Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2013 | |
Document and Entity Information [Abstract] | ' |
Entity Registrant Name | 'MER TELEMANAGEMENT SOLUTIONS LTD |
Entity Central Index Key | '0001025561 |
Document Type | '20-F |
Amendment Flag | 'false |
Document Period End Date | 31-Dec-13 |
Current Fiscal Year End Date | '--12-31 |
Document Fiscal Year Focus | '2013 |
Document Fiscal Period Focus | 'FY |
Entity Current Reporting Status | 'Yes |
Entity Well-known Seasoned Issuer | 'No |
Entity Filer Category | 'Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 4,665,557 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS: | ' | ' |
Cash and cash equivalents | $6,369 | $4,190 |
Restricted cash | 63 | 38 |
Marketable securities (Note 3) | 153 | 139 |
Trade receivables (net of allowance for doubtful accounts of $ 46 at December 31, 2012 and 2013, respectively) | 943 | 1,066 |
Deferred income taxes (Note 9d) | ' | 371 |
Other accounts receivable and prepaid expenses (Note 4) | 147 | 175 |
Total current assets | 7,675 | 5,979 |
LONG-TERM ASSETS: | ' | ' |
Lease deposits | ' | 4 |
Severance pay fund | 725 | 658 |
Total long-term assets | 725 | 662 |
PROPERTY AND EQUIPMENT, NET (Note 5) | 183 | 245 |
OTHER ASSETS: | ' | ' |
Intangible assets, net (Note 6a) | 567 | 759 |
Goodwill | 3,479 | 3,479 |
Total other assets | 4,046 | 4,238 |
Total assets | 12,629 | 11,124 |
CURRENT LIABILITIES: | ' | ' |
Trade payables | 254 | 279 |
Accrued expenses and other liabilities (Note 7) | 2,200 | 2,393 |
Deferred revenues | 1,766 | 1,648 |
Liabilities of discontinued operations (Note 1a) | 362 | 435 |
Total current liabilities | 4,582 | 4,755 |
LONG-TERM LIABILITIES: | ' | ' |
Accrued severance pay | 857 | 800 |
Deferred tax liability | 29 | ' |
COMMITMENTS AND CONTINGENT LIABILITIES (Note 8) | ' | ' |
SHAREHOLDERS' EQUITY (Note 11): | ' | ' |
Share capital - Ordinary shares of NIS 0.01 par value - Authorized: 12,000,000 shares at December 31, 2012 and 2013; Issued: 4,625,707 at December 31, 2012 and 4,670,957 at December 31, 2013; Outstanding: 4,620,307 shares at December 31, 2012 and 4,665,557 at December 31, 2013 | 13 | 13 |
Additional paid-in capital | 20,317 | 20,120 |
Treasury shares (5,400 Ordinary shares at December 31, 2012 and 2013) | -29 | -29 |
Accumulated other comprehensive loss | -6 | 5 |
Accumulated deficit | -13,134 | -14,540 |
Total shareholders' equity | 7,161 | 5,569 |
Total liabilities and shareholders' equity | $12,629 | $11,124 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | USD ($) | ILS | USD ($) | ILS |
CURRENT ASSETS: | ' | ' | ' | ' |
Trade receivables, allowance for doubtful accounts | $46 | ' | $46 | ' |
SHAREHOLDERS' EQUITY (Note 11): | ' | ' | ' | ' |
Ordinary shares, par value per share | ' | 0.01 | ' | 0.01 |
Ordinary shares, shares authorized | 12,000,000 | 12,000,000 | 12,000,000 | 12,000,000 |
Ordinary shares, shares issued | 4,670,957 | 4,670,957 | 4,625,707 | 4,625,707 |
Ordinary shares, shares outstanding | 4,665,557 | 4,665,557 | 4,620,307 | 4,620,307 |
Treasury shares, shares | 5,400 | 5,400 | 5,400 | 5,400 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues (Note 12): | ' | ' | ' |
Product sales | $2,076 | $3,665 | $3,828 |
Services | 10,396 | 9,461 | 8,175 |
Total revenues | 12,472 | 13,126 | 12,003 |
Cost of revenues: | ' | ' | ' |
Product sales | 770 | 1,154 | 1,105 |
Services | 3,254 | 3,340 | 2,836 |
Total cost of revenues | 4,024 | 4,494 | 3,941 |
Gross profit | 8,448 | 8,632 | 8,062 |
Operating expenses: | ' | ' | ' |
Research and development, net | 1,389 | 1,329 | 1,909 |
Selling and marketing | 2,164 | 2,457 | 1,905 |
General and administrative | 3,188 | 2,804 | 3,847 |
Total operating expenses | 6,741 | 6,590 | 7,661 |
Operating income | 1,707 | 2,042 | 401 |
Financial income, net | 61 | 60 | 2 |
Capital gain on sale of investment in affiliate | ' | ' | 78 |
Income before taxes on income | 1,768 | 2,102 | 481 |
Taxes on income, net (Note 9) | 435 | 736 | 10 |
Net income from continuing operations | 1,333 | 1,366 | 471 |
Net income (loss) from discontinued operations | 73 | ' | -84 |
Net income | $1,406 | $1,366 | $387 |
Net earnings per share: | ' | ' | ' |
Basic and diluted net earnings per Ordinary share from continuing operations | $0.28 | $0.30 | $0.11 |
Basic and diluted net earnings (loss) per Ordinary share from discontinued operations | $0.02 | ' | ($0.02) |
Basic and diluted net income per share | $0.30 | $0.30 | $0.09 |
Weighted average number of Ordinary shares used in computing basic net earnings per share | 4,659,230 | 4,478,677 | 4,459,057 |
Weighted average number of Ordinary shares used in computing diluted net earnings per share | 4,720,966 | 4,531,384 | 4,459,057 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract] | ' | ' | ' |
Net income | $1,406 | $1,366 | $387 |
Other comprehensive income (loss): | ' | ' | ' |
Change in foreign currency translation adjustments | -29 | 10 | 16 |
Available-for-sale investments: | ' | ' | ' |
Change in net unrealized gains (losses) | 19 | 8 | -29 |
Reclassification adjustment for net (gains) loss included in net loss | -1 | 6 | -2 |
Other comprehensive income (loss) | -11 | 24 | -15 |
Comprehensive income | $1,395 | $1,390 | $372 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | Total | Share capital [Member] | Additional paid-in capital [Member] | Treasury shares [Member] | Accumulated other comprehensive income (loss) [Member] | Accumulated Foreign Currency Translation Adjustments [Member] | Accumulated Unrealized Gains of Available-for-Sale Marketable Securities, Net [Member] | Accumulated deficit [Member] |
In Thousands, except Share data, unless otherwise specified | ||||||||
Balance at Dec. 31, 2010 | $3,363 | $13 | $19,676 | ($29) | ($4) | ' | ' | ($16,293) |
Balance, shares at Dec. 31, 2010 | ' | 4,459,057 | ' | ' | ' | ' | ' | ' |
Stock-based compensation related to options issued to employees | 65 | ' | 65 | ' | ' | ' | ' | ' |
Stock-based compensation related to options issued to non employees | 2 | ' | 2 | ' | ' | ' | ' | ' |
Transaction with principal shareholder | 30 | ' | 30 | ' | ' | ' | ' | ' |
Other comprehensive income (loss): | ' | ' | ' | ' | ' | ' | ' | ' |
Unrealized gains (losses) of available-for-sale marketable securities, net | -31 | ' | ' | ' | -31 | ' | ' | ' |
Foreign currency translation adjustments | 16 | ' | ' | ' | 16 | ' | ' | ' |
Net income | 387 | ' | ' | ' | ' | ' | ' | 387 |
Balance at Dec. 31, 2011 | 3,832 | 13 | 19,773 | -29 | -19 | ' | ' | -15,906 |
Balance, shares at Dec. 31, 2011 | ' | 4,459,057 | ' | ' | ' | ' | ' | ' |
Stock-based compensation related to options issued to employees | 41 | ' | 41 | ' | ' | ' | ' | ' |
Stock-based compensation related to options issued to non employees | 3 | ' | 3 | ' | ' | ' | ' | ' |
Exercise of stock options | 303 | ' | 303 | ' | ' | ' | ' | ' |
Exercise of stock options, shares | ' | 161,250 | ' | ' | ' | ' | ' | ' |
Other comprehensive income (loss): | ' | ' | ' | ' | ' | ' | ' | ' |
Unrealized gains (losses) of available-for-sale marketable securities, net | 14 | ' | ' | ' | 14 | ' | ' | ' |
Foreign currency translation adjustments | 10 | ' | ' | ' | 10 | ' | ' | ' |
Net income | 1,366 | ' | ' | ' | ' | ' | ' | 1,366 |
Balance at Dec. 31, 2012 | 5,569 | 13 | 20,120 | -29 | 5 | ' | ' | -14,540 |
Balance, shares at Dec. 31, 2012 | 4,620,307 | 4,620,307 | ' | ' | ' | ' | ' | ' |
Stock-based compensation related to options issued to employees | 93 | ' | 93 | ' | ' | ' | ' | ' |
Stock-based compensation related to options issued to non employees | 14 | ' | 14 | ' | ' | ' | ' | ' |
Exercise of stock options | 90 | ' | 90 | ' | ' | ' | ' | ' |
Exercise of stock options, shares | ' | 45,250 | ' | ' | ' | ' | ' | ' |
Other comprehensive income (loss): | ' | ' | ' | ' | ' | ' | ' | ' |
Unrealized gains (losses) of available-for-sale marketable securities, net | 18 | ' | ' | ' | 18 | ' | ' | ' |
Foreign currency translation adjustments | -29 | ' | ' | ' | -29 | ' | ' | ' |
Net income | 1,406 | ' | ' | ' | ' | ' | ' | 1,406 |
Balance at Dec. 31, 2013 | $7,161 | $13 | $20,317 | ($29) | ($6) | ($24) | $18 | ($13,134) |
Balance, shares at Dec. 31, 2013 | 4,665,557 | 4,665,557 | ' | ' | ' | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net income | $1,406 | $1,366 | $387 |
Net loss from discontinued operations | -73 | ' | 84 |
Net income from continuing operations | 1,333 | 1,366 | 471 |
Adjustments required to reconcile net income from continuing operations to net cash provided by operating activities: | ' | ' | ' |
Loss (gains) on sale of available-for-sale marketable securities | -1 | 6 | -2 |
Capital gain on sale of investment | ' | ' | -78 |
Depreciation and amortization | 316 | 393 | 447 |
Deferred income taxes, net | 400 | -340 | 2 |
Employees and non-employees stock-based compensation | 107 | 44 | 67 |
Transaction with principal shareholder | ' | ' | 30 |
Accrued severance pay, net | -10 | -1 | -110 |
Decrease (increase) in trade receivables, net | 123 | -212 | 397 |
Decrease (increase) in other accounts receivable and prepaid expenses | 30 | -178 | 76 |
Change in lease deposits | 3 | 2 | 24 |
Increase (decrease) in trade payables | -25 | -47 | 21 |
