ADTRAN INC, 10-K filed on 2/25/2020
Annual Report
v3.19.3.a.u2
Document and Entity Information - USD ($)
12 Months Ended
Dec. 31, 2019
Feb. 21, 2020
Jun. 30, 2019
Cover [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2019    
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
Trading Symbol ADTN    
Entity Registrant Name ADTRAN, Inc.    
Entity Central Index Key 0000926282    
Current Fiscal Year End Date --12-31    
Entity Well-known Seasoned Issuer Yes    
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Filer Category Large Accelerated Filer    
Entity Shell Company false    
Entity Emerging Growth Company false    
Entity Small Business false    
Entity Common Stock, Shares Outstanding   48,086,618  
Entity Public Float     $ 724,323,806
Entity Interactive Data Current Yes    
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 Annual Report true    
Document Transition Report false    
Title of 12(b) Security Common Stock, Par Value $0.01    
Security Exchange Name NASDAQ    
Documents Incorporated by Reference

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held on May 13, 2020 are incorporated herein by reference in Part III.

   
v3.19.3.a.u2
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Current Assets    
Cash and cash equivalents $ 73,773 $ 105,504
Short-term investments 33,243 3,246
Accounts receivable, less allowance for doubtful accounts of $38 and $128 as of December 31, 2019 and 2018, respectively 90,531 99,385
Other receivables 16,566 36,699
Inventory, net 98,305 99,848
Prepaid expenses and other current assets 7,892 10,744
Total Current Assets 320,310 355,426
Property, plant and equipment, net 73,708 80,635
Deferred tax assets, net 7,561 37,187
Goodwill 6,968 7,106
Intangibles, net 27,821 33,183
Other assets 14,261 5,668
Long-term investments 94,489 108,822
Total Assets 545,118 628,027
Current Liabilities    
Accounts payable 44,870 60,054
Bonds payable 24,600 1,000
Unearned revenue 11,963 17,940
Accrued expenses and other current liabilities 13,876 11,746
Accrued wages and benefits 13,890 14,752
Income tax payable, net 3,512 12,518
Total Current Liabilities 112,711 118,010
Non-current unearned revenue 6,012 5,296
Pension liability 15,886 13,086
Deferred compensation liability 21,698 18,256
Other non-current liabilities 8,385 2,500
Bonds payable   24,600
Total Liabilities 164,692 181,748
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 48,020 shares outstanding as of December 31, 2019 and 79,652 shares issued and 47,751 shares outstanding as of December 31, 2018 797 797
Additional paid-in capital 274,632 267,670
Accumulated other comprehensive loss (16,417) (14,416)
Retained earnings 806,702 883,975
Less treasury stock at cost: 31,638 and 31,901 shares as of December 31, 2019 and 2018, respectively (685,288) (691,747)
Total Stockholders' Equity 380,426 446,279
Total Liabilities and Stockholders' Equity $ 545,118 $ 628,027
v3.19.3.a.u2
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Statement Of Financial Position [Abstract]    
Allowance for doubtful accounts $ 38 $ 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 48,020,000 47,751,000
Treasury stock, shares 31,638,000 31,901,000
v3.19.3.a.u2
Consolidated Statements of Income (Loss) - USD ($)
shares in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Sales      
Total Sales $ 530,061,000 $ 529,277,000 $ 666,900,000
Cost of Sales      
Total Cost of Sales 310,894,000 325,712,000 363,265,000
Gross Profit 219,167,000 203,565,000 303,635,000
Selling, general and administrative expenses 130,288,000 124,440,000 135,583,000
Research and development expenses 126,200,000 124,547,000 130,666,000
Asset impairments 3,872,000 0 0
Gain on contingency (1,230,000)    
Operating Income (Loss) (39,963,000) (45,422,000) 37,386,000
Interest and dividend income 2,765,000 4,026,000 4,380,000
Interest expense (511,000) (533,000) (556,000)
Net investment gain (loss) 11,434,000 (4,050,000) 4,685,000
Other income (expense), net 1,498,000 1,286,000 (1,208,000)
Gain on bargain purchase of a business   11,322,000  
Income (Loss) Before Income Taxes (24,777,000) (33,371,000) 44,687,000
Income tax (expense) benefit (28,205,000) 14,029,000 (20,847,000)
Net Income (Loss) $ (52,982,000) $ (19,342,000) $ 23,840,000
Weighted average shares outstanding – basic 47,836 47,880 48,153
Weighted average shares outstanding – diluted 47,836 47,880 48,699
Earnings (loss) per common share – basic $ (1.11) $ (0.40) $ 0.50
Earnings (loss) per common share – diluted $ (1.11) $ (0.40) $ 0.49
Network Solutions [Member]      
Sales      
Total Sales $ 455,226,000 $ 458,232,000 $ 540,396,000
Cost of Sales      
Total Cost of Sales 263,677,000 278,929,000 279,563,000
Gross Profit 191,549,000 179,303,000 260,833,000
Services & Support [Member]      
Sales      
Total Sales 74,835,000 71,045,000 126,504,000
Cost of Sales      
Total Cost of Sales 47,217,000 46,783,000 83,702,000
Gross Profit $ 27,618,000 $ 24,262,000 $ 42,802,000
v3.19.3.a.u2
Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Statement Of Income And Comprehensive Income [Abstract]      
Net Income (loss) $ (52,982) $ (19,342) $ 23,840
Other Comprehensive Income (Loss), net of tax      
Net unrealized gains (losses) on available-for-sale securities 279 (3,130) 2,163
Defined benefit plan adjustments (1,185) (3,755) 731
Foreign currency translation (1,480) (4,236) 5,999
Other Comprehensive Income (Loss), net of tax (2,386) (11,121) 8,893
Comprehensive Income (Loss), net of tax $ (55,368) $ (30,463) $ 32,733
v3.19.3.a.u2
Consolidated Statements of Changes in Stockholders' Equity - 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, 2016 $ 479,517 $ 797 $ 252,957 $ 921,942 $ (683,991) $ (12,188)
Beginning Balance, Shares at Dec. 31, 2016   79,652        
Net income (loss) 23,840     23,840    
Other comprehensive income (loss), net of tax 8,893         8,893
Dividend payments ($0.09 per share) (17,368)     (17,368)    
Dividends accrued on unvested restricted stock units (37)     (37)    
Stock options exercised 13,412     (2,827) 16,239  
PSUs, RSUs and restricted stock vested (441)     (3,257) 2,816  
Purchase of treasury stock (17,348)       (17,348)  
Stock-based compensation expense 7,433   7,433      
ASU 2016-09 adoption 10   125 (115)    
Ending Balance at Dec. 31, 2017 497,911 $ 797 260,515 922,178 (682,284) (3,295)
Ending Balance, Shares at Dec. 31, 2017   79,652        
Net income (loss) (19,342)     (19,342)    
ASU adoption (see Note 1) | ASU 2014-09 [member] 278     278    
ASU adoption (see Note 1) | ASU 2016-01 [Member] 3,220     3,220    
Other comprehensive income (loss), net of tax (11,121)         (11,121)
Dividend payments ($0.09 per share) (17,267)     (17,267)    
Dividends accrued on unvested restricted stock units (7)     (7)    
Stock options exercised 1,483     (603) 2,086  
PSUs, RSUs and restricted stock vested (499)     (4,482) 3,983  
Purchase of treasury stock (15,532)       (15,532)  
Stock-based compensation expense 7,155   7,155      
Ending Balance at Dec. 31, 2018 $ 446,279 $ 797 267,670 883,975 (691,747) (14,416)
Ending Balance, Shares at Dec. 31, 2018 79,652 79,652        
Net income (loss) $ (52,982)     (52,982)    
ASU adoption (see Note 1) | ASU 2016-02 [member] 4     4    
ASU adoption (see Note 1) | ASU 2018-02 [Member]       (385)   385
Other comprehensive income (loss), net of tax (2,386)         (2,386)
Dividend payments ($0.09 per share) (17,212)     (17,212)    
Dividends accrued on unvested restricted stock units (10)     (10)    
Stock options exercised 526     (208) 734  
PSUs, RSUs and restricted stock vested (571)     (6,480) 5,909  
Purchase of treasury stock (184)       (184)  
Stock-based compensation expense 6,962   6,962      
Ending Balance at Dec. 31, 2019 380,426 $ 797 $ 274,632 $ 806,702 $ (685,288) $ (16,417)
Ending Balance (ASU 2018-02 [Member]) at Dec. 31, 2019 $ 385          
Ending Balance, Shares at Dec. 31, 2019 79,652 79,652        
v3.19.3.a.u2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Statement Of Stockholders Equity [Abstract]      
Dividend payments $ 0.09 $ 0.09 $ 0.09
v3.19.3.a.u2
Consolidated Statements of Cash Flows - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Cash flows from operating activities:      
Net income (loss) $ (52,982,000) $ (19,342,000) $ 23,840,000
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 17,771,000 15,891,000 15,692,000
Asset impairments 3,872,000 0 0
Amortization of net premium (discount) on available-for-sale investments (100,000) (50,000) 425,000
Net (gain) loss on long-term investments (11,434,000) 4,050,000 (4,685,000)
Net (gain) loss on disposal of property, plant and equipment 67,000 67,000 (145,000)
Gain on bargain purchase of a business   (11,322,000)  
Gain on contingency payment (1,230,000)    
Gain on life insurance proceeds (1,000,000)    
Stock-based compensation expense 6,962,000 7,155,000 7,433,000
Deferred income taxes 30,070,000 (17,257,000) 14,073,000
Change in operating assets and liabilities:      
Accounts receivable, net 8,282,000 49,200,000 (49,103,000)
Other receivables 20,046,000 (8,522,000) (10,222,000)
Inventory, net 1,252,000 24,192,000 (15,518,000)
Prepaid expenses and other assets 2,749,000 10,727,000 (4,830,000)
Accounts payable, net (13,494,000) (3,799,000) (17,742,000)
Accrued expenses and other liabilities (4,598,000) (3,226,000) (5,455,000)
Income taxes payable (8,705,000) 7,690,000 3,858,000
Net cash provided by (used in) operating activities (2,472,000) 55,454,000 (42,379,000)
Cash flows from investing activities:      
Purchases of property, plant and equipment (9,494,000) (8,110,000) (14,720,000)
Proceeds from disposals of property, plant and equipment     151,000
Proceeds from sales and maturities of available-for-sale investments 47,268,000 153,649,000 173,752,000
Purchases of available-for-sale investments (48,578,000) (123,209,000) (93,141,000)
Life insurance proceeds received 1,000,000    
Acquisition of business, net of cash acquired 13,000 (22,045,000)  
Net cash provided by (used in) investing activities (9,791,000) 285,000 66,042,000
Cash flows from financing activities:      
Proceeds from stock option exercises 526,000 1,483,000 13,412,000
Purchases of treasury stock (184,000) (15,532,000) (17,348,000)
Dividend payments (17,212,000) (17,267,000) (17,368,000)
Payments on long-term debt (1,000,000) (1,100,000) (1,100,000)
Net cash used in financing activities (17,870,000) (32,416,000) (22,404,000)
Net increase (decrease) in cash and cash equivalents (30,133,000) 23,323,000 1,259,000
Effect of exchange rate changes (1,598,000) (4,252,000) 5,279,000
Cash and cash equivalents, beginning of year 105,504,000 86,433,000 79,895,000
Cash and cash equivalents, end of year 73,773,000 105,504,000 86,433,000
Supplemental disclosure of cash flow information      
Cash paid during the year for interest 512,000 534,000 555,000
Cash paid during the year for income taxes 9,357,000 4,104,000 2,988,000
Supplemental disclosure of non-cash investing activities      
Purchases of property, plant and equipment included in accounts payable $ 90,000 62,000 $ 408,000
Contingent payment   $ 1,230,000  
v3.19.3.a.u2
Nature of Business
12 Months Ended
Dec. 31, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Nature of Business

Note 1 – Nature of Business

ADTRAN, Inc. (“ADTRAN” or the “Company”) is a leading global provider of networking and communications solutions. Our vision is to enable a fully connected world where the power to communicate is available to everyone, everywhere. Our unique approach, unmatched industry expertise and innovative solutions enable us to address almost any customer need. Our products and services are utilized by a diverse global customer base of network operators that range from those having national or regional reach, operating as telephone or cable television network operators, to alternative network providers such as municipalities or utilities, as well as managed service providers who serve small- and medium-sized businesses and distributed enterprises.

Principles of Consolidation

The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and include the financial position, results of operations, comprehensive income (loss), changes in equity and cash flows of ADTRAN and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. 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 expenses during the reporting period. Our more significant estimates include excess and obsolete inventory reserves, warranty reserves, customer rebates, determination and accrual of the deferred revenue components of multiple element sales agreements, estimated costs to complete obligations associated with deferred revenues and network installations, estimated income tax provision and income tax contingencies, fair value of stock-based compensation, assessment of goodwill and other intangibles for impairment, estimated lives of intangible assets, estimated pension liability, fair value of investments and evaluation of other-than-temporary declines in the value of investments. Actual amounts could differ significantly from these estimates.

Correction of Immaterial Misstatement

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.   

Summary of Significant Accounting Policies

 

Cash and Cash Equivalents

Cash and cash equivalents represent demand deposits, money market funds and short-term investments classified as available-for-sale with original maturities of three months or less. We maintain depository investments with certain financial institutions. Although these depository investments may exceed government insured depository limits, we have evaluated the credit worthiness of these applicable financial institutions and determined the risk of material financial loss due to the exposure of such credit risk to be minimal. As of December 31, 2019, $71.6 million of our cash and cash equivalents, primarily certain domestic money market funds and foreign depository accounts, were in excess of government provided insured depository limits.

Financial Instruments

The carrying amounts reported in the Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the immediate or short-term maturity of these financial instruments. The carrying amount reported for bonds payable was $24.6 million, which was its fair value as of December 31, 2019.

Investments with contractual maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Despite the long-term nature of their stated contractual maturities, we routinely buy and sell these securities and we believe we have the ability to quickly sell them to the remarketing agent, tender agent or issuer at par value plus accrued interest in the event we decide to liquidate our investment in a particular variable rate demand note. All income generated from these investments was recorded as interest income. We have not recorded any losses relating to variable rate demand notes.

Long-term investments is comprised of deferred compensation plan assets, corporate bonds, municipal fixed-rate bonds, asset-backed bonds, mortgage/agency-backed bonds, U.S. and foreign government bonds, marketable equity securities and other equity investments. Marketable equity securities are reported at fair value as determined by the most recently traded price of the securities at the balance sheet date, although the securities may not be readily marketable due to the size of the available market. Any changes in fair value are recognized in net investment gain (loss). Realized gains and losses on sales of debt securities are computed under the specific identification method and are included in other income (expense). See Note 5 for additional information.

Accounts Receivable

We record accounts receivable at net realizable value. Prior to establishing payment terms for a new customer, we evaluate the credit risk of the customer. Credit limits and payment terms established for new customers are re-evaluated periodically based on customer collection experience and other financial factors. As of December 31, 2019, single customers comprising more than 10% of our total accounts receivable balance included four customers, which accounted for 53.2% of our total accounts receivable. As of December 31, 2018, single customers comprising more than 10% of our total accounts receivable balance included two customers, which accounted for 36.9% of our total accounts receivable.

We regularly review the need to maintain an allowance for doubtful accounts and consider factors such as the age of accounts receivable balances, the current economic conditions that may affect a customer’s ability to pay, significant one-time events impacting these customers and our historical experience. If the financial condition of a customer deteriorates, resulting in an impairment of their ability to make payments, we may be required to record an allowance for doubtful accounts. If circumstances change with regard to individual receivable balances that have previously been determined to be uncollectible, and for which a specific reserve has been established, a reduction in our allowance for doubtful accounts may be required. Our allowance for doubtful accounts was $38 thousand and $0.1 million as of December 31, 2019 and December 31, 2018, respectively.

Inventory

Inventory is carried at the lower of cost and estimated net realizable value, with cost being determined using the first-in, first-out method. Standard costs for material, labor and manufacturing overhead are used to value inventory and are updated at least quarterly. 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 estimated reserve percentages, which consider 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 reserve. See Note 7 for additional information.

Property, Plant and Equipment

Property, plant and equipment, which is stated at cost, is depreciated using the straight-line method over the estimated useful lives of the assets. We depreciate building and land improvements from five to 39 years, office machinery and equipment from three to seven years, engineering machinery and equipment from three to seven years, and computer software from three to five years. Expenditures for repairs and maintenance are charged to expense as incurred. Major improvements that materially prolong the lives of the assets are capitalized. Gains and losses on the disposal of property, plant and equipment are recorded in operating income (loss). See Note 8 for additional information.

Intangible Assets

Purchased intangible assets with finite lives are carried at cost less accumulated amortization. Amortization is recorded over the estimated useful lives of the respective assets, which is two to 14 years. See Note 11 for additional information.

Impairment of Long-Lived Assets and Intangibles

Long-lived assets used in operations and intangible assets are reviewed 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. An impairment loss would be recognized in the amount by which the recorded value of the asset exceeds the fair value of the asset, measured by the quoted market price of an asset or an estimate based on the best information available in the circumstances. During the year ended December 31, 2019, we recognized an impairment loss of approximately $3.9 million related to the abandonment of certain information technology implementation projects which we had previously capitalized expenses related to these projects. There were no impairment losses for long-lived assets during the years ended December 31, 2018 or 2017, or for intangible assets recognized during the years ended December 31, 2019, 2018 or 2017.

Goodwill

Goodwill represents the excess purchase price over the fair value of net assets acquired. 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 by-pass a qualitative assessment 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 and, in turn, performed a step-1 analysis of goodwill. Based on the results of our step-1 analysis, no impairment charges on goodwill were recognized during the years ended December 31, 2019, 2018 and 2017.

Liability for Warranty

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 historical return rate and 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. 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 $8.4 million and $8.6 million as of December 31, 2019 and 2018, respectively. These liabilities are included in accrued expenses in the accompanying Consolidated Balance Sheets. During 2017, we recorded a reduction in warranty expense related to a settlement with a third-party supplier for a defective component, the impact of which is reflected in the following table.

A summary of warranty expense and write-off activity for the years ended December 31, 2019, 2018 and 2017 is as follows:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

Year Ended December 31,

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

8,623

 

 

$

9,724

 

 

$

8,548

 

Plus: Amounts charged to cost and expenses

 

 

4,569

 

 

 

7,392

 

 

 

6,951

 

Less: Deductions

 

 

(4,798

)

 

 

(8,493

)

 

 

(5,775

)

Balance at end of period

 

$

8,394

 

 

$

8,623

 

 

$

9,724

 

 

Pension Benefit Plan Obligations

We maintain a defined benefit pension plan covering employees in certain foreign countries. Pension benefit plan obligations are based on various assumptions used by our actuaries in calculating these amounts. These assumptions include discount rates, compensation rate increases, expected return on plan assets, retirement rates and mortality rates. Actual results that differ from the assumptions and changes in assumptions could affect future expenses and obligations. Our net pension liability totaled $15.9 million and $13.1 million as of December 31, 2019 and 2018, respectively.

Stock-Based Compensation

We have two stock incentive plans from which stock options, performance stock units (“PSUs”), restricted stock units (“RSUs”) and restricted stock are available for grant to employees and directors. Costs related to these awards are recognized over their vesting periods. All employee and director stock options granted under our stock option plans have an exercise price equal to the fair market value of the award, as defined in the plan, of the underlying common stock on the grant date. All of our outstanding stock option awards are classified as equity awards and therefore are measured at fair value on their grant date.

Stock-based compensation expense recognized for the years ended December 31, 2019, 2018 and 2017 was approximately $7.0 million, $7.2 million and $7.4 million, respectively. As of December 31, 2019, total unrecognized compensation cost related to non-vested stock options, PSUs, RSUs and restricted stock was approximately $17.2 million, which is expected to be recognized over an average remaining recognition period of 3.0 years. See Note 4 for additional information.

Research and Development Costs

Research and development costs include compensation for engineers and support personnel, outside contracted services, depreciation and material costs associated with new product development, enhancement of current products and product cost reductions. We continually evaluate new product opportunities and engage in intensive research and product development efforts. Research and development costs totaled $126.2 million, $124.5 million and $130.7 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Other Comprehensive Income (Loss)

The following table presents changes in accumulated other comprehensive income (loss), net of tax, by components of accumulated other comprehensive income (loss) for the years ended December 31, 2019 2018 and 2017:

 

 

(In thousands)

 

Unrealized

Gains (Losses)

on Available-

for-Sale

Securities

 

 

Unrealized Gains (Losses) on Cash Flow Hedges

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

ASU 2018-02 Adoption (2)

 

 

Total

 

Balance as of December 31, 2016

 

$

404

 

 

$

 

 

$

(5,017

)

 

$

(7,575

)

 

$

 

 

$

(12,188

)

Other comprehensive income before

   reclassifications

 

 

5,020

 

 

 

(619

)

 

 

451

 

 

 

5,999

 

 

 

 

 

 

10,851

 

Amounts reclassified from accumulated other

   comprehensive loss

 

 

(2,857

)

 

 

619

 

 

 

280

 

 

 

 

 

 

 

 

 

(1,958

)

Balance as of December 31, 2017

 

 

2,567

 

 

 

 

 

 

(4,286

)

 

 

(1,576

)

 

 

 

 

 

(3,295

)

Other comprehensive loss before

   reclassifications

 

 

685

 

 

 

 

 

 

(3,890

)

 

 

(4,236

)

 

 

 

 

 

(7,441

)

Amounts reclassified to retained earnings (1)

 

 

(3,220

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,220

)

Amounts reclassified from accumulated other

   comprehensive loss

 

 

(595

)

 

 

 

 

 

135

 

 

 

 

 

 

 

 

 

(460

)

Balance as of December 31, 2018

 

 

(563

)

 

 

 

 

 

(8,041

)

 

 

(5,812

)

 

 

 

 

 

(14,416

)

Other comprehensive loss before

   reclassifications

 

 

573

 

 

 

 

 

 

(1,717

)

 

 

(1,480

)

 

 

 

 

 

(2,624

)

Amounts reclassified to retained earnings (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

385

 

 

 

385

 

Amounts reclassified from accumulated other

   comprehensive loss

 

 

(294

)

 

 

 

 

 

532

 

 

 

 

 

 

 

 

 

238

 

Balance as of December 31, 2019

 

$

(284

)

 

$

 

 

$

(9,226

)

 

$

(7,292

)

 

$

385

 

 

$

(16,417

)

 

 

(1)

With the adoption of ASU 2016-01, the unrealized gains on our equity investments were reclassified to retained earnings.  See Recently Issued Accounting Standards below for more information.

 

(2)

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 13 for additional information.

The following tables present the details of reclassifications out of accumulated other comprehensive income (loss) for the years ended December 31, 2019, 2018 and 2017:

 

(In thousands)

 

2019

Details about Accumulated Other Comprehensive

Income Components

 

Amount Reclassified

from Accumulated Other

Comprehensive Loss

 

 

Affected Line Item in the

Statement Where Net Income

Is Presented

Unrealized gains on available-for-sale securities:

 

 

 

 

 

 

Net realized gain on sales of securities

 

$

397

 

 

Net investment gain (loss)

Defined benefit plan adjustments – actuarial losses

 

 

(771

)

 

(1)

Total reclassifications for the period, before tax

 

 

(374

)

 

 

Tax benefit

 

 

136

 

 

 

Total reclassifications for the period, net of tax

 

$

(238

)

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 14 for additional information.

 

 

(In thousands)

 

2018

Details about Accumulated Other Comprehensive

Income Components

 

Amount Reclassified

from Accumulated Other

Comprehensive Loss

 

 

Affected Line Item in the

Statement Where Net Income

Is Presented

Unrealized gains on available-for-sale securities:

 

 

 

 

 

 

Net realized gain on sales of securities

 

$

804

 

 

Net investment gain (loss)

Defined benefit plan adjustments – actuarial losses

 

 

(196

)

 

(1)

Total reclassifications for the period, before tax

 

 

608

 

 

 

Tax expense

 

 

(148

)

 

 

Total reclassifications for the period, net of tax

 

$

460

 

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 14 for additional information.

 

(In thousands)

 

2017

Details about Accumulated Other Comprehensive

Income Components

 

Amount Reclassified

from Accumulated Other

Comprehensive Loss

 

 

Affected Line Item in the

Statement Where Net Income

Is Presented

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

 

 

 

 

 

 

Net realized gain on sales of securities

 

$

4,864

 

 

Net investment gain (loss)

Impairment expense

 

 

(180

)

 

Net investment gain (loss)

Net losses on derivatives designated as hedging instruments

 

 

(897

)

 

Cost of sales

Defined benefit plan adjustments – actuarial losses

 

 

(406

)

 

(1)

Total reclassifications for the period, before tax

 

 

3,381

 

 

 

Tax expense

 

 

(1,423

)

 

 

Total reclassifications for the period, net of tax

 

$

1,958

 

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 14 for additional information.

 

The following tables present the tax effects related to the change in each component of other comprehensive income (loss) for the years ended December 31, 2019, 2018 and 2017:

 

 

 

2019

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

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

 

$

774

 

 

$

(201

)

 

$

573

 

Reclassification adjustment for amounts related to available-for-sale investments included in net loss

 

 

(397

)

 

 

103

 

 

 

(294

)

Defined benefit plan adjustments

 

 

(2,488

)

 

 

771

 

 

 

(1,717

)

Reclassification adjustment for amounts related to defined benefit plan adjustments included in net loss

 

 

771

 

 

 

(239

)

 

 

532

 

Foreign currency translation adjustment

 

 

(1,480

)

 

 

 

 

 

(1,480

)

Total Other Comprehensive Income (Loss)

 

$

(2,820

)

 

$

434

 

 

$

(2,386

)

 

 

 

2018

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

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

 

$

926

 

 

$

(241

)

 

$

685

 

Reclassification adjustment for amounts related to available-for-sale investments included in net loss

 

 

(804

)

 

 

209

 

 

 

(595

)

Reclassification adjustment for amounts reclassed to retained earnings related to the adoption of ASU 2016-01

 

 

(4,351

)

 

 

1,131

 

 

 

(3,220

)

Defined benefit plan adjustments

 

 

(5,638

)

 

 

1,748

 

 

 

(3,890

)

Reclassification adjustment for amounts related to defined benefit plan adjustments included in net loss

 

 

196

 

 

 

(61

)

 

 

135

 

Foreign currency translation adjustment

 

 

(4,236

)

 

 

 

 

 

(4,236

)

Total Other Comprehensive Income (Loss)

 

$

(13,907

)

 

$

2,786

 

 

$

(11,121

)

 

 

 

 

2017

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

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

 

$

8,230

 

 

$

(3,210

)

 

$

5,020

 

Reclassification adjustment for amounts related to available-for-sale investments included in net income

 

 

(4,684

)

 

 

1,827

 

 

 

(2,857

)

Unrealized gains (losses) on cash flow hedges

 

 

(897

)

 

 

278

 

 

 

(619

)

Reclassification adjustment for amounts related to cash flow hedges included in net income

 

 

897

 

 

 

(278

)

 

 

619

 

Defined benefit plan adjustments

 

 

654

 

 

 

(203

)

 

 

451

 

Reclassification adjustment for amounts related to defined benefit plan adjustments included in net income

 

 

406

 

 

 

(126

)

 

 

280

 

Foreign currency translation adjustment

 

 

5,999

 

 

 

 

 

 

5,999

 

Total Other Comprehensive Income (Loss)

 

$

10,605

 

 

$

(1,712

)

 

$

8,893

 

 

Income Taxes

The provision for income taxes has been determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from the difference between financial and tax bases of our assets and liabilities and are adjusted for changes in tax rates and tax laws when such changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

We establish reserves to remove some or all of the tax benefit of any of our tax positions at the time we determine that the positions become uncertain. We adjust these reserves, including any impact on the related interest and penalties, as facts and circumstances change.     

Foreign Currency

We record transactions denominated in foreign currencies using appropriate exchange rates from throughout the year. Assets and liabilities denominated in foreign currencies are remeasured at the balance sheet dates using the closing rates of exchange between those foreign currencies and the functional currency with any transaction gains or losses reported in other income (expense). Our primary exposures to foreign currency exchange rate movements are with our German subsidiary, whose functional currency is the Euro, our Australian subsidiary, whose functional currency is the Australian dollar and our Mexican subsidiary, whose functional currency is the U.S. dollar as most invoices are paid in Mexican Pesos. Adjustments resulting from translating financial statements of international subsidiaries are recorded as a component of accumulated other comprehensive income (loss).

Revenue

On January 1, 2018, we adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition.  

Accounting Policy under Topic 606

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

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

Network Solutions Segment

Network Solutions includes hardware products and 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.

Hardware and Software Revenue

Revenue from hardware sales is recognized when control is transferred to our customers, which is generally when we ship the products. Shipping terms are generally FOB shipping point. This segment also includes revenues from software license sales which is recognized at delivery and transfer of control to the customer. Revenue is recorded net of estimated discounts and rebates using historical trends. Customers are typically invoiced when control is transferred and revenue is recognized. Our products generally include assurance-based warranties of 90 days to five years for product defects, which are accrued at the time revenue is recognized.

In certain transactions, we are also the lessor in sales-type lease arrangements for network equipment that have terms of 18 months to five years. These arrangements typically include network equipment, network implementation services and maintenance services.        

Services & Support Segment

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

Maintenance Revenue

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

Network Implementation Revenue

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

Accounting Policy under Topic 605

Revenue was generally recognized when persuasive evidence of an arrangement exists, delivery has occurred, the product price was fixed or determinable, collection of the resulting receivable was reasonably assured, and product returns were reasonably estimable. For product sales, revenue was generally recognized upon shipment of the product to our customer in accordance with the title transfer terms of the sales agreement, generally Ex Works, per International Commercial Terms. In the case of consigned inventory, revenue was recognized when the end customer assumes ownership of the product. Contracts that contained multiple deliverables were evaluated to determine the units of accounting, and the consideration from the arrangement was allocated to each unit of accounting based on the relative selling price and corresponding terms of the contract. When this was not available, we were generally not able to determine third-party evidence of selling price because of the extent of customization among competing products or services from other companies. In these instances, we used best estimates to allocate consideration to each respective unit of accounting. These estimates included analysis of respective bills of material and review and analysis of similar product and service offerings. We recorded revenue associated with installation services when respective contractual obligations are complete. In instances where customer acceptance was required, revenue was deferred until respective acceptance criteria were met. Contracts that included both installation services and product sales were evaluated for revenue recognition in accordance with contract terms. As a result, installation services may have been considered a separate deliverable or may have been considered a combined single unit of accounting with the delivered product. Generally, either the purchaser, ADTRAN, or a third party would perform the installation of our products. Shipping fees were recorded as revenue and the related costs were included in cost of sales. Sales taxes invoiced to customers were included in revenues and represented less than one percent of total revenues. The corresponding sales taxes paid were included in cost of goods sold. Value-added taxes collected from customers in international jurisdictions were recorded in accrued expenses as a liability. Revenue was recorded net of discounts. Sales returns were recorded as a reduction of revenue and accrued based on historical sales return experience, which we believed provided a reasonable estimate of future returns.

Unearned Revenue

Unearned revenue primarily represents customer billings on our maintenance service programs and unearned revenues related to multiple element contracts where we still have contractual obligations to our customers. We currently offer maintenance contracts ranging from one month to five years. Revenue attributable to maintenance contracts is recognized on a straight-line basis over the related contract term. In addition, we provide software maintenance and a variety of hardware maintenance services to customers under contracts with terms up to ten years. When we defer revenue related to multiple performance obligations where we still have contractual obligations, we also defer the related costs. Current deferred costs are included in prepaid expenses and other current assets on the accompanying Consolidated Balance Sheets and totaled $1.6 million and $2.4 million as of December 31, 2019 and 2018, respectively. Non-current deferred costs are included in other assets on the accompanying Consolidated Balance Sheets and totaled $0.1 million and $0.8 million as of December 31, 2019 and 2018, respectively.

Earnings (Loss) per Share

Earnings (loss) per common share and earnings (loss) per common share assuming dilution, are based on the weighted average number of common shares and, when dilutive, common equivalent shares outstanding during the year. See Note 17 for additional information.

