0001558370-19-007685 | 10-Q | XBRL Viewer | Applied Optoelectronics INC

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2019	Aug. 02, 2019
Document And Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2019
Entity File Number	001-36083
Entity Registrant Name	Applied Optoelectronics, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	76-0533927
Entity Address, Address Line One	13139 Jess Pirtle Blvd.
Entity Address, City or Town	Sugar Land
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77478
City Area Code	281
Local Phone Number	295-1800
Title of 12(b) Security	Common Stock
Trading Symbol	AAOI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		20,028,929
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001158114
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current Assets
Cash and cash equivalents	$ 81,070	$ 55,646
Restricted cash	2,917	2,358
Accounts receivable - trade, net of allowance of $30 and $31, respectively	28,406	30,534
Notes receivable	136
Inventories	81,475	93,256
Prepaid income tax	1,312	1,188
Prepaid expenses and other current assets	5,719	11,293
Total current assets	201,035	194,275
Property, plant and equipment, net	247,887	234,211
Land use rights, net	5,743	5,814
Operating right of use asset	7,912
Intangible assets, net	4,028	3,977
Deferred income tax assets	27,437	21,714
Other assets, net	1,080	6,849
TOTAL ASSETS	495,122	466,840
Current liabilities
Current portion of notes payable and long-term debt	19,180	23,589
Accounts payable	31,526	29,910
Bank acceptance payable	2,532	4,628
Current lease liability	903
Accrued liabilities	13,986	19,291
Total current liabilities	68,127	77,418
Notes payable and long-term debt, less current portion	30,468	60,328
Convertible senior notes	76,630
Non-current lease liability	8,182
TOTAL LIABILITIES	183,407	137,746
Stockholders' equity:
Preferred Stock; 5,000 shares authorized at $0.001 par value; no shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively
Common Stock; 45,000 shares authorized at $0.001 par value; 19,951 and 19,810 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively	20	20
Additional paid-in capital	297,922	292,480
Accumulated other comprehensive income	(379)	602
Retained earnings	14,152	35,992
TOTAL STOCKHOLDERS' EQUITY	311,715	329,094
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 495,122	$ 466,840

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
CONDENSED CONSOLIDATED BALANCE SHEETS
Allowance for doubtful accounts	$ 30	$ 31
Preferred Stock par value	$ 0.001	$ 0.001
Preferred Stock shares authorized	5,000	5,000
Preferred Stock shares issued	0	0
Preferred Stock shares outstanding	0	0
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	45,000	45,000
Common stock shares issued	19,951	19,810
Common stock shares outstanding	19,951	19,810

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue, net	$ 43,411	$ 87,822	$ 96,130	$ 153,061
Cost of goods sold	32,873	53,959	73,241	93,362
Gross profit	10,538	33,863	22,889	59,699
Operating expenses
Research and development	11,151	12,645	22,336	24,381
Sales and marketing	2,331	2,377	4,926	4,851
General and administrative	10,884	9,898	21,324	19,354
Total operating expenses	24,366	24,920	48,586	48,586
Income (loss) from operations	(13,828)	8,943	(25,697)	11,113
Other income (expense)
Interest income	310	85	382	137
Interest expense	(1,490)	(279)	(2,486)	(350)
Other expense, net	451	1,581	296	554
Total other expense, net	(729)	1,387	(1,808)	341
Income (loss) before income taxes	(14,557)	10,330	(27,505)	11,454
Income tax benefit	3,191	(2,296)	5,665	(1,300)
Net income (loss)	$ (11,366)	$ 8,034	$ (21,840)	$ 10,154
Net income (loss) per share
Basic	$ (0.57)	$ 0.41	$ (1.10)	$ 0.52
Diluted	$ (0.57)	$ 0.40	$ (1.10)	$ 0.51
Weighted average shares used to compute net income (loss) per share:
Basic	19,931,745	19,590,164	19,897,602	19,541,478
Diluted	19,931,745	20,079,702	19,897,602	20,012,344

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY - USD ($) shares in Thousands, $ in Thousands	Common stock	Additional paid-in capital	Accumulated other comprehensive gain (loss)	Retained earnings	Total
Beginning balance, value at Dec. 31, 2017	$ 19	$ 285,376	$ 9,743	$ 38,138	$ 333,276
Beginning balance, shares at Dec. 31, 2017	19,451
Stock options exercised, net of shares withheld for employee tax, value		(1,228)			(1,228)
Stock options exercised, net of shares withheld for employee tax, in shares	78
Issuance of restricted stock, net of shares withheld for employee tax, value	$ 1	(930)			(929)
Issuance of restricted stock, net of shares withheld for employee tax, in shares	105
Share-based compensation		5,468			5,468
Foreign currency translation adjustment			(4,110)		(4,110)
Net income (loss)				10,154	10,154
Ending balance, value at Jun. 30, 2018	$ 20	288,686	5,633	48,292	342,631
Ending balance, shares at Jun. 30, 2018	19,634
Beginning balance, value at Mar. 31, 2018	$ 20	286,938	16,078	40,258	343,294
Beginning balance, shares at Mar. 31, 2018	19,538
Stock options exercised, net of shares withheld for employee tax, value		(619)			(619)
Stock options exercised, net of shares withheld for employee tax, in shares	40
Issuance of restricted stock, net of shares withheld for employee tax, value		(532)			(532)
Issuance of restricted stock, net of shares withheld for employee tax, in shares	56
Share-based compensation		2,899			2,899
Foreign currency translation adjustment			(10,445)		(10,445)
Net income (loss)				8,034	8,034
Ending balance, value at Jun. 30, 2018	$ 20	288,686	5,633	48,292	342,631
Ending balance, shares at Jun. 30, 2018	19,634
Beginning balance, value at Dec. 31, 2018	$ 20	292,480	602	35,992	329,094
Beginning balance, shares at Dec. 31, 2018	19,810
Stock options exercised, net of shares withheld for employee tax, value		7			7
Issuance of restricted stock, net of shares withheld for employee tax, value		(526)			(526)
Issuance of restricted stock, net of shares withheld for employee tax, in shares	141
Share-based compensation		5,961			5,961
Foreign currency translation adjustment			(981)		(981)
Net income (loss)				(21,840)	(21,840)
Ending balance, value at Jun. 30, 2019	$ 20	297,922	(379)	14,152	311,715
Ending balance, shares at Jun. 30, 2019	19,951
Beginning balance, value at Mar. 31, 2019	$ 20	295,130	2,950	25,518	323,618
Beginning balance, shares at Mar. 31, 2019	19,888
Issuance of restricted stock, net of shares withheld for employee tax, value		(227)			(227)
Issuance of restricted stock, net of shares withheld for employee tax, in shares	63
Share-based compensation		3,019			3,019
Foreign currency translation adjustment			(3,329)		(3,329)
Net income (loss)				(11,366)	(11,366)
Ending balance, value at Jun. 30, 2019	$ 20	$ 297,922	$ (379)	$ 14,152	$ 311,715
Ending balance, shares at Jun. 30, 2019	19,951

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Operating activities:
Net income (loss)	$ (21,840)	$ 10,154
Adjustments to reconcile net income to net cash provided by operating activities:
Lower of cost or market reserve adjustment to inventory	5,207	2,356
Depreciation and amortization	11,964	14,291
Amortization of debt issuance costs	457
Deferred income taxes, net	(5,770)	(381)
Loss (gain) on disposal of assets	10	(5)
Share-based compensation	5,961	5,468
Unrealized foreign exchange gain	(171)	(1,254)
Changes in operating assets and liabilities:
Accounts receivable, trade	2,128	11,182
Notes receivable	(137)
Prepaid income tax	(127)	781
Inventories	6,346	(21,614)
Other current assets	5,579	(1,489)
Operating right of use asset	561
Accounts payable	1,615	7,805
Accrued liabilities	(4,043)	(6,926)
Lease liability	(573)	(2,289)
Net cash provided by operating activities	7,167	18,079
Investing activities:
Maturities of short-term investments		36
Purchase of property, plant and equipment	(26,286)	(30,895)
Purchase of land use rights		(5,591)
Proceeds from disposal of equipment	1	11
Deposits and prepaid for equipment	5,763	1,444
Purchase of intangible assets	(316)	(225)
Net cash used in investing activities	(20,838)	(35,220)
Financing activities:
Proceeds from issuance of notes payable and long-term debt, net of debt issuance costs	10,537	26,556
Principal payments of long-term debt and notes payable	(41,203)	(1,093)
Proceeds from line of credit borrowings	38,473	79,953
Repayments of line of credit borrowings	(42,211)	(93,953)
Proceeds from bank acceptance payable	4,471
Repayments of bank acceptance payable	(6,575)
Proceeds from issuance of convertible senior notes, net of debt issuance costs	76,364
Exercise of stock options	7	53
Payments of tax withholding on behalf of employees related to share-based compensation	(526)	(2,212)
Net cash provided by financing activities	39,337	9,304
Effect of exchange rate changes on cash	317	1,832
Net increase (decrease) in cash, cash equivalents and restricted cash	25,983	(6,005)
Cash, cash equivalents and restricted cash at beginning of period	58,004	83,948
Cash, cash equivalents and restricted cash at end of period	83,987	77,943
Cash paid for:
Interest	498	255
Income taxes	224	7,783
Non-cash investing and financing activities:
Net change in accounts payable related to property and equipment additions	$ 777	$ 214

Revenue Recognition

6 Months Ended

Jun. 30, 2019

Revenue Recognition

Revenue Recognition

Note 3. Revenue Recognition

The adoption of Topic 606 represents a change in accounting principle that will provide financial statement readers with enhanced revenue recognition disclosures. In accordance with Topic 606, revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally, this occurs with the transfer of control of products or services. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services. Certain customers may receive cash and/or non-cash incentives, which are accounted for as variable consideration. To achieve this core principle, the Company applies the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to performance obligations in the contract; and (v) recognize revenue when or as the Company satisfies a performance obligation. The Company generally satisfies performance obligations at a point in time. Revenue is recognized based on the transaction price at the time the related performance obligation is satisfied by transferring a promised product or service to a customer.

Disaggregation of Revenue

Revenue is classified based on the location of where the product is manufactured. For additional information on the disaggregated revenues by geographical region, see Note 17, "Geographic Information.”

Revenue is also classified by major product category and is presented below (in thousands):


	Three months ended June 30,
	2019		% of Revenue	2018		% of Revenue
Data Center	$	31,806	73.3%	$	69,040	78.6%
CATV		9,818	22.6%		14,184	16.2%
Telecom		1,630	3.8%		4,157	4.7%
FTTH		16	0.0%		166	0.2%
Other		141	0.3%		275	0.3%
Total Revenue	$	43,411	100.0%	$	87,822	100.0%


	Six months ended June 30,
	2019		% of Revenue	2018		% of Revenue
Data Center	$	70,305	73.1%	$	119,623	78.2%
CATV		21,780	22.7%		24,752	16.2%
Telecom		3,368	3.5%		7,743	5.1%
FTTH		110	0.1%		277	0.2%
Other		567	0.6%		666	0.4%
Total Revenue	$	96,130	100.0%	$	153,061	100.0%

Operating Leases

6 Months Ended

Jun. 30, 2019

Operating Leases

Operating Leases

Note 4. Operating Leases

The Company leases space under non-cancelable operating leases for manufacturing facilities, research and development offices and certain storage facilities and apartments. These leases do not contain contingent rent provisions. The Company also leases certain machinery, office equipment and a vehicle under operating leases. Many of its leases include both lease (e.g. fixed payments including rent, taxes, and insurance costs) and non-lease components (e.g. common-area or other maintenance costs) which are accounted for as a single lease component as the Company has elected the practical expedient to group lease and non-lease components for all leases. Several of the leases include one or more options to renew which have been assessed and either includes or excludes from the calculation of the lease liability of the ROU asset based on management’s intentions and individual fact patterns. Several warehouses and apartments have non-cancelable lease terms of less than one-year and therefore, the Company has elected the practical expedient to exclude these short-term leases from its ROU asset and lease liabilities.

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Based on the applicable lease terms and current economic environment, the Company applies a location approach for determining the incremental borrowing rate.