Increase (decrease) in accrued expenses and other liabilities | -222 | 144 | 269 |
Decrease in deferred revenues | 118 | -377 | -427 |
Increase (decrease) in restricted cash | -25 | 7 | -45 |
Net cash provided by operating activities from continuing operations | 2,147 | 807 | 1,142 |
Cash flows from investing activities: | ' | ' | ' |
Proceeds from sale of affiliate | ' | ' | 90 |
Purchase of property and equipment | -62 | -188 | -87 |
Proceeds from sale of property and equipment | ' | 2 | 9 |
Investment in available-for-sale marketable securities | -80 | -74 | -49 |
Proceeds from sale of available-for-sale marketable securities | 84 | 71 | 40 |
Net cash provided by (used in) investing activities | -58 | -189 | 3 |
Cash flows from financing activities: | ' | ' | ' |
Proceeds from exercise of stock options | 90 | 303 | ' |
Net cash provided by financing activities | 90 | 303 | ' |
Net cash provided from discontinued Operations | ' | ' | ' |
Increase in cash and cash equivalents | 2,179 | 921 | 1,145 |
Cash and cash equivalents at the beginning of the year | 4,190 | 3,269 | 2,124 |
Cash and cash equivalents at the end of the year | 6,369 | 4,190 | 3,269 |
Cash paid during the year for: | ' | ' | ' |
Income taxes | $274 | $1,210 | $8 |
GENERAL
GENERAL | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
GENERAL [Abstract] | ' | ||||||||||||
GENERAL | ' | ||||||||||||
NOTE 1:- | GENERAL | ||||||||||||
a. | Mer Telemanagement Solutions Ltd. ("the Company" or "MTS") was incorporated on December 27, 1995. MTS and its subsidiaries ("the Group") is a worldwide provider of Telecom Expense Management (TEM), Mobile Virtual Network Enabler and Mobile Money services and solutions. | ||||||||||||
The Company's wholly-owned subsidiaries in the United States and Hong Kong, namely, MTS IntegraTRAK Inc. and MTS Asia Ltd., respectively, act as marketing and customer service organizations in those countries. | |||||||||||||
In March 2009, the Company discontinued the operations of TABS Brazil Ltda. its wholly owned subsidiary in Brazil, and its results of operations were classified as discontinued operations in the statement of operations. There are no assets from discontinued operations as of December 31, 2012 and 2013. | |||||||||||||
The summarized results of operations for TABS Brazil Ltda. for the years ended December 31, 2011, 2012 and 2013, which were reported separately as discontinued operations in the consolidated statements of income, are as follows: | |||||||||||||
Year ended December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Total operating expenses (income) | $ | 84 | $ | - | $ | (73 | ) | ||||||
Operating (loss) income | (84 | ) | - | 73 | |||||||||
Net (loss) income from discontinued operations | (84 | ) | - | 73 | |||||||||
Basic and diluted net income (loss) per Ordinary share from discontinued operations | $ | (0.02 | ) | - | $ | 0.02 | |||||||
b. | MTS's products are designed to provide telecommunication and information technology managers with tools to reduce communication costs, recover charges payable by third parties, and to detect and prevent abuse and misuse of telephone networks including fault telecommunication usage. MTS is a global provider of services and solutions in the Telecom Expense Management (TEM), Cloud Billing, Mobile Virtual Network Enabler (MVNE) and Mobile Money markets. The Company's TEM Suite helps organizations reduce operational expenses, improve productivity and optimize networks and services associated with communications networks and information technology. MVNE and Mobile Money offerings enable MVNOs and financial service providers to manage their customers' and resellers' lifecycles. | ||||||||||||
The Company's shares are listed for trade on the NASDAQ Capital Market under the symbol "MTSL". | |||||||||||||
Revenues from a major customer accounted for 16%, 23% and 33% of total revenues for the years ended December 31, 2011, 2012 and 2013, respectively. |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||||||
NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). | |||||||||||||||||
a. | Use of estimates: | ||||||||||||||||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they were made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||||||||
b. | Financial statements in U.S. dollars: | ||||||||||||||||
The majority of the revenues of the Group are generated in or linked to the U.S. dollar ("dollar"). In addition, a substantial portion of the Group's costs are incurred in dollars. The Company's management believes that the dollar is the currency of the primary economic environment in which the Company and certain of its subsidiaries operate. Thus, the functional and reporting currency of the Company and certain of its subsidiaries is the dollar. | |||||||||||||||||
Accordingly, monetary accounts maintained in currencies other than the dollar are re-measured into dollars in accordance with ASC 830, "Foreign Currency Matters." All transaction gains and losses of the re-measurement of monetary balance sheet items are reflected in the consolidated statements of operations as financial income or expenses, as appropriate. | |||||||||||||||||
For those foreign subsidiaries and affiliates, whose functional currency has been determined to be their local currency, assets and liabilities are translated at the year- end exchange rates and statements of operations items are translated at the average exchange rate prevailing during the period. The resulting translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in shareholders' equity. | |||||||||||||||||
c. | Principles of consolidation: | ||||||||||||||||
The consolidated financial statements include the accounts of the Group. Intercompany transactions and balances, including profits from intercompany sales not yet realized outside the Group, have been eliminated upon consolidation. | |||||||||||||||||
d. | Cash equivalents: | ||||||||||||||||
The Company considers all short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less to be cash equivalents. | |||||||||||||||||
e. | Restricted cash: | ||||||||||||||||
Restricted cash is a deposit account which is used only for payments of the Company's customers. | |||||||||||||||||
f. | Marketable securities: | ||||||||||||||||
The Company accounts for investments in debt and equity securities (other than those accounted for under the equity method of accounting) in accordance with ASC 320, "Investments - Debt and Equity Securities" ("ASC 320"). | |||||||||||||||||
Management determines the classification of investments in marketable debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. The Company classifies all of its securities as available for sale carried at fair market value. Fair value is determined based on observable market value quotes. Available for sale securities are carried at fair value, with unrealized gains and losses reported in "accumulated other comprehensive income (loss)" in shareholders' equity. Realized gains and losses on sales of investments, are included in earnings and are derived using the specific identification method for determining the cost of securities (see also Note 3). | |||||||||||||||||
Interest and dividends on securities are included in financial income, net. | |||||||||||||||||
ASC 320 provides guidance for determining when an investment in equity securities is considered impaired, whether impairment is other-than-temporary, and for measurement of an impairment loss. An investment is considered impaired if the fair value of the investment is less than its cost. If, after consideration of all available evidence to evaluate the realizable value of its investment, impairment is determined to be other-than-temporary, then an impairment loss should be recognized equal to the difference between the investment's cost and its fair value. | |||||||||||||||||
The Company applies ASC 320-10-65-1, "Recognition and Presentation of Other-Than-Temporary Impairments", according to which other-than-temporary impairment loss is recognized in earnings if the entity has the intent to sell the debt security, or if it is more likely than not that it will be required to sell the debt security before recovery of its amortized cost basis. However, if an entity does not expect to sell a debt security, it still needs to evaluate expected cash flows to be received and determines if a credit loss exists. In the event of a credit loss, only the amount of impairment associated with the credit loss is recognized currently in earnings. Amounts relating to factors other than credit losses are recorded in other comprehensive income (loss). | |||||||||||||||||
The marketable securities held by the Company are pledged to secure future rent payments for the Company's facilities in Israel. | |||||||||||||||||
g. | Property 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 depreciation rates: | |||||||||||||||||
% | |||||||||||||||||
Computers and peripheral equipment | 33 | ||||||||||||||||
Office furniture and equipment | 6 - 20 (mainly 7%) | ||||||||||||||||
Leasehold improvements | Shorter of useful life or lease term | ||||||||||||||||
