ASPEN AEROGELS INC, 10-Q filed on 5/6/2016
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 31, 2016
Apr. 30, 2016
Document And Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Mar. 31, 2016 
 
Document Fiscal Year Focus
2016 
 
Document Fiscal Period Focus
Q1 
 
Trading Symbol
ASPN 
 
Entity Registrant Name
ASPEN AEROGELS INC 
 
Entity Central Index Key
0001145986 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
23,233,762 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Current assets:
 
 
Cash and cash equivalents
$ 29,357 
$ 32,804 
Accounts receivable, net of allowances of $126 and $89
23,207 
20,624 
Inventories
6,139 
6,532 
Prepaid expenses and other current assets
707 
1,687 
Total current assets
59,410 
61,647 
Property, plant and equipment, net
79,539 
78,322 
Other assets
94 
105 
Total assets
139,043 
140,074 
Current liabilities:
 
 
Capital leases, current portion
54 
67 
Accounts payable
12,745 
10,684 
Accrued expenses
3,441 
5,568 
Deferred revenue
431 
681 
Other current liabilities
241 
409 
Total current liabilities
16,912 
17,409 
Capital leases, excluding current portion
30 
40 
Other long-term liabilities
136 
151 
Total liabilities
17,078 
17,600 
Commitments and contingencies (Note 6)
   
   
Stockholders' equity:
 
 
Preferred stock, $0.00001 par value; 5,000,000 shares authorized, no shares issued and outstanding at March 31, 2016 and December 31, 2015;
   
   
Common stock, $0.00001 par value; 125,000,000 shares authorized, 23,233,762 shares issued and outstanding at March 31, 2016; 23,184,852 shares issued and outstanding at December 31, 2015
Additional paid-in capital
529,263 
527,975 
Accumulated deficit
(407,298)
(405,501)
Total stockholders' equity
121,965 
122,474 
Total liabilities and stockholders' equity
$ 139,043 
$ 140,074 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Statement of Financial Position [Abstract]
 
 
Allowance for doubtful accounts
$ 126 
$ 89 
Preferred stock, par value
$ 0.00001 
$ 0.00001 
Preferred stock, shares authorized
5,000,000 
5,000,000 
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value
$ 0.00001 
$ 0.00001 
Common stock, shares authorized
125,000,000 
125,000,000 
Common stock, shares issued
23,233,762 
23,184,852 
Common stock, shares outstanding
23,233,762 
23,184,852 
Consolidated Statements of Operations (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Revenue:
 
 
Product
$ 32,286 
$ 23,211 
Research services
535 
289 
Total revenue
32,821 
23,500 
Cost of revenue:
 
 
Product
25,992 
18,845 
Research services
302 
141 
Gross profit
6,527 
4,514 
Operating expenses:
 
 
Research and development
1,310 
1,304 
Sales and marketing
3,062 
2,332 
General and administrative
3,913 
3,623 
Total operating expenses
8,285 
7,259 
Loss from operations
(1,758)
(2,745)
Interest expense, net
(39)
(45)
Total interest expense, net
(39)
(45)
Net loss
$ (1,797)
$ (2,790)
Net loss per share:
 
 
Basic
$ (0.08)
$ (0.12)
Diluted
$ (0.08)
$ (0.12)
Weighted-average common shares outstanding:
 
 
Basic and diluted
23,063,471 
22,992,273 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Cash flows from operating activities:
 
 
Net loss
$ (1,797)
$ (2,790)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
Depreciation and amortization
2,410 
2,184 
Stock compensation expense
1,370 
1,295 
Other
(13)
 
Changes in operating assets and liabilities:
 
 
Accounts receivable
(2,291)
(1,336)
Inventories
393 
(1,008)
Prepaid expenses and other assets
966 
(339)
Accounts payable
1,508 
(471)
Accrued expenses
(2,203)
(2,263)
Deferred revenue
(542)
1,070 
Other long-term liabilities
(15)
 
Net cash used in operating activities
(214)
(3,658)
Cash flows from investing activities:
 
 
Capital expenditures
(3,128)
(10,531)
Purchases of marketable securities
 
(2,501)
Net cash used in investing activities
(3,128)
(13,032)
Cash flows from financing activities:
 
 
Repayment of obligations under capital lease
(23)
(19)
Payments made for employee restricted stock tax withholdings
(82)
 
Net cash used in financing activities
(105)
(19)
Net decrease in cash and cash equivalents
(3,447)
(16,709)
Cash and cash equivalents at beginning of period
32,804 
49,719 
Cash and cash equivalents at end of period
29,357 
33,010 
Supplemental disclosures of cash flow information:
 
