View Filing Data

2019 thereafter

Total outstanding

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2015	May 05, 2015
Document And Entity Information
Entity Registrant Name	Applied Optoelectronics, Inc.
Entity Central Index Key	0001158114
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		14,940,596
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2015	Dec. 31, 2014
Current Assets
Cash and cash equivalents	$ 9,909	$ 32,175
Restricted cash	1,048	509
Short-term investments	8,190	8,189
Accounts receivable - trade, net	29,962	31,589
Inventories	43,565	33,780
Notes receivable	651	980
Prepaid expenses and other current assets	7,814	6,017
Total current assets	101,139	113,239
Cash restricted for construction in progress	8,993	0
Property, plant and equipment, net	69,512	64,808
Land use rights, net	920	930
Intangible assets, net	3,828	3,833
Other assets, net	1,823	860
TOTAL ASSETS	186,215	183,670
Current liabilities
Current portion of notes payable and long-term debt	18,721	9,591
Accounts payable	25,301	30,799
Bank acceptance payable	1,445	1,271
Accrued liabilities	6,318	6,940
Total current liabilities	51,785	48,601
Notes payable and long-term debt, less current portion	18,773	19,057
Other long term liabilities	750	1,000
TOTAL LIABILITIES	71,308	68,658
Stockholders' equity (deficit):
Preferred Stock: 5,000 shares authorized; no shares issued and outstanding at March 31, 2015 and December 31, 2014, $0.001 par value	0	0
Common Stock: 45,000 shares authorized; 14,893 shares issued and outstanding at March 31, 2015, $0.001 par value; 14,824 shares issued and outstanding at December 31, 2014, $0.001 par value	15	15
Additional paid-in capital	192,705	192,112
Accumulated other comprehensive gain	1,902	1,925
Accumulated deficit	(79,715)	(79,040)
TOTAL STOCKHOLDERS' EQUITY	114,907	115,012
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 186,215	$ 183,670

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Preferred Stock par value	$ 0.001	$ 0.001
Preferred Stock shares authorized	5,000,000	5,000,000
Preferred Stock shares issued	0	0
Preferred Stock shares outstanding	0	0
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	45,000,000	45,000,000
Common stock shares issued	14,893,000	14,824,000
Common stock shares outstanding	14,893,000	14,824,000

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Statement [Abstract]
Revenue, net	$ 30,234	$ 24,859
Cost of goods sold	20,183	16,206
Gross profit	10,051	8,653
Operating expenses
Research and development	4,805	3,546
Sales and marketing	1,559	1,333
General and administrative	5,003	3,554
Total operating expenses	11,367	8,433
Income (loss) from operations	(1,316)	220
Other income (expense)
Interest income	74	79
Interest expense	(125)	(162)
Other expense, net	692	(27)
Total other income (expense)	641	(110)
Income (loss) before income taxes	(675)	110
Income taxes	0	(25)
Net income (loss)	$ (675)	$ 85
Net income (loss) per share
Basic	$ (0.05)	$ 0.01
Diluted	$ (0.05)	$ 0.01
Weighted average shares used to compute net income (loss) per share
Basic	14,844,211	12,792,322
Diluted	14,844,211	13,787,580

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (675)	$ 85
Foreign currency translation adjustment, net of tax	(23)	(279)
Comprehensive loss	$ (698)	$ (194)

- 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	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Operating activities:
Net income (loss)	$ (675)	$ 85
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Provision for obsolete inventory	565	272
Depreciation and amortization	2,034	1,239
Loss on disposal of assets	10	(1)
Share-based compensation and warrant expense	516	489
Changes in operating assets and liabilities:
Accounts receivable	1,643	(1,829)
Bank acceptance receivable	326	0
Inventory	(10,543)	(4,822)
Other current assets	(1,764)	(46)
Accounts payable	(5,263)	4,298
Accrued liabilities	(647)	(406)
Net cash used in operating activities	(13,798)	(721)
Investing activities:
Purchase of short-term investments	(31)	0
Change in restricted cash for construction in progress	(8,993)	0
Purchase of property, plant and equipment	(6,333)	(5,647)
Proceeds from disposal of equipment	0	12
Deposits and deferred charges	(956)	(8)
Purchase of intangible assets	(94)	(3,065)
Net cash used in investing activities	(16,407)	(8,708)
Financing activities:
Proceeds from issuance of notes payable and long-term debt	0	3,150
Principal payments of long-term debt and notes payable	(94)	(26)
Proceeds from line of credit borrowings	25,091	5,788
Repayments of line of credit borrowings	(16,253)	(14,954)
Proceeds from bank acceptance payable	1,267	2,307
Repayments of bank acceptance payable	(1,086)	(1,940)
Repayments of notes payable	(250)	(250)
Increase in restricted cash	(537)	(73)
Exercise of stock options	77	107
Proceeds from common stock offering, net	0	45,671
Net cash provided by financing activities	8,215	39,780
Effect of exchange rate changes on cash	(276)	54
Net increase (decrease) in cash	(22,266)	30,405
Cash and cash equivalents at beginning of period	32,175	22,006
Cash and cash equivalents at end of period	9,909	52,411
Cash paid for:
Interest	136	164
Income taxes	75	26
Non-cash investing and financing activities:
Purchase of intangible assets with notes payable	$ 0	$ 3,000

1. Description of Business

3 Months Ended

Mar. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

1. Description of Business

Business Overview

Applied Optoelectronics, Inc., or AOI, was originally incorporated in Texas in February of 1997 and then converted to a Delaware corporation in March of 2013. AOI together with its wholly-owned subsidiaries are collectively referred to as the Company. The Company is a leading, vertically integrated provider of fiber-optic networking products, primarily for three networking end-markets: cable television, fiber-to-the-home and internet data centers. 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 in all three of its locations, located in the U.S., Taiwan and China. 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 products. The Company operates a division in Taipei, Taiwan that primarily manufactures transceivers for both the data center and fiber-to-the-home (“FTTH”) markets and performs research and development activities for the transceiver products. The Company operates in Ningbo, China through its wholly-owned subsidiary Prime World International Holdings, Ltd. (incorporated in the British Virgin Islands), the sole parent of Global Technology, Inc. (incorporated in the People’s Republic of China). Through Global Technology, the Company primarily manufactures Cable TV Broadband (“CATV”) systems and equipment and performs research and development activities for the CATV products.

