XML 20 R9.htm IDEA: XBRL DOCUMENT
v3.20.2

Description of the Company and Basis of Presentation | 9 Months Ended
--- | ---
Sep. 30, 2020
Description of the Company and Basis of Presentation |
Description of the Company and Basis of Presentation | Note 1 – Description of the Company and Basis of Presentation Description of the Company OneSpan Inc. and its wholly owned subsidiaries design, develop, market and support hardware and software security systems that manage and secure access to information assets. OneSpan has operations in Austria, Australia, Belgium, Brazil, Canada, China, France, Japan, The Netherlands, Singapore, Switzerland, the United Arab Emirates, the United Kingdom (U.K), and the United States (U.S.). ​ In accordance with ASC 280, Segment Reporting, our operations are reported as a single operating segment. The chief operating decision maker is the Chief Executive Officer who reviews the statement of operations of the Company on a consolidated basis, makes decisions and manages the operations of the Company as a single operating segment. ​ Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of OneSpan and its subsidiaries and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles in the United States (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the results of the interim periods presented. All significant intercompany accounts and transactions have been eliminated. Operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ended December 31, 2020, particularly in light of the novel coronavirus (COVID-19) pandemic and its effects on domestic and global economies. To limit the spread of COVID-19, governments have imposed, and may continue to impose, among other things, travel and business operation restrictions and stay-at-home orders and social distancing guidelines, causing some businesses to adjust, reduce or suspend operating activities. These disruptions and restrictions could adversely affect our operating results due to, among other things, reduced demand for our services and solutions as a result of our customers having to adjust, reduce or suspend operating activities. Beginning in the Summer of 2020 and continuing through the third quarter ended September 30, 2020, we have experienced softened demand for certain of our products and services due to, we believe, global economic uncertainty connected with the continued seriousness of the COVID-19 pandemic. ​ For additional information, see Part II, Item 1A – Risk Factors of this Form 10-Q for additional information regarding the potential impact of COVID-19 on the Company. ​ Revision of Previously Issued Financial Statements We have revised amounts reported in previously issued financial statements for the periods presented in this Quarterly Report on Form 10-Q related to immaterial errors. The errors relate to certain contracts with customers involving term-based software licenses and related maintenance and support services. The net contract assets that originated from a portion of these contracts in prior periods were not properly accounted for in subsequent periods, which caused overstatements of revenue in prior periods. ​ We evaluated the aggregate effects of the errors to our previously issued financial statements in accordance with SEC Staff Accounting Bulletins No. 99 and No. 108 and, based upon quantitative and qualitative factors, determined that the errors were not material to the previously issued financial statements and disclosures included in our Annual Reports on Form 10-K for the years ended December 31, 2019 and 2018, or for any quarterly periods included therein or through our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020. ​ The following tables present the effects of the aforementioned revisions on our condensed consolidated balance sheet as of December 31, 2019, our unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2019, our unaudited condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2019, our unaudited condensed consolidated statement of stockholders’ equity for the three and nine months ended September 30, 2019, our unaudited condensed consolidated statement of stockholders’ equity for the three months ended March 31, 2020, and our unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2019 (in thousands). ​ Condensed Consolidated Balance Sheet ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2019
in thousands |  | As Previously Reported |  | Adjustments | ​ | As Revised
Contract assets | ​ | $ | 7,058 | ​ | $ | (1,818) | ​ | $ | 5,240
Total current assets | ​ | ​ | 211,619 | ​ | ​ | (1,818) | ​ | ​ | 209,801
Contract assets - non-current | ​ | ​ | 3,565 | ​ | ​ | (210) | ​ | ​ | 3,355
Total assets | ​ | ​ | 384,570 | ​ | ​ | (2,028) | ​ | ​ | 382,542
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Short-term income taxes payable | ​ | ​ | 7,711 | ​ | ​ | (301) | ​ | ​ | 7,410
Total current liabilities | ​ | ​ | 74,113 | ​ | ​ | (301) | ​ | ​ | 73,812
Long-term deferred revenue | ​ | ​ | 15,259 | ​ | ​ | — | ​ | ​ | 15,259
Long-term income taxes payable | ​ | ​ | 6,958 | ​ | ​ | — | ​ | ​ | 6,958
Total liabilities | ​ | ​ | 120,549 | ​ | ​ | (301) | ​ | ​ | 120,248
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accumulated income | ​ | ​ | 181,167 | ​ | ​ | (1,727) | ​ | ​ | 179,440
Accumulated other comprehensive loss | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​
Total stockholders' equity | ​ | ​ | 264,021 | ​ | ​ | (1,727) | ​ | ​ | 262,294
Total liabilities and stockholders' equity | ​ | ​ | 384,570 | ​ | ​ | (2,028) | ​ | ​ | 382,542
​ Condensed Consolidated Statements of Operations (Unaudited) ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months ended September 30, 2019 | ​ | Nine Months ended September 30, 2019
