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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2019
Commitments And Contingencies Disclosure [Abstract] |
Commitments and Contingencies |
10. | Commitments and Contingencies:
Factoring The Company maintains arrangements under which eligible accounts receivable in Japan are sold without recourse to unrelated third-party financial institutions. These receivables were not included in the consolidated balance sheets as the criteria for sale treatment had been met. The Company sold $9,018 of receivables during the year ended December 31, 2019. There were no material gains or losses on the sale of such receivables. There were no amounts due from such third-party financial institutions at December 31, 2019. Intellectual Property Indemnification Obligations The Company has entered into agreements with customers that include limited intellectual property indemnification obligations that are customary in the industry. These guarantees generally require the Company to compensate the other party for certain damages and costs incurred as a result of third-party intellectual property claims arising from these transactions. The nature of the intellectual property indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay to its customers. Historically, the Company has not made any indemnification payments under such agreements and no amount has been accrued in the accompanying consolidated financial statements with respect to these indemnification guarantees. Warranty Reserves The Company generally provides a warranty on its products for a period of 12 to 14 months against defects in material and workmanship. The Company estimates the costs that may be incurred during the warranty period and records a liability in the amount of such costs at the time revenue is recognized. The Company’s estimate is based primarily on historical experience. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Settlements of warranty reserves are generally associated with sales that occurred during the 12 to 14 months prior to the year-end and warranty accruals are related to sales during the same year. Changes in the Company’s warranty reserves are as follows:
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |
Balance, beginning of the period |  | $ | 2,441 |  |  | $ | 2,427 |
Accruals |  |  | 4,265 |  |  |  | 3,486 |
Warranty liability assumed in Merger |  |  | 4,227 |  |  |  | — |
Usage |  |  | (4,585 | ) |  |  | (3,472 | )
Balance, end of the period |  | $ | 6,348 |  |  | $ | 2,441 |
Legal Matters From time to time, the Company is subject to legal proceedings and claims in the ordinary course of business. The following reflects an overview of the material activities with regard to these matters. Optical Solutions Inc. v. Nanometrics Incorporated (Case No. 18-cv-00417-BLF): On August 2, 2017, Nanometrics was named as defendant in a complaint filed in New Hampshire Superior Court (“Complaint”). The Complaint, brought by Optical Solutions, Inc. (“OSI”), alleges claims arising from a purported exclusive purchase contract between OSI and Nanometrics pertaining to certain product. On September 18, 2017, Nanometrics removed the action to the United States District Court for the District of New Hampshire. On September 25, 2017, Nanometrics moved to transfer the Complaint to the District Court for the Northern District of California (the “Court”). On December 20, 2017, Nanometrics filed its complaint against OSI in the California Superior Court for the County of Santa Clara alleging claims arising from OSI’s breach of certain purchase orders. Nanometrics’ complaint was later removed by OSI to the Northern District of California. On May 29, 2018, the District Court of New Hampshire issued an order granting Nanometrics’ motion to transfer the Complaint to the Northern District of California and denying Nanometrics’ motion to dismiss the Complaint without prejudice. On June 14, 2018, the Complaint was consolidated with Nanometrics’ complaint against OSI. On August 9, 2018, OSI filed an Amended Complaint. On September 19, 2018, Nanometrics filed a motion to dismiss OSI’s Amended Complaint for failure to state a claim. Nanometrics’ motion to dismiss was heard on February 28, 2019. On March 5, 2019, the Court granted Nanometrics’ Motion to Dismiss with leave to amend. OSI filed a Second Amended Complaint on March 29, 2019. Nanometrics filed a motion to dismiss OSI’s Second Amended Complaint on May 31, 2019. In October of 2019, Nanometrics was renamed Onto Innovation Inc. as a result of the Merger. Thereafter, the Company’s second motion to dismiss was heard on November 14, 2019. On November 26, 2019 the Court granted the Company’s Motion to dismiss with leave to amend. OSI filed a Third Amended Complaint on January 21, 2020. Trial has been set for May 16, 2022. At this time, the Company does not anticipate the outcome of this matter to have a material impact on its financial position, results of operations, or cash flows. Following the announcement of the proposed merger transaction between Nanometrics Incorporated and Rudolph Technologies, Inc., two purported class action complaints and three complaints were filed on behalf of Rudolph’s stockholders against Rudolph and its directors; of those five complaints, three were filed in the United States District Court for the District of Delaware, one in the United States District Court for the District of New Jersey, and one in the United States District Court for the District of Massachusetts. One of those five complaints also named Nanometrics and the subsidiary formed to effectuate the proposed merger transaction as defendants. A sixth complaint was filed on behalf of a Nanometrics stockholder against Nanometrics and its directors in the United States District Court for the Northern District of California. The complaints are captioned as follows: Stein v. Rudolph Technologies, Inc., et al. (D. Del.); Rosenblatt et al. v. Rudolph Technologies, Inc., et al. (D. Del.); Stein et al. v. Rudolph Technologies, Inc., et al. (D. Del.); Parikh v. Rudolph Technologies, Inc., et al. (D.N.J.); Roy v. Rudolph Technologies, Inc., et al. (D. Mass.); and Bryden-Moore v. Nanometrics Inc., et al. (N.D. Cal.). The Company refers to these actions collectively as the “Shareholder Actions.” The complaints in the Shareholder Actions generally asserted claims under Sections 14(a) and 20(a) of the Exchange Act challenging the adequacy of certain disclosures made in the version of the joint proxy statement/prospectus filed with the SEC on August 15, 2019, or, solely with respect to the complaint captioned Roy v. Rudolph Technologies, Inc., et al. (D. Mass.), the version of the joint proxy statement/prospectus filed with the SEC on September 10, 2019. The complaints generally sought, among other relief, an injunction preventing Rudolph from holding the Rudolph special meeting or consummating the transaction, an injunction preventing the Company from consummating the transaction, damages in the event that the merger is consummated, and attorneys’ fees. On October 11, 2019, plaintiffs in each of the Shareholder Actions agreed in principle to dismiss their claims in connection with the issuance of certain supplemental disclosures regarding the transaction and reserved the right to seek attorneys’ fees. The supplemental disclosures were filed with the Securities and Exchange Commission that same day. Subsequently, each of the plaintiffs filed a Notice of Voluntary Dismissal and a negotiation regarding the collective plaintiffs’ mootness fee claims was finalized. The payment for the plaintiffs’ mootness fee claims, which was immaterial, was thereafter made and the Shareholder Actions have been closed. Royalty Agreements Under various licensing agreements, the Company is obligated to pay royalties based on net sales of products sold. There are no minimum annual royalty payments. Royalty expense amounted to $1,429, $1,904 and $1,117 for the years ended December 31, 2019, 2018 and 2017, respectively. Open and Committed Purchase Orders The Company has open and committed purchase orders of $97,877 as of December 31, 2019. Line of Credit The Company has a credit agreement with a bank that provides for a line of credit which is secured by the marketable securities the Company has with the bank. The Company is permitted to borrow up to 70% of the value of eligible securities held at the time the line of credit is accessed. The available line of credit as of December 31, 2019 was approximately $91,258 with an available interest rate of 3.3%. The credit agreement is available to the Company until such time that either party terminates the arrangement at their discretion. The Company has not utilized the line of credit to date.

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