Business Combinations

The Company records assets acquired, liabilities assumed, contractual contingencies, when applicable, and intangible assets recognized as part of business combinations based on their fair values on the date of acquisition. The excess of the purchase price over the estimated fair values of the net tangible and intangible assets and liabilities assumed acquired is recorded as goodwill. If the estimated fair values of net tangible and intangible assets acquired and liabilities assumed exceed the purchase price, a bargain purchase gain is recorded. The Company’s estimates of fair value are based on historical experience, industry knowledge, certain information obtained from the management of the acquired company and, in some cases, valuations performed by independent third-party firms. The results of operations of acquired companies are included in the accompanying Consolidated Statements of Operations since their dates of acquisition. Costs incurred to complete the business combination, such as legal, accounting or other professional fees are charged to selling, general and administrative expenses as incurred.

Derivative Instruments and Hedging Activities

Historically, we have participated in foreign exchange forward contracts in connection with the management of exposure to fluctuations in foreign exchange rates as outlined below.

Cash Flow Hedges

 

Our cash flow hedging activities utilize foreign exchange forward contracts to reduce the risk that movements in exchange rates will adversely affect the net cash flows resulting from the planned purchase of products from foreign suppliers. Purchases of U.S. denominated inventory by our European subsidiary represent our primary exposure. Changes in the fair value of derivatives designated as cash flow hedges are recorded in accumulated other comprehensive income. Amounts related to cash flow hedges are reclassified from accumulated other comprehensive income to earnings when the underlying hedged item impacts earnings. This reclassification is recorded in the same line item of the consolidated statements of income as where the effects of the hedged item are recorded, which is cost of sales.

Undesignated Hedges

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

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

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. In November 2019, the FASB issued ASU 2019-11, Codification improvements to Topic 326, Financial Instruments – Credit Losses, which makes various narrow-scope amendments to the new credit losses standard, such as, providing disclosure relief for accrued interest receivables. 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 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.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this update simplify the accounting for income taxes by removing various exceptions, such as, the exception to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items. The amendments in this update, also simplify the accounting for income taxes related to income-based franchise taxes and requiring that an entity reflect enacted tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the effect of ASU 2019-12, 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 its 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 nonlease components. The adoption of this standard resulted in the recognition of a right-of-use asset and corresponding right-of-use liability on our Consolidated Balance Sheets 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 Consolidated Statement of Income or Statement of Cash Flows. See Note 9 for additional information.

As a lessor, the adoption of this standard did not have a material impact on our Consolidated Balance Sheet, Consolidated Statement of Income or 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.

v3.19.3.a.u2
Business Combinations
12 Months Ended
Dec. 31, 2019
Business Combinations [Abstract]  
Business Combinations

Note 2 – Business Combinations

In November 2018, we acquired SmartRG, Inc., a provider of carrier-class, open-source connected home platforms and cloud services for broadband service providers 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. These revenues are 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. In December 2019, $1.3 million of the $2.8 million was released from the escrow account pursuant to the agreement, with the final settlement of the remaining balance expected during the fourth quarter of 2020. The remaining minimum and maximum potential release of funds to the seller ranges from no payment to $1.5 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 and liabilities assumed. 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.

 

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

 

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

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

 

(In thousands)

 

Sumitomo

 

 

SmartRG

 

Assets

 

 

 

 

 

 

 

 

Tangible assets acquired

 

$

1,006

 

 

$

8,594

 

Intangible assets

 

 

22,100

 

 

 

9,960

 

Goodwill

 

 

 

 

 

3,476

 

Total assets acquired

 

 

23,106

 

 

 

22,030

 

Liabilities

 

 

 

 

 

 

 

 

Liabilities assumed

 

 

(3,978

)

 

 

(6,001

)

Total liabilities assumed

 

 

(3,978

)

 

 

(6,001

)

Total net assets

 

 

19,128

 

 

 

16,029

 

Gain on bargain purchase of a business, net of tax

 

 

(11,322

)

 

 

 

Total purchase price

 

$

7,806

 

 

$

16,029

 

 

Our Consolidated Statements of Income include the following revenue and net loss attributable to SmartRG and Sumitomo since the date of acquisition:

 

(In thousands)

 

March 19, 2018 to

December 31,

2018

 

Revenue

 

$

9,186

 

Net loss

 

$

(1,297

)

 

The details of the acquired intangible assets from the SmartRG and Sumitomo acquisitions are as follows:

 

(In thousands)

 

Value

 

 

Life (in years)

Customer relationships

 

$

15,190

 

 

3 - 12

Developed technology

 

 

7,400

 

 

7

Licensed technology

 

 

5,900

 

 

9

Supplier relationship

 

 

2,800

 

 

2

Licensing agreements

 

 

560

 

 

5 - 10

Trade name

 

 

210

 

 

3

Total

 

$

32,060

 

 

 

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

 

(In thousands)

 

2018

 

 

2017

 

Pro forma revenue

 

$

559,050

 

 

$

702,573

 

Pro forma net loss

 

$

(33,862

)

 

$

33,206

 

 

For the years ended December 31, 2019 and 2018, we incurred acquisition and integration related expenses and amortization of acquired intangibles of $5.0 million and $2.9 million, respectively, related to the SmartRG and Sumitomo acquisitions. No acquisition expenses related to the SmartRG and Sumitomo acquisitions were recorded during the year ended December 31, 2017.

v3.19.3.a.u2
Revenue
12 Months Ended
Dec. 31, 2019
Revenue From Contract With Customer [Abstract]  
Revenue

Note 3 - Revenue

 

The following table disaggregates our revenue by major source for the year ended December 31, 2019:

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

289,980

 

 

$

58,894

 

 

$

348,874

 

Subscriber Solutions & Experience(1)

 

 

144,651

 

 

 

8,269

 

 

 

152,920

 

Traditional & Other Products

 

 

20,595

 

 

 

7,672

 

 

 

28,267

 

Total

 

$

455,226

 

 

$

74,835

 

 

$

530,061

 

 

(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 major source for the year ended December 31, 2018:

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

301,801

 

 

$

57,069

 

 

$

358,870

 

Subscriber Solutions & Experience(1)

 

 

129,067

 

 

 

5,393

 

 

 

134,460

 

Traditional & Other Products

 

 

27,364

 

 

 

8,583

 

 

 

35,947

 

Total

 

$

458,232

 

 

$

71,045

 

 

$

529,277

 

 

 

(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 allocated to remaining performance obligations represents contract revenues that have not yet been recognized for contracts with a duration greater than one year. As of December 31, 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. As a practical expedient, for certain contracts recognize revenue equal to the amounts we are entitled to invoice which correspond to the value of completed performance obligations to date. The amount related to these performance obligations was $13.3 million as of December 31, 2018. The amount related to these performance obligations was $13.6 million as of December 31, 2019, and the Company expects to recognize 64% of such revenue over the next 12 months with the remainder thereafter.

 

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

 

(In thousands)

 

December 31, 2019

 

 

December 31, 2018

 

Accounts receivable

 

$

90,531

 

 

$

99,385

 

Contract assets(1)

 

$

2,812

 

 

$

3,766

 

Unearned revenue

 

$

11,963

 

 

$

17,940

 

Non-current unearned revenue

 

$

6,012

 

 

$

5,296

 

(1) Included in other receivables on the Consolidated Balance Sheets

Of the outstanding unearned revenue balance as of December 31, 2018, $12.7 million was recognized as revenue during the year ended December 31, 2019.

 

v3.19.3.a.u2
Stock-Based Compensation
12 Months Ended
Dec. 31, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock-Based Compensation

Note 4 – Stock-Based Compensation

Stock Incentive Program Descriptions

In January 2006, the Board of Directors adopted the ADTRAN, Inc. 2006 Employee Stock Incentive Plan (the “2006 Plan”), which authorized 13.0 million shares of common stock for issuance to certain employees and officers through incentive stock options and non-qualified stock options, stock appreciation rights, RSUs and restricted stock. The 2006 Plan was adopted by stockholder approval at our annual meeting of stockholders held in May 2006. Options granted under the 2006 Plan typically become exercisable beginning after one year of continued employment, normally pursuant to a four-year vesting schedule beginning on the first anniversary of the grant date and had a ten-year contractual term. The 2006 Plan was replaced in May 2015 by the ADTRAN, Inc. 2015 Employee Stock Incentive Plan (the “2015 Plan”). Expiration dates of options outstanding as of December 31, 2019 under the 2006 Plan range from 2020 to 2024.

In January 2015, the Board of Directors adopted the 2015 Plan, which authorized 7.7 million shares of common stock for issuance to certain employees and officers through incentive stock options and non-qualified stock options, stock appreciation rights, PSUs, RSUs and restricted stock. The 2015 Plan was adopted by stockholder approval at our annual meeting of stockholders held in May 2015. PSUs, RSUs and restricted stock granted under the 2015 Plan reduce the shares authorized for issuance under the 2015 Plan by 2.5 shares of common stock for each share underlying the award. Options granted under the 2015 Plan typically become exercisable beginning after one year of continued employment, normally pursuant to a four-year vesting schedule beginning on the first anniversary of the grant date and have a ten-year contractual term. Expiration dates of options outstanding as of December 31, 2019 under the 2015 Plan range from 2025 to 2026.

Our stockholders approved the 2010 Directors Stock Plan (the “2010 Directors Plan”) in May 2010, under which 0.5 million shares of common stock have been reserved for issuance. This plan replaced the 2005 Directors Stock Option Plan. Under the 2010 Directors Plan, the Company may issue stock options, restricted stock and RSUs to our non-employee directors. Stock awards issued under the 2010 Directors Plan become vested in full on the first anniversary of the grant date. Options issued under the 2010 Directors Plan had a ten-year contractual term. All remaining options under the 2010 Directors Plan expired in 2019.   

The following table summarizes stock-based compensation expense related to stock options, PSUs, RSUs and restricted stock for the years ended December 31, 2019, 2018 and 2017, which was recognized as follows:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

Stock-based compensation expense included in cost of sales

 

$

369

 

 

$

418

 

 

$

379

 

Selling, general and administrative expense

 

 

3,889

 

 

 

3,989

 

 

 

4,063

 

Research and development expense

 

 

2,704

 

 

 

2,748

 

 

 

2,991

 

Stock-based compensation expense included in operating expenses

 

 

6,593

 

 

 

6,737

 

 

 

7,054

 

Total stock-based compensation expense

 

 

6,962

 

 

 

7,155

 

 

 

7,433

 

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

 

 

(1,659

)

 

 

(1,432

)

 

 

(1,699

)

Total stock-based compensation expense, net of tax

 

$

5,303

 

 

$

5,723

 

 

$

5,734

 

PSUs, RSUs and restricted stock

Under the 2015 Plan, awards other than stock options, including PSUs, RSUs and restricted stock, may be granted to certain employees and officers.

Under our market-based PSU program, the number of shares of common stock earned by a recipient is subject to a market condition based on ADTRAN’s relative total shareholder return against all companies in the NASDAQ Telecommunications Index at the end of a three-year performance period. Depending on the relative total shareholder return over the performance period, the recipient may earn from 0% to 150% of the shares underlying the PSUs, with the shares earned distributed upon the vesting. The fair value of the award is based on the market price of our common stock on the date of grant, adjusted for the expected outcome of the impact of market conditions using a Monte Carlo Simulation valuation method. A portion of the granted PSUs vests and the underlying shares become deliverable upon the death or disability of the recipient or upon a change of control of ADTRAN, as defined by the 2015 Plan. The recipients of the PSUs receive dividend credits based on the shares of common stock underlying the PSUs. The dividend credits vest and are earned in the same manner as the PSUs and are paid in cash upon the issuance of common stock for the PSUs.

During the first quarter of 2017, the Compensation Committee of the Board of Directors approved a one-time PSU grant of 0.5 million shares that contained performance conditions and would have vested at the end of a three-year period if such performance conditions were met. The fair value of these performance-based PSU awards was equal to the closing price of our stock on the date of grant. These awards were forfeited during the first quarter of 2020 as the performance conditions were not achieved.

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. RSUs and restricted stock vest ratably over four-year and one-year periods, respectively.

 

We will continue to assess the assumptions and methodologies used to calculate the estimated fair value of stock-based compensation. If circumstances change, and additional data becomes available over time, we may change our assumptions and methodologies, which may materially impact our fair value determination.

The following table is a summary of our PSUs, RSUs and restricted stock outstanding as of December 31, 2018 and 2019 and the changes that occurred during 2019:    

 

(In thousands, except per share amounts)

 

Number of

shares

 

 

Weighted

Average Grant

Date Fair Value

 

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

 

 

1,570

 

 

$

18.52

 

PSUs, RSUs and restricted stock granted

 

 

897

 

 

$

9.63

 

PSUs, RSUs and restricted stock vested

 

 

(368

)

 

$

17.23

 

PSUs, RSUs and restricted stock forfeited

 

 

(208

)

 

$

18.24

 

Unvested PSUs, RSUs and restricted stock outstanding, December 31, 2019

 

 

1,891

 

 

$

14.58

 

 

As of December 31, 2019, total unrecognized compensation expense related to the non-vested portion of market-based PSUs, RSUs and restricted stock was approximately $17.2 million, which is expected to be recognized over an average remaining recognition period of 2.9 years and adjusted for actual forfeitures as they occur.

The following table details the significant assumptions that impact the fair value estimate of the market-based PSUs:

 

 

 

2019

 

2018

 

 

2017

 

Estimated fair value per share

 

$9.53 to $18.05

 

$

16.59

 

 

$

24.17

 

Expected volatility

 

32.7% to  38.9%

 

27.98% to 31.58%

 

 

 

27.03

%

Risk-free interest rate

 

1.6% to 2.46%

 

2.11% to 2.99%

 

 

 

1.78

%

Expected dividend yield

 

2.3% to 4.09%

 

1.83% to 2.49%

 

 

 

1.74

%

 

As of December 31, 2019, 1.0 million shares were available for issuance under shareholder-approved equity plans in connection with the grant and exercise of stock options, PSU’s, RSU’s or restricted stock.

Stock Options

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

 

 

 

Number of

Options

(in thousands)

 

 

Weighted

Average

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 granted

 

 

 

 

$

 

 

 

 

 

 

 

 

 

Stock options exercised

 

 

(34

)

 

$

15.53

 

 

 

 

 

 

 

 

 

Stock options forfeited

 

 

(32

)

 

$

15.56

 

 

 

 

 

 

 

 

 

Stock options expired

 

 

(744

)

 

$

23.72

 

 

 

 

 

 

 

 

 

Stock options outstanding, December 31, 2019

 

 

3,572

 

 

$

22.88

 

 

 

3.40

 

 

$

 

Stock options exercisable, December 31, 2019

 

 

3,570

 

 

$

22.89

 

 

 

3.40

 

 

$

 

All of the options above were issued at exercise prices that approximated fair market value at the date of grant. As of December 31, 2019, total unrecognized compensation expense related to non-vested stock options was approximately $11 thousand, which is expected to be recognized over an average remaining recognition period of one year and will be adjusted for actual forfeitures as they occur.

The aggregate intrinsic values in the table above represent the total pre-tax intrinsic value (the difference between ADTRAN’s closing stock price on the last trading day of 2019 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2019. The amount of aggregate intrinsic value will change based on the fair market value of ADTRAN’s stock and was $0 as of December 31, 2019.

The total pre-tax intrinsic value of options exercised during 2019, 2018 and 2017 was $0.1 million, $0.2 million and $3.4 million, respectively. The fair value of options fully vesting during 2019, 2018 and 2017 was $0.9 million, $2.5 million and $4.3 million, respectively.

The following table further describes our stock options outstanding as of December 31, 2019:

 

 

 

Options Outstanding

 

 

Options Exercisable

 

Range of

Exercise Prices

 

Options

Outstanding at

December 31, 2019

(In thousands)

 

 

Weighted Avg.

Remaining

Contractual Life

in Years

 

 

Weighted

Average

Exercise

Price

 

 

Options

Exercisable at

December 31, 2019

(In thousands)

 

 

Weighted

Average

Exercise

Price

 

$14.88 – $18.96

 

 

1,135

 

 

 

4.90

 

 

$

15.89

 

 

 

1,133

 

 

$

15.89

 

$18.97 – $23.45

 

 

685

 

 

 

4.70

 

 

$

19.10

 

 

 

685

 

 

$

19.10

 

$23.46 – $30.35

 

 

686

 

 

 

3.67

 

 

$

24.17

 

 

 

686

 

 

$

24.17

 

$30.36 – $41.92

 

 

1,066

 

 

 

1.29

 

 

$

31.93

 

 

 

1,066

 

 

$

31.93

 

 

 

 

3,572

 

 

 

 

 

 

 

 

 

 

 

3,570

 

 

 

 

 

 

The Black-Scholes option pricing model (the “Black-Scholes Model”) is used to determine the estimated fair value of stock option awards on the date of grant. The Black-Scholes Model requires the input of certain assumptions that involve judgment. Because our stock options have characteristics significantly different from those of traded options, and because changes in the input assumptions can materially affect the fair value estimate, existing models may not provide reliable measures of fair value of our stock options. The stock option pricing model requires the use of several assumptions that impact 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 in during the years ended December 31, 2019, 2018 or 2017.

v3.19.3.a.u2
Investments
12 Months Ended
Dec. 31, 2019
Investments Debt And Equity Securities [Abstract]  
Investments

Note 5 – Investments

Debt Securities and Other Investments

As of  December 31, 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

 

$

9,304

 

 

$

80

 

 

$

 

 

$

9,384

 

Municipal fixed-rate bonds

 

 

930

 

 

 

 

 

 

 

 

 

930

 

Asset-backed bonds

 

 

6,867

 

 

 

26

 

 

 

(3

)

 

 

6,890

 

Mortgage/Agency-backed bonds

 

 

6,944

 

 

 

26

 

 

 

(8

)

 

 

6,962

 

U.S. government bonds

 

 

12,311

 

 

 

21

 

 

 

(9

)

 

 

12,323

 

Foreign government bonds

 

 

372

 

 

 

 

 

 

(1

)

 

 

371

 

Variable rate demand notes

 

 

800

 

 

 

 

 

 

 

 

 

800

 

Available-for-sale debt securities held at fair value

 

$

37,528

 

 

$

153

 

 

$

(21

)

 

$

37,660

 

As of 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 December 31, 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

 

$

4,005

 

 

$

 

 

$

396

 

 

$

 

 

$

 

 

$

 

One to two years

 

 

4,120

 

 

 

930

 

 

 

760

 

 

 

213

 

 

 

1,347

 

 

 

 

Two to three years

 

 

967

 

 

 

 

 

 

1,632

 

 

 

1,424

 

 

 

9,344

 

 

 

 

Three to five years

 

 

292

 

 

 

 

 

 

2,092

 

 

 

494

 

 

 

1,632

 

 

 

371

 

Five to ten years

 

 

 

 

 

 

 

 

1,719

 

 

 

792

 

 

 

 

 

 

 

More than ten years

 

 

 

 

 

 

 

 

291

 

 

 

4,039

 

 

 

 

 

 

 

Total

 

$

9,384

 

 

$

930

 

 

$

6,890

 

 

$

6,962

 

 

$

12,323

 

 

$

371

 

 

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 securities are computed under the specific identification method. The following table presents gross realized gains and losses related to our debt securities for the years ended December 31, 2019, 2018 and 2017:

 

(In thousands)

Year Ended December 31,

 

2019

 

 

2018

 

 

2017

 

Gross realized gains on debt securities

 

$

108

 

 

$

57

 

 

$

169

 

Gross realized losses on debt securities

 

 

(50

)

 

 

(592

)

 

 

(226

)

Total gain (loss) recognized, net

 

$

58

 

 

$

(535

)

 

$

(57

)

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.

The following table presents the breakdown of debt securities and other investments with unrealized losses as of December 31, 2019:

 

 

 

Continuous Unrealized

Loss Position for Less

than 12 Months

 

 

Continuous Unrealized

Loss Position for 12

Months or Greater

 

 

Total

 

(In thousands)

 

Fair Value

 

 

Unrealized

Losses

 

 

Fair Value

 

 

Unrealized

Losses

 

 

Fair Value

 

 

Unrealized

Losses

 

Corporate bonds

 

 

203

 

 

 

 

 

 

 

 

 

 

 

 

203

 

 

 

 

Municipal fixed-rate bonds

 

 

930

 

 

 

 

 

 

 

 

 

 

 

 

930

 

 

 

 

Asset-backed bonds

 

 

797

 

 

 

(3

)

 

 

 

 

 

 

 

 

797

 

 

 

(3

)

Mortgage/Agency-backed bonds

 

 

2,594

 

 

 

(6

)

 

 

136

 

 

 

(2

)

 

 

2,730

 

 

 

(8

)

U.S. government bonds

 

 

4,070

 

 

 

(9

)

 

 

 

 

 

 

 

 

4,070

 

 

 

(9

)

Marketable equity securities

 

 

371

 

 

 

(1

)

 

 

 

 

 

 

 

 

371

 

 

 

(1

)

Total

 

$

8,965

 

 

$

(19

)

 

$

136

 

 

$

(2

)

 

$

9,101

 

 

$

(21

)

 The following table presents the breakdown of debt securities and other investments with unrealized losses as of December 31, 2018:

 

 

 

Continuous Unrealized

Loss Position for Less

than 12 Months

 

 

Continuous Unrealized

Loss Position for 12

Months or Greater

 

 

Total

 

(In thousands)

 

Fair Value

 

 

Unrealized

Losses

 

 

Fair Value

 

 

Unrealized

Losses

 

 

Fair Value

 

 

Unrealized

Losses

 

Corporate bonds

 

$

11,129

 

 

$

(60

)

 

$

3,608

 

 

$

(52

)

 

$

14,737

 

 

$

(112

)

Municipal fixed-rate bonds

 

 

 

 

 

 

 

 

1,136

 

 

 

(26

)

 

 

1,136

 

 

 

(26

)

Asset-backed bonds

 

 

1,874

 

 

 

(2

)

 

 

1,257

 

 

 

(12

)

 

 

3,131

 

 

 

(14

)

Mortgage/Agency-backed bonds

 

 

1,021

 

 

 

(5

)

 

 

1,918

 

 

 

(39

)

 

 

2,939

 

 

 

(44

)

U.S. government bonds

 

 

6,527

 

 

 

(48

)

 

 

537

 

 

 

(18

)

 

 

7,064

 

 

 

(66

)

Foreign government bonds

 

 

584

 

 

 

(8

)

 

 

 

 

 

 

 

 

584

 

 

 

(8

)

Total

 

$

21,135

 

 

$

(123

)

 

$

8,456

 

 

$

(147

)

 

$

29,591

 

 

$

(270

)

 

The decrease in unrealized losses during 2019, as reflected in the table above, results from changes in market positions associated with our fixed income portfolio.

 

Marketable Equity Securities

 

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

 

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

 

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

 

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 Consolidated Balance Sheets. 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 December 31, 2019. The remaining amount, approximately $0.9 million, was converted into a new note receivable, which is included in other receivables on the Consolidated Balance Sheets and represents a non-cash operating activity.

 

Realized and unrealized gains and losses for our marketable equity securities for the twelve months ended December 31, 2019 were as follows:

 

(In thousands)

 

2019

 

 

2018

 

Realized gains (losses) on equity securities sold

 

$

(96

)

 

$

1,306

 

Unrealized gains (losses) on equity securities held

 

 

11,472

 

 

 

(4,821

)

Total gain (loss) recognized, net

 

$

11,376

 

 

$

(3,515

)

 

As of December 31, 2019 and 2018, gross unrealized losses related to individual investments in a continuous loss position for twelve months or longer were not material.

U.S. GAAP establishes a three-level valuation hierarchy based upon observable and unobservable inputs for fair value measurement of financial instruments:

 

Level 1 – Observable outputs; values based on unadjusted quoted prices for identical assets or liabilities in an active market;

 

Level 2 – Significant inputs that are observable; values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly;

 

Level 3 – Significant unobservable inputs; values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs could include information supplied by investees.

We have categorized our cash equivalents and our investments held at fair value into this hierarchy as follows:

 

 

 

Fair Value Measurements as of December 31, 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

 

$

1,309

 

 

$

1,309

 

 

$

 

 

$

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

9,384

 

 

 

 

 

 

9,384

 

 

 

 

Municipal fixed-rate bonds

 

 

930

 

 

 

 

 

 

930

 

 

 

 

Asset-backed bonds

 

 

6,890

 

 

 

 

 

 

6,890

 

 

 

 

Mortgage/Agency-backed bonds

 

 

6,962

 

 

 

 

 

 

6,962

 

 

 

 

U.S. government bonds

 

 

12,323

 

 

 

12,323

 

 

 

 

 

 

 

Foreign government bonds

 

 

371

 

 

 

 

 

 

371

 

 

 

 

Variable rate demand notes

 

 

800

 

 

 

 

 

 

800

 

 

 

 

Marketable equity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities – various industries

 

 

35,501

 

 

 

35,501

 

 

 

 

 

 

 

Equity in escrow

 

 

298

 

 

 

298

 

 

 

 

 

 

 

Deferred compensation plan assets

 

 

21,698

 

 

 

21,698

 

 

 

 

 

 

 

Other investments

 

 

2,442

 

 

 

2,442

 

 

 

 

 

 

 

Total

 

$

98,908

 

 

$

73,571

 

 

$

25,337

 

 

$

 

 

 

 

Fair Value Measurements as of 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

 

 

$

 

 

$

 

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

 

$

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, security master files from large financial institutions and other third-party sources. These multiple market prices are used as inputs into a distribution-curve-based algorithm to determine the daily market value of each security.

 

Our variable rate demand notes have a structure that implies a standard expected market price. The frequent interest rate resets make it reasonable to expect the price to stay at par. These securities are priced at the expected market price.

v3.19.3.a.u2
Derivative Instruments and Hedging Activities
12 Months Ended
Dec. 31, 2019
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities

Note 6 – Derivative Instruments and Hedging Activities

As of December 31, 2019 and 2018, we had no foreign exchange forward contracts.

 

The change in the fair values of our derivative instruments recorded in the Consolidated Statements of Income (Loss) during the years ended December 31, 2019, 2018 and 2017 were as follows:

 

(In thousands)

 

Income Statement

Location

 

2019

 

 

2018

 

 

2017

 

Derivatives Not Designated as Hedging Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

Other income (expense)

 

$

 

 

$

13

 

 

$

(754

)

 

The change in our derivatives designated as hedging instruments recorded in other comprehensive income and reclassified to income, net of tax, during the twelve months ended December 31, 2019, 2018 and 2017 were as follows:

 

 

 

Location of

 

Amount of  Losses Reclassified

 

 

 

Losses Reclassified

 

from AOCI into Income

 

(In thousands)

 

from AOCI into Income

 

2019

 

 

2018

 

 

2017

 

Derivatives Designated as Hedging Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

Cost of Sales

 

$

 

 

$

 

 

$

(897

)

v3.19.3.a.u2
Inventory
12 Months Ended
Dec. 31, 2019
Inventory Disclosure [Abstract]  
Inventory

Note 7 – Inventory

As of December 31, 2019 and 2018, inventory was comprised of the following:

 

(In thousands)

 

2019

 

 

2018

 

Raw materials

 

$

36,987

 

 

$

45,333

 

Work in process

 

 

1,085

 

 

 

1,638

 

Finished goods

 

 

60,233

 

 

 

52,877

 

Total Inventory, net

 

$

98,305

 

 

$

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 estimated reserve percentages, which consider historical usage, known trends, inventory age and market conditions. As of December 31, 2019 and 2018, our inventory reserve was $34.1 million and $30.0 million, respectively.

v3.19.3.a.u2
Property, Plant and Equipment
12 Months Ended
Dec. 31, 2019
Property Plant And Equipment [Abstract]  
Property, Plant and Equipment

Note 8 – Property, Plant and Equipment

As of December 31, 2019 and 2018, property, plant and equipment was comprised of the following:

 

(In thousands)

 

2019

 

 

2018

 

Land

 

$

4,575

 

 

$

4,575

 

Building and land improvements

 

 

34,797

 

 

 

34,379

 

Building

 

 

68,157

 

 

 

68,183

 

Furniture and fixtures

 

 

19,959

 

 

 

19,831

 

Computer hardware and software

 

 

74,399

 

 

 

92,071

 

Engineering and other equipment

 

 

130,430

 

 

 

127,060

 

Total Property, Plant and Equipment

 

 

332,317

 

 

 

346,099

 

Less accumulated depreciation

 

 

(258,609

)

 

 

(265,464

)

Total Property, Plant and Equipment, net

 

$

73,708

 

 

$

80,635

 

 

Depreciation expense was $12.5 million, $12.7 million and $12.8 million for the years ended December 31, 2019, 2018 and 2017, respectively, which is recorded in cost of sales, selling, general and administrative expense and research and development expense in the consolidated statements of income.

We assess long-lived assets used in operations for potential 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 year ended December 31, 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 expenses related to these projects. The impairment charges were determined based on actual costs incurred as part of the projects. No impairment charges were recognized during the years ended December 31, 2018 and 2017.

v3.19.3.a.u2
Leases
12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Leases

Note 9 – Leases

 

We have operating leases for office space, automobiles and various other equipment in the U.S. and in certain international locations. We also reviewed other contracts, such as manufacturing agreements and service agreements, for potential 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 December 31, 2019, our operating leases had remaining lease terms of one month to six years, some of which included options to extend the leases for up to nine years, and some of which included 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 were 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 $0.4 million for the twelve months ended December 31, 2019, and is included in cost of sales, selling, general and administrative expenses and research and development expenses in the 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 $0.9 million for the twelve months ended December 31, 2019. For lease agreements entered into or reassessed after the adoption of Topic 842, we elected to not separate lease and nonlease components. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

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

 

 

 

 

 

December 31,

 

 

January 1,

 

(In thousands)

 

Classification

 

2019

 

 

2019 (1)

 

Assets

 

 

 

 

 

 

 

 

 

 

Right of use lease assets

 

Other assets

 

$

8,452

 

 

$

10,322

 

Total lease asset

 

 

 

$

8,452

 

 

$

10,322

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

Current lease liability

 

Accrued expenses

 

$

2,676

 

 

$

2,948

 

Non-current lease liability

 

Other non-current liabilities

 

 

5,818

 

 

 

7,374

 

Total lease liability

 

 

 

$

8,494

 

 

$

10,322

 

(1)

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

The components of lease expense included in the Consolidated Statements of Income for the twelve months ended December 31, 2019 were as follows:

 

 

 

For the Year Ended December 31,

 

(In thousands)

 

2019

 

Research and development expenses

 

$

2,417

 

Selling, general and administrative expenses

 

 

1,400

 

Cost of sales

 

 

64

 

Total operating lease expense

 

$

3,881

 

As of December 31, 2019, operating lease liabilities included on the Consolidated Balance Sheet by future maturity were as follows:

 

(In thousands)

 

Amount

 

2020

 

$

2,856

 

2021

 

 

2,412

 

2022

 

 

1,705

 

2023

 

 

1,160

 

2024

 

 

482

 

Thereafter

 

 

264

 

Total lease payments

 

 

8,879

 

Less: Interest

 

 

(385

)

Present value of lease liabilities

 

$

8,494

 

Future operating lease payments include $0.7 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 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 was 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 December 31, 2019:

 

 

 

As of  December 31,

 

 

 

2019

 

Weighted average remaining lease term (years)

 

 

 

 

     Operating leases with USD functional currency

 

 

2.6

 

     Operating leases with Euro functional currency

 

 

4.4

 

Weighted average discount rate

 

 

 

 

     Operating leases with USD functional currency

 

 

4.02

%

     Operating leases with Euro functional currency

 

 

1.84

%

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

 

 

As of  December 31,

 

(In thousands)

 

2019

 

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

 

 

 

 

     Cash used in operating activities related to operating leases

 

$

3,439

 

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

 

$

11,615

 

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 at the end of the lease. 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 nonlease components is determined by stand-alone selling 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. The Company has elected to exclude taxes related to sales-type leases from revenue and the associated expense of such taxes. As of December 31, 2019 and 2018, we did not have an allowance for credit losses for our net investment in sales-type leases. As of December 31, 2019 and 2018, the components of the net investment in sales-type leases were as follows:

 

 

December 31,

 

 

December 31,

 

(In thousands)

 

2019

 

 

2018

 

Current minimum lease payments receivable(1)

 

$

1,201

 

 

$

11,339

 

Non-current minimum lease payments receivable(2)

 

 

889

 

 

 

1,670

 

Total minimum lease payments receivable

 

 

2,090

 

 

 

13,009

 

Less: Current unearned revenue(1)

 

 

365

 

 

 

631

 

Less: Non-current unearned revenue(2)

 

 

163

 

 

 

473

 

Net investment in sales-type leases

 

$

1,562

 

 

$

11,905

 

 

 

(1)

Included in other receivables on the Consolidated Balance Sheet.