Interim Financial Statements

The condensed consolidated financial statements of the Company, as of March 31, 2015 and December 31, 2014 and for the three months ended March 31, 2015 and March 31, 2014, have been prepared in accordance with the instructions on Form 10-Q 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 normally provided in the Company’s 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, but does not include all disclosures required by U.S. generally accepted accounting principles (“GAAP”). 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, 2014. The results of operations for the three months ended March 31, 2015 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

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, valuation allowances for deferred tax assets, inventory reserve, share-based compensation expense, estimated useful lives of property and equipment, and taxes.

2. Significant Accounting Policies

3 Months Ended

Mar. 31, 2015

Accounting Policies [Abstract]

2. Significant Accounting Policies

There have been no changes in the Company’s significant accounting policies for the three months ended March 31, 2015, as compared to the significant accounting policies described in its Annual Report.

Recent accounting pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The standard provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements.

3. Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

3. Fair Value of Financial Instruments

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

	As of March 31, 2015								As of December 31, 2014
	(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Cash and cash equivalents	$	9,909	$	–	$	–	$	9,909	$	32,175	$	–	$	–	$	32,175
Restricted cash		10,041		–		–		10,041		509		–		–		509
Short term investments		8,190		–		–		8,190		8,189		–		–		8,189
Notes receivable		–		651		–		651		–		980		–		980
Total assets	$	28,140	$	651	$	–	$	28,791	$	40,873	$	980	$	–	$	41,853
Liabilities:
Bank acceptance payable		–		1,445		–		1,445		–		1,271		–		1,271
Total liabilities	$	–	$	1,445	$	–	$	1,445	$	–	$	1,271	$	–	$	1,271

The carrying value amounts of accounts receivable, prepaid expenses and other current assets, borrowings from our credit facility, accounts payable, accrued expenses and other current liabilities approximate fair value because of the short-term maturity of these instruments.

- 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

4. Earnings Per Share

3 Months Ended

Mar. 31, 2015

Net income (loss) per share

4. 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/awards and warrants outstanding during the period. In periods with net losses, normally dilutive shares become anti-dilutive, and therefore for those periods basic and dilutive earnings per share are the same.

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

	Three months ended March 31,
	2015			2014
Numerator:
Net income (loss)	$	(675	)	$	85
Denominator:
Weighted average shares used to compute net income (loss) per share
Basic		14,844			12,792
Effective of dilutive options and warrants		–			996
Diluted		14,844			13,788
Net income (loss) per share
Basic	$	(0.05	)	$	0.01
Diluted	$	(0.05	)	$	0.01

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

	Three months ended March 31,
	2015		2014
Employee stock options		412		–
Restricted stock units/awards		4		–
		416		–

5. Inventory

3 Months Ended

Mar. 31, 2015

Inventory Disclosure [Abstract]

5. Inventory

Inventories consist of the following for the periods indicated (in thousands):

	March 31, 2015		December 31, 2014
Raw materials	$	16,615	$	16,243
Work in process		20,964		13,379
Finished goods		5,986		4,158
	$	43,565	$	33,780

The lower of cost or market adjustment expensed for inventory for the three months ended March 31, 2015 and 2014 was $0.6 million and $0.3 million, respectively.

6. Property, Plant and Equipment

3 Months Ended

Mar. 31, 2015

Property, Plant and Equipment [Abstract]

6. Property, Plant and Equipment

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

	March 31, 2015			December 31, 2014
Land improvements	$	103		$	103
Building and improvements		25,056			16,196
Machinery and equipment		65,384			61,529
Furniture and fixtures		1,974			1,938
Computer equipment and software		5,372			4,712
Transportation equipment		272			270
		98,161			84,748
Less accumulated depreciation and amortization		(35,519	)		(32,412	)
		62,642			52,336
Construction in progress		5,769			11,371
Land		1,101			1,101
Property, plant and equipment, net	$	69,512		$	64,808

For the three months ended March 31, 2015 and 2014, depreciation expense of property, plant and equipment was $1.9 million and $1.2 million, respectively.

7. Intangible Assets

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

7. Intangible Assets

Intangible assets consisted of the following for the periods indicated (in thousands):

	March 31, 2015
	Gross Amount		Accumulated amortization			Intangible assets, net
Patents	$	5,062	$	(1,239	)	$	3,823
Trademarks		14		(9	)		5
Total intangible assets		5,076		(1,248	)		3,828

	December 31, 2014
	Gross Amount		Accumulated amortization			Intangible assets, net
Patents	$	4,968	$	(1,141	)	$	3,827
Trademarks		14		(8	)		6
Total intangible assets		4,982		(1,149	)		3,833

For the three months ended March 31, 2015 and 2014, amortization expense for intangible assets, included in general and administrative expenses on the income statement, was $100,000 and $69,000, respectively. The remaining weighted average amortization period for intangible assets is approximately 10 years.

In 2014 the Company acquired an intangible asset from an unrelated company in the form of a license to various patents related to transceiver product technology. The weighted-average amortization period for the license is 10 years.

