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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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95-2390133
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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3888 Calle Fortunada, San Diego, California
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92123
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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Item 1.
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Financial Statements
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September 30,
2016 |
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December 31,
2015 |
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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27,802
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$
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24,382
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Restricted cash
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100
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400
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Trade and other accounts receivable, net of allowance for doubtful accounts of $307 and $252, at September 30, 2016 and December 31, 2015, respectively
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20,661
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43,172
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Inventories, net
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34,939
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39,055
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Prepaid expenses and other current assets
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5,319
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2,593
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Total current assets
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88,821
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109,602
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Property and equipment, net
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28,978
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32,324
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Goodwill
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23,856
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23,635
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Pension asset
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6,265
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5,849
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Other non-current assets
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678
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603
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Total assets
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$
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148,598
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$
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172,013
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable and accrued liabilities
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$
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17,536
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$
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33,985
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Accrued employee compensation
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6,229
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6,672
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Deferred revenue and customer deposits
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3,079
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3,066
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Short-term borrowings and current portion of long-term debt
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44
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42
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Total current liabilities
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26,888
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43,765
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Deferred tax liability, long-term
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6,313
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6,076
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Long-term debt, excluding current portion
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56
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49
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Other long-term liabilities
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2,451
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2,947
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Total liabilities
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35,708
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52,837
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Commitments and contingencies (Note 11)
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Stockholders’ equity:
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Common stock, $0.10 par value per share, 80,000 and 40,000 shares authorized at September 30, 2016 and December 31, 2015, respectively; 32,090 and 31,782 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively
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3,206
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3,176
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Additional paid-in capital
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294,932
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291,505
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Accumulated deficit
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(191,935
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)
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(180,399
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)
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Accumulated other comprehensive income
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6,687
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4,894
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Total stockholders’ equity
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112,890
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119,176
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Total liabilities and stockholders’ equity
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$
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148,598
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$
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172,013
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2016
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2015
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2016
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2015
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Revenue
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$
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25,506
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$
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45,076
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$
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94,844
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$
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117,542
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Cost of revenue
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17,878
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30,820
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67,582
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80,830
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Gross profit
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7,628
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14,256
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27,262
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36,712
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Operating expenses:
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Selling, general and administrative
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8,374
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9,070
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26,695
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30,169
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Research and development
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5,193
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5,781
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16,261
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19,629
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Restructuring and exit costs
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—
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56
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297
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2,396
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Total operating expenses
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13,567
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14,907
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43,253
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52,194
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Loss from operations
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(5,939
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)
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(651
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)
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(15,991
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)
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(15,482
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)
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Gain on sale of product line
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—
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—
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(6,657
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)
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—
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Interest expense, net
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48
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30
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179
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201
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Other income
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(5
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)
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—
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(136
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)
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—
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Foreign currency exchange (gain) loss, net
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49
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(97
