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Revenue from Contracts with Customers | 12 Months Ended
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Dec. 28, 2019
Revenue from Contract with Customer [Abstract] |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Disaggregation of Revenue The following tables provide disaggregation of revenue from contracts with customers by major class of revenue, revenue by channel, and by geographical market, based on ship-to location of the end customer, where available, and ship-to location of distributor otherwise:
| Major Class of Revenue |  | Year Ended *
| (In thousands) |  | December 28, 2019 |  | December 29, 2018 |  | December 30, 2017
| Product |  | $ | 382,548 |  | 95% |  | $ | 380,468 |  | 95% |  | $ | 356,502 |  | 92%
| Licensing and services |  | 21,545 |  | 5% |  | 18,331 |  | 5% |  | 29,459 |  | 8%
| Total revenue |  | $ | 404,093 |  | 100% |  | $ | 398,799 |  | 100% |  | $ | 385,961 |  | 100%
| Revenue by Channel |  | Year Ended *
| (In thousands) |  | December 28, 2019 |  | December 29, 2018 |  | December 30, 2017
| Product revenue - Distributors |  | $ | 331,941 |  | 82% |  | $ | 330,719 |  | 83% |  | $ | 297,736 |  | 77%
| Product revenue - Direct |  | 50,607 |  | 13% |  | 49,749 |  | 12% |  | 58,766 |  | 15%
| Licensing and services revenue |  | 21,545 |  | 5% |  | 18,331 |  | 5% |  | 29,459 |  | 8%
| Total revenue |  | $ | 404,093 |  | 100% |  | $ | 398,799 |  | 100% |  | $ | 385,961 |  | 100%
| Revenue by Geographical Market |  | Year Ended * |
| (In thousands) |  | December 28, 2019 |  | December 29, 2018 |  | December 30, 2017
| Asia |  | $ | 298,765 |  | 74% |  | $ | 298,119 |  | 75% |  | $ | 277,638 |  | 72%
| Europe |  | 47,392 |  | 12% |  | 45,546 |  | 11% |  | 44,547 |  | 12%
| Americas |  | 57,936 |  | 14% |  | 55,134 |  | 14% |  | 63,776 |  | 16%
| Total revenue |  | $ | 404,093 |  | 100% |  | $ | 398,799 |  | 100% |  | $ | 385,961 |  | 100%
* | Amounts in periods prior to fiscal 2018 have not been adjusted under the modified retrospective method of adopting ASC 606 and, therefore, are presented under GAAP in effect during that period.
Contract balances Our contract assets relate to our rights to consideration for licenses and royalties due to us as a member of the HDMI consortium, with collection dependent on events other than the passage of time, such as collection of licenses and royalties from customers by the HDMI licensing agent. The balance results primarily from the amount of estimated revenue related to HDMI that we have recognized to date, but which has not yet been collected by the agent. Contract assets are recorded in Prepaid expenses and other current assets in our Consolidated Balance Sheets. The following table summarizes activity during the periods presented:
(In thousands) |
Balance as of December 31, 2017 | $ | 7,515 |
Revenues recorded during the period | 11,618 |
Transferred to accounts receivable or collected | (9,990 | )
Contract assets as of December 29, 2018 | 9,143 |
Revenues recorded during the period | 17,356 |
Transferred to Accounts receivable or collected | (20,930 | )
Contract assets as of December 28, 2019 | $ | 5,569 |
Contract liabilities are included in Accounts payable and accrued expenses on our Consolidated Balance Sheets. The following table summarizes activity during the periods presented:
(In thousands) |
Contract liabilities as of December 31, 2017 | $ | — |
Accruals for estimated future stock rotation and scrap returns | 4,281 |
Less: Release of accruals for recognized stock rotation and scrap returns | (2,667 | )
Contract liabilities as of December 29, 2018 | 1,614 |
Accruals for estimated future stock rotation and scrap returns | 5,763 |
Less: Release of accruals for recognized stock rotation and scrap returns | (5,064 | )