The Components of lease expense were as follows for the periods indicated (in thousands):


	Three months ended June 30,		Six months ended June 30,
		2019		2019
Operating lease expense	$	318	$	641
Short Term lease expense		51		80
Total lease expense	$	369	$	721

Maturities of lease liabilities are as follows for the future one-year periods ending June 30, (in thousands):


2020	$	1,212
2021		1,146
2022		1,092
2023		1,042
2024		1,055
2025 and thereafter		5,397
Total lease payments	$	10,944
Less imputed interest		(1,859)
Present value	$	9,085

The weighted average remaining lease term and discount rate for operating leases were as follows for the periods indicated:


	June 30,
	2019
Weighted Average Remaining Lease Term (Years)	9.69
Weighted Average Discount Rate	3.13%

Supplemental cash flow information related to operating leases was as follows for the periods indicated (in thousands):


	Six months ended June 30,
	2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	676
Operating cash flows from financing lease	—
Financing cash flows from financing lease	—
Right-of-use assets obtained in exchange for new operating lease liabilities	15
Right-of-use assets obtained in exchange for new finance lease liabilities	—

Earnings Per Share

6 Months Ended

Jun. 30, 2019

Net income (loss) per share

Earnings Per Share

Note 6. Earnings Per Share

Basic net income (loss) per share has been computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share has been computed using the weighted-average number of shares of common stock and dilutive potential common shares from stock options, restricted stock units and senior convertible notes outstanding during the period. In periods with net losses, normally dilutive shares become anti-dilutive. Therefore, basic and diluted earnings per share are the same.

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


	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Numerator:
Net income (loss)	$	(11,366)	$	8,034	$	(21,840)	$	10,154
Denominator:
Weighted average shares used to compute net income (loss) per share
Basic		19,932		19,590		19,898		19,541
Effect of dilutive options and restricted stock units		—		490		—		472
Diluted		19,932		20,080		19,898		20,012
Net income (loss) per share
Basic	$	(0.57)	$	0.41	$	(1.10)	$	0.52
Diluted	$	(0.57)	$	0.40	$	(1.10)	$	0.51

The following potentially dilutive securities were excluded from the diluted net income (loss) per share as their effect would have been antidilutive (in thousands):


	Three months ended June 30,		Six months ended June 30,
	2019	2018	2019	2018
Employee stock options	29	—	63	—
Restricted stock units	—	—	2	—
Shares for convertible senior notes	4,587	—	4,587
Total antidilutive shares	4,616	—	4,652	—

Property, Plant & Equipment

6 Months Ended

Jun. 30, 2019

Property, Plant and Equipment [Abstract]

Property, Plant & Equipment

Note 8. Property, Plant & Equipment

Property, plant and equipment consisted of the following for the periods indicated (in thousands):



	June 30, 2019		December 31, 2018
Land improvements	$	806	$	806
Building and improvements		83,121		80,960
Machinery and equipment		232,852		214,718
Furniture and fixtures		5,087		5,043
Computer equipment and software		10,041		9,709
Transportation equipment		654		658
		332,561		311,894
Less accumulated depreciation and amortization		(105,777)		(95,233)
		226,784		216,661
Construction in progress		20,002		16,449
Land		1,101		1,101
Total property, plant and equipment, net	$	247,887	$	234,211

For the three months ended June 30, 2019 and 2018, depreciation expense of property, plant and equipment was $5.9 million and $7.2 million, respectively. For the six months ended June 30, 2019 and 2018, depreciation expense of property, plant and equipment was $11.7 million and $14.0 million, respectively.

Depreciation expense of $2.3 million and $3.8 million was recorded as cost of sales for the three months ended June 30, 2019 and 2018, respectively. Depreciation expense of $4.8 million and $7.6 million was recorded as cost of sales for the six months ended June 30, 2019 and 2018, respectively.

Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Note 10. Fair Value of Financial Instruments

The following table represents a summary of the Company’s financial instruments measured at fair value on a recurring basis for the periods indicated (in thousands):


	As of June 30, 2019								As of December 31, 2018
	(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Cash and cash equivalents	$	81,070	$	—	$	—	$	81,070	$	55,646	$	—	$	—	$	55,646
Restricted cash		2,917		—		—		2,917		2,358		—		—		2,358
Total assets	$	83,987	$	—	$	—	$	83,987	$	58,004	$	—	$	—	$	58,004
Liabilities:
Bank acceptance payable		—	$	2,532		—	$	2,532		—	$	4,628		—	$	4,628
Convertible senior notes		—		71,500		—		71,500		—		—		—		—
Total liabilities	$	—	$	74,032	$	—	$	74,032	$	—	$	4,628	$	—	$	4,628

The carrying value amounts of accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate fair value because of the short-term maturity of these instruments. The carrying value amounts of debt approximate fair value due to the short-term nature of the debt since it renews frequently at current interest rates. The Company believes that the interest rates in effect at each period end represent the current market rates for similar borrowings.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Notes Payable and Long-Term Debt

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Notes Payable and Long-Term Debt

Note 11. Notes Payable and Long-Term Debt

Notes payable and long-term debt consisted of the following for the periods indicated (in thousands):


	June 30, 2019		December 31, 2018
Revolving line of credit with a U.S. bank up to $25,000 with interest at LIBOR plus 1.5%, maturing September 28, 2020	$	20,000	$	23,104
Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.15%, maturing April 1, 2024		—		20,067
Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.3%, maturing between April 1, 2023 and December 18, 2023		—		19,164
Revolving line of credit with a Taiwan bank up to $9,659 with interest at 2%, maturing July 29, 2019		3,220		3,256
Revolving line of credit with a Taiwan bank up to $7,000 with interest ranging from 1.5% to 3.5%, maturing July 26, 2019		3,219		3,550
Notes payable to a finance company due in monthly installments with 3.4% interest, maturing November 30, 2021		5,187		6,331
Notes payable to a finance company due in monthly installments with 3.1% interest, maturing January 21, 2022		5,545		—
Revolving line of credit with a Taiwan bank up to $2,576 with interest of 1.7%, maturing September 11, 2019		644		—
Revolving line of credit with a China bank up to $19,158 with interest ranging from 4.1% to 4.6%		—		8,652
Revolving line of credit with a China bank up to $26,183 with interest of 4.57%, maturing May 24, 2024		7,804		—
Credit facility with a China bank up to $14,546 with interest of 5.7%, maturing January 4, 2021		4,073		—
Sub-total		49,692		84,124
Less debt issuance costs, net		(44)		(207)
Grand total		49,648		83,917
Less current portion		(19,180)		(23,589)
Non-current portion	$	30,468	$	60,328

Bank Acceptance Notes Payable
Bank acceptance notes issued to vendors with a zero percent interest rate	$	2,532	$	4,628

The current portion of long-term debt is the amount payable within one year of the balance sheet date of June 30, 2019.

Maturities of long-term debt are as follows for the future one-year periods ending June 30, (in thousands):


2020	$	19,180
2021		24,249
2022		6,219
2023		—
2024		—
2025 and thereafter		—
Total outstanding	$	49,648

On September 28, 2017, the Company entered into a Loan Agreement (“Loan Agreement”), a Promissory Note, an Addendum to the Promissory Note, a BB&T Security Agreement, a Trademark Security Agreement, and a Patent Security Agreement (together the “Credit Facility”) with Branch Banking and Trust Company (“BB&T”). The Credit Facility provides the Company with a three-year, $50 million, revolving line of credit. Borrowings under the Credit Facility will be used for general corporate purposes. The Company makes monthly payments of accrued interest with the final monthly payment being for all principal and all accrued interest not yet paid. The Company’s obligations under the Credit Facility are secured by the Company’s accounts receivable, inventory, intellectual property, and all business assets with the exception of real estate and equipment. Borrowings under the Credit Facility bear interest at a rate equal to the one-month LIBOR plus 1.50%. The Credit Facility requires the Company to maintain certain financial covenants and also contains representations and warranties, and events of default applicable to the Company that are customary for agreements of this type.

On March 30, 2018, the Company executed a First Amendment to Loan Agreement, a Note Modification Agreement and Addendum to Promissory Note for $60 million, a Promissory Note and Addendum to Promissory Note for $26 million, a Promissory Note and Addendum to Promissory Note for $21.5 million, a Texas Deed of Trust and Security Agreement, an Assignment of Lease and Rent, and an Environmental Certification and Indemnity Agreement, (collectively, the “Amended Credit Facility”), with BB&T. The Amended Credit Facility amends the Company’s three-year $50 million line of credit with BB&T. The Amended Credit Facility (1) increases the principal amount of the three-year line of credit from $50 million to $60 million (the “Line of Credit”); (2) allows the Company to borrow an additional $26 million from BB&T in the form of a five-year capital expenditure loan (the “CapEx Loan”) and (3) allows the Company to borrow an additional $21.5 million in the form of a seventy-month real estate term loan (the “Term Loan”) to refinance the Company’s plant and facilities in Sugar Land, Texas. Borrowings under the Line of Credit bear interest at a rate equal to the one-month LIBOR plus a Line of Credit margin ranging between 1.40% and 2.0%. Borrowings under the CapEx Loan bear interest at a rate equal to the one-month LIBOR plus a CapEx Loan margin ranging between 1.30% and 2.0%. Borrowings under the Term Loan bear interest at a rate equal to the one-month LIBOR plus a Term Loan margin ranging between 1.15% and 2.0%. The Company is required to make monthly payments of principal and accrued interest with the final monthly payments being for all principal and accrued interest not yet paid. The Company’s obligations under the Amended Credit Facility are secured by the Company’s accounts receivable, inventory, equipment, intellectual property, real property, and virtually all business assets.

On February 1, 2019, the Company executed a Second Amendment to Loan Agreement with BB&T. The original loan agreement with BB&T, executed on September 28, 2017, and a first amendment to the original loan agreement, executed on March 30, 2018, provided the Company with a three-year $60 million line of credit; a $26 million five-year CapEx Loan and a $21.5 million seventy-month real estate term loan for the Company’s plant and facilities in Sugar Land, Texas. The Second Amendment to Loan Agreement extends the CapEx Loan draw-down date from March 30, 2019 to September 30, 2019, requires the Company to provide BB&T monthly financial statements and allows additional unfinanced capital expenditures.

On March 5, 2019, the Company executed a Third Amendment (the “Third Amendment”) to Loan Agreement with BB&T pursuant to which the Company has established a revolving credit line used for working capital purposes. The Third Amendment to the Loan Agreement, among other things: (i) contemplates the issuance of the Notes (as defined in Note 12 below) and the subsequent conversion of the Notes into common stock in accordance with the

terms of the Indenture, including the payment of cash for any fractional shares; (ii) adjusts pricing of the unused line fee to 0.20% per annum; (iii) reduces the maximum commitment under the line of credit from $60,000,000 to $25,000,000; and (iv) provides that, so long as the Company’s utilization of the revolving credit line is not greater than 60% of the available commitment, the Company will not be required to comply with its financial covenants, including its fixed charge coverage ratio or funded debt to EBITDA covenant, and provided that, such restriction on utilization will not apply during the period of time commencing seven business days prior to the end of any fiscal quarter through seven business days after the subsequent fiscal quarter.

On March 5, 2019, the Company used approximately $37.8 million of the net proceeds from the offering of the Notes to fully repay the CapEx Loan and Term Loan with BB&T.

As of June 30, 2019, the Company was in compliance with all covenants under the Loan Agreement. As of June 30, 2019, $20.0 million was outstanding under the Line of Credit.

On June 19, 2018, Prime World entered into a one year revolving credit facility totaling 300 million New Taiwan dollars, or approximately $9.8 million, (the “Taiwan Credit Facility”) with Taishin International Bank in Taiwan. Borrowing under the Taiwan Credit Facility will be used for short-term working capital. Prime World may draw upon the Taiwan Credit Facility from June 19, 2018 until July 31, 2019. The term of each draw shall be either 90 or 120 days. Borrowings under the Taiwan Credit Facility bear interest at a rate of 2.00% for 90 day draws and 1.95% for 120 day draws. At the end of the draw term, Prime World is required to make payments for all principal and accrued interest. The agreements for the Taiwan Credit Facility contain representations and warranties and events of default applicable to Prime World that are customary for agreements of this type. As of June 30, 2019, $3.2 million was outstanding under the Taiwan Credit Facility.