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)
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252
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316
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Loss before income taxes
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(6,031
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)
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(584
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(9,629
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)
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(15,999
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)
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Income tax provision
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824
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865
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1,907
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4,167
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Net loss
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$
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(6,855
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)
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$
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(1,449
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)
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$
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(11,536
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)
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$
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(20,166
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)
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Net loss per share
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Basic and diluted
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$
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(0.21
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)
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$
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(0.05
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)
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$
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(0.36
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)
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$
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(0.66
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)
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Weighted average common shares outstanding:
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||||||||
Basic and diluted
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31,989
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31,529
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31,828
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30,440
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Three Months Ended
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Nine Months Ended
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||||||||||||
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September 30,
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September 30,
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||||||||||||
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2016
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2015
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2016
|
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2015
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||||||||
Net loss
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$
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(6,855
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)
|
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$
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(1,449
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)
|
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$
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(11,536
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)
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$
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(20,166
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)
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Other comprehensive income (loss), net of tax:
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Foreign currency translation adjustment
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685
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(2,750
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)
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1,557
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2,776
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Defined benefit pension plan, net of tax:
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Amortization of deferred loss, net of tax provision of $12 and $2 for the three months ended September 30, 2016 and 2015, respectively; net of tax provision of $37 and $6 for the nine months ended September 30, 2016 and 2015, respectively
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49
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9
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146
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|
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27
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|
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Amortization of prior service cost, net of tax provision of $8 and $7 for the three months ended September 30, 2016 and 2015, respectively; net of tax provision of $23 and $21 for the nine months ended September 30, 2016 and 2015, respectively
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30
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27
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90
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|
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84
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|
||||
Other comprehensive income (loss), net of tax
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764
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(2,714
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)
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1,793
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2,887
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Comprehensive loss
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$
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(6,091
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)
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$
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(4,163
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)
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$
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(9,743
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)
|
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$
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(17,279
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)
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Nine Months Ended September 30,
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||||||
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2016
|
|
2015
|
||||
OPERATING ACTIVITIES:
|
|
|
|
|
||||
Net loss
|
|
$
|
(11,536
|
)
|
|
$
|
(20,166
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)
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Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
||||
Depreciation
|
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7,416
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|
|
8,633
|
|
||
Amortization of intangible assets
|
|
—
|
|
|
153
|
|
||
Loss on lease due to restructuring
|
|
87
|
|
|
1,208
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|
||
Pension cost (benefit)
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|
479
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|
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(60
|
)
|
||
Stock-based compensation expense
|
|
3,759
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|
|
2,906
|
|
||
Gain on sale of property and equipment
|
|
(131
|
)
|
|
—
|
|
||
Impairment of property and equipment
|
|
155
|
|
|
—
|
|
||
Gain on sale of product line
|
|
(6,657
|
)
|
|
—
|
|
||
Unrealized loss on foreign currency exchange rates
|
|
45
|
|
|
2,240
|
|
||
Release of tax liability
|
|
(1,518
|
)
|
|
—
|
|
||
Provision for losses on accounts receivable
|
|
56
|
|
|
90
|
|
||
Provision for losses on inventory
|
|
226
|
|
|
424
|
|
||
Provision for warranties
|
|
444
|
|
|
854
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Trade and other accounts receivable
|
|
20,151
|
|
|
7,475
|
|
||
Inventories
|
|
(7,209
|
)
|
|
3,672
|
|
||
Prepaid expenses and other assets
|
|
(1,288
|
)
|
|
(899
|
)
|
||
Pension asset
|
|
(441
|
)
|
|
(487
|
)
|
||
Accounts payable and accrued liabilities
|
|
(16,704
|
)
|
|
1,423
|
|
||
Deferred revenue and customer deposits
|
|
11
|
|
|
508
|
|
||
Accrued employee compensation
|
|
(962
|
)
|
|
(1,236
|
)
|
||
Deferred tax liability
|
|
113
|
|
|
2,161
|
|
||
Other long-term liabilities
|
|
(479
|
)
|
|
(369
|
)
|
||
Net cash provided by (used in) operating activities
|
|
(13,983
|
)
|
|
8,530
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
|
||||
Purchases of property and equipment
|
|
(4,689
|
)
|
|
(2,779
|
)
|
||
Proceeds from sale of property and equipment
|
|
133
|
|
|
—
|
|
||
Proceeds from sale of product line
|
|
20,486
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
|
15,930
|
|
|
(2,779
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
|
||||
Principal payments on long-term debt and short-term borrowings
|
|
(33
|
)
|
|
(18,833
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)
|
||
Proceeds from long-term debt and short-term borrowings
|
|
—
|
|
|
3,040
|
|
||
Proceeds from sale of common stock, net of offering costs
|
|
—
|
|
|
9,565
|
|
||
Proceeds from issuance of common stock under equity compensation plans
|
|
618
|
|
|
876
|
|
||
Restricted cash - release of compensating balance
|
|
300
|
|
|
(400
|
)
|
||
Net cash provided by (used in) financing activities
|
|
885
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|
|
(5,752
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
588
|
|
|
82
|
|
||
Increase in cash and cash equivalents
|
|
3,420
|
|
|
81
|
|
||
Cash and cash equivalents, beginning of period
|
|
24,382
|
|
|
24,732
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
27,802
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|
|
$
|
24,813
|
|
•
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Ultracapacitors:
The Company’s primary focus, ultracapacitors, are energy storage devices that possess a unique combination of high power density, extremely long operational life and the ability to charge and discharge very rapidly. The Company’s ultracapacitor cells, multi-cell packs and modules provide highly reliable energy storage and power delivery solutions for applications in multiple industries, including automotive, bus, rail and truck in transportation and grid energy storage, and wind in renewable energy.