​ |  | As Previously Reported |  | Adjustments | ​ | As Revised |  | As Previously Reported |  | Adjustments | ​ | As Revised
Revenue |  | ​ |  |  | ​ | ​ | ​ | ​ |  |  | ​ |  |  | ​ | ​ | ​ | ​ |
Product and license | ​ | $ | 61,181 | ​ | $ | 34 | ​ | $ | 61,215 | ​ | $ | 133,159 | ​ | $ | (484) | ​ | $ | 132,675
Services and other | ​ |  | 18,544 | ​ | ​ | (68) | ​ |  | 18,476 | ​ |  | 50,408 | ​ | ​ | (130) | ​ |  | 50,278
Total revenue | ​ |  | 79,725 | ​ | ​ | (34) | ​ |  | 79,691 | ​ |  | 183,567 | ​ | ​ | (614) | ​ |  | 182,953
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Gross Profit | ​ |  | 53,056 | ​ | ​ | (34) | ​ |  | 53,022 | ​ |  | 122,979 | ​ | ​ | (614) | ​ |  | 122,365
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating income | ​ |  | 17,119 | ​ | ​ | (34) | ​ |  | 17,085 | ​ |  | 9,381 | ​ | ​ | (614) | ​ |  | 8,767
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Income before income taxes | ​ |  | 15,736 | ​ | ​ | (34) | ​ |  | 15,702 | ​ |  | 8,102 | ​ | ​ | (614) | ​ |  | 7,488
Provision for income taxes | ​ |  | 3,864 | ​ | ​ | (9) | ​ |  | 3,855 | ​ |  | 4,363 | ​ | ​ | (155) | ​ |  | 4,208
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net Income | ​ | ​ | 11,872 | ​ | ​ | (25) | ​ | ​ | 11,847 | ​ | ​ | 3,739 | ​ | ​ | (459) | ​ | ​ | 3,280
​ ​ Condensed Consolidated Statements of Comprehensive Loss (Unaudited) ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months ended September 30, 2019 | ​ | Nine Months ended September 30, 2019
​ | ​ | As Previously Reported |  | Adjustments | ​ | As Revised |  | As Previously Reported |  | Adjustments | ​ | As Revised
Net income | ​ | $ | 11,872 | ​ | $ | (25) | ​ | $ | 11,847 | ​ | $ | 3,739 | ​ | $ | (459) | ​ | $ | 3,280
Comprehensive income (loss) | ​ | ​ | 8,838 | ​ | ​ | (25) | ​ | ​ | 8,813 | ​ | ​ | 249 | ​ | ​ | (459) | ​ | ​ | (210)
​ Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | Total Stockholders' Equity
in thousands |  | As Previously Reported |  | Adjustments | ​ | As Revised
Balance at December 31, 2018 | ​ | $ | 252,441 | ​ | $ | (802) | ​ | $ | 251,639
Net income (loss) | ​ | ​ | (5,671) | ​ | ​ | (385) | ​ | ​ | (6,056)
Balance at March 31, 2019 | ​ | ​ | 247,958 | ​ | ​ | (1,187) | ​ | ​ | 246,771
Net income (loss) | ​ | ​ | (2,461) | ​ | ​ | (50) | ​ | ​ | (2,511)
Balance at June 30, 2019 | ​ | ​ | 244,815 | ​ | ​ | (1,237) | ​ | ​ | 243,578
Net income (loss) | ​ | ​ | 11,872 | ​ | ​ | (25) | ​ | ​ | 11,847
Balance at September 30, 2019 | ​ | ​ | 254,075 | ​ | ​ | (1,262) | ​ | ​ | 252,813
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance at December 31, 2019 | ​ | $ | 264,021 | ​ | $ | (1,727) | ​ | $ | 262,294
Net income (loss) | ​ | ​ | 98 | ​ | ​ | (94) | ​ | ​ | 4
Balance at March 31, 2020 | ​ | ​ | 260,639 | ​ | ​ | (1,821) | ​ | ​ | 258,818
​ Condensed Consolidated Statements of Cash Flows (Unaudited) ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months ended September 30, 2019
in thousands | ​ | As Previously Reported |  | Adjustments | ​ | As Revised
Cash flows from operating activities: |  | ​ |  |  | ​ |  | ​ | ​ | ​
Net income | ​ | $ | 3,739 | ​ | $ | (459) | ​ | $ | 3,280
Changes in operating assets and liabilities: | ​ |  |  | ​ |  | ​ | ​ |  |
Contract assets | ​ |  | (74) | ​ |  | 614 | ​ |  | 540
Income taxes payable | ​ | ​ | (2,587) | ​ | ​ | (155) | ​ | ​ | (2,742)
Net cash used in operating activities | ​ |  | (13,662) | ​ |  | — | ​ |  | (13,662)
​ For the three months ended March 31, 2020, the impacts of the adjustments resulted in a decrease of $0.1 million to income before taxes, and a decrease of $0.1 million to net income, compared to the amounts previously reported. ​ Principles of Consolidation ​ The consolidated financial statements include the accounts of OneSpan Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. ​ Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Foreign Currency Translation and Transactions The financial position and results of the operations of the majority of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. Accordingly, assets and liabilities are translated into U.S. Dollars using current exchange rates as of the balance sheet date. Revenue and expenses are translated at average exchange rates prevailing during the year. Translation adjustments arising from differences in exchange rates are charged or credited to other comprehensive income (loss). Gains and losses resulting from foreign currency transactions are included in the condensed consolidated statements of operations in other income (expense), net. Foreign exchange transaction gains aggregated $0.4 million for the three months ended September 30, 2020, and foreign exchange transaction losses aggregate $1.9 million for the three months ended September 30, 2019. For the nine months ended September 30, 2020, foreign exchange loss aggregated $0.1 million, and foreign exchange transaction losses aggregated $2.6 million for the nine months ended September 30, 2019. The financial position and results of our operations in Singapore, Switzerland, and Canada are measured in U.S. Dollars. For these subsidiaries, gains and losses that result from foreign currency transactions are included in the consolidated statements of operations in other income (expense), net.

X
- Definition The entire disclosure for the business description and basis of presentation concepts. Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -URI http://asc.fasb.org/topic&trid=2122149 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -URI http://asc.fasb.org/topic&trid=2134479 + Details
Name: | us-gaap_BusinessDescriptionAndBasisOfPresentationTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration