2016 Q4 Form 10-K Financial Statement

#000139681417000009 Filed on March 01, 2017

View on sec.gov

Income Statement

Concept 2016 Q4 2015 Q4 2015 Q3
Revenue $72.90M $69.32M $62.21M
YoY Change 5.17% -64.93% 19.53%
Cost Of Revenue $23.62M $19.43M $15.90M
YoY Change 21.59% -74.91% -22.02%
Gross Profit $49.28M $49.89M $46.31M
YoY Change -1.23% -58.5% 46.29%
Gross Profit Margin 67.6% 71.97% 74.44%
Selling, General & Admin $34.70M $37.60M $35.31M
YoY Change -7.71% -64.75% 25.14%
% of Gross Profit 70.41% 75.36% 76.24%
Research & Development $17.10M $13.20M $5.893M
YoY Change 29.55% -29.53% 33.18%
% of Gross Profit 34.7% 26.46% 12.72%
Depreciation & Amortization $3.260M $3.120M $2.800M
YoY Change 4.49% -68.91% 21.74%
% of Gross Profit 6.62% 6.25% 6.05%
Operating Expenses $75.36M $70.13M $57.10M
YoY Change 7.46% -65.42% 7.68%
Operating Profit -$26.08M -$20.24M $5.109M
YoY Change 28.86% 291.87% -618.68%
Interest Expense -$1.500M -$1.700M $1.905M
YoY Change -11.76% -120.54% -6.48%
% of Operating Profit 37.29%
Other Income/Expense, Net -$100.0K -$100.0K -$1.742M
YoY Change 0.0% -98.81% -13.72%
Pretax Income -$4.000M -$2.600M $3.367M
YoY Change 53.85% -80.8% -212.08%
Income Tax $0.00 -$100.0K $281.0K
% Of Pretax Income 8.35%
Net Earnings -$3.973M -$2.498M $3.086M
YoY Change 59.05% -81.79% -202.73%
Net Earnings / Revenue -5.45% -3.6% 4.96%
Basic Earnings Per Share $0.08
Diluted Earnings Per Share -$107.0K -$67.93K $0.08
COMMON SHARES
Basic Shares Outstanding 37.40M shares 36.76M shares 36.66M shares
Diluted Shares Outstanding 41.04M shares

Balance Sheet

Concept 2016 Q4 2015 Q4 2015 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $172.6M $159.0M $146.4M
YoY Change 8.55% 1.47% -2.2%
Cash & Equivalents $35.94M $54.13M $30.52M
Short-Term Investments $136.7M $102.0M $115.9M
Other Short-Term Assets $9.300M $6.100M $4.600M
YoY Change 52.46% 1.67% -13.21%
Inventory $31.28M $61.65M $56.13M
Prepaid Expenses
Receivables $29.94M $25.86M $25.92M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $243.1M $252.6M $233.1M
YoY Change -3.76% 17.89% 16.99%
LONG-TERM ASSETS
Property, Plant & Equipment $101.0M $90.32M $86.32M
YoY Change 11.84% 48.97% 53.74%
Goodwill $46.74M $30.88M $28.89M
YoY Change 51.35% 29.96% 31.02%
Intangibles
YoY Change
Long-Term Investments $0.00 $13.50M $17.90M
YoY Change -100.0% -44.67% -26.94%
Other Assets $624.0K $406.0K $2.595M
YoY Change 53.69% -84.31% -11.97%
Total Long-Term Assets $148.4M $135.2M $135.9M
YoY Change 9.78% 20.87% 28.01%
TOTAL ASSETS
Total Short-Term Assets $243.1M $252.6M $233.1M
Total Long-Term Assets $148.4M $135.2M $135.9M
Total Assets $391.5M $387.7M $369.0M
YoY Change 0.96% 18.91% 20.82%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $7.511M $8.739M $8.471M
YoY Change -14.05% 29.31% 9.35%
Accrued Expenses $36.67M $35.38M $30.30M
YoY Change 3.65% 24.95% 29.56%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $104.0M $104.9M
YoY Change -100.0% 0.87% 2.74%
Long-Term Debt Due $118.5M $118.5M $0.00
YoY Change 0.0% -1.22% -100.0%
Total Short-Term Liabilities $44.84M $149.8M $145.4M
YoY Change -70.07% 6.98% 7.53%
LONG-TERM LIABILITIES
Long-Term Debt $108.7M $0.00 $0.00
YoY Change
Other Long-Term Liabilities $18.91M $11.47M $6.125M
YoY Change 64.86% 112.11% 17.0%
Total Long-Term Liabilities $18.91M $11.47M $6.125M
YoY Change 64.86% 112.11% 17.0%
TOTAL LIABILITIES
Total Short-Term Liabilities $44.84M $149.8M $145.4M
Total Long-Term Liabilities $18.91M $11.47M $6.125M
Total Liabilities $172.5M $169.3M $160.0M
YoY Change 1.86% 9.31% 6.42%
SHAREHOLDERS EQUITY
Retained Earnings -$346.2M -$308.3M -$305.8M
YoY Change 12.31% -0.6% -3.21%
Common Stock $37.00K $37.00K $37.00K
YoY Change 0.0% 2.78% 2.78%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares 0.000 shares 0.000 shares 0.000 shares
Shareholders Equity $219.0M $218.4M $209.0M
YoY Change
Total Liabilities & Shareholders Equity $391.5M $387.7M $369.0M
YoY Change 0.96% 18.91% 20.82%