 
Interest paid
52 
45 
Income taxes paid
Supplemental disclosures of non-cash activities:
 
 
Changes in accrued capital expenditures
484 
(341)
Advanced billings
$ 292 
 
Description of Business and Basis of Presentation
Description of Business and Basis of Presentation

(1) Description of Business and Basis of Presentation

Nature of Business

Aspen Aerogels, Inc. (the Company) is an energy technology company that designs, develops and manufactures innovative, high-performance aerogel insulation. The Company also conducts research and development related to aerogel technology supported by funding from several agencies of the U.S. government and other institutions in the form of research and development contracts.

The Company maintains its corporate offices in Northborough, Massachusetts. The Company has two wholly owned subsidiaries: Aspen Aerogels Rhode Island, LLC and Aspen Aerogels Germany, GmbH.

Unaudited Interim Financial Information

The accompanying unaudited interim consolidated financial statements include the accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and accompanying notes in our Annual Report on Form 10-K for the year ended December 31, 2015 (the Annual Report), filed with the Securities and Exchange Commission on March 4, 2016.

In the opinion of the Company’s management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments that are of a normal recurring nature and necessary for the fair statement of the Company’s financial position as of March 31, 2016 and the results of its operations and cash flows for the three months ended March 31, 2016 and 2015. The Company has evaluated events through the date of this filing.

The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016 or any other period.

There have been no changes to the Company’s significant accounting policies described in the Annual Report that have had a material impact on the Company’s consolidated financial statements and notes thereto.

Principles of Consolidation

The accompanying consolidated financial statements, which have been prepared in accordance with U.S. GAAP, include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements requires the Company to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include allowances for doubtful accounts, sales returns and allowances, inventory valuation, the carrying amount of property and equipment, stock-based compensation and deferred income taxes. The Company evaluates its estimates and assumptions on an on-going basis using historical experience and other factors, including the current economic environment, which are believed to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets and declines in business investment increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

Significant Accounting Policies
Significant Accounting Policies

(2) Significant Accounting Policies

Cash and Cash Equivalents

Cash equivalents include short-term, highly liquid instruments, which consist of money market accounts. All cash and cash equivalents are maintained with major financial institutions in North America. Deposits with these financial institutions may exceed the amount of insurance provided on such deposits; however, these deposits typically may be redeemed upon demand and, therefore, bear minimal risk.

Deferred Revenue

The Company records deferred revenue for product sales when (i) the Company has delivered products but other revenue recognition criteria have not been satisfied, (ii) payments have been received in advance of products being delivered or (iii) amounts are billed in accordance with contractual terms in advance of products being delivered.

Stock-based Compensation

Stock-based compensation expense is measured at the grant date based on the fair value of the award. Expense is recognized on a straight-line basis over the requisite service period for all awards with service conditions. For performance-based awards, the grant date fair value is recognized as expense when the condition is probable of being achieved, and then on a graded basis over the requisite service period. The Company uses the Black-Scholes option-pricing model to determine the fair value of service-based option awards, which requires a number of complex and subjective assumptions including fair value of the underlying security, the expected volatility of the underlying security, a risk-free interest rate and the expected term of the option. The fair value of restricted stock and restricted stock unit grants is determined using the closing trading price of the Company’s common stock on the date of grant. The fair value of awards containing market conditions is determined using a Monte Carlo simulation model based upon the terms of the conditions, the expected volatility of the underlying security, and other relevant factors.

During the three months ended March 31, 2016, the Company granted 420,284 restricted common stock units (RSUs) and non-qualified stock options (NSOs) to purchase 259,469 shares of common stock to employees under the 2014 Employee, Director and Consultant Equity Incentive Plan (the 2014 Equity Plan). The employee RSUs and NSOs will vest over a three year period.

Stock-based compensation is included in cost of sales or operating expenses, as applicable, and consists of the following:

 

     Three Months Ended
March 31,
 
     2016      2015  

Cost of product revenue

   $ 192         191   

Research and development expenses

     140         172   

Sales and marketing expenses

     261         230   

General and administrative expenses

     777         702   
  

 

 

    

 

 

 

Total stock-based compensation

   $ 1,370       $ 1,295   
  

 

 

    

 

 

 

Pursuant to the “evergreen” provisions of the 2014 Equity Plan, the number of shares of common stock authorized for issuance under the plan automatically increased by 463,697 shares to 6,069,201 shares effective January 1, 2016.