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•
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High-Voltage Capacitors:
The Company’s CONDIS
®
high-voltage capacitors are designed and manufactured to perform reliably for decades in all climates. These products include grading and coupling capacitors and capacitive voltage dividers that are used to ensure the safety and reliability of electric utility infrastructure and other applications involving transport, distribution and measurement of high-voltage electrical energy.
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Three Months Ended September 30,
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Nine Months Ended September 30,
|
||||||||||||
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2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Numerator
|
|
|
|
|
|
|
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|
||||||||
Net loss
|
|
$
|
(6,855
|
)
|
|
$
|
(1,449
|
)
|
|
$
|
(11,536
|
)
|
|
$
|
(20,166
|
)
|
Denominator
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
|
31,989
|
|
|
31,529
|
|
|
31,828
|
|
|
30,440
|
|
||||
Net loss per share
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
|
$
|
(0.21
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.36
|
)
|
|
$
|
(0.66
|
)
|
|
|
Three and Nine Months Ended September 30,
|
||||
|
|
2016
|
|
2015
|
||
Outstanding options to purchase common stock
|
|
465
|
|
|
956
|
|
Unvested restricted stock awards
|
|
96
|
|
|
263
|
|
Unvested restricted stock unit awards
|
|
1,686
|
|
|
870
|
|
Employee stock purchase plan awards
|
|
61
|
|
|
—
|
|
|
|
September 30,
2016 |
|
December 31, 2015
|
||||
Raw materials and purchased parts
|
|
$
|
14,602
|
|
|
$
|
21,126
|
|
Work-in-process
|
|
1,358
|
|
|
4,367
|
|
||
Finished goods
|
|
19,951
|
|
|
16,913
|
|
||
Consigned finished goods
|
|
—
|
|
|
28
|
|
||
Reserves
|
|
(972
|
)
|
|
(3,379
|
)
|
||
Total inventories, net
|
|
$
|
34,939
|
|
|
$
|
39,055
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Beginning balance
|
|
$
|
1,288
|
|
|
$
|
716
|
|
Product warranties issued
|
|
298
|
|
|
515
|
|
||
Settlement of warranties
|
|
(427
|
)
|
|
(530
|
)
|
||
Changes related to preexisting warranties
|
|
146
|
|
|
339
|
|
||
Ending balance
|
|
$
|
1,305
|
|
|
$
|
1,040
|
|
Balance at December 31, 2015
|
|
$
|
23,635
|
|
Foreign currency translation adjustments
|
|
512
|
|
|
Goodwill related to sale of product line
|
|
(291
|
)
|
|
Balance at September 30, 2016
|
|
$
|
23,856
|
|
|
|
Foreign
Currency Translation Adjustment |
|
Defined Benefit
Pension Plan |
|
Accumulated
Other Comprehensive Income |
|
Affected Line Items in the Statement of Operations
|
||||||
Balance as of December 31, 2015
|
|
$
|
9,933
|
|
|
$
|
(5,039
|
)
|
|
$
|
4,894
|
|
|
|
Other comprehensive income before reclassification
|
|
1,557
|
|
|
—
|
|
|
1,557
|
|
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
|
—
|
|
|
236
|
|
|
236
|
|
|
Cost of Sales, Selling, General and Administrative and Research and Development Expense
|
|||
Net other comprehensive income for the
nine months ended September 30, 2016
|
|
1,557
|
|
|
236
|
|
|
1,793
|
|
|
|
|||
Balance as of September 30, 2016
|
|
$
|
11,490
|
|
|
$
|
(4,803
|
)
|
|
$
|
6,687
|
|
|
|
|
|
Employee Severance Costs
|
|
Lease Obligation Costs
|
|
Other Exit Costs
|
|
Total
|
||||||||
Restructuring liability as of December 31, 2015
|
|
$
|
294
|
|
|
$
|
1,043
|
|
|
$
|
—
|
|
|
$
|
1,337
|
|
Costs incurred
|
|
67
|
|
|
86
|
|
|
298
|
|
|
451
|
|
||||
Amounts paid
|
|
(207
|
)
|
|
—
|
|
|
(246
|
)
|
|
(453
|
)
|
||||
Accruals released
|
|
(154
|