Cashflow Statement

Concept 2016 Q4 2015 Q4 2015 Q3
OPERATING ACTIVITIES
Net Income -$3.973M -$2.498M $3.086M
YoY Change 59.05% -81.79% -202.73%
Depreciation, Depletion And Amortization $3.260M $3.120M $2.800M
YoY Change 4.49% -68.91% 21.74%
Cash From Operating Activities $17.35M $16.06M $2.820M
YoY Change 8.03% 13.9% -68.6%
INVESTING ACTIVITIES
Capital Expenditures -$4.880M -$8.150M -$9.610M
YoY Change -40.12% -135.46% 94.14%
Acquisitions
YoY Change
Other Investing Activities -$2.040M $16.38M $2.760M
YoY Change -112.45% 47.17% -102.85%
Cash From Investing Activities -$6.910M $8.230M -$6.840M
YoY Change -183.96% 180.89% -93.28%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 1.070M 2.170M 1.830M
YoY Change -50.69% -20.8% -23.11%
NET CHANGE
Cash From Operating Activities 17.35M 16.06M 2.820M
Cash From Investing Activities -6.910M 8.230M -6.840M
Cash From Financing Activities 1.070M 2.170M 1.830M
Net Change In Cash 11.51M 26.46M -2.190M
YoY Change -56.5% 33.84% -97.58%
FREE CASH FLOW
Cash From Operating Activities $17.35M $16.06M $2.820M
Capital Expenditures -$4.880M -$8.150M -$9.610M
Free Cash Flow $22.23M $24.21M $12.43M
YoY Change -8.18% -372.51% -10.77%