8. Notes Payable and Long-Term Debt

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

8. Notes Payable and Long-Term Debt

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

	March 31, 2015			December 31, 2014
Revolving line of credit with a U.S. bank up to $15,000 with interest at LIBOR plus 2.75%, maturing July 15, 2017		15,000			15,000
Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 2.75%, maturing July 31, 2019		4,906			5,000
Revolving line of credit with a Taiwan bank up to $3,000 with interest based on the bank’s corporate interest rate index+ 1.5%, or 2.40% maturing on November 15, 2015		2,769			–
Revolving line of credit with a Taiwan bank up to $4,000 with interest at LIBOR plus 1.2% maturing on February 6, 2016		3,642			3,605
Revolving line of credit with a Taiwan bank up to $3,000 with interest at LIBOR plus 1.7% maturing on February 6, 2016		2,351			–
Revolving line of credit with a Taiwan bank up to $4,000 with interest at Taiwan Time Deposit Interest Rate Index plus 0.41% or LIBOR plus 1.28% maturing on November 27, 2015		3,572			3,536
Note payable to a finance company due in monthly installments with 4.95% interest, maturing July 30, 2015		255			443
Revolving line of credit with a China bank up to $3,200 with interest ranged from 0.76% to 1.66%, which mature in April and May 2015		2,557			1,064
Revolving line of credit with a China bank up to $7,200 with interest at 108% of China Prime rate, or 5.79%, maturing March 17, 2016		2,442			–
Total		37,494			28,648
Less current portion		(18,721	)		(9,591	)
Long term portion	$	18,773		$	19,057
Bank Acceptance Notes Payable
Bank acceptance notes issued to vendors with a zero percent interest rate, a 30% guarantee deposit of $434, and maturity dates ranging from April 2015 to September 2015		1,445			1,271

The current portion of long-term debt is the amount payable within one year of the balance sheet date of March 31, 2015. The one-month LIBOR rate was 0.15% on March 31, 2015.

Maturities of notes payable and long-term debt are as follows for the future one-year periods ending March 31 (in thousands):

The loan and security agreement in the U.S. with East West Bank included a $15.0 million revolving line of credit which matures on July 15, 2017. Also included with the same bank is a term loan of up to $5.0 million with monthly payments of principal and interest that matures on July 31, 2019. The interest rate on these loans is the LIBOR Borrowing Rate plus 2.75%. As of March 31, 2015, $15.0 million was outstanding under the revolving line of credit and $4.9 million was outstanding under the term loan.

On January 26, 2015, the Company entered into a construction loan agreement with East West Bank for up to $22.0 million dollars to finance the construction of its campus expansion plan in Sugar Land, Texas. The loan will have a fifteen month draw down period with monthly interest payments commencing on February 26, 2015 and ending April 26, 2016. Thereafter, the entire outstanding principal balance shall be converted to a sixty-nine month term loan with principal and interest payments due monthly amortized over three hundred months. The first principal and interest payment is due on May 26, 2016 and will continue the same day of each month thereafter. The final principal and interest payment is due on January 26, 2022 and will include all unpaid principal and all accrued and unpaid interest. The Company may pay without penalty all or a portion of the amount owed earlier than due. Under the loan agreement, the loan bears interest, at an annual rate based on the one-month LIBOR Borrowing Rate plus 2.75%. As of March 31, there were no amounts outstanding under this loan agreement.

The loan and security agreements with East West Bank require the Company to maintain certain financial covenants, including a minimum current ratio and minimum annual EBITDA. As of March 31, 2015, the Company was in compliance with all covenants contained in these agreements.

On January 6, 2015, the Company’s Taiwan location entered into a Credit Facility with CTBC Bank Co. Ltd. in Taipei, Taiwan for 90 million New Taiwan dollar ($3.0 million USD), one year revolving credit facility. Its obligations under the Credit Facility are unsecured. Borrowings under the Credit Facility will bear interest at a rate based on the Bank’s corporate interest rate index plus 1.5%, adjusted monthly. As of the execution of the Credit Facility the Bank’s corporate interest rate swap index is 0.91%. As of March 31, 2015, $2.8 million was outstanding under this credit facility.

On March 9, 2015, the Company’s Taiwan location renewed its $4.0 million, one year revolving credit facility agreement, originally dated December 31, 2013, with E. Sun Commercial Bank. Its obligations under the credit facility are secured by our $4.0 million cash deposit in a one-year CD with such bank and mature on February 6, 2016. The revolving line of credit bears interest at a rate equal to 1.78% for New Taiwan dollar borrowings and LIBOR plus 2.0% and a 0.10% service fee for U.S. dollar borrowings. As of March 31, 2015, $3.6 million was outstanding under this credit facility.

On March 9, 2015, the Company’s Taiwan location entered into an additional credit facility agreement with E. Sun Commercial Bank for a $3.0 million, one year revolving, unsecured credit facility, maturing on February 6, 2016. Borrowings under this credit facility will bear interest at a rate not less than the LIBOR borrowing rate plus 1.7%, divided by 0.946, and will also incur a 0.5% service fee. As of March 31, 2015, there are $2.4 million outstanding under this credit facility.

On March 25, 2015, the Company’s Taiwan location renewed its $4.0 million, one year revolving credit facility agreement, originally dated December 31, 2013, with Mega International Commercial Bank. Obligations under the credit facility are secured by a $4.0 million cash deposit in a one-year CD with such bank and mature on November 27, 2015. Borrowings under this credit facility will bear interest at a rate not less than the LIBOR borrowing rate plus 1.0%, divided by 0.946 for U.S. dollar borrowings, New Taiwan dollar borrowings interest will bear at a rate equal to the Bank’s base lending rate plus 0.76% and all other currency borrowings interest will bear at a rate equal to the Bank’s base lending rate plus 1.0% divided by 0.946. The current Bank base lending rate is 2.875%. As of March 31, 2015, $3.6 million was outstanding under this credit facility.

The Company’s Taiwan location had an outstanding note payable balance of $0.3 million with a financing company that matures on July 31, 2015.

As of March 31, 2015, the Company’s China subsidiary had credit facilities with China Construction Bank totaling $10.4 million, one line is U.S. currency based and the other is RMB currency based. As of March 31, 2015, the Company had a U.S. currency based loan of $2.6 million outstanding under various notes with three-month terms, maturing from April 2015 to May 2015. There was $2.4 million outstanding under the RMB currency based credit facility as of March 31, 2015, with a maturity date of March 17, 2016.

As of March 31, 2015, the Company had $32.1 million of unused borrowing capacity.