 

(2)

Included in other assets on the 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 Consolidated Statements of Income for the twelve months ended December 31, 2019 were as follows:

(In thousands)

 

For the Year Ended December 31, 2019

 

Sales - Network Solutions

 

$

1,723

 

Cost of sales - Network Solutions

 

 

675

 

Gross profit

 

$

1,048

 

 

 

 

 

 

Interest and dividend income

 

$

357

 

As of December 31, 2019 future minimum lease payments to be received from sales-type leases were as follows:

(In thousands)

 

Amount

 

2020

 

$

1,201

 

2021

 

 

565

 

2022

 

 

232

 

2023

 

 

86

 

2024

 

 

6

 

Total

 

$

2,090

 

 

v3.19.3.a.u2
Goodwill
12 Months Ended
Dec. 31, 2019
Goodwill Disclosure [Abstract]  
Goodwill

Note 10 – Goodwill

Goodwill, all of which relates to our acquisitions of Bluesocket, Inc. in 2011 and SmartRG in 2018, was $7.0 million as of December 31, 2019 and $7.1 million as of December 31, 2018 of which $6.6 million and $0.4 million was allocated to our Network Solutions and Services & Support reportable segments, respectively, for the year ended December 31, 2019, and of which $6.7 million and $0.4 million was allocated to our Network Solutions and Services & Support reportable segments, respectively, for the year ended December 31, 2018. Goodwill related to our SmartRG acquisition was reduced by $0.1 million during the twelve months ended December 31, 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 for the years ended December 31, 2019, 2018 and 2017, there were no events or circumstances that occurred that would more likely than not reduce the fair value of goodwill below its carrying value.

v3.19.3.a.u2
Intangible Assets
12 Months Ended
Dec. 31, 2019
Intangible Assets Net Excluding Goodwill [Abstract]  
Intangible Assets

Note 11 – Intangible Assets

As of December 31, 2019 and 2018, our intangible assets were comprised of the following:

 

 

 

2019

 

 

2018

 

(In thousands)

 

Gross Value

 

 

Accumulated

Amortization

 

 

Net Value

 

 

Gross Value

 

 

Accumulated

Amortization

 

 

Net Value

 

Customer relationships

 

$

22,356

 

 

$

(7,233

)

 

$

15,123

 

 

$

22,455

 

 

$

(5,380

)

 

$

17,075

 

Developed technology

 

 

10,170

 

 

 

(3,379

)

 

 

6,791

 

 

 

12,801

 

 

 

(4,867

)

 

 

7,934

 

Licensed technology

 

 

5,900

 

 

 

(1,174

)

 

 

4,726

 

 

 

5,900

 

 

 

(520

)

 

 

5,380

 

Supplier relationships

 

 

2,800

 

 

 

(2,508

)

 

 

292

 

 

 

2,800

 

 

 

(1,108

)

 

 

1,692

 

Intellectual property

 

 

 

 

 

 

 

 

 

 

 

930

 

 

 

(930

)

 

 

 

Licensing agreements

 

 

560

 

 

 

(79

)

 

 

481

 

 

 

560

 

 

 

(5

)

 

 

555

 

Patents

 

 

500

 

 

 

(226

)

 

 

274

 

 

 

500

 

 

 

(157

)

 

 

343

 

Trade names

 

 

310

 

 

 

(176

)

 

 

134

 

 

 

310

 

 

 

(106

)

 

 

204

 

Non-compete

 

 

 

 

 

 

 

 

 

 

 

200

 

 

 

(200

)

 

 

 

Total

 

$

42,596

 

 

$

(14,775

)

 

$

27,821

 

 

$

46,456

 

 

$

(13,273

)

 

$

33,183

 

 

Amortization expense was $5.3 million, $2.3 million and $2.9 million for the years ended December 31, 2019, 2018 and 2017, respectively.

As of December 31, 2019, the estimated future amortization expense of intangible assets is as follows:

 

(In thousands)

 

Amount

 

2020

 

$

4,444

 

2021

 

 

4,095

 

2022

 

 

3,471

 

2023

 

 

3,320

 

2024

 

 

3,226

 

Thereafter

 

 

9,265

 

Total

 

$

27,821

 

v3.19.3.a.u2
Alabama State Industrial Development Authority Financing and Economic Incentives
12 Months Ended
Dec. 31, 2019
Text Block [Abstract]  
Alabama State Industrial Development Authority Financing and Economic Incentives

Note 12 – Alabama State Industrial Development Authority Financing and Economic Incentives

In conjunction with the 1995 expansion of our Huntsville, Alabama facility, we were approved for participation in an incentive program offered by the State of Alabama Industrial Development Authority (“the Authority”). Pursuant to the program, on January 13, 1995, the Authority issued $20.0 million of its taxable revenue bonds (the “Taxable Revenue Bonds”) and loaned the proceeds from the sale of the Taxable Revenue Bonds to ADTRAN. Further advances on the Taxable Revenue Bonds were made by the Authority, bringing the total amount outstanding to $50.0 million. The Taxable Revenue Bonds bore interest, payable monthly with an interest rate of 2% per annum. The Taxable Revenue Bond’s outstanding aggregate principal amount of $24.6 million matured on January 1, 2020 and was repaid in full on January 2, 2020. The fair value of the bond as of December 31, 2019 was $24.6 million. We are required to make payments to the Authority in amounts necessary to pay the interest on the Taxable Revenue Bonds. Included in short-term investments as of December 31, 2019 is $25.6 million which is invested in a certificate of deposit. These funds serve as a collateral deposit against the principal of this bond, and we have the right to set-off the balance of the Taxable Revenue Bonds with the collateral deposit in order to reduce the balance of the indebtedness.

In conjunction with this program, we were eligible to receive certain economic incentives from the state of Alabama that reduce the amount of payroll withholdings that we were required to remit to the state for those employment positions that qualify under the program. We realized economic incentives related to payroll withholdings totaling $1.2 million, $1.4 million and $1.5 million for the years ended December 31, 2019, 2018 and 2017, respectively. This program concluded on January 2, 2020 following the maturity of the Taxable Revenue Bonds. No additional benefits will be received in future periods.

We made principal payments of $1.0 million and $1.1 million for the years ended December 31, 2019 and 2018. No additional principal payments will be made in future periods.

v3.19.3.a.u2
Income Taxes
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Income Taxes

Note 13 – Income Taxes

A summary of the components of the expense (benefit) for income taxes for the years ended December 31, 2019, 2018 and 2017 is as follows:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

Current

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

(518

)

 

$

(8,001

)

 

$

466

 

State

 

 

(1,065

)

 

 

(476

)

 

 

(150

)

International

 

 

(282

)

 

 

11,705

 

 

 

6,458

 

Total Current

 

 

(1,865

)

 

 

3,228

 

 

 

6,774

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

24,801

 

 

 

(14,448

)

 

 

8,024

 

State

 

 

5,815

 

 

 

(3,390

)

 

 

1,882

 

International

 

 

(546

)

 

 

581

 

 

 

4,167

 

Total Deferred

 

 

30,070

 

 

 

(17,257

)

 

 

14,073

 

Total Income Tax Expense (Benefit)

 

$

28,205

 

 

$

(14,029

)

 

$

20,847

 

 

Our effective income tax rate differs from the federal statutory rate due to the following:

 

 

 

2019

 

 

2018

 

 

2017

 

Tax provision computed at the federal statutory rate

 

 

21.00

%

 

 

21.00

%

 

 

35.00

%

State income tax provision, net of federal benefit

 

 

6.97

 

 

 

14.53

 

 

 

2.17

 

Federal research credits

 

 

15.53

 

 

 

14.23

 

 

 

(11.88

)

Foreign taxes

 

 

2.83

 

 

 

(11.45

)

 

 

(2.27

)

Tax-exempt income

 

 

0.49

 

 

 

0.45

 

 

 

(0.75

)

State tax incentives

 

 

3.85

 

 

 

3.15

 

 

 

(2.71

)

Change in valuation allowance

 

 

(172.82

)

 

 

 

 

 

 

Foreign tax credits

 

 

16.69

 

 

 

 

 

 

 

Stock-based compensation

 

 

(6.01

)

 

 

(2.87

)

 

 

1.43

 

Domestic production activity deduction

 

 

 

 

 

 

 

 

(1.13

)

Bargain purchase

 

 

 

 

 

8.82

 

 

 

 

Impact of U.S. tax reform

 

 

 

 

 

12.00

 

 

 

26.70

 

Global intangible low-taxed income ("GILTI")

 

 

(1.87

)

 

 

(17.48

)

 

 

 

Other, net

 

 

(0.49

)

 

 

(0.34

)

 

 

0.09

 

Effective Tax Rate

 

 

(113.83

)%

 

 

42.04

%

 

 

46.65

%

 

Income (loss) before expense (benefit) for income taxes for the years ended December 31, 2019, 2018 and 2017 is as follows:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

U.S. entities

 

$

(29,829

)

 

$

(74,131

)

 

$

26,552

 

International entities

 

 

5,052

 

 

 

40,760

 

 

 

18,135

 

Total

 

$

(24,777

)

 

$

(33,371

)

 

$

44,687

 

 

Income (loss) before expense (benefit) for income taxes for international entities reflects income (loss) based on statutory transfer pricing agreements. This amount does not correlate to consolidated international revenue, many of which occur from our U.S. entity.

Deferred income taxes on the Consolidated Balance Sheets result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The principal components of our current and non-current deferred taxes were as follows:

 

(In thousands)

 

2019

 

 

2018

 

Deferred tax assets

 

 

 

 

 

 

 

 

Inventory

 

$

7,144

 

 

$

6,609

 

Accrued expenses

 

 

2,330

 

 

 

2,850

 

Investments

 

 

 

 

 

1,122

 

Deferred compensation

 

 

5,660

 

 

 

4,779

 

Stock-based compensation

 

 

2,451

 

 

 

3,069

 

Uncertain tax positions related to state taxes and related interest

 

 

241

 

 

 

326

 

Pensions

 

 

7,074

 

 

 

5,538

 

Foreign losses

 

 

2,925

 

 

 

3,097

 

State losses and credit carry-forwards

 

 

3,995

 

 

 

8,164

 

Federal loss and research carry-forwards

 

 

12,171

 

 

 

17,495

 

Lease liabilities

 

 

2,496

 

 

 

 

Capitalized research and development expenditures

 

 

22,230

 

 

 

 

Valuation allowance

 

 

(48,616

)

 

 

(5,816

)

Total Deferred Tax Assets

 

 

20,101

 

 

 

47,233

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

(2,815

)

 

 

(3,515

)

Intellectual property

 

 

(5,337

)

 

 

(6,531

)

Right of use lease assets

 

 

(2,496

)

 

 

 

Investments

 

 

(1,892

)

 

 

 

Total Deferred Tax Liabilities

 

 

(12,540

)

 

 

(10,046

)

Net Deferred Tax Assets

 

$

7,561

 

 

$

37,187

 

 

In December 2017, the Tax Cuts and Jobs Act (“the Act”) was signed into law. As a result of the Act, we recognized an estimated expense of $11.9 million in the fourth quarter of 2017, of which $9.2 million related to the write-down of deferred tax assets and $2.7 million related to tax on unrepatriated foreign earnings. We calculated our best estimate of the impact of the Act in our 2017 year-end income tax provision in accordance with Staff Accounting Bulletin No. 118, which was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed to finalize the accounting for certain income tax effects of the Act. Additional work to complete a more detailed analysis of historical foreign earnings, as well as the full impact relating to the write-down of deferred tax assets, was completed in the third quarter of 2018 and resulted in a tax benefit of $4.0 million for the year ended December 31, 2018.

As of December 31, 2019 and 2018, non-current deferred taxes related to our investments and our defined benefit pension plan reflect deferred taxes on the net unrealized gains and losses on available-for-sale investments and deferred taxes on unrealized losses in our pension plan. The net change in non-current deferred taxes associated with these items, which resulted in a deferred tax benefit of $0.4 million and $2.8 million in 2019 and 2018, respectively, was recorded as an adjustment to other comprehensive income (loss), presented in the Consolidated Statements of Comprehensive Income (Loss).

 

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 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 was no longer able to conclude that it was more likely than not that our domestic deferred tax assets would be realized and a valuation allowance against our domestic deferred tax assets was established in the third quarter of 2019. The amount of the deferred tax assets considered realizable may be adjusted in future periods in the event that 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.

As of December 31, 2019, the Company had gross deferred tax assets totaling $56.2 million offset by a valuation allowance totaling $48.6 million. Of the valuation allowance, $42.8 million was established in the current year primarily related to our domestic deferred tax assets. The remaining $5.8 million established in prior periods related 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 $7.6 million in deferred tax assets that were 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:

 

 

 

December 31, 2019

 

(In thousands)

 

Deferred Tax Assets

 

 

Valuation Allowance

 

 

Deferred Tax Assets, net

 

Domestic

 

$

46,266

 

 

$

(46,266

)

 

$

 

International

 

 

9,911

 

 

 

(2,350

)

 

 

7,561

 

Total

 

$

56,177

 

 

$

(48,616

)

 

$

7,561

 

 

As of December 31, 2019 and 2018, the deferred tax assets for foreign and domestic loss carry-forwards, research and development tax credits, unamortized research and development costs and state credit carry-forwards totaled $41.3 million and $28.8 million, respectively. As of December 31, 2019, $19.1 million of these deferred tax assets will expire at various times between 2020 and 2039. The remaining deferred tax assets will either amortize through 2029 or carryforward indefinitely.

As of December 31, 2019 and 2018, respectively, our cash and cash equivalents were $73.8 million and $105.5 million and short-term investments were $33.2 million and $3.2 million, which provided available short-term liquidity of $107.0 million and $108.7 million. Of these amounts, our foreign subsidiaries held cash of $52.3 million and $87.1 million, respectively, representing approximately 48.9% and 80.1% of available short-term liquidity, which is used to fund on-going liquidity needs of these subsidiaries. We intend to permanently reinvest these funds outside the U.S. except to the extent any of these funds can be repatriated without withholding tax and our current business plans do not indicate a need to repatriate to fund domestic operations. However, if all of these funds were repatriated to the U.S. or used for U.S. operations, certain amounts could be subject to tax. Due to the timing and circumstances of repatriation of such earnings, if any, it is not practical to determine the amount of funds subject to unrecognized deferred tax liability.

During 2019, 2018 and 2017, no income tax benefit or expense was recorded for stock options exercised as an adjustment to equity.  

The change in the unrecognized income tax benefits for the years ended December 31, 2019, 2018 and 2017 is reconciled below:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

Balance at beginning of period

 

$

1,868

 

 

$

2,366

 

 

$

2,226

 

Increases for tax position related to:

 

 

 

 

 

 

 

 

 

 

 

 

Prior years

 

 

 

 

 

3

 

 

 

465

 

Current year

 

 

161

 

 

 

254

 

 

 

285

 

Decreases for tax positions related to:

 

 

 

 

 

 

 

 

 

 

 

 

Prior years

 

 

(71

)

 

 

 

 

 

(14

)

Expiration of applicable statute of limitations

 

 

(471

)

 

 

(755

)

 

 

(596

)

Balance at end of period

 

$

1,487

 

 

$

1,868

 

 

$

2,366

 

 

As of December 31, 2019, 2018 and 2017, our total liability for unrecognized tax benefits was $1.5 million, $1.9 million and $2.4 million, respectively, of which $1.4 million, $1.7 million and $2.2 million, respectively, would reduce our effective tax rate if we were successful in upholding all of the uncertain positions and recognized the amounts recorded. We classify interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense. As of December 31, 2019, 2018 and 2017, the balances of accrued interest and penalties were $0.5 million, $0.7 million and $0.8 million, respectively.

We do not anticipate a single tax position generating a significant increase or decrease in our liability for unrecognized tax benefits within 12 months of this reporting date. We file income tax returns in the U.S. for federal and various state jurisdictions and several foreign jurisdictions. We are not currently under audit by the Internal Revenue Service. Generally, we are not subject to changes in income taxes by any taxing jurisdiction for the years prior to 2016.

v3.19.3.a.u2
Employee Benefit Plans
12 Months Ended
Dec. 31, 2019
Compensation And Retirement Disclosure [Abstract]  
Employee Benefit Plans

Note 14 – Employee Benefit Plans

Pension Benefit Plan

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

The pension benefit plan obligations and funded status as of December 31, 2019 and 2018, were as follows:

 

(In thousands)

 

2019

 

 

2018

 

Change in projected benefit obligation:

 

 

 

 

 

 

 

 

Projected benefit obligation at beginning of period

 

$

37,245

 

 

$

34,893

 

Service cost

 

 

1,471

 

 

 

1,193

 

Interest cost

 

 

634

 

 

 

727

 

Actuarial loss - experience

 

 

453

 

 

 

38

 

Actuarial loss - assumptions

 

 

5,091

 

 

 

2,139

 

Benefit payments

 

 

(166

)

 

 

(138

)

Effects of foreign currency exchange rate changes

 

 

(826

)

 

 

(1,607

)

Projected benefit obligation at end of period

 

 

43,902

 

 

 

37,245

 

Change in plan assets:

 

 

 

 

 

 

 

 

Fair value of plan assets at beginning of period

 

 

24,159

 

 

 

26,624

 

Actual gain (loss) on plan assets

 

 

4,392

 

 

 

(2,024

)

Contributions

 

 

 

 

 

688

 

Effects of foreign currency exchange rate changes

 

 

(535

)

 

 

(1,129

)

Fair value of plan assets at end of period

 

 

28,016

 

 

 

24,159

 

Unfunded status at end of period

 

$

(15,886

)

 

$

(13,086

)

 

The accumulated benefit obligation was $43.9 million and $37.2 million as of December 31, 2019 and 2018, respectively. The increase in the accumulated benefit obligation and the actuarial loss was primarily attributable to a decrease in the discount rate during 2019.

The net amounts recognized in the balance sheet for the unfunded pension liability as of December 31, 2019 and 2018 were as follows:

 

(In thousands)

 

2019

 

 

2018

 

Current liability

 

$

 

 

$

 

Pension liability

 

 

15,886

 

 

 

13,086

 

Total

 

$

15,886

 

 

$

13,086

 

 

The components of net periodic pension cost, other than the service cost component, are included in other income (expense), net in the Consolidated Statements of Income (Loss). The components of net periodic pension cost and amounts recognized in other comprehensive income (loss) for the years ended December 31, 2019, 2018 and 2017 were as follows:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

Net periodic benefit cost:

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

$

1,471

 

 

$

1,193

 

 

$

1,260

 

Interest cost

 

 

634

 

 

 

727

 

 

 

607

 

Expected return on plan assets

 

 

(1,392

)

 

 

(1,548

)

 

 

(1,267

)

Amortization of actuarial losses

 

 

795

 

 

 

247

 

 

 

309

 

Net periodic benefit cost

 

 

1,508

 

 

 

619

 

 

 

909

 

Other changes in plan assets and benefit obligations

   recognized in other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Net actuarial (gain) loss

 

 

2,488

 

 

 

5,638

 

 

 

(654

)

Amortization of actuarial losses

 

 

(771

)

 

 

(196

)

 

 

(406

)

Amount recognized in other comprehensive income (loss)

 

 

1,717

 

 

 

5,442

 

 

 

(1,060

)

Total recognized in net periodic benefit cost and other

   comprehensive income (loss)

 

$

3,225

 

 

$

6,061

 

 

$

(151

)

The amounts recognized in accumulated other comprehensive income (loss) as of December 31, 2019 and 2018 were as follows:

 

(In thousands)

 

2019

 

 

2018

 

Net actuarial loss

 

$

(12,973

)

 

$

(11,256

)

 

The defined benefit pension plan is accounted for on an actuarial basis, which requires the use of various assumptions, including an expected rate of return on plan assets and a discount rate. The expected return on our German plan assets that is utilized in determining the benefit obligation and net periodic benefit cost is derived from periodic studies, which include a review of asset allocation strategies, anticipated future long-term performance of individual asset classes, risks using standard deviations, and correlations of returns among the asset classes that comprise the plans' asset mix. While the studies give appropriate consideration to recent plan performance and historical returns, the assumptions are primarily long-term, prospective rates of return. The discount rate has been derived from the returns of high-quality, corporate bonds denominated in Euro currency with durations close to the duration of our pension obligations.

The weighted-average assumptions that were used to determine the net periodic benefit cost for the years ended December 31, 2019, 2018 and 2017 were as follows:

 

 

 

2019

 

 

2018

 

 

2017

 

Discount rate

 

 

1.75

%

 

 

2.13

%

 

 

1.90

%

Rate of compensation increase

 

 

2.00

%

 

 

2.00

%

 

 

2.00

%

Expected long-term rates of return

 

 

5.90

%

 

 

5.90

%

 

 

5.90

%

 

The weighted-average assumptions that were used to determine the benefit obligation as of December 31, 2019 and 2018:

 

 

 

2019

 

 

2018

 

Discount rate

 

 

1.00

%

 

 

1.75

%

Rate of compensation increase

 

 

2.00

%

 

 

2.00

%

 

Actuarial gains and losses are recorded in accumulated other comprehensive income (loss). To the extent unamortized gains and losses exceed 10% of the higher of the market-related value of assets or the projected benefit obligation, the excess is amortized as a component of net periodic pension cost over the remaining service period of active participants. We estimate that $0.8 million will be amortized from accumulated other comprehensive income (loss) into net periodic pension cost in 2020 for the net actuarial loss.

We do not anticipate making any contributions to the pension plan in 2020.

The following pension benefit payments, which reflect expected future service, as appropriate, are expected to be paid to participants:

 

(In thousands)

 

 

 

 

2020

 

$

515

 

2021

 

 

582

 

2022

 

 

619

 

2023

 

 

706

 

2024

 

 

789

 

Thereafter

 

 

4,872

 

Total

 

$

8,083

 

 

U.S. GAAP establishes a three-level valuation hierarchy based upon observable and unobservable inputs for fair value measurement of financial instruments:

 

Level 1 – Observable outputs; values based on unadjusted quoted prices for identical assets or liabilities in an active market;

 

Level 2 – Significant inputs that are observable; values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly;

 

Level 3 – Significant unobservable inputs; values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs could include information supplied by investees.

We have categorized our cash equivalents and our investments held at fair value into this hierarchy as follows:

 

 

 

Fair Value Measurements at December 31, 2019 Using

 

(In thousands)

 

Fair Value

 

 

Quoted Prices

in Active

Markets for

Identical Assets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

Cash and cash equivalents

 

$

691

 

 

$

691

 

 

$

 

 

$

 

Available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government bonds

 

 

6,645

 

 

 

6,645

 

 

 

 

 

 

 

Corporate bonds

 

 

5,514

 

 

 

5,514

 

 

 

 

 

 

 

Emerging markets bonds

 

 

531

 

 

 

531

 

 

 

 

 

 

 

Equity funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global equity

 

 

11,071

 

 

 

11,071

 

 

 

 

 

 

 

Emerging markets

 

 

956

 

 

 

956

 

 

 

 

 

 

 

Balanced fund

 

 

863

 

 

 

863

 

 

 

 

 

 

 

Large cap value

 

 

312

 

 

 

312

 

 

 

 

 

 

 

Global real estate fund

 

 

902

 

 

 

902

 

 

 

 

 

 

 

Managed futures fund

 

 

531

 

 

 

531

 

 

 

 

 

 

 

Available-for-sale securities

 

 

27,325

 

 

 

27,325

 

 

 

 

 

 

 

Total

 

$

28,016

 

 

$

28,016

 

 

$

 

 

$

 

 

 

 

Fair Value Measurements at December 31, 2018 Using

 

(In thousands)

 

Fair Value

 

 

Quoted Prices

in Active

Markets for

Identical Assets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

Cash and cash equivalents

 

$

1,010

 

 

$

1,010

 

 

$

 

 

$

 

Available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government bonds

 

 

6,268

 

 

 

6,268

 

 

 

 

 

 

 

Corporate bonds

 

 

4,840

 

 

 

4,840

 

 

 

 

 

 

 

Emerging markets bonds

 

 

443

 

 

 

443

 

 

 

 

 

 

 

Equity funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global equity

 

 

7,743

 

 

 

7,743

 

 

 

 

 

 

 

Emerging markets

 

 

1,188

 

 

 

1,188

 

 

 

 

 

 

 

Balanced fund

 

 

815

 

 

 

815

 

 

 

 

 

 

 

Large cap value

 

 

262

 

 

 

262

 

 

 

 

 

 

 

Global real estate fund

 

 

926

 

 

 

926

 

 

 

 

 

 

 

Managed futures fund

 

 

664

 

 

 

664

 

 

 

 

 

 

 

Available-for-sale securities

 

 

23,149

 

 

 

23,149

 

 

 

 

 

 

 

Total

 

$

24,159

 

 

$

24,159

 

 

$

 

 

$

 

Our investment policy includes various guidelines and procedures designed to ensure assets are invested in a manner necessary to meet expected future benefits earned by participants and consider a broad range of economic conditions. Central to the policy are target allocation ranges by asset class, which is currently 50% for bond funds, 40% for equity funds and 10% cash, real estate and managed futures. The objectives of the target allocations are to maintain investment portfolios that diversify risk through prudent asset allocation parameters, achieve asset returns that meet or exceed the plans’ actuarial assumptions and achieve asset returns that are competitive with like institutions employing similar investment strategies.

The investment policy is periodically reviewed by us and a designated third-party fiduciary for investment matters. The policy is established and administered in a manner that is compliant at all times with applicable government regulations.

401(k) Savings Plan

We maintain the ADTRAN, Inc. 401(k) Retirement Plan (the “Savings Plan”) for the benefit of our eligible employees. The Savings Plan is intended to qualify under Sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”), and is intended to be a “safe harbor” 401(k) plan under Code Section 401(k)(12). The Savings Plan allows employees to save for retirement by contributing part of their compensation to the plan on a tax-deferred basis. The Savings Plan also requires us to contribute a “safe harbor” amount each year. We match up to 4% of employee contributions (100% of an employee’s first 3% of contributions and 50% of their next 2% of contributions), beginning on the employee’s one-year anniversary date. In calculating our matching contribution, we only use compensation up to the statutory maximum under the Code ($280,000 for 2019). All matching contributions under the Savings Plan vest immediately. Employer contribution expense and plan administration costs for the Savings Plan amounted to approximately $4.4 million, $4.4 million and $4.6 million in 2019, 2018 and 2017, respectively.

Deferred Compensation Plans

We maintain four deferred compensation programs for certain executive management employees and our Board of Directors.

For our executive management employees, the ADTRAN, Inc. Deferred Compensation Program for Employees is offered as a supplement to our tax-qualified 401(k) plan and is available to certain executive management employees who have been designated by our Board of Directors. This deferred compensation plan allows participants to defer all or a portion of certain specified bonuses and up to 25% of remaining cash compensation and permits us to make matching contributions on a discretionary basis without the limitations that apply to the 401(k) plan. To date, we have not made any matching contributions under this plan. We also maintain the ADTRAN, Inc. Equity Deferral Program for Employees. Under this plan, participants may elect to defer all or a portion of their vested PSUs and RSUs to the plan. Such deferrals shall continue to be held and deemed to be invested in shares of ADTRAN stock unless and until the amounts are distributed or such deferrals are moved to another deemed investment pursuant to an election made by the participant.

For our Board of Directors, we maintain the ADTRAN, Inc. Deferred Compensation Program for Directors. This program allows our Board of Directors to defer all or a portion of monetary remuneration paid to the Director, including, but not limited to, meeting fees and annual retainers. We also maintain the ADTRAN, Inc. Equity Deferral Program for Directors. Under this plan, participants may elect to defer all or a portion of their vested restricted stock awards. Such deferrals shall continue to be held and deemed to be invested in shares of ADTRAN stock unless and until the amounts are distributed or such deferrals are moved to another deemed investment pursuant to an election made by the director.

We have set aside the plan assets for all plans in a rabbi trust (the “Trust”) and all contributions are credited to bookkeeping accounts for the participants. The Trust assets are subject to the claims of our creditors in the event of bankruptcy or insolvency. The assets of the Trust are deemed to be invested in pre-approved mutual funds as directed by each participant and the participant’s bookkeeping account is credited with the earnings and losses attributable to those investments. Benefits are scheduled to be distributed six months after termination of employment in a single lump sum payment or annual installments paid over a three or ten-year term based on the participant’s election. Distributions will be made on a pro-rata basis from each of the hypothetical investments of the participant’s account in cash. Any whole shares of ADTRAN, Inc. common stock that are distributed will be distributed in-kind.

Assets of the Trust are deemed invested in mutual funds that cover an investment spectrum ranging from equities to money market instruments. These mutual funds are publicly quoted and reported at fair value. The fair value of the assets held by the Trust and the amounts payable to the plan participants as of December 31, 2019 and 2018 were as follows:

 

(In thousands)

 

2019

 

 

2018

 

Fair Value of Plan Assets

 

 

 

 

 

 

 

 

Long-term investments

 

$

21,698

 

 

$

18,256

 

Total Fair Value of Plan Assets

 

$

21,698

 

 

$

18,256

 

Amounts Payable to Plan Participants

 

 

 

 

 

 

 

 

Deferred compensation liability

 

$

21,698

 

 

$

18,256

 

Total Amounts Payable to Plan Participants

 

$

21,698

 

 

$

18,256

 

Interest and dividend income of the Trust are included in interest and dividend income in the accompanying 2019, 2018 and 2017 Consolidated Statements of Income (Loss). Changes in the fair value of the plan assets held by the Trust have been included in other income (expense) in the accompanying 2019, 2018 and 2017 Consolidated Statements of Income (Loss). Changes in the fair value of the deferred compensation liability are included as selling, general and administrative expense in the accompanying 2019, 2018 and 2017 Consolidated Statements of Income (Loss). Based on the changes in the total fair value of the Trust’s assets, we recorded deferred compensation income (expense) in 2019, 2018 and 2017 of $3.6 million, $(2.1) million and $(2.6) million, respectively.

Retiree Medical Coverage

We provided medical, dental and prescription drug coverage to two spouses of retired former officers on the same terms as provided to our active officers for up to 30 years. As of December 31, 2019 and 2018, this liability totaled $0.1 million.  

v3.19.3.a.u2
Segment Information and Major Customers
12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Segment Information and Major Customers

Note 15 – Segment Information and Major Customers

Our chief operating decision maker regularly reviews our financial performance based on two reportable segments across our segments– (1) Network Solutions and (2) Services & Support. Network Solutions includes hardware and software products and next-generation virtualized solutions used in service provider or business networks, as well as prior-generation products. Services & Support includes a portfolio of maintenance, network implementation and solutions integration services, which include hosted cloud services and subscription services.

We evaluate the performance of our segments based on gross profit. Selling, general and administrative expenses, research and development expenses, interest and dividend income, interest expense, net investment gain (loss), other income (expense) and income tax (expense) benefit are reported on a company-wide, functional basis only. There are no inter-segment revenues.

The following table presents information about the reported sales and gross profit of our reportable segments for each of the years ended December 31, 2019, 2018 and 2017. Asset information by reportable segment is not reported, since we do not produce such information internally.

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

 

 

Sales

 

 

Gross Profit

 

 

Sales

 

 

Gross Profit

 

 

Sales

 

 

Gross Profit

 

Network Solutions

 

$

455,226

 

 

$

191,549

 

 

$

458,232

 

 

$

179,303

 

 

$

540,396

 

 

$

260,833

 

Services & Support

 

 

74,835

 

 

 

27,618

 

 

 

71,045

 

 

 

24,262

 

 

 

126,504

 

 

 

42,802

 

Total

 

$

530,061

 

 

$

219,167

 

 

$

529,277

 

 

$

203,565

 

 

$

666,900

 

 

$

303,635

 

 

Sales by Category

In addition to the above reporting segments, we also report revenue for the following three categories – (1) Access & Aggregation, (2) Subscriber Solutions & Experience and (3) Traditional & Other Products.