h. | Impairment of long-lived assets: | ||||||||||||||||
The Company's long-lived assets and certain identifiable intangibles are reviewed for impairment in accordance with ASC 360, "Property, Plant and Equipment" ("ASC 360"), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. As of December 31, 2012 and 2013, no impairment losses were identified. | |||||||||||||||||
i. | Goodwill: | ||||||||||||||||
Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC 350,"Intangibles-Goodwill and Other" goodwill is subject to an annual impairment test or more frequently if impairment indicators are present. Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. The Company operates in two reporting units: Enterprise and Service providers. As determined in previous years all goodwill balance is assigned to the Enterprise reporting unit. | |||||||||||||||||
In September 2011, the FASB issued ASU 2011-08 which amends the rules for testing goodwill for impairment. Under the new rules, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. | |||||||||||||||||
The Company engaged a third party specialist in order to perform the 2013 annual impairment test. | |||||||||||||||||
The Company performs its annual impairment tests during the fourth quarter of each year. | |||||||||||||||||
For the period from September 30, 2013 until December 31, 2013, no events occurred or circumstances changed that reduced the fair value of the reporting unit below its carrying value. During 2011, 2012 and 2013, no impairment losses were identified. | |||||||||||||||||
j. | Intangible assets: | ||||||||||||||||
Intangible assets are amortized over their useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up in accordance with ASC 350. The Company's identifiable intangibles are reviewed for impairment in accordance with ASC 360 whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. | |||||||||||||||||
The Company's intangible assets were all acquired in connection with historical acquisitions. | |||||||||||||||||
Developed technology is amortized over a period of four-to-eight years, customer relationships are amortized over a period of six to eight years and brand names are amortized over a period of eleven years. During 2011, 2012 and 2013, no impairment losses were identified. | |||||||||||||||||
k. | Severance pay: | ||||||||||||||||
The Company's liability for severance pay for employees located in Israel is calculated pursuant to Israel's Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment, as of the balance sheet date. Employees are entitled to one month's salary for each year of employment or a portion thereof. The Company's severance pay liability for all of its employees is fully provided by monthly deposits with insurance policies and by an accrual. The value of these policies is recorded as an asset in the Company's balance sheet. | |||||||||||||||||
The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to Israel's Severance Pay Law or labor agreements. The value of the deposited funds is based on the cash surrendered value of these policies, and includes immaterial profits. | |||||||||||||||||
Severance expense for the years ended December 31, 2011, 2012 and 2013 amounted to approximately $ 155, $ 165 and $ 160, respectively. | |||||||||||||||||
l. | Revenue recognition: | ||||||||||||||||
The Company generates revenues mainly from licensing the rights to use its software products and from providing maintenance, hosting and managed services, support and training. Certain software licenses require significant customization. The Company sells its products directly to end-users and indirectly through resellers and OEMs (who are considered end users). | |||||||||||||||||
Revenues from software license agreements are recognized when all criteria outlined in ASC 985-605, "Revenue Recognition -Software", are met. Revenue from license fees is recognized when persuasive evidence of an agreement exists, delivery of the product has occurred, no significant obligations with regard to implementation remain, the fee is fixed or determinable and collectability is probable. The Company does not grant a right of return to its customers. | |||||||||||||||||
Where software arrangements involve multiple elements, revenue is allocated to each undelivered element based on vendor specific objective evidence ("VSOE") of the fair values of each undelivered element in the arrangement, in accordance with the "residual method". | |||||||||||||||||
Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered element and is recognized as revenue when all revenue recognition criteria of ASC 985-605, as amended, are satisfied. Under the residual method, any discount in the arrangement is allocated to the delivered element. If sufficient specific objective evidence does not exist for all undelivered elements, revenue is deferred for the entire arrangement until all revenue recognition criteria are met for such undelivered elements. | |||||||||||||||||
The Company has immaterial number of multiple element arrangements, therefore no VSOE is established. | |||||||||||||||||
Revenues from maintenance and support services are recognized over the term of the maintenance and support agreement on a straight line basis. | |||||||||||||||||
Revenues for hosting and managed services are recognized based on SAB 104 and ASC 605-25, when delivery has occurred or services have been rendered, the fee is fixed and determinable, collectability is probable and persuasive evidence of an arrangement exists. These revenues are recognized as one unit of accounting, on a straight-line basis over the term of the last undelivered element. | |||||||||||||||||
Deferred revenues include unearned amounts received under maintenance and support contracts, not yet recognized as revenues. | |||||||||||||||||
m. | Research and development costs: | ||||||||||||||||
ASC 985, "Software", requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. | |||||||||||||||||
Based on the Company's product development process, technological feasibility is established upon the completion of a working model. The Company does not incur material costs between the completion of a working model and the point at which the products are ready for general release. Therefore, research and development costs are charged to the statement of operations as incurred. | |||||||||||||||||
n. | Government grants: | ||||||||||||||||
Royalty-bearing grants from the Government of Israel for funding certain approved research and development projects are recognized at the time the Company is entitled to such grants, on the basis of the related costs incurred and recorded as a deduction of research and development costs. The Company recorded a grant in the amount of $ 10 in 2011. The Company did not receive any grants during the years ended December 31, 2012 and 2013, respectively. | |||||||||||||||||
o. | Income taxes: | ||||||||||||||||
The Company accounts for income taxes in accordance with ASC Topic 740, "Income Taxes" ("ASC 740"). ASC 740 prescribes the use of the liability method, according to which deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided to reduce deferred tax assets to their estimated realizable value. | |||||||||||||||||
ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, a company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. | |||||||||||||||||
p. | Accounting for stock-based compensation: | ||||||||||||||||
The Company applies ASC 718 "Compensation - Stock Compensation", and ASC 505-50 "Equity-Based Payments to Non-Employees", with respect to options and warrants issued to non-employees. ASC 718 requires the use of an option valuation model to measure the fair value of the options and warrants at the measurement date as defined in ASC 505-50. | |||||||||||||||||
ASC 718 requires companies to estimate the fair value of stock-based awards on the date of grant using an option-pricing model, where applicable. Stock-based compensation expense recognized in the Company's consolidated statements of operations for 2011, 2012 and 2013 include compensation expense for stock-based awards granted based on the grant date fair value estimated in accordance with the provisions of ASC 718. | |||||||||||||||||
The Company recognizes these compensation costs net of a forfeiture rate and recognizes the compensation costs for only those shares expected to vest on an accelerated method over the requisite service period for each separately vesting portion of the award, which is the option vesting term of four years. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. | |||||||||||||||||
The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option pricing model ("Black-Scholes"). No options were granted during 2012. The fair value for options granted in 2011 and 2013 was estimated at the date of grant using the Black-Scholes option pricing model with the following assumptions. | |||||||||||||||||
Year ended December 31, | |||||||||||||||||
Stock options | 2011 | 2012 | 2013 | ||||||||||||||
Expected volatility (1) | 100%-101.4% | - | 91.4%-100.3% | ||||||||||||||
Risk-free interest (2) | 0.37%-0.41% | - | 0.35%-0.78% | ||||||||||||||