9. Accrued Liabilites

3 Months Ended

Mar. 31, 2015

Payables and Accruals [Abstract]

9. Accrued Liabilites

Accrued liabilities consisted of the following for the periods indicated (in thousands):

	March 31, 2015		December 31, 2014
Accrued payroll	$	3,160	$	3,662
Accrued employee benefits		415		808
Accrued income taxes		–		52
Accrued state and local taxes		150		330
Advance payments		761		528
Accrued product warranty		230		247
Accrued other		1,602		1,313
	$	6,318	$	6,940

10. Other Income and Expense

3 Months Ended

Mar. 31, 2015

Other income (expense)

10. Other Income and Expense

Other income and expense consisted of the following for the periods indicated (in thousands):

	Three months ended March 31,
	2015			2014
Unrealized foreign exchange gain (loss)	$	43		$	(185	)
Realized foreign exchange gain (loss)		319			66
Government subsidy income		199			80
Other non-operating gain (loss)		141			11
Gain (loss) on disposal of assets		(10	)		1
	$	692		$	(27	)

11. Share-Based Compensation

3 Months Ended

Mar. 31, 2015

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

11. 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 issues stock options 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, restrictive stock awards (“RSAs”) and restrictive stock units (“RSUs”) may be granted from these plans. Prior to the Company’s initial public offering, 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 semi-annually thereafter. All options expire ten years after the date of grant.

The following is a summary of option activity:

	Number of shares			Weighted Average Exercise Price		Weighted Average Fair Value		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding, December 31, 2014		1,423			8.96		4.48		–		3,486
Exercised		(11	)		7.05		3.59		–		50
Forfeited		(16	)		9.93		5.32		–		22
Outstanding, March 31, 2015		1,396		$	8.96	$	4.47		7.852	$	6,869
Exercisable, March 31, 2015		687		$	8.20	$	3.69		7.357	$	3,905
Vested and expected to vest		1,326		$	8.91	$	4.43		7.823	$	6,592

As of March 31, 2015, there was approximately $3.2 million of unrecognized stock option expense, net of estimated forfeitures, which is expected to be recognized over 2.37 years.

Restricted Stock Units/Awards

The following is a summary of RSU/RSA activity:

	Number of shares			Weighted Average Fair Value		Aggregate Intrinsic Value
Outstanding at December 31, 2014		21			18.22		238
Granted		123			8.94		1,105
Exercised/Released		1			3.59		16
Cancelled/Forfeited		(2	)		8.94		–
Outstanding at March 31, 2015		143		$	10.31	$	1,992
Exercisable, March 31, 2015		17		$	18.20	$	231
Vested and expected to vest		137		$	10.35	$	1,908

As of March 31, 2015 was $1.0 million of unrecognized compensation expense related to these RSU’s and RSA’s. This expense is expected to be recognized over 3.81 years.

Share-Based Compensation

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

	Three months ended March 31,
	2015		2014
Share-Based compensation - by expense type
Cost of sales	$	16	$	25
Research and development		53		25
Sales and marketing		50		23
General and administrative		397		416
	$	516	$	489

	Three months ended March 31,
	2015		2014
Share-Based compensation - by award type
Employee stock options	$	385	$	414
Restricted stock units/awards		131		73
Warrants		–		2
	$	516	$	489

12. Stockholders' Equity

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

12. Stockholders' Equity

Common Stock

The Company has authorized the issuance of up to 45,000,000 shares of common stock, all of which have been designated voting common stock, under its Amended and Restated Certificate of Incorporation.

Convertible Preferred Stock

The Company has authorized the issuance of up to 5,000,000 shares of preferred stock under the Company’s Amended and Restated Certificate of Incorporation.

Warrants

As of March 31, 2015 and December 31, 2014, the Company had no outstanding warrants to purchase common or preferred stock, but approximately 30,000 outstanding as of March 31, 2014.

Public Offerings of Common Stock

On September 25, 2013, our registration statement on Form S-1 for our initial public offering was declared effective by the Securities and Exchange Commission. The offering commenced on September 26, and the Company sold 3.6 million shares of its common stock in its initial public offering at a price of $10.00 per share, providing proceeds of $31.5 million, net of expenses and underwriting discounts and commissions. The Company’s initial public offering closed on October 1, 2013.

On March 19, 2014, the Company sold 2.0 million shares of its common stock in a secondary offering at a price of $24.25 per share, providing proceeds of $45.7 million, net of expenses and underwriting discounts and commissions. The Company’s sale of 1.6 million shares in the secondary offering closed on March 25, 2014 and the Company’s sale of an additional 0.4 million shares as a result of the underwriters’ exercise of their option to purchase additional shares closed on March 28, 2014.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Paragraph 1
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-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 12: http://www.xbrl.org/2003/role/presentationRef
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-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph d
-Article 4

Reference 15: http://www.xbrl.org/2003/role/presentationRef
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-Name Regulation S-X (SX)
-Number 210
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Reference 16: http://www.xbrl.org/2003/role/presentationRef
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Reference 17: http://www.xbrl.org/2003/role/presentationRef
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Reference 18: http://www.xbrl.org/2003/role/presentationRef
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Reference 19: http://www.xbrl.org/2003/role/presentationRef
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-Number 210
-Section 04
-Article 3

+ Details

13. Segment and Geographic Information

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

13. Segment and 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 March 31,
	2015		2014
Revenues:
United States	$	7,294	$	5,137
Taiwan		18,341		14,340
China		4,599		5,382
	$	30,234	$	24,859

	As of the period ended
	March 31,		December 31,
	2015		2014
Long-lived assets:
United States	$	19,074	$	15,875
Taiwan		37,411		35,688
China		17,775		18,008
	$	74,260	$	69,571

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

14. Subsequent Events	3 Months Ended
14. Subsequent Events	Mar. 31, 2015
Subsequent Events [Abstract]
14. Subsequent Events	On April 1, 2015, the Company’s Taiwan location entered into a comprehensive credit line agreement with the Taipei branch of China Construction Bank, providing a revolving credit line of $10 million, maturing on April 1, 2016. Borrowings under the credit line agreement are secured by a standby letter of credit issued by the China branch of the bank under existing agreements between the bank and our China subsidiary. Borrowings under the credit line agreement reduce the amounts available under the existing credit line between the bank and its China subsidiary and cannot exceed 97% of the amount of the standby letter of credit issued by the China branch of the bank. Borrowings under the credit line agreement will bear interest at a rate not less than LIBOR plus 1.5% for U.S. dollar borrowings and at a rate of not less than Taiwan Interbank Offered Rate plus 0.9% for New Taiwan dollar borrowings.

