$DZSI
DZS INC.

2012 Q2 Form 10-Q Financial Statement

#000119312512346612 Filed on August 09, 2012

View on sec.gov

Income Statement

Concept 2012 Q2 2011 Q2
Revenue $30.84M $31.29M
YoY Change -1.47% -5.91%
Cost Of Revenue $21.56M $20.23M
YoY Change 6.6% -4.81%
Gross Profit $9.272M $11.07M
YoY Change -16.21% -7.86%
Gross Profit Margin 30.07% 35.36%
Selling, General & Admin $6.544M $7.492M
YoY Change -12.65% -10.7%
% of Gross Profit 70.58% 67.7%
Research & Development $4.820M $5.449M
YoY Change -11.54% 4.79%
% of Gross Profit 51.98% 49.24%
Depreciation & Amortization $80.00K $450.0K
YoY Change -82.22% 4.65%
% of Gross Profit 0.86% 4.07%
Operating Expenses $11.36M $12.94M
YoY Change -12.19% -4.78%
Operating Profit -$2.092M -$1.875M
YoY Change 11.57% 18.67%
Interest Expense $9.000K $28.00K
YoY Change -67.86% -107.0%
% of Operating Profit
Other Income/Expense, Net $15.00K $14.00K
YoY Change 7.14%
Pretax Income -$2.086M -$1.889M
YoY Change 10.43% -5.08%
Income Tax $16.00K $7.000K
% Of Pretax Income
Net Earnings -$2.102M -$1.896M
YoY Change 10.86% -5.2%
Net Earnings / Revenue -6.82% -6.06%
Basic Earnings Per Share -$0.07 -$0.06
Diluted Earnings Per Share -$0.07 -$0.06
COMMON SHARES
Basic Shares Outstanding 30.99M shares 30.64M shares
Diluted Shares Outstanding 30.99M shares 30.64M shares

Balance Sheet

Concept 2012 Q2 2011 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $13.10M $19.30M
YoY Change -32.12% -4.93%
Cash & Equivalents $13.13M $19.35M
Short-Term Investments
Other Short-Term Assets $2.400M $2.700M
YoY Change -11.11% 17.39%
Inventory $27.66M $27.70M
Prepaid Expenses
Receivables $25.46M $26.80M
Other Receivables $0.00 $0.00
Total Short-Term Assets $68.64M $76.50M
YoY Change -10.28% -6.36%
LONG-TERM ASSETS
Property, Plant & Equipment $584.0K $5.200M
YoY Change -88.77% -71.89%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $214.0K $200.0K
YoY Change 7.0% -33.33%
Total Long-Term Assets $798.0K $5.400M
YoY Change -85.22% -71.28%
TOTAL ASSETS
Total Short-Term Assets $68.64M $76.50M
Total Long-Term Assets $798.0K $5.400M
Total Assets $69.44M $81.90M
YoY Change -15.22% -18.51%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $12.04M $10.00M
YoY Change 20.37% 47.06%
Accrued Expenses $8.800M $11.80M
YoY Change -25.42% -13.24%
Deferred Revenue
YoY Change
Short-Term Debt $10.00M $10.00M
YoY Change 0.0% 0.0%
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $30.81M $31.80M
YoY Change -3.12% -34.97%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00
YoY Change
Other Long-Term Liabilities $4.085M $4.400M
YoY Change -7.16% 37.5%
Total Long-Term Liabilities $4.085M $4.400M
YoY Change -7.16% 37.5%
TOTAL LIABILITIES
Total Short-Term Liabilities $30.81M $31.80M
Total Long-Term Liabilities $4.085M $4.400M
Total Liabilities $34.89M $36.30M
YoY Change -3.87% -30.33%
SHAREHOLDERS EQUITY
Retained Earnings -$1.038B
YoY Change
Common Stock $1.072B
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $34.54M $45.70M
YoY Change
Total Liabilities & Shareholders Equity $69.44M $81.90M
YoY Change -15.22% -18.51%

Cashflow Statement

Concept 2012 Q2 2011 Q2
OPERATING ACTIVITIES
Net Income -$2.102M -$1.896M
YoY Change 10.86% -5.2%
Depreciation, Depletion And Amortization $80.00K $450.0K
YoY Change -82.22% 4.65%
Cash From Operating Activities -$1.890M $680.0K
YoY Change -377.94% -288.89%
INVESTING ACTIVITIES
Capital Expenditures -$100.0K -$530.0K
YoY Change -81.13% 178.95%
Acquisitions
YoY Change
Other Investing Activities $60.00K $0.00
YoY Change
Cash From Investing Activities -$50.00K -$530.0K
YoY Change -90.57% 178.95%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 50.00K 20.00K
YoY Change 150.0% -166.67%
NET CHANGE
Cash From Operating Activities -1.890M 680.0K
Cash From Investing Activities -50.00K -530.0K
Cash From Financing Activities 50.00K 20.00K
Net Change In Cash -1.890M 170.0K
YoY Change -1211.76% -129.31%
FREE CASH FLOW
Cash From Operating Activities -$1.890M $680.0K
Capital Expenditures -$100.0K -$530.0K
Free Cash Flow -$1.790M $1.210M
YoY Change -247.93% -811.76%

Facts In Submission

Frame Concept Type Concept / XBRL Key Value Unit
CY2012Q3 dei Entity Common Stock Shares Outstanding
EntityCommonStockSharesOutstanding
31080115 shares
CY2011Q2 us-gaap Product Warranty Accrual
ProductWarrantyAccrual
1553000
CY2011Q2 us-gaap Cash And Cash Equivalents At Carrying Value
CashAndCashEquivalentsAtCarryingValue
19348000
CY2012Q1 us-gaap Line Of Credit Facility Maximum Borrowing Capacity