The following tables disaggregates our revenue by major source for the years ended December 31, 2019, 2018 and 2017:

 

 

 

2019

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

289,980

 

 

$

58,894

 

 

$

348,874

 

Subscriber Solutions & Experience(1)

 

 

144,651

 

 

 

8,269

 

 

 

152,920

 

Traditional & Other Products

 

 

20,595

 

 

 

7,672

 

 

 

28,267

 

Total

 

$

455,226

 

 

$

74,835

 

 

$

530,061

 

 

 

 

2018

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

301,801

 

 

$

57,069

 

 

$

358,870

 

Subscriber Solutions & Experience(1)

 

 

129,067

 

 

 

5,393

 

 

 

134,460

 

Traditional & Other Products

 

 

27,364

 

 

 

8,583

 

 

 

35,947

 

Total

 

$

458,232

 

 

$

71,045

 

 

$

529,277

 

 

 

 

2017

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

361,955

 

 

$

111,989

 

 

$

473,944

 

Subscriber Solutions & Experience(1)

 

 

132,294

 

 

 

6,162

 

 

 

138,456

 

Traditional & Other Products

 

 

46,147

 

 

 

8,353

 

 

 

54,500

 

Total

 

$

540,396

 

 

$

126,504

 

 

$

666,900

 

 

 

(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.

Additional Information

The following table presents sales information by geographic area for the years ended December 31, 2019, 2018 and 2017:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

United States

 

$

300,853

 

 

$

288,843

 

 

$

508,178

 

Mexico

 

 

90,795

 

 

 

12,186

 

 

 

2,246

 

Germany

 

 

78,062

 

 

 

167,251

 

 

 

119,502

 

Other international

 

 

60,351

 

 

 

60,997

 

 

 

36,974

 

Total

 

$

530,061

 

 

$

529,277

 

 

$

666,900

 

 

Customers comprising more than 10% of revenue can change from year to year. Single customers comprising more than 10% of our revenue in 2019 included three customers at 19%, 17% and 13%. Single customers comprising more than 10% of our revenue in 2018 included two customers at 27% and 17%. Single customers comprising more than 10% of our revenue in 2017 included two customers at 40% and 16%. Other than those with more than 10% of revenues disclosed above, and excluding distributors, our next five largest customers can change, and has historically changed, from year-to-year. These combined customers represented 15%, 18% and 15% of total revenue in 2019, 2018 and 2017, respectively.

As of December 31, 2019, property, plant and equipment, net totaled $73.7 million, which included $69.9 million held in the U.S. and $3.9 million held outside the U.S. As of December 31, 2018, property, plant and equipment, net totaled $80.6 million, which included $77.3 million held in the U.S. and $3.3 million held outside the U.S. Property, plant and equipment, net is reported on a company-wide, functional basis only.

v3.19.3.a.u2
Commitments and Contingencies
12 Months Ended
Dec. 31, 2019
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 16 – 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 to a Latin American customer.  Investors in ADTRAN securities had until December 16, 2019 to move the court to serve as lead plaintiff in this action. 

On December 16, 2019, two purported investors in ADTRAN securities filed motions seeking to be appointed lead plaintiff in the case. On January 6, 2020, the United States District Court for the Southern District of New York granted Defendants’ unopposed request to transfer the case to the United States District Court for the Northern District of Alabama, where the case is now pending as Burbridge v. ADTRAN, Inc. et al., Docket No. 5:20-cv-00050-LCB. On January 27, 2020, the two prospective lead plaintiff movants filed a stipulation among plaintiffs seeking to be appointed as co-lead plaintiffs in the case.

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 to these commitments as of December 31, 2019.

 

Performance Bonds

 

Certain contracts, customers and/or jurisdictions in which we do business require us to provide various guarantees of performance such as bid bonds, performance bonds and customs bonds. As of December 31, 2019, we had commitments related to these bonds totaling $9.3 million which expire at various dates through August 2024. As of December 31, 2018, we had commitments related to these bonds totaling $6.5 million. Although the triggering events vary from contract to contract, in general we would only be liable for the amount of these guarantees in the event of default in our under each contract, the probability of which we believe is remote.

 

v3.19.3.a.u2
Earnings (Loss) per Share
12 Months Ended
Dec. 31, 2019
Earnings Per Share [Abstract]  
Earnings (Loss) per Share

Note 17 – Earnings (Loss) per Share

A summary of the calculation of basic and diluted earnings (loss) per share for the years ended December 31, 2019, 2018 and 2017 is as follows:

 

(In thousands, except for per share amounts)

 

2019

 

 

2018

 

 

2017

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

(52,982

)

 

$

(19,342

)

 

$

23,840

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares – basic

 

 

47,836

 

 

 

47,880

 

 

 

48,153

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

 

 

 

 

 

 

 

406

 

Restricted stock and restricted stock units

 

 

 

 

 

 

 

 

140

 

Weighted average number of shares – diluted

 

 

47,836

 

 

 

47,880

 

 

 

48,699

 

Earnings (loss)  per share – basic

 

$

(1.11

)

 

$

(0.40

)

 

$

0.50

 

Earnings (loss) per share – diluted

 

$

(1.11

)

 

$

(0.40

)

 

$

0.49

 

For each of the years ended December 31, 2019 and 2018, 5.7 million and 2.5 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.

For the year ended December 31, 2017, 3.2 million stock options were outstanding but were not included in the computation of diluted earnings (loss) per share because the options’ exercise prices were greater than the average market price of the common shares, therefore making them anti-dilutive under the treasury stock method.  

v3.19.3.a.u2
Restructuring
12 Months Ended
Dec. 31, 2019
Restructuring And Related Activities [Abstract]  
Restructuring

Note 18 – Restructuring

During the second half of 2019, the Company implemented a restructuring plan to realign its expense structure with the reduction in revenue experienced in recent years and overall Company objectives. Management assessed the efficiency of our operations and consolidated locations and personnel, among other things, where possible. As part of this restructuring plan, the Company announced plans to reduce its overall operating expenses, both in the U.S and internationally.

In February 2019, the Company 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.  

In January 2018, the Company announced an early retirement incentive program for employees that met certain defined requirements. The cumulative amount incurred during the year ended December 31, 2018 related to this restructuring program was $7.3 million. We did not incur any additional expenses related to this restructuring program during the year ended December 31, 2019.

A reconciliation of the beginning and ending restructuring liability, which is included in accrued wages and benefits in the Consolidated Balance Sheets as of December 31, 2019 and 2018, is as follows:

 

(In thousands)

 

2019

 

 

2018

 

Balance at beginning of period

 

$

185

 

 

$

205

 

Plus: Amounts charged to cost and expense

 

 

6,014

 

 

 

7,261

 

Less: Amounts paid

 

 

(4,631

)

 

 

(7,281

)

Balance at end of period

 

$

1,568

 

 

$

185

 

The components of restructuring expense in the Consolidated Statements of Income are for the years ended December 31, 2019, 2018 and 2017:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

Selling, general and administrative expenses

 

$

2,360

 

 

$

2,655

 

 

$

152

 

Research and development expenses

 

 

2,869

 

 

 

1,831

 

 

 

122

 

Cost of sales

 

 

785

 

 

 

2,775

 

 

 

 

Total restructuring expenses

 

$

6,014

 

 

$

7,261

 

 

$

274

 

The following table represents the components of restructuring expense by geographic area for the years ended December 31, 2019, 2018 and 2017:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

United States

 

$

3,336

 

 

$

7,120

 

 

$

274

 

International

 

 

2,678

 

 

 

141

 

 

 

 

Total restructuring expenses

 

$

6,014

 

 

$

7,261

 

 

$

274

 

v3.19.3.a.u2
Summarized Quarterly Financial Data (Unaudited)
12 Months Ended
Dec. 31, 2019
Quarterly Financial Information Disclosure [Abstract]  
Summarized Quarterly Financial Data (Unaudited)

Note 19 – Summarized Quarterly Financial Data (Unaudited)

The following table presents unaudited quarterly operating results for each of our last eight fiscal quarters. This information has been prepared on a basis consistent with our audited financial statements and includes all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation of the data.

Unaudited Quarterly Operating Results

 

 

 

Three Months Ended

 

(In thousands, except for per share amounts)

 

March 31, 2019

 

 

June 30, 2019

 

 

September 30, 2019

 

 

December 31, 2019

 

Net sales

 

$

143,791

 

 

$

156,391

 

 

$

114,092

 

 

$

115,787

 

Gross profit

 

$

60,612

 

 

$

65,015

 

 

$

46,331

 

 

$

47,209

 

Operating income (loss)

 

$

(6,167

)

 

$

562

 

 

$

(20,288

)

 

$

(14,070

)

Net income (loss)

 

$

770

 

 

$

3,995

 

 

$

(46,123

)

 

$

(11,624

)

Earnings (loss) per common share - basic

 

$

0.02

 

 

$

0.08

 

 

$

(0.96

)

 

$

(0.25

)

Earnings (loss) per common share - diluted

 

$

0.02

 

(1)

$

0.08

 

(1)

$

(0.96

)

 

$

(0.25

)

 

 

 

Three Months Ended

 

(In thousands, except for per share amounts)

 

March 31, 2018

 

 

June 30, 2018

 

 

September 30, 2018

 

 

December 31, 2018

 

Net sales

 

$

120,806

 

 

$

128,048

 

 

$

140,335

 

 

$

140,088

 

Gross profit

 

$

39,733

 

 

$

49,996

 

 

$

58,448

 

 

$

55,388

 

Operating income (loss)

 

$

(26,647

)

 

$

(12,813

)

 

$

(2,179

)

 

$

(3,783

)

Net income (loss)

 

$

(10,814

)

 

$

(7,670

)

 

$

7,589

 

 

$

(8,447

)

Earnings (loss) per common share - basic

 

$

(0.22

)

 

$

(0.16

)

 

$

0.16

 

 

$

(0.18

)

Earnings (loss) per common share - diluted

 

$

(0.22

)

 

$

(0.16

)

 

$

0.16

 

(1)

$

(0.18

)

 

 

(1)

Assumes exercise of dilutive securities calculated under the treasury stock method.

v3.19.3.a.u2
Subsequent Events
12 Months Ended
Dec. 31, 2019
Subsequent Events [Abstract]  
Subsequent Events

Note 20 – Subsequent Events

On January 2, 2020, we paid off the outstanding balance of $24.6 million of the Taxable Revenue Bonds upon their maturity. We used a restricted certificate of deposit which was held as collateral to repay the outstanding balance.

On February 5, 2020, the Board declared a quarterly cash dividend of $0.09 per common share to be paid to shareholders of record at the close of business on February 20, 2020. The quarterly dividend will be paid on March 5, 2019 payment in the aggregate amount of approximately $4.3 million. In July 2003, our Board of Directors elected to begin declaring quarterly dividends on our common stock considering the tax treatment of dividends and adequate levels of Company liquidity.

 

 

 

v3.19.3.a.u2
Schedule II - Valuation and Qualifying Accounts
12 Months Ended
Dec. 31, 2019
Valuation And Qualifying Accounts [Abstract]  
Schedule II - Valuation and Qualifying Accounts

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

 

(In thousands)

 

Balance at

Beginning

of Period

 

 

Charged to

Costs &

Expenses

 

 

Deductions

 

 

Balance at

End of

Period

 

Year ended December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Doubtful Accounts

 

$

128

 

 

 

38

 

 

 

128

 

 

$

38

 

Inventory Reserve

 

$

30,009

 

 

 

5,893

 

 

 

1,740

 

 

$

34,162

 

Warranty Liability

 

$

8,623

 

 

 

4,569

 

 

 

4,798

 

 

$

8,394

 

Deferred Tax Asset Valuation Allowance

 

$

5,816

 

 

 

43,560

 

 

 

760

 

 

$

48,616

 

Year ended December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Doubtful Accounts

 

$

 

 

 

128

 

 

 

 

 

$

128

 

Inventory Reserve

 

$

23,355

 

 

 

7,006

 

 

 

352

 

 

$

30,009

 

Warranty Liability

 

$

9,724

 

 

 

7,392

 

 

 

8,493

 

 

$

8,623

 

Deferred Tax Asset Valuation Allowance

 

$

6,006

 

 

 

 

 

 

190

 

 

$

5,816

 

Year ended December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Doubtful Accounts

 

$

 

 

 

 

 

 

 

 

$

 

Inventory Reserve

 

$

25,249

 

 

 

6,406

 

 

 

8,300

 

 

$

23,355

 

Warranty Liability

 

$

8,548

 

 

 

6,951

 

 

 

5,775

 

 

$

9,724

 

Deferred Tax Asset Valuation Allowance

 

$

6,149

 

 

 

18

 

 

 

161

 

 

$

6,006

 

 

v3.19.3.a.u2
Nature of Business (Policies)
12 Months Ended
Dec. 31, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Principles of Consolidation

Principles of Consolidation

The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and include the financial position, results of operations, comprehensive income (loss), changes in equity and cash flows of ADTRAN and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect 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 expenses during the reporting period. Our more significant estimates include excess and obsolete inventory reserves, warranty reserves, customer rebates, determination and accrual of the deferred revenue components of multiple element sales agreements, estimated costs to complete obligations associated with deferred revenues and network installations, estimated income tax provision and income tax contingencies, fair value of stock-based compensation, assessment of goodwill and other intangibles for impairment, estimated lives of intangible assets, estimated pension liability, fair value of investments and evaluation of other-than-temporary declines in the value of investments. Actual amounts could differ significantly from these estimates.

Correction of Immaterial Misstatements

Correction of Immaterial Misstatement

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.   

Cash and Cash Equivalents

Summary of Significant Accounting Policies

 

Cash and Cash Equivalents

Cash and cash equivalents represent demand deposits, money market funds and short-term investments classified as available-for-sale with original maturities of three months or less. We maintain depository investments with certain financial institutions. Although these depository investments may exceed government insured depository limits, we have evaluated the credit worthiness of these applicable financial institutions and determined the risk of material financial loss due to the exposure of such credit risk to be minimal. As of December 31, 2019, $71.6 million of our cash and cash equivalents, primarily certain domestic money market funds and foreign depository accounts, were in excess of government provided insured depository limits.

Financial Instruments

Financial Instruments

The carrying amounts reported in the Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the immediate or short-term maturity of these financial instruments. The carrying amount reported for bonds payable was $24.6 million, which was its fair value as of December 31, 2019.

Investments with contractual maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Despite the long-term nature of their stated contractual maturities, we routinely buy and sell these securities and we believe we have the ability to quickly sell them to the remarketing agent, tender agent or issuer at par value plus accrued interest in the event we decide to liquidate our investment in a particular variable rate demand note. All income generated from these investments was recorded as interest income. We have not recorded any losses relating to variable rate demand notes.

Long-term investments is comprised of deferred compensation plan assets, corporate bonds, municipal fixed-rate bonds, asset-backed bonds, mortgage/agency-backed bonds, U.S. and foreign government bonds, marketable equity securities and other equity investments. Marketable equity securities are reported at fair value as determined by the most recently traded price of the securities at the balance sheet date, although the securities may not be readily marketable due to the size of the available market. Any changes in fair value are recognized in net investment gain (loss). Realized gains and losses on sales of debt securities are computed under the specific identification method and are included in other income (expense). See Note 5 for additional information.

Accounts Receivable

Accounts Receivable

We record accounts receivable at net realizable value. Prior to establishing payment terms for a new customer, we evaluate the credit risk of the customer. Credit limits and payment terms established for new customers are re-evaluated periodically based on customer collection experience and other financial factors. As of December 31, 2019, single customers comprising more than 10% of our total accounts receivable balance included four customers, which accounted for 53.2% of our total accounts receivable. As of December 31, 2018, single customers comprising more than 10% of our total accounts receivable balance included two customers, which accounted for 36.9% of our total accounts receivable.

We regularly review the need to maintain an allowance for doubtful accounts and consider factors such as the age of accounts receivable balances, the current economic conditions that may affect a customer’s ability to pay, significant one-time events impacting these customers and our historical experience. If the financial condition of a customer deteriorates, resulting in an impairment of their ability to make payments, we may be required to record an allowance for doubtful accounts. If circumstances change with regard to individual receivable balances that have previously been determined to be uncollectible, and for which a specific reserve has been established, a reduction in our allowance for doubtful accounts may be required. Our allowance for doubtful accounts was $38 thousand and $0.1 million as of December 31, 2019 and December 31, 2018, respectively.

Inventory

Inventory

Inventory is carried at the lower of cost and estimated net realizable value, with cost being determined using the first-in, first-out method. Standard costs for material, labor and manufacturing overhead are used to value inventory and are updated at least quarterly. 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 estimated reserve percentages, which consider 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 reserve. See Note 7 for additional information.

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment, which is stated at cost, is depreciated using the straight-line method over the estimated useful lives of the assets. We depreciate building and land improvements from five to 39 years, office machinery and equipment from three to seven years, engineering machinery and equipment from three to seven years, and computer software from three to five years. Expenditures for repairs and maintenance are charged to expense as incurred. Major improvements that materially prolong the lives of the assets are capitalized. Gains and losses on the disposal of property, plant and equipment are recorded in operating income (loss). See Note 8 for additional information.

Intangible Assets

Intangible Assets

Purchased intangible assets with finite lives are carried at cost less accumulated amortization. Amortization is recorded over the estimated useful lives of the respective assets, which is two to 14 years. See Note 11 for additional information.

Impairment of Long-Lived Assets and Intangibles

Impairment of Long-Lived Assets and Intangibles

Long-lived assets used in operations and intangible assets are reviewed 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. An impairment loss would be recognized in the amount by which the recorded value of the asset exceeds the fair value of the asset, measured by the quoted market price of an asset or an estimate based on the best information available in the circumstances. During the year ended December 31, 2019, we recognized an impairment loss of approximately $3.9 million related to the abandonment of certain information technology implementation projects which we had previously capitalized expenses related to these projects. There were no impairment losses for long-lived assets during the years ended December 31, 2018 or 2017, or for intangible assets recognized during the years ended December 31, 2019, 2018 or 2017.

Goodwill

Goodwill

Goodwill represents the excess purchase price over the fair value of net assets acquired. 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 by-pass a qualitative assessment 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 and, in turn, performed a step-1 analysis of goodwill. Based on the results of our step-1 analysis, no impairment charges on goodwill were recognized during the years ended December 31, 2019, 2018 and 2017.

Liability for Warranty

Liability for Warranty

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 historical return rate and 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. 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 $8.4 million and $8.6 million as of December 31, 2019 and 2018, respectively. These liabilities are included in accrued expenses in the accompanying Consolidated Balance Sheets. During 2017, we recorded a reduction in warranty expense related to a settlement with a third-party supplier for a defective component, the impact of which is reflected in the following table.

A summary of warranty expense and write-off activity for the years ended December 31, 2019, 2018 and 2017 is as follows:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

Year Ended December 31,

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

8,623

 

 

$

9,724

 

 

$

8,548

 

Plus: Amounts charged to cost and expenses

 

 

4,569

 

 

 

7,392

 

 

 

6,951

 

Less: Deductions

 

 

(4,798

)

 

 

(8,493

)

 

 

(5,775

)

Balance at end of period

 

$

8,394

 

 

$

8,623

 

 

$

9,724

 

 

Pension Benefit Plan Obligations

Pension Benefit Plan Obligations

We maintain a defined benefit pension plan covering employees in certain foreign countries. Pension benefit plan obligations are based on various assumptions used by our actuaries in calculating these amounts. These assumptions include discount rates, compensation rate increases, expected return on plan assets, retirement rates and mortality rates. Actual results that differ from the assumptions and changes in assumptions could affect future expenses and obligations. Our net pension liability totaled $15.9 million and $13.1 million as of December 31, 2019 and 2018, respectively.

Stock-Based Compensation

Stock-Based Compensation

We have two stock incentive plans from which stock options, performance stock units (“PSUs”), restricted stock units (“RSUs”) and restricted stock are available for grant to employees and directors. Costs related to these awards are recognized over their vesting periods. All employee and director stock options granted under our stock option plans have an exercise price equal to the fair market value of the award, as defined in the plan, of the underlying common stock on the grant date. All of our outstanding stock option awards are classified as equity awards and therefore are measured at fair value on their grant date.

Stock-based compensation expense recognized for the years ended December 31, 2019, 2018 and 2017 was approximately $7.0 million, $7.2 million and $7.4 million, respectively. As of December 31, 2019, total unrecognized compensation cost related to non-vested stock options, PSUs, RSUs and restricted stock was approximately $17.2 million, which is expected to be recognized over an average remaining recognition period of 3.0 years. See Note 4 for additional information.

Research and Development Costs

Research and Development Costs

Research and development costs include compensation for engineers and support personnel, outside contracted services, depreciation and material costs associated with new product development, enhancement of current products and product cost reductions. We continually evaluate new product opportunities and engage in intensive research and product development efforts. Research and development costs totaled $126.2 million, $124.5 million and $130.7 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

The following table presents changes in accumulated other comprehensive income (loss), net of tax, by components of accumulated other comprehensive income (loss) for the years ended December 31, 2019 2018 and 2017:

 

 

(In thousands)

 

Unrealized

Gains (Losses)

on Available-

for-Sale

Securities

 

 

Unrealized Gains (Losses) on Cash Flow Hedges

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

ASU 2018-02 Adoption (2)

 

 

Total

 

Balance as of December 31, 2016

 

$

404

 

 

$

 

 

$

(5,017

)

 

$

(7,575

)

 

$

 

 

$

(12,188

)

Other comprehensive income before

   reclassifications

 

 

5,020

 

 

 

(619

)

 

 

451

 

 

 

5,999

 

 

 

 

 

 

10,851

 

Amounts reclassified from accumulated other

   comprehensive loss

 

 

(2,857

)

 

 

619

 

 

 

280

 

 

 

 

 

 

 

 

 

(1,958

)

Balance as of December 31, 2017

 

 

2,567

 

 

 

 

 

 

(4,286

)

 

 

(1,576

)

 

 

 

 

 

(3,295

)

Other comprehensive loss before

   reclassifications

 

 

685

 

 

 

 

 

 

(3,890

)

 

 

(4,236

)

 

 

 

 

 

(7,441

)

Amounts reclassified to retained earnings (1)

 

 

(3,220

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,220

)

Amounts reclassified from accumulated other

   comprehensive loss

 

 

(595

)

 

 

 

 

 

135

 

 

 

 

 

 

 

 

 

(460

)

Balance as of December 31, 2018

 

 

(563

)

 

 

 

 

 

(8,041

)

 

 

(5,812

)

 

 

 

 

 

(14,416

)

Other comprehensive loss before

   reclassifications

 

 

573

 

 

 

 

 

 

(1,717

)

 

 

(1,480

)

 

 

 

 

 

(2,624

)

Amounts reclassified to retained earnings (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

385

 

 

 

385

 

Amounts reclassified from accumulated other

   comprehensive loss

 

 

(294

)

 

 

 

 

 

532

 

 

 

 

 

 

 

 

 

238

 

Balance as of December 31, 2019

 

$

(284

)

 

$

 

 

$

(9,226

)

 

$

(7,292

)

 

$

385

 

 

$

(16,417

)

 

 

(1)

With the adoption of ASU 2016-01, the unrealized gains on our equity investments were reclassified to retained earnings.  See Recently Issued Accounting Standards below for more information.

 

(2)

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 13 for additional information.

The following tables present the details of reclassifications out of accumulated other comprehensive income (loss) for the years ended December 31, 2019, 2018 and 2017:

 

(In thousands)

 

2019

Details about Accumulated Other Comprehensive

Income Components

 

Amount Reclassified

from Accumulated Other

Comprehensive Loss

 

 

Affected Line Item in the

Statement Where Net Income

Is Presented

Unrealized gains on available-for-sale securities:

 

 

 

 

 

 

Net realized gain on sales of securities

 

$

397

 

 

Net investment gain (loss)

Defined benefit plan adjustments – actuarial losses

 

 

(771

)

 

(1)

Total reclassifications for the period, before tax

 

 

(374

)

 

 

Tax benefit

 

 

136

 

 

 

Total reclassifications for the period, net of tax

 

$

(238

)

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 14 for additional information.

 

 

(In thousands)

 

2018

Details about Accumulated Other Comprehensive

Income Components

 

Amount Reclassified

from Accumulated Other

Comprehensive Loss

 

 

Affected Line Item in the

Statement Where Net Income

Is Presented

Unrealized gains on available-for-sale securities:

 

 

 

 

 

 

Net realized gain on sales of securities

 

$

804

 

 

Net investment gain (loss)

Defined benefit plan adjustments – actuarial losses

 

 

(196

)

 

(1)

Total reclassifications for the period, before tax

 

 

608

 

 

 

Tax expense

 

 

(148

)

 

 

Total reclassifications for the period, net of tax

 

$

460

 

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 14 for additional information.

 

(In thousands)

 

2017

Details about Accumulated Other Comprehensive

Income Components

 

Amount Reclassified

from Accumulated Other

Comprehensive Loss

 

 

Affected Line Item in the

Statement Where Net Income

Is Presented

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

 

 

 

 

 

 

Net realized gain on sales of securities

 

$

4,864

 

 

Net investment gain (loss)

Impairment expense

 

 

(180

)

 

Net investment gain (loss)

Net losses on derivatives designated as hedging instruments

 

 

(897

)

 

Cost of sales

Defined benefit plan adjustments – actuarial losses

 

 

(406

)

 

(1)

Total reclassifications for the period, before tax

 

 

3,381

 

 

 

Tax expense

 

 

(1,423

)

 

 

Total reclassifications for the period, net of tax

 

$

1,958

 

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 14 for additional information.

 

The following tables present the tax effects related to the change in each component of other comprehensive income (loss) for the years ended December 31, 2019, 2018 and 2017:

 

 

 

2019

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

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

 

$

774

 

 

$

(201

)

 

$

573

 

Reclassification adjustment for amounts related to available-for-sale investments included in net loss

 

 

(397

)

 

 

103

 

 

 

(294

)

Defined benefit plan adjustments

 

 

(2,488

)

 

 

771

 

 

 

(1,717

)

Reclassification adjustment for amounts related to defined benefit plan adjustments included in net loss

 

 

771

 

 

 

(239

)

 

 

532

 

Foreign currency translation adjustment

 

 

(1,480

)

 

 

 

 

 

(1,480

)

Total Other Comprehensive Income (Loss)

 

$

(2,820

)

 

$

434

 

 

$

(2,386

)

 

 

 

2018

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

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

 

$

926

 

 

$

(241

)

 

$

685

 

Reclassification adjustment for amounts related to available-for-sale investments included in net loss

 

 

(804

)

 

 

209

 

 

 

(595

)

Reclassification adjustment for amounts reclassed to retained earnings related to the adoption of ASU 2016-01

 

 

(4,351

)

 

 

1,131

 

 

 

(3,220

)

Defined benefit plan adjustments

 

 

(5,638

)

 

 

1,748

 

 

 

(3,890

)

Reclassification adjustment for amounts related to defined benefit plan adjustments included in net loss

 

 

196

 

 

 

(61

)

 

 

135

 

Foreign currency translation adjustment

 

 

(4,236

)

 

 

 

 

 

(4,236

)

Total Other Comprehensive Income (Loss)

 

$

(13,907

)

 

$

2,786

 

 

$

(11,121

)

 

 

 

 

2017

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

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

 

$

8,230

 

 

$

(3,210

)

 

$

5,020

 

Reclassification adjustment for amounts related to available-for-sale investments included in net income

 

 

(4,684

)

 

 

1,827

 

 

 

(2,857

)

Unrealized gains (losses) on cash flow hedges

 

 

(897

)

 

 

278

 

 

 

(619

)

Reclassification adjustment for amounts related to cash flow hedges included in net income

 

 

897

 

 

 

(278

)

 

 

619

 

Defined benefit plan adjustments

 

 

654

 

 

 

(203

)

 

 

451

 

Reclassification adjustment for amounts related to defined benefit plan adjustments included in net income

 

 

406

 

 

 

(126

)

 

 

280

 

Foreign currency translation adjustment

 

 

5,999

 

 

 

 

 

 

5,999

 

Total Other Comprehensive Income (Loss)

 

$

10,605

 

 

$

(1,712

)

 

$

8,893

 

 

Income Taxes

Income Taxes

The provision for income taxes has been determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from the difference between financial and tax bases of our assets and liabilities and are adjusted for changes in tax rates and tax laws when such changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

We establish reserves to remove some or all of the tax benefit of any of our tax positions at the time we determine that the positions become uncertain. We adjust these reserves, including any impact on the related interest and penalties, as facts and circumstances change.     

Foreign Currency

Foreign Currency

We record transactions denominated in foreign currencies using appropriate exchange rates from throughout the year. Assets and liabilities denominated in foreign currencies are remeasured at the balance sheet dates using the closing rates of exchange between those foreign currencies and the functional currency with any transaction gains or losses reported in other income (expense). Our primary exposures to foreign currency exchange rate movements are with our German subsidiary, whose functional currency is the Euro, our Australian subsidiary, whose functional currency is the Australian dollar and our Mexican subsidiary, whose functional currency is the U.S. dollar as most invoices are paid in Mexican Pesos. Adjustments resulting from translating financial statements of international subsidiaries are recorded as a component of accumulated other comprehensive income (loss).

Revenue

Revenue

On January 1, 2018, we adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition.  

Accounting Policy under Topic 606

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

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

Network Solutions Segment

Network Solutions includes hardware products and 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.

Hardware and Software Revenue

Revenue from hardware sales is recognized when control is transferred to our customers, which is generally when we ship the products. Shipping terms are generally FOB shipping point. This segment also includes revenues from software license sales which is recognized at delivery and transfer of control to the customer. Revenue is recorded net of estimated discounts and rebates using historical trends. Customers are typically invoiced when control is transferred and revenue is recognized. Our products generally include assurance-based warranties of 90 days to five years for product defects, which are accrued at the time revenue is recognized.

In certain transactions, we are also the lessor in sales-type lease arrangements for network equipment that have terms of 18 months to five years. These arrangements typically include network equipment, network implementation services and maintenance services.        

Services & Support Segment

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

Maintenance Revenue

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

Network Implementation Revenue

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

Accounting Policy under Topic 605

Revenue was generally recognized when persuasive evidence of an arrangement exists, delivery has occurred, the product price was fixed or determinable, collection of the resulting receivable was reasonably assured, and product returns were reasonably estimable. For product sales, revenue was generally recognized upon shipment of the product to our customer in accordance with the title transfer terms of the sales agreement, generally Ex Works, per International Commercial Terms. In the case of consigned inventory, revenue was recognized when the end customer assumes ownership of the product. Contracts that contained multiple deliverables were evaluated to determine the units of accounting, and the consideration from the arrangement was allocated to each unit of accounting based on the relative selling price and corresponding terms of the contract. When this was not available, we were generally not able to determine third-party evidence of selling price because of the extent of customization among competing products or services from other companies. In these instances, we used best estimates to allocate consideration to each respective unit of accounting. These estimates included analysis of respective bills of material and review and analysis of similar product and service offerings. We recorded revenue associated with installation services when respective contractual obligations are complete. In instances where customer acceptance was required, revenue was deferred until respective acceptance criteria were met. Contracts that included both installation services and product sales were evaluated for revenue recognition in accordance with contract terms. As a result, installation services may have been considered a separate deliverable or may have been considered a combined single unit of accounting with the delivered product. Generally, either the purchaser, ADTRAN, or a third party would perform the installation of our products. Shipping fees were recorded as revenue and the related costs were included in cost of sales. Sales taxes invoiced to customers were included in revenues and represented less than one percent of total revenues. The corresponding sales taxes paid were included in cost of goods sold. Value-added taxes collected from customers in international jurisdictions were recorded in accrued expenses as a liability. Revenue was recorded net of discounts. Sales returns were recorded as a reduction of revenue and accrued based on historical sales return experience, which we believed provided a reasonable estimate of future returns.

