MAXWELL TECHNOLOGIES INC, 10-K filed on 2/17/2016
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2015
Feb. 12, 2016
Jun. 30, 2015
Document and Entity Information [Abstract]
 
 
 
Entity Registrant Name
MAXWELL TECHNOLOGIES INC 
 
 
Entity Central Index Key
0000319815 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2015 
 
 
Amendment Flag
false 
 
 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
FY 
 
 
Trading Symbol
mxwl 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Common Stock, Shares Outstanding
 
31,849,932 
 
Entity Public Float
 
 
$ 186,068,190 
Consolidated Balance Sheets (USD $)
Dec. 31, 2015
Dec. 31, 2014
Current assets:
 
 
Cash and cash equivalents
$ 24,382,000 
$ 24,732,000 
Restricted cash
400,000 
Trade and other accounts receivable, net of allowance for doubtful accounts of $252 and $143 at December 31, 2015 and 2014, respectively
43,172,000 
43,698,000 
Inventories, net
39,055,000 
44,856,000 
Prepaid expenses and other current assets
2,593,000 
2,426,000 
Total current assets
109,602,000 
115,712,000 
Property and equipment, net
32,324,000 
39,223,000 
Goodwill
23,635,000 
23,599,000 
Pension asset
5,849,000 
7,362,000 
Other non-current assets
603,000 
704,000 
Total assets
172,013,000 
186,600,000 
Current liabilities:
 
 
Accounts payable and accrued liabilities
33,985,000 
27,011,000 
Accrued employee compensation
6,672,000 
9,348,000 
Deferred revenue and customer deposits
3,066,000 
703,000 
Short-term borrowings and current portion of long-term debt
42,000 
15,549,000 
Deferred tax liability
1,111,000 
Total current liabilities
43,765,000 
53,722,000 
Deferred tax liability, long-term
6,076,000 
3,304,000 
Long-term debt, excluding current portion
49,000 
20,000 
Other long-term liabilities
2,947,000 
2,601,000 
Total liabilities
52,837,000 
59,647,000 
Commitments and contingencies (Note 10 and Note 12)
   
   
Stockholders’ equity:
 
 
Common stock, $0.10 par value per share, 40,000 shares authorized; 31,782 and 29,846 shares issued and outstanding at December 31, 2015 and 2014, respectively
3,176,000 
2,982,000 
Additional paid-in capital
291,505,000 
277,314,000 
Accumulated deficit
(180,399,000)
(158,066,000)
Accumulated other comprehensive income
4,894,000 
4,723,000 
Total stockholders’ equity
119,176,000 
126,953,000 
Total liabilities and stockholders’ equity
$ 172,013,000 
$ 186,600,000 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Statement of Financial Position [Abstract]
 
 
Trade and other accounts receivable, allowance for doubtful accounts
$ 252 
$ 143 
Common stock, par value
$ 0.10 
$ 0.10 
Common stock, shares authorized
40,000,000 
40,000,000 
Common stock, shares issued
31,782,000 
29,846,000 
Common stock, shares outstanding
31,782,000 
29,846,000 
Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Statement [Abstract]
 
 
 
Revenue
$ 167,372 
$ 186,586 
$ 193,534 
Cost of revenue
116,410 
118,143 
118,244 
Gross profit
50,962 
68,443 
75,290 
Operating expenses:
 
 
 
Selling, general and administrative
40,758 
43,022 
43,543 
Research and development
24,697 
26,320 
22,542 
Restructuring and exit costs
2,512 
Total operating expenses
67,967 
69,342 
66,085 
Income (loss) from operations
(17,005)
(899)
9,205 
Interest expense, net
266 
169 
Amortization of prepaid debt costs
18 
20 
60 
Foreign currency exchange loss, net
441 
838 
649 
Income (loss) before income taxes
(17,730)
(1,926)
8,492 
Income tax provision
4,603 
4,346 
2,152 
Net income (loss)
$ (22,333)
$ (6,272)
$ 6,340 
Net income (loss) per share:
 
 
 
Basic (in dollars per share)
$ (0.73)
$ (0.21)
$ 0.22 
Diluted (in dollars per share)
$ (0.73)
$ (0.21)
$ 0.22 
Weighted average common shares outstanding:
 
 
 
Basic (in shares)
30,716 
29,216 
28,869 
Diluted (in shares)
30,716 
29,216 
28,903 
Consolidated Statements of Comprehensive Income (Loss) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
Net income (loss)
$ (22,333)
$ (6,272)
$ 6,340 
Other comprehensive income (loss), net of tax:
 
 
 
Foreign currency translation adjustment
1,574 
(10,445)
2,428 
Defined benefit pension plan, net of tax:
 
 
 
Actuarial gain (loss) on benefit obligation and plan assets, net of tax benefit of $531 and $922, and tax provision of $597 for the years ended December 31, 2015, 2014 and 2013, respectively
(1,862)
(2,358)
2,785 
Amortization of deferred loss, net of tax provision of $10 and $32 for the years ended December 31, 2015 and 2013, respectively
35 
148 
Amortization of prior service cost, net of tax provision of $30, $39 and $8 for the years ended December 31, 2015, 2014 and 2013, respectively
106 
101 
36 
Settlements and plan changes, net of tax provision of $91 and $118, and tax benefit of $173 for the years ended December 31, 2015, 2014 and 2013, respectively
318 
302 
(805)
Other comprehensive income (loss), net of tax
171 
(12,400)
4,592 
Comprehensive income (loss)
$ (22,162)
$ (18,672)
$ 10,932 
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
Tax benefit from (provision for) actuarial (loss) gain on benefit obligation and plan assets
$ 531 
$ 922 
$ (597)
Tax benefit from (provision for) amortization of net loss recognized in net periodic benefit cost
(10)
(32)
Tax benefit from (provision for) amortization of prior service cost recognized in net periodic benefit cost
(30)
(39)
(8)
Tax benefit from (provision for) settlement
$ (91)
$ (118)
$ 173 
Consolidated Statements of Stockholders' Equity (USD $)
In Thousands, unless otherwise specified
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit [Member]
Accumulated Other Comprehensive Income [Member]
Beginning balance at Dec. 31, 2012
$ 124,933 
$ 2,913 
$ 267,623 
$ (158,134)
$ 12,531 
Beginning balance, shares at Dec. 31, 2012
 
29,162 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
Common stock issued under employee benefit plans, shares
 
67 
 
 
 
Common stock issued under employee benefit plans
412 
405 
 
 
Share-based compensation, shares
 
359 
 
 
 
Share-based compensation
3,980 
36 
3,944 
 
 
Repurchase and cancellation of restricted shares, shares
 
(25)
 
 
 
Repurchase and cancellation of restricted shares
47 
44 
 
 
Net income (loss)
6,340 
 
 
6,340 
 
Other Comprehensive Income
 
 
 
 
 
Foreign currency translation adjustment
2,428 
 
 
 
2,428 
Pension adjustment, net of tax provision (benefit)
2,164 
 
 
 
2,164 
Ending balance at Dec. 31, 2013
140,210 
2,953 
271,928 
(151,794)
17,123 
Ending balance, shares at Dec. 31, 2013
 
29,563 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
Common stock issued under employee benefit plans, shares
 
175 
 
 
 
Common stock issued under employee benefit plans
1,450 
18 
1,432 
 
 
Share-based compensation, shares
 
312 
 
 
 
Share-based compensation
3,964 
31 
3,933 
 
 
Repurchase and cancellation of restricted shares, shares
 
(204)
 
 
 
Repurchase and cancellation of restricted shares
20 
21 
 
 
Net income (loss)
(6,272)
 
 
(6,272)
 
Other Comprehensive Income
 
 
 
 
 
Foreign currency translation adjustment
(10,445)
 
 
 
(10,445)
Pension adjustment, net of tax provision (benefit)
(1,955)
 
 
 
(1,955)
Ending balance at Dec. 31, 2014
126,953 
2,982 
277,314 
(158,066)
4,723 
Ending balance, shares at Dec. 31, 2014
 
29,846 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
Common stock issued under employee benefit plans, shares
 
142 
 
 
 
Common stock issued under employee benefit plans
875 
14 
861 
 
 
Share-based compensation, shares
 
80 
 
 
 
Share-based compensation
3,946 
3,938 
 
 
Proceeds from issuance of common stock, shares
 
1,831 
 
 
 
Proceeds from issuance of common stock, net
9,564 
183 
9,381 
 
 
Cancellation of restricted shares, shares
 
(117)
 
 
 
Cancellation of restricted shares
11 
11 
 
 
Net income (loss)
(22,333)
 
 
(22,333)
 
Other Comprehensive Income
 
 
 
 
 
Foreign currency translation adjustment
1,574 
 
 
 
1,574 
Pension adjustment, net of tax provision (benefit)
(1,403)
 
 
 
(1,403)
Ending balance at Dec. 31, 2015
$ 119,176 
$ 3,176 
$ 291,505 
$ (180,399)
$ 4,894 
Ending balance, shares at Dec. 31, 2015
 
31,782 
 
 
 
Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Statement of Stockholders' Equity [Abstract]
 
 
 
Tax on pension adjustment
$ 400 
$ 765 
$ (464)
Consolidated Statements of Cash Flows (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Operating activities:
 
 
 
Net income (loss)
$ (22,333,000)
$ (6,272,000)
$ 6,340,000 
Adjustments to reconcile net income (loss) to net cash from operating activities:
 
 
 
Depreciation
11,385,000 
11,159,000 
8,880,000 
Amortization of intangible assets
166,000 
203,000 
299,000 
Amortization of prepaid debt costs
18,000 
20,000 
60,000 
Loss on lease due to restructuring
1,043,000 
Pension cost
412,000 
319,000 
20,000 
Stock-based compensation expense
3,946,000 
3,967,000 
3,980,000 
Unrealized loss (gain) on foreign currency exchange rates
1,631,000 
(2,126,000)
Release of tax valuation allowance
(170,000)
Provision for (recovery of) losses on accounts receivable
281,000 
20,000 
(35,000)
Provision for losses on inventory
541,000 
910,000 
1,622,000 
Provision for warranties
1,327,000 
717,000 
Changes in operating assets and liabilities:
 
 
 
Trade and other accounts receivable
315,000 
(15,100,000)
3,729,000 
Inventories
5,251,000 
(1,520,000)
(4,568,000)
Prepaid expenses and other assets
(53,000)
(99,000)
129,000 
Pension asset
(650,000)
(724,000)
Deferred tax liability
2,017,000 
2,250,000 
994,000 
Accounts payable and accrued liabilities
5,031,000 
144,000 
(2,559,000)
Deferred revenue and customer deposits
2,362,000 
46,000 
(5,365,000)
Accrued employee compensation
(2,670,000)
651,000 
4,018,000 
Other long-term liabilities
(470,000)
(728,000)
2,347,000 
Net cash provided by (used in) operating activities
9,380,000 
(6,163,000)
19,891,000 
Investing activities:
 
 
 
Purchases of property and equipment
(4,143,000)
(6,975,000)
(16,850,000)
Net cash used in investing activities
(4,143,000)
(6,975,000)
(16,850,000)
Financing activities:
 
 
 
Principal payments on long-term debt and short-term borrowings
(18,845,000)
(7,164,000)
(10,430,000)
Proceeds from long-term and short-term borrowings
3,040,000 
15,279,000 
8,709,000 
Repurchase of shares
(47,000)
Proceeds from issuance of common stock under equity compensation plans
875,000 
1,448,000 
412,000 
Proceeds from sale of common stock, net of offering costs
9,564,000 
Restricted cash - compensating balance
(400,000)
Net cash provided by (used in) financing activities
(5,766,000)
9,563,000 
(1,356,000)
Increase (decrease) in cash and cash equivalents from operations
(529,000)
(3,575,000)
1,685,000 
Effect of exchange rate changes on cash and cash equivalents
179,000 
(2,340,000)
223,000 
Increase (decrease) in cash and cash equivalents
(350,000)
(5,915,000)
1,908,000 
Cash and cash equivalents at beginning of year
24,732,000 
30,647,000 
28,739,000 
Cash and cash equivalents at end of year
24,382,000 
24,732,000 
30,647,000 
Cash paid for:
 
 
 
Interest
245,000 
223,000 
190,000 
Income taxes
3,475,000 
3,304,000 
1,950,000 
Purchases of property and equipment included in accounts payable and accrued liabilities
$ 345,000 
$ 889,000 
$ 575,000 
Description of Business and Summary of Significant Accounting Policies
Description of Business and Summary of Significant Accounting Policies
Description of Business and Summary of Significant Accounting Policies
Description of Business
Maxwell Technologies, Inc. is a Delaware corporation originally incorporated in 1965 under the name Maxwell Laboratories, Inc. In 1983, the Company completed an initial public offering, and in 1996, changed its name to Maxwell Technologies, Inc. The Company is headquartered in San Diego, California, and has three manufacturing facilities located in San Diego, California; Rossens, Switzerland; and Peoria, Arizona. In addition, the Company has two contract manufacturers located in China. Maxwell operates as single operating segment, which is comprised of three product lines:
Ultracapacitors: Maxwell's primary focus, ultracapacitors, are energy storage devices that possess a unique combination of high power density, extremely long operational life and the ability to charge and discharge very rapidly. Maxwell's ultracapacitor cells and multi-cell packs and modules provide highly reliable energy storage and power delivery solutions for applications in multiple industries, including transportation, automotive, information technology, renewable energy and industrial electronics.
High-Voltage Capacitors: Maxwell's CONDIS® high-voltage capacitors are designed and manufactured to perform reliably for decades in all climates. These products include grading and coupling capacitors and electronic voltage transformers that are used to ensure the safety and reliability of electric utility infrastructure and other applications involving transport, distribution and measurement of high-voltage electrical energy.
Radiation-Hardened Microelectronic Products: Maxwell's radiation-hardened microelectronic products for satellites and spacecraft include single board computers and components, such as high-density memory and data conversion modules. Many of these products incorporate Maxwell's proprietary RADPAK® packaging and shielding technology and novel architectures that enable them to withstand the effects of environmental radiation and perform reliably in space.
The Company’s products are designed and manufactured to perform reliably for the life of the products and systems into which they are integrated. The Company achieves high reliability through the application of proprietary technologies and rigorously controlled design, development, manufacturing and test processes.
Financial Statement Presentation
The accompanying consolidated financial statements include the accounts of Maxwell Technologies, Inc. and its subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All intercompany transactions and account balances have been eliminated in consolidation.
Liquidity
As of December 31, 2015, the Company had approximately $24.4 million in cash and cash equivalents and working capital of $65.8 million. In July 2015, the Company entered into a loan agreement with East West Bank (“EWB”), whereby EWB made available to the Company a secured credit facility in the form of a revolving line of credit which is available up to a maximum of the lesser of: (a) $25.0 million; or (b) a certain percentage of domestic and foreign trade receivables. As of December 31, 2015, there were no drawings under this revolving line of credit and the amount available was $22.7 million. Management believes the available cash balance, along with the available borrowings under the revolving line of credit, will be sufficient to fund operations, obligations as they become due, and capital investments for at least the next twelve months.
Reclassifications
Foreign currency exchange gains and losses have been reclassified from "cost of revenue" and "selling, general and administrative" expenses to "foreign currency exchange gains and losses, net" in the consolidated statement of operations for the years ended December 31, 2014 and 2013 to conform to the current period presentation. These reclassifications do not impact reported net income (loss) and do not otherwise have a material impact on the presentation of the overall financial statements.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect reported amounts and related disclosures. These estimates include, but are not limited to, assessing the collectability of accounts receivable, applied and unapplied production costs, production capacities, the usage and recoverability of inventories and long-lived assets, deferred income taxes, the incurrence of warranty obligations, impairment of goodwill, estimation of the cost to complete certain projects, estimation of pension assets and liabilities, accruals for estimated losses from legal matters, and estimation of the value of stock-based compensation awards, including the probability that the performance criteria of restricted stock awards and restricted stock units awards will be met.
Revenue Recognition
Revenue is derived primarily from the sale of manufactured products directly to customers. Product revenue is recognized, according to the guidelines of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) Numbers 101, Revenue Recognition in Financial Statements, and 104, Revenue Recognition, when all of the following criteria are met: (1) persuasive evidence of an arrangement exists (upon contract signing or receipt of an authorized purchase order from a customer); (2) title passes to the customer at either shipment from the Company’s facilities or receipt at the customer facility, depending on shipping terms; (3) customer payment is deemed fixed or determinable and free of contingencies or significant uncertainties; and (4) collectability is reasonably assured. This policy has been consistently applied from period to period.
A portion of our sales revenue is derived from sales to distributors. Distributor revenue is recognized when all of the criteria for revenue recognition are met, which is generally the time of shipment to the distributor; all returns and credits are estimable and not significant.
Revenue from production-type contracts, which represent less than five percent of total revenue, is recognized using the percentage of completion method. The degree of completion is determined based on costs incurred as a percentage of total costs anticipated, excluding costs that are not representative of progress to completion.
Total deferred revenue and customer deposits in the consolidated balance sheets as of December 31, 2015 and 2014 of $3.1 million and $703,000, respectively, relates to cash received from customers on sales for which the revenue recognition criteria had not been achieved, customer advances, as well as other less significant customer arrangements requiring the deferral of revenue.
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of cash in readily available checking accounts. Cash equivalents consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments.
Restricted Cash
Restricted cash as of December 31, 2015 consists of a $400,000 cash balance on deposit to secure certain ongoing banking transactions.
Accounts Receivable and Allowance for Doubtful Accounts
Trade receivables are stated at gross invoiced amount less an allowance for uncollectible accounts. The allowance for doubtful accounts reflects management’s best estimate of probable losses inherent in the accounts receivable balance. Management determines the allowance for doubtful accounts based on known troubled accounts, historical experience and other currently available evidence.
Inventories, net
Inventories are stated at the lower of cost (first-in first-out basis) or market. Finished goods and work-in-process inventory values include the cost of raw materials, labor and manufacturing overhead. Consigned inventory includes finished goods delivered to customers for which the related sale has not met the revenue recognition criteria and revenue has not been recognized. Inventory when written down to market value establishes a new cost basis and its value is not subsequently increased based upon changes in underlying facts and circumstances. The Company makes adjustments to reduce the cost of inventory to its net realizable value, if required, for estimated excess or obsolete inventories. Factors influencing these adjustments include inventories on-hand compared with historical and estimated future sales for existing and new products and assumptions about the likelihood of obsolescence. Unabsorbed costs are treated as expense in the period incurred.
Property and Equipment
Property and equipment are carried at cost and are depreciated using the straight-line method. Depreciation is provided over the estimated useful lives of the related assets (three to ten years). Leasehold improvements are depreciated over the shorter of their estimated useful life or the term of the lease. Leasehold improvements funded by landlords are recorded as property and equipment, which is depreciated over the shorter of the estimated useful life of the asset or the lease term, and deferred rent, which is amortized over the lease term. As of December 31, 2015 and 2014, the net book value of leasehold improvements funded by landlords was $2.2 million and $2.5 million, respectively. As of December 31, 2015 and 2014, the unamortized balance of deferred rent related to landlord funding of leasehold improvements was $2.2 million and $2.7 million, respectively, which is included in "accounts payable and accrued liabilities" and "other long-term liabilities" in the consolidated balance sheets.
Goodwill
Goodwill, which represents the excess of the cost of an acquired business over the net fair value assigned to its assets and liabilities, is not amortized. Instead, goodwill is assessed for impairment under the Intangibles—Goodwill and Other Topic of the FASB ASC. The Company has established December 31 as the annual impairment test date. The Company first makes a qualitative assessment as to whether goodwill is impaired and if it is more likely than not that goodwill is impaired, the Company performs a two-step quantitative impairment analysis to determine if goodwill is impaired. The Company may also determine to skip the qualitative assessment in any year and move directly to the quantitative test. No impairments of goodwill were reported during the years ended December 31, 2015, 2014 and 2013.
Impairment of Long-Lived Assets
Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying value of the assets may not be recoverable. If the Company determines that the carrying value of the asset is not recoverable, a permanent impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value. No impairments of property and equipment were recorded during the years ended December 31, 2015, 2014 and 2013.
Warranty Obligation
The Company provides warranties on all product sales. The majority of the Company’s warranties are for one to eight years in the normal course of business. The Company accrues for the estimated warranty costs at the time of sale based on historical warranty experience plus any known or expected changes in warranty exposure. As of December 31, 2015 and 2014, the accrued warranty liability included in "accounts payable and accrued liabilities" in the consolidated balance sheets was $1.3 million and $716,000, respectively.
Income Taxes
Deferred income taxes are provided on a liability method in accordance with the Income Taxes Topic of the FASB ASC, whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their reported amounts at each period end. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. The guidance also provides criteria for the recognition, measurement, presentation and disclosures of uncertain tax positions. A tax benefit from an uncertain tax position may be recognized if it is “more likely than not” that the position is sustainable based solely on its technical merits.
Concentration of Credit Risk
The Company maintains cash balances at various financial institutions primarily in California and in Switzerland. In California, cash balances commonly exceed the $250,000 Federal Deposit Insurance Corporation insurance limit. In Switzerland, the banks where the Company has cash deposits are either government-owned, or in the case of cash deposited with non-government banks, deposits are insured up to 100,000 Swiss Francs. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to any significant credit risk with respect to such cash and cash equivalents.
Financial instruments, which subject the Company to potential concentrations of credit risk, consist principally of the Company’s accounts receivable. The Company’s accounts receivable result from product sales to customers in various industries and in various geographical areas, both domestic and foreign. The Company performs credit evaluations of its customers and generally requires no collateral. One customer, Shenzhen Xinlikang Supply China Management Co. LTD., accounted for 19% of total revenues in 2015, 20% of total revenues in 2014, and 22% of total revenues in 2013, and accounted for 33% of total accounts receivable as of December 31, 2015. There were no customers that accounted for more than 10% of accounts receivable as of December 31, 2014.
Research and Development Expense
Research and development expenditures are expensed in the period incurred. Third-party funding of research and development expense under cost-sharing arrangements is recorded as an offset to research and development expense in the period the expenses are incurred. Research and development expense was $24.7 million, $26.3 million and $22.5 million, net of third-party funding under cost-sharing arrangements of $1.3 million, $1.0 million and $1.3 million, for the years ended December 31, 2015, 2014 and 2013, respectively.
Advertising Expense
Advertising costs are expensed in the period incurred. Advertising expense was $1.1 million, $1.4 million and $884,000 for the years ended December 31, 2015, 2014 and 2013, respectively.
Shipping and Handling Expense
The Company recognizes shipping and handling expenses as a component of cost of revenue. Total shipping and handling expense included in cost of revenue was $1.0 million, $1.5 million, and $1.3 million for the years ended December 31, 2015, 2014 and 2013, respectively.
Foreign Currencies
The Company’s primary foreign currency exposure is related to its subsidiary in Switzerland, which has Euro and local currency (Swiss Franc) revenue and operating expenses, and local currency loans. Changes in these currency exchange rates impact the reported U.S. dollar amount of revenue, expenses and debt. The functional currency of the Swiss subsidiary is the Swiss Franc. Assets and liabilities of the Swiss subsidiary are translated at month-end exchange rates, and revenues, expenses, gains and losses are translated at rates of exchange that approximate the rate in effect at the time of the transaction. Any translation adjustments resulting from this process are presented separately as a component of accumulated other comprehensive income within stockholders’ equity in the consolidated balance sheets. Foreign currency transaction gains and losses on intercompany balances considered long term in nature are accounted for as translation adjustments within equity. All other foreign currency transaction gains and losses are reported in "foreign currency exchange loss, net" in the consolidated statements of operations.
Foreign Currency Derivative Instruments
As part of its risk management strategy, the Company uses forward contracts to hedge certain foreign currency exposures. The Company's objective is to partially offset gains or losses resulting from these exposures with opposing gains or losses on the forward contracts, thereby reducing volatility of earnings created by these foreign currency exposures. In accordance with the Derivatives and Hedging Topic of the FASB ASC, the fair values of the forward contracts are estimated at each period end based on quoted market prices and are recorded as a net asset or liability on the consolidated balance sheets. These contracts are considered economic hedges but are not designated as hedges under the Derivatives and Hedging Topic of the FASB ASC, therefore, the change in the fair value of the instruments is recognized currently in the consolidated statements of operations and is recorded in "foreign currency exchange loss, net" in the consolidated statements of operations.
Net Income (Loss) per Share
In accordance with the Earnings Per Share Topic of the FASB ASC, basic net income (loss) per share is calculated using the weighted average number of common shares outstanding during the period. Diluted net income per share includes the impact of additional common shares that would have been outstanding if dilutive potential common shares were issued. Potentially dilutive securities are not considered in the calculation of diluted net loss per share, as their inclusion would be anti-dilutive. The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share data):
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
Numerator
 