Dividend yield (3) | 0% | - | 0% | ||||||||||||||
Expected life (years) (4) | 3.75 | - | 3.34-3.75 | ||||||||||||||
-1 | Expected volatility is estimated based upon actual historical stock price movements over an historical period equivalent to the option's expected term; | ||||||||||||||||
-2 | The risk-free interest rate for purposes of the Black-Scholes price calculation is based on the yield from U.S. Treasury Bonds with an equivalent term; | ||||||||||||||||
-3 | The dividend yield is estimated to be 0% as the Company has historically not paid dividends and has no foreseeable plans to pay dividends. | ||||||||||||||||
-4 | Expected term of options granted represents the period of time that options granted are expected to be outstanding, and is estimated based on the Company's history. | ||||||||||||||||
q. | Fair value of financial instruments: | ||||||||||||||||
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: | |||||||||||||||||
The carrying amounts of cash and cash equivalents, restricted cash, restricted marketable securities, trade receivables, other accounts receivable and trade payables approximate their fair value, due to the short-term maturity of such instruments. | |||||||||||||||||
The Company applies ASC 820 which clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: | |||||||||||||||||
Level 1 - | Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | ||||||||||||||||
Level 2 - | Include other inputs that are directly or indirectly observable in the marketplace. | ||||||||||||||||
Level 3 - | Unobservable inputs which are supported by little or no market activity. | ||||||||||||||||
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. | |||||||||||||||||
Assets measured at fair value under ASC 820 on a recurring basis as of December 31, 2013 were presented in the Company's consolidated balance sheet as follows: | |||||||||||||||||
Total | Quoted prices in active markets for identical assets | Significant other observable inputs | Significant unobservable inputs | ||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Marketable securities | $ | 153 | $ | 153 | - | - | |||||||||||
r. | Concentrations of credit risk: | ||||||||||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, trade receivables, and restricted marketable securities. | |||||||||||||||||
Cash and cash equivalents are deposited with major banks in Israel and in the United States. Such deposits in the United States may be in excess of insured limit and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company's investments are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these investments. | |||||||||||||||||
The Company's customers are located mainly in the United States (see Note 12). The Company performs ongoing credit evaluations of its customers. In certain circumstances, the Company may require letters of credit, other collateral or additional guarantees. The allowance for doubtful accounts is determined with respect to specific debts that are doubtful of collection according to management estimates. | |||||||||||||||||
The Company's restricted marketable securities include investments in equity securities and Israeli government securities. Management believes that the portfolio is well diversified, and accordingly, minimal credit risk exists with respect to these marketable securities. The Company has no off-balance-sheet concentrations of credit risk. | |||||||||||||||||
s. | Basic and diluted net earnings per share: | ||||||||||||||||
The Company accounts for net earnings per share based on ASC 260,"Earning Per Share", which requires companies to compute both basic and diluted earnings per share, and to disclose the methodology used for the calculations. Basic earnings per share are calculated using the weighted average number of shares outstanding during the period. Diluted earnings per share are computed on the basis of the weighted average number of shares outstanding and the effect of their dilutive potential during the period. | |||||||||||||||||
Basic net earnings per share are computed based on the weighted average number of Ordinary shares outstanding during each year. In 2011 all outstanding stock options were excluded from the calculation of the diluted net earnings (loss) per ordinary share since those options were anti-dilutive for the period. In 2012 and in 2013, 52,707 and 61,736, respectively, options have been included in the calculation of the diluted net earnings per Ordinary Share, the effect on the above-mentioned amount was immaterial. | |||||||||||||||||
t. | Derivatives and hedging: | ||||||||||||||||
ASC 815, "Derivatives and Hedging", as amended, requires the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value is immediately recognized in earnings. The Company uses derivatives to hedge certain cash flow foreign currency exposures in order to further reduce the Company's exposure to foreign currency risks. | |||||||||||||||||
The Company entered into put option contracts to hedge certain transactions denominated in foreign currencies. The purpose of the Company's foreign currency hedging activities is to protect the Company from risk that the eventual dollar cash flows from international activities will be adversely affected by changes in the exchange rates. The Company's put option contracts did not qualify as hedging instruments under ASC 815. | |||||||||||||||||
Changes in the fair value of put option contracts are reflected in the consolidated statements of operations as financial income or expense. | |||||||||||||||||
During 2011, 2012 and 2013, the Company entered into forward, call and put option contracts in the aggregated notional amount of $ 5,350, $ 3,750 and $ 2,400, respectively, that converted a portion of its floating currency liabilities to a fixed rate basis, thus reducing the impact of the exchange rate fluctuations on the Company's cash flow. In 2011, 2012 and 2013, the revaluation profit from these contracts with respect to the above transactions were $ 10, $ 47 and $ 65, respectively, and are presented in the statements of operations as financial expense, net. As of December 31, 2013, the Company had outstanding call and put option contracts in the amount of $900. | |||||||||||||||||
u. | Comprehensive income: | ||||||||||||||||
The Company accounts for comprehensive income in accordance with ASC Topic 220, "Comprehensive Income". This statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income generally represents all changes in stockholders' equity during the period except those resulting from investments by, or distributions to, stockholders. In May 2011, the FASB issued guidance that changed the requirement for presenting "Comprehensive Income" in the consolidated financial statements. The update requires an entity to present the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The Company adopted this new guidance on January 1, 2012 and elected to present the comprehensive income in two separate but consecutive statements. | |||||||||||||||||
Refer also to Note 2.w.1 below. | |||||||||||||||||
v. | Reclassification: | ||||||||||||||||
Certain amounts in prior years have been reclassified to conform to the current year's presentation. | |||||||||||||||||
w. | Impact of recently issued accounting standards | ||||||||||||||||
1 | In February 2013, the FASB issued ASU No. 2013-02, "Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income". Under ASU 2013-02, an entity is required to provide information about the amounts reclassified out of Accumulated Other Comprehensive Income ("AOCI") by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in the financial statements. ASU 2013-02 was effective for the Company as of January 1, 2013. This standard only impacts presentation and disclosure requirements. The Company adopted this new guidance on January 1, 2013 and the adoption did not have a material effect on our consolidated financial statements. | ||||||||||||||||
2 | In July 2013, the FASB issued a new accounting standard that will require the presentation of certain unrecognized tax benefits as reductions to deferred tax assets rather than as liabilities in the consolidated balance sheets when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. | ||||||||||||||||
The Company will be required to adopt this new standard on a prospective basis in the first quarter of fiscal 2015; however, early adoption is permitted as a retrospective application. The Company is currently evaluating the impact of this new standard on its consolidated financial statements. |
MARKETABLE_SECURITIES
MARKETABLE SECURITIES | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
MARKETABLE SECURITIES [Abstract] | ' | ||||||||||||||||||||||||||||||||
MARKETABLE SECURITIES | ' | ||||||||||||||||||||||||||||||||
NOTE 3:- | MARKETABLE SECURITIES | ||||||||||||||||||||||||||||||||
The following is a summary of the Company's accumulated gross unrealized gains/ losses from investment in marketable securities as of December 31, 2013: | |||||||||||||||||||||||||||||||||
31-Dec-12 | 31-Dec-13 | ||||||||||||||||||||||||||||||||
Amortized | Gross unrealized | Gross unrealized | Fair | Amortized | Gross unrealized | Gross unrealized | Fair | ||||||||||||||||||||||||||