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CY2016Q4 us-gaap Class Of Warrant Or Right Outstanding
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CY2016Q4 us-gaap Commitments And Contingencies
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CY2016Q4 us-gaap Common Stock Par Or Stated Value Per Share
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CY2015Q4 us-gaap Common Stock Shares Authorized
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CY2016Q4 us-gaap Common Stock Shares Authorized
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CY2016Q4 us-gaap Common Stock Shares Issued
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CY2016Q4 us-gaap Common Stock Shares Outstanding
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CY2016Q4 us-gaap Common Stock Value
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CY2016 us-gaap Comprehensive Income Net Of Tax
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CY2016Q4 us-gaap Convertible Debt Current
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CY2016Q4 us-gaap Convertible Debt Noncurrent
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CY2015Q3 us-gaap Cost Of Revenue
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CY2015Q4 us-gaap Cost Of Revenue
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CY2015 us-gaap Cost Of Revenue
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CY2016Q1 us-gaap Cost Of Revenue
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CY2016Q2 us-gaap Cost Of Revenue
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CY2016Q3 us-gaap Cost Of Revenue
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CY2016Q4 us-gaap Cost Of Revenue
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CY2016 us-gaap Cost Of Revenue
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CY2015 us-gaap Current Federal Tax Expense Benefit
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CY2016 us-gaap Current Federal Tax Expense Benefit
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CY2015 us-gaap Current State And Local Tax Expense Benefit
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CY2016 us-gaap Current State And Local Tax Expense Benefit
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CY2016Q4 us-gaap Debt Instrument Unamortized Discount
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CY2016Q4 us-gaap Deferred Tax Assets Net
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953000 USD
CY2016Q4 us-gaap Deferred Tax Assets Other
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531000 USD
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1310000 USD
CY2016Q4 us-gaap Deferred Tax Assets Property Plant And Equipment
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2604000 USD
CY2015Q4 us-gaap Deferred Tax Assets Tax Credit Carryforwards Research
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CY2016Q4 us-gaap Deferred Tax Assets Tax Credit Carryforwards Research
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CY2015Q4 us-gaap Deferred Tax Assets Tax Deferred Expense Reserves And Accruals
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CY2016Q4 us-gaap Deferred Tax Assets Tax Deferred Expense Reserves And Accruals
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CY2016Q4 us-gaap Deferred Tax Liabilities Financing Arrangements
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3186000 USD
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1700000 USD
CY2016 us-gaap Defined Contribution Plan Cost Recognized
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1500000 USD
CY2014Q4 us-gaap Depreciation
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9300000 USD
CY2015 us-gaap Depreciation
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CY2016 us-gaap Depreciation
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CY2014Q4 us-gaap Depreciation Depletion And Amortization
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CY2014 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
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CY2016 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
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CY2015 us-gaap Effective Income Tax Rate Reconciliation Change In Deferred Tax Assets Valuation Allowance
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CY2016 us-gaap Effective Income Tax Rate Reconciliation Change In Deferred Tax Assets Valuation Allowance
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CY2014 us-gaap Effective Income Tax Rate Reconciliation Nondeductible Expense Share Based Compensation Cost
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CY2015 us-gaap Effective Income Tax Rate Reconciliation Nondeductible Expense Share Based Compensation Cost
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CY2016 us-gaap Effective Income Tax Rate Reconciliation Nondeductible Expense Share Based Compensation Cost
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CY2015 us-gaap Effective Income Tax Rate Reconciliation Other Adjustments
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CY2014 us-gaap Effective Income Tax Rate Reconciliation State And Local Income Taxes
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CY2015 us-gaap Effective Income Tax Rate Reconciliation State And Local Income Taxes
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CY2016 us-gaap Effective Income Tax Rate Reconciliation State And Local Income Taxes
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CY2015 us-gaap Effective Income Tax Rate Reconciliation Tax Credits
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CY2016 us-gaap Effective Income Tax Rate Reconciliation Tax Credits
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CY2015Q4 us-gaap Employee Related Liabilities Current
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14919000 USD
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15000000 USD
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81000 USD
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CY2016 us-gaap Gain Loss On Disposition Of Assets
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CY2014Q4 us-gaap Gains Losses On Extinguishment Of Debt
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CY2016 us-gaap Gains Losses On Extinguishment Of Debt
GainsLossesOnExtinguishmentOfDebt
0 USD
CY2014Q4 us-gaap Goodwill
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23761000 USD
CY2015Q4 us-gaap Goodwill
Goodwill
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CY2016Q4 us-gaap Goodwill
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CY2016Q4 us-gaap Incentive From Lessor
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5600000 USD
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IncomeLossFromContinuingOperationsBeforeIncomeTaxesDomestic
3760000 USD
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CY2014Q4 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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CY2015 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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2120000 USD
CY2016 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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CY2016 us-gaap Income Loss From Continuing Operations Before Income Taxes Foreign
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CY2015 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
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CY2016 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
105000 USD
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CY2015 us-gaap Income Taxes Paid
IncomeTaxesPaid
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CY2016 us-gaap Income Taxes Paid
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247000 USD
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CY2015 us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