Unearned Revenue

Unearned Revenue

Unearned revenue primarily represents customer billings on our maintenance service programs and unearned revenues related to multiple element contracts where we still have contractual obligations to our customers. We currently offer maintenance contracts ranging from one month to five years. Revenue attributable to maintenance contracts is recognized on a straight-line basis over the related contract term. In addition, we provide software maintenance and a variety of hardware maintenance services to customers under contracts with terms up to ten years. When we defer revenue related to multiple performance obligations where we still have contractual obligations, we also defer the related costs. Current deferred costs are included in prepaid expenses and other current assets on the accompanying Consolidated Balance Sheets and totaled $1.6 million and $2.4 million as of December 31, 2019 and 2018, respectively. Non-current deferred costs are included in other assets on the accompanying Consolidated Balance Sheets and totaled $0.1 million and $0.8 million as of December 31, 2019 and 2018, respectively.

Earnings (Loss) per Share

Earnings (Loss) per Share

Earnings (loss) per common share and earnings (loss) per common share assuming dilution, are based on the weighted average number of common shares and, when dilutive, common equivalent shares outstanding during the year. See Note 17 for additional information.

Business Combinations

Business Combinations

The Company records assets acquired, liabilities assumed, contractual contingencies, when applicable, and intangible assets recognized as part of business combinations based on their fair values on the date of acquisition. The excess of the purchase price over the estimated fair values of the net tangible and intangible assets and liabilities assumed acquired is recorded as goodwill. If the estimated fair values of net tangible and intangible assets acquired and liabilities assumed exceed the purchase price, a bargain purchase gain is recorded. The Company’s estimates of fair value are based on historical experience, industry knowledge, certain information obtained from the management of the acquired company and, in some cases, valuations performed by independent third-party firms. The results of operations of acquired companies are included in the accompanying Consolidated Statements of Operations since their dates of acquisition. Costs incurred to complete the business combination, such as legal, accounting or other professional fees are charged to selling, general and administrative expenses as incurred.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

Historically, we have participated in foreign exchange forward contracts in connection with the management of exposure to fluctuations in foreign exchange rates as outlined below.

Cash Flow Hedges

 

Our cash flow hedging activities utilize foreign exchange forward contracts to reduce the risk that movements in exchange rates will adversely affect the net cash flows resulting from the planned purchase of products from foreign suppliers. Purchases of U.S. denominated inventory by our European subsidiary represent our primary exposure. Changes in the fair value of derivatives designated as cash flow hedges are recorded in accumulated other comprehensive income. Amounts related to cash flow hedges are reclassified from accumulated other comprehensive income to earnings when the underlying hedged item impacts earnings. This reclassification is recorded in the same line item of the consolidated statements of income as where the effects of the hedged item are recorded, which is cost of sales.

Undesignated Hedges

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

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

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. In November 2019, the FASB issued ASU 2019-11, Codification improvements to Topic 326, Financial Instruments – Credit Losses, which makes various narrow-scope amendments to the new credit losses standard, such as, providing disclosure relief for accrued interest receivables. 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 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.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this update simplify the accounting for income taxes by removing various exceptions, such as, the exception to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items. The amendments in this update, also simplify the accounting for income taxes related to income-based franchise taxes and requiring that an entity reflect enacted tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the effect of ASU 2019-12, 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 its 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 nonlease components. The adoption of this standard resulted in the recognition of a right-of-use asset and corresponding right-of-use liability on our Consolidated Balance Sheets 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 Consolidated Statement of Income or Statement of Cash Flows. See Note 9 for additional information.

As a lessor, the adoption of this standard did not have a material impact on our Consolidated Balance Sheet, Consolidated Statement of Income or 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.

v3.19.3.a.u2
Nature of Business (Tables)
12 Months Ended
Dec. 31, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Summary of Warranty Expense and Write-Off Activity

A summary of warranty expense and write-off activity for the years ended December 31, 2019, 2018 and 2017 is as follows:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

Year Ended December 31,

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

8,623

 

 

$

9,724

 

 

$

8,548

 

Plus: Amounts charged to cost and expenses

 

 

4,569

 

 

 

7,392

 

 

 

6,951

 

Less: Deductions

 

 

(4,798

)

 

 

(8,493

)

 

 

(5,775

)

Balance at end of period

 

$

8,394

 

 

$

8,623

 

 

$

9,724

 

 

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

The following table presents changes in accumulated other comprehensive income (loss), net of tax, by components of accumulated other comprehensive income (loss) for the years ended December 31, 2019 2018 and 2017:

 

 

(In thousands)

 

Unrealized

Gains (Losses)

on Available-

for-Sale

Securities

 

 

Unrealized Gains (Losses) on Cash Flow Hedges

 

 

Defined

Benefit Plan

Adjustments

 

 

Foreign

Currency

Adjustments

 

 

ASU 2018-02 Adoption (2)

 

 

Total

 

Balance as of December 31, 2016

 

$

404

 

 

$

 

 

$

(5,017

)

 

$

(7,575

)

 

$

 

 

$

(12,188

)

Other comprehensive income before

   reclassifications

 

 

5,020

 

 

 

(619

)

 

 

451

 

 

 

5,999

 

 

 

 

 

 

10,851

 

Amounts reclassified from accumulated other

   comprehensive loss

 

 

(2,857

)

 

 

619

 

 

 

280

 

 

 

 

 

 

 

 

 

(1,958

)

Balance as of December 31, 2017

 

 

2,567

 

 

 

 

 

 

(4,286

)

 

 

(1,576

)

 

 

 

 

 

(3,295

)

Other comprehensive loss before

   reclassifications

 

 

685

 

 

 

 

 

 

(3,890

)

 

 

(4,236

)

 

 

 

 

 

(7,441

)

Amounts reclassified to retained earnings (1)

 

 

(3,220

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,220

)

Amounts reclassified from accumulated other

   comprehensive loss

 

 

(595

)

 

 

 

 

 

135

 

 

 

 

 

 

 

 

 

(460

)

Balance as of December 31, 2018

 

 

(563

)

 

 

 

 

 

(8,041

)

 

 

(5,812

)

 

 

 

 

 

(14,416

)

Other comprehensive loss before

   reclassifications

 

 

573

 

 

 

 

 

 

(1,717

)

 

 

(1,480

)

 

 

 

 

 

(2,624

)

Amounts reclassified to retained earnings (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

385

 

 

 

385

 

Amounts reclassified from accumulated other

   comprehensive loss

 

 

(294

)

 

 

 

 

 

532

 

 

 

 

 

 

 

 

 

238

 

Balance as of December 31, 2019

 

$

(284

)

 

$

 

 

$

(9,226

)

 

$

(7,292

)

 

$

385

 

 

$

(16,417

)

 

 

(1)

With the adoption of ASU 2016-01, the unrealized gains on our equity investments were reclassified to retained earnings.  See Recently Issued Accounting Standards below for more information.

 

(2)

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 13 for additional information.

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 years ended December 31, 2019, 2018 and 2017:

 

(In thousands)

 

2019

Details about Accumulated Other Comprehensive

Income Components

 

Amount Reclassified

from Accumulated Other

Comprehensive Loss

 

 

Affected Line Item in the

Statement Where Net Income

Is Presented

Unrealized gains on available-for-sale securities:

 

 

 

 

 

 

Net realized gain on sales of securities

 

$

397

 

 

Net investment gain (loss)

Defined benefit plan adjustments – actuarial losses

 

 

(771

)

 

(1)

Total reclassifications for the period, before tax

 

 

(374

)

 

 

Tax benefit

 

 

136

 

 

 

Total reclassifications for the period, net of tax

 

$

(238

)

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 14 for additional information.

 

 

(In thousands)

 

2018

Details about Accumulated Other Comprehensive

Income Components

 

Amount Reclassified

from Accumulated Other

Comprehensive Loss

 

 

Affected Line Item in the

Statement Where Net Income

Is Presented

Unrealized gains on available-for-sale securities:

 

 

 

 

 

 

Net realized gain on sales of securities

 

$

804

 

 

Net investment gain (loss)

Defined benefit plan adjustments – actuarial losses

 

 

(196

)

 

(1)

Total reclassifications for the period, before tax

 

 

608

 

 

 

Tax expense

 

 

(148

)

 

 

Total reclassifications for the period, net of tax

 

$

460

 

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 14 for additional information.

 

(In thousands)

 

2017

Details about Accumulated Other Comprehensive

Income Components

 

Amount Reclassified

from Accumulated Other

Comprehensive Loss

 

 

Affected Line Item in the

Statement Where Net Income

Is Presented

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

 

 

 

 

 

 

Net realized gain on sales of securities

 

$

4,864

 

 

Net investment gain (loss)

Impairment expense

 

 

(180

)

 

Net investment gain (loss)

Net losses on derivatives designated as hedging instruments

 

 

(897

)

 

Cost of sales

Defined benefit plan adjustments – actuarial losses

 

 

(406

)

 

(1)

Total reclassifications for the period, before tax

 

 

3,381

 

 

 

Tax expense

 

 

(1,423

)

 

 

Total reclassifications for the period, net of tax

 

$

1,958

 

 

 

 

 

(1)

Included in the computation of net periodic pension cost. See Note 14 for additional information.

Tax Effects Related to the Change in Each Component of Other Comprehensive Income (Loss)

The following tables present the tax effects related to the change in each component of other comprehensive income (loss) for the years ended December 31, 2019, 2018 and 2017:

 

 

 

2019

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

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

 

$

774

 

 

$

(201

)

 

$

573

 

Reclassification adjustment for amounts related to available-for-sale investments included in net loss

 

 

(397

)

 

 

103

 

 

 

(294

)

Defined benefit plan adjustments

 

 

(2,488

)

 

 

771

 

 

 

(1,717

)

Reclassification adjustment for amounts related to defined benefit plan adjustments included in net loss

 

 

771

 

 

 

(239

)

 

 

532

 

Foreign currency translation adjustment

 

 

(1,480

)

 

 

 

 

 

(1,480

)

Total Other Comprehensive Income (Loss)

 

$

(2,820

)

 

$

434

 

 

$

(2,386

)

 

 

 

2018

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

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

 

$

926

 

 

$

(241

)

 

$

685

 

Reclassification adjustment for amounts related to available-for-sale investments included in net loss

 

 

(804

)

 

 

209

 

 

 

(595

)

Reclassification adjustment for amounts reclassed to retained earnings related to the adoption of ASU 2016-01

 

 

(4,351

)

 

 

1,131

 

 

 

(3,220

)

Defined benefit plan adjustments

 

 

(5,638

)

 

 

1,748

 

 

 

(3,890

)

Reclassification adjustment for amounts related to defined benefit plan adjustments included in net loss

 

 

196

 

 

 

(61

)

 

 

135

 

Foreign currency translation adjustment

 

 

(4,236

)

 

 

 

 

 

(4,236

)

Total Other Comprehensive Income (Loss)

 

$

(13,907

)

 

$

2,786

 

 

$

(11,121

)

 

 

 

 

2017

 

(In thousands)

 

Before-Tax

Amount

 

 

Tax

(Expense)

Benefit

 

 

Net-of-Tax

Amount

 

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

 

$

8,230

 

 

$

(3,210

)

 

$

5,020

 

Reclassification adjustment for amounts related to available-for-sale investments included in net income

 

 

(4,684

)

 

 

1,827

 

 

 

(2,857

)

Unrealized gains (losses) on cash flow hedges

 

 

(897

)

 

 

278

 

 

 

(619

)

Reclassification adjustment for amounts related to cash flow hedges included in net income

 

 

897

 

 

 

(278

)

 

 

619

 

Defined benefit plan adjustments

 

 

654

 

 

 

(203

)

 

 

451

 

Reclassification adjustment for amounts related to defined benefit plan adjustments included in net income

 

 

406

 

 

 

(126

)

 

 

280

 

Foreign currency translation adjustment

 

 

5,999

 

 

 

 

 

 

5,999

 

Total Other Comprehensive Income (Loss)

 

$

10,605

 

 

$

(1,712

)

 

$

8,893

 

v3.19.3.a.u2
Business Combinations (Tables)
12 Months Ended
Dec. 31, 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 and the final allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date for Sumitomo are as follows:

 

(In thousands)

 

Sumitomo

 

 

SmartRG

 

Assets

 

 

 

 

 

 

 

 

Tangible assets acquired

 

$

1,006

 

 

$

8,594

 

Intangible assets

 

 

22,100

 

 

 

9,960

 

Goodwill

 

 

 

 

 

3,476

 

Total assets acquired

 

 

23,106

 

 

 

22,030

 

Liabilities

 

 

 

 

 

 

 

 

Liabilities assumed

 

 

(3,978

)

 

 

(6,001

)

Total liabilities assumed

 

 

(3,978

)

 

 

(6,001

)

Total net assets

 

 

19,128

 

 

 

16,029

 

Gain on bargain purchase of a business, net of tax

 

 

(11,322

)

 

 

 

Total purchase price

 

$

7,806

 

 

$

16,029

 

 

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

Our Consolidated Statements of Income include the following revenue and net loss attributable to SmartRG and Sumitomo since the date of acquisition:

 

(In thousands)

 

March 19, 2018 to

December 31,

2018

 

Revenue

 

$

9,186

 

Net loss

 

$

(1,297

)

Details of the Acquired Intangible Assets

The details of the acquired intangible assets from the SmartRG and Sumitomo acquisitions are as follows:

 

(In thousands)

 

Value

 

 

Life (in years)

Customer relationships

 

$

15,190

 

 

3 - 12

Developed technology

 

 

7,400

 

 

7

Licensed technology

 

 

5,900

 

 

9

Supplier relationship

 

 

2,800

 

 

2

Licensing agreements

 

 

560

 

 

5 - 10

Trade name

 

 

210

 

 

3

Total

 

$

32,060

 

 

 

Summary of Unaudited Supplemental Pro Forma Information

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

 

(In thousands)

 

2018

 

 

2017

 

Pro forma revenue

 

$

559,050

 

 

$

702,573

 

Pro forma net loss

 

$

(33,862

)

 

$

33,206

 

 

v3.19.3.a.u2
Revenue (Tables)
12 Months Ended
Dec. 31, 2019
Revenue From Contract With Customer [Abstract]  
Disaggregate of Revenue by Major Source

The following table disaggregates our revenue by major source for the year ended December 31, 2019:

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

289,980

 

 

$

58,894

 

 

$

348,874

 

Subscriber Solutions & Experience(1)

 

 

144,651

 

 

 

8,269

 

 

 

152,920

 

Traditional & Other Products

 

 

20,595

 

 

 

7,672

 

 

 

28,267

 

Total

 

$

455,226

 

 

$

74,835

 

 

$

530,061

 

 

(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 major source for the year ended December 31, 2018:

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

301,801

 

 

$

57,069

 

 

$

358,870

 

Subscriber Solutions & Experience(1)

 

 

129,067

 

 

 

5,393

 

 

 

134,460

 

Traditional & Other Products

 

 

27,364

 

 

 

8,583

 

 

 

35,947

 

Total

 

$

458,232

 

 

$

71,045

 

 

$

529,277

 

 

 

(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 tables disaggregates our revenue by major source for the years ended December 31, 2019, 2018 and 2017:

 

 

 

2019

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

289,980

 

 

$

58,894

 

 

$

348,874

 

Subscriber Solutions & Experience(1)

 

 

144,651

 

 

 

8,269

 

 

 

152,920

 

Traditional & Other Products

 

 

20,595

 

 

 

7,672

 

 

 

28,267

 

Total

 

$

455,226

 

 

$

74,835

 

 

$

530,061

 

 

 

 

2018

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

301,801

 

 

$

57,069

 

 

$

358,870

 

Subscriber Solutions & Experience(1)

 

 

129,067

 

 

 

5,393

 

 

 

134,460

 

Traditional & Other Products

 

 

27,364

 

 

 

8,583

 

 

 

35,947

 

Total

 

$

458,232

 

 

$

71,045

 

 

$

529,277

 

 

 

 

2017

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

361,955

 

 

$

111,989

 

 

$

473,944

 

Subscriber Solutions & Experience(1)

 

 

132,294

 

 

 

6,162

 

 

 

138,456

 

Traditional & Other Products

 

 

46,147

 

 

 

8,353

 

 

 

54,500

 

Total

 

$

540,396

 

 

$

126,504

 

 

$

666,900

 

 

 

(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.

Information about Receivables, Contract Assets, and Unearned Revenue from Contracts with Customers

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

 

(In thousands)

 

December 31, 2019

 

 

December 31, 2018

 

Accounts receivable

 

$

90,531

 

 

$

99,385

 

Contract assets(1)

 

$

2,812

 

 

$

3,766

 

Unearned revenue

 

$

11,963

 

 

$

17,940

 

Non-current unearned revenue

 

$

6,012

 

 

$

5,296

 

(1) Included in other receivables on the Consolidated Balance Sheets

v3.19.3.a.u2
Stock-Based Compensation (Tables)
12 Months Ended
Dec. 31, 2019
Stock-Based Compensation Expense Related to Stock Options, PSUs, RSUs and Restricted Stock

The following table summarizes stock-based compensation expense related to stock options, PSUs, RSUs and restricted stock for the years ended December 31, 2019, 2018 and 2017, which was recognized as follows:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

Stock-based compensation expense included in cost of sales

 

$

369

 

 

$

418

 

 

$

379

 

Selling, general and administrative expense

 

 

3,889

 

 

 

3,989

 

 

 

4,063

 

Research and development expense

 

 

2,704

 

 

 

2,748

 

 

 

2,991

 

Stock-based compensation expense included in operating expenses

 

 

6,593

 

 

 

6,737

 

 

 

7,054

 

Total stock-based compensation expense

 

 

6,962

 

 

 

7,155

 

 

 

7,433

 

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

 

 

(1,659

)

 

 

(1,432

)

 

 

(1,699

)

Total stock-based compensation expense, net of tax

 

$

5,303

 

 

$

5,723

 

 

$

5,734

 

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 2019 and the changes that occurred during 2019:

(In thousands, except per share amounts)

 

Number of

shares

 

 

Weighted

Average Grant

Date Fair Value

 

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

 

 

1,570

 

 

$

18.52

 

PSUs, RSUs and restricted stock granted

 

 

897

 

 

$

9.63

 

PSUs, RSUs and restricted stock vested

 

 

(368

)

 

$

17.23

 

PSUs, RSUs and restricted stock forfeited

 

 

(208

)

 

$

18.24

 

Unvested PSUs, RSUs and restricted stock outstanding, December 31, 2019

 

 

1,891

 

 

$

14.58

 

 

Summary of Stock Options Outstanding

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

 

 

 

Number of

Options

(in thousands)

 

 

Weighted

Average

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 granted

 

 

 

 

$

 

 

 

 

 

 

 

 

 

Stock options exercised

 

 

(34

)

 

$

15.53

 

 

 

 

 

 

 

 

 

Stock options forfeited

 

 

(32

)

 

$

15.56

 

 

 

 

 

 

 

 

 

Stock options expired

 

 

(744

)

 

$

23.72

 

 

 

 

 

 

 

 

 

Stock options outstanding, December 31, 2019

 

 

3,572

 

 

$

22.88

 

 

 

3.40

 

 

$

 

Stock options exercisable, December 31, 2019

 

 

3,570

 

 

$

22.89

 

 

 

3.40

 

 

$

 

Stock Options Outstanding

The following table further describes our stock options outstanding as of December 31, 2019:

 

 

 

Options Outstanding

 

 

Options Exercisable

 

Range of

Exercise Prices

 

Options

Outstanding at

December 31, 2019

(In thousands)

 

 

Weighted Avg.

Remaining

Contractual Life

in Years

 

 

Weighted

Average

Exercise

Price

 

 

Options

Exercisable at

December 31, 2019

(In thousands)

 

 

Weighted

Average

Exercise

Price

 

$14.88 – $18.96

 

 

1,135

 

 

 

4.90

 

 

$

15.89

 

 

 

1,133

 

 

$

15.89

 

$18.97 – $23.45

 

 

685

 

 

 

4.70

 

 

$

19.10

 

 

 

685

 

 

$

19.10

 

$23.46 – $30.35

 

 

686

 

 

 

3.67

 

 

$

24.17

 

 

 

686

 

 

$

24.17

 

$30.36 – $41.92

 

 

1,066

 

 

 

1.29

 

 

$

31.93

 

 

 

1,066

 

 

$

31.93

 

 

 

 

3,572

 

 

 

 

 

 

 

 

 

 

 

3,570

 

 

 

 

 

 

Market-Based PSUs [Member]  
Summary of Weighted-Average Assumptions and Value of Options Granted The following table details the significant assumptions that impact the fair value estimate of the market-based PSUs:

 

 

 

2019

 

2018

 

 

2017

 

Estimated fair value per share

 

$9.53 to $18.05

 

$

16.59

 

 

$

24.17

 

Expected volatility

 

32.7% to  38.9%

 

27.98% to 31.58%

 

 

 

27.03

%

Risk-free interest rate

 

1.6% to 2.46%

 

2.11% to 2.99%

 

 

 

1.78

%

Expected dividend yield

 

2.3% to 4.09%

 

1.83% to 2.49%

 

 

 

1.74

%

 

v3.19.3.a.u2
Investments (Tables)
12 Months Ended
Dec. 31, 2019
Investments Debt And Equity Securities [Abstract]  
Debt Securities and Other Investments, Recorded at Fair Value

Debt Securities and Other Investments

As of  December 31, 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

 

$

9,304

 

 

$

80

 

 

$

 

 

$

9,384

 

Municipal fixed-rate bonds

 

 

930

 

 

 

 

 

 

 

 

 

930

 

Asset-backed bonds

 

 

6,867

 

 

 

26

 

 

 

(3

)

 

 

6,890

 

Mortgage/Agency-backed bonds

 

 

6,944

 

 

 

26

 

 

 

(8

)

 

 

6,962

 

U.S. government bonds

 

 

12,311

 

 

 

21

 

 

 

(9

)

 

 

12,323

 

Foreign government bonds

 

 

372

 

 

 

 

 

 

(1

)

 

 

371

 

Variable rate demand notes

 

 

800

 

 

 

 

 

 

 

 

 

800

 

Available-for-sale debt securities held at fair value

 

$

37,528

 

 

$

153

 

 

$

(21

)

 

$

37,660

 

As of 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 December 31, 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

 

$

4,005

 

 

$

 

 

$

396

 

 

$

 

 

$

 

 

$

 

One to two years

 

 

4,120

 

 

 

930

 

 

 

760

 

 

 

213

 

 

 

1,347

 

 

 

 

Two to three years

 

 

967

 

 

 

 

 

 

1,632

 

 

 

1,424

 

 

 

9,344

 

 

 

 

Three to five years

 

 

292

 

 

 

 

 

 

2,092

 

 

 

494

 

 

 

1,632

 

 

 

371

 

Five to ten years

 

 

 

 

 

 

 

 

1,719

 

 

 

792

 

 

 

 

 

 

 

More than ten years

 

 

 

 

 

 

 

 

291

 

 

 

4,039

 

 

 

 

 

 

 

Total

 

$

9,384

 

 

$

930

 

 

$

6,890

 

 

$

6,962

 

 

$

12,323

 

 

$

371

 

 

Gross Realized Gains and Losses on Sale of Debt Securities The following table presents gross realized gains and losses related to our debt securities for the years ended December 31, 2019, 2018 and 2017:

 

(In thousands)

Year Ended December 31,

 

2019

 

 

2018

 

 

2017

 

Gross realized gains on debt securities

 

$

108

 

 

$

57

 

 

$

169

 

Gross realized losses on debt securities

 

 

(50

)

 

 

(592

)

 

 

(226

)

Total gain (loss) recognized, net

 

$

58

 

 

$

(535

)

 

$

(57

)

Breakdown of Investments with Unrealized Losses

The following table presents the breakdown of debt securities and other investments with unrealized losses as of December 31, 2019:

 

 

 

Continuous Unrealized

Loss Position for Less

than 12 Months

 

 

Continuous Unrealized

Loss Position for 12

Months or Greater

 

 

Total

 

(In thousands)

 

Fair Value

 

 

Unrealized

Losses

 

 

Fair Value

 

 

Unrealized

Losses

 

 

Fair Value

 

 

Unrealized

Losses

 

Corporate bonds

 

 

203

 

 

 

 

 

 

 

 

 

 

 

 

203

 

 

 

 

Municipal fixed-rate bonds

 

 

930

 

 

 

 

 

 

 

 

 

 

 

 

930

 

 

 

 

Asset-backed bonds

 

 

797

 

 

 

(3

)

 

 

 

 

 

 

 

 

797

 

 

 

(3

)

Mortgage/Agency-backed bonds

 

 

2,594

 

 

 

(6

)

 

 

136

 

 

 

(2

)

 

 

2,730

 

 

 

(8

)

U.S. government bonds

 

 

4,070

 

 

 

(9

)

 

 

 

 

 

 

 

 

4,070

 

 

 

(9

)

Marketable equity securities

 

 

371

 

 

 

(1

)

 

 

 

 

 

 

 

 

371

 

 

 

(1

)

Total

 

$

8,965

 

 

$

(19

)

 

$

136

 

 

$

(2

)

 

$

9,101

 

 

$

(21

)

 The following table presents the breakdown of debt securities and other investments with unrealized losses as of December 31, 2018:

 

 

 

Continuous Unrealized

Loss Position for Less

than 12 Months

 

 

Continuous Unrealized

Loss Position for 12

Months or Greater

 

 

Total

 

(In thousands)

 

Fair Value

 

 

Unrealized

Losses

 

 

Fair Value

 

 

Unrealized

Losses

 

 

Fair Value

 

 

Unrealized

Losses

 

Corporate bonds

 

$

11,129

 

 

$

(60

)

 

$

3,608

 

 

$

(52

)

 

$

14,737

 

 

$

(112

)

Municipal fixed-rate bonds

 

 

 

 

 

 

 

 

1,136

 

 

 

(26

)

 

 

1,136

 

 

 

(26

)

Asset-backed bonds

 

 

1,874

 

 

 

(2

)

 

 

1,257

 

 

 

(12

)

 

 

3,131

 

 

 

(14

)

Mortgage/Agency-backed bonds

 

 

1,021

 

 

 

(5

)

 

 

1,918

 

 

 

(39

)

 

 

2,939

 

 

 

(44

)

U.S. government bonds

 

 

6,527

 

 

 

(48

)

 

 

537

 

 

 

(18

)

 

 

7,064

 

 

 

(66

)

Foreign government bonds

 

 

584

 

 

 

(8

)

 

 

 

 

 

 

 

 

584

 

 

 

(8

)

Total

 

$

21,135

 

 

$

(123

)

 

$

8,456

 

 

$

(147

)

 

$

29,591

 

 

$

(270

)

 

Realized and Unrealized Gains and Losses for Marketable Equity Securities

Realized and unrealized gains and losses for our marketable equity securities for the twelve months ended December 31, 2019 were as follows:

 

(In thousands)

 

2019

 

 

2018

 

Realized gains (losses) on equity securities sold

 

$

(96

)

 

$

1,306

 

Unrealized gains (losses) on equity securities held

 

 

11,472

 

 

 

(4,821

)

Total gain (loss) recognized, net

 

$

11,376

 

 

$

(3,515

)

Fair Value Measurements of Cash Equivalents and Investments

We have categorized our cash equivalents and our investments held at fair value into this hierarchy as follows:

 

 

 

Fair Value Measurements as of December 31, 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

 

$

1,309

 

 

$

1,309

 

 

$

 

 

$

 

Available-for-sale debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

9,384

 

 

 

 

 

 

9,384

 

 

 

 

Municipal fixed-rate bonds

 

 

930

 

 

 

 

 

 

930

 

 

 

 

Asset-backed bonds

 

 

6,890

 

 

 

 

 

 

6,890

 

 

 

 

Mortgage/Agency-backed bonds

 

 

6,962

 

 

 

 

 

 

6,962

 

 

 

 

U.S. government bonds

 

 

12,323

 

 

 

12,323

 

 

 

 

 

 

 

Foreign government bonds

 

 

371

 

 

 

 

 

 

371

 

 

 

 

Variable rate demand notes

 

 

800

 

 

 

 

 

 

800

 

 

 

 

Marketable equity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities – various industries

 

 

35,501

 

 

 

35,501

 

 

 

 

 

 

 

Equity in escrow

 

 

298

 

 

 

298

 

 

 

 

 

 

 

Deferred compensation plan assets

 

 

21,698

 

 

 

21,698

 

 

 

 

 

 

 

Other investments

 

 

2,442

 

 

 

2,442

 

 

 

 

 

 

 

Total

 

$

98,908

 

 

$

73,571

 

 

$

25,337

 

 

$

 

 

 

 

Fair Value Measurements as of 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

 

 

$

 

 

$

 

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

 

$

87,625

 

 

$

56,032

 

 

$

31,593

 

 

$

 

v3.19.3.a.u2
Derivative Instruments and Hedging Activities (Tables)
12 Months Ended
Dec. 31, 2019
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Schedule of Change in Fair Values of Derivative Instruments Recorded in Consolidated Statements of Income (Loss)

The change in the fair values of our derivative instruments recorded in the Consolidated Statements of Income (Loss) during the years ended December 31, 2019, 2018 and 2017 were as follows:

 

(In thousands)

 

Income Statement

Location

 

2019

 

 

2018

 

 

2017

 

Derivatives Not Designated as Hedging Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

Other income (expense)

 

$

 

 

$

13

 

 

$

(754

)

Schedule of Change in Derivatives Designated Hedging Instruments Recorded in Other Comprehensive Income and Reclassified to Income, Net of Tax

The change in our derivatives designated as hedging instruments recorded in other comprehensive income and reclassified to income, net of tax, during the twelve months ended December 31, 2019, 2018 and 2017 were as follows:

 

 

 

Location of

 

Amount of  Losses Reclassified

 

 

 

Losses Reclassified

 

from AOCI into Income

 

(In thousands)

 

from AOCI into Income

 

2019

 

 

2018

 

 

2017

 

Derivatives Designated as Hedging Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

Cost of Sales

 

$

 

 

$

 

 

$

(897

)

v3.19.3.a.u2
Inventory (Tables)
12 Months Ended
Dec. 31, 2019
Inventory Disclosure [Abstract]  
Components of Inventory

As of December 31, 2019 and 2018, inventory was comprised of the following:

 

(In thousands)

 

2019

 

 

2018

 

Raw materials

 

$

36,987

 

 

$

45,333

 

Work in process

 

 

1,085

 

 

 

1,638

 

Finished goods

 

 

60,233

 

 

 

52,877

 

Total Inventory, net

 

$

98,305

 

 

$

99,848

 

v3.19.3.a.u2
Property, Plant and Equipment (Tables)
12 Months Ended
Dec. 31, 2019
Property Plant And Equipment [Abstract]  
Property, Plant and Equipment

As of December 31, 2019 and 2018, property, plant and equipment was comprised of the following:

 

(In thousands)

 

2019

 

 

2018

 

Land

 

$

4,575

 

 

$

4,575

 

Building and land improvements

 

 

34,797

 

 

 

34,379

 

Building

 

 

68,157

 

 

 

68,183

 

Furniture and fixtures

 

 

19,959

 

 

 

19,831

 

Computer hardware and software

 

 

74,399

 

 

 

92,071

 

Engineering and other equipment

 

 

130,430

 

 

 

127,060

 

Total Property, Plant and Equipment

 

 

332,317

 

 

 

346,099

 

Less accumulated depreciation

 

 

(258,609

)

 

 

(265,464

)

Total Property, Plant and Equipment, net

 

$

73,708

 

 

$

80,635

 

v3.19.3.a.u2
Leases (Tables)
12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Schedule of Supplemental Balance Sheet Information Related to Operating Leases

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

 

 

 

 

 

December 31,

 

 

January 1,

 

(In thousands)

 

Classification

 

2019

 

 

2019 (1)

 

Assets

 

 

 

 

 

 

 

 

 

 

Right of use lease assets

 

Other assets

 

$

8,452

 

 

$

10,322

 

Total lease asset

 

 

 

$

8,452

 

 

$

10,322

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

Current lease liability

 

Accrued expenses

 

$

2,676

 

 

$

2,948

 

Non-current lease liability

 

Other non-current liabilities

 

 

5,818

 

 

 

7,374

 

Total lease liability

 

 

 

$

8,494

 

 

$

10,322

 

(1)

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

Components of Lease Expense included in Consolidated Statement of Income

The components of lease expense included in the Consolidated Statements of Income for the twelve months ended December 31, 2019 were as follows:

 

 

 

For the Year Ended December 31,

 

(In thousands)

 

2019

 

Research and development expenses

 

$

2,417

 

Selling, general and administrative expenses

 

 

1,400

 

Cost of sales

 

 

64

 

Total operating lease expense

 

$

3,881

 

Schedule of Maturity of Operating Lease Liabilities

As of December 31, 2019, operating lease liabilities included on the Consolidated Balance Sheet by future maturity were as follows:

 

(In thousands)

 

Amount

 

2020

 

$

2,856

 

2021

 

 

2,412

 

2022

 

 

1,705

 

2023

 

 

1,160

 

2024

 

 

482

 

Thereafter

 

 

264

 

Total lease payments

 

 

8,879

 

Less: Interest

 

 

(385

)

Present value of lease liabilities

 

$

8,494

 

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 December 31, 2019

 

 

As of  December 31,

 

 

 

2019

 

Weighted average remaining lease term (years)

 

 

 

 

     Operating leases with USD functional currency

 

 

2.6

 

     Operating leases with Euro functional currency

 

 

4.4

 

Weighted average discount rate

 

 

 

 

     Operating leases with USD functional currency

 

 

4.02

%

     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:

 

 

As of  December 31,

 

(In thousands)

 

2019

 

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

 

 

 

 

     Cash used in operating activities related to operating leases

 

$

3,439

 

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

 

$

11,615

 

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

 

 

December 31,

 

 

December 31,

 

(In thousands)

 

2019

 

 

2018

 

Current minimum lease payments receivable(1)

 

$

1,201

 

 

$

11,339

 

Non-current minimum lease payments receivable(2)

 

 

889

 

 

 

1,670

 

Total minimum lease payments receivable

 

 

2,090

 

 

 

13,009

 

Less: Current unearned revenue(1)

 

 

365

 

 

 

631

 

Less: Non-current unearned revenue(2)

 

 

163

 

 

 

473

 

Net investment in sales-type leases

 

$

1,562

 

 

$

11,905

 

 

 

(1)

Included in other receivables on the Consolidated Balance Sheet.