 
 
 
 
 
Net income (loss)
 
$
(22,333
)
 
$
(6,272
)
 
$
6,340

Denominator
 
 
 
 
 
 
Weighted average common shares outstanding
 
30,716

 
29,216

 
28,869

Effect of potentially dilutive securities
 
 
 
 
 
 
Options to purchase common stock
 

 

 
16

Restricted stock awards
 

 

 
3

Restricted stock unit awards
 

 

 
14

Employee stock purchase plan
 

 

 
1

Weighted average common shares outstanding, assuming dilution
 
30,716

 
29,216

 
28,903

Net income (loss) per share
 
 
 
 
 
 
Basic
 
$
(0.73
)
 
$
(0.21
)
 
$
0.22

Diluted
 
$
(0.73
)
 
$
(0.21
)
 
$
0.22


The following table summarizes instruments that may be convertible into common shares that are not included in the denominator used in the diluted net income (loss) per share calculation because to do so would be anti-dilutive (in thousands):
Common Stock
 
2015
 
2014
 
2013
Outstanding options to purchase common stock
 
931

 
672

 
790

Unvested restricted stock awards
 
245

 
528

 
424

Unvested restricted stock unit awards
 
885

 
224

 

Employee stock purchase plan awards
 
10

 
9

 
1


Stock-Based Compensation
The Company issues stock-based compensation awards to its employees and non-employee directors, including stock options, restricted stock, restricted stock units, and shares under an employee stock purchase plan. The Company records compensation expense for stock-based awards in accordance with the criteria set forth in the Stock Compensation Subtopic of the FASB ASC. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option grants. The determination of the fair value of stock options utilizing the Black-Scholes model is affected by the Company’s stock price and a number of assumptions, including expected volatility, expected term, risk-free interest rate and expected dividends.
The fair value of restricted stock awards ("RSAs") and restricted stock unit awards ("RSUs") with service-based or performance-based vesting is based on the closing market price of the Company’s common stock on the date of grant. Compensation expense equal to the fair value of each RSA or RSU is recognized ratably over the requisite service period. For RSAs and RSUs with vesting contingent on Company performance conditions, the Company uses the requisite service period that is most likely to occur. The requisite service period is estimated based on the performance period as well as any time-based service requirements. If it is unlikely that a performance condition will be achieved, no compensation expense is recognized unless it is later determined that achievement of the performance condition is likely. Expense may be adjusted for changes in the expected outcomes of the related performance conditions, with the impact of such changes recognized as a cumulative adjustment in the consolidated statement of operations in the period in which the expectation changes.
In 2014, the Company issued market-condition RSUs to certain members of executive management. Since the vesting of the market-condition RSUs is dependent on stock price performance, the fair values of these awards were estimated using a Monte-Carlo valuation model. The determination of the fair value of market-condition RSUs utilizing a Monte-Carlo valuation model was affected by the Company’s stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends.
Share-based compensation expense recognized in the consolidated statements of operations is based on equity awards ultimately expected to vest. The FASB ASC requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods with a cumulative catch up adjustment if actual forfeitures differ from those estimates. For market-condition awards, because the effect of the market-condition is reflected as a discount to the awards' fair value at grant date, subsequent forfeitures due to the Company's stock price performance do not result in a reversal of expense.
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. The standard provides companies with a single model for 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. 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. In August 2015, the FASB issued ASU 2015-14, Deferral of the Effective date, which defers the required adoption date of ASU 2014-09 by one year. As a result of the deferred effective date, ASU 2014-09 will be effective for the Company in its first quarter of fiscal 2018. Early adoption is permitted but not before the original effective date of the new standard of the first quarter of fiscal 2017. The Company is in the process of evaluating the transition method that will be elected and the impact of adoption on its consolidated financial statements.
In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity’s ability to continue as a going concern. ASU 2014-15 applies to all entities and is effective for annual and interim reporting periods ending after December 15, 2016, with early adoption permitted. The Company does not expect that the adoption of this standard will have a material effect on its financial statements.
In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs.  The update changes the presentation of debt issuance costs to a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. ASU 2015-03 is effective for annual and interim reporting periods ending after December 15, 2015. Early adoption is permitted, and the new guidance is to be applied on a retrospective basis to all prior periods. The Company does not expect that the adoption of this standard will have a material effect on its financial statements.
In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, to simplify the presentation of deferred taxes. This amendment requires that all deferred tax assets and liabilities, along with any related valuation allowances, be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for annual and interim reporting periods ending after December 15, 2017. Early adoption is permitted, and the new guidance may be applied either prospectively or retrospectively. The Company has adopted this guidance prospectively as of December 31, 2015. Therefore, prior periods have not been adjusted to reflect this adoption.
In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. The new guidance was issued to more closely align the measurement of inventory in U.S. GAAP with the measurement of inventory in International Financial Reporting Standards. The core principle of this updated guidance is that an entity should measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amendments in ASU 2015-11 apply to inventory that is measured using the first-in, first-out or average cost methods. ASU 2015-11 is effective for annual and interim reporting periods ending after December 15, 2016, including interim periods within those fiscal years, and should be applied prospectively. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company does not expect that the adoption of this standard will have a material effect on its financial statements.
In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10). This standard makes several modifications to Subtopic 825-10 including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. It is effective for interim and annual periods beginning after December 15, 2017. The Company does not expect that the adoption of this standard will have a material effect on its financial statements.
Business Enterprise Information
The Company operates as a single operating segment. According to the FASB ASC Topic Disclosures about Segments of an Enterprise and Related Information, operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing performance. The Company’s CODM is the Chief Executive Officer who evaluates the Company’s financial information and resources and assesses performance on a consolidated basis.
Revenues by product line and geographic area are presented below (in thousands):
 
 
Years ended December 31,
 
 
2015
 
2014
 
2013
Revenues by product line:
 
 
 
 
 
 
Ultracapacitors
 
$
114,525

 
$
135,637

 
$
136,277

High-voltage capacitors
 
41,718

 
40,361

 
43,339

Microelectronic products
 
11,129

 
10,588

 
13,918

Total
 
$
167,372

 
$
186,586

 
$
193,534

 
 
 
 
 
 
 
 
 
Years ended December 31,
 
 
2015
 
2014
 
2013
Revenues from external customers located in:
 
 
 
 
 
 
China
 
$
87,856

 
$
89,143

 
$
92,817

United States
 
20,836

 
23,758

 
29,090

Germany
 
13,972

 
16,384

 
25,935

All other countries (1)
 
44,708

 
57,301

 
45,692

Total
 
$
167,372

 
$
186,586

 
$
193,534

_____________
(1)
Revenue from external customers located in countries included in “All other countries” do not individually comprise more than 10% of total revenues for any of the years presented.
Long-lived assets by geographic location are as follows (in thousands):
 
 
As of December 31,
 
 
2015
 
2014
 
2013
Long-lived assets:
 
 
 
 
 
 
United States
 
$
22,267

 
$
28,013

 
$
33,740

China
 
4,148

 
4,991

 
5,444

Switzerland
 
6,021

 
5,663

 
6,422

Total
 
$
32,436

 
$
38,667

 
$
45,606

Balance Sheet Details
Balance Sheet Details
Balance Sheet Details (in thousands):
 
 
December 31,
 
 
2015
 
2014
Inventories, net:
 
 
 
 
Raw material and purchased parts
 
$
21,126

 
$
23,042

Work-in-process
 
4,367

 
2,522

Finished goods
 
16,913

 
23,127

Consigned finished goods
 
28

 
184

Reserves
 
(3,379
)
 
(4,019
)
Total inventories, net
 
$
39,055

 
$
44,856

 
 
 
 
 
Property and equipment, net:
 
 
 
 
Machinery, furniture and office equipment
 
$
76,077

 
$
72,323

Computer hardware and software
 
12,235

 
12,003

Leasehold improvements
 
16,883

 
16,661

Construction in progress
 
2,527

 
2,715

Property and equipment, gross
 
107,722

 
103,702

Less accumulated depreciation and amortization
 
(75,398
)
 
(64,479
)
Total property and equipment, net
 
$
32,324

 
$
39,223

 
 
 
 
 
Accounts payable and accrued liabilities:
 
 
 
 
Accounts payable
 
$
22,291

 
$
12,544

Income tax payable
 
1,376

 
1,852

Accrued warranty
 
1,288

 
716

Other accrued liabilities
 
9,030

 
11,899

Total accounts payable and accrued liabilities
 
$
33,985

 
$
27,011

 
 
 
 
 

 
 
Foreign
Currency
Translation
Adjustment
 
Defined Benefit
Pension  Plan
 
Accumulated
Other
Comprehensive
Income
 
Affected Line Item
in the
Statement of Operations
Accumulated other comprehensive income:
 
 
 
 
 
 
Balance at December 31, 2014
 
$
8,359

 
$
(3,636
)
 
$
4,723

 
 
Other comprehensive income before reclassification
 
1,574

 

 
1,574

 
 
Amounts reclassified from accumulated other comprehensive income (loss)
 

 
(1,403
)
 
(1,403
)
 
Cost of Sales, Selling, General and Administrative and Research and Development Expense
Net other comprehensive income for the year ended December 31, 2015
 
1,574

 
(1,403
)
 
171

 
 
Balance at December 31, 2015
 
$
9,933

 
$
(5,039
)
 
$
4,894

 
 
Goodwill
Goodwill
Goodwill
The Company reviews goodwill for impairment annually according to the Intangibles—Goodwill and Other Topic of the FASB ASC. The Company makes a qualitative evaluation about the likelihood of goodwill impairment and if it concludes that it is more likely than not that the carrying amount of a reporting unit is greater than its fair value, then it will be required to perform the first step of the two-step quantitative impairment test. Otherwise, performing the two-step impairment test is unnecessary. The first step consists of estimating the fair value and comparing the estimated fair value with the carrying value of the reporting unit. If the fair value is less than the carrying value, a second step is performed to compute the amount of the impairment by determining an implied fair value of goodwill. The implied fair value of goodwill is the residual fair value derived by deducting the fair value of a reporting unit’s assets and liabilities from its estimated total fair value, which was calculated in step one. An impairment charge would represent the excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of the goodwill. The guidance requires goodwill to be reviewed annually at the same time every year or when an event occurs or circumstances change such that it is reasonably possible that an impairment may exist. The Company selected December 31 as its annual testing date. As a result of the Company’s annual assessments as of December 31, 2015, 2014, and 2013, no impairment was indicated.
The change in the carrying amount of goodwill during 2014 and 2015 was as follows (in thousands):
Balance at December 31, 2013
$
25,978

Foreign currency translation adjustments
(2,379
)
Balance at December 31, 2014
23,599

Foreign currency translation adjustments
36

Balance at December 31, 2015
$
23,635

Fair Value Measurements
Fair Value Measurements
Fair Value Measurement
The Company records certain financial instruments at fair value in accordance with the Fair Value Measurements and Disclosures Topic of the FASB ASC. As of December 31, 2015, the financial instruments to which this topic applied were financial instruments for foreign currency forward contracts and pension assets.
As of December 31, 2015, the fair value of foreign currency forward contracts was an asset of $16,000, which is recorded in “trade and other accounts receivable” in the consolidated balance sheet. The fair value of derivative instruments is measured using models following quoted market prices in active markets for identical instruments, which is a Level 2 input under the fair value hierarchy of the Fair Value Measurements and Disclosures Topic of the FASB ASC. All forward contracts as of December 31, 2015 had approximately a one-month original maturity term and matured on January 5, 2016 or February 2, 2016. Also see Note 6, Foreign Currency Derivative Instruments, and Note 11, Pension and Other Postretirement Benefit Plans, of this Annual Report on Form 10-K, for further discussion of fair value measurements.
The carrying value of short-term and long-term borrowings approximates fair value because of the relative short maturity of these instruments and the interest rates the Company could currently obtain.
Credit Facilities
Borrowings
Credit Facilities
Revolving Line of Credit
In July 2015, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with East West Bank (“EWB”), whereby EWB made available to the Company a secured credit facility in the form of a revolving line of credit (the “Revolving Line of Credit”). The Revolving Line of Credit is available up to a maximum of the lesser of: (a) $25.0 million; or (b) a certain percentage of domestic and foreign trade receivables. As of December 31, 2015 the amount available under the Revolving Line of Credit was $22.7 million. In general, amounts borrowed under the Revolving Line of Credit are secured by a lien on all of the Company’s assets, including its intellectual property, as well as a pledge of 100% of its equity interests in the Company’s Swiss subsidiary. The obligations under the Loan Agreement are guaranteed by the Swiss subsidiary. The Revolving Line of Credit will mature on July 3, 2018; however, repayment of amounts owed pursuant to the Loan Agreement may be accelerated in the event that the Company is in violation of the representations, warranties and covenants made in the Loan Agreement, including certain financial covenants set forth therein. The financial covenants that the Company is required to meet during the term of the credit agreement include a minimum four-quarter rolling EBITDA, a quarterly minimum quick ratio and a monthly minimum cash requirement.
Amounts borrowed under the Revolving Line of Credit bear interest, payable monthly. Such interest shall accrue based upon, at the Company’s election, subject to certain limitations, either the Prime Rate plus a margin ranging from 0% to 0.50% or the LIBOR Rate plus a margin ranging from 2.75% to 3.25%, the specific rate for each as determined based upon the Company’s leverage ratio from time to time.
The Company is required to pay an annual commitment fee of $125,000, and an unused commitment fee of the average daily unused amount of the Revolving Line of Credit, payable monthly, equal to a per annum rate in a range of 0.30% to 0.50%, as determined by the Company’s leverage ratio on the last day of the previous fiscal quarter. No amounts have been borrowed under the Revolving Line of Credit as of December 31, 2015.
Former Credit Facility
In December 2011, the Company obtained a secured credit facility in the form of a revolving line of credit (the “Former Revolving Line of Credit”) and an equipment term loan (the “Equipment Term Loan”) (together, the “Former Credit Facility”). Borrowings under the Former Credit Facility bore interest, payable monthly, at either (i) the bank's prime rate or (ii) LIBOR plus 2.25%, at the Company's option subject to certain limitations. The Equipment Term Loan was available to finance 80% of eligible equipment purchases made between April 1, 2011 and April 30, 2012. During this period, the Company borrowed $5.0 million under the Equipment Term Loan. The balance of the Equipment Term Loan was paid in full by the maturity date of April 30, 2015. Concurrently with entering into the Loan Agreement described above, in July 2015, the Company repaid all outstanding loans under the Former Revolving Line of Credit and the Former Credit Facility was terminated. The Company did not incur any early termination or prepayment penalties under the Former Credit Facility in connection with the above transactions.
Other Long-term Borrowings
Maxwell SA has various financing agreements for vehicles. These agreements are for up to an original three-year repayment period with interest rates ranging from 1.9% to 5.1%. At December 31, 2015 and 2014, $91,000 and $82,000, respectively, was outstanding under these agreements.
Foreign Currency Derivative Instruments
Foreign Currency Derivative Instruments
Foreign Currency Derivative Instruments
Maxwell uses forward contracts to hedge certain monetary assets and liabilities, primarily receivables and payables, and cash balances, denominated in foreign currencies. The change in fair value of these forward contracts represents a natural hedge as gains and losses on these instruments partially offset the changes in the fair value of the underlying monetary assets and liabilities due to movements in currency exchange rates. These forward contracts generally expire in one month. These contracts are considered economic hedges but are not designated as hedges under the Derivatives and Hedging Topic of the FASB ASC, therefore, the change in the fair value of the instruments is recognized currently in the consolidated statements of operations.
The net gains and losses on foreign currency forward contracts included in "foreign currency exchange loss, net" in the consolidated statements of operations are as follows (in thousands):
 
 
Year Ended December 31,
 
 
2015
 
2014
 
2013
Total gain (loss)
 
$
(720
)
 
$
(5,265
)
 
$
359


The net gains and losses on foreign currency derivative contracts were partially offset by net gains and losses on the underlying monetary assets and liabilities. Foreign currency gains and losses on those underlying monetary assets and liabilities included in "foreign currency exchange loss, net" in the consolidated statements of operations are as follows (in thousands):
 
 
Year Ended December 31,
 
 
2015
 
2014
 
2013
Total gain (loss)
 
$
179

 
$
4,391

 
$
(1,009
)

As of December 31, 2015, the total notional amount of foreign currency forward contracts not designated as hedges was $1.3 million.
The following table presents gross amounts, amounts offset and net amounts presented in the consolidated balance sheets for the Company's derivative instruments measured at fair value (in thousands):
 
 
December 31, 2015
 
December 31, 2014
Gross amounts of recognized asset (liability)
 
$
66

 
$
(1,993
)
Gross amounts offset in the consolidated balance sheets
 
(50
)
 
350

Net amount of recognized asset (liability) presented in the consolidated balance sheets
 
$
16

 
$
(1,643
)