As of March 31, 2016, 2,619,142 shares of common stock were reserved for issuance upon the exercise or vesting, as appropriate, of outstanding stock-based awards granted under the 2014 Equity Plan. In addition, 93,233 shares of common stock are reserved for issuance upon the exercise of outstanding stock options granted under the Company’s 2001 Equity Plan. Any cancellations or forfeitures of the options outstanding under the 2001 Equity Plan will result in the shares reserved for issuance upon exercise of such options becoming available for grant under the 2014 Equity Plan. As of March 31, 2016, there were 3,011,912 shares of common stock available for grant under the 2014 Equity Plan.

 

Earnings per Share

The Company calculates net loss per common share based on the weighted-average number of common shares outstanding during each period. Potential common stock equivalents are determined using the treasury stock method. The weighted-average number of common shares included in the computation of diluted net loss gives effect to all potentially dilutive common equivalent shares, including outstanding stock options, RSUs and warrants. Common equivalent shares are excluded from the computation of diluted net loss per share if their effect is antidilutive.

Segments

Operating segments are identified as components of an enterprise about which separate, discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company’s chief operating decision maker reviews consolidated operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company views its operations and manages its business as one operating segment.

Information about the Company’s revenues, based on shipment destination or services location, is presented in the following table:

 

     Three Months Ended
March 31,
 
     2016      2015  
     (In thousands)  

Revenue:

     

U.S.

   $ 11,413       $ 10,684   

International

     21,408         12,816   
  

 

 

    

 

 

 

Total

   $ 32,821       $ 23,500   
  

 

 

    

 

 

 

Recently Issued Accounting Standards

In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The amendment is to simplify several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in ASU 2016-09 are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently assessing the impact of ASU 2016-09 on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (FASB ASU 2016-02). FASB ASU 2016-02 changes the accounting for leases and includes a requirement to record all leases on the consolidated balance sheets as assets and liabilities. This update is effective for fiscal years beginning after December 15, 2018. Early application is permitted. The Company has not yet selected a transition method and is evaluating the effect the updated standard will have on its consolidated financial statements and related disclosures.

In August 2015, the FASB issued a deferral of ASU 2014-09, Revenue from Contracts with Customers. The standard will eliminate the transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. As a result of the deferral, public entities are required to apply the revenue recognition standard for annual reporting period beginning on or after December 15, 2017, including interim periods within that annual reporting period. Early application is not permitted. We have not yet selected a transition method and are evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures.

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

Inventories
Inventories

(3) Inventories

Inventories consist of the following:

 

     March 31,
2016
     December 31,
2015
 
     (In thousands)  

Raw materials

   $ 3,979       $ 4,432   

Finished goods

     2,160         2,100   
  

 

 

    

 

 

 

Total

   $ 6,139       $ 6,532   
  

 

 

    

 

 

 

Property, Plant and Equipment, Net
Property, Plant and Equipment, Net

(4) Property, Plant and Equipment, Net

Property, plant and equipment consist of the following:

 

     March 31,
2016
     December 31,
2015
     Useful
life
     (In thousands)

Construction in progress

   $ 8,152       $ 5,138       —  

Buildings

     23,885         23,884       30 years

Machinery and equipment

     105,177         104,658       3-10 years

Computer equipment and software

     6,966         6,888       3 years
  

 

 

    

 

 

    

Total

     144,180         140,568      

Accumulated depreciation

     (64,641      (62,246   
  

 

 

    

 

 

    

Property, plant and equipment, net

   $ 79,539       $ 78,322      
  

 

 

    

 

 

    

Depreciation expense was $2.4 million and $2.2 million for the three months ended March 31, 2016 and 2015, respectively.

Construction in progress totaled $8.2 million and $5.1 million at March 31, 2016 and December 31, 2015, respectively. Construction in progress included engineering designs and other pre-construction costs for the planned manufacturing facility in Statesboro, Georgia of $4.7 million and $2.3 million at March 31, 2016 and December 31, 2015, respectively.

Accrued Expenses
Accrued Expenses

(5) Accrued Expenses

Accrued expenses consist of the following:

 

     March 31,
2016
     December 31,
2015
 
     (In thousands)  

Employee compensation

   $ 2,272       $ 4,184   

Other accrued expenses

     1,169         1,384   
  

 

 

    

 

 

 

Total

   $ 3,441       $ 5,568   
  

 

 

    

 

 

 

Commitments and Contingencies
Commitments and Contingencies

(6) Commitments and Contingencies

Asset Retirement Obligation

The Company has asset retirement obligations (ARO) arising from requirements to perform certain asset retirement activities upon the termination of its Northborough, Massachusetts facility lease and upon disposal of certain machinery and equipment. The liability was initially measured at fair value and subsequently adjusted for accretion expense and changes in the amount or timing of the estimated cash flows. The corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s remaining useful life.