On October 3, 2018, Prime World entered into a revolving credit facility for up to $7 million, (the “Revolving Credit Facility”) with the Development Bank of Singapore (Taiwan) Ltd. (“DBS”). Borrowing under the Revolving Credit Facility will be used for short-term working capital. Prime World may draw upon the Revolving Credit Facility from October 3, 2018 until July 26, 2019. The term of each draw shall be either 60 or 90 days depending on the purpose of the draw. Borrowings under the Revolving Credit Facility bear interest at a rate equal to DBS’s cost of funds rate plus 1.25% for draws in U.S. Dollars and 1.35% plus the Bank’s cost of funds rate for draws in New Taiwan Dollars. DBS’s cost of fund’s rate is adjusted daily. Prime World is required to make monthly payments of accrued interest with the final monthly payment being for all principal and all accrued interest not yet paid. Prime World’s obligations under the Revolving Credit Facility is secured by promissory notes executed between Prime World and DBS at the time of each draw. The agreements for the Revolving Credit Facility contain representations and warranties and events of default applicable to the Prime World that are customary for agreements of this type. As of June 30, 2019, $3.2 million was outstanding under the Revolving Credit Facility.

On November 29, 2018, Prime World entered into a Purchase and Sale Contract (the “Sale Contract”) and an Equipment Finance Agreement with Chailease Finance Co., Ltd. (“Chailease”) in connection with certain equipment. Pursuant to the Sale Contract, Prime World sold certain equipment to Chailease for a purchase price of NT$267,340,468, or approximately $8.7 million. Simultaneously, Prime World leased the equipment back from Chailease for a term of three-years, pursuant to the Equipment Finance Agreement. Prime World is obligated to pay an initial payment of NT$67,340,468, or approximately $2.2 million, thereafter the monthly lease payments range from NT$5,571,229, or $0.2 million, to NT$6,139,188, or approximately $0.2 million. Based on the lease payments made under the Equipment Finance Agreement, the annual interest rate is calculated to be 3.5%. Upon an event of default under the Equipment Finance Agreement, Prime World’s payment obligation will be secured by a promissory note to Chailease in the amount of NT$210,601,605, or approximately $6.8 million, subject to certain terms and conditions. The title of the equipment will be transferred to Prime World upon expiration of the Equipment Finance Agreement. As of June 30, 2019, $5.2 million was outstanding under the Equipment Finance Agreement.

On January 21, 2019, Prime World entered into a second Purchase and Sale Contract (the “Second Sales Contract”), Promissory Note, and a second Equipment Finance Agreement, (collectively, the “Second Financing Agreements”) with Chailease in connection with certain equipment. Pursuant to the Second Sales Contract, Prime World sold certain equipment to Chailease for a purchase price of NT$267,333,186, or approximately $8.7 million. Simultaneously, Prime World leased the equipment back from Chailease for a term of three-years, pursuant to the Second Equipment Finance Agreement. Prime World is obligated to pay an initial monthly payment of NT$67,333,186, or approximately $2.2 million, thereafter the monthly lease payments range from NT$5,570,167, or approximately $0.2

million to NT$6,082,131, or approximately $0.2 million. Based on the lease payments made under the Second Equipment Finance Agreement, the annual interest rate is calculated to be 3.1%. Upon an event of default under the Second Equipment Finance Agreement, Prime World’s payment obligation will be secured by a promissory note to Chailease at the amount of NT$209,555,736 or approximately $6.8 million, subject to certain terms and conditions. The title of the equipment will be transferred to Prime World upon expiration of the Second Equipment Finance Agreement. As of June 30, 2019, $5.5 million was outstanding under the Second Equipment Finance Agreement.

On December 11, 2018, Prime World entered into a one-year credit facility totaling New Taiwan Dollars 150 million, or approximately $4.9 million, (the “Credit Facility”) with CTBC Bank Co., Ltd. (“CTBC”). Borrowing under the Credit Facility will be used for short-term working capital. Prime World may draw upon the Credit Facility from December 11, 2018 until October 31, 2019. The term of each draw shall be up to 120 days. Under the Credit Facility borrowing in New Taiwan Dollars will bear interest at a rate equal to CTBC’s Enterprise Swap Index Rate plus 1.2%; for all foreign currency borrowing interest bear at a rate equal to CTBC’s Cost of Fund lending rate plus 1.2%. As of the execution of the Credit Facility, CTBC’s Enterprise Swap Index Rate and Cost of Funds lending rate is 0.69% and 3.40% respectively. At the end of the draw term, Prime World is required to make payments for all principal and accrued interest. The Credit Facility contains representations and warranties, and events of default applicable to Prime World that are customary for agreements of this type. As of June 30, 2019, there was no outstanding balance under the Credit Facility.

On April 11, 2019, Prime World entered into a one-year credit facility totaling NT$80 million, or approximately $2.6 million, (the “Far Eastern Credit Facility”) with Far Eastern International Bank Co., Ltd. (“Far Eastern”). Prime World may draw upon the Far Eastern Credit Facility from April 11, 2019 until April 11, 2020. The term of each draw shall be up to 180 days. Under the Far Eastern Credit Facility borrowing in New Taiwan Dollars will bear interest at a rate equal to Far Eastern’s published one-year fixed term time deposits rate, plus 0.655%; for all foreign currency borrowing, interest shall be the TAIFX3 rate for the length of time equal to the term of the loan or the next longer tenor for which rates are quoted, plus 0.7%. As of the execution of the Far Eastern Credit Facility, Far Eastern’s published one-year fixed term time deposits rate and TAIFX3 rate are 1.045 % and 2.75%, respectively. Prime World’s obligations under the Far Eastern Credit Facility will be secured by promissory note executed between Prime World and Far Eastern. As of June 30, 2019, $0.6 million was outstanding under the Far Eastern Credit Facility.

On September 21, 2018, the Company’s China subsidiary, Global, entered into a five-year revolving credit line agreement, totaling 129,000,000 Chinese Renminbi, or RMB, or approximately $18.6 million, (the “Credit Line”) and a Security Agreement with China Construction Bank Co., Ltd., in Ningbo, China (“CCB”). Borrowing under the Credit Line will be used for general corporate and capital investment purposes, including the issuance of bank acceptance notes to Global’s vendors. Global may draw upon the Credit Line between September 21, 2018 and September 17, 2023; however, the amount of available credit under the Credit Line may be reduced by CCB without notice to Global and may be decreased subject to changes of Chinese government regulations. Each draw bears interest equal to CCB’s commercial banking interest rate effective on the day of the applicable draw. Global’s obligations under the Credit Line is secured by real property owned by Global in China and mortgaged to CCB under the terms of the Security Agreement. On May 10, 2019, Global repaid the Credit Line without penalty and terminated the agreement. As of June 30, 2019, the outstanding balance of bank acceptance notes issued to vendors was $0.5 million and will be fully repaid by September 26, 2019.

On April 19, 2019, the Company’s China subsidiary, Global, entered into a twelve (12) month revolving line of credit agreement, totaling 60,000,000 RMB, or approximately $8.9 million, (the “China Merchants Credit Line”), with China Merchants Bank Co., Ltd., in Ningbo, China (“China Merchants”). The China Merchants Credit Line will be used by Global for general corporate purposes, including the issuance of bank acceptance notes to Global’s vendors. Global may draw upon the China Merchants Credit Line from April 19, 2019 until April 18, 2020 (the “Credit Period”). During the Credit Period, Global may request to draw upon the China Merchants Credit Line on an as-needed basis; however, the amount of available credit under the China Merchants Credit Line and the approval of each draw may be reduced or declined by China Merchants due to changes in Chinese government regulations and/or changes in Global’s financial and operational condition at the time of each requested draw. Each draw will bear interest equal to China Merchants’ commercial banking interest rate effective on the day of the applicable draw. Global’s obligations under the China Merchants Credit Line are unsecured. As of June 30, 2019, there was no outstanding balance under the China Merchants Credit Line and the outstanding balance of bank acceptance notes issued to vendors was $1.4 million.

On April 30, 2019, the Company’s China subsidiary, Global, entered into a one-year credit facility totaling 9,900,000 RMB, or approximately $1.5 million, (the “SPD ¥9.9M Credit Facility”), with Shanghai Pudong Development Bank Co., Ltd., in Beilun District, Ningbo City, China (“SPD”). Borrowing under the SPD ¥9.9M Credit Facility will be used for short-term working capital. Global may draw upon the SPD ¥9.9M Credit Facility from April 30, 2019 until May 9, 2019. Borrowing under the SPD ¥9.9M Credit Facility will mature on April 30, 2020 and will bear interest equal to SPD’s published twelve (12) month prime loan rate in effect on the date of the draw, plus 0.2475%. Under the SPD ¥9.9M Credit Facility, Global will make monthly payments of accrued interest and the principal shall be repaid upon maturity. Global’s obligations under the SPD ¥9.9M Credit Facility are unsecured. The SPD ¥9.9M Credit Facility has been replaced by the SPD Credit Line on May 24, 2019.

On May 7, 2019, the Company’s China subsidiary, Global, entered into a one-year credit facility totaling 30,000,000 RMB, or approximately $4.5 million, (the “SPD ¥30M Credit Facility”), with Shanghai Pudong Development Bank Co., Ltd., in Ningbo City, China (“SPD”). Borrowing under the SPD ¥30M Credit Facility will be used to repay Global’s outstanding loans with China Construction Bank. Borrowing under the SPD ¥30M Credit Facility will mature on May 7, 2020 and will bear interest equal to the Bank’s published twelve (12) month prime loan rate in effect on the date of the draw, plus 0.2475%. As of the execution of the Credit Facility agreement, the Bank’s published 12 months prime loan rate is 4.32%. Under the SPD ¥30M Credit Facility, Global will make monthly payments of accrued interest; principal shall be repaid upon maturity. Global’s obligations under the SPD ¥30M Credit Facility are unsecured. The SPD ¥30M Credit Facility has been replaced by the SPD Credit Line on May 24, 2019.

On May 8, 2019, the Company’s China subsidiary, Global, entered into a six-month credit facility totaling 2,000,000 USD (the “$2M Credit Facility”) with Shanghai Pudong Development Bank Co., Ltd., in Ningbo City, China (“SPD”). Borrowing under the $2M Credit Facility will be used to repay Global’s outstanding loans with CCB and for general corporate purposes. Borrowing under the $2M Credit Facility will mature on November 7, 2019 and will bear interest equal to SPD’s published six (6) month LIBOR in effect on the date of the draw, plus 1.48%. As of the execution of the $2M Credit Facility agreement, the SPD published 6 months LIBOR rate was 2.59438%. Under the $2M Credit Facility, Global will make quarterly payments of accrued interest; principal shall be repaid upon maturity. Global’s obligations under the $2M Credit Facility are unsecured. The $2M Credit Facility also contains rights and obligations, representations and warranties, and events of default applicable to the Company that are customary for agreements of this type. The $2M Credit Facility has been replaced by the SPD Credit Line on May 24, 2019.

On May 24, 2019, the Company’s China subsidiary, Global, entered into a five-year revolving credit line agreement, totaling 180,000,000 RMB (the “SPD Credit Line”), or approximately $26.2 million, and a mortgage security agreement (the “Security Agreement”), with Shanghai Pudong Development Bank Co., Ltd., in Ningbo City, China (“SPD”). Borrowing under the SPD Credit Line will be used for general corporate and capital investment purposes, including the issuance of bank acceptance notes to Global’s vendors. The total SPD Credit Line of 180 million RMB is inclusive of all credit facilities previously entered into with SPD including: a 30 million RMB credit facility entered into on May 7, 2019; and a 9.9 million RMB credit facility entered into on April 30, 2019. Global may draw upon the SPD Credit Line on an as-needed basis at any time during the 5-year term; however, draws under the SPD Credit Line may become due and repayable to SPD at the SPD’s discretion due to changes in Chinese government regulations and/or changes in Global’s financial and operational condition. Each draw will bear interest equal to SPD’s commercial banking interest rate effective on the day of the applicable draw. Global’s obligations under the SPD Credit Line will be secured by real property owned by Global and mortgaged to the Bank under the terms of the Security Agreement. The agreements for the SPD Credit Line and the Security Agreement also contain rights and obligations, representations and warranties, and events of default applicable to the Company that are customary for agreements of this type. As of June 30, 2019, $7.8 million was outstanding under the SPD Credit Line and the outstanding balance of bank acceptance notes issued to vendors was $0.7 million.