 

(2)

Included in other assets on the Consolidated Balance Sheet.

Schedule of Components of Sales-type Lease Gross Profit and Interest and Dividend Income Included in 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 Consolidated Statements of Income for the twelve months ended December 31, 2019 were as follows:

(In thousands)

 

For the Year Ended December 31, 2019

 

Sales - Network Solutions

 

$

1,723

 

Cost of sales - Network Solutions

 

 

675

 

Gross profit

 

$

1,048

 

 

 

 

 

 

Interest and dividend income

 

$

357

 

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

As of December 31, 2019 future minimum lease payments to be received from sales-type leases were as follows:

(In thousands)

 

Amount

 

2020

 

$

1,201

 

2021

 

 

565

 

2022

 

 

232

 

2023

 

 

86

 

2024

 

 

6

 

Total

 

$

2,090

 

v3.19.3.a.u2
Intangible Assets (Tables)
12 Months Ended
Dec. 31, 2019
Intangible Assets Net Excluding Goodwill [Abstract]  
Summary of Intangible Assets

As of December 31, 2019 and 2018, our intangible assets were comprised of the following:

 

 

 

2019

 

 

2018

 

(In thousands)

 

Gross Value

 

 

Accumulated

Amortization

 

 

Net Value

 

 

Gross Value

 

 

Accumulated

Amortization

 

 

Net Value

 

Customer relationships

 

$

22,356

 

 

$

(7,233

)

 

$

15,123

 

 

$

22,455

 

 

$

(5,380

)

 

$

17,075

 

Developed technology

 

 

10,170

 

 

 

(3,379

)

 

 

6,791

 

 

 

12,801

 

 

 

(4,867

)

 

 

7,934

 

Licensed technology

 

 

5,900

 

 

 

(1,174

)

 

 

4,726

 

 

 

5,900

 

 

 

(520

)

 

 

5,380

 

Supplier relationships

 

 

2,800

 

 

 

(2,508

)

 

 

292

 

 

 

2,800

 

 

 

(1,108

)

 

 

1,692

 

Intellectual property

 

 

 

 

 

 

 

 

 

 

 

930

 

 

 

(930

)

 

 

 

Licensing agreements

 

 

560

 

 

 

(79

)

 

 

481

 

 

 

560

 

 

 

(5

)

 

 

555

 

Patents

 

 

500

 

 

 

(226

)

 

 

274

 

 

 

500

 

 

 

(157

)

 

 

343

 

Trade names

 

 

310

 

 

 

(176

)

 

 

134

 

 

 

310

 

 

 

(106

)

 

 

204

 

Non-compete

 

 

 

 

 

 

 

 

 

 

 

200

 

 

 

(200

)

 

 

 

Total

 

$

42,596

 

 

$

(14,775

)

 

$

27,821

 

 

$

46,456

 

 

$

(13,273

)

 

$

33,183

 

Estimated Future Amortization Expense Related to Intangible Assets

As of December 31, 2019, the estimated future amortization expense of intangible assets is as follows:

 

(In thousands)

 

Amount

 

2020

 

$

4,444

 

2021

 

 

4,095

 

2022

 

 

3,471

 

2023

 

 

3,320

 

2024

 

 

3,226

 

Thereafter

 

 

9,265

 

Total

 

$

27,821

 

v3.19.3.a.u2
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Summary of Components of Expense (Benefit) for Income Taxes

A summary of the components of the expense (benefit) for income taxes for the years ended December 31, 2019, 2018 and 2017 is as follows:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

Current

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

(518

)

 

$

(8,001

)

 

$

466

 

State

 

 

(1,065

)

 

 

(476

)

 

 

(150

)

International

 

 

(282

)

 

 

11,705

 

 

 

6,458

 

Total Current

 

 

(1,865

)

 

 

3,228

 

 

 

6,774

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

24,801

 

 

 

(14,448

)

 

 

8,024

 

State

 

 

5,815

 

 

 

(3,390

)

 

 

1,882

 

International

 

 

(546

)

 

 

581

 

 

 

4,167

 

Total Deferred

 

 

30,070

 

 

 

(17,257

)

 

 

14,073

 

Total Income Tax Expense (Benefit)

 

$

28,205

 

 

$

(14,029

)

 

$

20,847

 

 

Effective Income Tax Rate Differs from Federal Statutory Rate

Our effective income tax rate differs from the federal statutory rate due to the following:

 

 

 

2019

 

 

2018

 

 

2017

 

Tax provision computed at the federal statutory rate

 

 

21.00

%

 

 

21.00

%

 

 

35.00

%

State income tax provision, net of federal benefit

 

 

6.97

 

 

 

14.53

 

 

 

2.17

 

Federal research credits

 

 

15.53

 

 

 

14.23

 

 

 

(11.88

)

Foreign taxes

 

 

2.83

 

 

 

(11.45

)

 

 

(2.27

)

Tax-exempt income

 

 

0.49

 

 

 

0.45

 

 

 

(0.75

)

State tax incentives

 

 

3.85

 

 

 

3.15

 

 

 

(2.71

)

Change in valuation allowance

 

 

(172.82

)

 

 

 

 

 

 

Foreign tax credits

 

 

16.69

 

 

 

 

 

 

 

Stock-based compensation

 

 

(6.01

)

 

 

(2.87

)

 

 

1.43

 

Domestic production activity deduction

 

 

 

 

 

 

 

 

(1.13

)

Bargain purchase

 

 

 

 

 

8.82

 

 

 

 

Impact of U.S. tax reform

 

 

 

 

 

12.00

 

 

 

26.70

 

Global intangible low-taxed income ("GILTI")

 

 

(1.87

)

 

 

(17.48

)

 

 

 

Other, net

 

 

(0.49

)

 

 

(0.34

)

 

 

0.09

 

Effective Tax Rate

 

 

(113.83

)%

 

 

42.04

%

 

 

46.65

%

 

Income (Loss) Before Expense (Benefit) for Income Taxes

Income (loss) before expense (benefit) for income taxes for the years ended December 31, 2019, 2018 and 2017 is as follows:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

U.S. entities

 

$

(29,829

)

 

$

(74,131

)

 

$

26,552

 

International entities

 

 

5,052

 

 

 

40,760

 

 

 

18,135

 

Total

 

$

(24,777

)

 

$

(33,371

)

 

$

44,687

 

 

Components of Deferred Income Taxes Assets and Liabilities

Deferred income taxes on the Consolidated Balance Sheets result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The principal components of our current and non-current deferred taxes were as follows:

 

(In thousands)

 

2019

 

 

2018

 

Deferred tax assets

 

 

 

 

 

 

 

 

Inventory

 

$

7,144

 

 

$

6,609

 

Accrued expenses

 

 

2,330

 

 

 

2,850

 

Investments

 

 

 

 

 

1,122

 

Deferred compensation

 

 

5,660

 

 

 

4,779

 

Stock-based compensation

 

 

2,451

 

 

 

3,069

 

Uncertain tax positions related to state taxes and related interest

 

 

241

 

 

 

326

 

Pensions

 

 

7,074

 

 

 

5,538

 

Foreign losses

 

 

2,925

 

 

 

3,097

 

State losses and credit carry-forwards

 

 

3,995

 

 

 

8,164

 

Federal loss and research carry-forwards

 

 

12,171

 

 

 

17,495

 

Lease liabilities

 

 

2,496

 

 

 

 

Capitalized research and development expenditures

 

 

22,230

 

 

 

 

Valuation allowance

 

 

(48,616

)

 

 

(5,816

)

Total Deferred Tax Assets

 

 

20,101

 

 

 

47,233

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

(2,815

)

 

 

(3,515

)

Intellectual property

 

 

(5,337

)

 

 

(6,531

)

Right of use lease assets

 

 

(2,496

)

 

 

 

Investments

 

 

(1,892

)

 

 

 

Total Deferred Tax Liabilities

 

 

(12,540

)

 

 

(10,046

)

Net Deferred Tax Assets

 

$

7,561

 

 

$

37,187

 

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

 

 

 

December 31, 2019

 

(In thousands)

 

Deferred Tax Assets

 

 

Valuation Allowance

 

 

Deferred Tax Assets, net

 

Domestic

 

$

46,266

 

 

$

(46,266

)

 

$

 

International

 

 

9,911

 

 

 

(2,350

)

 

 

7,561

 

Total

 

$

56,177

 

 

$

(48,616

)

 

$

7,561

 

Change in Unrecognized Income Tax Benefits

The change in the unrecognized income tax benefits for the years ended December 31, 2019, 2018 and 2017 is reconciled below:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

Balance at beginning of period

 

$

1,868

 

 

$

2,366

 

 

$

2,226

 

Increases for tax position related to:

 

 

 

 

 

 

 

 

 

 

 

 

Prior years

 

 

 

 

 

3

 

 

 

465

 

Current year

 

 

161

 

 

 

254

 

 

 

285

 

Decreases for tax positions related to:

 

 

 

 

 

 

 

 

 

 

 

 

Prior years

 

 

(71

)

 

 

 

 

 

(14

)

Expiration of applicable statute of limitations

 

 

(471

)

 

 

(755

)

 

 

(596

)

Balance at end of period

 

$

1,487

 

 

$

1,868

 

 

$

2,366

 

 

v3.19.3.a.u2
Employee Benefit Plans (Tables)
12 Months Ended
Dec. 31, 2019
Compensation And Retirement Disclosure [Abstract]  
Schedule of Pension Benefit Plan Obligations and Funded Status

The pension benefit plan obligations and funded status as of December 31, 2019 and 2018, were as follows:

 

(In thousands)

 

2019

 

 

2018

 

Change in projected benefit obligation:

 

 

 

 

 

 

 

 

Projected benefit obligation at beginning of period

 

$

37,245

 

 

$

34,893

 

Service cost

 

 

1,471

 

 

 

1,193

 

Interest cost

 

 

634

 

 

 

727

 

Actuarial loss - experience

 

 

453

 

 

 

38

 

Actuarial loss - assumptions

 

 

5,091

 

 

 

2,139

 

Benefit payments

 

 

(166

)

 

 

(138

)

Effects of foreign currency exchange rate changes

 

 

(826

)

 

 

(1,607

)

Projected benefit obligation at end of period

 

 

43,902

 

 

 

37,245

 

Change in plan assets:

 

 

 

 

 

 

 

 

Fair value of plan assets at beginning of period

 

 

24,159

 

 

 

26,624

 

Actual gain (loss) on plan assets

 

 

4,392

 

 

 

(2,024

)

Contributions

 

 

 

 

 

688

 

Effects of foreign currency exchange rate changes

 

 

(535

)

 

 

(1,129

)

Fair value of plan assets at end of period

 

 

28,016

 

 

 

24,159

 

Unfunded status at end of period

 

$

(15,886

)

 

$

(13,086

)

Summary of Net Amounts Recognized Balance Sheet for the Unfunded Pension Liability

The net amounts recognized in the balance sheet for the unfunded pension liability as of December 31, 2019 and 2018 were as follows:

 

(In thousands)

 

2019

 

 

2018

 

Current liability

 

$

 

 

$

 

Pension liability

 

 

15,886

 

 

 

13,086

 

Total

 

$

15,886

 

 

$

13,086

 

Components of Net Periodic Pension Cost and Amounts Recognized Other Comprehensive Income (Loss)

The components of net periodic pension cost, other than the service cost component, are included in other income (expense), net in the Consolidated Statements of Income (Loss). The components of net periodic pension cost and amounts recognized in other comprehensive income (loss) for the years ended December 31, 2019, 2018 and 2017 were as follows:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

Net periodic benefit cost:

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

$

1,471

 

 

$

1,193

 

 

$

1,260

 

Interest cost

 

 

634

 

 

 

727

 

 

 

607

 

Expected return on plan assets

 

 

(1,392

)

 

 

(1,548

)

 

 

(1,267

)

Amortization of actuarial losses

 

 

795

 

 

 

247

 

 

 

309

 

Net periodic benefit cost

 

 

1,508

 

 

 

619

 

 

 

909

 

Other changes in plan assets and benefit obligations

   recognized in other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Net actuarial (gain) loss

 

 

2,488

 

 

 

5,638

 

 

 

(654

)

Amortization of actuarial losses

 

 

(771

)

 

 

(196

)

 

 

(406

)

Amount recognized in other comprehensive income (loss)

 

 

1,717

 

 

 

5,442

 

 

 

(1,060

)

Total recognized in net periodic benefit cost and other

   comprehensive income (loss)

 

$

3,225

 

 

$

6,061

 

 

$

(151

)

Accumulated Other Comprehensive Income (Loss)

The amounts recognized in accumulated other comprehensive income (loss) as of December 31, 2019 and 2018 were as follows:

 

(In thousands)

 

2019

 

 

2018

 

Net actuarial loss

 

$

(12,973

)

 

$

(11,256

)

Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost

The weighted-average assumptions that were used to determine the net periodic benefit cost for the years ended December 31, 2019, 2018 and 2017 were as follows:

 

 

 

2019

 

 

2018

 

 

2017

 

Discount rate

 

 

1.75

%

 

 

2.13

%

 

 

1.90

%

Rate of compensation increase

 

 

2.00

%

 

 

2.00

%

 

 

2.00

%

Expected long-term rates of return

 

 

5.90

%

 

 

5.90

%

 

 

5.90

%

Weighted-Average Assumptions Used to Determine Benefit Obligation

 

The weighted-average assumptions that were used to determine the benefit obligation as of December 31, 2019 and 2018:

 

 

 

2019

 

 

2018

 

Discount rate

 

 

1.00

%

 

 

1.75

%

Rate of compensation increase

 

 

2.00

%

 

 

2.00

%

Schedule of Pension Benefit Payments Expected Future Service The following pension benefit payments, which reflect expected future service, as appropriate, are expected to be paid to participants:

 

(In thousands)

 

 

 

 

2020

 

$

515

 

2021

 

 

582

 

2022

 

 

619

 

2023

 

 

706

 

2024

 

 

789

 

Thereafter

 

 

4,872

 

Total

 

$

8,083

 

 

Schedule of Cash Equivalents and Investments Held at Fair Value

We have categorized our cash equivalents and our investments held at fair value into this hierarchy as follows:

 

 

 

Fair Value Measurements at December 31, 2019 Using

 

(In thousands)

 

Fair Value

 

 

Quoted Prices

in Active

Markets for

Identical Assets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

Cash and cash equivalents

 

$

691

 

 

$

691

 

 

$

 

 

$

 

Available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government bonds

 

 

6,645

 

 

 

6,645

 

 

 

 

 

 

 

Corporate bonds

 

 

5,514

 

 

 

5,514

 

 

 

 

 

 

 

Emerging markets bonds

 

 

531

 

 

 

531

 

 

 

 

 

 

 

Equity funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global equity

 

 

11,071

 

 

 

11,071

 

 

 

 

 

 

 

Emerging markets

 

 

956

 

 

 

956

 

 

 

 

 

 

 

Balanced fund

 

 

863

 

 

 

863

 

 

 

 

 

 

 

Large cap value

 

 

312

 

 

 

312

 

 

 

 

 

 

 

Global real estate fund

 

 

902

 

 

 

902

 

 

 

 

 

 

 

Managed futures fund

 

 

531

 

 

 

531

 

 

 

 

 

 

 

Available-for-sale securities

 

 

27,325

 

 

 

27,325

 

 

 

 

 

 

 

Total

 

$

28,016

 

 

$

28,016

 

 

$

 

 

$

 

 

 

 

Fair Value Measurements at December 31, 2018 Using

 

(In thousands)

 

Fair Value

 

 

Quoted Prices

in Active

Markets for

Identical Assets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

Cash and cash equivalents

 

$

1,010

 

 

$

1,010

 

 

$

 

 

$

 

Available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government bonds

 

 

6,268

 

 

 

6,268

 

 

 

 

 

 

 

Corporate bonds

 

 

4,840

 

 

 

4,840

 

 

 

 

 

 

 

Emerging markets bonds

 

 

443

 

 

 

443

 

 

 

 

 

 

 

Equity funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global equity

 

 

7,743

 

 

 

7,743

 

 

 

 

 

 

 

Emerging markets

 

 

1,188

 

 

 

1,188

 

 

 

 

 

 

 

Balanced fund

 

 

815

 

 

 

815

 

 

 

 

 

 

 

Large cap value

 

 

262

 

 

 

262

 

 

 

 

 

 

 

Global real estate fund

 

 

926

 

 

 

926

 

 

 

 

 

 

 

Managed futures fund

 

 

664

 

 

 

664

 

 

 

 

 

 

 

Available-for-sale securities

 

 

23,149

 

 

 

23,149

 

 

 

 

 

 

 

Total

 

$

24,159

 

 

$

24,159

 

 

$

 

 

$

 

Fair Value of Assets Held by Trust and Amounts Payable to Plan Participants The fair value of the assets held by the Trust and the amounts payable to the plan participants as of December 31, 2019 and 2018 were as follows:

 

(In thousands)

 

2019

 

 

2018

 

Fair Value of Plan Assets

 

 

 

 

 

 

 

 

Long-term investments

 

$

21,698

 

 

$

18,256

 

Total Fair Value of Plan Assets

 

$

21,698

 

 

$

18,256

 

Amounts Payable to Plan Participants

 

 

 

 

 

 

 

 

Deferred compensation liability

 

$

21,698

 

 

$

18,256

 

Total Amounts Payable to Plan Participants

 

$

21,698

 

 

$

18,256

 

v3.19.3.a.u2
Segment Information and Major Customers (Tables)
12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Sales and Gross Profit of Reportable Segments

The following table presents information about the reported sales and gross profit of our reportable segments for each of the years ended December 31, 2019, 2018 and 2017. Asset information by reportable segment is not reported, since we do not produce such information internally.

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

 

 

Sales

 

 

Gross Profit

 

 

Sales

 

 

Gross Profit

 

 

Sales

 

 

Gross Profit

 

Network Solutions

 

$

455,226

 

 

$

191,549

 

 

$

458,232

 

 

$

179,303

 

 

$

540,396

 

 

$

260,833

 

Services & Support

 

 

74,835

 

 

 

27,618

 

 

 

71,045

 

 

 

24,262

 

 

 

126,504

 

 

 

42,802

 

Total

 

$

530,061

 

 

$

219,167

 

 

$

529,277

 

 

$

203,565

 

 

$

666,900

 

 

$

303,635

 

 

Disaggregate of Revenue by Major Source

The following table disaggregates our revenue by major source for the year ended December 31, 2019:

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

289,980

 

 

$

58,894

 

 

$

348,874

 

Subscriber Solutions & Experience(1)

 

 

144,651

 

 

 

8,269

 

 

 

152,920

 

Traditional & Other Products

 

 

20,595

 

 

 

7,672

 

 

 

28,267

 

Total

 

$

455,226

 

 

$

74,835

 

 

$

530,061

 

 

(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 major source for the year ended December 31, 2018:

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

301,801

 

 

$

57,069

 

 

$

358,870

 

Subscriber Solutions & Experience(1)

 

 

129,067

 

 

 

5,393

 

 

 

134,460

 

Traditional & Other Products

 

 

27,364

 

 

 

8,583

 

 

 

35,947

 

Total

 

$

458,232

 

 

$

71,045

 

 

$

529,277

 

 

 

(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 tables disaggregates our revenue by major source for the years ended December 31, 2019, 2018 and 2017:

 

 

 

2019

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

289,980

 

 

$

58,894

 

 

$

348,874

 

Subscriber Solutions & Experience(1)

 

 

144,651

 

 

 

8,269

 

 

 

152,920

 

Traditional & Other Products

 

 

20,595

 

 

 

7,672

 

 

 

28,267

 

Total

 

$

455,226

 

 

$

74,835

 

 

$

530,061

 

 

 

 

2018

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

301,801

 

 

$

57,069

 

 

$

358,870

 

Subscriber Solutions & Experience(1)

 

 

129,067

 

 

 

5,393

 

 

 

134,460

 

Traditional & Other Products

 

 

27,364

 

 

 

8,583

 

 

 

35,947

 

Total

 

$

458,232

 

 

$

71,045

 

 

$

529,277

 

 

 

 

2017

 

(In thousands)

 

Network Solutions

 

 

Services & Support

 

 

Total

 

Access & Aggregation

 

$

361,955

 

 

$

111,989

 

 

$

473,944

 

Subscriber Solutions & Experience(1)

 

 

132,294

 

 

 

6,162

 

 

 

138,456

 

Traditional & Other Products

 

 

46,147

 

 

 

8,353

 

 

 

54,500

 

Total

 

$

540,396

 

 

$

126,504

 

 

$

666,900

 

 

 

(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.

Sales Information by Geographic Area

The following table presents sales information by geographic area for the years ended December 31, 2019, 2018 and 2017:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

United States

 

$

300,853

 

 

$

288,843

 

 

$

508,178

 

Mexico

 

 

90,795

 

 

 

12,186

 

 

 

2,246

 

Germany

 

 

78,062

 

 

 

167,251

 

 

 

119,502

 

Other international

 

 

60,351

 

 

 

60,997

 

 

 

36,974

 

Total

 

$

530,061

 

 

$

529,277

 

 

$

666,900

 

v3.19.3.a.u2
Earnings (Loss) per Share (Tables)
12 Months Ended
Dec. 31, 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 years ended December 31, 2019, 2018 and 2017 is as follows:

 

(In thousands, except for per share amounts)

 

2019

 

 

2018

 

 

2017

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

(52,982

)

 

$

(19,342

)

 

$

23,840

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares – basic

 

 

47,836

 

 

 

47,880

 

 

 

48,153

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

 

 

 

 

 

 

 

406

 

Restricted stock and restricted stock units

 

 

 

 

 

 

 

 

140

 

Weighted average number of shares – diluted

 

 

47,836

 

 

 

47,880

 

 

 

48,699

 

Earnings (loss)  per share – basic

 

$

(1.11

)

 

$

(0.40

)

 

$

0.50

 

Earnings (loss) per share – diluted

 

$

(1.11

)

 

$

(0.40

)

 

$

0.49

 

v3.19.3.a.u2
Restructuring (Tables)
12 Months Ended
Dec. 31, 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 Consolidated Balance Sheets as of December 31, 2019 and 2018, is as follows:

 

(In thousands)

 

2019

 

 

2018

 

Balance at beginning of period

 

$

185

 

 

$

205

 

Plus: Amounts charged to cost and expense

 

 

6,014

 

 

 

7,261

 

Less: Amounts paid

 

 

(4,631

)

 

 

(7,281

)

Balance at end of period

 

$

1,568

 

 

$

185

 

Schedule of Components of Restructuring Expense

The components of restructuring expense in the Consolidated Statements of Income are for the years ended December 31, 2019, 2018 and 2017:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

Selling, general and administrative expenses

 

$

2,360

 

 

$

2,655

 

 

$

152

 

Research and development expenses

 

 

2,869

 

 

 

1,831

 

 

 

122

 

Cost of sales

 

 

785

 

 

 

2,775

 

 

 

 

Total restructuring expenses

 

$

6,014

 

 

$

7,261

 

 

$

274

 

The following table represents the components of restructuring expense by geographic area for the years ended December 31, 2019, 2018 and 2017:

 

(In thousands)

 

2019

 

 

2018

 

 

2017

 

United States

 

$

3,336

 

 

$

7,120

 

 

$

274

 

International

 

 

2,678

 

 

 

141

 

 

 

 

Total restructuring expenses

 

$

6,014

 

 

$

7,261

 

 

$

274

 

v3.19.3.a.u2
Summarized Quarterly Financial Data (Unaudited) (Tables)
12 Months Ended
Dec. 31, 2019
Quarterly Financial Information Disclosure [Abstract]  
Quarterly Operating Results

The following table presents unaudited quarterly operating results for each of our last eight fiscal quarters. This information has been prepared on a basis consistent with our audited financial statements and includes all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation of the data.

Unaudited Quarterly Operating Results

 

 

 

Three Months Ended

 

(In thousands, except for per share amounts)

 

March 31, 2019

 

 

June 30, 2019

 

 

September 30, 2019

 

 

December 31, 2019

 

Net sales

 

$

143,791

 

 

$

156,391

 

 

$

114,092

 

 

$

115,787

 

Gross profit

 

$

60,612

 

 

$

65,015

 

 

$

46,331

 

 

$

47,209

 

Operating income (loss)

 

$

(6,167

)

 

$

562

 

 

$

(20,288

)

 

$

(14,070

)

Net income (loss)

 

$

770

 

 

$

3,995

 

 

$

(46,123

)

 

$

(11,624

)

Earnings (loss) per common share - basic

 

$

0.02

 

 

$

0.08

 

 

$

(0.96

)

 

$

(0.25

)

Earnings (loss) per common share - diluted

 

$

0.02

 

(1)

$

0.08

 

(1)

$

(0.96

)

 

$

(0.25

)

 

 

 

Three Months Ended

 

(In thousands, except for per share amounts)

 

March 31, 2018

 

 

June 30, 2018

 

 

September 30, 2018

 

 

December 31, 2018

 

Net sales

 

$

120,806

 

 

$

128,048

 

 

$

140,335

 

 

$

140,088

 

Gross profit

 

$

39,733

 

 

$

49,996

 

 

$

58,448

 

 

$

55,388

 

Operating income (loss)

 

$

(26,647

)

 

$

(12,813

)

 

$

(2,179

)

 

$

(3,783

)

Net income (loss)

 

$

(10,814

)

 

$

(7,670

)

 

$

7,589

 

 

$

(8,447

)

Earnings (loss) per common share - basic

 

$

(0.22

)

 

$

(0.16

)

 

$

0.16

 

 

$

(0.18

)

Earnings (loss) per common share - diluted

 

$

(0.22

)

 

$

(0.16

)

 

$

0.16

 

(1)

$

(0.18

)

 

 

(1)

Assumes exercise of dilutive securities calculated under the treasury stock method.