 

A summary of ARO activity consists of the following:

 

     Three Months
Ended

March 31, 2016
 
     (In thousands)  

Balance at beginning of period

   $ 397   

Settlement costs

     (156 )
  

 

 

 

Balance at end of period

   $ 241   
  

 

 

 

During the three months ended March 31, 2016, the Company incurred approximately $0.2 million in settlement costs in support of completing the restoration of 31,577 square feet of space formerly utilized for manufacturing operations in the Northborough, Massachusetts facility. This manufacturing space will be vacated and returned to the landlord on or before June 30, 2016. The remaining ARO reserve totaling $0.2 million is the maximum obligation to restore the remaining space in the Northborough facility currently utilized by the Company as its corporate headquarters.

Revolving Line of Credit

The Company maintains a revolving credit facility with Silicon Valley Bank which expires on August 31, 2016. The Company may borrow up to $20 million under the facility subject to compliance with certain covenants and borrowing base limitations. At the Company’s election, the interest rate applicable to borrowings under the revolving credit facility may be based on the prime rate or LIBOR. Prime rate-based rates vary from prime rate plus 0.75% per annum to prime rate plus 1.75% per annum, while LIBOR-based rates vary from LIBOR plus 3.75% per annum to LIBOR plus 4.25% per annum. In addition, the Company is required to pay a monthly unused revolving line facility fee of 0.5% per annum of the average unused portion of the revolving credit facility. The revolving credit facility is secured by a first priority security interest in all assets of the Company, including those at the East Providence facility, except for certain exclusions.

At both March 31, 2016 and December 31, 2015, the Company had no amounts drawn on the revolving credit facility. The Company had outstanding letters of credit backed by the revolving credit facility of $2.7 million at March 31, 2016 and December 31, 2015, which reduce the funds otherwise available to the Company under the facility. Based on the available borrowing base, the effective amount available to the Company under the revolving credit facility at March 31, 2016 was $13.0 million after consideration of the $2.7 million of outstanding letters of credit. Under the revolving credit facility, the Company is required to comply with financial covenants relating to, among other items, minimum Adjusted EBITDA, maximum unfinanced capital expenditures and other non-financial covenants. At March 31, 2016, the Company was in compliance with all such financial covenants.

Letters of Credit

Pursuant to the terms of its Northborough, Massachusetts facility lease, the Company has been required to provide the landlord with letters of credit securing certain obligations. In addition, the Company has been required to provide certain customers with letters of credit securing obligations under commercial contracts. The Company had letters of credit outstanding for $2.7 million at March 31, 2016 and December 31, 2015. These letters of credit are secured by the Company’s revolving credit facility.

Litigation

The Company is, from time to time, a party to litigation that arises in the normal course of its business operations. See Part II, Item 1 (“Legal Proceedings”) of this Quarterly Report on Form 10-Q for a description of certain of the Company’s current legal proceedings. The Company is not presently a party to any litigation for which it believes a loss is probable requiring an amount to be accrued or a possible loss contingency requiring disclosure.

Net Loss Per Share
Net Loss Per Share

(7) Net Loss Per Share

The computation of basic and diluted net loss per share consists of the following:

 

     Three Months Ended
March 31,
 
     2016      2015  
    

(In thousands, except

share and per share data)

 

Numerator:

     

Net loss

   $ (1,797 )    $ (2,790 )
  

 

 

    

 

 

 

Denominator:

     

Weighted average shares outstanding, basic and diluted

     23,063,471         22,992,273   
  

 

 

    

 

 

 

Net loss per share, basic and diluted

   $ (0.08    $ (0.12
  

 

 

    

 

 

 

Potentially dilutive common shares that were excluded from the computation of diluted net loss per share because they were anti-dilutive consist of the following:

 

     Three Months Ended
March 31,
 
     2016      2015  

Common stock options

     1,952,879         1,231,542   

Restricted common stock units

     759,510         524,847   

Common stock warrants

     131         131   

Restricted common stock awards

     132,130         54,089   
  

 

 

    

 

 

 

Total

     2,844,650         1,810,609   
  

 

 

    

 

 

 

In the table above, anti-dilutive shares consist of those common stock equivalents that have (i) an exercise price above the average stock price for the period or (ii) related average unrecognized stock compensation expense sufficient to buy-back the entire amount of shares. The Company excludes the shares issued in connection with restricted stock awards from the calculation of basic weighted average common shares outstanding until the restrictions lapse.