On June 21, 2019, the Company’s China subsidiary, Global, entered into a 18 month credit facility totaling 100,000,000 RMB (the “¥100M Credit Facility”), or approximately $14.6 million, with China Zheshang Bank Co., Ltd., in Ningbo City, China (“CZB”). Borrowing under the ¥100M Credit Facility will be used by Global for general corporate purposes. Global may draw upon the ¥100M Credit Facility from June 21, 2019 until January 4, 2021 (the “¥100M Credit Period”). During the ¥100M Credit Period, Global may request to draw upon the ¥100M Credit Facility on an as-needed basis; however, draws under the ¥100M Credit Facility may become due and repayable to CZB at CZB’s discretion due to changes in Chinese government regulations and/or changes in Global’s financial and operational condition. Each draw will bear interest equal to CZB’s commercial banking interest rate effective on the day of the applicable draw. Global’s obligations under the ¥100M Credit Facility will be secured by real property owned by Global

and mortgaged to CZB under the terms of the Real Estate Security Agreement. The agreements for the ¥100M Credit Facility and the Real Estate Security Agreement also contain rights and obligations, representations and warranties, and events of default applicable to the Company that are customary for agreements of this type. As of June 30, 2019, $4.1 million was outstanding under the ¥100M Credit Facility.

On June 21, 2019, the Company’s China subsidiary, Global, entered into a three-year credit facility totaling 50,000,000 RMB (the “¥50M Credit Facility”), or approximately $7.3 million, with China Zheshang Bank Co., Ltd., in Ningbo City, China (“CZB”). Borrowing under the ¥50M Credit Facility will be used by Global for general corporate purposes. Global may draw upon the ¥50M Credit Facility from June 21, 2019 until June 20, 2022 (the “¥50M Credit Period”). During the ¥50M Credit Period, Global may request to draw upon the Credit Facility on an as-needed basis; however, draws under the ¥50M Credit Facility may become due and repayable to CZB at CZB’s discretion due to changes in Chinese government regulations and/or changes in Global’s financial and operational condition. Each draw will bear interest equal to CZB’s commercial banking interest rate effective on the day of the applicable draw. Global’s obligations under the ¥50M Credit Facility will be secured by machinery and equipment owned by Global and mortgaged to CZB under the terms of the Machinery and Equipment Security Agreement. The agreements for the ¥50M Credit Facility and the Machinery and Equipment Security Agreement also contain rights and obligations, representations and warranties, and events of default applicable to the Company that are customary for agreements of this type. As of June 30, 2019, there was no outstanding balance under the ¥50M Credit Facility.

As of June 30, 2019 and December 31, 2018, the Company had $64.7 million and $63.6 million of unused borrowing capacity, respectively.

One-month LIBOR rates were 2.4% and 2.5% at June 30, 2019 and December 31, 2018, respectively.

As of June 30, 2019 and December 31, 2018, there was $1.2 million and $1.4 million of restricted cash, investments or security deposits associated with the loan facilities, respectively.

Convertible Senior Notes

6 Months Ended

Jun. 30, 2019

Convertible Senior Notes

Convertible Senior Notes

Note 12. Convertible Senior Notes

On March 5, 2019, the Company issued $80.5 million of 5% convertible senior notes due 2024 (the “Notes”). The Notes were issued pursuant to an indenture, dated as of March 5, 2019 (the “Indenture”), between the Company and Wells Fargo Bank, National Association, as trustee, paying agent, and conversion agent (the “Trustee”). The Notes bear interest at a rate of 5.00% per year, payable in cash semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2019. The Notes will mature on March 15, 2024, unless earlier repurchased, redeemed or converted in accordance with their terms.

The sale of the Notes generated net proceeds of $76.4 million, after deducting the Initial Purchasers’ discounts and offering expenses payable by the Company. The Company used approximately $37.8 million of the net proceeds from the offering to fully repay the CapEx Loan and Term Loan with BB&T and the remainder will be used for general corporate purposes.

The following table presents the carrying value of the Notes for the periods indicated (in thousands):


	June 30,		December 31,
	2019		2018
Principal	$	80,500	$	—
Unamortized debt issuance costs		(3,870)		—
Net carrying amount	$	76,630	$	—

The Notes are convertible at the option of holders of the Notes at any time until the close of business on the scheduled trading day immediately preceding the maturity date. Upon conversion, holders of the Notes will receive shares of the Company’s common stock, together, if applicable, with cash in lieu of any fractional share, at the then-applicable conversion rate. The initial conversion rate is 56.9801 shares of the Company’s common stock per $1,000 principal amount of Notes (representing an initial conversion price of approximately $17.55 per share of common stock, which represents an initial conversion premium of approximately 30% above the closing price of $13.50 per share of the

Company’s common stock on February 28, 2019), subject to customary adjustments. If a make-whole fundamental change (as defined in the Indenture) occurs, and in connection with certain other conversions before March 15, 2022, the Company will in certain circumstances increase the conversion rate for a specified period of time.

Initially there are no guarantors of the Notes, but the Notes will be fully and unconditionally guaranteed, on a senior, unsecured basis by certain of the Company’s future domestic subsidiaries. The Notes are the Company’s senior, unsecured obligations and are equal in right of payment with existing and future senior, unsecured indebtedness, senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the Notes and effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness. The Note Guarantee (as defined in the Indenture) of each future guarantor, if any, will be such guarantor’s senior, unsecured obligations and are equal in right of payment with existing and future senior, unsecured indebtedness, senior in right of payment to such future guarantor’s existing and future indebtedness that is expressly subordinated to the Notes and effectively subordinated to such future guarantor’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness.

Holders may require the Company to repurchase their Notes upon the occurrence of a fundamental change (as defined in the Indenture) at a cash purchase price equal to the principal amount thereof plus accrued and unpaid interest, if any.

The Company may not redeem the Notes prior to March 15, 2022. On or after March 15, 2022, the Company may redeem for cash all or part of the Notes if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such redemption notice. The redemption price is equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. In addition, calling any Note for redemption will constitute a “make-whole fundamental change” with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption.

The Indenture contains covenants that limit the Company’s ability and the ability of our subsidiaries to, among other things: (i) incur or guarantee additional indebtedness or issue disqualified stock; and (ii) create or incur liens.

The Company incurred approximately $4.1 million in transaction costs in connection with the issuance of the Notes. These costs were recognized as a reduction of the carrying amount of the Notes utilizing the effective interest method and are being amortized over the term of the notes.

The following table sets forth interest expense information related to the Notes (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Contractual interest expense		1,006		—		1,308		—
Amortization of debt issuance costs		205		—		266		—
Total interest cost	$	1,211	$	—	$	1,574	$	—
Effective interest rate		5.116%		0%		5.116%		0%

Share-Based Compensation

6 Months Ended

Jun. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Note 15. Share-Based Compensation

Equity Plans

The Company’s board of directors and stockholders approved the following equity plans:

●

the 1998 Share Incentive Plan

●

the 2000 Share Incentive Plan

●

the 2004 Share Incentive Plan

●

the 2006 Share Incentive Plan

●

the 2013 Equity Incentive Plan (“2013 Plan”)

The Company issued stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) to employees, consultants and non-employee directors. Stock option awards generally vest over a four year period and have a maximum term of ten years. Stock options under these plans have been granted with an exercise price equal to the fair market value on the date of the grant. Nonqualified and Incentive Stock Options, RSAs and RSUs may be granted from these plans. Prior to the Company’s initial public offering in September 2013, the fair market value of the Company’s stock had been historically determined by the board of directors and from time to time with the assistance of third party valuation specialists.

Stock Options

Options have been granted to the Company’s employees under the five incentive plans and generally become exercisable as to 25% of the shares on the first anniversary date following the date of grant and 12.5% on a semi-annual basis thereafter. All options expire ten years after the date of grant.

The following is a summary of option activity (in thousands, except per share data):



				Weighted				Weighted
		Weighted		Average				Average
		Average		Share Price		Weighted		Remaining	Aggregate
	Number of	Exercise		on Date of		Average		Contractual	Intrinsic
	shares	Price		Exercise		Fair Value		Life	Value
	(in thousands, except price data)
Outstanding, January 1, 2019	287	$	10.19			$	5.31		$	1,503
Exercised	(1)		6.77	$	13.67		4.96			7
Forfeited	—		—				—			—
Outstanding, June 30, 2019	286	$	10.20			$	5.31	4.11		217
Exercisable, June 30, 2019	286	$	10.20					4.11		217
Vested and expected to vest	286	$	10.20					4.11	$	217

As of June 30, 2019, there was no unrecognized stock option expense.

Restricted Stock Units/Awards

The following is a summary of RSU/RSA activity (in thousands, except per share data):


		Weighted
		Average Share		Weighted		Aggregate
	Number of	Price on Date		Average Fair		Intrinsic
	shares	of Release		Value		Value
	(in thousands, except price data)
Outstanding at January 1, 2019	826			$	32.07	$	12,744
Granted	417				13.54		5,644
Released	(205)	$	14.79		28.36		3,034
Cancelled/Forfeited	(27)				27.91		274
Outstanding, June 30, 2019	1,011				25.29		10,393
Vested and expected to vest	1,011			$	25.29	$	10,393

As of June 30, 2019, there was $23.0 million of unrecognized compensation expense related to these RSUs and RSAs. This expense is expected to be recognized over 2.3 years.

Share-Based Compensation

Employee share-based compensation expenses recognized for the periods indicated (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Share-based compensation - by expense type
Cost of goods sold	$	198	$	211	$	387	$	388
Research and development		657		676		1,296		1,252
Sales and marketing		279		260		550		488
General and administrative		1,885		1,752		3,728		3,340
Total share-based compensation expense	$	3,019	$	2,899	$	5,961	$	5,468


	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Share-based compensation - by award type
Employee stock options	$	—	$	12	$	—	$	12
Restricted stock units		3,019		2,887		5,961		5,456
Total share-based compensation expense	$	3,019	$	2,899	$	5,961	$	5,468

Geographic Information

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Geographic Information

Note 17. Geographic Information

The Company operates in one reportable segment. The Company’s Chief Executive Officer, who is considered to be the chief operating decision maker, manages the Company’s operations as a whole and reviews financial information presented on a consolidated basis, accompanied by information about product revenue, for purposes of evaluating financial performance and allocating resources.

The following tables set forth the Company’s revenue and asset information by geographic region. Revenue is classified based on the location of where the product is manufactured. Long-lived assets in the tables below comprise only property, plant, equipment and intangible assets (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Revenues:
United States	$	1,652	$	3,768	$	3,650	$	7,331
Taiwan		22,108		28,970		46,128		62,173
China		19,651		55,084		46,352		83,557
	$	43,411	$	87,822	$	96,130	$	153,061

	As of the period ended
	June 30,		December 31,
	2019		2018
Long-lived assets:
United States	$	94,983	$	88,815
Taiwan		65,509		65,451
China		97,166		89,736
	$	257,658	$	244,002

Contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Note 18. Contingencies

Litigation

Overview

From time to time, the Company may be subject to legal proceedings and litigation arising in the ordinary course of business, including, but not limited to, inquiries, investigations, audits and other regulatory proceedings, such as described below. The Company records a loss provision when it believes it is both probable that a liability has been incurred and the amount can be reasonably estimated. Unless otherwise disclosed, the Company is unable to estimate the possible loss or range of loss for the legal proceeding described below.

Except for the lawsuits described below, the Company believes that there are no claims or actions pending or threatened against it, the ultimate disposition of which would have a material adverse effect on it.

Class Action and Shareholder Derivative Litigation

On August 5, 2017, a lawsuit was filed in the U.S. District Court for the Southern District of Texas against the Company and two of its officers in Mona Abouzied v. Applied Optoelectronics, Inc., Chih-Hsiang (Thompson) Lin, and Stefan J. Murry, et al., Case No. 4:17-cv-02399. The complaint in this matter seeks class action status on behalf of the Company’s shareholders, alleging violations of Sections 10(b) and 20(a) of the Exchange Act against the Company, its chief executive officer, and its chief financial officer, arising out of its announcement on August 3, 2017 that “we see softer than expected demand for our 40G solutions with one of our large customers that will offset the sequential growth and increased demand we expect in 100G.” A second, related action was filed by Plaintiff Chad Ludwig on August 16, 2017 (Case No. 4:17-cv-02512) in the Southern District of Texas. The two cases were consolidated before Judge Vanessa D. Gilmore. On January 22, 2018, the court appointed Lawrence Rougier as Lead Plaintiff and Levi & Korinsky LLP as Lead Counsel. Lead Plaintiff filed an amended consolidated class action complaint on March 6, 2018. The amended complaint requests unspecified damages and other relief. The Company filed a motion to dismiss on April 4, 2018, which was denied on March 28, 2019. The Company disputes the allegations, and intends to continue to vigorously defend against these claims. On May 15, 2019, Lead Plaintiff filed a motion for leave to amend the consolidated class action complaint for the purpose of adding named Plaintiffs Richard Hamilton, Kenneth X. Luthy, Roy H. Cetlin, and John Kugel (together with Lead Plaintiff Lawrence Rougier, “Plaintiffs”) to the case. The court granted the motion on May 16, 2019. The substantive allegations in the Plaintiffs’ operative second amended consolidated class action complaint remain unchanged. On May 28, 2019, Plaintiffs filed a motion seeking to certify the case as a class action pursuant to Federal Rule of Civil Procedure 23 and seeking appointment of Plaintiffs as class representatives and Levi & Korsinsky as class counsel. On July 12, 2019, the Company filed a response in opposition to the motion for class certification. The deadline for Plaintiffs’ reply brief is August 26, 2019. The case is currently in the early stages of discovery, and fact discovery is scheduled to be completed by June 1, 2020.. At this early stage, we are not yet able to determine the likelihood of loss, if any, arising from this matter.

On August 7, 2018, Plaintiff Lei Jin filed a purported derivative action on behalf of nominal defendant Applied Optoelectronics, Inc. in the U.S. District Court for the Southern District of Texas against the Company’s chief executive officer, chief financial officer and board of directors (Case No. 4:18-cv-02713). This case was consolidated with a later filed derivative lawsuit filed by Plaintiff Yiu Kwong Ng in the U.S. District Court for the Southern District of Texas (Case No. 4:18-cv-4751). The allegations in the consolidated derivative complaints are substantially similar to those underlying the Abouzied securities class action and the Taneja securities class action discussed below. The consolidated derivative action is stayed pending a ruling on defendants’ forthcoming motion to dismiss in the Taneja securities class action.

On October 1, 2018, a lawsuit was filed in the U.S. District Court for the Southern District of Texas against the Company and two of its officers in Gaurav Taneja v. Applied Optoelectronics, Inc., Thompson Lin, and Stefan Murry, Case No. 4:18-cv-03544. The complaint in this matter seeks class action status on behalf of the Company’s shareholders, alleging violations of Sections 10(b) and 20(a) of the Exchange Act against the Company, its chief executive officer, and its chief financial officer, arising out of its announcement on September 28, 2018 that it was revising its third quarter revenue guidance due to “an issue with a small percentage of 25G lasers within a specific customer environment.” This case was consolidated with two identical cases styled Davin Pokoik v. Applied Optoelectronics, Inc., Chih-Hsiang Lin, and Stefan J. Murry, Case No. 4:18-cv-3722 and Stephen McGrath v. Applied Optoelectronics, Inc., Chih-Hsiang Lin, and Stefan J. Murry. Mark Naglich was appointed as Lead Plaintiff on the consolidated matter on January 4, 2019. Lead Plaintiff filed an amended consolidated complaint on March 5, 2019, and the Company filed a motion to dismiss the amended consolidated complaint on May 6, 2019. On July 5, 2019, Plaintiff filed a response in opposition to the motion to dismiss. The deadline for the Company’s reply brief in support of the motion to dismiss is August 5, 2019. The Company disputes the allegations and intends to vigorously contest the matter.

Books and Records Request

On April 10, 2019, stockholder David Bono filed a complaint in the Delaware Court of Chancery against the Company seeking to inspect certain corporate books and records pursuant to Section 220 of the Delaware General Corporation Law. The lawsuit is styled David Bono v. Applied Optoelectronics, Inc., Case No. 2019-0275 (Del. Ch. 2019). The complaint does not seek damages but seeks the plaintiff’s costs and expenses, including attorneys’ fees, as well as the requested books and records. On July 5, 2019, by agreement of the parties, the Vice Chancellor issued an order staying the case to allow the parties to seek resolution of the dispute outside of litigation. A joint status report is due to the Court by September 3, 2019.

Significant Accounting Policies (Policies)	6 Months Ended
Significant Accounting Policies (Policies)	Jun. 30, 2019
Significant Accounting Policies
Business Overview	Business Overview Applied Optoelectronics, Inc. (“AOI” or the “Company”) is a Delaware corporation. The Company is a leading, vertically integrated provider of fiber-optic networking products, primarily for four networking end-markets: internet data center, cable television, telecommunications and fiber-to-the-home. The Company designs and manufactures a wide range of optical communications products at varying levels of integration, from components, subassemblies and modules to complete turn-key equipment. The Company has manufacturing and research and development facilities located in the U.S., Taiwan and China. In the U.S., at its corporate headquarters and manufacturing facilities in Sugar Land, Texas, the Company primarily manufactures lasers and laser components and performs research and development activities for laser component and optical module products. In addition, the Company also has a research and development facility in Duluth, Georgia. The Company operates in Taipei, Taiwan and Ningbo, China through its wholly-owned subsidiary Prime World International Holdings, Ltd. (“Prime World”, incorporated in the British Virgin Islands). Prime World operates a branch in Taipei, Taiwan, which primarily manufactures transceivers and performs research and development activities for the transceiver products. Prime World is also the parent of Global Technology, Inc. (“Global”, incorporated in the People’s Republic of China). Through Global, the Company primarily manufactures certain of its data center transceiver products, including subassemblies, as well as Cable TV Broadband (“CATV”) systems and equipment, and performs research and development activities for the CATV products.
Interim Financial Statements	Interim Financial Statements The unaudited condensed consolidated financial statements of the Company as of June 30, 2019 and December 31, 2018 and for the three and six months ended June 30, 2019 and June 30, 2018, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim information and with the instructions on Form 10-Q and Rule 10-01 of Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In accordance with those rules and regulations, the Company has omitted certain information and notes required by GAAP for annual consolidated financial statements. In the opinion of management, the condensed consolidated financial statements contain all adjustments, except as otherwise noted, necessary for the fair presentation of the Company’s financial position and results of operations for the periods presented. The year-end condensed balance sheet data was derived from audited financial statements. These condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K (“Annual Report”) for the fiscal year ended December 31, 2018. The results of operations for the three and six months ended June 30, 2019 are not necessarily indicative of the results expected for the entire fiscal year. All significant intercompany accounts and transactions have been eliminated.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates in the consolidated financial statements and accompanying notes. Significant estimates and assumptions that impact these financial statements and the accompanying notes relate to, among other things, allowance for doubtful accounts, inventory reserve, product warranty costs, share-based compensation expense, estimated useful lives of property and equipment, and taxes.
Revenue Recognition	The adoption of Topic 606 represents a change in accounting principle that will provide financial statement readers with enhanced revenue recognition disclosures. In accordance with Topic 606, revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally, this occurs with the transfer of control of products or services. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services. Certain customers may receive cash and/or non-cash incentives, which are accounted for as variable consideration. To achieve this core principle, the Company applies the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to performance obligations in the contract; and (v) recognize revenue when or as the Company satisfies a performance obligation. The Company generally satisfies performance obligations at a point in time. Revenue is recognized based on the transaction price at the time the related performance obligation is satisfied by transferring a promised product or service to a customer. Disaggregation of Revenue Revenue is classified based on the location of where the product is manufactured. For additional information on the disaggregated revenues by geographical region, see Note 17, "Geographic Information.”
Recent Accounting Pronouncements	Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted in 2019 On February 25, 2016, the FASB released Accounting Standards Update (ASU) No. 2016-02, Leases, to complete its project to overhaul lease accounting. The ASU codifies ASC 842, Leases, which will replace the guidance in ASC 840. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. The Company adopted this ASU on January 1, 2019 without any impact to beginning retained earnings. Upon adoption of the new lease standard, the Company elected the package of practical expedients which allowed it to carry forward the historical lease classification on existing leases at adoption. In addition, the Company elected the short-term lease recognition exemption for all leases that qualify. The Company also elected the practical expedient to not separate lease and non-lease components for all of its leases. The Company has implemented internal controls to enable the presentation of financial information on adoption. The standard has a material impact on the Company’s consolidated balance sheet, but did not have an impact in its consolidated income statements. The most significant effects of adopting the new standard relate to the recognition of new ROU assets and lease liabilities on its balance sheet for its Taiwan branch. See Note 4, "Operating Leases" for additional information on the required disclosures related to the impact of adopting this standard. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for nonemployee share-based payment transactions. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The Company adopted this ASU on January 1, 2019 with no impact on its consolidated financial statements. Recent Accounting Pronouncements Yet to be Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments, which changes the way entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net earnings. The new standard is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Based on the composition of the Company’s investment portfolio, current market conditions, and historical credit loss activity, the adoption of ASU 2016-13 is not expected to have a material impact on its consolidated financial statements.
Earnings Per Share	Basic net income (loss) per share has been computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share has been computed using the weighted-average number of shares of common stock and dilutive potential common shares from stock options, restricted stock units and senior convertible notes outstanding during the period. In periods with net losses, normally dilutive shares become anti-dilutive. Therefore, basic and diluted earnings per share are the same.

Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2019

Revenue Recognition

Schedule of revenue classified by major product category


	Three months ended June 30,
	2019		% of Revenue	2018		% of Revenue
Data Center	$	31,806	73.3%	$	69,040	78.6%
CATV		9,818	22.6%		14,184	16.2%
Telecom		1,630	3.8%		4,157	4.7%
FTTH		16	0.0%		166	0.2%
Other		141	0.3%		275	0.3%
Total Revenue	$	43,411	100.0%	$	87,822	100.0%


	Six months ended June 30,
	2019		% of Revenue	2018		% of Revenue
Data Center	$	70,305	73.1%	$	119,623	78.2%
CATV		21,780	22.7%		24,752	16.2%
Telecom		3,368	3.5%		7,743	5.1%
FTTH		110	0.1%		277	0.2%
Other		567	0.6%		666	0.4%
Total Revenue	$	96,130	100.0%	$	153,061	100.0%

Operating Leases (Tables)

6 Months Ended

Jun. 30, 2019

Operating Leases

Summary of components of lease expense

The Components of lease expense were as follows for the periods indicated (in thousands):


	Three months ended June 30,		Six months ended June 30,
		2019		2019
Operating lease expense	$	318	$	641
Short Term lease expense		51		80
Total lease expense	$	369	$	721

Summary of maturities of our lease liabilities for all operating leases

Maturities of lease liabilities are as follows for the future one-year periods ending June 30, (in thousands):


2020	$	1,212
2021		1,146
2022		1,092
2023		1,042
2024		1,055
2025 and thereafter		5,397
Total lease payments	$	10,944
Less imputed interest		(1,859)
Present value	$	9,085

Summary of weighted average remaining lease terms and discount rates


	June 30,
	2019
Weighted Average Remaining Lease Term (Years)	9.69
Weighted Average Discount Rate	3.13%

Summary of cash flow information

Supplemental cash flow information related to operating leases was as follows for the periods indicated (in thousands):


	Six months ended June 30,
	2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	676
Operating cash flows from financing lease	—
Financing cash flows from financing lease	—
Right-of-use assets obtained in exchange for new operating lease liabilities	15
Right-of-use assets obtained in exchange for new finance lease liabilities	—