market | Market | ||||||||||||||||||||||||||||||||
cost | gains | losses | value | Cost | gains | losses | Value | ||||||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||||||||||||
Equity securities | $ | 81 | $ | 4 | $ | 7 | $ | 78 | $ | 65 | $ | 10 | $ | 1 | $ | 74 | |||||||||||||||||
Corporate bonds | 47 | 2 | - | 49 | 36 | 6 | - | 42 | |||||||||||||||||||||||||
Israeli Government debt | 11 | 1 | - | 12 | 34 | 3 | - | 37 | |||||||||||||||||||||||||
$ | 139 | $ | 7 | $ | 7 | $ | 139 | $ | 135 | $ | 19 | $ | 1 | $ | 153 | ||||||||||||||||||
The net realized gains and (losses) on sales of available-for-sale securities of $ 2, $ (6) and approximately $ 1 in 2011, 2012 and 2013, respectively, were recorded in financial income. | |||||||||||||||||||||||||||||||||
The amortized cost and fair value of debt and securities as of December 31, 2012 and 2013, by contractual maturity, are shown below: | |||||||||||||||||||||||||||||||||
31-Dec-12 | 31-Dec-13 | ||||||||||||||||||||||||||||||||
Amortized cost | Fair market value | Amortized cost | Fair market value | ||||||||||||||||||||||||||||||
Matures up to one year | $ | 51 | $ | 54 | $ | 79 | $ | 87 | |||||||||||||||||||||||||
Matures after one year through five years | 41 | 42 | 28 | 32 | |||||||||||||||||||||||||||||
Matures after five years | 14 | 16 | 12 | 15 | |||||||||||||||||||||||||||||
Equity securities - no definite maturity date | 33 | 27 | 16 | 19 | |||||||||||||||||||||||||||||
Total | $ | 139 | $ | 139 | $ | 135 | $ | 153 | |||||||||||||||||||||||||
The marketable securities are restricted in order to secure the Company's obligations under an office lease (see Note 8). |
OTHER_ACCOUNTS_RECEIVABLE_AND_
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES [Abstract] | ' | ||||||||
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | ' | ||||||||
NOTE 4:- | OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Government authorities | $ | 32 | $ | 12 | |||||
Prepaid expenses | 23 | 60 | |||||||
Lease deposits | 53 | 41 | |||||||
Related parties | 10 | 6 | |||||||
Others | 57 | 28 | |||||||
$ | 175 | $ | 147 |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
PROPERTY AND EQUIPMENT [Abstract] | ' | ||||||||
PROPERTY AND EQUIPMENT | ' | ||||||||
NOTE 5:- | PROPERTY AND EQUIPMENT | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Cost: | |||||||||
Computers and peripheral equipment | $ | 752 | $ | 813 | |||||
Office furniture and equipment | 185 | 186 | |||||||
Leasehold improvements | 50 | 50 | |||||||
987 | 1,049 | ||||||||
Accumulated depreciation: | |||||||||
Computers and peripheral equipment | 564 | 678 | |||||||
Office furniture and equipment | 141 | 151 | |||||||
Leasehold improvements | 37 | 37 | |||||||
Accumulated depreciation | 742 | 866 | |||||||
Depreciated cost | $ | 245 | $ | 183 | |||||
The depreciation expense for the years ended December 31, 2011, 2012 and 2013 amounted to $ 82, $ 102 and $124, respectively. |
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
INTANGIBLE ASSETS [Abstract] | ' | ||||||||
INTANGIBLE ASSETS | ' | ||||||||
NOTE 6:- | INTANGIBLE ASSETS | ||||||||
a. | Intangibles consist of the following: | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Cost: | |||||||||
Development technology | $ | 2,170 | $ | 2,170 | |||||
Customer relationships | 1,015 | 1,015 | |||||||
Brand name | 229 | 229 | |||||||
3,414 | 3,414 | ||||||||
Accumulated amortization: | |||||||||
Development technology | 1,675 | 1,798 | |||||||
Customer relationships | 897 | 945 | |||||||
Brand name | 83 | 104 | |||||||
2,655 | 2,847 | ||||||||
Amortized cost | $ | 759 | $ | 567 | |||||
b. | Amortization expense amounted to $ 365, $ 291 and $192 for the years ended December 31, 2011, 2012 and 2013, respectively. | ||||||||
c. | Estimated amortization expense for: | ||||||||
Year ended December 31, | |||||||||
2014 | $ | 177 | |||||||
2015 | 167 | ||||||||
2016 | 160 | ||||||||
2017 | 21 | ||||||||
2018-2019 | 42 | ||||||||
$ | 567 |
ACCRUED_EXPENSES_AND_OTHER_LIA
ACCRUED EXPENSES AND OTHER LIABILITIES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract] | ' | ||||||||
ACCRUED EXPENSES AND OTHER LIABILITIES | ' | ||||||||
NOTE 7:- | ACCRUED EXPENSES AND OTHER LIABILITIES | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Employees and payroll accruals | $ | 999 | $ | 1,013 | |||||
Institutions and income tax payable | 353 | 134 | |||||||
Accrued expenses | 958 | 1,007 | |||||||
Related parties | 83 | 46 | |||||||
$ | 2,393 | $ | 2,200 |
COMMITMENTS_AND_CONTINGENT_LIA
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | ' | ||||
COMMITMENTS AND CONTINGENT LIABILITIES | ' | ||||
NOTE 8:- | COMMITMENTS AND CONTINGENT LIABILITIES | ||||
a. | Lease commitments: | ||||
The Company and its subsidiaries lease office space and motor vehicles through operating leases. The facilities of the Company and its subsidiaries are leased for periods ending February 2019. Future minimum lease commitments under non-cancelable operating leases as of December 31, 2013 are as follows: | |||||
2014 | $ | 217 | |||
2015 | 78 | ||||
2016 | 58 | ||||
2017-2019 | 126 | ||||
$ | 479 | ||||
Lease expenses for the years ended December 31, 2011, 2012 and 2013 were approximately $ 573, $ 462 and $ 480, respectively. | |||||
b. | Royalty commitments: | ||||
The Company is committed to pay royalties to the Office of the Chief Scientist ("OCS") of the Ministry of Industry, Trade and Labor of the Government of Israel on proceeds from sales of products resulting from the research and development projects in which the OCS participated. In the event that development of a specific product in which the OCS participated is successful, the Company will be obligated to repay the grants through royalty payments at the rate of 3% to 5% based on the sales of the Company, up to 100%-150% of the grants received linked to the dollar. Grants received after January 1999 is subject to interest at a rate equal to the 12 month LIBOR rate. The obligation to pay these royalties is contingent upon actual sales of the products and, in the absence of such sales, no payment is required. | |||||
As of December 31, 2013, the Company had a contingent liability to pay royalties in the amount of approximately $ 8,638 plus interest for grants received after January 1999. | |||||
The Company has paid or accrued royalties in its cost of revenues relating to the repayment of such OCS grants in the amount of $ 219, $ 200 and $ 136 for the years ended December 31, 2011, 2012 and 2013, respectively. | |||||
c. | Claims and demands: | ||||
1 | In April 2000, the Israeli Tax Authorities (the "ITA") issued a demand to the Company for a tax payment for the period of 1997-1999 in the amount of approximately NIS 6,000 ($ 1,607 as of December 31, 2012). The Company appealed the demand to the Israeli Tel Aviv District. | ||||
In October 2012, the Tel Aviv District Court rendered its decision, according to which, the Company's claims were partly accepted and partly denied. According to the court ruling and the final assessment letter from the ITA, the Company had to pay approximately $ 1,430, of which $ 1,190 was paid during 2012 and $ 240 was paid in 2013. | |||||
2 | Claims related to discontinued operations: | ||||
a) | The Company is a party to various claims that arose in TABS Brazil. Accordingly, the Company recorded a provision of approximately $ 226 in respect of such claims in accordance with ASC 450, "Contingencies", based on the opinion of Company's management. | ||||
b) | During August 2007, TABS Brazil was ordered by the Labor Law Court in Brazil to pay approximately $ 71 to one of its former employees. Such amount bears a 1% interest rate per month from the date that the claim was filed. The Company recorded a provision in its financial statements for the total amount of the claim. As of December 31, 2013 total claims related to discontinued operations amounted to $ 362. | ||||
3 | In September 2010, Asentinel LLC ("Asentinel"), a competitor of the Company, filed a patent infringement complaint against AnchorPoint (now known as The Info Group Inc.), from whom we purchased certain assets in December 2008, and two other defendants, in the United States District Court for the Western District of Tennessee. On December 2, 2011 the Company entered into a settlement agreement with Asentinel, according to which the Company made a lump sum payment for the alleged past damages, which was expensed in 2011, and Asentinel granted the Company a license to use certain of its patents in return for ongoing annual royalty payments for periods subsequent to January 1, 2012. During 2013 the Company recorded royalty payments in cost of revenues with respect to Asentinel in the amount of $ 48. | ||||
4 | The Israeli Government, through the Fund for Encouragement of Marketing Activities, awarded C. Mer Industries Ltd., a related party of the Company grants for participation in foreign marketing expenses, partially related to the Company's marketing activities for the years 1996 - 1998. During 2012, the Company received through an affiliated company a demand with respect to the reimbursement of above-mentioned grants. As of December 31, 2012 and 2013, the Company made a provision in the amount that was considered probable. | ||||