LineOfCreditFacilityMaximumBorrowingCapacity
25000000
CY2012Q2 us-gaap Prepaid Expense And Other Assets Current
PrepaidExpenseAndOtherAssetsCurrent
2393000
CY2012Q2 us-gaap Operating Leases Future Minimum Payments Due Current
OperatingLeasesFutureMinimumPaymentsDueCurrent
1206000
CY2012Q2 us-gaap Property Plant And Equipment Gross
PropertyPlantAndEquipmentGross
15568000
CY2012Q2 us-gaap Lines Of Credit Current
LinesOfCreditCurrent
10000000
CY2012Q2 us-gaap Additional Paid In Capital Common Stock
AdditionalPaidInCapitalCommonStock
1071937000
CY2012Q2 us-gaap Debt Instrument Basis Spread On Variable Rate
DebtInstrumentBasisSpreadOnVariableRate
0.035 pure
CY2012Q2 us-gaap Inventory Work In Process Net Of Reserves
InventoryWorkInProcessNetOfReserves
2508000
CY2012Q2 us-gaap Other Assets Noncurrent
OtherAssetsNoncurrent
214000
CY2012Q2 us-gaap Line Of Credit Facility Interest Rate At Period End
LineOfCreditFacilityInterestRateAtPeriodEnd
0.0397 pure
CY2012Q2 us-gaap Property Plant And Equipment Other
PropertyPlantAndEquipmentOther
4098000
CY2012Q2 us-gaap Stockholders Equity
StockholdersEquity
34542000
CY2012Q2 us-gaap Machinery And Equipment Gross
MachineryAndEquipmentGross
9093000
CY2012Q2 us-gaap Inventory Raw Materials Net Of Reserves
InventoryRawMaterialsNetOfReserves
16501000
CY2012Q2 us-gaap Line Of Credit Facility Amount Outstanding
LineOfCreditFacilityAmountOutstanding
10000000
CY2012Q2 us-gaap Common Stock Shares Authorized
CommonStockSharesAuthorized
180000000 shares
CY2011Q4 us-gaap Product Warranty Accrual
ProductWarrantyAccrual
1546000
CY2012Q2 us-gaap Operating Leases Future Minimum Payments Due In Three Years
OperatingLeasesFutureMinimumPaymentsDueInThreeYears
486000
CY2012Q2 us-gaap Operating Leases Future Minimum Payments Due In Two Years
OperatingLeasesFutureMinimumPaymentsDueInTwoYears
736000
CY2012Q2 us-gaap Product Warranty Accrual
ProductWarrantyAccrual
1575000
CY2011Q4 us-gaap Property Plant And Equipment Gross
PropertyPlantAndEquipmentGross
15496000
CY2011Q4 us-gaap Lines Of Credit Current
LinesOfCreditCurrent
15000000
CY2011Q4 us-gaap Additional Paid In Capital Common Stock
AdditionalPaidInCapitalCommonStock
1071390000
CY2011Q4 us-gaap Inventory Work In Process Net Of Reserves
InventoryWorkInProcessNetOfReserves
2985000
CY2011Q4 us-gaap Inventory Raw Materials Net Of Reserves
InventoryRawMaterialsNetOfReserves
16770000
CY2011Q4 us-gaap Common Stock Shares Authorized
CommonStockSharesAuthorized
180000000 shares
CY2012Q2 us-gaap Common Stock Shares Outstanding
CommonStockSharesOutstanding
31075000 shares
CY2011Q4 us-gaap Other Assets Noncurrent
OtherAssetsNoncurrent
213000
CY2011Q4 us-gaap Property Plant And Equipment Other
PropertyPlantAndEquipmentOther
4076000
CY2011Q4 us-gaap Stockholders Equity
StockholdersEquity
39527000
CY2011Q4 us-gaap Machinery And Equipment Gross
MachineryAndEquipmentGross
9043000
CY2012Q2 us-gaap Liabilities
Liabilities
34894000
CY2012Q2 us-gaap Accounts Payable Current
AccountsPayableCurrent
12037000
CY2012Q2 us-gaap Common Stock Value
CommonStockValue
31000
CY2012Q2 us-gaap Common Stock Par Or Stated Value Per Share
CommonStockParOrStatedValuePerShare
0.001
CY2012Q2 us-gaap Assets Current
AssetsCurrent
68638000
CY2012Q2 us-gaap Operating Leases Future Minimum Payments Due
OperatingLeasesFutureMinimumPaymentsDue
3316000
CY2012Q2 us-gaap Accumulated Depreciation Depletion And Amortization Property Plant And Equipment
AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment
14984000
CY2012Q2 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
584000
CY2012Q2 zhne Accrued Expenses And Other Current Liabilities
AccruedExpensesAndOtherCurrentLiabilities
8772000
CY2012Q2 zhne Allowance For Doubtful Accounts Receivable And Sales Returns Current
AllowanceForDoubtfulAccountsReceivableAndSalesReturnsCurrent
2057000
CY2012Q2 zhne Surety Bonds Outstanding
SuretyBondsOutstanding
7400000
CY2012Q2 zhne Termination Notice Period
TerminationNoticePeriod
P30D
CY2012Q2 zhne Operating Leases Future Minimum Payments Due In Four Years And Thereafter
OperatingLeasesFutureMinimumPaymentsDueInFourYearsAndThereafter
CY2010Q4 us-gaap Product Warranty Accrual
ProductWarrantyAccrual
1683000
CY2010Q4 us-gaap Cash And Cash Equivalents At Carrying Value
CashAndCashEquivalentsAtCarryingValue
21174000
CY2011Q4 us-gaap Prepaid Expense And Other Assets Current
PrepaidExpenseAndOtherAssetsCurrent
2672000