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2019

Net income (loss) per share

Schedule of Computation basic and diluted net loss per share

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


	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Numerator:
Net income (loss)	$	(11,366)	$	8,034	$	(21,840)	$	10,154
Denominator:
Weighted average shares used to compute net income (loss) per share
Basic		19,932		19,590		19,898		19,541
Effect of dilutive options and restricted stock units		—		490		—		472
Diluted		19,932		20,080		19,898		20,012
Net income (loss) per share
Basic	$	(0.57)	$	0.41	$	(1.10)	$	0.52
Diluted	$	(0.57)	$	0.40	$	(1.10)	$	0.51

Schedule of potentially dilutive securities


	Three months ended June 30,		Six months ended June 30,
	2019	2018	2019	2018
Employee stock options	29	—	63	—
Restricted stock units	—	—	2	—
Shares for convertible senior notes	4,587	—	4,587
Total antidilutive shares	4,616	—	4,652	—

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Schedule of assets and liabilities at fair value

The following table represents a summary of the Company’s financial instruments measured at fair value on a recurring basis for the periods indicated (in thousands):


	As of June 30, 2019								As of December 31, 2018
	(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Cash and cash equivalents	$	81,070	$	—	$	—	$	81,070	$	55,646	$	—	$	—	$	55,646
Restricted cash		2,917		—		—		2,917		2,358		—		—		2,358
Total assets	$	83,987	$	—	$	—	$	83,987	$	58,004	$	—	$	—	$	58,004
Liabilities:
Bank acceptance payable		—	$	2,532		—	$	2,532		—	$	4,628		—	$	4,628
Convertible senior notes		—		71,500		—		71,500		—		—		—		—
Total liabilities	$	—	$	74,032	$	—	$	74,032	$	—	$	4,628	$	—	$	4,628

Notes Payable and Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Schedule of notes payable and long-term debt

Notes payable and long-term debt consisted of the following for the periods indicated (in thousands):


	June 30, 2019		December 31, 2018
Revolving line of credit with a U.S. bank up to $25,000 with interest at LIBOR plus 1.5%, maturing September 28, 2020	$	20,000	$	23,104
Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.15%, maturing April 1, 2024		—		20,067
Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 1.3%, maturing between April 1, 2023 and December 18, 2023		—		19,164
Revolving line of credit with a Taiwan bank up to $9,659 with interest at 2%, maturing July 29, 2019		3,220		3,256
Revolving line of credit with a Taiwan bank up to $7,000 with interest ranging from 1.5% to 3.5%, maturing July 26, 2019		3,219		3,550
Notes payable to a finance company due in monthly installments with 3.4% interest, maturing November 30, 2021		5,187		6,331
Notes payable to a finance company due in monthly installments with 3.1% interest, maturing January 21, 2022		5,545		—
Revolving line of credit with a Taiwan bank up to $2,576 with interest of 1.7%, maturing September 11, 2019		644		—
Revolving line of credit with a China bank up to $19,158 with interest ranging from 4.1% to 4.6%		—		8,652
Revolving line of credit with a China bank up to $26,183 with interest of 4.57%, maturing May 24, 2024		7,804		—
Credit facility with a China bank up to $14,546 with interest of 5.7%, maturing January 4, 2021		4,073		—
Sub-total		49,692		84,124
Less debt issuance costs, net		(44)		(207)
Grand total		49,648		83,917
Less current portion		(19,180)		(23,589)
Non-current portion	$	30,468	$	60,328

Bank Acceptance Notes Payable
Bank acceptance notes issued to vendors with a zero percent interest rate	$	2,532	$	4,628

Maturities of notes payable and long-term debt

Maturities of long-term debt are as follows for the future one-year periods ending June 30, (in thousands):


2020	$	19,180
2021		24,249
2022		6,219
2023		—
2024		—
2025 and thereafter		—
Total outstanding	$	49,648

Convertible Senior Notes (Tables)

6 Months Ended

Jun. 30, 2019

Convertible Senior Notes

Schedule of carrying value of the Convertible Senior Notes

The following table presents the carrying value of the Notes for the periods indicated (in thousands):


	June 30,		December 31,
	2019		2018
Principal	$	80,500	$	—
Unamortized debt issuance costs		(3,870)		—
Net carrying amount	$	76,630	$	—

Schedule of interest expense

The following table sets forth interest expense information related to the Notes (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Contractual interest expense		1,006		—		1,308		—
Amortization of debt issuance costs		205		—		266		—
Total interest cost	$	1,211	$	—	$	1,574	$	—
Effective interest rate		5.116%		0%		5.116%		0%

Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of option activity

The following is a summary of option activity (in thousands, except per share data):



				Weighted				Weighted
		Weighted		Average				Average
		Average		Share Price		Weighted		Remaining	Aggregate
	Number of	Exercise		on Date of		Average		Contractual	Intrinsic
	shares	Price		Exercise		Fair Value		Life	Value
	(in thousands, except price data)
Outstanding, January 1, 2019	287	$	10.19			$	5.31		$	1,503
Exercised	(1)		6.77	$	13.67		4.96			7
Forfeited	—		—				—			—
Outstanding, June 30, 2019	286	$	10.20			$	5.31	4.11		217
Exercisable, June 30, 2019	286	$	10.20					4.11		217
Vested and expected to vest	286	$	10.20					4.11	$	217

Summary of RSU/RSA activity

The following is a summary of RSU/RSA activity (in thousands, except per share data):


		Weighted
		Average Share		Weighted		Aggregate
	Number of	Price on Date		Average Fair		Intrinsic
	shares	of Release		Value		Value
	(in thousands, except price data)
Outstanding at January 1, 2019	826			$	32.07	$	12,744
Granted	417				13.54		5,644
Released	(205)	$	14.79		28.36		3,034
Cancelled/Forfeited	(27)				27.91		274
Outstanding, June 30, 2019	1,011				25.29		10,393
Vested and expected to vest	1,011			$	25.29	$	10,393

Schedule of employee stock-based compensation expenses

Employee share-based compensation expenses recognized for the periods indicated (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Share-based compensation - by expense type
Cost of goods sold	$	198	$	211	$	387	$	388
Research and development		657		676		1,296		1,252
Sales and marketing		279		260		550		488
General and administrative		1,885		1,752		3,728		3,340
Total share-based compensation expense	$	3,019	$	2,899	$	5,961	$	5,468


	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Share-based compensation - by award type
Employee stock options	$	—	$	12	$	—	$	12
Restricted stock units		3,019		2,887		5,961		5,456
Total share-based compensation expense	$	3,019	$	2,899	$	5,961	$	5,468

Geographic Information (Tables)

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Revenue information by geographic region


	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Revenues:
United States	$	1,652	$	3,768	$	3,650	$	7,331
Taiwan		22,108		28,970		46,128		62,173
China		19,651		55,084		46,352		83,557
	$	43,411	$	87,822	$	96,130	$	153,061

Long-lived assets by geographic region

	As of the period ended
	June 30,		December 31,
	2019		2018
Long-lived assets:
United States	$	94,983	$	88,815
Taiwan		65,509		65,451
China		97,166		89,736
	$	257,658	$	244,002

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Numerator:
Net income (loss)	$ (11,366)	$ 8,034	$ (21,840)	$ 10,154
Weighted average shares used to compute net income (loss) per share
Basic	19,931,745	19,590,164	19,897,602	19,541,478
Effect of dilutive options and restricted stock units		490,000		472,000
Diluted	19,931,745	20,079,702	19,897,602	20,012,344
Net income (loss) per share
Basic	$ (0.57)	$ 0.41	$ (1.10)	$ 0.52
Diluted	$ (0.57)	$ 0.40	$ (1.10)	$ 0.51

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(19))
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
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Reference 3: http://www.xbrl.org/2003/role/exampleRef
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-Name Accounting Standards Codification
-Topic 260
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-Paragraph 52
-URI http://asc.fasb.org/extlink&oid=117327953&loc=d3e4984-109258

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(21))
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
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-Subparagraph (SX 210.9-04(23))
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=117326831&loc=SL5780133-109256

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section S99
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-Subparagraph (SX 210.9-04(23))
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
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-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(19))
-URI http://asc.fasb.org/extlink&oid=116637232&loc=SL114874131-224263

+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Notes Payable and Long-Term Debt (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Notes payable and long-term debt	$ 49,692	$ 84,124
Less debt issuance costs, net	(44)	(207)
Grand Total	49,648	83,917
Current portion of notes payable and long-term debt	(19,180)	(23,589)
Long term portion of notes payable and long-term debt	30,468	60,328
Bank acceptance notes	$ 2,532	4,628
Term loan 1
Notes payable and long-term debt		20,067
Term loan 1 \| London Interbank Offered Rate (LIBOR)
Basis spread on variable rate	1.15%
Term loan 2
Notes payable and long-term debt		19,164
Term loan 2 \| London Interbank Offered Rate (LIBOR)
Basis spread on variable rate	1.30%
Note payable 1
Notes payable and long-term debt	$ 5,187	6,331
Stated interest rate	3.40%
Note payable 2
Notes payable and long-term debt	$ 5,545
Stated interest rate	3.10%
Credit facility
Notes payable and long-term debt	$ 4,073
Revolving line of credit maximum borrowing capacity	$ 14,546
Stated interest rate	5.70%
Revolving Line of Credit
Notes payable and long-term debt	$ 20,000
Revolving Line of Credit \| Revolving Line of Credit 1
Notes payable and long-term debt	20,000	23,104
Revolving line of credit maximum borrowing capacity	$ 25,000
Revolving Line of Credit \| Revolving Line of Credit 1 \| London Interbank Offered Rate (LIBOR)
Basis spread on variable rate	1.50%
Revolving Line of Credit \| Revolving Line of Credit 2
Notes payable and long-term debt	$ 3,220	3,256
Revolving line of credit maximum borrowing capacity	$ 9,659
Basis spread on variable rate	2.00%
Revolving Line of Credit \| Revolving Line of Credit 3
Notes payable and long-term debt	$ 3,219	3,550
Revolving line of credit maximum borrowing capacity	7,000
Revolving Line of Credit \| Revolving Line of Credit 4
Notes payable and long-term debt	644
Revolving line of credit maximum borrowing capacity	$ 2,576
Basis spread on variable rate	1.70%
Revolving Line of Credit \| Revolving Line of Credit 5
Notes payable and long-term debt		$ 8,652
Revolving line of credit maximum borrowing capacity	$ 19,158
Revolving Line of Credit \| Revolving Line of Credit 6
Notes payable and long-term debt	7,804
Revolving line of credit maximum borrowing capacity	$ 26,183
Basis spread on variable rate	4.57%
Revolving Line of Credit \| Minimum \| Revolving Line of Credit 3
Basis spread on variable rate	1.50%
Revolving Line of Credit \| Minimum \| Revolving Line of Credit 5
Basis spread on variable rate	4.10%
Revolving Line of Credit \| Maximum \| Revolving Line of Credit 3
Basis spread on variable rate	3.50%
Revolving Line of Credit \| Maximum \| Revolving Line of Credit 5
Basis spread on variable rate	4.60%

