XML 92 R26.htm IDEA: XBRL DOCUMENT v2.4.1.9
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)
 12 Months Ended
Dec. 31, 2014
Accounting Policies [Abstract]  
Schedule of Consideration Transferred

 

  (a) Consideration transferred:

 

Cash

 $ 14,678   

Fair value of Contingent Consideration

   3,434   
  

 

 

  

Total

 $ 18,112   
  

 

 

  
Schedule of Purchase Price Allocation to Net Tangible and Intangible Assets Based on their Estimated Fair Values
(b) Under business combination accounting, the total purchase price was allocated to RivieraWaves’ net tangible and intangible assets based on their estimated fair values as set forth below. The excess of the purchase price over the net tangible and identifiable intangible assets was recorded as goodwill.

 

Cash and cash equivalents

 $ 1,189   

Bank deposits

   1,384   

Other assets

   2,898   

Intangible assets

   6,161   

Goodwill

   10,114   
  

 

 

  

Total assets

   21,746   

Current liabilities

   (2,201 ) 

Deferred tax liabilities, net

   (1,433 ) 
  

 

 

  

Total liabilities

   (3,634 ) 

Total

 $ 18,112   
  

 

 
Components of Intangible Assets Associated with Acquisition

The following table sets forth the components of intangible assets associated with the RivieraWaves acquisition:

 

     Fair
value		  

Core technologies (1)

    $ 5,796   

Customer relationships (2)

      272   

Customer backlog (3)

      93   
  

 

 

  

Total intangible assets

 $ 6,161   
  

 

 

  

 

(1) Core technologies represent a combination of RivieraWaves’ processes and trade secrets related to the design and development of its products. This proprietary know-how can be leveraged to develop new technology and improve the Company’s products and is amortized using the straight line method.
(2) Customer relationships represent the underlying relationships and agreements with RivieraWaves’ installed customer base and are amortized using the straight line method.
(3) Customer backlog represents an order or production backlog arises from contracts or sales orders and are amortized using the straight line method.
Annual Depreciation Rates of Property, Plant and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates:

 

    

%

Computers, software and equipment

    10-33

Office furniture and equipment

    7-25

Leasehold improvements

    10
   (the shorter of the expected lease term or useful economic life)
Assumptions Used to Estimate Fair Value of Stock Options Granted

The fair value for the Company’s stock options and SARs (other than share issuances in connection with the employee stock purchase plan, as detailed below) granted to employees and non-employees directors was estimated using the following assumptions:

 

     2012    2013    2014

Expected dividend yield

    0%    0%    0%

Expected volatility

    43%-58%    38%-54%    33%-52%

Risk-free interest rate

    0.1%-1.2%    0.1%-2.5%    0.1%-2.5%

Expected forfeiture (employees)

    10%    10%    10%

Expected forfeiture (executives)

    5%    5%    5%

Contractual term of up to

    10 years    10 years    10 years

Suboptimal exercise multiple (employees)

    2.1    2.1    2.1

Suboptimal exercise multiple (executives)

    2.4    2.4    2.4
Assumptions Used to Estimate Fair Value of Employee Stock Purchase Plan

The fair value for rights to purchase shares of common stock under the Company’s employee stock purchase plan was estimated on the date of grant using the following assumptions:

 

     2012    2013    2014

Expected dividend yield

    0%    0%    0%

Expected volatility

    41%-61%    34%-53%    29%-52%

Risk-free interest rate

    0.1%-0.6%    0.1%-0.2%    0.1%-0.2%

Expected forfeiture

    0%    0%    0%

Contractual term of up to

    24 months    24 months    24 months
Equity-Based Compensation Expenses Related to Stock Options, SARs and Employee Stock Purchase Plan

During the years ended December 31, 2012, 2013 and 2014, the Company recognized equity-based compensation expense related to stock options, SARs and employee stock purchase plan as follows:

 

     Year ended December 31,  
     2012      2013      2014  

Cost of revenue

    $ 241       $ 312       $ 193   

Research and development, net

      1,810         2,014         2,027   

Sales and marketing

      1,036         1,311         909   

General and administrative

      1,996         2,283         1,882   
  

 

 

     

 

 

     

 

 

  

Total equity-based compensation expense

 $ 5,083    $ 5,920    $ 5,011   
  

 

 

     

 

 

     

 

 

  
Calculation of Basic and Diluted Net Income (Loss) Per Share

Diluted net income (loss) per share is computed based on the weighted average number of shares of common stock outstanding during each year, plus dilutive potential shares of common stock considered outstanding during the year, in accordance with FASB ASC No. 260, “Earnings Per Share.”

 

     Year ended December 31,  
     2012      2013      2014  

Numerator:

         

Net income (loss)

    $ 13,685       $ 6,685       $ (819 ) 

Denominator (in thousands):

         

Weighted-average common stock outstanding

      22,798         22,009         20,622   

Effect of stock options and stock appreciation rights

      559         456         —     
  

 

 

     

 

 

     

 

 

  

Diluted weighted-average common stock outstanding

   23,357      22,465      20,622   
  

 

 

     

 

 

     

 

 

  

Basic net income (loss) per share

 $ 0.60    $ 0.30    $ (0.04 ) 
  

 

 

     

 

 

     

 

 

  

Diluted net income (loss) per share

 $ 0.59    $ 0.30    $ (0.04 )