Income Taxes
Income Taxes

(8) Income Taxes

The Company incurred net operating losses and recorded a full valuation allowance against net deferred tax assets for all periods presented. Accordingly, the Company has not recorded a provision for federal or state income taxes.

Description of Business and Basis of Presentation (Policies)

Nature of Business

Aspen Aerogels, Inc. (the Company) is an energy technology company that designs, develops and manufactures innovative, high-performance aerogel insulation. The Company also conducts research and development related to aerogel technology supported by funding from several agencies of the U.S. government and other institutions in the form of research and development contracts.

The Company maintains its corporate offices in Northborough, Massachusetts. The Company has two wholly owned subsidiaries: Aspen Aerogels Rhode Island, LLC and Aspen Aerogels Germany, GmbH.

Unaudited Interim Financial Information

The accompanying unaudited interim consolidated financial statements include the accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and accompanying notes in our Annual Report on Form 10-K for the year ended December 31, 2015 (the Annual Report), filed with the Securities and Exchange Commission on March 4, 2016.

In the opinion of the Company’s management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments that are of a normal recurring nature and necessary for the fair statement of the Company’s financial position as of March 31, 2016 and the results of its operations and cash flows for the three months ended March 31, 2016 and 2015. The Company has evaluated events through the date of this filing.

The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016 or any other period.

There have been no changes to the Company’s significant accounting policies described in the Annual Report that have had a material impact on the Company’s consolidated financial statements and notes thereto.

Principles of Consolidation

The accompanying consolidated financial statements, which have been prepared in accordance with U.S. GAAP, include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements requires the Company to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include allowances for doubtful accounts, sales returns and allowances, inventory valuation, the carrying amount of property and equipment, stock-based compensation and deferred income taxes. The Company evaluates its estimates and assumptions on an on-going basis using historical experience and other factors, including the current economic environment, which are believed to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets and declines in business investment increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

Cash and Cash Equivalents

Cash equivalents include short-term, highly liquid instruments, which consist of money market accounts. All cash and cash equivalents are maintained with major financial institutions in North America. Deposits with these financial institutions may exceed the amount of insurance provided on such deposits; however, these deposits typically may be redeemed upon demand and, therefore, bear minimal risk.

Deferred Revenue

The Company records deferred revenue for product sales when (i) the Company has delivered products but other revenue recognition criteria have not been satisfied, (ii) payments have been received in advance of products being delivered or (iii) amounts are billed in accordance with contractual terms in advance of products being delivered.

Stock-based Compensation

Stock-based compensation expense is measured at the grant date based on the fair value of the award. Expense is recognized on a straight-line basis over the requisite service period for all awards with service conditions. For performance-based awards, the grant date fair value is recognized as expense when the condition is probable of being achieved, and then on a graded basis over the requisite service period. The Company uses the Black-Scholes option-pricing model to determine the fair value of service-based option awards, which requires a number of complex and subjective assumptions including fair value of the underlying security, the expected volatility of the underlying security, a risk-free interest rate and the expected term of the option. The fair value of restricted stock and restricted stock unit grants is determined using the closing trading price of the Company’s common stock on the date of grant. The fair value of awards containing market conditions is determined using a Monte Carlo simulation model based upon the terms of the conditions, the expected volatility of the underlying security, and other relevant factors.

During the three months ended March 31, 2016, the Company granted 420,284 restricted common stock units (RSUs) and non-qualified stock options (NSOs) to purchase 259,469 shares of common stock to employees under the 2014 Employee, Director and Consultant Equity Incentive Plan (the 2014 Equity Plan). The employee RSUs and NSOs will vest over a three year period.

Stock-based compensation is included in cost of sales or operating expenses, as applicable, and consists of the following:

 

     Three Months Ended
March 31,
 
     2016      2015  

Cost of product revenue

   $ 192         191   

Research and development expenses

     140         172   

Sales and marketing expenses

     261         230   

General and administrative expenses

     777         702   
  

 

 

    

 

 

 

Total stock-based compensation

   $ 1,370       $ 1,295   
  

 

 

    

 

 

 

Pursuant to the “evergreen” provisions of the 2014 Equity Plan, the number of shares of common stock authorized for issuance under the plan automatically increased by 463,697 shares to 6,069,201 shares effective January 1, 2016.