v3.19.3.a.u2
Nature of Business - Additional Information (Detail)
3 Months Ended 6 Months Ended 12 Months Ended
Jan. 01, 2019
USD ($)
Jun. 30, 2019
USD ($)
Jun. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
Customer
IncentivePlan
Dec. 31, 2018
USD ($)
Customer
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Summary Of Significant Accounting Policy [Line Items]              
Cash, uninsured amount       $ 71,600,000      
Bonds payable, carrying amount       24,600,000      
Bonds payable, fair value       $ 24,600,000      
Number of single customer comprising more than 10% of account receivable | Customer       4 2    
Allowance for doubtful accounts       $ 38,000 $ 128,000    
Asset impairments       3,872,000 0 $ 0  
Impairment charges recognized on goodwill       $ 0 0 0  
Period of assurance-based warranty for product defects       90 days to five years      
Liability for warranty obligations       $ 8,394,000 8,623,000 9,724,000 $ 8,548,000
Pension liability       $ 15,886,000 13,086,000    
Number of stock incentive plans | IncentivePlan       2      
Stock-based compensation expense       $ 6,962,000 7,155,000 7,433,000  
Total unrecognized compensation cost related to non-vested stock options, PSUs, RSUs and restricted stock       $ 17,200,000      
Recognition period of unvested compensation expense       3 years      
Research and development costs       $ 126,200,000 124,547,000 $ 130,666,000  
Operating lease, right-of-use asset $ 10,322,000     8,452,000      
Operating lease, right-of-use liability 10,322,000     8,494,000      
Prepaid Expenses and Other Current Assets [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Current deferred costs related to prepaid and other assets       1,600,000 2,400,000    
Other Assets [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Non-current deferred costs related to other assets       $ 100,000 $ 800,000    
ASU 2018-02 [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Reclassification of tax effects related to adoption ASU $ 400,000            
Minimum [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Amortization, estimated useful lives       2 years      
Lessor sales type lease arrangement terms for network equipments       18 months      
Maintenance service periods       1 month      
Maintenance contract period       1 month      
Maximum [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Amortization, estimated useful lives       14 years      
Lessor sales type lease arrangement terms for network equipments       5 years      
Maintenance service periods       5 years      
Maintenance contract period       5 years      
Maximum [Member] | Accounting Policy under Topic 605 [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Invoiced sales tax as percentage on total revenues.       1.00%      
Building and Land Improvements [Member] | Minimum [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Property, plant and equipment, estimated useful lives       5 years      
Building and Land Improvements [Member] | Maximum [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Property, plant and equipment, estimated useful lives       39 years      
Office Machinery and Equipment [Member] | Minimum [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Property, plant and equipment, estimated useful lives       3 years      
Office Machinery and Equipment [Member] | Maximum [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Property, plant and equipment, estimated useful lives       7 years      
Engineering Machinery and Equipment [Member] | Minimum [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Property, plant and equipment, estimated useful lives       3 years      
Engineering Machinery and Equipment [Member] | Maximum [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Property, plant and equipment, estimated useful lives       7 years      
Computer Software [Member] | Minimum [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Property, plant and equipment, estimated useful lives       3 years      
Computer Software [Member] | Maximum [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Property, plant and equipment, estimated useful lives       5 years      
Credit Concentration Risk [Member] | Accounts Receivable [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Percentage of accounts receivable accounted by each customers       53.20% 36.90%    
Out-of-Period Adjustment [Member]              
Summary Of Significant Accounting Policy [Line Items]              
Increase (decrease) in cost of goods sold   $ 800,000 $ (200,000)        
Increase (decrease) in excess and obsolete inventory reserve   $ 800,000 $ (200,000)        
v3.19.3.a.u2
Nature of Business - Summary of Warranty Expense and Write-Off Activity (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Product Warranties Disclosures [Abstract]      
Balance at beginning of period $ 8,623 $ 9,724 $ 8,548
Plus: Amounts charged to cost and expenses 4,569 7,392 6,951
Less: Deductions (4,798) (8,493) (5,775)
Balance at end of period $ 8,394 $ 8,623 $ 9,724
v3.19.3.a.u2
Nature of Business - Changes in Accumulated Other Comprehensive Income (Loss), Net of Tax by Components Of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Beginning Balance $ 446,279 $ 497,911 $ 479,517
Other comprehensive income (loss) before reclassifications (2,624) (7,441) 10,851
Amounts reclassified to retained earnings 385 (3,220)  
Amounts reclassified from accumulated other comprehensive loss 238 (460) (1,958)
Ending Balance 380,426 446,279 497,911
ASU 2018-02 [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Amounts reclassified to retained earnings 385    
Ending Balance 385    
Unrealized Gains (Losses) on Available-for-Sale Securities [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Beginning Balance (563) 2,567 404
Other comprehensive income (loss) before reclassifications 573 685 5,020
Amounts reclassified to retained earnings   (3,220)  
Amounts reclassified from accumulated other comprehensive loss (294) (595) (2,857)
Ending Balance (284) (563) 2,567
Unrealized Gains (Losses) on Cash Flow Hedges [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Other comprehensive income (loss) before reclassifications     (619)
Amounts reclassified from accumulated other comprehensive loss     619
Defined Benefit Plan Adjustments [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Beginning Balance (8,041) (4,286) (5,017)
Other comprehensive income (loss) before reclassifications (1,717) (3,890) 451
Amounts reclassified from accumulated other comprehensive loss 532 135 280
Ending Balance (9,226) (8,041) (4,286)
Foreign Currency Adjustments [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Beginning Balance (5,812) (1,576) (7,575)
Other comprehensive income (loss) before reclassifications (1,480) (4,236) 5,999
Ending Balance (7,292) (5,812) (1,576)
Accumulated Other Comprehensive Income [Member]      
Accumulated Other Comprehensive Income (Loss) [Line Items]      
Beginning Balance (14,416) (3,295) (12,188)
Ending Balance $ (16,417) $ (14,416) $ (3,295)
v3.19.3.a.u2
Nature of Business - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Cost of sales                 $ (310,894) $ (325,712) $ (363,265)
Defined benefit plan adjustments – actuarial losses                 5,091 2,139  
Income (Loss) Before Income Taxes                 (24,777) (33,371) 44,687
Tax benefit (expense)                 (28,205) 14,029 (20,847)
Total reclassifications for the period, net of tax $ (11,624) $ (46,123) $ 3,995 $ 770 $ (8,447) $ 7,589 $ (7,670) $ (10,814) (52,982) (19,342) 23,840
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                 (771) (196) (406)
Income (Loss) Before Income Taxes                 (374) 608 3,381
Tax benefit (expense)                 136 (148) (1,423)
Total reclassifications for the period, net of tax                 (238) 460 1,958
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 (loss)                 $ 397 $ 804 4,864
Impairment Expense [Member] | Reclassification Out of Accumulated Other Comprehensive Income (Loss) [Member]                      
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Net investment gain (loss)                     (180)
Net Losses on Derivatives Designated as Hedging Instruments [Member] | Reclassification Out of Accumulated Other Comprehensive Income (Loss) [Member]                      
Reclassification Adjustment Out of Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Cost of sales                     $ (897)
v3.19.3.a.u2
Nature of Business - Tax Effects Related to the Change in Each Component of Other Comprehensive Income (Loss) (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Equity [Abstract]      
Unrealized gain (loss) on available-for-sale securities, Before-Tax Amount $ 774 $ 926 $ 8,230
Unrealized gain (loss) on available-for-sale securities, Tax (Expense) Benefit (201) (241) (3,210)
Unrealized gain (loss) on available-for-sale securities, Net-of-Tax Amount 573 685 5,020
Reclassification adjustment for amounts related to available-for-sale investments included in net income (loss), Before-Tax Amount (397) (804) (4,684)
Reclassification adjustment for amounts related to available-for-sale investments included in net income (loss), Tax (Expense) Benefit 103 209 1,827
Reclassification adjustment for amounts related to available-for-sale investments included in net income (loss), Net-of-Tax Amount (294) (595) (2,857)
Reclassification adjustment for amounts reclassed to retained earnings related of the adoption of ASU 2018-02/2016-01, Before-Tax Amount   (4,351)  
Reclassification adjustment for amounts reclassed to retained earnings related of the adoption of ASU 2018-02/2016-01, Tax (Expense) Benefit   1,131  
Reclassification adjustment for amounts reclassed to retained earnings related of the adoption of ASU 2018-02/2016-01, Net-of-Tax Amount   (3,220)  
Unrealized gains (losses) on cash flow hedges, Before-Tax Amount     (897)
Unrealized gains (losses) on cash flow hedges, Tax (Expense) Benefit     278
Unrealized gains (losses) on cash flow hedges, Net-of-Tax Amount     (619)
Reclassification adjustment for amounts related to cash flow hedges included in net income, Before-Tax Amount     897
Reclassification adjustment for amounts related to cash flow hedges included in net income, Tax (Expense) Benefit     (278)
Reclassification adjustment for amounts related to cash flow hedges included in net income, Net-of-Tax Amount     619
Defined benefit plan adjustments, Before-Tax Amount (2,488) (5,638) 654
Defined benefit plan adjustments, Tax (Expense) Benefit 771 1,748 (203)
Defined benefit plan adjustments, Net-of-Tax Amount (1,717) (3,890) 451
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net income (loss), Before-Tax Amount 771 196 406
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net income (loss), Tax (Expense) Benefit (239) (61) (126)
Reclassification adjustment for amounts related to defined benefit plan adjustments included in net income (loss), Net-of-Tax Amount 532 135 280
Foreign currency translation adjustment, Before-Tax Amount (1,480) (4,236) 5,999
Foreign currency translation adjustment, Net-of-Tax Amount (1,480) (4,236) 5,999
Total Other Comprehensive Income (Loss), Before-Tax Amount (2,820) (13,907) 10,605
Total Other Comprehensive Income (Loss), Tax (Expense) Benefit 434 2,786 (1,712)
Other Comprehensive Income (Loss), net of tax $ (2,386) $ (11,121) $ 8,893
v3.19.3.a.u2
Business Combinations - Additional Information (Detail) - USD ($)
3 Months Ended 12 Months Ended
Nov. 30, 2018
Mar. 19, 2018
Jun. 30, 2019
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
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]              
Business acquisition, agreement month and year         2018-11    
Business acquisition, description         In November 2018, we acquired SmartRG, Inc., a provider of carrier-class, open-source connected home platforms and cloud services for broadband service providers 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. These revenues are 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            
Business combination escrow fund released         $ 1,300,000    
Goodwill 3,500,000            
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 $ 1,500,000            
Sumitomo [Member]              
Business Acquisition [Line Items]              
Business acquisition, description         On March 19, 2018, we acquired Sumitomo Electric Lightwave Corp.’s (SEL) North American EPON business and entered into a technology license and OEM supply agreement with Sumitomo Electric Industries, Ltd. (SEI).    
Date of acquisition         Mar. 19, 2018    
Bargain purchase gain net of income taxes   $ 11,322,000   $ 11,300,000      
Smart RG and Sumitomo [Member]              
Business Acquisition [Line Items]              
Acquisition and integration related expenses and amortization of acquired intangibles         $ 5,000,000.0 $ 2,900,000 $ 0
v3.19.3.a.u2
Business Combinations - Final Allocation of the Purchase Price to the Estimated Fair Value of the Assets Acquired and Liabilities Assumed (Detail) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Nov. 30, 2018
Mar. 19, 2018
Mar. 31, 2018
Dec. 31, 2018
Dec. 31, 2019
Assets          
Goodwill       $ 7,106 $ 6,968
Liabilities          
Gain on bargain purchase of a business, net of tax       $ (11,322)  
Sumitomo [Member]          
Assets          
Tangible assets acquired   $ 1,006      
Intangible assets   22,100      
Total assets acquired   23,106      
Liabilities          
Liabilities assumed   (3,978)      
Total liabilities assumed   (3,978)      
Total net assets   19,128      
Gain on bargain purchase of a business, net of tax   (11,322) $ (11,300)    
Total purchase price   $ 7,806      
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 net assets 16,029        
Total purchase price $ 16,029        
v3.19.3.a.u2
Business Combinations - Summary of Actual Revenue and Net Loss Included in Consolidated Statements of Income (Detail) - Smart RG and Sumitomo [Member]
$ in Thousands
9 Months Ended
Dec. 31, 2018
USD ($)
Business Acquisition [Line Items]  
Revenue $ 9,186
Net loss $ (1,297)
v3.19.3.a.u2
Business Combinations - Details of the Acquired Intangible Assets (Detail) - Smart RG and Sumitomo [Member]
$ in Thousands
Nov. 30, 2018
USD ($)
Business Acquisition [Line Items]  
Total, Value $ 32,060
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 $ 15,190
Customer Relationships [Member] | Minimum [Member]  
Business Acquisition [Line Items]  
Life (in years) 3 years
Customer Relationships [Member] | Maximum [Member]  
Business Acquisition [Line Items]  
Life (in years) 12 years
Licensed Technology [Member]  
Business Acquisition [Line Items]  
Total, Value $ 5,900
Life (in years) 9 years
Supplier Relationship [Member]  
Business Acquisition [Line Items]  
Total, Value $ 2,800
Life (in years) 2 years
Licensing Agreements [Member]  
Business Acquisition [Line Items]  
Total, Value $ 560
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
Trade Name [Member]  
Business Acquisition [Line Items]  
Total, Value $ 210
Life (in years) 3 years
v3.19.3.a.u2
Business Combinations - Summary of Unaudited Supplemental Pro Forma Information (Detail) - Smart RG and Sumitomo [Member] - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Business Acquisition [Line Items]    
Pro forma revenue $ 559,050 $ 702,573
Pro forma net loss $ (33,862) $ 33,206
v3.19.3.a.u2
Revenue - Disaggregate of Revenue by Major Source (Detail) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Disaggregation Of Revenue [Line Items]                      
Revenue $ 115,787 $ 114,092 $ 156,391 $ 143,791 $ 140,088 $ 140,335 $ 128,048 $ 120,806 $ 530,061 $ 529,277 $ 666,900
Access & Aggregation [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 348,874 358,870  
Subscriber Solutions & Experience [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 152,920 134,460 138,456
Traditional & Other Products [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 28,267 35,947 54,500
Network Solutions [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 455,226 458,232 540,396
Network Solutions [Member] | Access & Aggregation [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 289,980 301,801  
Network Solutions [Member] | Subscriber Solutions & Experience [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 144,651 129,067 132,294
Network Solutions [Member] | Traditional & Other Products [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 20,595 27,364 46,147
Services & Support [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 74,835 71,045 126,504
Services & Support [Member] | Access & Aggregation [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 58,894 57,069  
Services & Support [Member] | Subscriber Solutions & Experience [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 8,269 5,393 6,162
Services & Support [Member] | Traditional & Other Products [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 $ 7,672 $ 8,583 $ 8,353
v3.19.3.a.u2
Revenue - Additional Information (Detail) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Revenue [Line Items]    
Remaining performance obligations $ 0  
Recognized revenue 12,700,000  
Other Than Maintenance Services    
Revenue [Line Items]    
Remaining performance obligations $ 13,600,000 $ 13,300,000
v3.19.3.a.u2
Revenue - Additional Information (Detail1) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01
Dec. 31, 2019
Revenue [Line Items]  
Remaining performance obligations, percentage 64.00%
Remaining performance obligations, period 12 months
v3.19.3.a.u2
Revenue - Information about Receivables, Contract Assets, and Unearned Revenue from Contracts with Customers (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Revenue From Contract With Customer [Abstract]    
Accounts receivable $ 90,531 $ 99,385
Contract assets 2,812 3,766
Unearned revenue 11,963 17,940
Non-current unearned revenue $ 6,012 $ 5,296
v3.19.3.a.u2
Stock-Based Compensation (Stock Incentive Program Descriptions) - Additional Information (Detail) - shares
12 Months Ended
Dec. 31, 2019
Jan. 31, 2015
2006 Employee Stock Incentive Plan [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Number of shares of common stock authorized 13,000,000.0  
Vesting period 4 years  
Contractual term 10 years  
2015 Employee Stock Incentive Plan [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Number of shares of common stock authorized   7,700,000
Vesting period 4 years  
Contractual term 10 years  
Multiplier used when issuing PSUs, restricted stock and RSUs   2.5
2010 Directors Stock Plan [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Number of shares of common stock authorized 500,000  
Contractual term 10 years  
Expiration date of options 2019  
Minimum [Member] | 2006 Employee Stock Incentive Plan [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Expiration date of options 2020  
Minimum [Member] | 2015 Employee Stock Incentive Plan [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Expiration date of options 2025  
Maximum [Member] | 2006 Employee Stock Incentive Plan [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Expiration date of options 2024  
Maximum [Member] | 2015 Employee Stock Incentive Plan [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Expiration date of options 2026  
v3.19.3.a.u2
Stock-Based Compensation - Stock-Based Compensation Expense Related to Stock Options, PSUs, RSUs and Restricted Stock (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Total stock-based compensation expense $ 6,962 $ 7,155 $ 7,433
Tax benefit for expense associated with non-qualified options, PSUs, RSUs and restricted stock (1,659) (1,432) (1,699)
Total stock-based compensation expense, net of tax 5,303 5,723 5,734
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 369 418 379
Selling, General and Administrative Expense [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Total stock-based compensation expense 3,889 3,989 4,063
Research and Development Expense [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Total stock-based compensation expense 2,704 2,748 2,991
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 $ 6,593 $ 6,737 $ 7,054
v3.19.3.a.u2
Stock-Based Compensation (PSUs, RSUs and Restricted Stock) - Additional Information (Detail) - USD ($)
shares in Thousands, $ in Millions
3 Months Ended 12 Months Ended
Mar. 31, 2017
Dec. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
One-time PSU shares grant approved by board of directors   897
Recognition period of unvested compensation expense   3 years
Performance Stock Units (PSUs) [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Vesting period   3 years
One-time PSU shares grant approved by board of directors 500  
Performance Stock Units (PSUs) [Member] | Minimum [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Percentage of performance stock units granted   0.00%
Performance Stock Units (PSUs) [Member] | Maximum [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Percentage of performance stock units granted   150.00%
Restricted Stock Units (RSUs) [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Vesting period   4 years
Restricted Stock [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Vesting period   1 year
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   $ 17.2
Recognition period of unvested compensation expense   2 years 10 months 24 days
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   1,000
v3.19.3.a.u2
Stock-Based Compensation - Summary of PSUs, RSUs and Restricted Stock Outstanding (Detail)
shares in Thousands
12 Months Ended
Dec. 31, 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 897
Number of Shares, PSUs, RSUs and restricted stock vested | shares (368)
Number of Shares, PSUs, RSUs and restricted stock forfeited | shares (208)
Number of Shares, Unvested PSUs, RSUs and restricted stock outstanding, ending balance | shares 1,891
Weighted Average Grant Date Fair Value, Unvested PSUs, RSUs and restricted stock outstanding, Beginning Balance | $ / shares $ 18.52
Weighted Average Grant Date Fair Value, PSUs, RSUs and restricted stock granted | $ / shares 9.63
Weighted Average Grant Date Fair Value, PSUs, RSUs and restricted stock vested | $ / shares 17.23
Weighted Average Grant Date Fair Value, PSUs, RSUs and restricted stock forfeited | $ / shares 18.24
Weighted Average Grant Date Fair Value, Unvested PSUs, RSUs and restricted stock outstanding, Ending Balance | $ / shares $ 14.58
v3.19.3.a.u2
Stock-Based Compensation - Summary of Weighted-Average Assumptions and Value of Options Granted (Detail) - Market-Based PSUs [Member] - $ / shares
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Estimated fair value per share   $ 16.59 $ 24.17
Expected volatility     27.03%
Risk-free interest rate     1.78%
Expected dividend yield     1.74%
Minimum [Member]      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Estimated fair value per share $ 9.53    
Expected volatility 32.70% 27.98%  
Risk-free interest rate 1.60% 2.11%  
Expected dividend yield 2.30% 1.83%  
Maximum [Member]      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Estimated fair value per share $ 18.05    
Expected volatility 38.90% 31.58%  
Risk-free interest rate 2.46% 2.99%  
Expected dividend yield 4.09% 2.49%  
v3.19.3.a.u2
Stock-Based Compensation - Summary of Stock Options Outstanding (Detail) - USD ($)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]      
Number of Options, Stock options outstanding, Beginning Balance 4,382,000    
Number of Options, Stock options granted 0 0 0
Number of Options, Stock options exercised (34,000)    
Number of Options, Stock options forfeited (32,000)    
Number of Options, Stock options expired (744,000)    
Number of Options, Stock options outstanding, Ending Balance 3,572,000 4,382,000  
Number of Options, Stock options exercisable 3,570,000    
Weighted Average Exercise Price, Stock options outstanding, Beginning Balance $ 22.91    
Weighted Average Exercise Price, Stock options exercised 15.53    
Weighted Average Exercise Price, Stock options forfeited 15.56    
Weighted Average Exercise Price, Stock options expired 23.72    
Weighted Average Exercise Price, Stock options outstanding, Ending Balance 22.88 $ 22.91  
Weighted Average Exercise Price, Stock options exercisable $ 22.89    
Weighted Avg. Remaining Contractual Life in Years, Stock options outstanding 3 years 4 months 24 days 4 years 1 month 6 days  
Weighted Avg. Remaining Contractual Life in Years, Stock options exercisable 3 years 4 months 24 days    
Aggregate Intrinsic Value, Stock options outstanding $ 0    
v3.19.3.a.u2
Stock-Based Compensation (Stock Options) - Additional Information (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Recognition period of unvested compensation expense 3 years    
Aggregate intrinsic value based on fair market value $ 0    
Total pre-tax intrinsic value of options exercised 100 $ 200 $ 3,400
Fair value of options fully vested $ 900 $ 2,500 $ 4,300
Number of Stock options, granted 0 0 0
Unvested Stock Options [Member]      
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]      
Unrecognized compensation expense related to non-vested stock options $ 11    
Recognition period of unvested compensation expense 1 year    
v3.19.3.a.u2
Stock-Based Compensation - Stock Options Outstanding (Detail) - $ / shares
shares in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]    
Options Outstanding at 12/31/19 3,572 4,382
Options Exercisable at 12/31/19 3,570  
Weighted Average Exercise Price, Options exercisable $ 22.89  
$14.88 - 18.96 [Member]    
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]    
Lower Range Limit 14.88  
Upper Range Limit $ 18.96  
Options Outstanding at 12/31/19 1,135  
Weighted Avg. Remaining Contractual Life In Years, Options Outstanding 4 years 10 months 24 days  
Weighted Average Exercise Price, Options Outstanding $ 15.89  
Options Exercisable at 12/31/19 1,133  
Weighted Average Exercise Price, Options exercisable $ 15.89  
$18.97 - 23.45 [Member]    
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]    
Lower Range Limit 18.97  
Upper Range Limit $ 23.45  
Options Outstanding at 12/31/19 685  
Weighted Avg. Remaining Contractual Life In Years, Options Outstanding 4 years 8 months 12 days  
Weighted Average Exercise Price, Options Outstanding $ 19.10  
Options Exercisable at 12/31/19 685  
Weighted Average Exercise Price, Options exercisable $ 19.10  
$23.46 - 30.35 [Member]    
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]    
Lower Range Limit 23.46  
Upper Range Limit $ 30.35  
Options Outstanding at 12/31/19 686  
Weighted Avg. Remaining Contractual Life In Years, Options Outstanding 3 years 8 months 1 day  
Weighted Average Exercise Price, Options Outstanding $ 24.17  
Options Exercisable at 12/31/19 686  
Weighted Average Exercise Price, Options exercisable $ 24.17  
$30.36 - 41.92 [Member]    
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]    
Lower Range Limit 30.36  
Upper Range Limit $ 41.92  
Options Outstanding at 12/31/19 1,066  
Weighted Avg. Remaining Contractual Life In Years, Options Outstanding 1 year 3 months 14 days  
Weighted Average Exercise Price, Options Outstanding $ 31.93  
Options Exercisable at 12/31/19 1,066  
Weighted Average Exercise Price, Options exercisable $ 31.93  
v3.19.3.a.u2
Investments - Debt Securities and Other Investments, Recorded at Fair Value (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost $ 37,528 $ 41,042
Gross Unrealized Gains 153 27
Gross Unrealized Losses (21) (270)
Fair Value 37,660 40,799
Corporate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 9,304 20,777
Gross Unrealized Gains 80 19
Gross Unrealized Losses   (112)
Fair Value 9,384 20,684
Municipal Fixed-Rate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 930 1,339
Gross Unrealized Losses   (26)
Fair Value 930 1,313
Asset-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 6,867 5,230
Gross Unrealized Gains 26 5
Gross Unrealized Losses (3) (14)
Fair Value 6,890 5,221
Mortgage/Agency-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 6,944 3,833
Gross Unrealized Gains 26 2
Gross Unrealized Losses (8) (44)
Fair Value 6,962 3,791
U.S. Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 12,311 9,271
Gross Unrealized Gains 21 1
Gross Unrealized Losses (9) (66)
Fair Value 12,323 9,206
Variable Rate Demand Notes [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 800  
Fair Value 800  
Foreign Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Amortized Cost 372 592
Gross Unrealized Losses (1) (8)
Fair Value $ 371 $ 584
v3.19.3.a.u2
Investments - Contractual Maturities of Debt Securities (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale debt securities, Fair Value/Carrying Value $ 37,660 $ 40,799
Corporate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Less than one year 4,005  
One to two years 4,120  
Two to three years 967  
Three to five years 292  
Available-for-sale debt securities, Fair Value/Carrying Value 9,384 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]    
Less than one year 396  
One to two years 760  
Two to three years 1,632  
Three to five years 2,092  
Five to ten years 1,719  
More than ten years 291  
Available-for-sale debt securities, Fair Value/Carrying Value 6,890 5,221
Mortgage/Agency-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
One to two years 213  
Two to three years 1,424  
Three to five years 494  
Five to ten years 792  
More than ten years 4,039  
Available-for-sale debt securities, Fair Value/Carrying Value 6,962 3,791
U.S. Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
One to two years 1,347  
Two to three years 9,344  
Three to five years 1,632  
Available-for-sale debt securities, Fair Value/Carrying Value 12,323 9,206
Foreign Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Three to five years 371  
Available-for-sale debt securities, Fair Value/Carrying Value $ 371 $ 584
v3.19.3.a.u2
Investments - Gross Realized Gains and Losses on Sale of Debt Securities (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Investments Debt And Equity Securities [Abstract]      
Gross realized gains on debt securities $ 108 $ 57 $ 169
Gross realized losses on debt securities (50) (592) (226)
Total gain (loss) recognized, net $ 58 $ (535) $ (57)
v3.19.3.a.u2
Investments - Additional Information (Detail) - USD ($)
$ in Millions
3 Months Ended 12 Months Ended
Mar. 31, 2019
Dec. 31, 2019
Dec. 31, 2018
Jan. 01, 2018
Schedule of Investments [Line Items]        
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
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.a.u2
Investments - Breakdown of Investments with Unrealized Losses (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]    
Continuous Unrealized Loss Position for Less than 12 Months, Fair Value $ 8,965 $ 21,135
Continuous Unrealized Loss Position for Less than 12 Months, Unrealized Losses (19) (123)
Continuous Unrealized Loss Position for 12 Months or Greater, Fair Value 136 8,456
Continuous Unrealized Loss Position for 12 Months or Greater, Unrealized Losses (2) (147)
Total Fair Value 9,101 29,591
Total Unrealized Losses (21) (270)
Corporate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Continuous Unrealized Loss Position for Less than 12 Months, Fair Value 203 11,129
Continuous Unrealized Loss Position for Less than 12 Months, Unrealized Losses   (60)
Continuous Unrealized Loss Position for 12 Months or Greater, Fair Value   3,608
Continuous Unrealized Loss Position for 12 Months or Greater, Unrealized Losses   (52)
Total Fair Value 203 14,737
Total Unrealized Losses   (112)
Municipal Fixed-Rate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Continuous Unrealized Loss Position for Less than 12 Months, Fair Value 930  
Continuous Unrealized Loss Position for 12 Months or Greater, Fair Value   1,136
Continuous Unrealized Loss Position for 12 Months or Greater, Unrealized Losses   (26)
Total Fair Value 930 1,136
Total Unrealized Losses   (26)
Asset-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Continuous Unrealized Loss Position for Less than 12 Months, Fair Value 797 1,874
Continuous Unrealized Loss Position for Less than 12 Months, Unrealized Losses (3) (2)
Continuous Unrealized Loss Position for 12 Months or Greater, Fair Value   1,257
Continuous Unrealized Loss Position for 12 Months or Greater, Unrealized Losses   (12)
Total Fair Value 797 3,131
Total Unrealized Losses (3) (14)
Mortgage/Agency-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Continuous Unrealized Loss Position for Less than 12 Months, Fair Value 2,594 1,021
Continuous Unrealized Loss Position for Less than 12 Months, Unrealized Losses (6) (5)
Continuous Unrealized Loss Position for 12 Months or Greater, Fair Value 136 1,918
Continuous Unrealized Loss Position for 12 Months or Greater, Unrealized Losses (2) (39)
Total Fair Value 2,730 2,939
Total Unrealized Losses (8) (44)
U.S. Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Continuous Unrealized Loss Position for Less than 12 Months, Fair Value 4,070 6,527
Continuous Unrealized Loss Position for Less than 12 Months, Unrealized Losses (9) (48)
Continuous Unrealized Loss Position for 12 Months or Greater, Fair Value   537
Continuous Unrealized Loss Position for 12 Months or Greater, Unrealized Losses   (18)
Total Fair Value 4,070 7,064
Total Unrealized Losses (9) (66)
Marketable Equity Securities [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Continuous Unrealized Loss Position for Less than 12 Months, Fair Value 371  
Continuous Unrealized Loss Position for Less than 12 Months, Unrealized Losses (1)  
Total Fair Value 371  
Total Unrealized Losses $ (1)  
Foreign Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Continuous Unrealized Loss Position for Less than 12 Months, Fair Value   584
Continuous Unrealized Loss Position for Less than 12 Months, Unrealized Losses   (8)
Total Fair Value   584
Total Unrealized Losses   $ (8)
v3.19.3.a.u2
Investments - Realized and Unrealized Gains and Losses for Marketable Equity Securities (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Investments Debt And Equity Securities [Abstract]    
Realized gains (losses) on equity securities sold $ (96) $ 1,306
Unrealized gains (losses) on equity securities held 11,472 (4,821)
Total gain (loss) recognized, net $ 11,376 $ (3,515)
v3.19.3.a.u2
Investments - Fair Value Measurements of Cash Equivalents and Investments (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities $ 37,660 $ 40,799
Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Total 98,908 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]    
Total 73,571 56,032
Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Total 25,337 31,593
Money Market Funds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Cash equivalents 1,309 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 1,309 1,554
Corporate Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 9,384 20,684
Corporate Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 9,384 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 9,384 20,684
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 6,890 5,221
Asset-Backed Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 6,890 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 6,890 5,221
Mortgage/Agency-Backed Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 6,962 3,791
Mortgage/Agency-Backed Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 6,962 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 6,962 3,791
U.S. Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 12,323 9,206
U.S. Government Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 12,323 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 12,323 9,206
Foreign Government Bonds [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 371 584
Foreign Government Bonds [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 371 584
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 371 584
Variable Rate Demand Notes [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 800  
Variable Rate Demand Notes [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 800  
Variable Rate Demand Notes [Member] | Fair Value, Measurements [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Available-for-sale securities 800  
Marketable Equity Securities - Various Industries [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Marketable equity securities 35,501 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 35,501 26,763
Equity in Escrow [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Marketable equity securities 298 253
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 298 253
Other Investments [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Other investments 2,442  
Other Investments [Member] | Fair Value, Measurements [Member] | Quoted Prices in Active Market for Identical Assets (Level 1) [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Other investments 2,442  
Deferred Compensation Plan Assets [Member] | Fair Value, Measurements [Member]    
Schedule of Available-for-sale Securities [Line Items]    
Marketable equity securities 21,698 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 $ 21,698 $ 18,256
v3.19.3.a.u2
Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Foreign Exchange Forward Contracts [Member]    
Derivative [Line Items]    
Derivative instruments, amount $ 0 $ 0
v3.19.3.a.u2
Derivative Instruments and Hedging Activities - Schedule of Change in Fair Values of Derivative Instruments Recorded in Consolidated Statements of Income (Loss) (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Foreign Exchange Contracts [Member] | Other Income (Expense) [Member]    
Derivatives Not Designated as Hedging Instruments:    
Derivative instrument, gain or loss $ 13 $ (754)
v3.19.3.a.u2
Derivative Instruments and Hedging Activities - Schedule of Change in Derivatives Designated Hedging Instruments Recorded in Other Comprehensive Income and Reclassified to Income, Net of Tax (Detail)
$ in Thousands
12 Months Ended
Dec. 31, 2017
USD ($)
Foreign Exchange Contracts [Member] | Derivatives Designated as Hedging Instruments [Member] | Cost of Sales [Member]  
Derivative [Line Items]  
Amount of Losses Reclassified from AOCI into Income $ (897)
v3.19.3.a.u2