d. | Guarantees: | ||||
The Company provided a bank guarantee in the amount of $ 68 to secure its obligations under one of its lease agreements, see also Note 3. |
TAXES_ON_INCOME
TAXES ON INCOME | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
TAXES ON INCOME [Abstract] | ' | ||||||||||||
TAXES ON INCOME | ' | ||||||||||||
NOTE 9:- | TAXES ON INCOME | ||||||||||||
a. | Israeli taxation: | ||||||||||||
1 | Corporate tax rates: | ||||||||||||
The Israeli corporate tax rate was 24% in 2011, 25% in 2012 and 25% in 2013. | |||||||||||||
On December 5, 2011, the Israeli Parliament (the Knesset) passed the Law for Tax Burden Reform (Legislative Amendments), 2011 ("the Law") which, among others, canceled effective from 2012, the scheduled progressive reduction in the corporate tax rate. The Law also increased the corporate tax rate to 25% in 2012. In view of this increase in the corporate tax rate to 25% in 2012, the real capital gains tax rate and the real betterment tax rate were also increased accordingly. | |||||||||||||
On July 30, 2013, the Israeli Parliament approved the second and third readings of the Economic Plan for 2013-2014 ("Amended Budget Law") which consists, among others, of fiscal changes whose main aim is to enhance the collection of taxes in those years. These changes include, among others, raising the Israeli corporate tax rate from 25% to 26.5% effective from January 1, 2014. | |||||||||||||
2 | Tax benefits under the Law for the Encouragement of Capital Investments, 1959 ("the Law"): | ||||||||||||
According to the Law, the Company is entitled to various tax benefits by virtue of the "approved enterprise" status granted to part of their enterprises, as implied by this Law. The principal benefits by virtue of the Law are: | |||||||||||||
According to the provisions of the Law, the Company has chosen to enjoy the "Alternative" track. Under this track, the Company is tax exempt in the first two years of the benefit period and subject to tax at the reduced rate of 10%-25% for a period of several years for the remaining benefit period. | |||||||||||||
Another condition for receiving the benefits under the alternative track is a minimum qualifying investment. This condition requires an investment in the acquisition of productive assets such as machinery and equipment which must be carried out within three years. The minimum qualifying investment required for setting up a plant is NIS 300. As for plant expansions, the minimum qualifying investment is the higher of NIS 300 and an amount equivalent to the "qualifying percentage" of the value of the productive assets. Productive assets that are used by the plant but not owned by it will also be viewed as productive assets. The Company was eligible under the terms of minimum qualifying investment and elected 2008 as its "year of election". | |||||||||||||
The qualifying percentage of the value of the productive assets is as follows: | |||||||||||||
The value of productive | The new proportion that the | ||||||||||||
assets before the expansion | required investment bears to the | ||||||||||||
(NIS in millions) | value of productive assets | ||||||||||||
Up to NIS 140 (app. $ 40) | 12% | ||||||||||||
NIS 140 - NIS 500 | 7% | ||||||||||||
(app. $ 40-$ 144) | |||||||||||||
More than NIS 500(app.$144) | 5% | ||||||||||||
The income qualifying for tax benefits under the alternative track is the taxable income of a company that has met certain conditions as determined by the Investment Law ("a beneficiary company"), and which is derived from an industrial enterprise. The Investment Law specifies the types of qualifying income that is entitled to tax benefits under the alternative track with respect of an industrial enterprise, whereby income from an industrial enterprise includes, among others, revenues from the production and development of software products and revenues from industrial research and development activities performed for a foreign resident (and approved by the Head of the Administration of Industrial Research and Development). | |||||||||||||
The benefit period starts with the first year the beneficiary enterprise earns taxable income, provided that 14 years have not passed since the approval was granted and 12 years have not passed since the enterprise began operating. In respect of expansion programs pursuant to Amendment No. 60 to the Investment Law, the benefit period starts at the later of the year elected and the first year the Company earns taxable income provided that 12 years have not passed since the beginning of the year of election. The respective benefit period has not yet begun. | |||||||||||||
The above benefits are contingent upon the fulfillment of the conditions stipulated by the Investment Law, regulations published there-under and the letters of approval for the investments in the approved enterprises, as above. Non-compliance with the conditions may cancel all or part of the benefits and refund of the amount of the benefits, including interest. Management believes that the Company is meeting the aforementioned conditions. | |||||||||||||
Amendments to the Investment Law: | |||||||||||||
In December 2010, the "Knesset" passed the Investment Law for Economic Policy for 2011 and 2012 (Amended Legislation), 2011, which prescribes, among other things, amendments to the Investment Law. The amendment became effective as of January 1, 2011. According to the amendment, the benefit tracks in the Law were modified and a flat tax rate applies to the Company's entire preferred income. The Company will be able to opt to apply (the waiver is non-recourse) the amendment and from then on it will be subject to the amended tax rates that are: 2011 and 2012 - 15% (in development area A - 10%), 2013 and 2014 - 12.5% (in | |||||||||||||
development area A - 7%) and in 2015 and thereafter - 12% (in development area A - 6%). | |||||||||||||
As of December 31, 2013, the Company chose not to adopt this amendment, but may elect to do so in the future. | |||||||||||||
3 | Tax assessments: | ||||||||||||
The Company has received final tax assessments until the 2008 tax year. | |||||||||||||
4 | Tax benefits under the Law for the Encouragement of Industry (Taxation), 1969: | ||||||||||||
The Law for the Encouragement of Industry (Taxation), 1969, provides several tax benefits for industrial companies. An industrial company is defined as a company resident in Israel, at least 90% of the income of which in a given tax year exclusive of income from specified government loans, capital gains, interest and dividends, is derived from an industrial enterprise owned by it. An industrial enterprise is defined as an enterprise whose major activity in a given tax year is industrial production activity. | |||||||||||||
MTS is currently qualified as an "industrial company" under the above definition and, as such, is entitled to certain tax benefits, mainly accelerated depreciation of machinery and equipment, as prescribed by regulations published under the Inflationary Adjustments Law, the right to claim public issuance expenses and amortization of intangible property rights as a deduction for tax purposes. | |||||||||||||
Eligibility for benefits under the Law for the Encouragement of Industry (Taxation), 1969, is not subject to receipt of prior approval from any governmental authority. No assurance can be given that the Israeli Tax Authorities will agree that the Company qualifies, or, if the Company qualifies, then the Company will continue to qualify as an industrial company or that the benefits described above will be available to the Company in the future. | |||||||||||||
5 | Tax Benefits for Research and Development: | ||||||||||||
Israeli tax law permits, under some conditions, a tax deduction for expenditures in the year incurred, including capital expenditures, in scientific research and development projects. The deduction is permitted if, among other things, the expenditures are approved by the relevant government ministry and the research and development is for the promotion of the enterprise and is carried out by, or on behalf of, a company seeking the deduction. | |||||||||||||
The OCS has approved some of the Company's research and development programs and the Company has been able to deduct, for tax purposes, a portion of its research and development expenses net of the grants received. Other research and development expenses that are not approved may be deducted for tax purposes in three equal installments during a three-year period. | |||||||||||||
b. | Income taxes on non-Israeli subsidiaries: | ||||||||||||
Non-Israeli subsidiaries are taxed according to the tax laws in their respective countries of residence. | |||||||||||||
c. | Net operating loss carry-forwards: | ||||||||||||