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CY2016 us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
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710000 USD
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4082000 USD
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6713000 USD
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2526000 USD
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87000 USD
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1621000 USD
CY2015 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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2007000 USD
CY2016 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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3377000 USD
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CY2016 us-gaap Increase Decrease In Restricted Cash
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0 USD
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0 shares
CY2015 us-gaap Incremental Common Shares Attributable To Call Options And Warrants
IncrementalCommonSharesAttributableToCallOptionsAndWarrants
6000 shares
CY2016 us-gaap Incremental Common Shares Attributable To Call Options And Warrants
IncrementalCommonSharesAttributableToCallOptionsAndWarrants
0 shares
CY2014Q4 us-gaap Incremental Common Shares Attributable To Conversion Of Debt Securities
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0 shares
CY2015 us-gaap Incremental Common Shares Attributable To Conversion Of Debt Securities
IncrementalCommonSharesAttributableToConversionOfDebtSecurities
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CY2016 us-gaap Incremental Common Shares Attributable To Conversion Of Debt Securities
IncrementalCommonSharesAttributableToConversionOfDebtSecurities
0 shares
CY2014Q4 us-gaap Incremental Common Shares Attributable To Equity Unit Purchase Agreements
IncrementalCommonSharesAttributableToEquityUnitPurchaseAgreements
0 shares
CY2015 us-gaap Incremental Common Shares Attributable To Equity Unit Purchase Agreements
IncrementalCommonSharesAttributableToEquityUnitPurchaseAgreements
1000 shares
CY2016 us-gaap Incremental Common Shares Attributable To Equity Unit Purchase Agreements
IncrementalCommonSharesAttributableToEquityUnitPurchaseAgreements
0 shares
CY2014Q4 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
0 shares
CY2015 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
1638000 shares
CY2016 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
IncrementalCommonSharesAttributableToShareBasedPaymentArrangements
0 shares
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400000 USD
CY2015 us-gaap Interest Costs Capitalized
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800000 USD
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1500000 USD
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InterestExpense
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InterestExpense
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61645000 USD
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31278000 USD
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16712000 USD
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11742000 USD
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12152000 USD
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11621000 USD
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382000 USD
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Liabilities
172490000 USD
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CY2015 us-gaap Net Cash Provided By Used In Financing Activities Continuing Operations
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10699000 USD
CY2016 us-gaap Net Cash Provided By Used In Financing Activities Continuing Operations
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7261000 USD
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CY2016 us-gaap Net Cash Provided By Used In Investing Activities Continuing Operations
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26564000 USD
CY2015 us-gaap Net Cash Provided By Used In Operating Activities Continuing Operations
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28021000 USD
CY2016 us-gaap Net Cash Provided By Used In Operating Activities Continuing Operations
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33453000 USD
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1260000 USD
CY2015Q2 us-gaap Net Income Loss
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8000 USD
CY2015Q3 us-gaap Net Income Loss
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3086000 USD
CY2015Q4 us-gaap Net Income Loss
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CY2015 us-gaap Net Income Loss
NetIncomeLoss
1856000 USD
CY2016Q1 us-gaap Net Income Loss
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CY2016Q2 us-gaap Net Income Loss
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CY2016Q3 us-gaap Net Income Loss
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CY2016Q4 us-gaap Net Income Loss
NetIncomeLoss
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CY2016 us-gaap Description Of New Accounting Pronouncements Not Yet Adopted
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:10px;padding-top:4px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">RECENT ACCOUNTING PRONOUNCEMENTS</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Recently Adopted</font></div><div style="line-height:120%;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-top:0px;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In April 2015, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2015-03, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Interest&#8212;Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs</font><font style="font-family:inherit;font-size:10pt;">, which requires debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. The Company adopted this standard on January 1, 2016. The Company applied the new guidance retrospectively to all prior periods presented in the financial statements to conform to the 2016 presentation. As a result, </font><font style="font-family:inherit;font-size:10pt;">$1.9 million</font><font style="font-family:inherit;font-size:10pt;"> of debt issuance costs related to the Company&#8217;s convertible senior notes at December 31, 2015 were reclassified from other assets to a reduction in the carrying value of the Company&#8217;s convertible senior notes. </font></div><div style="line-height:120%;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Not Adopted as of </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">December&#160;31, 2016</font><font style="font-family:inherit;font-size:10pt;font-style:italic;"> </font></div><div style="line-height:120%;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In May 2014, the FASB issued ASU 2014-09, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Revenue from Contracts with Customers</font><font style="font-family:inherit;font-size:10pt;">, which requires that an entity recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to its customers. In order to achieve this core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. During the fiscal third quarter of 2015, the FASB approved a one year deferral to the effective date to be adopted by all public companies for all annual periods and interim reporting periods beginning after December 15, 2017. During 2016, the FASB issued additional guidance and clarification relating to identifying performance obligations, licensing, principal versus agent considerations, assessing collectability, presentation of sales taxes, noncash consideration and contract modifications and completed contracts at transition. These updates will replace existing revenue recognition guidance under GAAP when it becomes effective for the Company beginning January 1, 2018, and permits two methods of adoption: the full retrospective&#160;method, which requires the standard to be applied to each prior period presented, or the modified retrospective method, which requires the cumulative effect of adoption to be recognized as an adjustment to opening retained earnings in the period of adoption. While the Company is continuing to evaluate the impact of these updates on its consolidated financial statements, it does not expect the implementation of ASU 2014-09 and the subsequently issued related guidance to have a material impact on its consolidated financial statements.