As of March 31, 2016, 2,619,142 shares of common stock were reserved for issuance upon the exercise or vesting, as appropriate, of outstanding stock-based awards granted under the 2014 Equity Plan. In addition, 93,233 shares of common stock are reserved for issuance upon the exercise of outstanding stock options granted under the Company’s 2001 Equity Plan. Any cancellations or forfeitures of the options outstanding under the 2001 Equity Plan will result in the shares reserved for issuance upon exercise of such options becoming available for grant under the 2014 Equity Plan. As of March 31, 2016, there were 3,011,912 shares of common stock available for grant under the 2014 Equity Plan.

Earnings per Share

The Company calculates net loss per common share based on the weighted-average number of common shares outstanding during each period. Potential common stock equivalents are determined using the treasury stock method. The weighted-average number of common shares included in the computation of diluted net loss gives effect to all potentially dilutive common equivalent shares, including outstanding stock options, RSUs and warrants. Common equivalent shares are excluded from the computation of diluted net loss per share if their effect is antidilutive.

Segments

Operating segments are identified as components of an enterprise about which separate, discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company’s chief operating decision maker reviews consolidated operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company views its operations and manages its business as one operating segment.

Information about the Company’s revenues, based on shipment destination or services location, is presented in the following table:

 

     Three Months Ended
March 31,
 
     2016      2015  
     (In thousands)  

Revenue:

     

U.S.

   $ 11,413       $ 10,684   

International

     21,408         12,816   
  

 

 

    

 

 

 

Total

   $ 32,821       $ 23,500   
  

 

 

    

 

 

 

Recently Issued Accounting Standards

In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The amendment is to simplify several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in ASU 2016-09 are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently assessing the impact of ASU 2016-09 on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (FASB ASU 2016-02). FASB ASU 2016-02 changes the accounting for leases and includes a requirement to record all leases on the consolidated balance sheets as assets and liabilities. This update is effective for fiscal years beginning after December 15, 2018. Early application is permitted. The Company has not yet selected a transition method and is evaluating the effect the updated standard will have on its consolidated financial statements and related disclosures.

In August 2015, the FASB issued a deferral of ASU 2014-09, Revenue from Contracts with Customers. The standard will eliminate the transaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. As a result of the deferral, public entities are required to apply the revenue recognition standard for annual reporting period beginning on or after December 15, 2017, including interim periods within that annual reporting period. Early application is not permitted. We have not yet selected a transition method and are evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures.

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

Significant Accounting Policies (Tables)

Stock-based compensation is included in cost of sales or operating expenses, as applicable, and consists of the following:

 

     Three Months Ended
March 31,
 
     2016      2015  

Cost of product revenue

   $ 192         191   

Research and development expenses

     140         172   

Sales and marketing expenses

     261         230   

General and administrative expenses

     777         702   
  

 

 

    

 

 

 

Total stock-based compensation

   $ 1,370       $ 1,295   
  

 

 

    

 

 

 

Information about the Company’s revenues, based on shipment destination or services location, is presented in the following table:

 

     Three Months Ended
March 31,
 
     2016      2015  
     (In thousands)  

Revenue:

     

U.S.

   $ 11,413       $ 10,684   

International

     21,408         12,816   
  

 

 

    

 

 

 

Total

   $ 32,821       $ 23,500   
  

 

 

    

 

 

 
Inventories (Tables)
Schedule of Inventories

Inventories consist of the following:

 

     March 31,
2016
     December 31,
2015
 
     (In thousands)  

Raw materials

   $ 3,979       $ 4,432   

Finished goods

     2,160         2,100   
  

 

 

    

 

 

 

Total

   $ 6,139       $ 6,532   
  

 

 

    

 

 

Property, Plant and Equipment, Net (Tables)
Summary of Property, Plant and Equipment

Property, plant and equipment consist of the following:

 


     March 31,
2016
     December 31,
2015
     Useful
life
     (In thousands)

Construction in progress

   $ 8,152       $ 5,138       —  

Buildings

     23,885         23,884       30 years

Machinery and equipment

     105,177         104,658       3-10 years

Computer equipment and software

     6,966         6,888       3 years
  

 

 

    

 

 

    

Total

     144,180         140,568      

Accumulated depreciation

     (64,641      (62,246   
  

 

 

    

 

 

    

Property, plant and equipment, net

   $ 79,539       $ 78,322      
  

 