CY2012Q2 us-gaap Operating Leases Future Minimum Payments Remainder Of Fiscal Year
OperatingLeasesFutureMinimumPaymentsRemainderOfFiscalYear
888000
CY2012Q2 us-gaap Other Liabilities Noncurrent
OtherLiabilitiesNoncurrent
4085000
CY2012Q2 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
-1037647000
CY2012Q2 us-gaap Assets
Assets
69436000
CY2012Q2 us-gaap Accounts Receivable Net Current
AccountsReceivableNetCurrent
25457000
CY2012Q2 us-gaap Inventory Net
InventoryNet
27658000
CY2012Q2 us-gaap Liabilities And Stockholders Equity
LiabilitiesAndStockholdersEquity
69436000
CY2012Q2 us-gaap Leasehold Improvements Gross
LeaseholdImprovementsGross
2067000
CY2012Q2 us-gaap Line Of Credit Facility Remaining Borrowing Capacity
LineOfCreditFacilityRemainingBorrowingCapacity
2300000
CY2012Q2 us-gaap Cash And Cash Equivalents At Carrying Value
CashAndCashEquivalentsAtCarryingValue
13130000
CY2012Q2 us-gaap Common Stock Shares Issued
CommonStockSharesIssued
31075000 shares
CY2012Q2 us-gaap Accumulated Other Comprehensive Income Loss Net Of Tax
AccumulatedOtherComprehensiveIncomeLossNetOfTax
221000
CY2012Q2 us-gaap Letters Of Credit Outstanding Amount
LettersOfCreditOutstandingAmount
11400000
CY2012Q2 us-gaap Furniture And Fixtures Gross
FurnitureAndFixturesGross
310000
CY2012Q2 us-gaap Cash
Cash
13130000
CY2012Q2 us-gaap Liabilities Current
LiabilitiesCurrent
30809000
CY2012Q2 us-gaap Inventory Finished Goods Net Of Reserves
InventoryFinishedGoodsNetOfReserves
8649000
CY2011Q4 us-gaap Common Stock Shares Outstanding
CommonStockSharesOutstanding
30820000 shares
CY2011Q4 us-gaap Liabilities
Liabilities
41205000
CY2011Q4 us-gaap Accounts Payable Current
AccountsPayableCurrent
11797000
CY2011Q4 us-gaap Other Liabilities Noncurrent
OtherLiabilitiesNoncurrent
4379000
CY2011Q4 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
-1032131000
CY2011Q4 us-gaap Assets
Assets
80732000
CY2011Q4 us-gaap Money Market Funds At Carrying Value
MoneyMarketFundsAtCarryingValue
66000
CY2011Q4 us-gaap Accounts Receivable Net Current
AccountsReceivableNetCurrent
31598000
CY2011Q4 us-gaap Inventory Net
InventoryNet
27393000
CY2011Q4 us-gaap Liabilities And Stockholders Equity
LiabilitiesAndStockholdersEquity
80732000
CY2011Q4 us-gaap Leasehold Improvements Gross
LeaseholdImprovementsGross
2067000
CY2011Q4 us-gaap Restricted Cash And Cash Equivalents Noncurrent
RestrictedCashAndCashEquivalentsNoncurrent
58000
CY2011Q4 us-gaap Cash And Cash Equivalents At Carrying Value
CashAndCashEquivalentsAtCarryingValue
18190000
CY2011Q4 us-gaap Common Stock Shares Issued
CommonStockSharesIssued
30820000 shares
CY2011Q4 us-gaap Accumulated Other Comprehensive Income Loss Net Of Tax
AccumulatedOtherComprehensiveIncomeLossNetOfTax
237000
CY2011Q4 us-gaap Furniture And Fixtures Gross
FurnitureAndFixturesGross
310000
CY2011Q4 us-gaap Cash
Cash
18124000
CY2011Q4 us-gaap Liabilities Current
LiabilitiesCurrent
36826000
CY2011Q4 us-gaap Inventory Finished Goods Net Of Reserves
InventoryFinishedGoodsNetOfReserves
7638000
CY2011Q4 us-gaap Common Stock Value
CommonStockValue
31000
CY2011Q4 us-gaap Common Stock Par Or Stated Value Per Share
CommonStockParOrStatedValuePerShare
0.001
CY2011Q4 us-gaap Assets Current
AssetsCurrent
79853000
CY2011Q4 us-gaap Accumulated Depreciation Depletion And Amortization Property Plant And Equipment
AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment
14888000
CY2011Q4 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
608000
CY2011Q4 zhne Accrued Expenses And Other Current Liabilities
AccruedExpensesAndOtherCurrentLiabilities
10029000
CY2011Q4 zhne Allowance For Doubtful Accounts Receivable And Sales Returns Current
AllowanceForDoubtfulAccountsReceivableAndSalesReturnsCurrent
2024000
CY2011Q4 zhne Lease Liability For Excess Facilities
LeaseLiabilityForExcessFacilities
835000
us-gaap Operating Income Loss
OperatingIncomeLoss
-4377000
us-gaap Increase Decrease In Accounts Payable
IncreaseDecreaseInAccountsPayable
-1826000
us-gaap Other Nonoperating Income Expense
OtherNonoperatingIncomeExpense
70000
us-gaap Comprehensive Income Net Of Tax
ComprehensiveIncomeNetOfTax
-4343000
us-gaap Proceeds From Issuance Of Shares Under Incentive And Share Based Compensation Plans Including Stock Options
ProceedsFromIssuanceOfSharesUnderIncentiveAndShareBasedCompensationPlansIncludingStockOptions
65000
us-gaap Share Based Compensation
ShareBasedCompensation
523000
us-gaap Product Warranty Accrual Payments