Contract liabilities as of December 28, 2019 | $ | 2,313 |
The impact to revenue in fiscal years 2019 and 2018 from the release of accruals for recognized stock rotation and scrap returns was offset by the processing of return merchandise authorizations totaling $5.0 million and $3.7 million, respectively, yielding a net revenue increase of approximately $0.1 million and a net revenue decrease of approximately $1.0 million, respectively. Impact of Adoption of ASC 606 We adopted ASC 606 effective on December 31, 2017, the first day of our 2018 fiscal year, using the modified retrospective method. ASC 606 requires us to disclose the effect of adoption on each financial statement line item in the year of adoption as compared to the revenue recognition accounting standard that was in effect previously, and an explanation of the reasons for significant changes. The significant impacts of the new standard were to accelerate the recognition of revenues on both sales to certain distributors and certain licensing activities. As a result of adopting this standard, we recorded a cumulative effect adjustment of $27.4 million as a reduction to Accumulated deficit on December 31, 2017, resulting primarily from a net $20.2 million of previously deferred distributor revenues and costs and $6.6 million of previously unrecognized licensing revenues. The effect of adoption on each financial statement line item is detailed in the tables below:
Condensed Consolidated Statement of Operations
|  | Year ended December 29, 2018
(In thousands, except per share data) |  | As reported under new standard |  | Adjustments |  | Pro forma as if previous standard was in effect
Product revenue |  | $ | 380,468 |  |  | $ | (14,098 | ) |  | $ | 366,370 |
Licensing and services revenue |  | 18,331 |  |  | (1,478 | ) |  | 16,853 |
Cost of product revenue |  | 179,101 |  |  | (6,399 | ) |  | 172,702 |
Net loss |  | $ | (26,322 | ) |  | $ | (9,177 | ) |  | $ | (35,499 | )
Net loss per share, basic and diluted |  | $ | (0.21 | ) |  | $ | (0.07 | ) |  | $ | (0.28 | )
Condensed Consolidated Balance Sheets
|  | As of December 29, 2018
(In thousands) |  | As reported under new standard |  | Adjustments |  | Pro forma as if previous standard was in effect
Accounts receivable, net of allowance for doubtful accounts |  | $ | 60,890 |  |  | $ | 6,600 |  |  | $ | 67,490 |
Inventories |  | 67,096 |  |  | 78 |  |  | 67,174 |
Prepaid expenses and other current assets |  | 27,762 |  |  | (9,775 | ) |  | 17,987 |
Total assets |  | $ | 623,687 |  |  | $ | (3,097 | ) |  | $ | 620,590 |
Accounts payable and accrued expenses (includes restructuring) |  | $ | 51,763 |  |  | $ | (1,156 | ) |  | $ | 50,607 |
Deferred income and allowances on sales to distributors |  | — |  |  | 34,637 |  |  | 34,637 |
Accumulated deficit |  | (476,783 | ) |  | (36,578 | ) |  | (513,361 | )
Total liabilities and stockholders' equity |  | $ | 623,687 |  |  | $ | (3,097 | ) |  | $ | 620,590 |
Condensed Consolidated Statement of Cash Flows
|  | Year ended December 29, 2018
(In thousands) |  | As reported under new standard |  | Adjustments |  | Pro forma as if previous standard was in effect
Cash flows from operating activities: |  |  |  |  |  |
Net loss |  | $ | (26,322 | ) |  | $ | (9,177 | ) |  | $ | (35,499 | )
Accounts receivable, net |  | (3,978 | ) |  | (8,408 | ) |  | (12,386 | )
Inventories |  | 13,177 |  |  | (448 | ) |  | 12,729 |
Prepaid expenses and other assets |  | (11,667 | ) |  | 2,260 |  |  | (9,407 | )
Accounts payable and accrued expenses (includes restructuring) |  | 13,325 |  |  | (1,614 | ) |  | 11,711 |
Deferred income and allowances on sales to distributors |  | $ | — |  |  | $ | 17,387 |  |  | $ | 17,387 |

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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