 

    

 

 

    
Accrued Expenses (Tables)
Schedule of Accrued Expenses

Accrued expenses consist of the following:

 

     March 31,
2016
     December 31,
2015
 
     (In thousands)  

Employee compensation

   $ 2,272       $ 4,184   

Other accrued expenses

     1,169         1,384   
  

 

 

    

 

 

 

Total

   $ 3,441       $ 5,568   
  

 

 

    

 

 

 

Commitments and Contingencies (Tables)
Summary of ARO Activity

A summary of ARO activity consists of the following:

 

     Three Months
Ended

March 31, 2016
 
     (In thousands)  

Balance at beginning of period

   $ 397   

Settlement costs

     (156 )
  

 

 

 

Balance at end of period

   $ 241   
  

 

 

 

Net Loss Per Share (Tables)

The computation of basic and diluted net loss per share consists of the following:

 

     Three Months Ended
March 31,
 
     2016      2015  
    

(In thousands, except

share and per share data)

 

Numerator:

     

Net loss

   $ (1,797 )    $ (2,790 )
  

 

 

    

 

 

 

Denominator:

     

Weighted average shares outstanding, basic and diluted

     23,063,471         22,992,273   
  

 

 

    

 

 

 

Net loss per share, basic and diluted

   $ (0.08    $ (0.12
  

 

 

    

 

 

 

Potentially dilutive common shares that were excluded from the computation of diluted net loss per share because they were anti-dilutive consist of the following:

 

     Three Months Ended
March 31,
 
     2016      2015  

Common stock options

     1,952,879         1,231,542   

Restricted common stock units

     759,510         524,847   

Common stock warrants

     131         131   

Restricted common stock awards

     132,130         54,089   
  

 

 

    

 

 

 

Total

     2,844,650         1,810,609   
  

 

 

    

 

 

 

Description of Business and Basis of Presentation - Additional Information (Detail)
3 Months Ended
Mar. 31, 2016
Subsidiary
Regulatory Assets [Abstract]
 
Number of Subsidiaries
Significant Accounting Policies - Additional Information (Detail)
3 Months Ended 0 Months Ended 3 Months Ended
Mar. 31, 2016
Segment
Jan. 1, 2016
2014 Equity Plan [Member]
Mar. 31, 2016
2014 Equity Plan [Member]
Jan. 1, 2016
2014 Equity Plan [Member]
Mar. 31, 2016
2014 Equity Plan [Member]
Restricted Stock Units [Member]
Mar. 31, 2016
2014 Equity Plan [Member]
Non-Qualified Stock Options [Member]
Mar. 31, 2016
2001 Equity Plan [Member]
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
 
Authorized number of shares increased by
 
463,697 
 
 
 
 
 
Increased number of shares available for grant
 
 
3,011,912 
6,069,201 
 
 
 
Stock-based awards granted
 
 
 
 
420,284 
 
 
Shares issued for 2014 Equity Plan
 
 
 
 
 
259,469 
 
Stock-based award vesting period
 
 
 
 
3 years 
3 years 
 
Shares reserved for issuance
 
 
2,619,142 
 
 
 
93,233 
Number of segment
 
 
 
 
 
 
Significant Accounting Policies - Summary of Stock Based Compensation Included in Cost of Sales or Operating Expenses (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
Total stock-based compensation
$ 1,370 
$ 1,295 
Cost of Product Revenue [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
Total stock-based compensation
192 
191 
Research and Development Expenses [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
Total stock-based compensation
140 
172 
Sales and Marketing Expenses [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
Total stock-based compensation
261 
230 
General and Administrative Expenses [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
Total stock-based compensation
$ 777 
$ 702 
Significant Accounting Policies - Schedule of Revenues, Based on Shipment Destination or Research Services Location (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Segment Reporting Information [Line Items]
 
 
Revenue
$ 32,821 
$ 23,500 
U.S. [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenue
11,413 
10,684 
International [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenue
$ 21,408 
$ 12,816 
Inventories - Schedule of Inventories (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Inventory Disclosure [Abstract]
 
 
Raw materials
$ 3,979 
$ 4,432 
Finished goods
2,160 
2,100 
Total
$ 6,139 
$ 6,532 
Property, Plant and Equipment, Net - Summary of Property, Plant and Equipment (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment, gross
$ 144,180 
$ 140,568 
Accumulated depreciation
(64,641)
(62,246)
Property, plant and equipment, net
79,539 
78,322 
Buildings [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment, gross
23,885 
23,884 
Property, plant and equipment, Useful life
30 years 
 