As of December 31, 2013, the Company and its subsidiaries in Hong Kong and the U.S. had an estimated total amount of available carry-forward tax losses of approximately $ 19,454, $ 285 and $ 539, respectively to offset against future taxable profits. The operating tax loss carry-forwards in Israel may be offset indefinitely against operating income. In addition, as of December 31, 2013, the Company had capital losses in the amount of approximately $ 417 that can be carried forward indefinitely. | |||||||||||||
MTS IntegraTRAK is subject to U.S. income taxes. Total net operating loss carry-forwards of approximately $ 539 as of December 31, 2013, will expire in the years 2021 to 2028. The Company's management believes that utilization of the U.S. net operating losses may be subject to substantial annual limitation due to the "change in ownership" provisions of the Internal Revenue Code of 1986 and similar state provisions. Such annual limitation may result in the expiration of net operating losses before utilization. | |||||||||||||
d. | Deferred income taxes: | ||||||||||||
Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax liabilities and assets are as follows: | |||||||||||||
December 31, | |||||||||||||
Deferred tax assets: | 2012 | 2013 | |||||||||||
Tax loss carry-forwards | $ | 4,872 | $ | 5,377 | |||||||||
Allowances for doubtful accounts and accruals for employee benefits | 101 | 95 | |||||||||||
Intangible assets | 118 | 103 | |||||||||||
Depreciation, accruals for interest and other | 724 | 721 | |||||||||||
Deferred tax asset before valuation allowance | 5,815 | 6,296 | |||||||||||
Goodwill | (658 | ) | (674 | ) | |||||||||
Valuation allowance | (4,786 | ) | (5,651 | ) | |||||||||
Deferred tax assets (liability), net | $ | 371 | $ | (29 | ) | ||||||||
Presented as follows: | |||||||||||||
Short-term assets | $ | 371 | $ | - | |||||||||
Long-term liability | - | (29 | ) | ||||||||||
MTS and certain of its subsidiaries have provided valuation allowances in respect of deferred tax assets resulting from tax loss carry-forwards and other temporary differences, since they have a history of losses incurred over the past years. Management currently believes that it is more likely than not that part of the deferred tax relating to the loss carry-forwards in the Company and its subsidiaries and other temporary differences will not be realized in the foreseeable future. | |||||||||||||
e. | A reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company and the actual tax expense as reported in the statements of operations is as follows: | ||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Income before taxes on income, net, as reported in the statements of operations from continuing operations | $ | 481 | $ | 2,102 | $ | 1,768 | |||||||
Tax rates | 24 | % | 25 | % | 25 | % | |||||||
Theoretical tax expense (benefit) | $ | 115 | $ | 526 | $ | 442 | |||||||
Increase in taxes resulting from: | |||||||||||||
Effect of different tax rates | 19 | 25 | 27 | ||||||||||
U.S. state tax | 8 | 26 | 35 | ||||||||||
Utilization of carry-forward tax losses for which valuation allowance was provided | (2 | ) | (380 | ) | - | ||||||||
Taxes in respect of previous years as a result of court ruling | - | 1,415 | - | ||||||||||
Changes in provision for uncertain tax positions | 6 | (362 | ) | 1 | |||||||||
Change in valuation allowance | - | (340 | ) | 148 | |||||||||
Deferred taxes for which valuation allowance was provided | (136 | ) | (174 | ) | (218 | ) | |||||||
Taxes on income, net, as reported in the statements of operations | $ | 10 | $ | 736 | $ | 435 | |||||||
f. | Income before income taxes is comprised as follows: | ||||||||||||
Year ended December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Domestic | $ | 225 | $ | 1,808 | $ | 1,561 | |||||||
Foreign | 256 | 294 | 207 | ||||||||||
$ | 481 | $ | 2,102 | $ | 1,768 | ||||||||
g. | Taxes on income are comprised as follows: | ||||||||||||
Year ended December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Current taxes | $ | 8 | $ | 26 | $ | 35 | |||||||
Deferred taxes | 2 | (340 | ) | 400 | |||||||||
Taxes in respect of previous years as a result of court ruling | - | 1,050 | - | ||||||||||
$ | 10 | $ | 736 | $ | 435 | ||||||||
Foreign | $ | 10 | $ | 57 | $ | 64 | |||||||
h. | As of December 31, 2013, the Company had a liability for unrecognized tax benefits of $ 101. A reconciliation of the opening and closing amounts of unrecognized tax benefits is as follows: | ||||||||||||
December 31, | |||||||||||||
2012 | 2013 | ||||||||||||
Balance as of beginning of the year | $ | 632 | $ | 100 | |||||||||
Additions based on tax positions taken during the current period | 3 | 1 | |||||||||||
Decrease based on tax positions taken during the current period | (535 | ) | - | ||||||||||
Balance at the end of the year | $ | 100 | $ | 101 |
RELATED_PARTY_TRANSACTIONS_AND
RELATED PARTY TRANSACTIONS AND BALANCES | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
RELATED PARTY TRANSACTIONS AND BALANCES [Abstract] | ' | ||||||||||||
RELATED PARTY TRANSACTIONS AND BALANCES | ' | ||||||||||||
NOTE 10:- | RELATED PARTY TRANSACTIONS AND BALANCES | ||||||||||||
a. | The Company receives certain services from C. Mer Industries Ltd. or C. Mer, a publicly traded company. Mr. Chaim Mer, the Company's chairman of the board and Mr. Isaac Ben Bassat, a director of the Company, are members of the controlling group of C. Mer. These services include reimbursement for shared expenses related to a commercial insurance policy. For the years ended December 31, 2011, 2012 and 2013, the Company paid or accrued $ 16, $ 13 and $ 16, respectively, with respect to the above mentioned expenses. In 2012 MTS Ltd. engaged with Mer Telecom Ltd., a subsidiary of C. Mer, in a deployment of its Mobile Financial Services (MFS) solution for a customer in Africa and completed the deployment in 2013. The Company recorded revenue in the amount of $ 0 and $ 29 in 2012 and 2013, respectively. As of December 31, 2013 the solution was implemented, but the customer has not yet activated the solution. | ||||||||||||
From January 1, 2009 until September 2011, as part of the acquisition of certain assets and liabilities of AnchorPoint, the Company received certain services from Data Distributors Inc., a company controlled by Mr. Roger Challen, a director of the Company and the controlling shareholder of the Info Group Inc., a beneficial owner of 23.5% of the Company's Ordinary shares. These services include reimbursement for shared expenses, development and IT services, other administrative services, and rental related fees. Expenses recognized with respect to the above mentioned services were approximately $ 195, $ 0 and $ 0 for the year ended December 31, 2011, 2012 and 2013, respectively. In addition, the Company rents an office in Powder Springs, Georgia, from Mr. Challen, under a month-to-month lease. For the year ended December 31, 2013, the Company paid or accrued $ 56 with respect to the above mentioned rent expenses. | |||||||||||||
On March 25, 2009, the Company's Audit Committee and Board of Directors approved a transaction with Mer& Co. (1982) Ltd., or Mer & Co, a subsidiary of C. Mer. According to the terms of the transaction, the Company will sell its products to Mer & Co, which has an Israel Defense Forces approved supplier number, and Mer & Co will represent the Company and resell its products to the Israeli Defense Forces. During 2013, revenues from the abovementioned transaction amounted to $ 45. | |||||||||||||
b. | Balances and transactions with related parties were as follows: | ||||||||||||
1 | Balances with related parties: | ||||||||||||
December 31, | |||||||||||||
2012 | 2013 | ||||||||||||
Other accounts payable and accrued expenses (see Note 7) | $ | 83 | $ | 46 | |||||||||
Other accounts receivable and prepaid expenses (see note 4) | $ | 10 | $ | 6 | |||||||||
2 | Transactions with related parties: | ||||||||||||
Year ended December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Revenues derived from a related party | $ | 103 | $ | 101 | $ | 74 | |||||||
Amounts charged by related parties: | |||||||||||||
Cost of revenues | $ | *54 | $ | 53 | $ | 16 | |||||||
Operating expenses | 323 | 121 | 195 | ||||||||||
$ | 377 | $ | 174 | $ | 211 |
SHAREHOLDERS_EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
SHAREHOLDERS' EQUITY [Abstract] | ' | ||||||||||||||||
SHAREHOLDERS' EQUITY | ' | ||||||||||||||||
NOTE 11:- | SHAREHOLDERS' EQUITY | ||||||||||||||||
a. | Share capital: | ||||||||||||||||
The Ordinary shares entitle their holders the right to receive notice to participate in and vote at general meetings of the Company and the right to receive cash dividends, if declared. | |||||||||||||||||
b. | Stock options: | ||||||||||||||||
MTS has authorized, through its 1996 Incentive Share Option Plan ("the Plan"), the grant of options to officers, management, employees and directors of MTS or any subsidiary of up to 750,000 of MTS's Ordinary shares, which may be granted under the Plan, pursuant to section 102 of the Israel Income Tax Ordinance. Any option, which is canceled or forfeited before expiration, will become available for future grants. | |||||||||||||||||