The Company has the legal right to offset these recognized assets and liabilities upon settlement of the derivative instruments. All of the forward contracts outstanding at December 31, 2015 matured on January 5, 2016 or February 2, 2016. For additional information, refer to Note 4, Fair Value Measurements.
Stock Plans
Stock Plans
Stock Plans
Equity Incentive Plans
The Company has two active share-based compensation plans as of December 31, 2015: the 2004 Employee Stock Purchase Plan (“ESPP”) and the 2013 Omnibus Equity Incentive Plan (the “Incentive Plan”), as approved by the stockholders. Under the Incentive Plan, incentive stock options, non-qualified stock options, restricted stock awards and restricted stock units have been granted to employees and non-employee directors. Generally, these awards vest over periods of one to four years. In addition, equity awards have been issued to senior management where vesting of the award is tied to Company performance or market conditions. The Company’s policy is to issue new shares of its common stock upon the exercise of stock options, vesting of restricted stock units, granting of restricted stock awards or ESPP purchases.
The Company’s Incentive Plan currently provides for an equity incentive pool of 3,750,000 shares. Shares reserved for issuance are replenished by forfeited shares. Additionally, equity awards forfeited under the Company’s 2005 equity incentive plan are added to the total shares available for issuance under the Incentive Plan.
For the year ended December 31, 2015, the tax benefit associated with stock option exercises, restricted stock unit vesting, restricted stock grants, and disqualifying dispositions of both incentive stock options and stock issued under the Company’s ESPP, was approximately $1.4 million. No tax benefits were recognized in the years ended December 31, 2015, 2014 or 2013 because excess tax benefits were not realized by the Company.
Stock Options
The Company grants stock options to its employees and executive management on a discretionary basis. The following table summarizes total aggregate stock option activity for the year ended December 31, 2015 (in thousands, except for per share data):
 
 
Number of
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value
Balance at December 31, 2014
 
672

 
$
12.00

 
 
 
 
Granted
 
322

 
6.72

 
 
 
 
Exercised
 
(19
)
 
6.80

 
 
 
 
Cancelled
 
(44
)
 
11.70

 
 
 
 
Balance at December 31, 2015
 
931

 
$
10.19

 
3.85
 
$
196

Vested or expected to vest at December 31, 2015
 
886

 
$
10.38

 
3.57
 
$
162

Exercisable at December 31, 2015
 
638

 
$
11.81

 
1.34
 
$
16


The weighted-average grant date fair value of stock options granted during the years ended December 31, 2015 and 2013 was $3.34 and $2.89, respectively. No stock options were granted during the year ended December 31, 2014. The total intrinsic value of options exercised during the years ended December 31, 2015, 2014 and 2013 was $16,000, $638,000 and $18,000, respectively. Cash proceeds from option exercises for the year ended December 31, 2015 were $128,000.
The fair value of the stock options granted during the years ended December 31, 2015 and 2013 was estimated using the Black-Scholes valuation model using the following assumptions:
 
 
Years Ended December 31,
 
 
2015
 
2013
Expected dividends
 
%
 
%
Expected volatility range
 
60% to 61%

 
58% to 69%

Expected volatility weighted average
 
60
%
 
63
%
Risk-free interest rate
 
1.6
%
 
1.1% to 2.1%

Expected life/term weighted average (in years)
 
4.9

 
2.9


The expected dividend yield is zero because the Company has never paid cash dividends and has no present intention to pay cash dividends. The expected term is based on the Company’s historical experience from previous stock option grants. Expected volatility is based on the historical volatility of the Company’s stock measured over a period commensurate with the expected option term. The Company does not consider implied volatility due to the low volume of publicly traded options in the Company's stock. The risk-free interest rate is derived from the zero coupon rate on U.S. Treasury instruments with a term comparable to the option’s expected term.
As of December 31, 2015, there was $741,000 of total unrecognized compensation cost related to stock options. The cost is expected to be recognized over a weighted average period of 3.3 years.
Restricted Stock Awards
In 2011, the Company began granting restricted stock awards ("RSAs") to its employees as part of its annual equity incentive award programs. Generally, vesting of RSAs is contingent upon a period of service, typically four years. In addition, the Company granted performance RSAs to executive management with vesting contingent upon specified Company performance conditions; however, no performance RSAs vested or are expected to vest. During the year ended December 31, 2014, the Company ceased granting RSAs and began granting restricted stock unit awards ("RSUs") to employees and executive management as part of its annual equity incentive award program.
The following table summarizes RSA activity for the year ended December 31, 2015 (in thousands, except for per share data):
 
 
Shares
 
Weighted Average
Grant Date
Fair Value
Nonvested at December 31, 2014
 
528

 
$
13.77

Vested
 
(180
)
 
15.58

Forfeited
 
(103
)
 
10.37

Nonvested at December 31, 2015
 
245

 
$
13.87


The weighted average grant date fair value of RSAs granted during the years ended December 31, 2014 and 2013 was $14.21 and $10.20, respectively. No RSAs were granted during the year ended December 31, 2015.
The vest date fair value of RSAs vested in 2015, 2014 and 2013 was $1.2 million, $1.2 million and $916,000, respectively. As of December 31, 2015, there was $2.4 million of unrecognized compensation cost related to nonvested RSAs expected to be recognized over a weighted average period of 1.7 years.
Restricted Stock Units
Non-employee directors receive annual RSU awards, normally in February of each year, as partial consideration for their annual retainer compensation. These awards vest in full one year from the date of grant provided the non-employee director provides continued service.
Beginning in 2014, the Company began granting RSUs to employees and executive management as part of its annual equity incentive award program. The majority of RSU awards are service-based and vest in equal installments over four years of continuous service. Each RSU represents the right to receive one unrestricted share of the Company’s common stock upon vesting.
The following table summarizes RSU activity for the year ended December 31, 2015 (in thousands, except for per share data):
 
 
Shares
 
Weighted Average
Grant Date
Fair Value
Nonvested at December 31, 2014
 
224

 
$
10.02

Granted
 
829

 
7.02

Vested
 
(80
)
 
10.02

Forfeited
 
(88
)
 
8.57

Nonvested at December 31, 2015
 
885

 
$
7.36


The weighted average grant date fair value of RSUs granted in the years ended December 31, 2015, 2014 and 2013 was $7.02, $12.63 and $10.25, respectively. The vest date fair value of RSUs vested in 2015, 2014 and 2013 was $498,000, $631,000 and $275,000, respectively. As of December 31, 2015, there was $2.9 million of unrecognized compensation cost related to nonvested RSU awards. The cost is expected to be recognized over a weighted average period of 2.5 years.
Included in RSU activity above are 215,000 and 50,000 performance-RSUs granted in the years ended December 31, 2015 and 2014 with an average grant date fair value of $7.18 and $10.85 per share, respectively, and vesting contingent upon specified Company performance conditions. Also included in RSUs are 70,000 market-condition RSUs granted in 2014, which vest upon the achievement of certain stock price thresholds and the completion of three years of continuous employment from the date of grant and have an average grant date fair value of $7.71 per share. Since the vesting of the market-condition RSUs is dependent on stock price performance, the fair values of these awards were estimated using a Monte-Carlo valuation model with the following weighted-average assumptions:
 
 
Year ended December 31, 2014
Market price at grant per share
 
$
15.03

Expected dividends
 

Expected volatility
 
65
%
Risk-free interest rate
 
0.86
%
The following table summarizes the amount of compensation expense recognized for RSUs for the years ended December 31, 2015, 2014 and 2013 (in thousands):
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
Service-based restricted stock units
 
$
1,362

 
$
749

 
$
592

Performance-based restricted stock units
 
(28
)
 
28

 

Market-condition restricted stock units
 
128

 
90

 

Total compensation expense recognized for employee restricted stock units
 
$
1,462

 
$
867

 
$
592


Employee Stock Purchase Plan
In 2013, the Company amended and restated the 2004 Employee Stock Purchase Plan (“ESPP”). Pursuant to the ESPP, the aggregate number of shares of common stock which may be purchased shall not exceed 1,000,000 shares of common stock of the Company. For the years ended December 31, 2015 and 2014, 145,733 and 93,588 shares, respectively, were purchased under the ESPP.
The ESPP permits substantially all employees to purchase common stock through payroll deductions, at 85% of the lower of the trading price of the stock at the beginning or at the end of each six-month offering period. The number of shares purchased is based on participants’ contributions made during the offering period.
The fair value of the “look back” option for ESPP shares issued during the offering period is estimated using the Black-Scholes valuation model for a call and a put option. The share price used for the model is a 15% discount on the stock price on the last trading day before the offering period; the number of shares to be purchased is based on employee contributions. The fair value of ESPP awards was calculated using the following weighted-average assumptions:
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
Expected dividends
 
%
 
%
 
%
Stock price on valuation date
 
5.97

 
8.47

 
7.77

Expected volatility
 
57
%
 
77
%
 
46
%
Risk-free interest rate
 
0.29
%
 
0.08
%
 
0.07
%
Expected life (in years)
 
0.5

 
0.4

 
0.3

Fair value per share
 
$
1.86

 
$
4.56

 
$
2.45


The intrinsic value of shares of the Company’s stock purchased pursuant to the ESPP for offering periods within the years ended December 31, 2015, 2014 and 2013 was $210,000, $449,000 and $33,000, respectively.
Stock-based Compensation Expense
Compensation cost for stock options, restricted stock, restricted stock units and the ESPP is as follows (in thousands):
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
Stock options
 
$
232

 
$
52

 
$
827

Restricted stock
 
1,974

 
2,536

 
2,491

Restricted stock units
 
1,462

 
867

 
592

ESPP
 
278

 
512

 
70

Total stock-based compensation expense
 
$
3,946

 
$
3,967

 
$
3,980

Stock-based compensation cost included in cost of revenue; selling, general and administrative expense; and research and development expense is as follows (in thousands): 
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
Cost of revenue
 
$
644

 
$
740

 
$
1,079

Selling, general and administrative
 
2,502

 
2,362

 
2,140

Research and development
 
800

 
865

 
761

Total stock-based compensation expense
 
$
3,946

 
$
3,967

 
$
3,980


Share Reservations
The following table summarizes the reservation of shares under the Company's stock-based compensation plans as of December 31, 2015:
2013 Omnibus Equity Incentive Plan
2,200,800

2004 Employee Stock Purchase Plan
307,126

Total
2,507,926

Stock Offering
Stock offering
Shelf Registration Statement
On June 3, 2014, the Company filed a shelf registration statement on Form S-3 with the U.S. Securities and Exchange Commission ("SEC") to, from time to time, sell up to an aggregate of $125 million of any combination of its common stock, warrants, debt securities or units. On June 30, 2014, the registration statement was declared effective by the SEC. On April 23, 2015, the Company entered into an At-the-Market Equity Offering Sales Agreement (“Sales Agreement”) with Cowen and Company, LLC (“Cowen”) pursuant to which they could sell, up to an aggregate of $10.0 million in shares of common stock through Cowen, as sales agent. Under the Sales Agreement, the Company agreed to pay Cowen a commission equal to 3.0% of the gross proceeds from the sale of shares of our common stock. On June 11, 2015, the Company completed the sale of approximately $10.0 million of common stock and terminated the offering. Approximately 1.83 million shares were sold in the offering at an average share price of $5.46. The Company received net proceeds of $9.6 million after commissions and offering costs of $406,000. Due to a late Form 8-K filing by the Company on June 1, 2015, which was due by May 29, 2015, the Company is currently ineligible to use its shelf registration statement beginning on the filing date of this Annual Report on Form 10-K. The Company expects to again be eligible as of June 1, 2016.
Income Taxes
Income Taxes
Income Taxes
For financial reporting purposes, income (loss) before income taxes includes the following components (in thousands):
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
United States
 
$
(35,074
)
 
$
(19,301
)
 
$
(5,270
)
Foreign
 
17,344

 
17,375

 
13,762

Total
 
$
(17,730
)
 
$
(1,926
)
 
$
8,492


The provision for income taxes based on income (loss) before income taxes is as follows (in thousands):
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
Federal:
 
 
 
 
 
 
Current
 
$

 
$

 
$
(258
)
Deferred
 
(4,297
)
 
(5,608
)
 
222

 
 
(4,297
)
 
(5,608
)
 
(36
)
State:
 
 
 
 
 
 
Current
 
6

 
6

 
6

Deferred
 
62

 
853

 
88

 
 
68

 
859

 
94

Foreign:
 
 
 
 
 
 
Current
 
4,930

 
2,453

 
2,022

Deferred
 
8

 
1,944

 
311

 
 
4,938

 
4,397

 
2,333

Increase (decrease) in valuation allowance
 
3,894

 
4,698

 
(239
)
Tax provision
 
$
4,603

 
$
4,346

 
$
2,152


The provision for income taxes in the accompanying consolidated statements of operations differs from the amount calculated by applying the statutory income tax rate to income (loss) from continuing operations before income taxes. The primary components of such difference are as follows (in thousands):
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
Taxes at federal statutory rate
 
$
(6,028
)
 
$
(655
)
 
$
2,888

State taxes, net of federal benefit
 
(236
)
 
(90
)
 
(29
)
Effect of tax rate differential for foreign subsidiary
 
(2,641
)
 
(3,570
)
 
(2,531
)
Valuation allowance, including tax benefits of stock activity
 
3,894

 
4,698

 
(239
)
Foreign taxes on unremitted earnings
 
2,085

 
1,590

 

Stock-based compensation
 
134

 
621

 
460

Foreign withholding taxes
 
180

 

 

Return to provision adjustments
 
1,131

 
536

 
(920
)
Subpart F income inclusion
 
5,914

 
1,167

 
2,446

Other
 
170

 
49

 
77

Tax provision
 
$
4,603

 
$
4,346

 
$
2,152


The Company has established a valuation allowance against its U.S. federal and state deferred tax assets due to the uncertainty surrounding the realization of such assets as evidenced by the cumulative losses from operations through December 31, 2015. Management periodically evaluates the recoverability of the deferred tax assets. At such time as it is determined that it is more likely than not that deferred assets are realizable, the valuation allowance will be reduced accordingly and recorded as a tax benefit, with the exception of $15.5 million which will impact additional paid in capital as discussed below. The Company has recorded a valuation allowance of $68.1 million as of December 31, 2015 to reflect the estimated amount of deferred tax assets that may not be realized. The Company released its valuation allowance related to its Germany subsidiary of $316,000 as the Company believes that it is more likely than not that the deferred tax assets will be realized. The Company increased its valuation allowance by $3.9 million for the year ended December 31, 2015.
At December 31, 2015, the Company has federal and state net operating loss carryforwards of approximately $152.9 million and $61.2 million, respectively. The federal tax loss carryforwards will begin to expire in 2020 and the state tax loss carryforwards will begin to expire in 2016. In addition, the Company has research and development and other tax credit carryforwards for federal and state income tax purposes as of December 31, 2015 of $6.1 million and $7.7 million, respectively. The federal credits will begin to expire in 2019 unless utilized and the state credits have an indefinite life. Pursuant to Internal Revenue Code Sections 382 and 383, use of the Company’s federal net operating loss and credit carryforwards may be limited due to a cumulative change in ownership of more than 50% within a three-year period.
Excess tax benefits associated with stock option exercises, restricted stock grants, and disqualifying dispositions of both incentive stock options and stock issued from the Company’s Employee Stock Purchase Plan in the amount of $3.5 million and $3.6 million, for 2015 and 2014, respectively, did not reduce current income taxes payable and, accordingly, are not included in the deferred tax asset relating to net operating loss carryforwards, but are included with the federal and state net operating loss carryforwards disclosed in this footnote. The tax benefits associated with stock option deductions from 1998 to 2005 in the amount of $15.5 million were not recorded in additional paid-in capital because their realization was not more likely than not to occur and, consequently, a valuation allowance was recorded against the entire benefit.
The Company has been granted a tax holiday in Switzerland, which is effective as of January 1, 2012 for 10 years. The tax holiday is conditional upon the Company meeting certain employment and investment thresholds. The impact of this tax holiday decreased foreign taxes by $672,000 and $665,000 for 2015 and 2014, respectively. The benefit of the tax holiday on net loss per diluted share was $0.02 and $0.02 for 2015 and 2014, respectively.
The Company records U.S. income taxes on the undistributed earnings of foreign subsidiaries unless the subsidiaries’ earnings are considered indefinitely reinvested outside of the U.S. As a result of changes in the Company's financial projections, the Company changed its estimate of amounts considered permanently reinvested. Therefore, in the years ended December 31, 2015 and 2014, the Company recorded a deferred tax liability of $2.1 million and $1.6 million, respectively, associated with $41.7 million and $31.8 million, respectively, of unremitted earnings of a foreign subsidiary that are no longer considered indefinitely reinvested. In the event that the Company repatriates these funds, this withholding tax would become payable to the Swiss government. As of December 31, 2015, the cumulative amount of undistributed earnings considered indefinitely reinvested was $10.2 million. Determination of the amount of any unrecognized deferred income tax liability on the excess of the financial reporting basis over the tax basis of investments in foreign subsidiaries is not practicable because of the complexities of the hypothetical calculation.
Items that give rise to significant portions of the deferred tax accounts are as follows (in thousands):
 
 
December 31,
 
 
2015
 
2014
Deferred tax assets:
 
 
 
 
Tax loss carryforwards
 
$
52,504

 
$
54,551

Tax credit carryforwards
 
19

 
19

Uniform capitalization, contract and inventory related reserves
 
1,558

 
1,728

Accrued vacation
 
592

 
669

Stock-based compensation
 
1,466

 
1,428

Capitalized research and development
 
6,212

 

Tax basis depreciation less book depreciation
 
1,019

 

Intangible assets
 
1,533

 
1,364

Deferred revenue
 
254

 
149

Accrued foreign taxes
 
1,271

 

Unrealized gains and losses
 

 
1,780

Other
 
2,527

 
2,668

Total
 
68,955

 
64,356

Deferred tax liabilities:
 
 
 
 
Inventory deduction
 
(235
)
 
(206
)
Pension assets
 
(1,173
)
 
(1,476
)
Allowance for doubtful accounts
 
(378
)
 
(407
)
Tax basis depreciation less book depreciation
 

 
(192
)
Withholding tax on undistributed earnings of foreign subsidiary
 
(3,675
)
 
(1,590
)
Unrealized gains and losses
 
(984
)
 

Other
 
(1
)
 
(241
)
Total
 
(6,446
)
 
(4,112
)
Net deferred tax assets before valuation allowance
 
62,509

 
60,244

Valuation allowance
 
(68,093
)
 
(64,199
)
Net deferred tax liabilities
 
$
(5,584
)
 
$
(3,955
)

As of December 31, 2015 and 2014, deferred tax assets of $491,000 and $460,000, respectively were included in other non-current assets in the consolidated balance sheet.
The Company accounts for uncertain tax benefits in accordance with the provisions of section 740-10 of the Accounting for Uncertainty in Income Taxes Topic of the FASB ASC. Of the total unrecognized tax benefits at December 31, 2015, approximately $13.8 million was recorded as a reduction to deferred tax assets, which caused a corresponding reduction in the Company’s valuation allowance of $13.8 million. To the extent unrecognized tax benefits are recognized at a time when a valuation allowance does not exist, the recognition of the $13.8 million tax benefit would reduce the effective tax rate. The Company does not anticipate that the amount of unrecognized tax benefits as of December 31, 2015 will change materially within the 12 month period following December 31, 2015.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Balance at December 31, 2013
$
12,634

Increase in current period positions
890

Decrease in prior period positions
(1,585
)
Balance at December 31, 2014
11,939

Increase in current period positions
1,466

Increase in prior period positions
609

Balance at December 31, 2015
$
14,014


The Company recognizes interest and penalties as a component of income tax expense. Interest and penalties for the years ended December 31, 2015, 2014 and 2013 were $119,000, $34,000 and $126,000, respectively.
The Company’s U.S. federal income tax returns for tax years subsequent to 2009 are subject to examination by the Internal Revenue Service and its state income tax returns subsequent to 2008 are subject to examination by state tax authorities. The Company’s foreign tax returns subsequent to 2004 are subject to examination by the foreign tax authorities.
Net operating losses from years for which the statute of limitations has expired (2008 and prior for federal and 2007 and prior for state) could be adjusted in the event that the taxing jurisdictions challenge the amounts of net operating loss carryforwards from such years.
Leases
Leases
Leases
Rental expense amounted to $5.0 million, $5.6 million and $5.1 million for the years ended December 31, 2015, 2014 and 2013, respectively, and was incurred primarily for facility leases. Future annual minimum rental commitments as of December 31, 2015 are as follows (in thousands):
Fiscal Years
 
2016
$
4,316

2017
3,652

2018
2,274

2019
2,266

2020
1,266

Thereafter
2,407

Total
$
16,181

Pension and Other Postretirement Benefit Plans
Pension and Other Postretirement Benefit Plans
Pension and Other Postretirement Benefit Plans
Foreign Plan
The Compensation—Retirement Benefits Subtopic of the FASB ASC requires balance sheet recognition of the total over funded or underfunded status of pension and postretirement benefit plans. Under the guidance, actuarial gains and losses, prior service costs or credits, and any remaining transition assets or obligations that have not been recognized under previous accounting standards must be recognized as a component of accumulated other comprehensive income within stockholders’ equity, net of tax effects, until they are amortized as a component of net periodic benefit cost (income).
The Company’s plan is regulated by the Swiss Government and is funded by the employees and the Company. The pension benefit is based on compensation, length of service and credited investment earnings. The plan guarantees both a minimum rate of return as well as minimum annuity purchase rates. The Company’s funding policy with respect to the pension plan is to contribute the amount required by Swiss law, using the required percentage applied to the employee’s compensation. In addition, participating employees are required to contribute to the pension plan. The Company made pension contributions of $640,000, $720,000 and $722,000 in 2015, 2014 and 2013, respectively; 45% of the total contributions to the plan each year are made by the employees. This plan has a measurement date of December 31. The Company does not have any rights to the assets of the plan other than the right to offset the liabilities of the plan.
The net pension asset decreased from $7.4 million to $5.8 million during the year ended December 31, 2015. The decrease in plan assets was primarily due to a significant number of employee departures and the corresponding benefits paid from account balances combined with a decreased return on plan assets. The increase in the benefit obligation was affected by an actuarial loss resulting from assumption changes made to reflect current market conditions as well as other plan costs. This increase was partially offset by the amount of benefits paid. The accumulated benefit obligation was approximately $31.3 million as of December 31, 2015 and 2014. The plan is fully funded and continues to be in a surplus condition.
The following table reflects changes in the pension benefit obligation and plan assets for the years ended December 31, 2015 and 2014 (in thousands):
 