)
|
|
—
|
|
|
—
|
|
|
(154
|
)
|
||||
Other non-cash adjustments
|
|
—
|
|
|
(237
|
)
|
|
(52
|
)
|
|
(289
|
)
|
||||
Restructuring liability as of September 30, 2016
|
|
$
|
—
|
|
|
$
|
892
|
|
|
$
|
—
|
|
|
$
|
892
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Total gain (loss)
|
|
$
|
—
|
|
|
$
|
(157
|
)
|
|
$
|
(88
|
)
|
|
$
|
2,242
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Total gain (loss)
|
|
$
|
—
|
|
|
$
|
254
|
|
|
$
|
(37
|
)
|
|
$
|
(2,558
|
)
|
|
|
December 31, 2015
|
||
Gross amounts of recognized asset
|
|
$
|
66
|
|
Gross amounts offset
|
|
(50
|
)
|
|
Net amount of recognized asset
|
|
$
|
16
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||
|
|
September 30,
|
|
September 30,
|
||
|
|
2015
|
|
2015
|
||
Expected dividend yield
|
|
—
|
%
|
|
—
|
%
|
Expected volatility
|
|
60
|
%
|
|
61
|
%
|
Risk-free interest rate
|
|
1.60
|
%
|
|
1.59
|
%
|
Expected term (in years)
|
|
5.0
|
|
|
5.0
|
|
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
|
|
2016
|
|
Expected dividend yield
|
|
—
|
%
|
Expected volatility
|
|
62
|
%
|
Risk-free interest rate
|
|
1.07
|
%
|
Expected term (in years)
|
|
3.0
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
RSU Type
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service-based
|
|
$
|
544
|
|
|
$
|
400
|
|
|
$
|
1,613
|
|
|
$
|
975
|
|
Performance objectives
|
|
30
|
|
|
(60
|
)
|
|
71
|
|
|
(28
|
)
|
||||
Market-condition
|
|
250
|
|
|
34
|
|
|
621
|
|
|
102
|
|
||||
|
|
$
|
824
|
|
|
$
|
374
|
|
|
$
|
2,305
|
|
|
$
|
1,049
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Expected dividend yield
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
||||
Expected volatility
|
|
54
|
%
|
|
68
|
%
|
|
58
|
%
|
|
58
|
%
|
||||
Risk-free interest rate
|
|
0.36
|
%
|
|
0.01
|
%
|
|
0.45
|
%
|
|
0.08
|
%
|
||||
Expected term (in years)
|
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
||||
Fair value per share
|
|
$
|
1.59
|
|
|
$
|
1.54
|
|
|
$
|
2.04
|
|
|
$
|
1.74
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Cost of revenue
|
|
$
|
146
|
|
|
$
|
186
|
|
|
$
|
643
|
|
|
$
|
539
|
|
Selling, general and administrative
|
|
799
|
|
|
708
|
|
|
2,436
|
|
|
1,732
|
|
||||
Research and development
|
|
152
|
|
|
161
|
|
|
680
|
|
|
635
|
|
||||
Total stock-based compensation expense
|
|
$
|
1,097
|
|
|
$
|
1,055
|
|
|
$
|
3,759
|
|
|
$
|
2,906
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service cost
|
|
$
|
295
|
|
|
$
|
239
|
|
|
$
|
883
|
|
|
$
|
726
|
|
Interest cost
|
|
62
|
|
|
83
|
|
|
185
|
|
|
251
|
|
||||
Expected return on plan assets
|
|
(296
|
)
|
|
(386
|
)
|
|
(885
|
)
|
|
(1,175
|
)
|
||||
Prior service cost amortization
|
|
38
|
|
|
34
|
|
|
113
|
|
|
105
|
|
||||
Deferred loss amortization
|
|
61
|
|
|
11
|
|
|
183
|
|
|
33
|
|
||||
Net periodic pension cost (benefit)
|
|
$
|
160
|
|
|
$
|
(19
|
)
|
|
$
|
479
|
|
|
$
|
(60
|
)
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
our ability to remain competitive and stimulate customer demand through successful introduction of new products, and to educate our prospective customers on the products we offer;
|
•
|
dependence upon the sale of products to a small number of customers and vertical markets, some of which are heavily dependent on government funding or government subsidy programs which could be reduced, modified or discontinued in the future;
|
•
|
dependence upon the sale of products into Asia and Europe, where macroeconomic factors outside our control may adversely affect our sales;
|
•
|
downward pressures on product pricing from increased competition and shifts in sales mix with respect to low margin and high margin business;