Inventory - Components of Inventory (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Inventory Disclosure [Abstract]    
Raw materials $ 36,987 $ 45,333
Work in process 1,085 1,638
Finished goods 60,233 52,877
Total Inventory, net $ 98,305 $ 99,848
v3.19.3.a.u2
Inventory - Additional Information (Detail) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Inventory Disclosure [Abstract]    
Inventory valuation reserves $ 34.1 $ 30.0
v3.19.3.a.u2
Property, Plant and Equipment - Property, Plant and Equipment (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Property Plant And Equipment [Abstract]    
Land $ 4,575 $ 4,575
Building and land improvements 34,797 34,379
Building 68,157 68,183
Furniture and fixtures 19,959 19,831
Computer hardware and software 74,399 92,071
Engineering and other equipment 130,430 127,060
Total Property, Plant and Equipment 332,317 346,099
Less accumulated depreciation (258,609) (265,464)
Total Property, Plant and Equipment, net $ 73,708 $ 80,635
v3.19.3.a.u2
Property, Plant and Equipment - Additional Information (Detail) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Property Plant And Equipment [Abstract]      
Depreciation $ 12,500,000 $ 12,700,000 $ 12,800,000
Asset impairments $ 3,872,000 $ 0 $ 0
v3.19.3.a.u2
Leases - Additional Information (Detail) - USD ($)
12 Months Ended
Dec. 31, 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 $ 400,000  
Variable lease cost 900,000  
Future operating lease payments 8,879,000 $ 700,000
Allowance for credit losses for our investment in sales type leases $ 0 $ 0
Minimum [Member]    
Lessor and Lessee Lease Description [Line Items]    
Operating lease, remaining lease terms 1 month  
Operating lease, options to terminate term 3 months  
Lessor sales type lease arrangement terms for network equipments 18 months  
Maximum [Member]    
Lessor and Lessee Lease Description [Line Items]    
Operating lease, remaining lease terms 6 years  
Operating lease, renewal term 9 years  
Lessor sales type lease arrangement terms for network equipments 5 years  
v3.19.3.a.u2
Leases - Schedule of Supplemental Balance Sheet Information Related to Operating Leases (Details) - USD ($)
$ in Thousands
Dec. 31, 2019
Jan. 01, 2019
ASSETS    
Right of use lease assets $ 8,452 $ 10,322
Operating lease, right-of-use asset, statement of financial position [extensible list] us-gaap:OtherAssetsNoncurrent us-gaap:OtherAssetsNoncurrent
Liabilities    
Current lease liability $ 2,676 $ 2,948
Non-current lease liability $ 5,818 $ 7,374
Operating lease, liability, current, statement of financial position [extensible list] us-gaap:AccruedLiabilitiesCurrent us-gaap:AccruedLiabilitiesCurrent
Operating lease, liability, noncurrent, statement of financial position [extensible list] us-gaap:OtherLiabilitiesNoncurrent us-gaap:OtherLiabilitiesNoncurrent
Total lease liability $ 8,494 $ 10,322
v3.19.3.a.u2
Leases - Components of Lease Expense included in Consolidated Statement of Income (Detail)
$ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
Lessor Lease Description [Line Items]  
Total operating lease expense $ 3,881
Research and Development Expenses [Member]  
Lessor Lease Description [Line Items]  
Total operating lease expense 2,417
Selling, General and Administrative Expenses [Member]  
Lessor Lease Description [Line Items]  
Total operating lease expense 1,400
Cost of Sales [Member]  
Lessor Lease Description [Line Items]  
Total operating lease expense $ 64
v3.19.3.a.u2
Leases - Schedule of Maturity of Operating Lease Liabilities (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Jan. 01, 2019
Dec. 31, 2018
Operating Lease Liabilities Payments Due [Abstract]      
2020 $ 2,856    
2021 2,412    
2022 1,705    
2023 1,160    
2024 482    
Thereafter 264    
Total lease payments 8,879   $ 700
Less: Interest (385)    
Present value of lease liabilities $ 8,494 $ 10,322  
v3.19.3.a.u2
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.a.u2
Leases - Schedule of Weighted Average Remaining Lease Terms and Weighted Average Discount Rates (Detail)
Dec. 31, 2019
USD  
Weighted average remaining lease term (years)  
Operating leases with functional currency 2 years 7 months 6 days
Weighted average discount rate  
Operating leases with functional currency 4.02%
Euro  
Weighted average remaining lease term (years)  
Operating leases with functional currency 4 years 4 months 24 days
Weighted average discount rate  
Operating leases with functional currency 1.84%
v3.19.3.a.u2
Leases - Schedule of Supplemental Cash Flow Information Related to Operating Leases (Detail)
$ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
Cash paid for amounts included in the measurement of operating lease assets / liabilities  
Cash used in operating activities related to operating leases $ 3,439
Right-of-use assets obtained in exchange for lease obligations $ 11,615
v3.19.3.a.u2
Leases - Components of Net Investment in Sales-Type Leases (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Sales Type Leases Net Investment In Leases [Abstract]    
Current minimum lease payments receivable $ 1,201 $ 11,339
Non-current minimum lease payments receivable 889 1,670
Total minimum lease payments receivable 2,090 13,009
Less: Current unearned revenue 365 631
Less: Non-current unearned revenue 163 473
Net investment in sales-type leases $ 1,562 $ 11,905
v3.19.3.a.u2
Leases - Schedule of Components of Sales-type Lease Gross Profit and Interest and Dividend Income Included in Consolidated Statements of Income (Detail)
$ in Thousands
12 Months Ended
Dec. 31, 2019
USD ($)
Sales [Member] | Network Solutions [Member]  
Lessor Lease Description [Line Items]  
Sales type leases $ 1,723
Stock-based Compensation Expense Included in Cost of Sales [Member] | Network Solutions [Member]  
Lessor Lease Description [Line Items]  
Sales type leases 675
Gross Profit [Member]  
Lessor Lease Description [Line Items]  
Sales type leases 1,048
Interest and Dividend Income [Member]  
Lessor Lease Description [Line Items]  
Sales type leases $ 357
v3.19.3.a.u2
Leases - Schedule of Future Minimum Lease Payments to be Received from Sales-Type Leases (Detail)
$ in Thousands
Dec. 31, 2019
USD ($)
Sales Type And Direct Financing Leases Lease Receivable Fiscal Year Maturity [Abstract]  
2020 $ 1,201
2021 565
2022 232
2023 86
2024 6
Total $ 2,090
v3.19.3.a.u2
Goodwill - Additional Information (Detail) - USD ($)
$ in Millions
12 Months Ended
Nov. 30, 2018
Dec. 31, 2019
Dec. 31, 2018
Goodwill [Line Items]      
Goodwill   $ 7.0 $ 7.1
Network Solutions [Member]      
Goodwill [Line Items]      
Goodwill   6.6 6.7
Services & Support [Member]      
Goodwill [Line Items]      
Goodwill   0.4 $ 0.4
SmartRG Inc [Member]      
Goodwill [Line Items]      
Goodwill $ 3.5    
Goodwill, reduced amount relates to acquisition   $ 0.1  
v3.19.3.a.u2
Intangible Assets - Summary of Intangible Assets (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Finite Lived Intangible Assets [Line Items]    
Gross Value $ 42,596 $ 46,456
Accumulated Amortization (14,775) (13,273)
Net Value 27,821 33,183
Customer Relationships [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value 22,356 22,455
Accumulated Amortization (7,233) (5,380)
Net Value 15,123 17,075
Developed Technology [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value 10,170 12,801
Accumulated Amortization (3,379) (4,867)
Net Value 6,791 7,934
Licensed Technology [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value 5,900 5,900
Accumulated Amortization (1,174) (520)
Net Value 4,726 5,380
Supplier Relationships [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value 2,800 2,800
Accumulated Amortization (2,508) (1,108)
Net Value 292 1,692
Intellectual Property [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value   930
Accumulated Amortization   (930)
Licensing Agreements [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value 560 560
Accumulated Amortization (79) (5)
Net Value 481 555
Patent [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value 500 500
Accumulated Amortization (226) (157)
Net Value 274 343
Trade Names [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value 310 310
Accumulated Amortization (176) (106)
Net Value $ 134 204
Non-compete [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross Value   200
Accumulated Amortization   $ (200)
v3.19.3.a.u2
Intangible Assets - Additional Information (Detail) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Intangible Assets Net Excluding Goodwill [Abstract]      
Amortization expense $ 5.3 $ 2.3 $ 2.9
v3.19.3.a.u2
Intangible Assets - Estimated Future Amortization Expense Related to Intangible Assets (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Finite Lived Intangible Assets Future Amortization Expense [Abstract]    
2020 $ 4,444  
2021 4,095  
2022 3,471  
2023 3,320  
2024 3,226  
Thereafter 9,265  
Net Value $ 27,821 $ 33,183
v3.19.3.a.u2
Alabama State Industrial Development Authority Financing and Economic Incentives - Additional Information (Detail) - USD ($)
$ in Thousands
12 Months Ended
Jan. 02, 2020
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2008
Jan. 13, 1995
Debt Instrument [Line Items]            
Proceeds from state industrial development authority issued taxable bonds loaned to ADTRAN   $ 24,600        
Estimated fair value of bond   24,600        
Total realized economic incentives   1,200 $ 1,400 $ 1,500    
Payments on long-term debt   1,000 $ 1,100 $ 1,100    
Taxable Revenue Bonds [Member]            
Debt Instrument [Line Items]            
Proceeds from state industrial development authority issued taxable bonds loaned to ADTRAN   $ 24,600     $ 50,000 $ 20,000
Repayment of bond $ 24,600          
Percentage of interest on bond   2.00%        
Maturity date of bond     Jan. 01, 2020      
Estimated fair value of bond   $ 24,600        
Certificate of deposit   $ 25,600        
v3.19.3.a.u2
Income Taxes - Summary of Components of Expense (Benefit) for Income Taxes (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Current      
Federal $ (518) $ (8,001) $ 466
State (1,065) (476) (150)
International (282) 11,705 6,458
Total Current (1,865) 3,228 6,774
Deferred      
Federal 24,801 (14,448) 8,024
State 5,815 (3,390) 1,882
International (546) 581 4,167
Total Deferred 30,070 (17,257) 14,073
Total Income Tax Expense (Benefit) $ 28,205 $ (14,029) $ 20,847
v3.19.3.a.u2
Income Taxes - Effective Income Tax Rate Differs from Federal Statutory Rate (Detail)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Tax Disclosure [Abstract]      
Tax provision computed at the federal statutory rate 21.00% 21.00% 35.00%
State income tax provision, net of federal benefit 6.97% 14.53% 2.17%
Federal research credits 15.53% 14.23% (11.88%)
Foreign taxes 2.83% (11.45%) (2.27%)
Tax-exempt income 0.49% 0.45% (0.75%)
State tax incentives 3.85% 3.15% (2.71%)
Change in valuation allowance (172.82%)    
Foreign tax credits 16.69%    
Stock-based compensation (6.01%) (2.87%) 1.43%
Domestic production activity deduction     (1.13%)
Bargain purchase   8.82%  
Impact of U.S. tax reform   12.00% 26.70%
Global intangible low-taxed income ("GILTI") (1.87%) (17.48%)  
Other, net (0.49%) (0.34%) 0.09%
Effective Tax Rate (113.83%) 42.04% 46.65%
v3.19.3.a.u2
Income Taxes - Income (Loss) Before Expense (Benefit) for Income Taxes (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Tax Disclosure [Abstract]      
U.S. entities $ (29,829) $ (74,131) $ 26,552
International entities 5,052 40,760 18,135
Income (Loss) Before Income Taxes $ (24,777) $ (33,371) $ 44,687
v3.19.3.a.u2
Income Taxes - Principal Components of Current and Non-current Deferred Taxes (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Income Tax Disclosure [Abstract]    
Inventory $ 7,144 $ 6,609
Accrued expenses 2,330 2,850
Investments   1,122
Deferred compensation 5,660 4,779
Stock-based compensation 2,451 3,069
Uncertain tax positions related to state taxes and related interest 241 326
Pensions 7,074 5,538
Foreign losses 2,925 3,097
State losses and credit carry-forwards 3,995 8,164
Federal loss and research carry-forwards 12,171 17,495
Lease liabilities 2,496  
Capitalized research and development expenditures 22,230  
Valuation allowance (48,616) (5,816)
Total Deferred Tax Assets 20,101 47,233
Property, plant and equipment (2,815) (3,515)
Intellectual property (5,337) (6,531)
Right of use lease assets (2,496)  
Investments (1,892)  
Total Deferred Tax Liabilities (12,540) (10,046)
Net Deferred Tax Assets $ 7,561 $ 37,187
v3.19.3.a.u2
Income Taxes - Additional Information (Detail) - USD ($)
3 Months Ended 12 Months Ended
Dec. 31, 2017
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Income Tax Disclosure [Line Items]          
Tax cuts and jobs act, incomplete accounting, estimated income tax expense $ 11,900,000        
Tax cuts and jobs act, incomplete accounting, estimated write-down of deferred tax assets 9,200,000        
Tax cuts and jobs act, incomplete accounting, change in tax rate estimate income tax expense related to unrepatriated foreign earnings 2,700,000        
Tax cuts and jobs act, complete accounting, income tax expense (benefit)     $ (4,000,000.0)    
Deferred tax benefit recorded as an adjustment to other comprehensive income   $ 400,000 2,800,000    
Deferred tax assets, gross   56,177,000      
Valuation allowance established against deferred tax assets   48,616,000      
Deferred tax assets, state research and development credits   12,171,000 17,495,000    
Net of deferred tax liabilities   7,561,000 37,187,000    
Foreign and domestic loss carry-forwards, research and development tax credits, unamortized research and development cost and state credit carry-forwards   $ 41,300,000 28,800,000    
Operating loss carry forwards expiration year   2029      
Deferred tax assets   $ 20,101,000 47,233,000    
Cash and cash equivalents   73,773,000 105,504,000    
Short-term investments   33,243,000 3,246,000    
Short-term liquidity amount   107,000,000.0 108,700,000    
Income tax benefit (expense) from stock options exercised adjustment to equity   0 0 $ 0  
Unrecognized tax benefits 2,366,000 1,487,000 1,868,000 2,366,000 $ 2,226,000
Unrecognized tax benefits, effective tax rate 2,200,000 1,400,000 1,700,000 2,200,000  
Accrued interest and penalties $ 800,000 500,000 700,000 $ 800,000  
Foreign Subsidiaries [Member]          
Income Tax Disclosure [Line Items]          
Short-term liquidity amount   $ 52,300,000 $ 87,100,000    
Short-term liquidity, in percentage   48.90% 80.10%    
Operating Losses Expiration Between 2020 and 2039 [Member]          
Income Tax Disclosure [Line Items]          
Deferred tax assets   $ 19,100,000      
Minimum [Member]          
Income Tax Disclosure [Line Items]          
Operating loss carry forwards expiration year   2020      
Maximum [Member]          
Income Tax Disclosure [Line Items]          
Operating loss carry forwards expiration year   2039      
Domestic [Member]          
Income Tax Disclosure [Line Items]          
Deferred tax assets, gross   $ 46,266,000      
Valuation allowance established against deferred tax assets   46,266,000      
Valuation allowance established against deferred tax assets   42,800,000      
State And Foreign Country [Member]          
Income Tax Disclosure [Line Items]          
Deferred tax assets, state research and development credits   $ 5,800,000      
v3.19.3.a.u2
Income Taxes - Summary of Supplemental Balance Sheet Information Related to Deferred Tax Assets (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Operating Loss Carryforwards [Line Items]    
Deferred Tax Assets $ 56,177  
Valuation Allowance (48,616)  
Net Deferred Tax Assets 7,561 $ 37,187
Domestic [Member]    
Operating Loss Carryforwards [Line Items]    
Deferred Tax Assets 46,266  
Valuation Allowance (46,266)  
International [Member]    
Operating Loss Carryforwards [Line Items]    
Deferred Tax Assets 9,911  
Valuation Allowance (2,350)  
Net Deferred Tax Assets $ 7,561  
v3.19.3.a.u2
Income Taxes - Change in Unrecognized Income Tax Benefits (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Income Tax Disclosure [Abstract]      
Balance at beginning of period $ 1,868 $ 2,366 $ 2,226
Increases for tax position related to, Prior years   3 465
Increases for tax position related to, Current year 161 254 285
Decreases for tax positions related to, Prior years (71)   (14)
Expiration of applicable statute of limitations (471) (755) (596)
Balance at end of period $ 1,487 $ 1,868 $ 2,366
v3.19.3.a.u2
Employee Benefit Plans (Pension Benefit Plan) - Schedule of Pension Benefit Plan Obligations and Funded Status (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Change in projected benefit obligation:      
Projected benefit obligation at beginning of period $ 37,245 $ 34,893  
Service cost 1,471 1,193 $ 1,260
Interest cost 634 727 607
Actuarial loss - experience 453 38  
Actuarial loss - assumptions 5,091 2,139  
Benefit payments (166) (138)  
Effects of foreign currency exchange rate changes (826) (1,607)  
Projected benefit obligation at end of period 43,902 37,245 34,893
Change in plan assets:      
Fair value of plan assets at beginning of period 24,159 26,624  
Actual gain (loss) on plan assets 4,392 (2,024)  
Contributions   688  
Effects of foreign currency exchange rate changes (535) (1,129)  
Fair value of plan assets at end of period 28,016 24,159 $ 26,624
Unfunded status at end of period $ (15,886) $ (13,086)  
v3.19.3.a.u2
Employee Benefit Plans (Pension Benefit Plan) - Additional Information (Detail) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Defined Benefit Plan Disclosure [Line Items]    
Accumulated benefit obligation $ 43.9 $ 37.2
Estimated amortization from accumulated other comprehensive income (loss) into net periodic pension cost in 2020 $ 0.8  
Bond Funds [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Percentage of target allocation ranges by asset class 50.00%  
Equity Funds [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Percentage of target allocation ranges by asset class 40.00%  
Cash, Real Estate, and Managed Futures [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Percentage of target allocation ranges by asset class 10.00%  
Minimum [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Threshold for unamortized gain losses 10.00%  
v3.19.3.a.u2
Employee Benefit Plans (Pension Benefit Plan) - Summary of Net Amounts Recognized Balance Sheet for the Unfunded Pension Liability (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Compensation And Retirement Disclosure [Abstract]    
Current liability $ 0 $ 0
Pension liability 15,886 13,086
Total $ 15,886 $ 13,086
v3.19.3.a.u2
Employee Benefit Plans (Pension Benefit Plan) - Components of Net Periodic Pension Cost and Amounts Recognized Other Comprehensive Income (Loss) (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Net periodic benefit cost:      
Service cost $ 1,471 $ 1,193 $ 1,260
Interest cost 634 727 607
Expected return on plan assets (1,392) (1,548) (1,267)
Amortization of actuarial losses 795 247 309
Net periodic benefit cost 1,508 619 909
Other changes in plan assets and benefit obligations recognized in other comprehensive income:      
Net actuarial (gain) loss 2,488 5,638 (654)
Amortization of actuarial losses (771) (196) (406)
Amount recognized in other comprehensive income (loss) 1,717 5,442 (1,060)
Total recognized in net periodic benefit cost and other comprehensive income (loss) $ 3,225 $ 6,061 $ (151)
v3.19.3.a.u2
Employee Benefit Plans (Pension Benefit Plan) - Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Compensation And Retirement Disclosure [Abstract]    
Net actuarial loss $ (12,973) $ (11,256)
v3.19.3.a.u2
Employee Benefit Plans (Pension Benefit Plan) - Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost (Detail)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Compensation And Retirement Disclosure [Abstract]      
Discount rate 1.75% 2.13% 1.90%
Rate of compensation increase 2.00% 2.00% 2.00%
Expected long-term rates of return 5.90% 5.90% 5.90%
v3.19.3.a.u2
Employee Benefit Plans (Pension Benefit Plan) - Weighted-Average Assumptions Used to Determine Benefit Obligation (Detail)
Dec. 31, 2019
Dec. 31, 2018
Compensation And Retirement Disclosure [Abstract]    
Discount rate 1.00% 1.75%
Rate of compensation increase 2.00% 2.00%
v3.19.3.a.u2
Employee Benefit Plans (Pension Benefit Plan) - Schedule of Pension Benefit Payments Expected Future Service (Detail)
$ in Thousands
Dec. 31, 2019
USD ($)
Compensation And Retirement Disclosure [Abstract]  
2020 $ 515
2021 582
2022 619
2023 706
2024 789
Thereafter 4,872
Total $ 8,083
v3.19.3.a.u2
Employee Benefit Plans (Pension Benefit Plan) - Schedule of Cash Equivalents and Investments Held at Fair Value (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets $ 28,016 $ 24,159 $ 26,624
Pension Benefit Plan [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 28,016 24,159  
Pension Benefit Plan [Member] | Cash and Cash Equivalents [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 691 1,010  
Pension Benefit Plan [Member] | Available-For-Sale Securities [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 27,325 23,149  
Pension Benefit Plan [Member] | Government Bonds [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 6,645 6,268  
Pension Benefit Plan [Member] | Corporate Bonds [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 5,514 4,840  
Pension Benefit Plan [Member] | Emerging Markets Bonds [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 531 443  
Pension Benefit Plan [Member] | Global Equity [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 11,071 7,743  
Pension Benefit Plan [Member] | Emerging Markets [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 956 1,188  
Pension Benefit Plan [Member] | Balanced Fund [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 863 815  
Pension Benefit Plan [Member] | Large Cap Value [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 312 262  
Pension Benefit Plan [Member] | Global Real Estate Fund [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 902 926  
Pension Benefit Plan [Member] | Managed Futures Fund [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 531 664  
Pension Benefit Plan [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 28,016 24,159  
Pension Benefit Plan [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Cash and Cash Equivalents [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 691 1,010  
Pension Benefit Plan [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Available-For-Sale Securities [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 27,325 23,149  
Pension Benefit Plan [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Government Bonds [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 6,645 6,268  
Pension Benefit Plan [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Corporate Bonds [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 5,514 4,840  
Pension Benefit Plan [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Emerging Markets Bonds [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 531 443  
Pension Benefit Plan [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Global Equity [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 11,071 7,743  
Pension Benefit Plan [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Emerging Markets [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 956 1,188  
Pension Benefit Plan [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Balanced Fund [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 863 815  
Pension Benefit Plan [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Large Cap Value [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 312 262  
Pension Benefit Plan [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Global Real Estate Fund [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets 902 926  
Pension Benefit Plan [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Managed Futures Fund [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Fair value of plan assets $ 531 $ 664  
v3.19.3.a.u2
Employee Benefit Plans (401(k) Savings Plan) - Additional Information (Detail) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Compensation And Retirement Disclosure [Abstract]      
Criteria of employer to contribute in employee saving plan 100% of an employee’s first 3% of contributions and 50% of their next 2% of contributions    
Percentage of employer match to employee's contribution 100.00%    
Percentage of employer match to employee's contribution 50.00%    
Upper limit of employer match 4.00%    
Maximum statutory compensation under code $ 280,000    
Contribution expense and plan administration costs for savings plan $ 4,400,000 $ 4,400,000 $ 4,600,000
v3.19.3.a.u2
Employee Benefit Plans (Deferred Compensation Plans) - Additional Information (Detail)
$ in Millions
12 Months Ended
Dec. 31, 2019
USD ($)
Compensation_Program
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Compensation And Retirement Disclosure [Abstract]      
Number of deferred compensation programs | Compensation_Program 4    
Maximum percentage of cash compensation allowed to be deferred under the deferred compensation plan 25.00%    
Criteria for benefit distribution six months after termination of employment in a single lump sum payment or annual installments paid over a three or ten-year term based on the participant’s election    
Deferred compensation income (expense) adjustments due to fair value of the trust assets | $ $ 3.6 $ (2.1) $ (2.6)
v3.19.3.a.u2
Employee Benefit Plans (Deferred Compensation Plans) - Fair Value of Assets Held by Trust and Amounts Payable to Plan Participants (Detail) - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Defined Benefit Plan Disclosure [Line Items]    
Long-term Investments $ 21,698 $ 18,256
Amounts Payable to Plan Participants Deferred Compensation Liability 21,698 18,256
Deferred Compensation Plan Assets [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Long-term investments 21,698 18,256
Deferred Compensation Liability [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Amounts Payable to Plan Participants Deferred Compensation Liability $ 21,698 $ 18,256
v3.19.3.a.u2
Employee Benefit Plans (Retiree Medical Coverage) - Additional Information (Detail) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Compensation And Retirement Disclosure [Abstract]    
Maximum number of years medical, dental and prescription drug coverage to spouses of retired former officers 30 years  
Total liability recorded to provide medical, dental and prescription drug coverage $ 0.1 $ 0.1
v3.19.3.a.u2
Segment Information and Major Customers - Additional Information (Detail)
$ in Millions
12 Months Ended
Dec. 31, 2019
USD ($)
Customer
Segment
Category
Dec. 31, 2018
USD ($)
Customer
Dec. 31, 2017
Customer
Segment Reporting Information [Line Items]      
Number of reportable segments | Segment 2    
Number of categories | Category 3    
Number of single customer comprising more than 10% of revenue | Customer 3 2 2
Long-lived assets $ 73.7 $ 80.6  
U.S. [Member]      
Segment Reporting Information [Line Items]      
Long-lived assets 69.9 77.3  
Outside U.S. [Member]      
Segment Reporting Information [Line Items]      
Long-lived assets $ 3.9 $ 3.3  
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Customer 1 [Member]      
Segment Reporting Information [Line Items]      
Concentration risk, percentage 19.00% 27.00% 40.00%
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Customer 2 [Member]      
Segment Reporting Information [Line Items]      
Concentration risk, percentage 17.00% 17.00% 16.00%
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Customer 3 [Member]      
Segment Reporting Information [Line Items]      
Concentration risk, percentage 13.00%    
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | The Five Largest Customers Other Than Those With More Than 10% Of Revenues and Excluding Distributors [Member]      
Segment Reporting Information [Line Items]      
Concentration risk, percentage 15.00% 18.00% 15.00%
v3.19.3.a.u2
Segment Information and Major Customers - Sales and Gross Profit of Reportable Segments (Detail) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Segment Reporting Information [Line Items]                      
Sales $ 115,787 $ 114,092 $ 156,391 $ 143,791 $ 140,088 $ 140,335 $ 128,048 $ 120,806 $ 530,061 $ 529,277 $ 666,900
Gross Profit $ 47,209 $ 46,331 $ 65,015 $ 60,612 $ 55,388 $ 58,448 $ 49,996 $ 39,733 219,167 203,565 303,635
Network Solutions [Member]                      
Segment Reporting Information [Line Items]                      
Sales                 455,226 458,232 540,396
Gross Profit                 191,549 179,303 260,833
Services & Support [Member]                      
Segment Reporting Information [Line Items]                      
Sales                 74,835 71,045 126,504
Gross Profit                 $ 27,618 $ 24,262 $ 42,802
v3.19.3.a.u2
Segment Information and Major Customers - Disaggregation of Revenue by Major Source (Detail) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Disaggregation Of Revenue [Line Items]                      
Revenue $ 115,787 $ 114,092 $ 156,391 $ 143,791 $ 140,088 $ 140,335 $ 128,048 $ 120,806 $ 530,061 $ 529,277 $ 666,900
Network Solutions [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 455,226 458,232 540,396
Services & Support [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 74,835 71,045 126,504
Access & Aggregation [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 348,874 358,870 473,944
Access & Aggregation [Member] | Network Solutions [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 289,980 301,801 361,955
Access & Aggregation [Member] | Services & Support [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 58,894 57,069 111,989
Subscriber Solutions & Experience [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 152,920 134,460 138,456
Subscriber Solutions & Experience [Member] | Network Solutions [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 144,651 129,067 132,294
Subscriber Solutions & Experience [Member] | Services & Support [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 8,269 5,393 6,162
Traditional & Other Products [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 28,267 35,947 54,500
Traditional & Other Products [Member] | Network Solutions [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 20,595 27,364 46,147
Traditional & Other Products [Member] | Services & Support [Member]                      
Disaggregation Of Revenue [Line Items]                      
Revenue                 $ 7,672 $ 8,583 $ 8,353
v3.19.3.a.u2
Segment Information and Major Customers - Sales Information by Geographic Area (Detail) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Revenue from External Customer [Line Items]                      
Sales $ 115,787 $ 114,092 $ 156,391 $ 143,791 $ 140,088 $ 140,335 $ 128,048 $ 120,806 $ 530,061 $ 529,277 $ 666,900
United States [Member]                      
Revenue from External Customer [Line Items]                      
Sales                 300,853 288,843 508,178
Mexico [Member]                      
Revenue from External Customer [Line Items]                      
Sales                 90,795 12,186 2,246
Germany [Member]                      
Revenue from External Customer [Line Items]                      
Sales                 78,062 167,251 119,502
Other International [Member]                      
Revenue from External Customer [Line Items]                      
Sales                 $ 60,351 $ 60,997 $ 36,974
v3.19.3.a.u2
Commitments and Contingencies - Additional Information (Detail)
$ in Millions
12 Months Ended
Oct. 17, 2019
Officer
Dec. 31, 2019
USD ($)
EquityFund
Dec. 31, 2018
USD ($)
Contingencies And Commitments [Line Items]      
Number of private equity funds | EquityFund   2  
Commitments towards private equity funds   $ 7.7  
Commitments related to performance bonds   $ 9.3 $ 6.5
Commitments related to performance bonds expiration month and year   2024-08  
Investment Commitments [Member]      
Contingencies And Commitments [Line Items]      
Aggregate investment committed in private equity funds   $ 7.9  
Current Executive Officers [Member]      
Contingencies And Commitments [Line Items]      
Number of officers | Officer 2    
Former Executive Officers [Member]      
Contingencies And Commitments [Line Items]      
Number of officers | Officer 1    
v3.19.3.a.u2
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 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Numerator                      
Net Income (Loss) $ (11,624) $ (46,123) $ 3,995 $ 770 $ (8,447) $ 7,589 $ (7,670) $ (10,814) $ (52,982) $ (19,342) $ 23,840
Denominator                      
Weighted average number of shares – basic                 47,836 47,880 48,153
Effect of dilutive securities:                      
Stock options                     406
Restricted stock and restricted stock units                     140
Weighted average number of shares – diluted                 47,836 47,880 48,699
Earnings (loss) per share – basic $ (0.25) $ (0.96) $ 0.08 $ 0.02 $ (0.18) $ 0.16 $ (0.16) $ (0.22) $ (1.11) $ (0.40) $ 0.50
Earnings (loss) per share – diluted $ (0.25) $ (0.96) $ 0.08 $ 0.02 $ (0.18) $ 0.16 $ (0.16) $ (0.22) $ (1.11) $ (0.40) $ 0.49
v3.19.3.a.u2
Earnings (Loss) Per Share - Additional Information (Detail) - shares
shares in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]      
Anti-dilutive effect excluded calculation of diluted earnings (loss) per share     3.2
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 (loss) per share 5.7 2.5  
v3.19.3.a.u2
Restructuring - Additional Information (Detail)
$ in Millions
12 Months Ended
Dec. 31, 2018
USD ($)
Restructuring And Related Activities [Abstract]  
Cumulative amount incurred for restructuring program $ 7.3
v3.19.3.a.u2
Restructuring - Schedule of Reconciliation of Restructuring Liability (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Restructuring And Related Activities [Abstract]      
Balance at beginning of period $ 185 $ 205  
Plus: Amounts charged to cost and expense 6,014 7,261 $ 274
Less: Amounts paid (4,631) (7,281)  
Balance at end of period $ 1,568 $ 185 $ 205
v3.19.3.a.u2
Restructuring - Schedule of Components of Restructuring Expense in Consolidated Statements of Income (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Restructuring Cost And Reserve [Line Items]      
Total restructuring expenses $ 6,014 $ 7,261 $ 274
Selling, General and Administrative Expenses [Member]      
Restructuring Cost And Reserve [Line Items]      
Total restructuring expenses 2,360 2,655 152
Research and Development Expenses [Member]      
Restructuring Cost And Reserve [Line Items]      
Total restructuring expenses 2,869 1,831 $ 122
Cost of Sales [Member]      
Restructuring Cost And Reserve [Line Items]      
Total restructuring expenses $ 785 $ 2,775  
v3.19.3.a.u2
Restructuring - Schedule of Components of Restructuring Expense by Geographic Area (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Restructuring Cost And Reserve [Line Items]      
Total restructuring expenses $ 6,014 $ 7,261 $ 274
United States [Member]      
Restructuring Cost And Reserve [Line Items]      
Total restructuring expenses 3,336 7,120 $ 274
International [Member]      
Restructuring Cost And Reserve [Line Items]      
Total restructuring expenses $ 2,678 $ 141  
v3.19.3.a.u2
Summarized Quarterly Financial Data (Unaudited) - Quarterly Operating Results (Detail) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Quarterly Financial Information Disclosure [Abstract]                      
Net sales $ 115,787 $ 114,092 $ 156,391 $ 143,791 $ 140,088 $ 140,335 $ 128,048 $ 120,806 $ 530,061 $ 529,277 $ 666,900
Gross profit 47,209 46,331 65,015 60,612 55,388 58,448 49,996 39,733 219,167 203,565 303,635
Operating income (loss) (14,070) (20,288) 562 (6,167) (3,783) (2,179) (12,813) (26,647) (39,963) (45,422) 37,386
Net income (loss) $ (11,624) $ (46,123) $ 3,995 $ 770 $ (8,447) $ 7,589 $ (7,670) $ (10,814) $ (52,982) $ (19,342) $ 23,840
Earnings (loss) per common share - basic $ (0.25) $ (0.96) $ 0.08 $ 0.02 $ (0.18) $ 0.16 $ (0.16) $ (0.22) $ (1.11) $ (0.40) $ 0.50
Earnings (loss) per common share - diluted $ (0.25) $ (0.96) $ 0.08 $ 0.02 $ (0.18) $ 0.16 $ (0.16) $ (0.22) $ (1.11) $ (0.40) $ 0.49
v3.19.3.a.u2
Subsequent Events - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Thousands
12 Months Ended
Feb. 05, 2020
Jan. 02, 2020
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Mar. 05, 2019
Subsequent Event [Line Items]            
Payments on long-term debt     $ 1,000 $ 1,100 $ 1,100  
Dividend payments     $ 0.09 $ 0.09 $ 0.09  
Quarterly dividend payable, aggregate amount           $ 4,300
Subsequent Event [Member]            
Subsequent Event [Line Items]            
Dividend declaration date Feb. 05, 2020          
Dividend payments $ 0.09          
Dividend record date Feb. 20, 2020          
Dividend payment date Mar. 05, 2019          
Subsequent Event [Member] | Taxable Revenue Bonds [Member]            
Subsequent Event [Line Items]            
Payments on long-term debt   $ 24,600        
v3.19.3.a.u2
Schedule II - Valuation and Qualifying Accounts (Detail) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Allowance for Doubtful Accounts [Member]      
Valuation and Qualifying Accounts Disclosure [Line Items]      
Balance at beginning of period $ 128    
Charged to costs & expenses 38 $ 128  
Deductions 128    
Balance at end of period 38 128  
Inventory Reserve [Member]      
Valuation and Qualifying Accounts Disclosure [Line Items]      
Balance at beginning of period 30,009 23,355 $ 25,249
Charged to costs & expenses 5,893 7,006 6,406
Deductions 1,740 352 8,300
Balance at end of period 34,162 30,009 23,355
Warranty Liability [Member]      
Valuation and Qualifying Accounts Disclosure [Line Items]      
Balance at beginning of period 8,623 9,724 8,548
Charged to costs & expenses 4,569 7,392 6,951
Deductions 4,798 8,493 5,775
Balance at end of period 8,394 8,623 9,724
Deferred Tax Asset Valuation Allowance [Member]      
Valuation and Qualifying Accounts Disclosure [Line Items]      
Balance at beginning of period 5,816 6,006 6,149
Charged to costs & expenses 43,560   18
Deductions 760 190 161
Balance at end of period $ 48,616 $ 5,816 $ 6,006