 
Pension Benefits
 
 
Years ended December 31,
 
 
2015
 
2014
Change in benefit obligation:
 
 
 
 
Benefit obligation at beginning of year
 
$
33,006

 
$
32,577

Service cost
 
958

 
846

Interest cost
 
332

 
697

Plan participant contributions
 
523

 
593

Benefits paid
 
(3,064
)
 
(3,018
)
Actuarial loss
 
1,262

 
4,974

Plan change
 
83

 

Effect of foreign currency translation
 
53

 
(3,663
)
Projected benefit obligation at end of year
 
33,153

 
33,006

Changes in plan assets:
 
 
 
 
Fair value of plan assets at beginning of year
 
40,368

 
43,145

Actual return on plan assets
 
419

 
3,478

Company contributions
 
640

 
720

Plan participant contributions
 
523

 
593

Benefits paid
 
(3,064
)
 
(3,018
)
Effect of foreign currency translation
 
116

 
(4,550
)
Fair value of plan assets at end of year
 
39,002

 
40,368

Funded status at end of year
 
$
5,849

 
$
7,362


Amounts recognized in the consolidated balance sheets consist of (in thousands):
 
 
As of December 31,
 
 
2015
 
2014
Net long-term pension asset
 
$
5,849

 
$
7,362

 
 
 
 
 
Accumulated other comprehensive loss consists of the following:
 

 

Net prior service cost
 
837

 
853

Net loss
 
5,668

 
3,897

Accumulated other comprehensive loss before taxes
 
$
6,505

 
$
4,750


The components of net periodic pension cost and other amounts recognized in other comprehensive income (loss) before taxes are as follows (in thousands):
 
 
Years ended December 31,
 
 
2015
 
2014
 
2013
Components of net periodic pension cost:
 
 
 
 
 
 
Service cost
 
$
958

 
$
846

 
$
831

Interest cost
 
332

 
697

 
504

Expected return on plan assets
 
(1,551
)
 
(1,784
)
 
(1,539
)
Prior service cost amortization
 
136

 
140

 
44

Deferred loss amortization
 
45

 

 
180

Settlement cost
 
492

 
420

 

Net periodic pension cost
 
$
412

 
$
319

 
$
20

Other amounts recognized in other comprehensive income (loss) before income taxes are as follows:
 
 
 
 
 
 
Prior service cost amortization
 
$
(136
)
 
$
(140
)
 
$
(44
)
Loss (gain) on value of plan assets
 
1,131

 
(1,695
)
 
(2,977
)
Actuarial (gain) loss on benefit obligation
 
1,262

 
4,975

 
(405
)
Plan change
 
83

 

 
978

Settlement
 
(492
)
 
(420
)
 

Deferred loss amortization
 
(45
)
 

 
(180
)
Total recognized in other comprehensive income (loss), before taxes
 
$
1,803

 
$
2,720

 
$
(2,628
)
Total recognized in net periodic pension cost and other comprehensive income (loss), before taxes
 
$
2,215

 
$
3,039

 
$
(2,608
)

Assumptions used to determine the benefit obligation and net periodic pension cost are as follows:
 
 
Pension Benefits
 
 
Years ended December 31,
 
 
2015
 
2014
Weighted-average assumptions used to determine benefit obligation:
 
 
 
 
Discount rate
 
0.75
%
 
1.00
%
Rate of compensation increase
 
2.50
%
 
2.50
%
Measurement date
 
11/30/2015

 
12/31/2014

Weighted-average assumptions used to determine net periodic pension cost:
 
 
 
 
Discount rate
 
1.00
%
 
2.25
%
Expected long-term return on plan assets
 
3.75
%
 
4.25
%
Rate of compensation increase
 
2.50
%
 
2.50
%
 
 
 
 
 
 
 
 
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
 
 
 
 
Equity securities
 
29
%
 
33
%
Debt securities
 
23
%
 
22
%
Real estate investment funds
 
43
%
 
40
%
Other
 
5
%
 
5
%
Total
 
100
%
 
100
%

The pension plan’s overall strategy and investment policy is managed by the board of the plan. The overall long-term rate is based on the target asset allocation of 14% Swiss bonds, 10% non-Swiss hedged bonds, 10% Swiss equities, 15% global equities, 40% real estate, 5% emerging market equities, 4% alternative investments and 2% cash and other short-term investments.
The 2016 expected future long-term rate of return is estimated to be 3.00%, which is based on historical asset rates of returns for each asset allocation classification at a 0.21% rate for Swiss bonds, 0% for hedged foreign bonds, 2.54% for real estate, 3.52% for Swiss equities, 5.21% for unhedged global equities, 5.21% unhedged emerging markets, 1.23% for alternative investments and 0.23% for cash. The 2015 expected long-term rate of return was 3.75% and was based on the historical asset rates of return of 0.76% for Swiss bonds, 5.31% for unhedged emerging markets, 1.04% for hedged foreign bonds, 3.69% for real property, 4.10% for Swiss equities and 5.45% for unhedged global equities, 2.33% for alternative investments and 1.32% for cash.
Expected amortization during the year ending December 31, 2016 is as follows (in thousands):
 
 
 
Amortization of net prior service costs
$
149


The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands):
2016
$
1,360

2017
1,372

2018
1,431

2019
1,411

2020
1,340

Years 2021 through 2025
7,392

Total
$
14,306


The Company expects to contribute approximately $550,000 to the pension plan in 2016.
Investment objectives:
The primary investment goal of the pension plan is to achieve a total annualized return of 3.00% over the long-term. The investments are evaluated, compared and benchmarked to plans with similar investment strategies. The plan also attempts to minimize risk by not having any single security or class of securities with a disproportionate impact on the plan. As a guideline, assets are diversified by asset classes (equity, fixed income/bonds, and alternative investments).
The fair values of the plans assets at December 31, 2015 and 2014, by asset category, are as follows (in thousands):
 
 
 
 
Fair Value Measurements at
 
 
 
 
December 31, 2015
 
 
Total
 
Active
Market
Prices
(Level 1)
 
Significant
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash:
 
 
 
 
 
 
 
 
Held in Swiss Franc, Euro and USD
 
$
808

 
$
808

 
$

 
$

Equity securities:
 
 
 
 
 
 
 
 
Investment funds
 
12,292

 
11,303

 
989

 

Real estate investment funds
 
16,917

 

 

 
16,917

Fixed income / Bond Securities
 
 
 
 
 
 
 
 
Fixed income / Bond securities:
 
8,949

 
8,949

 

 

Other assets (accounts receivable, assets at real estate management company)
 
36

 

 
36

 

Net assets of pension plan
 
$
39,002

 
$
21,060

 
$
1,025

 
$
16,917


 
 
 
 
Fair Value Measurements at
 
 
 
 
December 31, 2014
 
 
Total
 
Active
Market
Prices
(Level 1)
 
Significant
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash:
 
 
 
 
 
 
 
 
Held in Swiss Franc, Euro and USD
 
$
973

 
$
973

 
$

 
$

Equity securities:
 
 
 
 
 
 
 
 
Investment funds
 
14,481

 
14,481

 

 

Real estate investment funds
 
16,049

 

 

 
16,049

Fixed income / Bond Securities
 
 
 
 
 
 
 
 
Fixed income / Bond securities:
 
8,839

 
8,839

 

 

Other assets (accounts receivable, assets at real estate management company)
 
26

 

 
26

 

Net assets of pension plan
 
$
40,368

 
$
24,293

 
$
26

 
$
16,049


Fair Value of Assets
Level 1: Observable inputs such as quoted prices in active markets for identical assets.
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
For those financial instruments with significant Level 3 inputs, the following table summarizes the activity for the year by investment type:
Description
 
Real estate
investments
Beginning balance, December 31, 2014
 
$
16,049

Total unrealized gains included in net gain (1)
 
869

Foreign currency translation adjustments
 
(1
)
Ending balance, December 31, 2015
 
$
16,917

_____________
(1)
Total unrealized gains are reported as a component of the pension adjustment in accumulated other comprehensive income in the consolidated statement of stockholders’ equity.
U.S. Plan
The Company has a postretirement benefit plan covering its employees in the United States. Substantially all U.S. employees are eligible to elect coverage under a contributory employee savings plan which provides for Company matching contributions based on one-half of employee contributions up to certain plan limits. The Company’s matching contributions under this plan totaled $637,000, $547,000 and $506,000 for the years ended December 31, 2015, 2014 and 2013, respectively.
Legal Proceedings
Legal Proceedings
Legal Proceedings
Although the Company expects to incur significant legal fees in connection with the below legal proceedings, the Company is unable to estimate the amount of such legal fees and therefore, such fees will be expensed in the period the legal services are performed.
FCPA Matter
In January 2011, the Company reached settlements with the U.S. Securities and Exchange Commission ("SEC") and the U.S. Department of Justice (“DOJ”) with respect to charges asserted by the SEC and DOJ relating to the anti-bribery, books and records, internal controls, and disclosure provisions of the U.S. Foreign Corrupt Practices Act (“FCPA”) and other securities laws violations. The Company paid the monetary penalties under these settlements in installments such that all monetary penalties were paid in full by January 2013. With respect to the DOJ charges, a judgment of dismissal was issued in the U.S. District Court for the Southern District of California on March 28, 2014.
On October 15, 2013, the Company received an informal notice from the DOJ that an indictment against the former Senior Vice President and General Manager of its Swiss subsidiary had been filed in the United States District Court for the Southern District of California. The indictment is against the individual, a former officer, and not against the Company and the Company does not foresee that further penalties or fines could be assessed against it as a corporate entity for this matter. However, the Company may be required throughout the term of the action to advance the legal fees and costs incurred by the individual defendant and to incur other financial obligations. While the Company maintains directors’ and officers’ insurance policies which are intended to cover legal expenses related to its indemnification obligations in situations such as these, the Company cannot determine if and to what extent the insurance policy will cover the legal fees for this matter. Accordingly, the legal fees that may be incurred by the Company in defending this former officer could have a material impact on its financial condition and results of operation.
Swiss Bribery Matter
In August 2013, the Company's Swiss subsidiary was served with a search warrant from the Swiss federal prosecutor’s office. At the end of the search, the Swiss federal prosecutor presented the Company with a listing of the materials gathered by the representatives and then removed the materials from its premises for keeping at the prosecutor’s office. Based upon the Company’s exposure to the case, the Company believes this action to be related to the same or similar facts and circumstances as the FCPA action previously settled with the SEC and the DOJ. During initial discussions, the Swiss prosecutor has acknowledged both the existence of the Company's deferred prosecution agreement with the DOJ and its cooperation efforts thereunder, both of which should have a positive impact on discussions going forward. Additionally, other than the activities previously reviewed in conjunction with the SEC and DOJ matters under the FCPA, the Company has no reason to believe that additional facts or circumstances are under review by the Swiss authorities. In late March 2015, the Company was informed that the Swiss prosecutor intended to inform the parties in April 2015 as to whether the prosecutor’s office will bring charges or abandon the proceedings. However, to date, the Swiss prosecutor has not issued its formal decision. At this stage in the investigation, the Company is currently unable to determine the extent to which it will be subject to fines in accordance with Swiss bribery laws and what additional expenses will be incurred in order to defend this matter. As such, the Company cannot determine whether there is a reasonable possibility that a loss will be incurred nor can it estimate the range of any such potential loss. Accordingly, the Company has not accrued an amount for any potential loss associated with this action, but an adverse result could have a material adverse impact on its financial condition and results of operation.
Government Investigations
In early 2013, the Company voluntarily provided information to the United States Attorney's Office for the Southern District of California and the SEC related to its announcement that it intended to file restated financial statements for fiscal years 2011 and 2012. On June 11, 2015, the Company received a subpoena from the SEC requesting certain documents related to, among other things, the facts and circumstances surrounding the restated financial statements. The Company is providing information to the SEC in response to that subpoena and continues to cooperate with the SEC. At this stage, the Company cannot predict the ultimate outcome of this investigation or whether it will result in any loss. Accordingly, the Company has not accrued an amount for any potential loss associated with this action, but an adverse result could have a material adverse impact on its financial condition and results of operation.
Federal Shareholder Derivative Matter
On April 23, 2013 and May 7, 2013, two shareholder derivative actions were filed in the United States District Court for the Southern District of California, entitled Kienzle v. Schramm, et al., Case No. 13-cv-0966 (S.D. Cal. filed April 23, 2013) and Agrawal v. Cortes, et al., Case No. 13-cv-1084 (S.D. Cal. filed May 7, 2013). The complaints named as defendants certain of the Company's current and former officers and directors and named the Company as a nominal defendant. The complaints alleged that the individual defendants caused or allowed the Company to issue false and misleading statements about its financial condition, operations, management, and internal controls and falsely represented that it maintained adequate controls. The complaints asserted causes of action for breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets and unjust enrichment. The lawsuits sought unspecified damages, an order directing the Company to take all necessary actions to reform and improve its corporate governance and internal procedures, restitution and disgorgement of profits, benefits, and other compensation, attorneys' and experts' fees, and costs and expenses.. The court issued an order consolidating the two actions on October 30, 2013 under the heading In re Maxwell Technologies, Inc. Derivative Litigation. On September 19, 2014, the parties entered into a memorandum of understanding concerning settlement of this matter related to certain corporate governance reforms to be implemented and/or maintained by the Company. On December 10, 2014, the parties signed a stipulation of settlement and on March 16, 2015, the court granted final approval of the settlement and dismissed this action. On July 13, 2015, the court issued an order establishing a fee award of $1.1 million to be paid to the plaintiffs in exchange for the benefit bestowed upon the Company due to the corporate governance reforms, and on August 10, 2015, the Company’s insurance carrier paid this amount in full.
State Shareholder Derivative Matter
On April 11, 2013 and April 18, 2013, two shareholder derivative actions were filed in California Superior Court for the County of San Diego, entitled Warsh v. Schramm, et al., Case No. 37-2013-00043884 (San Diego Sup. Ct. filed April 11, 2013) and Neville v. Cortes, et al., Case No. 37-2013-00044911-CU-BT-CTL (San Diego Sup. Ct. filed April 18, 2013). The complaints named as defendants certain of the Company's current and former officers and directors as well as its former auditor McGladrey LLP. The Company was named as a nominal defendant. The complaints alleged that the individual defendants made or caused the Company to make false and/or misleading statements regarding its financial condition, and failed to disclose material adverse facts about its business, operations and prospects. The complaints asserted causes of action for breaches of fiduciary duty for disseminating false and misleading information, failing to maintain internal controls, and failing to properly oversee and manage the Company, as well as for unjust enrichment, abuse of control, gross mismanagement, professional negligence and accounting malpractice, and aiding and abetting breaches of fiduciary duty. The lawsuits sought unspecified damages, an order directing the Company to take all necessary actions to reform and improve its corporate governance and internal procedures, restitution and disgorgement of profits, benefits and other compensation, attorneys' and experts' fees, and costs and expenses. On May 7, 2013, the court consolidated the two actions. On July 2, 2013, the Company filed a motion to stay the actions pending resolution of the federal derivative actions, which the state court granted on November 1, 2013. As a result of the settlement in the federal derivative action above, the parties filed a joint stipulation to dismiss this matter and, on May 13, 2015, the court signed an order dismissing the matter with prejudice. The deadline to appeal this order lapsed on August 24, 2015.
Shareholder Inspection Letter
On April 9, 2013, Stephen Neville, a purported shareholder of the Company, sent a letter to the Company seeking to inspect its books and records pursuant to California Corporations Code Section 1601. The demand sought inspection of documents related to the Company's March 7, 2013 announcement that it would be restating its previously-issued financial statements for 2011 and 2012, board minutes and committee materials, and other documents related to its board or management discussions regarding revenue recognition from January 1, 2011 to the present. Pursuant to the stipulation of settlement in the federal shareholder derivative matter and following the settlement in the federal derivative action above, the parties filed a joint stipulation to dismiss this matter and, on May 12, 2015, the court signed an order dismissing the matter with prejudice. The deadline to appeal this order lapsed on August 24, 2015.
Restructuring and Exit Costs
Restructuring and Exit Costs
Restructuring and Exit Costs
During the year ended December 31, 2015, the Company initiated a restructuring plan to consolidate U.S. manufacturing operations and to reduce headcount and operating expenses in order to align the Company’s cost structure with the current business forecast and to improve operational efficiency. The plan also includes the potential divestiture of a product line. In connection with the restructuring plan, the Company expects to incur total restructuring charges between $2.6 million and $3.3 million. The anticipated charges include approximately $1.2 million to $1.9 million in facilities costs related to the consolidation of manufacturing operations, $1.3 million in employee severance costs and $125,000 in relocation costs. The Company also expects to incur $560,000 in accelerated equipment depreciation expense and $1.6 million in capital expenditures related to the restructuring. Upon completion of the plan, which is anticipated to be substantially completed by the end of the first quarter of 2016, total cash expenditures related to restructuring activities are expected to be approximately $1.4 million. During the year ended December 31, 2015, the Company paid $1.0 million in restructuring expenses.
The Company accounts for charges resulting from restructuring and exit activities in accordance with ASC Topic 420, Exit or Disposal Cost Obligations (“ASC 420”), and ASC Topic 712, Compensation-Nonretirement Postemployment Benefits for employee termination benefits to be paid in accordance with its ongoing employee termination benefit arrangement.
In June 2015, the Company ceased use of approximately 60,000 square feet of its Peoria, AZ manufacturing facility, and determined this leased space would have no future economic benefit to the Company based on the current business forecast. As a result, in June 2015, the Company recorded a liability for the future rent obligation associated with this space, net of estimated sublease income, in accordance with ASC Topic 420. The liability recorded related to the exit of this leased space was $1.2 million, before tax, and is a component of the total expected restructuring charge.
Restructuring charges for the year ended December 31, 2015 include $1.3 million in employee severance costs for work force reductions. This amount includes planned severance payments to be paid in consideration of past employee services under the Company’s ongoing employee termination benefit arrangement, which were probable of incurrence and estimable as of December 31, 2015.
For the year ended December 31, 2015, the Company recorded total charges related to its restructuring plan of $2.5 million within "restructuring and exit costs" and recorded $434,000 of accelerated depreciation expense within “cost of revenue” in the consolidated statements of operations. As of December 31, 2015, the Company had a $294,000 liability associated with employee severance recorded in “accrued employee compensation”, $231,000 of lease obligation costs recorded within “other current liabilities” and $812,000 of lease obligation costs recorded within "other long term liabilities” in the consolidated balance sheet.
The following table summarizes the restructuring and exit costs for the year ended December 31, 2015 (in thousands):
Year ended December 31, 2015
 
Employee Severance Costs
 
Lease Obligation Costs
 
Total
Costs incurred
 
$
1,439

 
$
1,208

 
$
2,647

Amounts paid
 
(1,010
)
 

 
(1,010
)
Accruals released
 
(135
)
 

 
(135
)
Other non-cash adjustments
 

 
(165
)
 
(165
)
Restructuring liability as of December 31, 2015
 
$
294

 
$
1,043

 
$
1,337

Unaudited Quarterly Financial Information
Unaudited Quarterly Financial Information
Unaudited Quarterly Financial Information
 
 
Quarter Ended
 
 
 
 
March 31
 
 
 
June 30
 
 
 
September 30
 
 
 
December 31
 
 
 
 
(in thousands except per share data)
 
 
Year Ended December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$
34,670

 
  
 
$
37,796

 
  
 
$
45,076

 
  
 
$
49,830

 
  
Gross profit
 
10,303

 
  
 
12,153

 
  
 
14,256

 
  
 
14,250

 
  
Net income (loss)
 
(9,341
)
 
(a) 
 
(9,376
)
 
(b) 
 
(1,449
)
 
(c) 
 
(2,167
)
 
(d) 
Basic and diluted net loss per share
 
$
(0.32
)
 
  
 
$
(0.31
)
 
 
 
$
(0.05
)
 
  
 
$
(0.07
)
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
March 31
 
 
 
June 30
 
 
 
September 30
 
 
 
December 31
 
 
 
 
(in thousands except per share data)
 
 
Year Ended December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$
46,001

 
  
 
$
46,074

 
  
 
$
41,593

 
  
 
$
52,918

 
  
Gross profit
 
17,863

 
  
 
16,597

 
  
 
15,480

 
  
 
18,503

 
  
Net income (loss)
 
319

 
(e) 
 
(1,181
)
 
(f) 
 
(3,292
)
 
(g) 
 
(2,118
)
 
(h) 
Basic and diluted net income (loss) per share
 
$
0.01

 
  
 
$
(0.04
)
 
 
 
$
(0.11
)
 
 
 
$
(0.07
)
 