ProductWarrantyAccrualPayments
570000
us-gaap Earnings Per Share Basic And Diluted
EarningsPerShareBasicAndDiluted
-0.14
us-gaap Depreciation And Amortization
DepreciationAndAmortization
896000
us-gaap Net Cash Provided By Used In Operating Activities
NetCashProvidedByUsedInOperatingActivities
-1104000
us-gaap Net Cash Provided By Used In Investing Activities
NetCashProvidedByUsedInInvestingActivities
-780000
us-gaap Investment Income Interest
InvestmentIncomeInterest
2000
us-gaap Payments To Acquire Property Plant And Equipment
PaymentsToAcquirePropertyPlantAndEquipment
780000
us-gaap Cash And Cash Equivalents Period Increase Decrease
CashAndCashEquivalentsPeriodIncreaseDecrease
-1826000
us-gaap General And Administrative Expense
GeneralAndAdministrativeExpense
4164000
us-gaap Increase Decrease In Other Operating Assets
IncreaseDecreaseInOtherOperatingAssets
-124000
us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets
194000
us-gaap Sales Revenue Net
SalesRevenueNet
60866000
us-gaap Increase Decrease In Accounts Receivable
IncreaseDecreaseInAccountsReceivable
-1928000
us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
-4382000
us-gaap Selling And Marketing Expense
SellingAndMarketingExpense
10893000
us-gaap Other Comprehensive Income Foreign Currency Transaction And Translation Gain Loss Arising During Period Net Of Tax
OtherComprehensiveIncomeForeignCurrencyTransactionAndTranslationGainLossArisingDuringPeriodNetOfTax
-7000
us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
10965000
us-gaap Product Warranty Accrual Warranties Issued
ProductWarrantyAccrualWarrantiesIssued
440000
us-gaap Net Cash Provided By Used In Financing Activities
NetCashProvidedByUsedInFinancingActivities
65000
us-gaap Cost Of Revenue
CostOfRevenue
39221000
us-gaap Operating Expenses
OperatingExpenses
26022000
us-gaap Increase Decrease In Inventories
IncreaseDecreaseInInventories
-3396000
us-gaap Increase Decrease In Accrued Liabilities And Other Operating Liabilities
IncreaseDecreaseInAccruedLiabilitiesAndOtherOperatingLiabilities
-2606000
us-gaap Gross Profit
GrossProfit
21645000
us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
WeightedAverageNumberOfShareOutstandingBasicAndDiluted
30618000 shares
us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
5220000 shares
us-gaap Net Income Loss
NetIncomeLoss
-4336000
us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
-46000
us-gaap Effect Of Exchange Rate On Cash And Cash Equivalents
EffectOfExchangeRateOnCashAndCashEquivalents
-7000
us-gaap Interest Expense
InterestExpense
77000
zhne Provision For Doubtful Accounts Receivable And Sales Returns
ProvisionForDoubtfulAccountsReceivableAndSalesReturns
991000
dei Trading Symbol
TradingSymbol
ZHNE
dei Entity Registrant Name
EntityRegistrantName
ZHONE TECHNOLOGIES INC
dei Amendment Flag
AmendmentFlag
false
dei Entity Filer Category
EntityFilerCategory
Smaller Reporting Company
dei Document Fiscal Period Focus
DocumentFiscalPeriodFocus
Q2
dei Document Fiscal Year Focus
DocumentFiscalYearFocus
2012
dei Document Type
DocumentType
10-Q
dei Document Period End Date
DocumentPeriodEndDate
2012-06-30
dei Entity Central Index Key
EntityCentralIndexKey
0001101680
dei Current Fiscal Year End Date
CurrentFiscalYearEndDate
--12-31
us-gaap Operating Income Loss
OperatingIncomeLoss
-5446000
us-gaap Increase Decrease In Accounts Payable
IncreaseDecreaseInAccountsPayable
240000
us-gaap Other Nonoperating Income Expense
OtherNonoperatingIncomeExpense
6000
us-gaap Comprehensive Income Net Of Tax
ComprehensiveIncomeNetOfTax
-5532000
us-gaap Proceeds From Issuance Of Shares Under Incentive And Share Based Compensation Plans Including Stock Options
ProceedsFromIssuanceOfSharesUnderIncentiveAndShareBasedCompensationPlansIncludingStockOptions
115000
us-gaap Revenue Recognition Multiple Element Arrangements
RevenueRecognitionMultipleElementArrangements
