v3.20.2

Summary of Significant Accounting Policies and Other Information (Tables)

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Adjustments on the Line Items Within Financial Statements

The effects of the adjustments on the line items within the Company’s Consolidated Balance Sheet at December 31, 2019 are as follows:

(in thousands)						December 31, 2019 (As Previously Reported)						Adjustment						December 31, 2019 (As Revised)
Additional paid-in capital						$	165,527					$	(8,800)					$	156,727
Treasury stock						$	(10,141)					$	8,800					$	(1,341)

The effects of the adjustments on the line items within the Company’s Consolidated Statement of Stockholders’ Equity for the year ended December 31, 2019 are as follows:

(in thousands)						Additional Paid-in Capital																		Treasury Stock
						As previously reported						Adjustment						As revised						As previously reported						Adjustment						As revised
Year ended December 31, 2019
Balance at December 31, 2018						$	126,412					$	(6,688)					$	119,724					$	(9,849)					$	6,688					$	(3,161)
Stock-based compensation expense *						1,540						(2,112)						(572)						(292)						2,112						1,820
Balance at December 31, 2019						$	165,527					$	(8,800)					$	156,727					$	(10,141)					$	8,800					$	(1,341)

*There was no impact to total stock-based compensation expense as a result of the adjustment.

The effects of the adjustments on the line items within the Company’s Consolidated Statement of Stockholders’ Equity (unaudited) for the three month periods ended June 30, 2020, March 31, 2020, and September 30, 2019, the six month period ended June 30, 2020, and the nine month period ended September 30, 2019, respectively, are as follows:

(in thousands)						Additional Paid-in Capital																		Treasury Stock
						As previously reported						Adjustment						As revised						As previously reported						Adjustment						As revised
Three months ended June 30, 2020 (unaudited)
Balance at March 31, 2020						$	165,691					$	(8,800)					$	156,891					$	(10,149)					$	8,800					$	(1,349)
Balance at June 30, 2020						$	165,852					$	(8,800)					$	157,052					$	(10,154)					$	8,800					$	(1,354)
Three months ended March 31, 2020 (unaudited)
Balance at December 31, 2019						$	165,527					$	(8,800)					$	156,727					$	(10,141)					$	8,800					$	(1,341)
Balance at March 31, 2020						$	165,691					$	(8,800)					$	156,891					$	(10,149)					$	8,800					$	(1,349)
Three months ended September 30, 2019 (unaudited)
Balance at June 30, 2019						$	165,437					$	(6,907)					$	158,530					$	(10,325)					$	6,907					$	(3,418)
Stock-based compensation expense *						(14)						(1,893)						(1,907)						187						1,893						2,080
Balance at September 30, 2019						$	165,380					$	(8,800)					$	156,580					$	(10,138)					$	8,800					$	(1,338)
Six months ended June 30, 2020 (unaudited)
Balance at December 31, 2019						$	165,527					$	(8,800)					$	156,727					$	(10,141)					$	8,800					$	(1,341)
Balance at June 30, 2020						$	165,852					$	(8,800)					$	157,052					$	(10,154)					$	8,800					$	(1,354)
Nine months ended September 30, 2019 (unaudited)
Balance at December 31, 2018						$	126,412					$	(6,688)					$	119,724					$	(9,849)					$	6,688					$	(3,161)
Stock-based compensation expense *						1,390						(2,112)						(722)						(289)						2,112						1,823
Balance at September 30, 2019						$	165,380					$	(8,800)					$	156,580					$	(10,138)					$	8,800					$	(1,338)

*There was no impact to total stock-based compensation expense as a result of the adjustment.