2. Significant Accounting Policies (Policies)	3 Months Ended
2. Significant Accounting Policies (Policies)	Mar. 31, 2015
Accounting Policies [Abstract]
Business Overview	Business Overview Applied Optoelectronics, Inc., or AOI, was originally incorporated in Texas in February of 1997 and then converted to a Delaware corporation in March of 2013. AOI together with its wholly-owned subsidiaries are collectively referred to as the Company. The Company is a leading, vertically integrated provider of fiber-optic networking products, primarily for three networking end-markets: cable television, fiber-to-the-home and internet data centers. 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 in all three of its locations, located in the U.S., Taiwan and China. 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 products. The Company operates a division in Taipei, Taiwan that primarily manufactures transceivers for both the data center and fiber-to-the-home (“FTTH”) markets and performs research and development activities for the transceiver products. The Company operates in Ningbo, China through its wholly-owned subsidiary Prime World International Holdings, Ltd. (incorporated in the British Virgin Islands), the sole parent of Global Technology, Inc. (incorporated in the People’s Republic of China). Through Global Technology, the Company primarily manufactures Cable TV Broadband (“CATV”) systems and equipment and performs research and development activities for the CATV products.
Interim Financial Statements	Interim Financial Statements The condensed consolidated financial statements of the Company, as of March 31, 2015 and December 31, 2014 and for the three months ended March 31, 2015 and March 31, 2014, have been prepared in accordance with the instructions on Form 10-Q 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 normally provided in the Company’s 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, but does not include all disclosures required by U.S. generally accepted accounting principles (“GAAP”). 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, 2014. The results of operations for the three months ended March 31, 2015 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, valuation allowances for deferred tax assets, inventory reserve, share-based compensation expense, estimated useful lives of property and equipment, and taxes.
Recent accounting pronouncements	Recent accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The standard provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements.

3. Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Schedule of assets and liabilities at fair value

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

	As of March 31, 2015								As of December 31, 2014
	(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Cash and cash equivalents	$	9,909	$	–	$	–	$	9,909	$	32,175	$	–	$	–	$	32,175
Restricted cash		10,041		–		–		10,041		509		–		–		509
Short term investments		8,190		–		–		8,190		8,189		–		–		8,189
Notes receivable		–		651		–		651		–		980		–		980
Total assets	$	28,140	$	651	$	–	$	28,791	$	40,873	$	980	$	–	$	41,853
Liabilities:
Bank acceptance payable		–		1,445		–		1,445		–		1,271		–		1,271
Total liabilities	$	–	$	1,445	$	–	$	1,445	$	–	$	1,271	$	–	$	1,271

4. Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2015

Net income (loss) per share

Computation of basic and diluted net loss per share

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

	Three months ended March 31,
	2015			2014
Numerator:
Net income (loss)	$	(675	)	$	85
Denominator:
Weighted average shares used to compute net income (loss) per share
Basic		14,844			12,792
Effective of dilutive options and warrants		–			996
Diluted		14,844			13,788
Net income (loss) per share
Basic	$	(0.05	)	$	0.01
Diluted	$	(0.05	)	$	0.01

Schedule of potentially dilutive securites

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

	Three months ended March 31,
	2015		2014
Employee stock options		412		–
Restricted stock units/awards		4		–
		416		–

5. Inventory (Tables)

3 Months Ended

Mar. 31, 2015

Inventory Disclosure [Abstract]

Schedule of inventories

Inventories consist of the following for the periods indicated (in thousands):

	March 31, 2015		December 31, 2014
Raw materials	$	16,615	$	16,243
Work in process		20,964		13,379
Finished goods		5,986		4,158
	$	43,565	$	33,780

6. Property, Plant and Equipment (Tables)

3 Months Ended

Mar. 31, 2015

Property, Plant and Equipment [Abstract]

Schedule of property, plant and equipment

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

	March 31, 2015			December 31, 2014
Land improvements	$	103		$	103
Building and improvements		25,056			16,196
Machinery and equipment		65,384			61,529
Furniture and fixtures		1,974			1,938
Computer equipment and software		5,372			4,712
Transportation equipment		272			270
		98,161			84,748
Less accumulated depreciation and amortization		(35,519	)		(32,412	)
		62,642			52,336
Construction in progress		5,769			11,371
Land		1,101			1,101
Property, plant and equipment, net	$	69,512		$	64,808

7. Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible assets consisted of the following for the periods indicated (in thousands):

	March 31, 2015
	Gross Amount		Accumulated amortization			Intangible assets, net
Patents	$	5,062	$	(1,239	)	$	3,823
Trademarks		14		(9	)		5
Total intangible assets		5,076		(1,248	)		3,828

	December 31, 2014
	Gross Amount		Accumulated amortization			Intangible assets, net
Patents	$	4,968	$	(1,141	)	$	3,827
Trademarks		14		(8	)		6
Total intangible assets		4,982		(1,149	)		3,833

8. Notes Payable and Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2015

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):

	March 31, 2015			December 31, 2014
Revolving line of credit with a U.S. bank up to $15,000 with interest at LIBOR plus 2.75%, maturing July 15, 2017		15,000			15,000
Term loan with a U.S. bank with monthly payments of principal and interest at LIBOR plus 2.75%, maturing July 31, 2019		4,906			5,000
Revolving line of credit with a Taiwan bank up to $3,000 with interest based on the bank’s corporate interest rate index+ 1.5%, or 2.40% maturing on November 15, 2015		2,769			–
Revolving line of credit with a Taiwan bank up to $4,000 with interest at LIBOR plus 1.2% maturing on February 6, 2016		3,642			3,605
Revolving line of credit with a Taiwan bank up to $3,000 with interest at LIBOR plus 1.7% maturing on February 6, 2016		2,351			–
Revolving line of credit with a Taiwan bank up to $4,000 with interest at Taiwan Time Deposit Interest Rate Index plus 0.41% or LIBOR plus 1.28% maturing on November 27, 2015		3,572			3,536
Note payable to a finance company due in monthly installments with 4.95% interest, maturing July 30, 2015		255			443
Revolving line of credit with a China bank up to $3,200 with interest ranged from 0.76% to 1.66%, which mature in April and May 2015		2,557			1,064
Revolving line of credit with a China bank up to $7,200 with interest at 108% of China Prime rate, or 5.79%, maturing March 17, 2016		2,442			–
Total		37,494			28,648
Less current portion		(18,721	)		(9,591	)
Long term portion	$	18,773		$	19,057
Bank Acceptance Notes Payable
Bank acceptance notes issued to vendors with a zero percent interest rate, a 30% guarantee deposit of $434, and maturity dates ranging from April 2015 to September 2015		1,445			1,271

Maturities of notes payable and long-term debt

Maturities of notes payable and long-term debt are as follows for the future one-year periods ending March 31 (in thousands):

9. Accrued Liabilites (Tables)

3 Months Ended

Mar. 31, 2015

Payables and Accruals [Abstract]

Schedule of accrued liabilities

Accrued liabilities consisted of the following for the periods indicated (in thousands):

	March 31, 2015		December 31, 2014
Accrued payroll	$	3,160	$	3,662
Accrued employee benefits		415		808
Accrued income taxes		–		52
Accrued state and local taxes		150		330
Advance payments		761		528
Accrued product warranty		230		247
Accrued other		1,602		1,313
	$	6,318	$	6,940

10. Other Income and Expense (Tables)

3 Months Ended

Mar. 31, 2015

Other income (expense)

Schedule of other income and expense

Other income and expense consisted of the following for the periods indicated (in thousands):

	Three months ended March 31,
	2015			2014
Unrealized foreign exchange gain (loss)	$	43		$	(185	)
Realized foreign exchange gain (loss)		319			66
Government subsidy income		199			80
Other non-operating gain (loss)		141			11
Gain (loss) on disposal of assets		(10	)		1
	$	692		$	(27	)

11. Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2015

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

Summary of option activity

The following is a summary of option activity:

	Number of shares			Weighted Average Exercise Price		Weighted Average Fair Value		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding, December 31, 2014		1,423			8.96		4.48		–		3,486
Exercised		(11	)		7.05		3.59		–		50
Forfeited		(16	)		9.93		5.32		–		22
Outstanding, March 31, 2015		1,396		$	8.96	$	4.47		7.852	$	6,869
Exercisable, March 31, 2015		687		$	8.20	$	3.69		7.357	$	3,905
Vested and expected to vest		1,326		$	8.91	$	4.43		7.823	$	6,592

Summary of RSU activity

The following is a summary of RSU/RSA activity:

	Number of shares			Weighted Average Fair Value		Aggregate Intrinsic Value
Outstanding at December 31, 2014		21			18.22		238
Granted		123			8.94		1,105
Exercised/Released		1			3.59		16
Cancelled/Forfeited		(2	)		8.94		–
Outstanding at March 31, 2015		143		$	10.31	$	1,992
Exercisable, March 31, 2015		17		$	18.20	$	231
Vested and expected to vest		137		$	10.35	$	1,908

Schedule of employee stock-based compensation expenses

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

	Three months ended March 31,
	2015		2014
Share-Based compensation - by expense type
Cost of sales	$	16	$	25
Research and development		53		25
Sales and marketing		50		23
General and administrative		397		416
	$	516	$	489

	Three months ended March 31,
	2015		2014
Share-Based compensation - by award type
Employee stock options	$	385	$	414
Restricted stock units/awards		131		73
Warrants		–		2
	$	516	$	489

13. Segment and Geographic Information (Tables)

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Revenue and asset information by geographic region

Long-lived assets in the tables below comprise only property, plant, equipment and intangible assets (in thousands):

	Three months ended March 31,
	2015		2014
Revenues:
United States	$	7,294	$	5,137
Taiwan		18,341		14,340
China		4,599		5,382
	$	30,234	$	24,859

	As of the period ended
	March 31,		December 31,
	2015		2014
Long-lived assets:
United States	$	19,074	$	15,875
Taiwan		37,411		35,688
China		17,775		18,008
	$	74,260	$	69,571

3. Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2015	Dec. 31, 2014
Assets:
Notes receivable	$ 651	$ 980
Liabilities:
Bank acceptance payable	1,445	1,271
Fair Value, Measurements, Recurring [Member]
Assets:
Cash and cash equivalents	9,909	32,175
Restricted cash	10,041	509
Short term investments	8,190	8,189
Notes receivable	651	980
Total assets	28,791	41,853
Liabilities:
Bank acceptance payable	1,445	1,271
Total liabilities	1,445	1,271
Fair Value, Measurements, Recurring [Member] \| Level 1 [Member]
Assets:
Cash and cash equivalents	9,909	32,175
Restricted cash	10,041	509
Short term investments	8,190	8,189
Notes receivable	0	0
Total assets	28,140	40,873
Liabilities:
Bank acceptance payable	0	0
Total liabilities	0	0
Fair Value, Measurements, Recurring [Member] \| Level 2 [Member]
Assets:
Cash and cash equivalents	0	0
Restricted cash	0	0
Short term investments	0	0
Notes receivable	651	980
Total assets	651	980
Liabilities:
Bank acceptance payable	1,445	1,271
Total liabilities	1,445	1,271
Fair Value, Measurements, Recurring [Member] \| Level 3 [Member]
Assets:
Cash and cash equivalents	0	0
Restricted cash	0	0
Short term investments	0	0
Notes receivable	0	0
Total assets	0	0
Liabilities:
Bank acceptance payable	0	0
Total liabilities	$ 0	$ 0

4. Earnings Per Share (Details-EPS calculation) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Numerator:
Net income (loss)	$ (675)	$ 85
Weighted average shares used to compute net income (loss) per share
Basic	14,844,211	12,792,322
Effective of dilutive options and warrants	0	996
Diluted	14,844,211	13,787,580
Net income (loss) per share
Basic	$ (0.05)	$ 0.01
Diluted	$ (0.05)	$ 0.01