<div> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="4%"><font size="1">&#xA0;</font></td> <td valign="top" width="4%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i>(e)</i></b></font></td> <td valign="top" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Revenue Recognition</i></b></font></td> </tr> </table> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 8%"> <font style="FONT-FAMILY: Times New Roman" size="2">The Company recognizes revenue when the earnings process is complete. The Company recognizes product revenue upon shipment of product under contractual terms which transfer title to customers upon shipment, under normal credit terms, net of estimated sales returns and allowances at the time of shipment. The Company&#x2019;s arrangements generally do not have any significant post-delivery obligations. If the Company&#x2019;s arrangements include customer acceptance provisions, revenue is recognized upon obtaining the signed acceptance certificate from the customer, unless the Company can objectively demonstrate that the delivered products or services meet all the acceptance criteria specified in the arrangement prior to obtaining the signed acceptance.&#xA0;In those instances where revenue is recognized prior to obtaining the signed acceptance certificate, the Company uses successful completion of customer testing as the basis to objectively demonstrate that the delivered products or services meet all the acceptance criteria specified in the arrangement. The Company also considers historical acceptance experience with the customer, as well as the payment terms specified in the arrangement, when revenue is recognized prior to obtaining the signed acceptance certificate. When collectability is not reasonably assured, revenue is recognized when cash is collected.</font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 8%"> <font style="FONT-FAMILY: Times New Roman" size="2">The Company makes certain sales to product distributors. These customers are given certain privileges to return a portion of inventory. Return privileges generally allow distributors to return inventory based on a percent of purchases made within a specific period of time. The Company recognizes revenue on sales to distributors that have contractual return rights when the products have been sold by the distributors, unless there is sufficient customer specific sales and sales returns history to support revenue recognition upon shipment. In those instances when revenue is recognized upon shipment to distributors, the Company uses historical rates of return from the distributors to provide for estimated product returns. The Company accrues for warranty costs, sales returns and other allowances at the time of shipment based on historical experience and expected future costs.</font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 8%"> <font style="FONT-FAMILY: Times New Roman" size="2">The Company&#x2019;s products and services qualify as separate units of accounting and are deemed to be non-contingent deliverables as the Company&#x2019;s arrangements typically do not have any significant performance, cancellation, termination and refund type provisions. Products are typically considered delivered upon shipment. Revenue from services is recognized ratably over the period during which the services are to be performed.</font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 8%"> <font style="FONT-FAMILY: Times New Roman" size="2">The Company derives revenue primarily from stand-alone sales of its products. In certain cases, the Company&#x2019;s products are sold along with services, which include education, training, installation, and/or extended warranty services. The Company has established third-party evidence of selling price (&#x201C;TPE&#x201D;) for its training, education and installation services. TPE is determined based on competitor prices for similar deliverables when sold separately. These service arrangements are typically short term in nature and are largely completed shortly after delivery of the product. Training and education services are based on a daily rate per person and vary according to the type of class offered. Installation services are based on daily rate per person and vary according to the complexity of the products being installed.</font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 8%"> <font style="FONT-FAMILY: Times New Roman" size="2">Extended warranty services are priced based on the type of product and are sold in one to five year durations. Extended warranty services include the right to warranty coverage beyond the standard warranty period. In substantially all of the arrangements with multiple deliverables pertaining to arrangements with these services, the Company has used and intends to continue using vendor-specific objective evidence of selling price (&#x201C;VSOE&#x201D;) to determine the selling price for the services. The Company determines VSOE based on its normal pricing practices for these specific services when sold separately.