Machinery and Equipment [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment, gross
105,177 
104,658 
Computer Equipment and Software [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment, gross
6,966 
6,888 
Property, plant and equipment, Useful life
3 years 
 
Construction in Progress [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment, gross
$ 8,152 
$ 5,138 
Minimum [Member] |
Machinery and Equipment [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment, Useful life
3 years 
 
Maximum [Member] |
Machinery and Equipment [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property, plant and equipment, Useful life
10 years 
 
Property, Plant and Equipment, Net - Additional Information (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Property, Plant and Equipment [Line Items]
 
 
 
Depreciation expense
$ 2,400,000 
$ 2,200,000 
 
Property, plant and equipment, gross
144,180,000 
 
140,568,000 
Construction in Progress [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, plant and equipment, gross
8,152,000 
 
5,138,000 
Statesboro, Georgia [Member] |
Construction in Progress [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property, plant and equipment, gross
$ 4,700,000 
 
$ 2,300,000 
Accrued Expenses - Schedule of Accrued Expenses (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Accrued Liabilities, Current [Abstract]
 
 
Employee compensation
$ 2,272 
$ 4,184 
Other accrued expenses
1,169 
1,384 
Total
$ 3,441 
$ 5,568 
Commitments and Contingencies - Summary of ARO Activity (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
 
Balance at beginning of period
$ 397 
Settlement costs
(156)
Balance at end of period
$ 241 
Commitments and Contingencies - Additional Information (Detail) (USD $)
3 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Commitments And Contingencies [Line Items]
 
 
Number of square feet for lease
31,577 
 
Settlement costs
$ 156,000 
 
ARO reserve
200,000 
 
Silicon Valley Bank Credit Facility [Member] |
Revolving Credit Facility [Member]
 
 
Commitments And Contingencies [Line Items]
 
 
Line of credit agreement, extended maturity date
Aug. 31, 2016 
 
Maximum increased borrowing amount
20,000,000 
 
Percentage of unused revolving line facility fee
0.50% 
 
Interest rate description
The interest rate applicable to borrowings under the revolving credit facility may be based on the prime rate or LIBOR. Prime rate-based rates vary from prime rate plus 0.75% per annum to prime rate plus 1.75% per annum, while LIBOR-based rates vary from LIBOR plus 3.75% per annum to LIBOR plus 4.25% per annum. 
 
Line of credit facility amount withdrawn
Letters of credit outstanding
2,700,000 
2,700,000 
Line of credit facility borrowing capacity
$ 13,000,000 
 
Silicon Valley Bank Credit Facility [Member] |
Revolving Credit Facility [Member] |
Minimum [Member] |
Prime Rate [Member]
 
 
Commitments And Contingencies [Line Items]
 
 
Additional interest rate per annum
0.75% 
 
Silicon Valley Bank Credit Facility [Member] |
Revolving Credit Facility [Member] |
Minimum [Member] |
LIBOR Rate [Member]
 
 
Commitments And Contingencies [Line Items]
 
 
Additional interest rate per annum
3.75% 
 
Silicon Valley Bank Credit Facility [Member] |
Revolving Credit Facility [Member] |
Maximum [Member] |
Prime Rate [Member]
 
 
Commitments And Contingencies [Line Items]
 
 
Additional interest rate per annum
1.75% 
 
Silicon Valley Bank Credit Facility [Member] |
Revolving Credit Facility [Member] |
Maximum [Member] |
LIBOR Rate [Member]
 
 
Commitments And Contingencies [Line Items]
 
 
Additional interest rate per annum
4.25% 
 
Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Numerator:
 
 
Net loss
$ (1,797)
$ (2,790)
Denominator:
 
 
Weighted average shares outstanding, basic and diluted
23,063,471 
22,992,273 
Net loss per share, basic and diluted
$ (0.08)
$ (0.12)
Net Loss Per Share - Summary of Potentially Dilutive Common Shares Excluded from Computation of Diluted Net Loss Per Share (Detail)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Anti-dilutive Securities
2,844,650 
1,810,609 
Common Stock Options [Member]
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Anti-dilutive Securities
1,952,879 
1,231,542 
Restricted Common Stock Units [Member]
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Anti-dilutive Securities
759,510 
524,847 
Common Stock Warrants [Member]
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Anti-dilutive Securities
131 
131 
Restricted Common Stock Awards [Member]
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Anti-dilutive Securities
132,130 
54,089