Notes Payable and Long-Term Debt - Term Debt - Narrative2 (Details)																						6 Months Ended		12 Months Ended
	Jun. 21, 2019 USD ($)	May 24, 2019 USD ($)	May 08, 2019 USD ($)	May 07, 2019 USD ($)	Apr. 30, 2019 USD ($)	Apr. 19, 2019 USD ($)	Apr. 11, 2019 USD ($)	Mar. 05, 2019 USD ($) D	Feb. 01, 2019 USD ($)	Jan. 21, 2019 USD ($)	Jan. 21, 2019 TWD ($)	Dec. 11, 2018 USD ($)	Nov. 29, 2018 USD ($)	Nov. 29, 2018 TWD ($)	Oct. 03, 2018 USD ($)	Sep. 21, 2018 USD ($)	Jun. 19, 2018 USD ($)	Jun. 18, 2018	Mar. 30, 2018 USD ($)	Mar. 10, 2018	Sep. 28, 2017 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)	Jun. 21, 2019 CNY (¥)	May 24, 2019 CNY (¥)	May 07, 2019 CNY (¥)	Apr. 30, 2019 CNY (¥)	Apr. 19, 2019 CNY (¥)	Apr. 11, 2019 TWD ($)	Mar. 04, 2019 USD ($)	Jan. 21, 2019 TWD ($)	Dec. 11, 2018 TWD ($)	Nov. 29, 2018 TWD ($)	Sep. 21, 2018 CNY (¥)	Jun. 19, 2018 TWD ($)
Notes payable and long-term debt																						$ 49,692,000		$ 84,124,000
Repayments of outstanding balance																						42,211,000	$ 93,953,000
Unused borrowing capacity																						64,700,000		63,600,000
Restricted cash, investments or security deposit associated with loan facilities																						$ 1,200,000		$ 1,400,000
One Month LIBOR Rate
Basis spread on variable rate																						2.40%		2.50%
Prime World \| Finance Lease 2
Finance lease agreement balance																						$ 5,500,000
Prime World \| Promissory note
Guarantee deposit										$ 6,800,000			$ 6,800,000																			$ 209,555,736		$ 210,601,605
Revolving Line of Credit 2 \| Prime World
Term of revolving credit facility																	1 year
Revolving line of credit maximum borrowing capacity																	$ 9,800,000																			$ 300,000,000
Stated interest rate																	1.95%																			1.95%
Revolving Line of Credit 2 \| Prime World \| Minimum
Draw term																	90 days	90 days
Revolving Line of Credit 2 \| Prime World \| Maximum
Draw term																	120 days	120 days
Stated interest rate																	2.00%																			2.00%
Revolving Line of Credit 2 \| Prime World \| Taiwan Interbank Offered Rate
Notes payable and long-term debt																						3,200,000
Revolving Line of Credit 3 \| Prime World
Revolving line of credit maximum borrowing capacity															$ 7,000,000
Notes payable and long-term debt																						3,200,000
Revolving Line of Credit 3 \| Prime World \| Minimum
Draw term															60 days
Revolving Line of Credit 3 \| Prime World \| Maximum
Draw term															90 days
Revolving Line of Credit 3 \| Prime World \| Cost of funds rate \| U.S. Dollars
Basis spread on variable rate															1.25%
Revolving Line of Credit 3 \| Prime World \| Cost of funds rate \| NTD
Basis spread on variable rate															1.35%
CTBC Bank Co. Ltd. \| Enterprise Swap Index Rate
Base lending rate plus												1.2
CTBC Bank Co. Ltd. \| Prime World
Term of revolving credit facility												1 year
Revolving line of credit maximum borrowing capacity												$ 4,900,000																					$ 150,000,000
Notes payable and long-term debt																						0
CTBC Bank Co. Ltd. \| Prime World \| Maximum
Draw term												120 days
CTBC Bank Co. Ltd. \| Prime World \| Cost of funds rate
Basis spread on variable rate												3.40%
Base lending rate plus												1.2
CTBC Bank Co. Ltd. \| Prime World \| Enterprise Swap Index Rate
Basis spread on variable rate												0.69%
China Construction Bank \| Revolving Line of Credit 4
Term of revolving credit facility																5 years
Revolving line of credit maximum borrowing capacity																$ 18,600,000																			¥ 129,000,000
China Construction Bank \| Revolving Line of Credit 4 \| Bank Acceptance Notes Payable
Notes payable and long-term debt																						500,000
Chailease Finance Co. Ltd. \| Prime World \| Finance Lease 2
Purchase price										$ 8,700,000	$ 267,333,186		$ 8,700,000	$ 267,340,468
Financial lease term										3 years	3 years		3 years	3 years
Initial payment amount										$ 2,200,000	$ 67,333,186		$ 2,200,000	$ 67,340,468
Finance lease interest rate										3.1	3.1		3.5	3.5
Finance lease agreement balance																						5,200,000
Chailease Finance Co. Ltd. \| Prime World \| Finance Lease 2 \| Minimum
Lease payment per month										$ 200,000	$ 5,570,167		$ 200,000	$ 5,571,229
Chailease Finance Co. Ltd. \| Prime World \| Finance Lease 2 \| Maximum
Lease payment per month										$ 200,000	$ 6,082,131		$ 200,000	$ 6,139,188
Branch Banking and Trust Company
Repayments of outstanding balance								$ 37,800,000
Branch Banking and Trust Company \| Promissory Note One [Member]
Revolving line of credit maximum borrowing capacity																			$ 60,000,000
Branch Banking and Trust Company \| Promissory Note One [Member] \| One Month LIBOR Rate \| Minimum
Basis spread on variable rate																			1.40%
Branch Banking and Trust Company \| Promissory Note One [Member] \| One Month LIBOR Rate \| Maximum
Basis spread on variable rate																			2.00%
Branch Banking and Trust Company \| Promissory Note Two [Member]
Term of revolving credit facility									5 years
Branch Banking and Trust Company \| Promissory Note Three [Member]
Period on which utilization will not apply from business days prior to the end of any fiscal quarter \| D								7
Period on which utilization will not apply to business days after the subsequent fiscal quarter \| D								7
Branch Banking and Trust Company \| Promissory Note Three [Member] \| Third Amendment
Revolving line of credit maximum borrowing capacity								$ 25,000,000																							$ 60,000,000
Percentage of unused line fee								0.20%
Percentage of utilization of revolving credit line upon available commitment								60.00%
Branch Banking and Trust Company \| First Credit Facility
Term of revolving credit facility									3 years												3 years
Revolving line of credit maximum borrowing capacity									$ 60,000,000												$ 50,000,000
Term of loan																					3 years
Branch Banking and Trust Company \| First Credit Facility \| London Interbank Offered Rate (LIBOR)
Basis spread on variable rate																					1.50%
Revolving Line of Credit
Notes payable and long-term debt																						20,000,000.0
Revolving Line of Credit \| Revolving Line of Credit 2
Revolving line of credit maximum borrowing capacity																						$ 9,659,000
Basis spread on variable rate																						2.00%
Notes payable and long-term debt																						$ 3,220,000		$ 3,256,000
Revolving Line of Credit \| Revolving Line of Credit 3
Revolving line of credit maximum borrowing capacity																						7,000,000
Notes payable and long-term debt																						$ 3,219,000		$ 3,550,000
Revolving Line of Credit \| Revolving Line of Credit 3 \| Minimum
Basis spread on variable rate																						1.50%
Revolving Line of Credit \| Revolving Line of Credit 3 \| Maximum
Basis spread on variable rate																						3.50%
Revolving Line of Credit \| Revolving Line of Credit 4
Revolving line of credit maximum borrowing capacity																						$ 2,576,000
Basis spread on variable rate																						1.70%
Notes payable and long-term debt																						$ 644,000
Revolving Line of Credit \| Branch Banking and Trust Company \| Promissory Note One [Member]
Revolving line of credit maximum borrowing capacity																			$ 60,000,000
Capital expenditure loan \| Branch Banking and Trust Company
Notes payable and long-term debt									$ 26,000,000
Capital expenditure loan \| Branch Banking and Trust Company \| Promissory Note Two [Member]
Term of revolving credit facility																				5 years
Notes payable and long-term debt																			$ 26,000,000
Capital expenditure loan \| Branch Banking and Trust Company \| Promissory Note Two [Member] \| One Month LIBOR Rate \| Minimum
Basis spread on variable rate																			1.30%
Capital expenditure loan \| Branch Banking and Trust Company \| Promissory Note Two [Member] \| One Month LIBOR Rate \| Maximum
Basis spread on variable rate																			2.00%
Real estate term loan \| Branch Banking and Trust Company
Term of revolving credit facility									70 months										70 months
Notes payable and long-term debt									$ 21,500,000
Real estate term loan \| Branch Banking and Trust Company \| Promissory Note Three [Member]
Notes payable and long-term debt																			$ 21,500,000
Real estate term loan \| Branch Banking and Trust Company \| Promissory Note Three [Member] \| One Month LIBOR Rate \| Minimum
Basis spread on variable rate																			1.15%
Real estate term loan \| Branch Banking and Trust Company \| Promissory Note Three [Member] \| One Month LIBOR Rate \| Maximum
Basis spread on variable rate																			2.00%
Far Eastern Credit Facility \| Prime World
Term of revolving credit facility							1 year
Revolving line of credit maximum borrowing capacity							$ 2,600,000																							$ 80,000,000
Notes payable and long-term debt																						600,000
Draw term							180 days
Far Eastern Credit Facility \| Prime World \| One-Year Fixed Term Time Deposits Rate
Basis spread on variable rate							0.655%
Bank's cost of fund lending rate							1.045%
Far Eastern Credit Facility \| Prime World \| TAIFX3
Basis spread on variable rate							0.70%
Bank's cost of fund lending rate							2.75%
China Merchants Credit Line
Notes payable and long-term debt																						0
China Merchants Credit Line \| Bank Acceptance Notes Payable
Notes payable and long-term debt																						1,400,000
China Merchants Credit Line \| Revolving line of credit agreement
Term of revolving credit facility						12 months
Revolving line of credit maximum borrowing capacity						$ 8,900,000																							¥ 60,000,000
SPD Credit Facility
Term of revolving credit facility					1 year
Revolving line of credit maximum borrowing capacity					$ 1,500,000																							¥ 9,900,000
SPD Credit Facility \| 12 month prime loan rate
Basis spread on variable rate					0.2475%
30M Credit Facility
Term of revolving credit facility				1 year
Revolving line of credit maximum borrowing capacity				$ 4,500,000																							¥ 30,000,000
30M Credit Facility \| 12 month prime loan rate
Basis spread on variable rate				0.2475%
Bank's cost of fund lending rate				4.32%
SPD Credit Line
Term of revolving credit facility		5 years
SPD Credit Line \| Revolving line of credit agreement
Term of revolving credit facility		5 years
Revolving line of credit maximum borrowing capacity		$ 26,200,000																				7,800,000				¥ 180,000,000
SPD Credit Line \| Revolving line of credit agreement \| Bank Acceptance Notes Payable
Notes payable and long-term debt																						700,000
2M Credit Facility
Term of revolving credit facility			6 months
Revolving line of credit maximum borrowing capacity			$ 2,000,000
2M Credit Facility \| Six Month LIBOR Rate
Basis spread on variable rate			1.48%
Bank's cost of fund lending rate			2.59438%
100M Credit Facility
Term of revolving credit facility	18 months
Revolving line of credit maximum borrowing capacity	$ 14,600,000																								¥ 100,000,000
Notes payable and long-term debt																						4,100,000
50M Credit Facility
Term of revolving credit facility	3 years
Revolving line of credit maximum borrowing capacity	$ 7,300,000																								¥ 50,000,000
Notes payable and long-term debt																						$ 0

Convertible Senior Notes (Details)			3 Months Ended	6 Months Ended
Convertible Senior Notes (Details)	Mar. 05, 2019 USD ($) item	Feb. 28, 2019 $ / shares	Jun. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018
Debt Instrument [Line Items]
Proceeds from sale of notes after deducting the Initial Purchaser's discounts and offering expenses				$ 76,364,000
Net carrying amount			$ 76,630,000	76,630,000
Interest expense
Amortization of debt issuance costs				(457,000)
Convertible senior notes due 2024
Debt Instrument [Line Items]
Interest rate	5.00%
Proceeds from sale of notes after deducting the Initial Purchaser's discounts and offering expenses	$ 76,400,000
Repayments of capital expenditure loan and real estate term loan	37,800,000
Principal	$ 80,500,000		80,500,000	80,500,000
Unamortized debt issuance costs			(3,870,000)	(3,870,000)
Net carrying amount			76,630,000	76,630,000
Initial conversion rate	56.9801%
Initial conversion price \| $ / shares		$ 17.55
Initial conversion premium		30.00%
Share price \| $ / shares		$ 13.50
Percentage of sale price per share to conversion price	130.00%
Number of trading days \| item	20
Number of consecutive trading days	30
Redemption price as percentage of principal amount	100.00%
Transaction costs			4,100,000	4,100,000
Interest expense
Contractual interest expense			(1,006,000)	(1,308,000)
Amortization of debt issuance costs			(205,000)	(266,000)
Total interest cost			$ (1,211,000)	$ (1,574,000)
Effective interest rate			5.116%	5.116%	0.00%