</font></div><div style="line-height:120%;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-top:0px;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In July 2015, the FASB issued ASU 2015-11, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Inventory (Topic 330): Simplifying the Measurement of Inventory</font><font style="font-family:inherit;font-size:10pt;">. The standard requires entities to measure most inventory &#8220;at the lower of cost and net realizable value,&#8221; thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market (market in this context is defined as one of three different measures, one of which is net realizable value). The standard is effective for the Company prospectively beginning January 1, 2017. The adoption of ASU 2015-11 is not expected to have a material impact on the Company&#8217;s consolidated financial statements.</font></div><div style="line-height:120%;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-top:0px;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2016, the FASB issued ASU 2016-02,&#160;</font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Leases (ASC 842)</font><font style="font-family:inherit;font-size:10pt;">.&#160;This update requires lessees to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. The lease liability will be equal to the present value of lease payments and the right-of-use asset will be based on the lease liability, subject to adjustment for items such as initial direct costs. For income statement purposes, the new standard retains a dual model similar to Accounting Standards Codification, or ASC, 840, requiring leases to be classified as either operating or financing. For lessees, operating leases will result in straight-line expense (similar to current accounting by lessees for operating leases under ASC 840) while financing leases will result in a front-loaded expense pattern (similar to current accounting by lessees for capital leases under ASC 840). This update also introduces new disclosure requirements for leasing arrangements. The standard is effective for annual reporting periods beginning after December 15, 2018 and interim periods within those annual periods. Early adoption is permitted. The Company is evaluating the impact of ASU 2016-02 on its consolidated financial statements. Refer to Note&#160;17, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Commitments and Contingencies</font><font style="font-family:inherit;font-size:10pt;">, for further discussion on the Company&#8217;s leases.</font></div><div style="line-height:120%;padding-top:0px;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;padding-top:0px;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In March 2016, the FASB issued ASU 2016-09,&#160;</font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Compensation&#8212;Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting</font><font style="font-family:inherit;font-size:10pt;">. This update includes multiple provisions intended to simplify various aspects of the accounting for share-based payment transactions including accounting for excess tax benefits and tax deficiencies, classification of excess tax benefits in the statement of cash flows and accounting for award forfeitures. The update also removes the present requirement to delay recognition of an excess tax benefit until it reduces current taxes payable, instead, it is required to be recognized at the time of settlement, subject to normal valuation allowance considerations. This update became effective for the Company beginning January 1, 2017. The Company will elect an accounting policy change to record forfeitures as they occur rather than estimating forfeitures during each period and will record a charge of approximately </font><font style="font-family:inherit;font-size:10pt;">$0.3 million</font><font style="font-family:inherit;font-size:10pt;"> to retained earnings as of January 1, 2017 related to the reversal of cumulative forfeiture estimates. The adoption of this standard also will result in the recognition of </font><font style="font-family:inherit;font-size:10pt;">$29.3 million</font><font style="font-family:inherit;font-size:10pt;"> of previously unrecognized excess tax benefits in deferred tax assets, fully offset by a valuation allowance. All tax-related cash flows resulting from stock-based compensation, including the excess tax benefits related to the settlement of stock-based awards, will be classified as cash flows from operating activities on the Company&#8217;s consolidated statements of cash flows. Based on a preliminary assessment, the Company does not believe that any of the provisions in ASU 2016-09 will have a significant impact on its consolidated financial statements.</font></div><div style="line-height:120%;padding-top:0px;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In June 2016, the FASB issued ASU 2016-13, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Financial Instruments&#8212;Credit Losses (Topic 326)</font><font style="font-family:inherit;font-size:10pt;">, which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. This update also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity&#8217;s portfolio. This ASU is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact of ASU 2016-13 on its consolidated financial statements.</font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2016, the FASB issued&#160;ASU&#160;2016-15,&#160;</font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Statement of Cash Flows (Topic&#160;230): Classification of Certain Cash Receipts and Cash Payments</font><font style="font-family:inherit;font-size:10pt;">, which clarifies existing guidance on how companies present and classify certain cash receipts and cash payments in the statement of cash flows by addressing specific cash flow issues in an effort to reduce diversity in practice, including guidance on debt prepayment or extinguishment costs and contingent consideration payments made after a&#160;business combination.&#160;This update&#160;is effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact of&#160;ASU&#160;2016-15&#160;on its consolidated financial statements.</font></div><div style="line-height:120%;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or not significant to the consolidated financial statements of the Company.</font></div></div>
CY2016 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:10px;padding-top:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingent assets and contingent liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, among other things, revenue recognition, inventory costs, impairments of goodwill and long-lived assets, liabilities and accruals, stock-based compensation and the valuation of deferred tax assets. The Company&#8217;s critical accounting policies are those that are both most important to the Company&#8217;s consolidated financial condition and results of operations and require the most difficult, subjective or complex judgments on the part of management in their application, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Because of the uncertainty of factors surrounding the estimates or judgments used in the preparation of the consolidated financial statements, actual results could differ from these estimates.</font></div></div>

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