</font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; FONT-SIZE: 1px"> &#xA0;</p> <p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 8%"> <font style="FONT-FAMILY: Times New Roman" size="2">In most instances, particularly as it relates to products, the Company is not able to establish VSOE for all deliverables in an arrangement with multiple elements. This may be due to infrequently selling each element separately, not pricing products within a narrow range, or only having a limited sales history. When VSOE cannot be established, the Company attempts to establish the selling price of each element based on TPE. Generally, the Company&#x2019;s marketing strategy differs from that of the Company&#x2019;s peers and the Company&#x2019;s offerings contain a significant level of customization and differentiation such that the comparable pricing of products with similar functionality cannot be obtained. Furthermore, the Company is unable to reliably determine what similar competitor products&#x2019; selling prices are on a stand-alone basis. Therefore, the Company is typically not able to determine TPE for the Company&#x2019;s products.</font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 8%"> <font style="FONT-FAMILY: Times New Roman" size="2">When the Company is unable to establish selling price using VSOE or TPE, the Company uses best estimate of selling price (&#x201C;BSP&#x201D;). The objective of BSP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand-alone basis. The BSP of each deliverable is determined using average discounts from list price from historical sales transactions or cost plus margin approaches based on the factors, including but not limited to, the Company&#x2019;s gross margin objectives and pricing practices plus customer and market specific considerations.</font></p> </div>
us-gaap Share Based Compensation
ShareBasedCompensation
432000
us-gaap Increase Decrease In Restricted Cash
IncreaseDecreaseInRestrictedCash
-58000
us-gaap Product Warranty Accrual Payments
ProductWarrantyAccrualPayments
575000
us-gaap Earnings Per Share Basic And Diluted
EarningsPerShareBasicAndDiluted
-0.18
us-gaap Concentration Risk Credit Risk
ConcentrationRiskCreditRisk
<div> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="4%"><font size="1">&#xA0;</font></td> <td valign="top" width="4%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i>(g)</i></b></font></td> <td valign="top" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Concentration of Risk</i></b></font></td> </tr> </table> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 8%"> <font style="FONT-FAMILY: Times New Roman" size="2">The Company&#x2019;s customers include competitive and incumbent local exchange carriers, competitive access providers, Internet service providers, wireless carriers and resellers serving these markets. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Allowances are maintained for potential doubtful accounts. For the three and six months ended June&#xA0;30, 2012, Global Village Telecom (&#x201C;GVT&#x201D;) accounted for 10% and 12% of net revenue, respectively. For the three and six months ended June&#xA0;30, 2012, Axtel S.A.B. DE C.V. (&#x201C;Axtel&#x201D;) accounted for 11% and 8% of net revenue, respectively. For both the three and six months ended June&#xA0;30, 2011, GVT accounted for 7% of net revenue. For the three and six months ended June&#xA0;30, 2011, Axtel accounted for 8% and 6% of net revenue, respectively.</font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; FONT-SIZE: 1px"> &#xA0;</p> <p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 8%"> <font style="FONT-FAMILY: Times New Roman" size="2">As of June&#xA0;30, 2012, Emirates Telecommunications Corporation (&#x201C;Etisalat&#x201D;), GVT and Axtel accounted for 19%, 11% and 13% of net accounts receivable, respectively. As of December&#xA0;31, 2011, the same customers accounted for 29%, 2% and 24% of net accounts receivable, respectively.</font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 8%"> <font style="FONT-FAMILY: Times New Roman" size="2">As of June&#xA0;30, 2012 and December&#xA0;31, 2011, receivables from customers in countries other than the United States represented 70% and 71%, respectively, of net accounts receivable.</font></p> </div>
us-gaap Depreciation And Amortization
DepreciationAndAmortization