|
•
|
risks related to our international operations including, but not limited to, our ability to adequately comply with the changing rules and regulations in countries where our business is conducted, our ability to oversee and control our foreign subsidiaries and their operations, our ability to effectively manage foreign currency exchange rate fluctuations arising from our international operations, and our ability to continue to comply with the U.S. Foreign Corrupt Practices Act as well as the anti-bribery laws of foreign jurisdictions;
|
•
|
risk that our restructuring efforts may not be successful and that we may not be able to realize the anticipated cost savings and other benefits;
|
•
|
successful acquisition, development and retention of key personnel;
|
•
|
our ability to effectively manage our reliance upon certain suppliers of key component parts, specialty equipment and logistical services;
|
•
|
our ability to match production volume to actual customer demand;
|
•
|
our ability to manage product quality problems;
|
•
|
our ability to protect our intellectual property rights and to defend claims against us;
|
•
|
our ability to effectively identify, enter into, manage and benefit from strategic alliances;
|
•
|
occurrence of a catastrophic event at any of our facilities;
|
•
|
occurrence of a technology systems failure, network disruption, or breach in data security;
|
•
|
our ability to obtain sufficient capital to meet our operating or other needs; and,
|
•
|
our ability to manage and minimize the impact of unfavorable legal proceedings.
|
•
|
Executive Overview
|
•
|
Current Year Highlights
|
•
|
Results of Operations
|
•
|
Liquidity and Capital Resources
|
•
|
Critical Accounting Estimates
|
•
|
Recent Accounting Pronouncements
|
•
|
Off Balance Sheet Arrangements
|
•
|
In January, we announced that our ultracapacitors had been selected by Beijing Huadian Tianren Electric Power Control Technology Co., Ltd., a subsidiary of China Guodian Corporation, as the core component of a wind farm energy storage demonstration project. One of the five largest power producers in the country, China Guodian Corporation’s system is the first megawatt (MW)-scale, ultracapacitor-based wind farm energy storage system in the world.
|
•
|
In February, we announced the newest addition to our K2 family with a 3-volt, 3,000-farad ultracapacitor cell. With 31 percent higher power than our leading 2.7-volt, 3,000-farad cell in the industry-standard 60 mm cylindrical form factor, customers now have the flexibility to either increase available power and energy in the same volume or significantly cost-optimize their system designs with fewer cells or modules while maintaining the same power and energy.
|
•
|
In March, Duke Energy, the largest electric power holding company in the United States, announced the commissioning of a new hybrid-energy storage system utilizing our ultracapacitors to manage solar smoothing events.
|
•
|
In April, we announced that we entered into a definitive agreement to sell our microelectronics product line to Data Device Corporation, a subsidiary of ILC Industries, Inc. The transaction was completed on April 27, 2016.
|
•
|
In July, we announced that our ultracapacitors are being used for regenerative braking energy storage in the Beijing subway system. As part of the strategic partnership with China Railway Rolling Stock Corporation that we announced last year, we continue to collaborate to develop next-generation capacitive energy storage solutions for the China rail market.