 
_____________

(a)
Includes a non-cash expense for stock-based compensation of $839,000.
(b)
Includes restructuring costs of $2.3 million, a non-cash deferred tax expense of $2.1 million in connection with the probable repatriation of a portion of the unremitted earnings of a foreign subsidiary and a non-cash expense for stock-based compensation of $1.0 million.
(c)
Includes a non-cash expense for stock-based compensation of $1.1 million.
(d)
Includes a non-cash expense for stock-based compensation of $1.0 million.
(e)
Includes a non-cash expense for stock-based compensation of $755,000.
(f)
Includes a non-cash expense for stock-based compensation of $1.2 million.
(g)
Includes a non-cash expense for stock-based compensation of $1.0 million.
(h)
Includes non-cash deferred tax expense of $1.6 million in connection with the probable repatriation of a portion of the unremitted earnings of a foreign subsidiary and a non-cash expense for stock-based compensation of $1.0 million.
Schedule II - Valuation and Qualifying Accounts
Schedule II Valuation and Qualifying Accounts
Schedule II
Valuation and Qualifying Accounts (in thousands)

 
 
Balance at the
Beginning of
the Year ($)
 
Charged to
Expense ($)
 
Acquisitions/
Transfers
and
Other ($)
 
Write-offs
Net of
Recoveries ($)
 
Balance at
the End of
the Year ($)
Allowance for Doubtful Accounts:
 
 
 
 
 
 
 
 
 
 
December 31, 2013
 
157

 
22

 

 
(45
)
 
134

December 31, 2014
 
134

 
61

 

 
(52
)
 
143

December 31, 2015
 
143

 
304

 
1

 
(196
)
 
252

Allowance for Excess and Obsolete Inventories:
 
 
 
 
 
 
 
 
 
 
December 31, 2013
 
1,941

 
2,023

 
12

 
(406
)
 
3,570

December 31, 2014
 
3,570

 
892

 
(24
)
 
(419
)
 
4,019

December 31, 2015
 
4,019

 
475

 
(1
)
 
(1,114
)
 
3,379

Description of Business and Summary of Significant Accounting Policies (Policies)
Financial Statement Presentation
The accompanying consolidated financial statements include the accounts of Maxwell Technologies, Inc. and its subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All intercompany transactions and account balances have been eliminated in consolidation.
Reclassifications
Foreign currency exchange gains and losses have been reclassified from "cost of revenue" and "selling, general and administrative" expenses to "foreign currency exchange gains and losses, net" in the consolidated statement of operations for the years ended December 31, 2014 and 2013 to conform to the current period presentation. These reclassifications do not impact reported net income (loss) and do not otherwise have a material impact on the presentation of the overall financial statements.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect reported amounts and related disclosures. These estimates include, but are not limited to, assessing the collectability of accounts receivable, applied and unapplied production costs, production capacities, the usage and recoverability of inventories and long-lived assets, deferred income taxes, the incurrence of warranty obligations, impairment of goodwill, estimation of the cost to complete certain projects, estimation of pension assets and liabilities, accruals for estimated losses from legal matters, and estimation of the value of stock-based compensation awards, including the probability that the performance criteria of restricted stock awards and restricted stock units awards will be met.
Revenue Recognition
Revenue is derived primarily from the sale of manufactured products directly to customers. Product revenue is recognized, according to the guidelines of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) Numbers 101, Revenue Recognition in Financial Statements, and 104, Revenue Recognition, when all of the following criteria are met: (1) persuasive evidence of an arrangement exists (upon contract signing or receipt of an authorized purchase order from a customer); (2) title passes to the customer at either shipment from the Company’s facilities or receipt at the customer facility, depending on shipping terms; (3) customer payment is deemed fixed or determinable and free of contingencies or significant uncertainties; and (4) collectability is reasonably assured. This policy has been consistently applied from period to period.
A portion of our sales revenue is derived from sales to distributors. Distributor revenue is recognized when all of the criteria for revenue recognition are met, which is generally the time of shipment to the distributor; all returns and credits are estimable and not significant.
Revenue from production-type contracts, which represent less than five percent of total revenue, is recognized using the percentage of completion method. The degree of completion is determined based on costs incurred as a percentage of total costs anticipated, excluding costs that are not representative of progress to completion.
Total deferred revenue and customer deposits in the consolidated balance sheets as of December 31, 2015 and 2014 of $3.1 million and $703,000, respectively, relates to cash received from customers on sales for which the revenue recognition criteria had not been achieved, customer advances, as well as other less significant customer arrangements requiring the deferral of revenue.
Cash and Cash Equivalents
Cash and cash equivalents consist primarily of cash in readily available checking accounts. Cash equivalents consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments.
Accounts Receivable and Allowance for Doubtful Accounts
Trade receivables are stated at gross invoiced amount less an allowance for uncollectible accounts. The allowance for doubtful accounts reflects management’s best estimate of probable losses inherent in the accounts receivable balance. Management determines the allowance for doubtful accounts based on known troubled accounts, historical experience and other currently available evidence.
Inventories, net
Inventories are stated at the lower of cost (first-in first-out basis) or market. Finished goods and work-in-process inventory values include the cost of raw materials, labor and manufacturing overhead. Consigned inventory includes finished goods delivered to customers for which the related sale has not met the revenue recognition criteria and revenue has not been recognized. Inventory when written down to market value establishes a new cost basis and its value is not subsequently increased based upon changes in underlying facts and circumstances. The Company makes adjustments to reduce the cost of inventory to its net realizable value, if required, for estimated excess or obsolete inventories. Factors influencing these adjustments include inventories on-hand compared with historical and estimated future sales for existing and new products and assumptions about the likelihood of obsolescence. Unabsorbed costs are treated as expense in the period incurred.
Property and Equipment
Property and equipment are carried at cost and are depreciated using the straight-line method. Depreciation is provided over the estimated useful lives of the related assets (three to ten years). Leasehold improvements are depreciated over the shorter of their estimated useful life or the term of the lease. Leasehold improvements funded by landlords are recorded as property and equipment, which is depreciated over the shorter of the estimated useful life of the asset or the lease term, and deferred rent, which is amortized over the lease term. As of December 31, 2015 and 2014, the net book value of leasehold improvements funded by landlords was $2.2 million and $2.5 million, respectively. As of December 31, 2015 and 2014, the unamortized balance of deferred rent related to landlord funding of leasehold improvements was $2.2 million and $2.7 million, respectively, which is included in "accounts payable and accrued liabilities" and "other long-term liabilities" in the consolidated balance sheets.
Goodwill
Goodwill, which represents the excess of the cost of an acquired business over the net fair value assigned to its assets and liabilities, is not amortized. Instead, goodwill is assessed for impairment under the Intangibles—Goodwill and Other Topic of the FASB ASC. The Company has established December 31 as the annual impairment test date. The Company first makes a qualitative assessment as to whether goodwill is impaired and if it is more likely than not that goodwill is impaired, the Company performs a two-step quantitative impairment analysis to determine if goodwill is impaired. The Company may also determine to skip the qualitative assessment in any year and move directly to the quantitative test. No impairments of goodwill were reported during the years ended December 31, 2015, 2014 and 2013.
The Company reviews goodwill for impairment annually according to the Intangibles—Goodwill and Other Topic of the FASB ASC. The Company makes a qualitative evaluation about the likelihood of goodwill impairment and if it concludes that it is more likely than not that the carrying amount of a reporting unit is greater than its fair value, then it will be required to perform the first step of the two-step quantitative impairment test. Otherwise, performing the two-step impairment test is unnecessary. The first step consists of estimating the fair value and comparing the estimated fair value with the carrying value of the reporting unit. If the fair value is less than the carrying value, a second step is performed to compute the amount of the impairment by determining an implied fair value of goodwill. The implied fair value of goodwill is the residual fair value derived by deducting the fair value of a reporting unit’s assets and liabilities from its estimated total fair value, which was calculated in step one. An impairment charge would represent the excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of the goodwill. The guidance requires goodwill to be reviewed annually at the same time every year or when an event occurs or circumstances change such that it is reasonably possible that an impairment may exist. The Company selected December 31 as its annual testing date.
Impairment of Long-Lived Assets
Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying value of the assets may not be recoverable. If the Company determines that the carrying value of the asset is not recoverable, a permanent impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value. No impairments of property and equipment were recorded during the years ended December 31, 2015, 2014 and 2013.
Warranty Obligation
The Company provides warranties on all product sales. The majority of the Company’s warranties are for one to eight years in the normal course of business. The Company accrues for the estimated warranty costs at the time of sale based on historical warranty experience plus any known or expected changes in warranty exposure.
Income Taxes
Deferred income taxes are provided on a liability method in accordance with the Income Taxes Topic of the FASB ASC, whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their reported amounts at each period end. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. The guidance also provides criteria for the recognition, measurement, presentation and disclosures of uncertain tax positions. A tax benefit from an uncertain tax position may be recognized if it is “more likely than not” that the position is sustainable based solely on its technical merits.
Concentration of Credit Risk
The Company maintains cash balances at various financial institutions primarily in California and in Switzerland. In California, cash balances commonly exceed the $250,000 Federal Deposit Insurance Corporation insurance limit. In Switzerland, the banks where the Company has cash deposits are either government-owned, or in the case of cash deposited with non-government banks, deposits are insured up to 100,000 Swiss Francs. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to any significant credit risk with respect to such cash and cash equivalents.
Financial instruments, which subject the Company to potential concentrations of credit risk, consist principally of the Company’s accounts receivable. The Company’s accounts receivable result from product sales to customers in various industries and in various geographical areas, both domestic and foreign. The Company performs credit evaluations of its customers and generally requires no collateral.
Research and Development Expense
Research and development expenditures are expensed in the period incurred. Third-party funding of research and development expense under cost-sharing arrangements is recorded as an offset to research and development expense in the period the expenses are incurred.
Advertising Expense
Advertising costs are expensed in the period incurred.
Shipping and Handling Expense
The Company recognizes shipping and handling expenses as a component of cost of revenue.
Foreign Currencies
The Company’s primary foreign currency exposure is related to its subsidiary in Switzerland, which has Euro and local currency (Swiss Franc) revenue and operating expenses, and local currency loans. Changes in these currency exchange rates impact the reported U.S. dollar amount of revenue, expenses and debt. The functional currency of the Swiss subsidiary is the Swiss Franc. Assets and liabilities of the Swiss subsidiary are translated at month-end exchange rates, and revenues, expenses, gains and losses are translated at rates of exchange that approximate the rate in effect at the time of the transaction. Any translation adjustments resulting from this process are presented separately as a component of accumulated other comprehensive income within stockholders’ equity in the consolidated balance sheets. Foreign currency transaction gains and losses on intercompany balances considered long term in nature are accounted for as translation adjustments within equity. All other foreign currency transaction gains and losses are reported in "foreign currency exchange loss, net" in the consolidated statements of operations.
Foreign Currency Derivative Instruments
As part of its risk management strategy, the Company uses forward contracts to hedge certain foreign currency exposures. The Company's objective is to partially offset gains or losses resulting from these exposures with opposing gains or losses on the forward contracts, thereby reducing volatility of earnings created by these foreign currency exposures. In accordance with the Derivatives and Hedging Topic of the FASB ASC, the fair values of the forward contracts are estimated at each period end based on quoted market prices and are recorded as a net asset or liability on the consolidated balance sheets. These contracts are considered economic hedges but are not designated as hedges under the Derivatives and Hedging Topic of the FASB ASC, therefore, the change in the fair value of the instruments is recognized currently in the consolidated statements of operations and is recorded in "foreign currency exchange loss, net" in the consolidated statements of operations.
Net Income (Loss) per Share
In accordance with the Earnings Per Share Topic of the FASB ASC, basic net income (loss) per share is calculated using the weighted average number of common shares outstanding during the period. Diluted net income per share includes the impact of additional common shares that would have been outstanding if dilutive potential common shares were issued. Potentially dilutive securities are not considered in the calculation of diluted net loss per share, as their inclusion would be anti-dilutive.
Stock-Based Compensation
The Company issues stock-based compensation awards to its employees and non-employee directors, including stock options, restricted stock, restricted stock units, and shares under an employee stock purchase plan. The Company records compensation expense for stock-based awards in accordance with the criteria set forth in the Stock Compensation Subtopic of the FASB ASC. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option grants. The determination of the fair value of stock options utilizing the Black-Scholes model is affected by the Company’s stock price and a number of assumptions, including expected volatility, expected term, risk-free interest rate and expected dividends.
The fair value of restricted stock awards ("RSAs") and restricted stock unit awards ("RSUs") with service-based or performance-based vesting is based on the closing market price of the Company’s common stock on the date of grant. Compensation expense equal to the fair value of each RSA or RSU is recognized ratably over the requisite service period. For RSAs and RSUs with vesting contingent on Company performance conditions, the Company uses the requisite service period that is most likely to occur. The requisite service period is estimated based on the performance period as well as any time-based service requirements. If it is unlikely that a performance condition will be achieved, no compensation expense is recognized unless it is later determined that achievement of the performance condition is likely. Expense may be adjusted for changes in the expected outcomes of the related performance conditions, with the impact of such changes recognized as a cumulative adjustment in the consolidated statement of operations in the period in which the expectation changes.
In 2014, the Company issued market-condition RSUs to certain members of executive management. Since the vesting of the market-condition RSUs is dependent on stock price performance, the fair values of these awards were estimated using a Monte-Carlo valuation model. The determination of the fair value of market-condition RSUs utilizing a Monte-Carlo valuation model was affected by the Company’s stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends.
Share-based compensation expense recognized in the consolidated statements of operations is based on equity awards ultimately expected to vest. The FASB ASC requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods with a cumulative catch up adjustment if actual forfeitures differ from those estimates. For market-condition awards, because the effect of the market-condition is reflected as a discount to the awards' fair value at grant date, subsequent forfeitures due to the Company's stock price performance do not result in a reversal of expense.
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. The standard provides companies with a single model for 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. 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. In August 2015, the FASB issued ASU 2015-14, Deferral of the Effective date, which defers the required adoption date of ASU 2014-09 by one year. As a result of the deferred effective date, ASU 2014-09 will be effective for the Company in its first quarter of fiscal 2018. Early adoption is permitted but not before the original effective date of the new standard of the first quarter of fiscal 2017. The Company is in the process of evaluating the transition method that will be elected and the impact of adoption on its consolidated financial statements.
In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity’s ability to continue as a going concern. ASU 2014-15 applies to all entities and is effective for annual and interim reporting periods ending after December 15, 2016, with early adoption permitted. The Company does not expect that the adoption of this standard will have a material effect on its financial statements.
In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs.  The update changes the presentation of debt issuance costs to a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. ASU 2015-03 is effective for annual and interim reporting periods ending after December 15, 2015. Early adoption is permitted, and the new guidance is to be applied on a retrospective basis to all prior periods. The Company does not expect that the adoption of this standard will have a material effect on its financial statements.
In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, to simplify the presentation of deferred taxes. This amendment requires that all deferred tax assets and liabilities, along with any related valuation allowances, be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for annual and interim reporting periods ending after December 15, 2017. Early adoption is permitted, and the new guidance may be applied either prospectively or retrospectively. The Company has adopted this guidance prospectively as of December 31, 2015. Therefore, prior periods have not been adjusted to reflect this adoption.
In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. The new guidance was issued to more closely align the measurement of inventory in U.S. GAAP with the measurement of inventory in International Financial Reporting Standards. The core principle of this updated guidance is that an entity should measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amendments in ASU 2015-11 apply to inventory that is measured using the first-in, first-out or average cost methods. ASU 2015-11 is effective for annual and interim reporting periods ending after December 15, 2016, including interim periods within those fiscal years, and should be applied prospectively. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company does not expect that the adoption of this standard will have a material effect on its financial statements.
In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall (Subtopic 825-10). This standard makes several modifications to Subtopic 825-10 including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. It is effective for interim and annual periods beginning after December 15, 2017. The Company does not expect that the adoption of this standard will have a material effect on its financial statements.
Business Enterprise Information
The Company operates as a single operating segment. According to the FASB ASC Topic Disclosures about Segments of an Enterprise and Related Information, operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing performance. The Company’s CODM is the Chief Executive Officer who evaluates the Company’s financial information and resources and assesses performance on a consolidated basis.
Fair Value Measurement
The Company records certain financial instruments at fair value in accordance with the Fair Value Measurements and Disclosures Topic of the FASB ASC. As of December 31, 2015, the financial instruments to which this topic applied were financial instruments for foreign currency forward contracts and pension assets.
As of December 31, 2015, the fair value of foreign currency forward contracts was an asset of $16,000, which is recorded in “trade and other accounts receivable” in the consolidated balance sheet. The fair value of derivative instruments is measured using models following quoted market prices in active markets for identical instruments, which is a Level 2 input under the fair value hierarchy of the Fair Value Measurements and Disclosures Topic of the FASB ASC. All forward contracts as of December 31, 2015 had approximately a one-month original maturity term and matured on January 5, 2016 or February 2, 2016. Also see Note 6, Foreign Currency Derivative Instruments, and Note 11, Pension and Other Postretirement Benefit Plans, of this Annual Report on Form 10-K, for further discussion of fair value measurements.
The carrying value of short-term and long-term borrowings approximates fair value because of the relative short maturity of these instruments and the interest rates the Company could currently obtain.
Description of Business and Summary of Significant Accounting Policies (Tables)
The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share data):
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
Numerator
 
 
 
 
 
 
Net income (loss)
 
$
(22,333
)
 
$
(6,272
)
 
$
6,340

Denominator
 
 
 
 
 
 
Weighted average common shares outstanding
 
30,716

 
29,216

 
28,869

Effect of potentially dilutive securities
 
 
 
 
 
 
Options to purchase common stock
 

 

 
16

Restricted stock awards
 

 

 
3

Restricted stock unit awards
 

 

 
14

Employee stock purchase plan
 

 

 
1

Weighted average common shares outstanding, assuming dilution
 
30,716

 
29,216

 
28,903

Net income (loss) per share
 
 
 
 
 
 
Basic
 
$
(0.73
)
 
$
(0.21
)
 
$
0.22

Diluted
 
$
(0.73
)
 
$
(0.21
)
 
$
0.22

The following table summarizes instruments that may be convertible into common shares that are not included in the denominator used in the diluted net income (loss) per share calculation because to do so would be anti-dilutive (in thousands):
Common Stock
 
2015
 
2014
 
2013
Outstanding options to purchase common stock
 
931

 
672

 
790

Unvested restricted stock awards
 
245

 
528

 
424

Unvested restricted stock unit awards
 
885

 
224

 

Employee stock purchase plan awards
 
10

 
9

 
1

Revenues by product line and geographic area are presented below (in thousands):
 
 
Years ended December 31,
 
 
2015
 
2014
 
2013
Revenues by product line:
 
 
 
 
 
 
Ultracapacitors
 
$
114,525

 
$
135,637

 
$
136,277

High-voltage capacitors
 
41,718

 
40,361

 
43,339

Microelectronic products
 
11,129

 
10,588

 
13,918

Total
 
$
167,372

 
$
186,586

 
$
193,534

 
 
 
 
 
 
 
 
 
Years ended December 31,
 
 
2015
 
2014
 
2013
Revenues from external customers located in:
 
 
 
 
 
 
China
 
$
87,856

 
$
89,143

 
$
92,817

United States
 
20,836

 
23,758

 
29,090

Germany
 
13,972

 
16,384

 
25,935

All other countries (1)
 
44,708

 
57,301

 
45,692

Total
 
$
167,372

 
$
186,586

 
$
193,534

_____________
(1)
Revenue from external customers located in countries included in “All other countries” do not individually comprise more than 10% of total revenues for any of the years presented.
Long-lived assets by geographic location are as follows (in thousands):
 
 
As of December 31,
 
 
2015
 
2014
 
2013
Long-lived assets:
 
 
 
 
 
 
United States
 
$
22,267

 
$
28,013

 
$
33,740

China
 
4,148

 
4,991

 
5,444

Switzerland
 
6,021

 
5,663

 
6,422

Total
 
$
32,436

 
$
38,667

 
$
45,606

Balance Sheet Details (Tables)
 
 
December 31,
 
 
2015
 
2014
Inventories, net:
 
 
 
 
Raw material and purchased parts
 
$
21,126

 
$
23,042

Work-in-process
 
4,367

 
2,522

Finished goods
 
16,913

 
23,127

Consigned finished goods
 
28

 
184

Reserves
 
(3,379
)
 
(4,019
)
Total inventories, net
 
$
39,055

 
$
44,856

 
 
 
 
 
Property and equipment, net:
 
 
 
 
Machinery, furniture and office equipment
 
$
76,077

 
$
72,323

Computer hardware and software
 
12,235

 
12,003

Leasehold improvements
 
16,883

 
16,661

Construction in progress
 
2,527

 
2,715

Property and equipment, gross
 
107,722

 
103,702

Less accumulated depreciation and amortization
 
(75,398
)
 
(64,479
)
Total property and equipment, net
 
$
32,324

 
$
39,223

 
 
 
 
 
Accounts payable and accrued liabilities:
 
 
 
 
Accounts payable
 
$
22,291

 
$
12,544

Income tax payable
 
1,376

 
1,852

Accrued warranty
 
1,288

 
716

Other accrued liabilities
 
9,030

 
11,899

Total accounts payable and accrued liabilities
 
$
33,985

 
$
27,011

 
 