Schedules of Concentration of Risk, by Risk Factor

The following table presents customers individually accounting for more than 10% of the Company’s net sales:

						For the Three Months Ended September 30,												For the Nine Months Ended September 30,
						2020						2019						2020						2019
Customer A						17		%				15		%				10		%				12		%
Customer B						11		%				11		%				14		%				15		%
Customer C						11		%				**						11		%				**
Customer D						**						11		%				**						**
Customer E						**						11		%				**						**

The following table presents customers individually accounting for more than 10% of the Company’s accounts receivable:

						As of September 30, 2020						As of December 31, 2019
Customer A						**						49		%
Customer B						16		%				**
Customer C						18		%				**

The following table presents suppliers individually accounting for more than 10% of the Company’s purchases:

						For the Three Months Ended September 30,												For the Nine Months Ended September 30,
						2020						2019						2020						2019
Supplier A						38		%				29		%				25		%				20		%
Supplier B						**						12		%				**						12		%

**Less than 10% of the total

Schedule of Inventory, Current

Inventories consisted of the following:

(in thousands) Inventories						As of September 30, 2020						As of December 31, 2019
Raw materials						$	104,286					$	90,677
Work in process						5,014						2,007
Finished goods						22,751						19,119
Total inventories						132,051						111,803
Inventory allowance						(3,224)						(2,964)
Inventories, net						$	128,827					$	108,839

Activity in the Company’s inventory allowance was as follows:

(in thousands)						For the Nine Months Ended September 30,
Inventory Allowance						2020						2019
Balance at beginning of period						$	2,964					$	5,730
Charged to expense						1,272						560
Write-offs						(1,012)						(2,027)
Balance at end of period						$	3,224					$	4,263

Schedule of Other Accrued Liabilities

Other accrued liabilities consisted of the following:

(in thousands) Other Accrued Liabilities						As of September 30, 2020						As of December 31, 2019
Accrued product warranty						$	16,210					$	17,142
Litigation reserves *						2,535						5,020
Contract liabilities						52,502						26,898
Accrued compensation and benefits						1,978						6,599
Operating lease liabilities						3,802						3,789
Accrued interest expense						917						1,087
Other						5,105						5,495
Total						$	83,049					$	66,030

*As of September 30, 2020 litigation reserves primarily consisted of reserves related to the settlement of the SEC and USAO investigations that were resolved in September 2020 and other matters. As of December 31, 2019, litigation reserves primarily consisted of reserves related to the settlement of the SEC and USAO investigations and the Federal Derivative Litigation. The Company concluded that insurance recovery was probable related to $0.2 million and $1.9 million of the litigation reserves as of September 30, 2020 and December 31, 2019, respectively, and recognized full recovery of the reserved amounts in Prepaid expenses and other current assets. See Note 9. Commitments and Contingencies for additional information.

Schedule of Accrued Product Warranty

Accrued product warranty activities are presented below:

(in thousands)												For the Nine Months Ended September 30,
Accrued Product Warranty																		2020						2019
Balance at beginning of period																		$	25,501					$	23,102
Current year provision *																		13,949						7,706
Changes in estimates for preexisting warranties **																		8,756						2,730
Payments made during the period																		(15,357)						(7,244)
Balance at end of period																		32,849						26,294
Less: Current portion																		16,210						14,677
Noncurrent accrued product warranty																		$	16,639					$	11,617

*Warranty costs, net of supplier recoveries, were $18.2 million and $7.4 million for the nine months ended September 30, 2020 and 2019, respectively. Supplier recoveries were $4.6 million and $3.0 million for the nine months ended September 30, 2020 and 2019, respectively.

**Change in estimates for preexisting warranties reflect changes in the Company’s estimate of warranty costs for products sold in prior periods. Such adjustments typically occur when claims experience deviates from historical and expected trends. The Company’s warranty liability is generally affected by failure rates, repair costs and the timing of failures. Future events and circumstances related to these factors could materially change the estimates and require adjustments to the warranty liability. In addition, new product launches require a greater use of judgment in developing estimates until historical experience becomes available. The Company recorded a benefit for changes in estimates of preexisting warranties of $1.2 million, or $0.05 per diluted share, for the three months ended September 30, 2020, and charges of $8.8 million, or $0.38 per diluted share, for the nine months ended September 30, 2020. The Company recorded charges for changes in estimates of preexisting warranties of $2.7 million, or $0.13 per diluted share, for the nine months ended September 30, 2019.

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