- Definition

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

+ References + Details

- Definition

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

+ References + Details

4. Earnings Per Share (Details-Antidilutive shares) - shares	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Potentially dilutive securires excluded from computation of diluted net income (loss) per share	416	0
Employee Stock Option [Member]
Potentially dilutive securires excluded from computation of diluted net income (loss) per share	412	0
Restricted Stock [Member]
Potentially dilutive securires excluded from computation of diluted net income (loss) per share	4	0

5. Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2015	Dec. 31, 2014
Inventory Details
Raw materials	$ 16,615	$ 16,243
Work in process	20,964	13,379
Finished goods	5,986	4,158
Inventories	$ 43,565	$ 33,780

5. Inventory (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
5. Inventory (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2015	Mar. 31, 2014
Inventory Details Narrative
Lower of cost or market adjustment for inventory	$ 600	$ 300

6. Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2015	Dec. 31, 2014
Property, plant and equipment, gross	$ 98,161	$ 84,748
Less accumulated depreciation and amortization	(35,519)	(32,412)
Property, plant and equipment	62,642	52,336
Construction in progress	5,769	11,371
Land	1,101	1,101
Property, plant and equipment, net	69,512	64,808
Land improvements [Member]
Property, plant and equipment, gross	103	103
Building and improvements [Member]
Property, plant and equipment, gross	25,056	16,196
Machinery and equipment [Member]
Property, plant and equipment, gross	65,384	61,529
Furniture and fixtures [Member]
Property, plant and equipment, gross	1,974	1,938
Computer rquipment and software [Member]
Property, plant and equipment, gross	5,372	4,712
Transportation equipment [Member]
Property, plant and equipment, gross	$ 272	$ 270

6. Property, Plant and Equipment (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Property Plant And Equipment Details Narrative
Depreciation expense	$ 1,900	$ 1,200

7. Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2015	Dec. 31, 2014
Gross Amount	$ 5,076	$ 4,982
Accumulated amortization	(1,248)	(1,149)
Intangible assets, net	3,828	3,833
Patents [Member]
Gross Amount	5,062	4,968
Accumulated amortization	(1,239)	(1,141)
Intangible assets, net	3,823	3,827
Trademarks [Member]
Gross Amount	14	14
Accumulated amortization	(9)	(8)
Intangible assets, net	$ 5	$ 6

7. Intangible Assets (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense for intangible assets	$ 100,000	$ 69,000
Weighted average amortization period	10 years

8. Notes Payable and Long-Term Debt (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Notes payable and long-term debt total	$ 37,494	$ 26,108
Current portion of notes payable and long-term debt	(18,721)	(9,591)
Long term portion of notes payable and long-term debt	18,773	19,057
Bank acceptance notes	1,445	1,271
Revolving Line of Credit 1
Notes payable and long-term debt total	$ 15,000	15,000
Debt maturity date	Jul. 15, 2017
Interest rate	LIBOR plus 2.75%
Term loan 1
Notes payable and long-term debt total	$ 4,906	5,000
Debt maturity date	Jul. 19, 2019
Interest rate	LIBOR plus 2.75%
Revolving Line of Credit 2
Notes payable and long-term debt total	$ 2,769	0
Debt maturity date	Nov. 15, 2015
Interest rate	interest rate swap index 1.5%, or 2.40%
Revolving Line of Credit 3
Notes payable and long-term debt total	$ 3,642	3,605
Debt maturity date	Feb. 06, 2016
Interest rate	LIBOR plus 1.2%
Revolving Line of Credit 4
Notes payable and long-term debt total	$ 2,351	0
Debt maturity date	Feb. 06, 2016
Interest rate	LIBOR plus 1.7%
Revolving Line of Credit 5
Notes payable and long-term debt total	$ 3,572	3,536
Debt maturity date	Nov. 27, 2015
Interest rate	Interest Rate Index plus 0.41% or LIBOR plus 1.28%
Note Payable
Notes payable and long-term debt total	$ 255	443
Debt maturity date	Jul. 30, 2015
Interest rate	4.95% interest
Revolving Line of Credit 5
Notes payable and long-term debt total	$ 2,557	1,064
Debt maturity date	May 31, 2015
Interest rate	interest ranged from 0.76% to 1.66%
Revolving Line of Credit 7
Notes payable and long-term debt total	$ 2,442	0
Debt maturity date	Mar. 17, 2016
Interest rate	interest at 108% of China Prime rate, or 5.79%
Bank Acceptance Notes Payable
Notes payable and long-term debt total	$ 1,445	$ 1,271
Debt maturity date	Sep. 30, 2015
Interest rate	zero percent interest rate, a 30% guarantee deposit ofÂ $434

8. Notes Payable and Long-Term Debt (Details - Debt maturities) $ in Thousands	Mar. 31, 2015 USD ($)
Maturities of notes payable and long-term debt
2016	$ 18,721
2017	16,132
2018	1,132
2019 thereafter	660
Total outstanding	$ 37,494

8. Notes Payable and Long-Term Debt (Details Narrative) $ in Thousands	3 Months Ended
	Mar. 31, 2015 USD ($)
Note payable	$ 37,494
Unused borrowing capacity	32,100
Taiwan location
Note payable	$ 300
Revolving line of credit, maturity date	Jul. 31, 2015
East West Bank
Revolving line of credit maximum borrowing capacity	$ 15,000
Revolving line of credit amount outstanding	$ 15,000
Revolving line of credit, maturity date	Jul. 15, 2017
East West Bank Term Loan
Revolving line of credit maximum borrowing capacity	$ 5,000
Revolving line of credit amount outstanding	$ 4,900
Revolving line of credit, maturity date	Jul. 31, 2019
East West Bank Construction Loan
Revolving line of credit maximum borrowing capacity	$ 22,000
Revolving line of credit amount outstanding	$ 0
Revolving line of credit, maturity date	Apr. 26, 2016
CTBC Bank Taipei
Revolving line of credit maximum borrowing capacity	$ 3,000
Revolving line of credit amount outstanding	2,800
E. Sun Commercial Bank
Revolving line of credit maximum borrowing capacity	4,000
Revolving line of credit amount outstanding	$ 3,600
Revolving line of credit, maturity date	Dec. 31, 2013
E. Sun Commercial Bank 2
Revolving line of credit maximum borrowing capacity	$ 3,000
Revolving line of credit amount outstanding	$ 2,400
Revolving line of credit, maturity date	Feb. 06, 2016
Mega International Commercial Bank
Revolving line of credit maximum borrowing capacity	$ 4,000
Revolving line of credit amount outstanding	$ 3,600
Revolving line of credit, maturity date	Nov. 27, 2015
China Construction Bank
Revolving line of credit maximum borrowing capacity	$ 10,400
Revolving line of credit amount outstanding	2,400
Note payable	$ 2,600
Revolving line of credit, maturity date	Mar. 17, 2016

9. Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2015	Dec. 31, 2014
Accrued Liabilities Details
Accrued payroll	$ 3,160	$ 3,662
Accrued employee benefits	415	808
Accrued income taxes	0	52
Accrued state and local taxes	150	330
Advance payments	761	528
Accrued product warranty	230	247
Accrued other	1,602	1,313
Total accrued liabilities	$ 6,318	$ 6,940

10. Other Income and Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Other Income And Expense Details
Unrealized foreign exchange gain (loss)	$ 43	$ (185)
Realized foreign exchange gain (loss)	319	66
Government subsidy income	199	80
Other non-operating gain (loss)	141	11
Gain (loss) on disposal of assets	(10)	1
Total other income and expense	$ 692	$ (27)

11. Share-Based Compensation (Details-Option activity) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2015 USD ($) $ / shares shares
Number of Shares
Outstanding, beginning balance \| shares	1,423,000
Exercised \| shares	(11,000)
Forfeited \| shares	(16,000)
Outstanding, ending balance \| shares	1,396,000
Exericsable, ending balance \| shares	687,000
Vested and expected to vest \| shares	1,326,000
Weighted Average Exercise Price
Outstanding, beginning balance	$ 8.96
Exercised	7.05
Forfeited	9.93
Outstanding, ending balance	8.96
Exericsable, ending balance	8.20
Vested and expected to vest	8.91
Weighted Average Fair Value
Outstanding, beginning balance	4.48
Exercised	3.59
Forfeited	5.32
Outstanding, ending balance	4.47
Exericsable, ending balance	3.69
Vested and expected to vest	$ 4.43
Weighted Average Remaining Contractual Life
Outstanding, ending balance	7 years 10 months 7 days
Exericsable, ending balance	7 years 4 months 9 days
Vested and expected to vest	7 years 9 months 27 days
Aggregate Intrinsic Value
Aggregate intrinsic value, outstanding \| $	$ 3,486
Exercised \| $	50
Forfeited \| $	22
Aggregate intrinsic value, outstanding \| $	6,869
Exericsable, ending balance \| $	3,905
Vested and expected to vest \| $	$ 6,592

11. Share-Based Compensation (Details-Restricted Stock Units) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2015 USD ($) $ / shares shares
Number of shares
Exericsable, ending balance \| shares	687,000
Vested and expected to vest \| shares	1,326,000
Weighted Average Fair Value
Exericsable, ending balance \| $ / shares	$ 3.69
Vested and expected to vest \| $ / shares	$ 4.43
Aggregate Intrinsic Value
Aggregate intrinsic value, outstanding	$ 3,486
Aggregate intrinsic value, outstanding	6,869
Exericsable, ending balance	3,905
Vested and expected to vest	$ 6,592
Restricted Stock Units/Awards
Number of shares
Outstanding, beginning balance \| shares	21,000
Granted \| shares	123,000
Exercised/Released \| shares	1,000
Cancelled/Forfeited \| shares	(2,000)
Outstanding, ending balance \| shares	143,000
Exericsable, ending balance \| shares	0
Vested and expected to vest \| shares	137,000
Weighted Average Fair Value
Outstanding, beginning balance \| $ / shares	$ 18.22
Granted \| $ / shares	8.94
Exercised/Released \| $ / shares	3.59
Cancelled/Forfeited \| $ / shares	8.94
Outstanding, ending balance \| $ / shares	10.31
Exericsable, ending balance \| $ / shares	18.20
Vested and expected to vest \| $ / shares	$ 10.35
Aggregate Intrinsic Value
Aggregate intrinsic value, outstanding	$ 238
Granted	1,105
Exercised/Released	16
Cancelled/Forfeited	0
Aggregate intrinsic value, outstanding	1,992
Exericsable, ending balance	231
Vested and expected to vest	$ 1,908

11. Share-Based Compensation (Details-Share based compensation expense) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Employee stock-based compensation expense	$ 516	$ 489
Employee Stock Option [Member]
Employee stock-based compensation expense	385	414
Restricted Stock Units/Awards
Employee stock-based compensation expense	131	73
Warrant [Member]
Employee stock-based compensation expense	0	2
Cost of sales [Member]
Employee stock-based compensation expense	16	25
Research and development [Member]
Employee stock-based compensation expense	53	25
Sales and marketing [Member]
Employee stock-based compensation expense	50	23
General and administrative [Member]
Employee stock-based compensation expense	$ 397	$ 416

11. Share-Based Compensation (Details Narrative) $ in Thousands	3 Months Ended
	Mar. 31, 2015 USD ($)
Unrecognized compensation expense	$ 3,200
Unrecognized compensation expense recognized period	2 years 4 months 13 days
Restricted Stock Units/Awards
Unrecognized compensation expense	$ 1,000
Unrecognized compensation expense recognized period	3 years 9 months 22 days

12. Stockholders Equity (Details Narrative)	Mar. 31, 2015 shares
Equity [Abstract]
Warrants outstanding	30,000

13. Segment and Geographic Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Revenues	$ 30,234	$ 24,859
Long-lived assets	74,260		$ 69,571
UNITED STATES
Revenues	7,294	5,137
Long-lived assets	19,074		15,875
TAIWAN, PROVINCE OF CHINA
Revenues	18,341	14,340
Long-lived assets	37,411		35,688
CHINA
Revenues	4,599	$ 5,382
Long-lived assets	$ 17,775		$ 18,008