diluted earnings per share 4.1   3.0 2.3
v3.19.3
Segment Information - Additional Information (Detail)
9 Months Ended
Sep. 30, 2019
Category
Segment
Segment Reporting [Abstract]  
Number of reportable segments | Segment 2
Number of categories | Category 3
v3.19.3
Segment Information - Sales and Gross Profit of Reportable Segments (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Segment Reporting Information [Line Items]        
Sales $ 114,092 $ 140,335 $ 414,274 $ 389,189
Gross Profit 46,331 58,448 171,958 148,177
Network Solutions [Member]        
Segment Reporting Information [Line Items]        
Sales 94,018 121,043 359,007 341,359
Gross Profit 37,574 51,100 151,654 133,175
Services & Support [Member]        
Segment Reporting Information [Line Items]        
Sales 20,074 19,292 55,267 47,830
Gross Profit $ 8,757 $ 7,348 $ 20,304 $ 15,002
v3.19.3
Segment Information - Sales Information by Category (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Disaggregation Of Revenue [Line Items]        
Revenue $ 114,092 $ 140,335 $ 414,274 $ 389,189
Access & Aggregation [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 65,114 91,901 274,313 258,323
Subscriber Solutions & Experience [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue 42,476 38,552 119,731 103,213
Traditional & Other Products [Member]        
Disaggregation Of Revenue [Line Items]        
Revenue $ 6,502 $ 9,882 $ 20,230 $ 27,653
v3.19.3
Segment Information- Sales Information by Geographic Area (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Revenue from External Customer [Line Items]        
Sales $ 114,092 $ 140,335 $ 414,274 $ 389,189
United States [Member]        
Revenue from External Customer [Line Items]        
Sales 83,144 83,730 230,960 214,039
International [Member]        
Revenue from External Customer [Line Items]        
Sales $ 30,948 $ 56,605 $ 183,314 $ 175,150
v3.19.3
Liability for Warranty Returns - Additional Information (Detail) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2019
Jun. 30, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Dec. 31, 2017
Product Warranties Disclosures [Abstract]            
Period of assurance-based warranty for product defects 90 days to five years          
Liability for warranty obligations $ 8,657 $ 8,972 $ 8,623 $ 9,024 $ 10,111 $ 9,724
v3.19.3
Liability for Warranty Returns - Summary of Warranty Expense and Write-Off Activity (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Product Warranties Disclosures [Abstract]        
Balance at beginning of period $ 8,972 $ 10,111 $ 8,623 $ 9,724
Plus: Amounts charged to cost and expenses 816 (34) 3,796 6,649
Less: Deductions (1,131) (1,053) (3,762) (7,349)
Balance at end of period $ 8,657 $ 9,024 $ 8,657 $ 9,024
v3.19.3
Commitments and Contingencies - Additional Information (Detail)
$ in Millions
Oct. 17, 2019
Officer
Sep. 30, 2019
USD ($)
EquityFund
Contingencies And Commitments [Line Items]    
Number of private equity funds | EquityFund   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
Current Executive Officers [Member] | Subsequent Event [Member]    
Contingencies And Commitments [Line Items]    
Number of officers | Officer 2  
Former Executive Officers [Member] | Subsequent Event [Member]    
Contingencies And Commitments [Line Items]    
Number of officers | Officer 1  
v3.19.3
Restructuring - Additional Information (Detail) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Dec. 31, 2018
Restructuring And Related Activities [Abstract]          
Cumulative amount incurred for restructuring program $ 1.1 $ 0.3 $ 1.9 $ 7.2 $ 7.3
v3.19.3
Restructuring - Schedule of Reconciliation of Restructuring Liability (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Restructuring And Related Activities [Abstract]        
Balance at beginning of period $ 2,655   $ 185  
Plus: Amounts charged to cost and expense 1,195 $ 261 4,658 $ 7,236
Less: Amounts paid (252)   (1,245)  
Balance at end of period $ 3,598   $ 3,598  
v3.19.3
Restructuring - Schedule of Components of Restructuring Expense in Condensed Consolidated Statements of Income (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Restructuring Cost And Reserve [Line Items]        
Total restructuring expenses $ 1,195 $ 261 $ 4,658 $ 7,236
Selling, General and Administrative Expenses [Member]        
Restructuring Cost And Reserve [Line Items]        
Total restructuring expenses 531 $ 261 2,078 2,661
Research and Development Expenses [Member]        
Restructuring Cost And Reserve [Line Items]        
Total restructuring expenses 602   1,833 1,814
Cost of Sales [Member]        
Restructuring Cost And Reserve [Line Items]        
Total restructuring expenses $ 62   $ 747 $ 2,761
v3.19.3
Restructuring - Schedule of Components of Restructuring Expense by Geographic Area (Detail) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Restructuring Cost And Reserve [Line Items]        
Total restructuring expenses $ 1,195 $ 261 $ 4,658 $ 7,236
United States [Member]        
Restructuring Cost And Reserve [Line Items]        
Total restructuring expenses 1,116 256 1,941 7,096
International [Member]        
Restructuring Cost And Reserve [Line Items]        
Total restructuring expenses $ 79 $ 5 $ 2,717 $ 140
v3.19.3
Subsequent Events - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Millions
3 Months Ended
Oct. 30, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 02, 2019
Subsequent Event [Line Items]                
Dividend payments   $ 0.09 $ 0.09 $ 0.09 $ 0.09 $ 0.09 $ 0.09  
Subsequent Event [Member]                
Subsequent Event [Line Items]                
Dividend declaration date Oct. 30, 2019              
Dividend payments $ 0.09              
Dividend record date Nov. 14, 2019              
Dividend payment date Dec. 02, 2019              
Scenario Forecast [Member]                
Subsequent Event [Line Items]                
Quarterly dividend payable, aggregate amount subsequent to balance sheet date               $ 4.3