|
•
|
In July, we entered into a 12-month joint development agreement with one of the world’s leading automotive OEMs to develop a “proof of concept” that, if successful, could lead to the world’s first electric drivetrain based on our technology, targeting a 2021 automotive platform launch.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Revenue
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue
|
|
70
|
%
|
|
68
|
%
|
|
71
|
%
|
|
69
|
%
|
Gross profit
|
|
30
|
%
|
|
32
|
%
|
|
29
|
%
|
|
31
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative
|
|
33
|
%
|
|
20
|
%
|
|
29
|
%
|
|
25
|
%
|
Research and development
|
|
21
|
%
|
|
13
|
%
|
|
17
|
%
|
|
17
|
%
|
Restructuring and exit costs
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
2
|
%
|
Total operating expenses
|
|
54
|
%
|
|
33
|
%
|
|
46
|
%
|
|
44
|
%
|
Loss from operations
|
|
(24
|
)%
|
|
(1
|
)%
|
|
(17
|
)%
|
|
(13
|
)%
|
Gain on sale of product line
|
|
—
|
%
|
|
—
|
%
|
|
(7
|
)%
|
|
—
|
%
|
Loss before income taxes
|
|
(24
|
)%
|
|
(1
|
)%
|
|
(10
|
)%
|
|
(13
|
)%
|
Income tax provision
|
|
3
|
%
|
|
2
|
%
|
|
2
|
%
|
|
4
|
%
|
Net loss
|
|
(27
|
)%
|
|
(3
|
)%
|
|
(12
|
)%
|
|
(17
|
)%
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
Decrease
|
|
% Change
|
|
2016
|
|
2015
|
|
Decrease
|
|
% Change
|
||||||||||||||
Revenue
|
|
$
|
25,506
|
|
|
$
|
45,076
|
|
|
$
|
(19,570
|
)
|
|
(43
|
)%
|
|
$
|
94,844
|
|
|
$
|
117,542
|
|
|
$
|
(22,698
|
)
|
|
(19
|
)%
|
Cost of revenue
|
|
17,878
|
|
|
30,820
|
|
|
(12,942
|
)
|
|
(42
|
)%
|
|
67,582
|
|
|
80,830
|
|
|
(13,248
|
)
|
|
(16
|
)%
|
||||||
% of Revenue
|
|
70
|
%
|
|
68
|
%
|
|
|
|
|
|
71
|
%
|
|
69
|
%
|
|
|
|
|
||||||||||
Gross profit
|
|
$
|
7,628
|
|
|
$
|
14,256
|
|
|
$
|
(6,628
|
)
|
|
(46
|
)%
|
|
$
|
27,262
|
|
|
$
|
36,712
|
|
|
$
|
(9,450
|
)
|
|
(26
|
)%
|
% of Revenue
|
|
30
|
%
|
|
32
|
%
|
|
|
|
|
|
29
|
%
|
|
31
|
%
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
Decrease
|
|
% Change
|
|
2016
|
|
2015
|
|
Decrease
|
|
% Change
|
||||||||||||||
Selling, general and administrative
|
|
$
|
8,374
|
|
|
$
|
9,070
|
|
|
$
|
(696
|
)
|
|
(8
|
)%
|
|
$
|
26,695
|
|
|
$
|
30,169
|
|
|
$
|
(3,474
|
)
|
|
(12
|
)%
|
% of Revenue
|
|
33
|
%
|
|
20
|
%
|
|
|
|
|
|
29
|
%
|
|
25
|
%
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
Decrease
|
|
% Change
|
|
2016
|
|
2015
|
|
Decrease
|
|
% Change
|
|||||||||||||
Research and development
|
|
$
|
5,193
|
|
|
5,781
|
|
|
$
|
(588
|
)
|
|
(10
|
)%
|
|
$
|
16,261
|
|
|
$
|
19,629
|
|
|
$
|
(3,368
|
)
|
|
(17
|
)%
|
% of Revenue
|
|
21
|
%
|
|
13
|
%
|
|
|
|
|
|
17
|
%
|
|
17
|
%
|
|
|
|
|
|
|
Employee Severance Costs
|
|
Lease Obligation Costs
|
|
Other Exit Costs
|
|
Total
|
||||||||
Restructuring liability as of December 31, 2015
|
|
$
|
294
|
|
|
$
|
1,043
|
|
|
$
|
—
|
|
|
$
|
1,337
|
|
Costs incurred
|
|
67
|
|
|
86
|
|
|
298
|
|
|
451
|
|
||||
Amounts paid
|
|
(207
|
)
|
|
—
|
|
|
(246
|
)
|
|
(453
|
)
|
||||
Accruals released
|
|
(154
|
)
|
|
—
|
|
|
—
|
|
|
(154
|
)
|
||||
Other non-cash adjustments
|
|
—
|
|
|
(237
|
)
|
|
(52
|
)
|
|
(289
|
)
|
||||
Restructuring liability as of September 30, 2016
|
|
$
|
—
|
|
|
$
|
892
|
|
|
$
|
—
|
|
|
$
|
892
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Total cash provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
(13,983
|
)
|
|
$
|
8,530
|
|
Investing activities
|
|
15,930
|
|
|
(2,779
|
)
|
||
Financing activities
|
|
885
|
|
|
(5,752
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
588
|
|
|
82
|
|
||
Increase in cash and cash equivalents
|
|
$
|
3,420
|
|
|
$
|
81
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 6.