 
 
 
 
 
Foreign
Currency
Translation
Adjustment
 
Defined Benefit
Pension  Plan
 
Accumulated
Other
Comprehensive
Income
 
Affected Line Item
in the
Statement of Operations
Accumulated other comprehensive income:
 
 
 
 
 
 
Balance at December 31, 2014
 
$
8,359

 
$
(3,636
)
 
$
4,723

 
 
Other comprehensive income before reclassification
 
1,574

 

 
1,574

 
 
Amounts reclassified from accumulated other comprehensive income (loss)
 

 
(1,403
)
 
(1,403
)
 
Cost of Sales, Selling, General and Administrative and Research and Development Expense
Net other comprehensive income for the year ended December 31, 2015
 
1,574

 
(1,403
)
 
171

 
 
Balance at December 31, 2015
 
$
9,933

 
$
(5,039
)
 
$
4,894

 
 
Goodwill (Tables)
Change in the carrying amount of goodwill
The change in the carrying amount of goodwill during 2014 and 2015 was as follows (in thousands):
Balance at December 31, 2013
$
25,978

Foreign currency translation adjustments
(2,379
)
Balance at December 31, 2014
23,599

Foreign currency translation adjustments
36

Balance at December 31, 2015
$
23,635

Foreign Currency Derivative Instruments (Tables)
The net gains and losses on foreign currency forward contracts included in "foreign currency exchange loss, net" in the consolidated statements of operations are as follows (in thousands):
 
 
Year Ended December 31,
 
 
2015
 
2014
 
2013
Total gain (loss)
 
$
(720
)
 
$
(5,265
)
 
$
359

Foreign currency gains and losses on those underlying monetary assets and liabilities included in "foreign currency exchange loss, net" in the consolidated statements of operations are as follows (in thousands):
 
 
Year Ended December 31,
 
 
2015
 
2014
 
2013
Total gain (loss)
 
$
179

 
$
4,391

 
$
(1,009
)
The following table presents gross amounts, amounts offset and net amounts presented in the consolidated balance sheets for the Company's derivative instruments measured at fair value (in thousands):
 
 
December 31, 2015
 
December 31, 2014
Gross amounts of recognized asset (liability)
 
$
66

 
$
(1,993
)
Gross amounts offset in the consolidated balance sheets
 
(50
)
 
350

Net amount of recognized asset (liability) presented in the consolidated balance sheets
 
$
16

 
$
(1,643
)
Stock Plans (Tables)
The following table summarizes total aggregate stock option activity for the year ended December 31, 2015 (in thousands, except for per share data):
 
 
Number of
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Term
(in years)
 
Aggregate
Intrinsic
Value
Balance at December 31, 2014
 
672

 
$
12.00

 
 
 
 
Granted
 
322

 
6.72

 
 
 
 
Exercised
 
(19
)
 
6.80

 
 
 
 
Cancelled
 
(44
)
 
11.70

 
 
 
 
Balance at December 31, 2015
 
931

 
$
10.19

 
3.85
 
$
196

Vested or expected to vest at December 31, 2015
 
886

 
$
10.38

 
3.57
 
$
162

Exercisable at December 31, 2015
 
638

 
$
11.81

 
1.34
 
$
16

The fair value of the stock options granted during the years ended December 31, 2015 and 2013 was estimated using the Black-Scholes valuation model using the following assumptions:
 
 
Years Ended December 31,
 
 
2015
 
2013
Expected dividends
 
%
 
%
Expected volatility range
 
60% to 61%

 
58% to 69%

Expected volatility weighted average
 
60
%
 
63
%
Risk-free interest rate
 
1.6
%
 
1.1% to 2.1%

Expected life/term weighted average (in years)
 
4.9

 
2.9

The following table summarizes RSU activity for the year ended December 31, 2015 (in thousands, except for per share data):
 
 
Shares
 
Weighted Average
Grant Date
Fair Value
Nonvested at December 31, 2014
 
224

 
$
10.02

Granted
 
829

 
7.02

Vested
 
(80
)
 
10.02

Forfeited
 
(88
)
 
8.57

Nonvested at December 31, 2015
 
885

 
$
7.36

The share price used for the model is a 15% discount on the stock price on the last trading day before the offering period; the number of shares to be purchased is based on employee contributions. The fair value of ESPP awards was calculated using the following weighted-average assumptions:
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
Expected dividends
 
%
 
%
 
%
Stock price on valuation date
 
5.97

 
8.47

 
7.77

Expected volatility
 
57
%
 
77
%
 
46
%
Risk-free interest rate
 
0.29
%
 
0.08
%
 
0.07
%
Expected life (in years)
 
0.5

 
0.4

 
0.3

Fair value per share
 
$
1.86

 
$
4.56

 
$
2.45

Compensation cost for stock options, restricted stock, restricted stock units and the ESPP is as follows (in thousands):
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
Stock options
 
$
232

 
$
52

 
$
827

Restricted stock
 
1,974

 
2,536

 
2,491

Restricted stock units
 
1,462

 
867

 
592

ESPP
 
278

 
512

 
70

Total stock-based compensation expense
 
$
3,946

 
$
3,967

 
$
3,980

Stock-based compensation cost included in cost of revenue; selling, general and administrative expense; and research and development expense is as follows (in thousands): 
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
Cost of revenue
 
$
644

 
$
740

 
$
1,079

Selling, general and administrative
 
2,502

 
2,362

 
2,140

Research and development
 
800

 
865

 
761

Total stock-based compensation expense
 
$
3,946

 
$
3,967

 
$
3,980

The following table summarizes the reservation of shares under the Company's stock-based compensation plans as of December 31, 2015:
2013 Omnibus Equity Incentive Plan
2,200,800

2004 Employee Stock Purchase Plan
307,126

Total
2,507,926

The following table summarizes RSA activity for the year ended December 31, 2015 (in thousands, except for per share data):
 
 
Shares
 
Weighted Average
Grant Date
Fair Value
Nonvested at December 31, 2014
 
528

 
$
13.77

Vested
 
(180
)
 
15.58

Forfeited
 
(103
)
 
10.37

Nonvested at December 31, 2015
 
245

 
$
13.87

Since the vesting of the market-condition RSUs is dependent on stock price performance, the fair values of these awards were estimated using a Monte-Carlo valuation model with the following weighted-average assumptions:
 
 
Year ended December 31, 2014
Market price at grant per share
 
$
15.03

Expected dividends
 

Expected volatility
 
65
%
Risk-free interest rate
 
0.86
%
The following table summarizes the amount of compensation expense recognized for RSUs for the years ended December 31, 2015, 2014 and 2013 (in thousands):
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
Service-based restricted stock units
 
$
1,362

 
$
749

 
$
592

Performance-based restricted stock units
 
(28
)
 
28

 

Market-condition restricted stock units
 
128

 
90

 

Total compensation expense recognized for employee restricted stock units
 
$
1,462

 
$
867

 
$
592

Income Taxes (Tables)
For financial reporting purposes, income (loss) before income taxes includes the following components (in thousands):
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
United States
 
$
(35,074
)
 
$
(19,301
)
 
$
(5,270
)
Foreign
 
17,344

 
17,375

 
13,762

Total
 
$
(17,730
)
 
$
(1,926
)
 
$
8,492

The provision for income taxes based on income (loss) before income taxes is as follows (in thousands):
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
Federal:
 
 
 
 
 
 
Current
 
$

 
$

 
$
(258
)
Deferred
 
(4,297
)
 
(5,608
)
 
222

 
 
(4,297
)
 
(5,608
)
 
(36
)
State:
 
 
 
 
 
 
Current
 
6

 
6

 
6

Deferred
 
62

 
853

 
88

 
 
68

 
859

 
94

Foreign:
 
 
 
 
 
 
Current
 
4,930

 
2,453

 
2,022

Deferred
 
8

 
1,944

 
311

 
 
4,938

 
4,397

 
2,333

Increase (decrease) in valuation allowance
 
3,894

 
4,698

 
(239
)
Tax provision
 
$
4,603

 
$
4,346

 
$
2,152

The primary components of such difference are as follows (in thousands):
 
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
Taxes at federal statutory rate
 
$
(6,028
)
 
$
(655
)
 
$
2,888

State taxes, net of federal benefit
 
(236
)
 
(90
)
 
(29
)
Effect of tax rate differential for foreign subsidiary
 
(2,641
)
 
(3,570
)
 
(2,531
)
Valuation allowance, including tax benefits of stock activity
 
3,894

 
4,698

 
(239
)
Foreign taxes on unremitted earnings
 
2,085

 
1,590

 

Stock-based compensation
 
134

 
621

 
460

Foreign withholding taxes
 
180

 

 

Return to provision adjustments
 
1,131

 
536

 
(920
)
Subpart F income inclusion
 
5,914

 
1,167

 
2,446

Other
 
170

 
49

 
77

Tax provision
 
$
4,603

 
$
4,346

 
$
2,152

Items that give rise to significant portions of the deferred tax accounts are as follows (in thousands):
 
 
December 31,
 
 
2015
 
2014
Deferred tax assets:
 
 
 
 
Tax loss carryforwards
 
$
52,504

 
$
54,551

Tax credit carryforwards
 
19

 
19

Uniform capitalization, contract and inventory related reserves
 
1,558

 
1,728

Accrued vacation
 
592

 
669

Stock-based compensation
 
1,466

 
1,428

Capitalized research and development
 
6,212

 

Tax basis depreciation less book depreciation
 
1,019

 

Intangible assets
 
1,533

 
1,364

Deferred revenue
 
254

 
149

Accrued foreign taxes
 
1,271

 

Unrealized gains and losses
 

 
1,780

Other
 
2,527

 
2,668

Total
 
68,955

 
64,356

Deferred tax liabilities:
 
 
 
 
Inventory deduction
 
(235
)
 
(206
)
Pension assets
 
(1,173
)
 
(1,476
)
Allowance for doubtful accounts
 
(378
)
 
(407
)
Tax basis depreciation less book depreciation
 

 
(192
)
Withholding tax on undistributed earnings of foreign subsidiary
 
(3,675
)
 
(1,590
)
Unrealized gains and losses
 
(984
)
 

Other
 
(1
)
 
(241
)
Total
 
(6,446
)
 
(4,112
)
Net deferred tax assets before valuation allowance
 
62,509

 
60,244

Valuation allowance
 
(68,093
)
 
(64,199
)
Net deferred tax liabilities
 
$
(5,584
)
 
$
(3,955
)
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Balance at December 31, 2013
$
12,634

Increase in current period positions
890

Decrease in prior period positions
(1,585
)
Balance at December 31, 2014
11,939

Increase in current period positions
1,466

Increase in prior period positions
609

Balance at December 31, 2015
$
14,014

Leases (Tables)
Future annual minimum rental commitments
Future annual minimum rental commitments as of December 31, 2015 are as follows (in thousands):
Fiscal Years
 
2016
$
4,316

2017
3,652

2018
2,274

2019
2,266

2020
1,266

Thereafter
2,407

Total
$
16,181

Pension and Other Postretirement Benefit Plans (Tables)
The following table reflects changes in the pension benefit obligation and plan assets for the years ended December 31, 2015 and 2014 (in thousands):
 
 
Pension Benefits
 
 
Years ended December 31,
 
 
2015
 
2014
Change in benefit obligation:
 
 
 
 
Benefit obligation at beginning of year
 
$
33,006

 
$
32,577

Service cost
 
958

 
846

Interest cost
 
332

 
697

Plan participant contributions
 
523

 
593

Benefits paid
 
(3,064
)
 
(3,018
)
Actuarial loss
 
1,262

 
4,974

Plan change
 
83

 

Effect of foreign currency translation
 
53

 
(3,663
)
Projected benefit obligation at end of year
 
33,153

 
33,006

Changes in plan assets:
 
 
 
 
Fair value of plan assets at beginning of year
 
40,368

 
43,145

Actual return on plan assets
 
419

 
3,478

Company contributions
 
640

 
720

Plan participant contributions
 
523

 
593

Benefits paid
 
(3,064
)
 
(3,018
)
Effect of foreign currency translation
 
116

 
(4,550
)
Fair value of plan assets at end of year
 
39,002

 
40,368

Funded status at end of year
 
$
5,849

 
$
7,362

Amounts recognized in the consolidated balance sheets consist of (in thousands):
 
 
As of December 31,
 
 
2015
 
2014
Net long-term pension asset
 
$
5,849

 
$
7,362

 
 
 
 
 
Accumulated other comprehensive loss consists of the following:
 

 

Net prior service cost
 
837

 
853

Net loss
 
5,668

 
3,897

Accumulated other comprehensive loss before taxes
 
$
6,505

 
$
4,750

The components of net periodic pension cost and other amounts recognized in other comprehensive income (loss) before taxes are as follows (in thousands):
 
 
Years ended December 31,
 
 
2015
 
2014
 
2013
Components of net periodic pension cost:
 
 
 
 
 
 
Service cost
 
$
958

 
$
846

 
$
831

Interest cost
 
332

 
697

 
504

Expected return on plan assets
 
(1,551
)
 
(1,784
)
 
(1,539
)
Prior service cost amortization
 
136

 
140

 
44

Deferred loss amortization
 
45

 

 
180

Settlement cost
 
492

 
420

 

Net periodic pension cost
 
$
412

 
$
319

 
$
20

Other amounts recognized in other comprehensive income (loss) before income taxes are as follows:
 
 
 
 
 
 
Prior service cost amortization
 
$
(136
)
 
$
(140
)
 
$
(44
)
Loss (gain) on value of plan assets
 
1,131

 
(1,695
)
 
(2,977
)
Actuarial (gain) loss on benefit obligation
 
1,262

 
4,975

 
(405
)
Plan change
 
83

 

 
978

Settlement
 
(492
)
 
(420
)
 

Deferred loss amortization
 
(45
)
 

 
(180
)
Total recognized in other comprehensive income (loss), before taxes
 
$
1,803

 
$
2,720

 
$
(2,628
)
Total recognized in net periodic pension cost and other comprehensive income (loss), before taxes
 
$
2,215

 
$
3,039

 
$
(2,608
)
Assumptions used to determine the benefit obligation and net periodic pension cost are as follows:
 
 
Pension Benefits
 
 
Years ended December 31,
 
 
2015
 
2014
Weighted-average assumptions used to determine benefit obligation:
 
 
 
 
Discount rate
 
0.75
%
 
1.00
%
Rate of compensation increase
 
2.50
%
 
2.50
%
Measurement date
 
11/30/2015

 
12/31/2014

Weighted-average assumptions used to determine net periodic pension cost:
 
 
 
 
Discount rate
 
1.00
%
 
2.25
%
Expected long-term return on plan assets
 
3.75
%
 
4.25
%
Rate of compensation increase
 
2.50
%
 
2.50
%
 
 
 
 
 
 
 
 
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
 
 
 
 
Equity securities
 
29
%
 
33
%
Debt securities
 
23
%
 
22
%
Real estate investment funds
 
43
%
 
40
%
Other
 
5
%
 
5
%
Total
 
100
%
 
100
%
Expected amortization during the year ending December 31, 2016 is as follows (in thousands):
 
 
 
Amortization of net prior service costs
$
149

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands):
2016
$
1,360

2017
1,372

2018
1,431

2019
1,411

2020
1,340

Years 2021 through 2025
7,392

Total
$
14,306

The fair values of the plans assets at December 31, 2015 and 2014, by asset category, are as follows (in thousands):
 
 
 
 
Fair Value Measurements at
 
 
 
 
December 31, 2015
 
 
Total
 
Active
Market
Prices
(Level 1)
 
Significant
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash:
 
 
 
 
 
 
 
 
Held in Swiss Franc, Euro and USD
 
$
808

 
$
808

 
$

 
$

Equity securities:
 
 
 
 
 
 
 
 
Investment funds
 
12,292

 
11,303

 
989

 

Real estate investment funds
 
16,917

 

 

 
16,917

Fixed income / Bond Securities
 
 
 
 
 
 
 
 
Fixed income / Bond securities:
 
8,949

 
8,949

 

 

Other assets (accounts receivable, assets at real estate management company)
 
36

 

 
36

 

Net assets of pension plan
 
$
39,002

 
$
21,060

 
$
1,025

 
$
16,917


 
 
 
 
Fair Value Measurements at
 
 
 
 
December 31, 2014
 
 
Total
 
Active
Market
Prices
(Level 1)
 
Significant
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash:
 
 
 
 
 
 
 
 
Held in Swiss Franc, Euro and USD
 
$
973

 
$
973

 
$

 
$

Equity securities:
 
 
 
 
 
 
 
 
Investment funds
 
14,481

 
14,481

 

 

Real estate investment funds
 
16,049

 

 

 
16,049

Fixed income / Bond Securities
 
 
 
 
 
 
 
 
Fixed income / Bond securities:
 
8,839

 
8,839

 

 

Other assets (accounts receivable, assets at real estate management company)
 
26

 

 
26

 

Net assets of pension plan
 
$
40,368

 
$
24,293

 
$
26

 
$
16,049

For those financial instruments with significant Level 3 inputs, the following table summarizes the activity for the year by investment type:
Description
 
Real estate
investments
Beginning balance, December 31, 2014
 
$
16,049

Total unrealized gains included in net gain (1)
 
869

Foreign currency translation adjustments
 
(1
)
Ending balance, December 31, 2015
 
$
16,917

_____________
(1)
Total unrealized gains are reported as a component of the pension adjustment in accumulated other comprehensive income in the consolidated statement of stockholders’ equity.
Restructuring and Exit Costs (Tables)
Restructuring and exit costs
The following table summarizes the restructuring and exit costs for the year ended December 31, 2015 (in thousands):
Year ended December 31, 2015
 
Employee Severance Costs
 
Lease Obligation Costs
 
Total
Costs incurred
 
$
1,439

 
$
1,208

 
$
2,647

Amounts paid
 
(1,010
)
 

 
(1,010
)
Accruals released
 
(135
)
 

 
(135
)
Other non-cash adjustments
 

 
(165
)
 
(165
)
Restructuring liability as of December 31, 2015
 
$
294

 
$
1,043

 
$
1,337

Unaudited Quarterly Financial Information (Tables)
Unaudited quarterly results of operations
 
 
Quarter Ended
 
 
 
 
March 31
 
 
 
June 30
 
 
 
September 30
 
 
 
December 31
 
 
 
 
(in thousands except per share data)
 
 
Year Ended December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$
34,670

 
  
 
$
37,796

 
  
 
$
45,076

 
  
 
$
49,830

 
  
Gross profit
 
10,303

 
  
 
12,153

 
  
 
14,256

 
  
 
14,250

 
  
Net income (loss)
 
(9,341
)
 
(a) 
 
(9,376
)
 
(b) 
 
(1,449
)
 
(c) 
 
(2,167
)
 
(d) 
Basic and diluted net loss per share
 
$
(0.32
)
 
  
 
$
(0.31
)
 
 
 
$
(0.05
)
 
  
 
$
(0.07
)
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
 
 
March 31
 
 
 
June 30
 
 
 
September 30
 
 
 
December 31
 
 
 
 
(in thousands except per share data)
 
 
Year Ended December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenue
 
$
46,001

 
  
 
$
46,074

 
  
 
$
41,593

 
  
 
$
52,918

 
  
Gross profit
 
17,863

 
  
 
16,597

 
  
 
15,480

 
  
 
18,503

 
  
Net income (loss)
 
319

 
(e) 
 
(1,181
)
 
(f) 
 
(3,292
)
 
(g) 
 
(2,118
)
 
(h) 
Basic and diluted net income (loss) per share
 
$
0.01

 
  
 
$
(0.04
)
 
 
 
$
(0.11
)
 
 
 
$
(0.07
)
 
 
_____________

(a)
Includes a non-cash expense for stock-based compensation of $839,000.
(b)
Includes restructuring costs of $2.3 million, a non-cash deferred tax expense of $2.1 million in connection with the probable repatriation of a portion of the unremitted earnings of a foreign subsidiary and a non-cash expense for stock-based compensation of $1.0 million.
(c)
Includes a non-cash expense for stock-based compensation of $1.1 million.
(d)
Includes a non-cash expense for stock-based compensation of $1.0 million.
(e)
Includes a non-cash expense for stock-based compensation of $755,000.
(f)
Includes a non-cash expense for stock-based compensation of $1.2 million.
(g)
Includes a non-cash expense for stock-based compensation of $1.0 million.
(h)
Includes non-cash deferred tax expense of $1.6 million in connection with the probable repatriation of a portion of the unremitted earnings of a foreign subsidiary and a non-cash expense for stock-based compensation of $1.0 million.
Description of Business and Summary of Significant Accounting Policies (Textual) (Details)
12 Months Ended 12 Months Ended
Dec. 31, 2015
USD ($)
manufacturing_location
Segment
Dec. 31, 2014
USD ($)
Dec. 31, 2013
USD ($)
Dec. 31, 2015
CHF
Dec. 31, 2012
USD ($)
Dec. 31, 2015
High Reliability [Member]
product_line
Dec. 31, 2015
China [Member]
contract_manufacturer
Dec. 31, 2015
Minimum
Dec. 31, 2015
Maximum
Dec. 31, 2015
Shenzhen Xinlikang [Member]
Accounts Receivable [Member]
Customer Concentration Risk [Member]
Significant Accounting Policies [Line Items]
 
 
 
 
 
 
 
 
 
 
Restricted cash
$ 400,000 
$ 0 
 
 
 
 
 
 
 
 
Concentration Risk, Percentage
 
 
 
 
 
 
 
 
 
33.00% 
Manufacturing locations
 
 
 
 
 
 
 
 
 
Number of contract manufacturers
 
 
 
 
 
 
 
 
 
Number of product lines
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
24,382,000 
24,732,000 
30,647,000 
 
28,739,000 
 
 
 
 
 
Consigned finished goods
28,000 
184,000 
 
 
 
 
 
 
 
 
Total deferred revenue and customer deposits
3,066,000 
703,000 
 
 
 
 
 
 
 
 
Estimated useful lives of property and equipment
 
 
 
 
 
 
 
3 years 
10 years 
 
Leasehold improvements funded by landlords
2,200,000 
2,500,000 
 
 
 
 
 
 
 
 
Deferred rent related to leasehold improvements funding by landlords
2,200,000 
2,700,000 
 
 
 
 
 
 
 
 
Standard product warranty, term, minimum
1 year 
 
 
 
 
 
 
 
 
 
Standard product warranty, term, maximum
8 years 
 
 
 
 
 
 
 
 
 
Accrued warranty
1,288,000 
716,000 
 
 
 
 
 
 
 
 
FDIC insurance limit
250,000 
 
 
 
 
 
 
 
 
 
Switzerland non-government financial institutions insured amount
 
 
 
100,000 
 
 
 
 
 
 
Research and development expense
24,697,000 
26,320,000 
22,542,000 
 
 
 
 
 
 
 
Third party funding offset
1,300,000 
1,000,000 
1,300,000 
 
 
 
 
 
 
 
Advertising expense
1,100,000 
1,400,000 
884,000 
 
 
 
 
 
 
 
Shipping and handling expense
$ 1,000,000 
$ 1,500,000 
$ 1,300,000 
 
 
 
 
 
 
 
Number of operating segments
 
 
 
 
 
 
 
 
 
Description of Business and Summary of Significant Accounting Policies (Concentration of Credit Risk) (Details) (Customer Concentration Risk [Member])
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Sales [Member]
 
 
 
Concentration Risk [Line Items]
 
 
 
Number of customers over 10% or Sales and AR
 
 
Sales [Member] |
Shenzhen Xinlikang [Member]
 
 
 
Concentration Risk [Line Items]
 
 
 
Major customer, percentage of sales
19.00% 
20.00% 
22.00% 
Accounts Receivable [Member] |
Shenzhen Xinlikang [Member]
 
 
 
Concentration Risk [Line Items]
 
 
 
Major customer, percentage of sales
33.00% 
 
 
Description of Business and Summary of Significant Accounting Policies (Computation of basic and diluted net income (loss) per share) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Schedule of computation of basic and diluted net income (loss) per share
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$ (2,167)1
$ (1,449)2
$ (9,376)3
$ (9,341)4
$ (2,118)5
$ (3,292)1
$ (1,181)6
$ 319 7
$ (22,333)
$ (6,272)
$ 6,340 
Weighted average common shares outstanding
 
 
 
 
 
 
 
 
30,716 
29,216 
28,869 
Effect of potentially dilutive securities
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding, assuming dilution
 
 
 
 
 
 
 
 
30,716 
29,216 
28,903 
Net income (loss) per share:
 
 
 
 
 
 
 
 
 
 
 
Basic (in dollars per share)
 
 
 
 
 
 
 
 
$ (0.73)
$ (0.21)
$ 0.22 
Diluted (in dollars per share)
 
 
 
 
 
 
 
 
$ (0.73)
$ (0.21)
$ 0.22 
Options to purchase common stock
 
 
 
 
 
 
 
 
 
 
 
Effect of potentially dilutive securities
 
 
 
 
 
 
 
 
 
 
 
Effect of potentially dilutive securities
 
 
 
 
 
 
 
 
16 
Restricted Stock Awards
 
 
 
 
 
 
 
 
 
 
 
Effect of potentially dilutive securities
 
 
 
 
 
 
 
 
 
 
 
Effect of potentially dilutive securities
 
 
 
 
 
 
 
 
Restricted Stock Units
 
 
 
 
 
 
 
 
 
 
 
Effect of potentially dilutive securities
 
 
 
 
 
 
 
 
 
 
 
Effect of potentially dilutive securities
 
 
 
 
 
 
 
 
14 
Employee Stock Purchase Plan
 
 
 
 
 
 
 
 
 
 
 
Effect of potentially dilutive securities
 
 
 
 
 
 
 
 
 
 
 
Effect of potentially dilutive securities
 
 
 
 
 
 
 
 
Description of Business and Summary of Significant Accounting Policies (Antidilutive securities excluded from computation of earnings per share) (Details)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Options to purchase common stock
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Anti-dilutive, shares
931 
672 
790 
Restricted Stock Awards
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Anti-dilutive, shares
245 
528 
424 
Restricted Stock Units
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Anti-dilutive, shares
885 
224 
Employee stock purchase plan awards
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Anti-dilutive, shares
10 
Description of Business and Summary of Significant Accounting Policies (Revenues by product line and geographic area) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
$ 49,830 
$ 45,076 
$ 37,796 
$ 34,670 
$ 52,918 
$ 41,593 
$ 46,074 
$ 46,001 
$ 167,372 
$ 186,586 
$ 193,534 
China [Member]
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
87,856 
89,143 
92,817 
United States [Member]
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
20,836 
23,758 
29,090 
Germany
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
13,972 
16,384 
25,935 
All other countries [Member]
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
44,708 1
57,301 1
45,692 1
Ultracapacitors [Member]
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
114,525 
135,637 
136,277 
High-Voltage Capacitors [Member]
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
41,718 
40,361 
43,339 
Microelectronic Products [Member]
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
$ 11,129 
$ 10,588 
$ 13,918 
Description of Business and Summary of Significant Accounting Policies (Long-lived assets by geographic location) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Long-Lived Assets [Line Items]
 
 
 
Total
$ 32,436 
$ 38,667 
$ 45,606 
United States [Member]
 
 
 
Long-Lived Assets [Line Items]
 
 
 
Total
22,267 
28,013 
33,740 
China [Member]
 
 
 
Long-Lived Assets [Line Items]
 
 
 
Total
4,148 
4,991 
5,444 
Switzerland [Member]
 
 
 
Long-Lived Assets [Line Items]
 
 
 
Total
$ 6,021 
$ 5,663 
$ 6,422 
Balance Sheet Details (Details) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Inventory
 
 
Raw material and purchased parts
$ 21,126,000 
$ 23,042,000 
Work-in-process
4,367,000 
2,522,000 
Finished goods
16,913,000 
23,127,000 
Consigned finished goods
28,000 
184,000 
Reserves
(3,379,000)
(4,019,000)
Total inventories, net
39,055,000 
44,856,000 
Property and equipment, net:
 
 
Property and equipment, gross
107,722,000 
103,702,000 
Less accumulated depreciation and amortization
(75,398,000)
(64,479,000)
Total property and equipment, net
32,324,000 
39,223,000 
Accounts payable and accrued liabilities:
 
 
Accounts payable
22,291,000 
12,544,000 
Income tax payable
1,376,000 
1,852,000 
Accrued warranty
1,288,000 
716,000 
Other accrued liabilities
9,030,000 
11,899,000 
Total accounts payable and accrued liabilities
33,985,000 
27,011,000 
Machinery, furniture and office equipment [Member]
 
 
Property and equipment, net:
 
 
Property and equipment, gross
76,077,000 
72,323,000 
Computer hardware and software [Member]
 
 
Property and equipment, net:
 
 
Property and equipment, gross
12,235,000 
12,003,000 
Leasehold improvements [Member]
 
 
Property and equipment, net:
 
 
Property and equipment, gross
16,883,000 
16,661,000 
Construction in progress [Member]
 
 
Property and equipment, net:
 
 
Property and equipment, gross
$ 2,527,000 
$ 2,715,000 
Balance Sheet Details (Accumulated other comprehensive income) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Accumulated other comprehensive income
 
Balance at December 31, 2014
$ 4,723 
Other comprehensive income before reclassification
1,574 
Amounts reclassified from accumulated other comprehensive income (loss)
(1,403)
Net other comprehensive income for the year ended December 31, 2015
171 
Balance at December 31, 2015
4,894 
Foreign Currency Translation Adjustment
 
Accumulated other comprehensive income
 
Balance at December 31, 2014
8,359 
Other comprehensive income before reclassification
1,574 
Amounts reclassified from accumulated other comprehensive income (loss)
Net other comprehensive income for the year ended December 31, 2015
1,574 
Balance at December 31, 2015
9,933 
Defined Benefit Pension Plan
 
Accumulated other comprehensive income
 
Balance at December 31, 2014
(3,636)
Other comprehensive income before reclassification
Amounts reclassified from accumulated other comprehensive income (loss)
(1,403)
Net other comprehensive income for the year ended December 31, 2015
(1,403)
Balance at December 31, 2015
$ (5,039)
Goodwill (Goodwill rollforward) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
Balance, beginning of period
$ 23,599 
$ 25,978 
Foreign currency translation adjustments
36 
(2,379)
Balance, end of period
$ 23,635 
$ 23,599 
Fair Value Measurements Fair Value Measurements (Details) (USD $)
Dec. 31, 2015
Fair Value Disclosures [Abstract]
 
Fair value of foreign currency forward contracts
$ 16,000 
Credit facilities (Details) (USD $)
12 Months Ended 12 Months Ended 13 Months Ended
Dec. 31, 2015
Dec. 31, 2015
Minimum
Dec. 31, 2015
Maximum
Dec. 31, 2015
Maxwell SA auto leases
Financing Agreements
Vehicles
Dec. 31, 2014
Maxwell SA auto leases
Financing Agreements
Vehicles
Dec. 31, 2015
Revolving Credit Facility
Dec. 31, 2015
Revolving Credit Facility
Prime Rate
Dec. 31, 2015
Revolving Credit Facility
LIBOR
Apr. 30, 2012
Revolving Credit Facility
LIBOR
Apr. 30, 2012
Secured Debt
Equipment Term Loan
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
 
 
Revolving line of credit, maximum
 
 
 
 
 
$ 25,000,000.0 
 
 
 
 
Amount available revolving credit facility
 
 
 
 
 
22,700,000.0 
 
 
 
 
Required pledge of equity interests in subsidiary, percent
100.00% 
 
 
 
 
 
 
 
 
 
Interest rate percentage, minimum
 
 
 
1.90% 
 
 
0.00% 
2.75% 
 
 
Interest rate percentage, maximum
 
 
 
5.10% 
 
 
0.50% 
3.25% 
 
 
Annual commitment fee
125,000 
 
 
 
 
 
 
 
 
 
Unused commitment fee, percentage
 
0.30% 
0.50% 
 
 
 
 
 
 
 
Debt instrument, variable rate
 
 
 
 
 
 
 
 
2.25% 
 
Eligible equipment purchase, percentage
 
 
 
 
 
 
 
 
 
80.00% 
Debt instrument, amount borrowed
 
 
 
 
 
 
 
 
 
5,000,000 
Debt instrument, term
 
 
 
3 years 
 
 
 
 
 
 
Long-term borrowings
 
 
 
$ 91,000 
$ 82,000 
 
 
 
 
 
Foreign Currency Derivative Instruments (Gains and losses on foreign currency forward contracts) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Foreign Currency Derivatives [Abstract]
 
 
 
Total gain (loss)
$ (720)
$ (5,265)
$ 359 
Foreign Currency Derivative Instruments (Gains and losses on foreign currency derivative contracts partially offset by net gains and losses on underlying monetary assets) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Foreign Currency Derivatives [Abstract]
 
 
 
Total gain (loss)
$ 179 
$ 4,391 
$ (1,009)
Foreign Currency Derivative Instruments (Textual) (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
 
Notional amount of foreign currency forward contracts not designated as hedges
$ 1.3 
Foreign Currency Derivative Instruments Foreign Currency Derivative Instruments (Schedule of Gross Amounts, Amounts Offset, and Net Amounts) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]
 
 
Gross amounts of recognized asset (liability)
$ 66 
 
Gross amounts of recognized asset (liability)
 
(1,993)
Gross amounts offset in the consolidated balance sheets
50 
 
Gross amounts offset in the consolidated balance sheets
 
350 
Net amount of recognized asset (liability) presented in the consolidated balance sheets
16 
 
Net amount of recognized asset (liability) presented in the consolidated balance sheets
 
$ (1,643)
Stock Plans (Textual) (Details) (USD $)
12 Months Ended
Dec. 31, 2015
share_based_compensation_plan
Dec. 31, 2014
Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of active share-based compensation plans
 
 
Tax benefit associated with stock option exercises
$ 1,400,000 
 
 
Tax benefit realized on stock-based compensation
Weighted average grant date fair value of stock options granted
$ 3.34 
 
$ 2.89 
Number of stock options granted
322,000 
 
Total intrinsic value of options exercised
16,000 
638,000 
18,000 
Cash proceeds from options exercises
128,000 
 
 
Minimum
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Period of option vesting
1 year 
 
 
Maximum
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Period of option vesting
4 years 
 
 
Employee Stock Option
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Total unrecognized compensation cost adjusted for estimated forfeitures
741,000 
 
 
Unrecognized compensation cost, weighted average recognition period
3 years 4 months 
 
 
Restricted Stock Awards
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Period of option vesting
4 years 
 
 
Total unrecognized compensation cost adjusted for estimated forfeitures
2,400,000 
 
 
Unrecognized compensation cost, weighted average recognition period
1 year 8 months 
 
 
Fair value per unit
 
$ 14.21 
$ 10.20 
Service-based share awards vest date fair value
1,200,000 
1,200,000 
916,000 
Number of shares granted
 
 
Restricted Stock Units
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Period of option vesting
1 year 
 
 
Total unrecognized compensation cost adjusted for estimated forfeitures
2,900,000 
 
 
Unrecognized compensation cost, weighted average recognition period
2 years 6 months 
 
 
Fair value per unit
$ 7.02 
$ 12.63 
$ 10.25 
Service-based share awards vest date fair value
498,000 
631,000 
275,000 
Number of shares granted
829,000 
 
 
Number of unrestricted shares of common stock received upon vesting
 
 
Restricted Stock Units |
Service-based restricted stock units
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Period of option vesting
4 years 
 
 
Restricted Stock Units |
Performance-based restricted stock units
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Fair value per unit
$ 7.18 
$ 10.85 
 
Number of shares granted
215,000 
50,000 
 
Restricted Stock Units |
Market-condition restricted stock units
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Period of option vesting
 
3 years 
 
Fair value per unit
 
$ 7.71 
 
Number of shares granted
 
70,000 
 
Employee stock purchase plan awards
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of shares included in equity incentive pool
1,000,000 
 
 
Fair value per unit
$ 1.86 
$ 4.56 
$ 2.45 
Number of shares issued during period
145,733 
93,588 
 
Percentage of trading price of stock
85.00% 
 
 
Offering period under ESPP
6 months 
 
 
Percentage discount on the stock price
15.00% 
 
 
Intrinsic value of stock purchased pursuant to ESPP
$ 210,000 
$ 449,000 
$ 33,000 
Incentive Plan
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of shares included in equity incentive pool
3,750,000 
 
 
Stock Plans (Stock Option Activity) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Number of Shares
 
 
Balance at December 31, 2014
672,000 
 
Granted
322,000 
Exercised
(19,000)
 
Cancelled
(44,000)
 
Balance at December 31, 2015
931,000 
672,000 
Vested or expected to vest at December 31, 2015
886,000 
 
Exercisable at December 31, 2015
638,000 
 
Weighted Average Exercise Price
 
 
Balance at December 31, 2014
$ 12.00 
 
Granted
$ 6.72 
 
Exercised
$ 6.80 
 
Cancelled
$ 11.70 
 
Balance at December 31, 2015
$ 10.19 
$ 12.00 
Vested or expected to vest at December 31, 2015
$ 10.38 
 
Exercisable at December 31, 2015
$ 11.81 
 
Additional Disclosures
 
 
Balance at period end, Weighted Average Remaining Contractual Term (in years)
3 years 10 months 5 days 
 
Balance at period end, Aggregate Intrinsic Value
$ 196 
 
Vested or expected to vest, Weighted Average Contractual Term (in years)
3 years 6 months 27 days 
 
Vested or expected to vest, Aggregate Intrinsic Value
162 
 
Exercisable, Weighted Average Contractual Term (in years)
1 year 4 months 2 days 
 
Exercisable, Aggregate Intrinsic Value
$ 16 
 
Stock Plans (Fair Value of Awards Weighted-Average Assumptions) (Details)
12 Months Ended
Dec. 31, 2015
Employee Stock Option
Dec. 31, 2013
Employee Stock Option
Dec. 31, 2014
Restricted Stock Units
Dec. 31, 2013
Minimum
Employee Stock Option
Dec. 31, 2013
Maximum
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
Market price at grant per share
 
 
$ 15.03 
 
 
Expected dividends
0.00% 
0.00% 
0.00% 
 
 
Expected volatility
 
 
65.00% 
 
 
Expected volatility, minimum
60.00% 
58.00% 
 
 
 
Expected volatility, maximum
61.00% 
69.00% 
 
 
 
Expected volatility, weighted average
60.00% 
63.00% 
 
 
 
Risk-free interest rate
1.60% 
 
0.86% 
1.10% 
2.10% 
Expected life (in years)
4 years 10 months 15 days 
2 years 10 months 15 days 
 
 
 
Stock Plans (Restricted Stock Award Activity) (Details) (Restricted Stock Awards, USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Restricted Stock Awards
 
 
 
Shares
 
 
 
Nonvested at December 31, 2014
528,000 
 
 
Granted
 
 
Vested
(180,000)
 
 
Forfeited
(103,000)
 
 
Nonvested at December 31, 2015
245,000 
528,000 
 
Weighted Average Grant Date Fair Value
 
 
 
Nonvested at December 31, 2014
$ 13.77 
 
 
Granted
 
$ 14.21 
$ 10.20 
Vested
$ 15.58 
 
 
Forfeited
$ 10.37 
 
 
Nonvested at December 31, 2015
$ 13.87 
$ 13.77 
 
Stock Plans Stock Plans (Restricted Stock Unit Awards Activity) (Details) (Restricted Stock Units, USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Restricted Stock Units
 
 
 
Shares
 
 
 
Nonvested at December 31, 2014
224,000 
 
 
Granted
829,000 
 
 
Vested
(80,000)
 
 
Forfeited
(88,000)
 
 
Nonvested at December 31, 2015
885,000 
224,000 
 
Weighted Average Grant Date Fair Value
 
 
 
Nonvested at December 31, 2014
$ 10.02 
 
 
Granted
$ 7.02 
$ 12.63 
$ 10.25 
Vested
$ 10.02 
 
 
Forfeited
$ 8.57 
 
 
Nonvested at December 31, 2015
$ 7.36 
$ 10.02 
 
Stock Plans (Stock-based Compensation Expense) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
$ 3,946 
$ 3,967 
$ 3,980 
Cost of revenue
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
644 
740 
1,079 
Selling, general and administrative
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
2,502 
2,362 
2,140 
Research and development
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
800 
865 
761 
Restricted Stock Units
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
1,462 
867 
592 
Restricted Stock Units |
Service-based restricted stock units
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
1,362 
749 
592 
Restricted Stock Units |
Performance-based restricted stock units
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
(28)
28 
Restricted Stock Units |
Market-condition restricted stock units
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
128 
90 
Employee Stock Option
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
232 
52 
827 
Restricted Stock Awards
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
1,974 
2,536 
2,491 
Employee Stock Purchase Plan
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Total stock-based compensation expense
$ 278 
$ 512 
$ 70 
Stock Plans (Fair Value of "Look Back" Option for ESPP Weighted-Average Assumptions) (Details) (Employee Stock Purchase Plan, USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Employee Stock Purchase Plan
 
 
 
Schedule of stock options and employee stock purchase plan weighted-average assumptions
 
 
 
Expected dividends
0.00% 
0.00% 
0.00% 
Stock price on valuation date
$ 5.97 
$ 8.47 
$ 7.77 
Expected volatility
57.00% 
77.00% 
46.00% 
Risk-free interest rate
0.29% 
0.08% 
0.07% 
Expected life (in years)
6 months 
0 years 4 months 25 days 
3 months 
Fair value per unit
$ 1.86 
$ 4.56 
$ 2.45 
Stock Plans (Reservation of Shares for Issuance) (Details)
Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Total reservation of shares under stock compensation plans
2,507,926 
2013 Omnibus Equity Incentive Plan
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Total reservation of shares under stock compensation plans
2,200,800 
2004 Employee Stock Purchase Plan
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Total reservation of shares under stock compensation plans
307,126 
Stock Offering Stock Offering (Textual) (Details) (USD $)
Share data in Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Jun. 3, 2014
Stock Offering [Line Items]
 
 
Value of Securities Permitted For Issuance Under Shelf Registration
 
$ 125,000,000 
Sale of Stock, Consideration Received on Transaction Upon Sale
10,000,000 
 