Accrued Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Accrued payroll	$ 7,868	$ 10,772
Accrued rent		1,200
Accrued employee benefits	1,585	2,862
Accrued state and local taxes	631	1,088
Accrued interest	1,336	163
Advance payments	273	426
Accrued product warranty	894	995
Accrued commission expenses	211	398
Accrued professional fees	202	315
Accrued capital expenditures	12	371
Accrued other	974	701
Total accrued liabilities	$ 13,986	$ 19,291

Share-Based Compensation - Option Activity (Details) - Employee stock options $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($) $ / shares shares
Number of Shares
Outstanding, beginning balance \| shares	287
Exercised \| shares	(1)
Outstanding, ending balance \| shares	286
Exercisable, ending balance \| shares	286
Vested and expected to vest \| shares	286
Weighted Average Exercise Price
Outstanding, beginning balance	$ 10.19
Exercised	6.77
Outstanding, ending balance	10.20
Exercisable, ending balance	10.20
Vested and expected to vest	10.20
Weighted Average Share Price on Date of Exercise	13.67
Weighted Average Fair Value [Abstract]
Outstanding, beginning balance	5.31
Exercised	4.96
Outstanding, ending balance	$ 5.31
Weighted Average Remaining Contractual Life
Outstanding, ending balance	4 years 1 month 9 days
Exercisable, ending balance	4 years 1 month 9 days
Vested and expected to vest	4 years 1 month 9 days
Aggregate Intrinsic Value
Aggregate intrinsic value, beginning balance \| $	$ 1,503
Exercised \| $	7
Aggregate intrinsic value, ending balance \| $	217
Exercisable, ending balance \| $	217
Vested and expected to vest \| $	$ 217

Share-Based Compensation - Restricted Stock Units (Details) - Restricted stock units $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($) $ / shares shares
Number of shares
Outstanding, beginning balance \| shares	826
Granted \| shares	417
Released \| shares	(205)
Cancelled/Forfeited \| shares	(27)
Outstanding, ending balance \| shares	1,011
Vested and expected to vest \| shares	1,011
Weighted Average Share Price on Date of Release	$ 14.79
Weighted Average Fair Value
Outstanding, beginning balance	32.07
Granted	13.54
Released	28.36
Cancelled/Forfeited	27.91
Outstanding, ending balance	25.29
Vested and expected to vest	$ 25.29
Aggregate Intrinsic Value [Abstract]
Aggregate intrinsic value, outstanding \| $	$ 12,744
Granted \| $	5,644
Released \| $	3,034
Cancelled/Forfeited \| $	274
Aggregate intrinsic value, outstanding \| $	10,393
Vested and expected to vest \| $	$ 10,393

Description of Business (Details)	Jun. 30, 2019 item
Description of Business
Number of networking end markets	4

Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Revenue Recognition (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue
Revenues	$ 43,411	$ 87,822	$ 96,130	$ 153,061
Percentage of Revenue	100.00%	100.00%	100.00%	100.00%
Data Center
Disaggregation of Revenue
Revenues	$ 31,806	$ 69,040	$ 70,305	$ 119,623
Percentage of Revenue	73.30%	78.60%	73.10%	78.20%
CATV
Disaggregation of Revenue
Revenues	$ 9,818	$ 14,184	$ 21,780	$ 24,752
Percentage of Revenue	22.60%	16.20%	22.70%	16.20%
Telecom
Disaggregation of Revenue
Revenues	$ 1,630	$ 4,157	$ 3,368	$ 7,743
Percentage of Revenue	3.80%	4.70%	3.50%	5.10%
FTTH
Disaggregation of Revenue
Revenues	$ 16	$ 166	$ 110	$ 277
Percentage of Revenue	0.00%	0.20%	0.10%	0.20%
Other
Disaggregation of Revenue
Revenues	$ 141	$ 275	$ 567	$ 666
Percentage of Revenue	0.30%	0.30%	0.60%	0.40%
Before Topic 606
Disaggregation of Revenue
Revenues		$ 87,822		$ 153,061

Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials	$ 26,581	$ 30,214
Work in process and sub-assemblies	48,008	49,192
Finished goods	6,886	13,850
Total inventories	$ 81,475	$ 93,256

Property, Plant & Equipment - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 5.9	$ 7.2	$ 11.7	$ 14.0
Cost of Sales, depreciation	$ 2.3	$ 3.8	$ 4.8	$ 7.6

Intangible Assets, net (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Gross Amount	$ 7,308	$ 6,998
Accumulated amortization	(3,280)	(3,021)
Amortization expense for intangible assets	4,028	3,977
Patents
Gross Amount	7,292	6,983
Accumulated amortization	(3,267)	(3,008)
Amortization expense for intangible assets	4,025	3,975
Trademarks
Gross Amount	16	15
Accumulated amortization	(13)	(13)
Amortization expense for intangible assets	$ 3	$ 2

B. Summary Of Significant Accounting Policies - Lease (Details)	6 Months Ended
	Jun. 30, 2019
Significant Accounting Policies
Lease, Practical Expedients, Package [true false]	true
Lease, Practical Expedient, Lessor Single Lease Component [true false]	true

Operating Leases - Lease Expense (Details) $ in Thousands	3 Months Ended	6 Months Ended
Operating Leases - Lease Expense (Details) $ in Thousands	Jun. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)
Operating Leases
Options to renew		true
Lease, Practical Expedients, Package [true false]		true
Lease, Practical Expedient, Lessor Single Lease Component [true false]	true	true
Components of lease expense
Operating lease expense	$ 318	$ 641
Short Term lease expense	51	80
Total lease expense	$ 369	$ 721

Operating Leases - Maturities of lease liabilities (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Operating Leases
2020	$ 1,212
2021	1,146
2022	1,092
2023	1,042
2024	1,055
2025 and thereafter	5,397
Total lease payments	10,944
Less imputed interest	(1,859)
Present value	$ 9,085

Operating Leases - Weighted Average (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Weighted Average Remaining Lease Term And Discount Rate For Operating Leases Abstract
Weighted Average Remaining Lease Term (Years)	9 years 8 months 8 days
Weighted Average Discount Rate	3.13%
Supplemental Cash Flow Information Related To Operating Leases Abstract
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases	$ 676
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 15

Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2017
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Abstract
Cash and cash equivalents	$ 81,070	$ 55,646
Restricted Cash	2,917	2,358
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$ 83,987	$ 58,004	$ 77,943	$ 83,948

Earnings Per Share - Potentially Dilutive Shares (Details) - shares shares in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Potentially dilutive securities excluded from EPS	4,616	4,652
Employee stock options
Potentially dilutive securities excluded from EPS	29	63
Restricted stock units
Potentially dilutive securities excluded from EPS		2
Shares for convertible senior notes
Potentially dilutive securities excluded from EPS	4,587	4,587

Inventories - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Inventories - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Inventory Disclosure [Abstract]
Lower of cost or market reserve adjustment for inventory	$ 2,900	$ 1,500	$ 5,207	$ 2,356

Property, Plant & Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Property, plant and equipment, gross	$ 332,561	$ 311,894
Less accumulated depreciation and amortization	(105,777)	(95,233)
Property, plant and equipment after accumulated depreciation and amortization, excluding construction in progress and land	226,784	216,661
Construction in progress	20,002	16,449
Land	1,101	1,101
Total property, plant and equipment, net	247,887	234,211
Land improvements
Property, plant and equipment, gross	806	806
Building and improvements
Property, plant and equipment, gross	83,121	80,960
Machinery and equipment
Property, plant and equipment, gross	232,852	214,718
Furniture and fixtures
Property, plant and equipment, gross	5,087	5,043
Computer equipment and software
Property, plant and equipment, gross	10,041	9,709
Transportation equipment
Property, plant and equipment, gross	$ 654	$ 658

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Liabilities:
Bank acceptance payable	$ 2,532	$ 4,628
Fair Value, Measurements, Recurring
Assets:
Cash and cash equivalents	81,070	55,646
Restricted cash	2,917	2,358
Total assets	83,987	58,004
Liabilities:
Bank acceptance payable	2,532	4,628
Convertible senior notes	71,500
Total liabilities	74,032	4,628
Level 1 \| Fair Value, Measurements, Recurring
Assets:
Cash and cash equivalents	81,070	55,646
Restricted cash	2,917	2,358
Total assets	83,987	58,004
Level 2 \| Fair Value, Measurements, Recurring
Liabilities:
Bank acceptance payable	2,532	4,628
Convertible senior notes	71,500
Total liabilities	$ 74,032	$ 4,628

Notes Payable and Long-Term Debt - Debt Maturities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Maturities of notes payable and long-term debt
2020	$ 19,180
2021	24,249
2022	6,219
Total outstanding	$ 49,648	$ 83,917

Other Income and Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Other Income and Expense (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Other Income and Expense.
Foreign exchange transaction loss (gain)	$ 216	$ 1,289	$ (17)	$ 249
Government subsidy income	74	269	162	269
Other non-operating (loss) gain	161	19	161	31
Gain (loss) on disposal of assets		4	(10)	5
Total other expense, net	$ 451	$ 1,581	$ 296	$ 554

Share-Based Compensation - Narrative (Details) $ in Millions	6 Months Ended
	Jun. 30, 2019 USD ($) plan
Minimum
Vesting period	4 years
Restricted stock units
Unrecognized compensation expense	$ 23.0
Unrecognized compensation expense recognized period	2 years 3 months 18 days
Employee stock options
Number of incentive plans \| plan	5
Options Expiration Period	10 years
Unrecognized compensation expense	$ 0.0
Employee stock options \| Share-based Compensation Award, Tranche One
Vesting rights (as a percent)	25.00%
Employee stock options \| Share-based Compensation Award, Tranche Two
Vesting rights (as a percent)	12.50%
2013 Plan \| Restricted stock units
Maximum term	10 years

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Effective tax rate	(22.00%)	22.20%	(20.60%)	11.40%
Federal statutory rate	21.00%	21.00%	21.00%	21.00%
Accumulated undistributed earnings generated by its foreign subsidiaries	$ 23		$ 23

Geographic Information - Revenues (Details) $ in Thousands	3 Months Ended		6 Months Ended
Geographic Information - Revenues (Details) $ in Thousands	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) item	Jun. 30, 2018 USD ($)
Number of Reportable segment \| item			1
Revenues	$ 43,411	$ 87,822	$ 96,130	$ 153,061
Before Topic 606
Revenues		87,822		153,061
United States
Revenues	1,652		3,650
United States \| Before Topic 606
Revenues		3,768		7,331
Taiwan
Revenues	22,108		46,128
Taiwan \| Before Topic 606
Revenues		28,970		62,173
China
Revenues	$ 19,651		$ 46,352
China \| Before Topic 606
Revenues		$ 55,084		$ 83,557

Geographic Information - Long Lived Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Long-lived assets	$ 257,658	$ 244,002
United States
Long-lived assets	94,983	88,815
Taiwan
Long-lived assets	65,509	65,451
China
Long-lived assets	$ 97,166	$ 89,736

Subsequent Events - Narrative (Details)1 - Subsequent Events - Prime World - Revolving line of credit agreement	Jul. 23, 2019 USD ($)	Jul. 23, 2019 TWD ($)
Subsequent Event [Line Items]
Term of credit facility	1 year
Minimum
Subsequent Event [Line Items]
Draw term	90 days
Maximum
Subsequent Event [Line Items]
Draw term	120 days
NT$100M Credit Line
Subsequent Event [Line Items]
Credit facility maximum borrowing capacity	$ 3,300,000	$ 100,000,000
NT$100M Credit Line \| Minimum
Subsequent Event [Line Items]
Draw term	90 days
Stated interest rate	2.20%	2.20%
NT$100M Credit Line \| Maximum
Subsequent Event [Line Items]
Draw term	120 days
Stated interest rate	2.25%	2.25%
US$1M Credit Line
Subsequent Event [Line Items]
Credit facility maximum borrowing capacity	$ 1,000,000