157000
us-gaap Net Cash Provided By Used In Operating Activities
NetCashProvidedByUsedInOperatingActivities
-23000
us-gaap Net Cash Provided By Used In Investing Activities
NetCashProvidedByUsedInInvestingActivities
-136000
us-gaap Line Of Credit Facility Unused Capacity Commitment Fee Percentage
LineOfCreditFacilityUnusedCapacityCommitmentFeePercentage
0.0025 pure
us-gaap Payments To Acquire Property Plant And Equipment
PaymentsToAcquirePropertyPlantAndEquipment
194000
us-gaap Cash And Cash Equivalents Period Increase Decrease
CashAndCashEquivalentsPeriodIncreaseDecrease
-5060000
us-gaap General And Administrative Expense
GeneralAndAdministrativeExpense
3813000
us-gaap Increase Decrease In Other Operating Assets
IncreaseDecreaseInOtherOperatingAssets
1000
us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets
-279000
us-gaap Sales Revenue Net
SalesRevenueNet
57897000
us-gaap Increase Decrease In Accounts Receivable
IncreaseDecreaseInAccountsReceivable
-5352000
us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
-5467000
us-gaap Selling And Marketing Expense
SellingAndMarketingExpense
9540000
us-gaap Other Comprehensive Income Foreign Currency Transaction And Translation Gain Loss Arising During Period Net Of Tax
OtherComprehensiveIncomeForeignCurrencyTransactionAndTranslationGainLossArisingDuringPeriodNetOfTax
-16000
us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
9745000
us-gaap Product Warranty Accrual Warranties Issued
ProductWarrantyAccrualWarrantiesIssued
604000
us-gaap Net Cash Provided By Used In Financing Activities
NetCashProvidedByUsedInFinancingActivities
-4885000
us-gaap Cost Of Revenue
CostOfRevenue
40245000
us-gaap Operating Leases Rent Expense Minimum Rentals
OperatingLeasesRentExpenseMinimumRentals
0
us-gaap Impairment Of Long Lived Assets Held For Use
ImpairmentOfLongLivedAssetsHeldForUse
61000
us-gaap Operating Expenses
OperatingExpenses
23098000
us-gaap Long Term Purchase Commitment Amount
LongTermPurchaseCommitmentAmount
7200000
us-gaap Repayments Of Debt
RepaymentsOfDebt
5000000
us-gaap Increase Decrease In Inventories
IncreaseDecreaseInInventories
265000
us-gaap Increase Decrease In Accrued Liabilities And Other Operating Liabilities
IncreaseDecreaseInAccruedLiabilitiesAndOtherOperatingLiabilities
-1551000
us-gaap Gross Profit
GrossProfit
17652000
us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
WeightedAverageNumberOfShareOutstandingBasicAndDiluted
30871000 shares
us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
5827000 shares
us-gaap Net Income Loss
NetIncomeLoss
-5516000
us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
49000
us-gaap Effect Of Exchange Rate On Cash And Cash Equivalents
EffectOfExchangeRateOnCashAndCashEquivalents
-16000
us-gaap Use Of Estimates
UseOfEstimates
<div> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="4%"><font size="1">&#xA0;</font></td> <td valign="top" width="4%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i>(d)</i></b></font></td> <td valign="top" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Use of Estimates</i></b></font></td> </tr> </table> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 8%"> <font style="FONT-FAMILY: Times New Roman" size="2">The preparation of the condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.</font></p> </div>
us-gaap Interest Expense
InterestExpense
27000
zhne Provision For Doubtful Accounts Receivable And Sales Returns
ProvisionForDoubtfulAccountsReceivableAndSalesReturns
789000
zhne Standard Product Warranty Time Period
StandardProductWarrantyTimePeriod
P1Y
zhne Lease Expiration Month And Year
LeaseExpirationMonthAndYear
2012-06
zhne Contractual And Estimated Sublease Revenue
ContractualAndEstimatedSubleaseRevenue
835000
CY2012Q1 us-gaap Line Of Credit Facility Expiration Date1
LineOfCreditFacilityExpirationDate1
2014-03-12
CY2012Q1 us-gaap Line Of Credit Facility Expiration Date1
LineOfCreditFacilityExpirationDate1
2014-03-12
CY2011Q2 us-gaap Operating Income Loss
OperatingIncomeLoss
-1875000
CY2011Q2 us-gaap Other Nonoperating Income Expense
OtherNonoperatingIncomeExpense
14000
CY2011Q2 us-gaap Comprehensive Income Net Of Tax
ComprehensiveIncomeNetOfTax
-1893000
CY2011Q2 us-gaap Earnings Per Share Basic And Diluted
EarningsPerShareBasicAndDiluted
-0.06
CY2011Q2 us-gaap General And Administrative Expense
GeneralAndAdministrativeExpense
2093000
CY2011Q2 us-gaap Sales Revenue Net
SalesRevenueNet
31294000