|
Exhibits
|
Exhibit
Number |
|
|
Description of Document
|
|
|
|
|
10.1
|
|
|
Third Amendment to Loan and Security Agreement, dated October 31, 2016, by and between East West Bank and Maxwell Technologies, Inc. *
|
|
|
|
|
31.1
|
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) (Section 302 Certification) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
|
|
|
|
|
31.2
|
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) (Section 302 Certification) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
|
|
|
|
|
32
|
|
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 (Section 906 Certification), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
|
|
|
|
|
101
|
|
|
The following financial statements and footnotes from the Maxwell Technologies, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) (iv) Condensed Consolidated Statements of Cash Flows; and (v) the Notes to Condensed Consolidated Financial Statements. *
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*
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Filed herewith.
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MAXWELL TECHNOLOGIES, INC.
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Date:
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November 2, 2016
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By:
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/s/ Franz Fink
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Franz Fink
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President and Chief Executive Officer
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Date:
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November 2, 2016
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By:
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/s/ David Lyle
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David Lyle
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Senior Vice President, Chief Financial Officer, Treasurer and Secretary
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Fiscal Quarter Ending
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Minimum Adjusted Quick Ratio
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September 30, 2016
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1.20 to 1.00
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December 31, 2016
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1.20 to 1.00
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March 31, 2017
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1.20 to 1.00
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June 30, 2017
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1.20 to 1.00
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September 30, 2017
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1.10 to 1.00
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December 31, 2017, and each Fiscal Quarter thereafter
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1.00 to 1.00
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Fiscal Quarter Ending
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Minimum EBITDA
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September 30, 2016
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($3,000,000)
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December 31, 2016
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($6,500,000)
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March 31, 2017
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($6,050,000)
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June 30, 2017
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($4,250,000)
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September 30, 2017
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($2,750,000)
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December 31, 2017, and each Fiscal Quarter thereafter
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$0
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MAXWELL TECHNOLOGIES, INC.
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By:
__/s/ Franz Fink_________________
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Name:
__Franz Fink_________________
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Title:
__CEO_______________________
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EAST WEST BANK
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By:
__/s/ Alexis Coyle_______________
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Name:
__Alexis Coyle_______________
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Title:
__Managing Director___________
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MAXWELL TECHNOLOGIES SA
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By:
___/s/ Emily Lough________________
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Name:
_Emily Lough__________________
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Title:
_Director_______________________
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Please send all Required Reporting to:
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Eric Berlin
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FROM:
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MAXWELL TECHNOLOGIES, INC.
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FINANCIAL COVENANTS
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REQUIRED
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ACTUAL
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COMPLIES
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Minimum Consolidated Cash
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$10,000,000
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$__________
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Yes
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No
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N/A
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Minimum Adjusted Quick Ratio (tested quarterly)
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______: 1.00
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_____:1.00
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Yes
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No
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N/A
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2 Quarter Minimum EBITDA (tested quarterly)
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$___________
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$__________
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Yes
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No
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N/A
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1.
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I have reviewed this quarterly report on Form 10-Q of Maxwell Technologies, Inc. for the quarter ended
September 30, 2016
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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November 2, 2016
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MAXWELL TECHNOLOGIES, INC.
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By:
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/s/ Franz Fink
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Franz Fink
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President and Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Maxwell Technologies, Inc. for the quarter ended
September 30, 2016
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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November 2, 2016
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MAXWELL TECHNOLOGIES, INC.
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By:
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/s/ David Lyle
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David Lyle
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Senior Vice President, Chief Financial Officer,
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Treasurer and Secretary
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(Principal Financial Officer)
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Date:
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November 2, 2016
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MAXWELL TECHNOLOGIES, INC.
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By:
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/s/ Franz Fink
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Franz Fink
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President and Chief Executive Officer
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(Principal Executive Officer)
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Date:
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November 2, 2016
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By:
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/s/ David Lyle
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David Lyle
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Senior Vice President, Chief Financial Officer,
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Treasurer and Secretary
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(Principal Financial Officer)
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