Sale of Stock, Percentage of Commissions to Sales Agent for Shares of Common Stock Sold Upon Sale
3.00% 
 
Shares Issued, Price Per Share
$ 5.46 
 
Proceeds from Issuance of Common Stock
9,600,000 
 
Payments of Stock Issuance Costs
$ 406,000 
 
Common Stock [Member]
 
 
Stock Offering [Line Items]
 
 
Proceeds from issuance of common stock, shares
1,831 
 
Income Taxes - Income (Loss) Before Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Tax Disclosure [Abstract]
 
 
 
United States
$ (35,074)
$ (19,301)
$ (5,270)
Foreign
17,344 
17,375 
13,762 
Income (loss) before income taxes
$ (17,730)
$ (1,926)
$ 8,492 
Income Taxes - Income Taxes Provision (Benefit) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Tax Disclosure [Abstract]
 
 
 
Federal, current
$ 0 
$ 0 
$ (258)
Federal, deferred
(4,297)
(5,608)
222 
Federal, total
(4,297)
(5,608)
(36)
State, current
State, deferred
62 
853 
88 
State, total
68 
859 
94 
Foreign, current
4,930 
2,453 
2,022 
Foreign, deferred
1,944 
311 
Foreign, total
4,938 
4,397 
2,333 
Valuation allowance
3,894 
4,698 
(239)
Tax provision
$ 4,603 
$ 4,346 
$ 2,152 
Income Taxes - Reconciliation (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Tax Disclosure [Abstract]
 
 
 
 
Taxes at federal statutory rate
 
$ (6,028)
$ (655)
$ 2,888 
State taxes, net of federal benefit
 
(236)
(90)
(29)
Effect of tax rate differential for foreign subsidiary
 
(2,641)
(3,570)
(2,531)
Valuation allowance, including tax benefits of stock activity
 
3,894 
4,698 
(239)
Foreign taxes on unremitted earnings
1,590 
2,085 
 
Stock-based compensation
 
134 
621 
460 
Foreign withholding taxes
 
180 
Return to provision adjustments
 
1,131 
536 
(920)
Subpart F income inclusion
 
5,914 
1,167 
2,446 
Other
 
170 
49 
77 
Tax provision
 
$ 4,603 
$ 4,346 
$ 2,152 
Income Taxes Income Taxes (Textual) (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Taxes [Line Items]
 
 
 
 
Valuation allowance
$ 64,199,000 
$ 68,093,000 
$ 64,199,000 
 
Increase (decrease) in valuation allowance
 
(3,900,000)
 
 
Operating loss carryforwards, federal
 
152,900,000 
 
 
Operating loss carryforwards, state
 
61,200,000 
 
 
Tax credit carryforwards research and development and other, federal
 
6,100,000 
 
 
Tax credit carryforwards research and development and other, state
 
7,700,000 
 
 
Excess tax benefits from employee stock purchase plan
 
3,500,000 
3,600,000 
 
Decrease in foreign tax
 
672,000 
665,000 
 
Benefit of the tax holiday on net income per share (diluted)
 
$ 0.02 
$ 0.02 
 
Foreign taxes on unremitted earnings
1,590,000 
2,085,000 
 
Unremitted earnings of a foreign subsidiary no longer considered indefinitely reinvested
31,800,000 
41,700,000 
31,800,000 
 
Unremitted earnings from foreign subsidiaries
 
10,200,000 
 
 
Deferred tax assets included in non-current assets
460,000 
491,000 
460,000 
 
Total unrecognized tax benefits
 
13,800,000 
 
 
Interest and penalties
 
119,000 
34,000 
126,000 
Germany
 
 
 
 
Income Taxes [Line Items]
 
 
 
 
Increase (decrease) in valuation allowance
 
316,000 
 
 
Deferred Tax Asset, Stock Option Deductions
 
 
 
 
Income Taxes [Line Items]
 
 
 
 
Valuation allowance
 
$ 15,500,000 
 
 
Income Taxes - Deferred Tax Assets and Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Deferred tax assets:
 
 
Tax loss carryforwards
$ 52,504 
$ 54,551 
Tax credit carryforwards
19 
19 
Uniform capitalization, contract and inventory related reserves
1,558 
1,728 
Accrued vacation
592 
669 
Stock-based compensation
1,466 
1,428 
Capitalized research and development
6,212 
Tax basis depreciation less book depreciation
1,019 
Intangible assets
1,533 
1,364 
Deferred revenue
254 
149 
Accrued foreign taxes
1,271 
Unrealized gains and losses
1,780 
Other
2,527 
2,668 
Total
68,955 
64,356 
Deferred tax liabilities:
 
 
Inventory deduction
(235)
(206)
Pension assets
(1,173)
(1,476)
Allowance for doubtful accounts
(378)
(407)
Tax basis depreciation less book depreciation
(192)
Withholding tax on undistributed earnings of foreign subsidiary
(3,675)
(1,590)
Unrealized gains and losses
(984)
Other
(1)
(241)
Total
(6,446)
(4,112)
Net deferred tax assets before valuation allowance
62,509 
60,244 
Valuation allowance
(68,093)
(64,199)
Net deferred tax liabilities
$ (5,584)
$ (3,955)
Income Taxes - Reconciliation of Unrecognized Tax Benefit (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
Beginning Balance
$ 11,939 
$ 12,634 
Increase in current period positions
1,466 
890 
Decrease in prior period positions
 
(1,585)
Increase in prior period positions
609 
 
Ending Balance
$ 14,014 
$ 11,939 
Leases (Future annual minimum rental commitments) (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Leases [Abstract]
 
 
 
Rental expense
$ 5,000,000 
$ 5,600,000 
$ 5,100,000 
Future annual minimum rental commitments
 
 
 
2015
4,316,000 
 
 
2016
3,652,000 
 
 
2017
2,274,000 
 
 
2018
2,266,000 
 
 
2019
1,266,000 
 
 
Thereafter
2,407,000 
 
 
Total
$ 16,181,000 
 
 
Pension and Other Postretirement Benefit Plans (Textual) (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Percentage of total contributions made by employees
45.00% 
 
 
Pension asset
$ 5,849,000 
$ 7,362,000 
 
Foreign Plan [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Employer contributions
640,000 
720,000 
722,000 
Pension asset
5,849,000 
7,362,000 
 
Accumulated benefit obligation
31,300,000 
31,300,000 
 
Estimated future employer contributions in 2015
$ 550,000 
 
 
Pension and Other Postretirement Benefit Plans (Changes in the pension benefit obligation and plan assets) (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Change in benefit obligation:
 
 
 
Defined Benefit Plan, Plan Amendments
$ 83,000 
$ 0 
 
Changes in plan assets:
 
 
 
Funded status at end of year
5,849,000 
7,362,000 
 
Foreign Plan [Member]
 
 
 
Change in benefit obligation:
 
 
 
Benefit obligation at beginning of year
33,006,000 
32,577,000 
 
Service cost
958,000 
846,000 
831,000 
Interest cost
332,000 
697,000 
504,000 
Plan participant contributions
523,000 
593,000 
 
Benefits paid
(3,064,000)
(3,018,000)
 
Actuarial loss
1,262,000 
4,974,000 
 
Effect of foreign currency translation
53,000 
(3,663,000)
 
Projected benefit obligation at end of year
33,153,000 
33,006,000 
32,577,000 
Changes in plan assets:
 
 
 
Fair value of plan assets at beginning of year
40,368,000 
43,145,000 
 
Actual return on plan assets
419,000 
3,478,000 
 
Company contributions
640,000 
720,000 
722,000 
Plan participant contributions
523,000 
593,000 
 
Benefits paid
(3,064,000)
(3,018,000)
 
Effect of foreign currency translation
116,000 
(4,550,000)
 
Fair value of plan assets at end of year
39,002,000 
40,368,000 
43,145,000 
Funded status at end of year
$ 5,849,000 
$ 7,362,000 
 
Pension and Other Postretirement Benefit Plans (Amounts recognized in balance sheet) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Defined Benefit Plan Disclosure [Line Items]
 
 
Net long-term pension asset
$ 5,849 
$ 7,362 
Foreign Plan [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Net long-term pension asset
5,849 
7,362 
Accumulated other comprehensive loss consists of the following:
 
 
Net prior service cost
837 
853 
Net loss
5,668 
3,897 
Accumulated other comprehensive loss before taxes
$ 6,505 
$ 4,750 
Pension and Other Postretirement Benefit Plans (Net periodic pension cost (income) and other amounts recognized in other comprehensive income (loss) before taxes) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Components of net periodic pension cost:
 
 
 
Net periodic pension cost
$ 412 
$ 319 
$ 20 
Foreign Plan [Member]
 
 
 
Components of net periodic pension cost:
 
 
 
Service cost
958 
846 
831 
Interest cost
332 
697 
504 
Expected return on plan assets
(1,551)
(1,784)
(1,539)
Prior service cost amortization
136 
140 
44 
Deferred loss amortization
45 
180 
Settlement cost
492 
420 
Net periodic pension cost
412 
319 
20 
Other amounts recognized in other comprehensive income (loss) before income taxes are as follows:
 
 
 
Prior service cost amortization
(136)
(140)
(44)
Loss (gain) on value of plan assets
1,131 
(1,695)
(2,977)
Actuarial (gain) loss on benefit obligation
1,262 
4,975 
(405)
Actuarial (gain) loss on benefit obligation
83 
978 
Settlement
(492)
(420)
Deferred loss amortization
(45)
(180)
Total recognized in other comprehensive income (loss), before taxes
1,803 
2,720 
(2,628)
Total recognized in net periodic pension cost and other comprehensive income (loss), before taxes
$ 2,215 
$ 3,039 
$ (2,608)
Pension and Other Postretirement Benefit Plans (Assumptions used to determine the benefit obligation and net periodic benefit cost) (Details) (Foreign Plan [Member])
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Weighted-average assumptions used to determine benefit obligation:
 
 
Discount rate
0.75% 
1.00% 
Rate of compensation increase
2.50% 
2.50% 
Weighted-average assumptions used to determine net periodic pension cost:
 
 
Discount rate
1.00% 
2.25% 
Expected long-term return on plan assets
3.75% 
4.25% 
Rate of compensation increase
2.50% 
2.50% 
Percentage of the fair value of total plan assets held in each major category of plan assets:
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
100.00% 
100.00% 
Equity Securities [Member]
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
29.00% 
33.00% 
Debt Securities [Member]
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
23.00% 
22.00% 
Real estate investment funds
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
43.00% 
40.00% 
Other [Member]
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
 
 
Percentage of the fair value of total plan assets held in each major category of plan assets:
5.00% 
5.00% 
Pension and Other Postretirement Benefit Plans (Plan assets) (Details) (Foreign Plan [Member])
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Defined Benefit Plan Disclosure [Line Items]
 
 
Expected future long-term rate of return on plan assets, percent
3.00% 
3.75% 
Swiss bonds [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
14.00% 
 
Historical asset rates of return (percentage)
0.21% 
0.76% 
Non-Swiss hedged bonds [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
10.00% 
 
Swiss equities [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
10.00% 
 
Historical asset rates of return (percentage)
3.52% 
4.10% 
Global equities [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
15.00% 
 
Hedged Foreign Bonds [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Historical asset rates of return (percentage)
0.00% 
1.04% 
Real Estate [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
40.00% 
 
Historical asset rates of return (percentage)
2.54% 
3.69% 
Unhedged Global Equities [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Historical asset rates of return (percentage)
5.21% 
5.45% 
Emerging Market Equities [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
5.00% 
 
Historical asset rates of return (percentage)
5.21% 
5.31% 
Alernative investments [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
4.00% 
 
Historical asset rates of return (percentage)
1.23% 
2.33% 
Cash and other short-term investments [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Target plan asset allocation, percentage
2.00% 
 
Historical asset rates of return (percentage)
0.23% 
1.32% 
Pension and Other Postretirement Benefit Plans (Expected benefit payments) (Details) (Foreign Plan [Member], USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Foreign Plan [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
2015
$ 1,360 
2016
1,372 
2017
1,431 
2018
1,411 
2019
1,340 
Years 2020 through 2024
7,392 
Total
$ 14,306 
Pension and Other Postretirement Benefit Plans (Fair values of the plans assets) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Financial instruments with significant Level 3 inputs
 
 
 
Foreign currency translation adjustment
$ 1,574 
$ (10,445)
$ 2,428 
Foreign Plan [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
39,002 
40,368 
43,145 
Financial instruments with significant Level 3 inputs
 
 
 
Beginning balance, December 31, 2014
16,049 
 
 
Total unrealized gains included in net gain
869 1
 
 
Foreign currency translation adjustment
(1)
 
 
Ending balance, December 31, 2015
16,917 
 
 
Foreign Plan [Member] |
Held in Swiss Franc, Euro and USD [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
808 
973 
 
Foreign Plan [Member] |
Equity Securities [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
12,292 
14,481 
 
Foreign Plan [Member] |
Real estate investment funds
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
16,917 
16,049 
 
Foreign Plan [Member] |
Fixed income / Bond securities:
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
8,949 
8,839 
 
Foreign Plan [Member] |
Other [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
36 
26 
 
Foreign Plan [Member] |
Active Market Prices (Level 1)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
21,060 
24,293 
 
Foreign Plan [Member] |
Active Market Prices (Level 1) |
Held in Swiss Franc, Euro and USD [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
808 
973 
 
Foreign Plan [Member] |
Active Market Prices (Level 1) |
Equity Securities [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
11,303 
14,481 
 
Foreign Plan [Member] |
Active Market Prices (Level 1) |
Real estate investment funds
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
 
Foreign Plan [Member] |
Active Market Prices (Level 1) |
Fixed income / Bond securities:
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
8,949 
8,839 
 
Foreign Plan [Member] |
Active Market Prices (Level 1) |
Other [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
 
Foreign Plan [Member] |
Significant Observable Inputs (Level 2)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
1,025 
26 
 
Foreign Plan [Member] |
Significant Observable Inputs (Level 2) |
Held in Swiss Franc, Euro and USD [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
 
Foreign Plan [Member] |
Significant Observable Inputs (Level 2) |
Equity Securities [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
989 
 
Foreign Plan [Member] |
Significant Observable Inputs (Level 2) |
Real estate investment funds
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
 
Foreign Plan [Member] |
Significant Observable Inputs (Level 2) |
Fixed income / Bond securities:
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
 
Foreign Plan [Member] |
Significant Observable Inputs (Level 2) |
Other [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
36 
26 
 
Foreign Plan [Member] |
Significant Unobservable Inputs (Level 3)
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
16,917 
16,049 
 
Foreign Plan [Member] |
Significant Unobservable Inputs (Level 3) |
Held in Swiss Franc, Euro and USD [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
 
Foreign Plan [Member] |
Significant Unobservable Inputs (Level 3) |
Equity Securities [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
 
Foreign Plan [Member] |
Significant Unobservable Inputs (Level 3) |
Real estate investment funds
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
16,917 
16,049 
 
Foreign Plan [Member] |
Significant Unobservable Inputs (Level 3) |
Fixed income / Bond securities:
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
 
Foreign Plan [Member] |
Significant Unobservable Inputs (Level 3) |
Other [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Net assets of pension plan
$ 0 
$ 0 
 
Pension and Other Postretirement Benefit Plans (Contributory employee savings plan) (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Defined Contribution Plan Disclosure [Line Items]
 
 
 
Matching contribution, contributory employee savings plan, amount
$ 637,000 
$ 547,000 
$ 506,000 
Postretirement Benefit Plan [Member] |
United States [Member]
 
 
 
Defined Contribution Plan Disclosure [Line Items]
 
 
 
Company matching contribution percentage
50.00% 
 
 
Legal Proceedings (Textual) (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 3 Months Ended
Jul. 13, 2015
Federal Shareholder Derivative Settlement
Jun. 30, 2013
Federal Shareholder Derivative Settlement
shareholder_derivative_actions
Jun. 30, 2013
State Shareholder Derivative Matter
shareholder_derivative_actions
May 7, 2013
State Shareholder Derivative Matter
shareholder_derivative_actions
Loss Contingencies [Line Items]
 
 
 
 
Number of shareholder class actions filed
 
 
Fee award amount
$ 1.1 
 
 
 
Number of actions
 
 
 
Restructuring and Exit Costs (Narrative) (Details) (USD $)
3 Months Ended 12 Months Ended
Jun. 30, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Total expected restructuring charges
 
$ 1,400,000 
 
 
Amount paid in restructuring expenses
 
1,010,000 
 
 
Liability recorded related to the exit of leased space
 
2,647,000 
 
 
Restructuring and exit costs
2,300,000 
2,512,000 
Accelerated depreciation expense
 
434,000 
 
 
Restructuring liability
 
1,337,000 
 
 
Minimum
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Total expected restructuring charges
 
2,600,000 
 
 
Maximum
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Total expected restructuring charges
 
3,300,000 
 
 
Facility Closing
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Amount paid in restructuring expenses
 
 
 
Square feet of manufacturing facility
 
60,000 
 
 
Liability recorded related to the exit of leased space
 
1,208,000 
 
 
Restructuring liability
 
1,043,000 
 
 
Facility Closing |
Minimum
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Total expected restructuring charges
 
1,200,000 
 
 
Facility Closing |
Maximum
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Total expected restructuring charges
 
1,900,000 
 
 
Employee Severance Costs
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Total expected restructuring charges
 
1,300,000 
 
 
Amount paid in restructuring expenses
 
1,010,000 
 
 
Liability recorded related to the exit of leased space
 
1,439,000 
 
 
Restructuring and exit costs
 
1,300,000 
 
 
Restructuring liability
 
294,000 
 
 
Employee Relocation
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Total expected restructuring charges
 
125,000 
 
 
Accelerated Depreciation
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Total expected restructuring charges
 
560,000 
 
 
Capital Expenditures
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Total expected restructuring charges
 
1,600,000 
 
 
Other Current Liabilities |
Facility Closing
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring liability
 
231,000 
 
 
Other Noncurrent Liabilities |
Facility Closing
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring liability
 
$ 812,000 
 
 
Restructuring and Exit Costs (Schedule of Severance and Exit Costs) (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Restructuring Cost and Reserve [Line Items]
 
Costs incurred
$ 2,647,000 
Amounts paid
(1,010,000)
Accruals released
(135,000)
Other non-cash adjustments
(165,000)
Restructuring liability
1,337,000 
Employee Severance Costs
 
Restructuring Cost and Reserve [Line Items]
 
Costs incurred
1,439,000 
Amounts paid
(1,010,000)
Accruals released
(135,000)
Other non-cash adjustments
Restructuring liability
294,000 
Facility Closing
 
Restructuring Cost and Reserve [Line Items]
 
Costs incurred
1,208,000 
Amounts paid
Accruals released
Other non-cash adjustments
(165,000)
Restructuring liability
$ 1,043,000 
Unaudited Quarterly Financial Information (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Operating Income (Loss) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 49,830,000 
$ 45,076,000 
$ 37,796,000 
$ 34,670,000 
$ 52,918,000 
$ 41,593,000 
$ 46,074,000 
$ 46,001,000 
$ 167,372,000 
$ 186,586,000 
$ 193,534,000 
Gross profit
14,250,000 
14,256,000 
12,153,000 
10,303,000 
18,503,000 
15,480,000 
16,597,000 
17,863,000 
50,962,000 
68,443,000 
75,290,000 
Net income (loss)
(2,167,000)1
(1,449,000)2
(9,376,000)3
(9,341,000)4
(2,118,000)5
(3,292,000)1
(1,181,000)6
319,000 7
(22,333,000)
(6,272,000)
6,340,000 
Basic and diluted net loss per share
$ (0.07)
$ (0.05)
$ (0.31)
$ (0.32)
$ (0.07)
$ (0.11)
$ (0.04)
$ 0.01 
 
 
 
Stock-based compensation expense
1,000,000 
1,100,000 
1,000,000 
839,000 
1,000,000 
1,000,000 
1,200,000 
755,000 
3,946,000 
3,967,000 
3,980,000 
Deferred Tax Liabilities, Undistributed Foreign Earnings
3,675,000 
 
 
 
1,590,000 
 
 
 
3,675,000 
1,590,000 
 
Restructuring and exit costs
 
 
2,300,000 
 
 
 
 
 
2,512,000 
Repatriation of Foreign Earnings, Amount
 
 
 
 
$ 1,590,000 
 
 
 
$ 2,085,000 
 
$ 0 
Schedule II - Valuation and Qualifying Accounts (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Allowance for Doubtful Accounts [Member]
 
 
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Balance at the Beginning of the Year ($)
$ 143 
$ 134 
$ 157 
Charged to Expense ($)
304 
61 
22 
Acquisitions/ Transfers and Other ($)
Write-offs Net of Recoveries ($)
(196)
(52)
(45)
Balance at the End of the Year ($)
252 
143 
134 
Allowance for Excess and Obsolete Inventories [Member]
 
 
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Balance at the Beginning of the Year ($)
4,019 
3,570 
1,941 
Charged to Expense ($)
475 
892 
2,023 
Acquisitions/ Transfers and Other ($)
(1)
(24)
12 
Write-offs Net of Recoveries ($)
(1,114)
(419)
(406)
Balance at the End of the Year ($)
$ 3,379 
$ 4,019 
$ 3,570