CY2011Q2 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
-1889000
CY2011Q2 us-gaap Selling And Marketing Expense
SellingAndMarketingExpense
5399000
CY2011Q2 us-gaap Cost Of Revenue
CostOfRevenue
20228000
CY2011Q2 us-gaap Operating Expenses
OperatingExpenses
12941000
CY2011Q2 us-gaap Other Comprehensive Income Foreign Currency Transaction And Translation Gain Loss Arising During Period Net Of Tax
OtherComprehensiveIncomeForeignCurrencyTransactionAndTranslationGainLossArisingDuringPeriodNetOfTax
3000
CY2011Q2 us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
5449000
CY2011Q2 us-gaap Gross Profit
GrossProfit
11066000
CY2011Q2 us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
WeightedAverageNumberOfShareOutstandingBasicAndDiluted
30644000 shares
CY2011Q2 us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
5220000 shares
CY2011Q2 us-gaap Net Income Loss
NetIncomeLoss
-1896000
CY2011Q2 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
7000
CY2011Q2 us-gaap Interest Expense
InterestExpense
28000
CY2012Q2 us-gaap Operating Income Loss
OperatingIncomeLoss
-2092000
CY2012Q2 us-gaap Other Nonoperating Income Expense
OtherNonoperatingIncomeExpense
15000
CY2012Q2 us-gaap Comprehensive Income Net Of Tax
ComprehensiveIncomeNetOfTax
-2122000
CY2012Q2 us-gaap Earnings Per Share Basic And Diluted
EarningsPerShareBasicAndDiluted
-0.07
CY2012Q2 us-gaap General And Administrative Expense
GeneralAndAdministrativeExpense
1719000
CY2012Q2 us-gaap Sales Revenue Net
SalesRevenueNet
30835000
CY2012Q2 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
-2086000
CY2012Q2 us-gaap Selling And Marketing Expense
SellingAndMarketingExpense
4825000
CY2012Q2 us-gaap Other Comprehensive Income Foreign Currency Transaction And Translation Gain Loss Arising During Period Net Of Tax
OtherComprehensiveIncomeForeignCurrencyTransactionAndTranslationGainLossArisingDuringPeriodNetOfTax
-20000
CY2012Q2 us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
4820000
CY2012Q2 us-gaap Cost Of Revenue
CostOfRevenue
21563000
CY2012Q2 us-gaap Operating Expenses
OperatingExpenses
11364000
CY2012Q2 us-gaap Gross Profit
GrossProfit
9272000
CY2012Q2 us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
WeightedAverageNumberOfShareOutstandingBasicAndDiluted
30985000 shares
CY2012Q2 us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
5827000 shares
CY2012Q2 us-gaap Net Income Loss
NetIncomeLoss
-2102000
CY2012Q2 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
16000
CY2012Q2 us-gaap Interest Expense
InterestExpense
9000

Files In Submission

Name View Source Status
0001193125-12-346612-index-headers.html Edgar Link pending
0001193125-12-346612-index.html Edgar Link pending
0001193125-12-346612.txt Edgar Link pending
0001193125-12-346612-xbrl.zip Edgar Link pending
d364687d10q.htm Edgar Link pending
d364687dex101.htm Edgar Link pending
d364687dex311.htm Edgar Link pending
d364687dex312.htm Edgar Link pending
d364687dex321.htm Edgar Link pending
FilingSummary.xml Edgar Link unprocessable
Financial_Report.xls Edgar Link pending
R1.htm Edgar Link pending
R10.htm Edgar Link pending
R11.htm Edgar Link pending
R12.htm Edgar Link pending
R13.htm Edgar Link pending
R14.htm Edgar Link pending
R15.htm Edgar Link pending
R16.htm Edgar Link pending
R17.htm Edgar Link pending
R18.htm Edgar Link pending
R19.htm Edgar Link pending
R2.htm Edgar Link pending
R20.htm Edgar Link pending
R21.htm Edgar Link pending
R22.htm Edgar Link pending
R23.htm Edgar Link pending
R24.htm Edgar Link pending
R25.htm Edgar Link pending
R26.htm Edgar Link pending
R27.htm Edgar Link pending
R28.htm Edgar Link pending
R29.htm Edgar Link pending
R3.htm Edgar Link pending
R30.htm Edgar Link pending
R31.htm Edgar Link pending
R32.htm Edgar Link pending
R33.htm Edgar Link pending
R34.htm Edgar Link pending
R35.htm Edgar Link pending
R36.htm Edgar Link pending
R37.htm Edgar Link pending
R38.htm Edgar Link pending
R39.htm Edgar Link pending
R4.htm Edgar Link pending
R40.htm Edgar Link pending
R5.htm Edgar Link pending
R6.htm Edgar Link pending
R7.htm Edgar Link pending
R8.htm Edgar Link pending
R9.htm Edgar Link pending
report.css Edgar Link pending
Show.js Edgar Link pending
zhne-20120630.xml Edgar Link completed
zhne-20120630.xsd Edgar Link pending
zhne-20120630_cal.xml Edgar Link unprocessable
zhne-20120630_def.xml Edgar Link unprocessable
zhne-20120630_lab.xml Edgar Link unprocessable
zhne-20120630_pre.xml Edgar Link unprocessable