Each option granted under the Plan is exercisable until the earlier of five years from the date of the grant of the option or the expiration dates of the option plan. The exercise price of the options granted under the plans may not be less than the nominal value of the shares into which such options were exercised. The options primarily vest gradually over four years of employment. | |||||||||||||||||
In 2003, pursuant to an amendment in section 102 of the Israeli Income Tax Ordinance the Company rolled-over the remaining 446,958 options available at that time under the Plan for future grants under the 2003 Incentive Share Option Plan ("the 2003 Plan") that conforms with the newly amended provisions of section 102 of the Israel Income Tax Ordinance. In August 2013, shareholders approved amendments to the 2003 Plan. Its term was extended by ten years so that the 2003 Plan will expire on November 30, 2023, unless further extended. The number of ordinary shares issuable under the 2003 Plan was increased by an additional 500,000 ordinary shares, so that the Company is entitled to issue up to 946,957 ordinary shares under the 2003 Plan. | |||||||||||||||||
In June 2006, the Company authorized pursuant to its 2006 Stock Option plan ("the 2006 Plan"), the grant of options to officers, management, employees and directors of MTS IntegraTRAK or any subsidiary of up to 200,000 of the Company's Ordinary shares. Each option granted under the 2006 Plan will be either an option intended to be treated as an "incentive stock option", within the meaning of section 422 of the Internal Revenue Code of 1986, as amended, or an option that will be treated as a "non-qualified stock option". | |||||||||||||||||
At the Company's 2011 annual general meeting, shareholders approved an amendment to the 2006 Plan to provide for the issuance thereunder of an additional 200,000 Ordinary shares and to increase the total number of Ordinary shares with respect to which options may be granted there-under to any eligible employee during any 12 month period to 150,000 Ordinary shares, subject to adjustment as provided in the 2006 Plan. | |||||||||||||||||
At the Company's 2013 annual general meeting, shareholders approved an amendment to the 2006 Plan to provide for the issuance thereunder of an additional 150,000 post-reverse split ordinary shares, such that the Company will be entitled to issue options to purchase up to 550,000 Ordinary shares under the 2006 Plan. Each option granted under the 2006 Plan is exercisable until the earlier of five years from the date of the grant of the option or the expiration dates of the option plan. The exercise price of the options granted under the 2006 Plan may not be less than the fair market value of an Ordinary share determined as of the date of grant of the option. | |||||||||||||||||
During 2013, 35,250 options were exercised under the 2003 and 2006 Plans. | |||||||||||||||||
As of December 31, 2013, 844,536 Ordinary shares are available for future option grants. | |||||||||||||||||
c. | A summary of option activity under the Company's stock option plans to its employees as of December 31, 2013 and changes during the year ended December 31, 2013 are as follows: | ||||||||||||||||
Number of options | Weighted-average exercise price | Weighted- average remaining contractual term (in years) | Aggregate intrinsic value | ||||||||||||||
Outstanding at December 31, 2012 | 276,750 | $ | 1.7 | 3.01 | $ | 513 | |||||||||||
Granted | 172,000 | $ | 2.18 | 4.47 | |||||||||||||
Exercised | (30,500 | ) | $ | 1.99 | - | ||||||||||||
Expired and forfeited | (15,000 | ) | $ | 2.15 | - | ||||||||||||
Outstanding at December 31, 2013 | 403,250 | $ | 1.86 | 3.11 | $ | 289.14 | |||||||||||
Vested and expected to vest | 380,290 | $ | 1.86 | 3.08 | $ | 273.88 | |||||||||||
Exercisable at December 31, 2013 | 116,250 | $ | 1.73 | 1.81 | $ | 98.4 | |||||||||||
The weighted average grant-date fair value of options granted during 2011 and 2013 was $ 0.87 and $ 1.45 per option, respectively. During 2012 there were no option grants. | |||||||||||||||||
The total compensation cost related to options granted to employees under the Company's share-based compensation plans recognized for the years ended December 31, 2011, 2012 and 2013 amounted at $ 65, $ 41 and $ 93, respectively, net of estimated forfeitures. | |||||||||||||||||
As of December 31, 2013, there was $ 182 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the | |||||||||||||||||
Company's stock option plans. That cost is expected to be recognized over a weighted-average period of three years. | |||||||||||||||||
d. | Total stock-based compensation expenses recognized in 2011, 2012 and 2013: | ||||||||||||||||
The total stock-based compensation expense related to employees' equity-based awards, recognized for the years ended December 31, 2011, 2012 and 2013, was comprised as follows: | |||||||||||||||||
Year ended December 31, | |||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Cost of revenues | $ | 3 | $ | - | $ | 7 | |||||||||||
Research and development expenses | 8 | 1 | 7 | ||||||||||||||
Selling and marketing | 4 | 1 | - | ||||||||||||||
General and administrative expenses | 50 | 39 | 79 | ||||||||||||||
$ | 65 | $ | 41 | $ | 93 | ||||||||||||
e. | Options to non-employees: | ||||||||||||||||
Issuance date | In connection with | Number of options granted | Options exercisable | Exercise price per share | Exercisable through | ||||||||||||
9-Nov-11 | consultant | 2,500 | 2,500 | 1.94 | May-14 | ||||||||||||
8-Aug-13 | consultant | 40,000 | - | 2.08 | Aug-18 | ||||||||||||
At the Company's 2013 annual general meeting, shareholder approved the grant of options to one of the Company's consultants, who also serves as a director of the Company, to purchase 40,000 ordinary shares. | |||||||||||||||||
In November 2011, the Company granted 7,250 options to a consultant. The Company accounted for its outstanding options to non-employees under the fair value method of ASC 718 and ASC 505-50. The fair value for these options was estimated at the measurement date using the Black-Scholes option-pricing model. During 2013 the consultant exercised 4,750 options. Compensation expense related to the grant of stock options to non-employees amounted to $ 2, $ 3 and $ 14 for the years ended December 31, 2011, 2012 and 2013, respectively. |
REPORTABLE_SEGMENTS_AND_GEOGAP
REPORTABLE SEGMENTS AND GEOGAPHIC INFORMATION | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
REPORTABLE SEGMENTS AND GEOGAPHIC INFORMATION [Abstract] | ' | ||||||||||||
REPORTABLE SEGMENTS AND GEOGAPHIC INFORMATION | ' | ||||||||||||
NOTE 12:- | REPORTABLE SEGMENTS AND GEOGAPHIC INFORMATION | ||||||||||||
a. | Reportable segments: | ||||||||||||
The Chief Operating Decision Maker ("CODM") assesses the Company's business based on two operating segments: Enterprise and Service Providers. Enterprise includes Telecom Expenses Management solutions ("TEM") and services and solutions. Service Providers, includes billing and Mobile Virtual Network Operator ("MVNO") services and solutions. These two segments also comprise the Company's reporting units. The CODM uses adjusted net income before interest, tax, depreciation and amortization, capital gain and stock based compensation ("adjusted EBITDA"), to assess performance, measure liquidity and make decisions. Adjusted EBITDA is a non-GAAP unaudited measure of profit and loss. | |||||||||||||
The Company's segments are engaged in business activities for which they earn revenues and incur expenses, their results are reviewed by the CODM and discrete financial information is available. | |||||||||||||
Asset information, by reportable segment, is not reviewed by the CODM, therefore segment asset disclosure is not included. | |||||||||||||
The following tables present the financial information for the Company's reportable segments. | |||||||||||||
Year ended December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Enterprise: | |||||||||||||
Revenue | $ | 9,232 | $ | 9,041 | $ | 7,817 | |||||||
Adjusted EBITDA (Unaudited) | $ | 555 | $ | 1,701 | $ | 1,231 | |||||||
Service providers: | |||||||||||||
Revenue | $ | 2,771 | $ | 4,085 | $ | 4,655 | |||||||
Adjusted EBITDA (Unaudited) | $ | 360 | $ | 778 | $ | 899 | |||||||
Segments total: | |||||||||||||
Revenue | $ | 12,003 | $ | 13,126 | $ | 12,472 | |||||||
Adjusted EBITDA (Unaudited) | $ | 915 | $ | 2,479 | $ | 2,130 | |||||||
A reconciliation of total adjusted EBITDA to net income for each year is as follows: | |||||||||||||
Year ended December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Adjusted EBITDA(Unaudited) | $ | 915 | $ | 2,479 | $ | 2,130 | |||||||
Depreciation and amortization expenses | 447 | 393 | 316 | ||||||||||
Stock-based compensation | 67 | 44 | $ | 107 | |||||||||
Capital gain | (78 | ) | - | - | |||||||||
Financial income, net | (2 | ) | (60 | ) | (61 | ) | |||||||
Income tax expenses | 10 | 736 | 435 | ||||||||||
Net income from continuing operations | $ | 471 | $ | 1,366 | $ | 1,333 | |||||||
The total revenues from external customers are attributed to geographic areas based on the location of the customer: | |||||||||||||
Year ended December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
United States | $ | 8,915 | $ | 10,251 | $ | 10,817 | |||||||
Germany | 683 | 482 | 252 | ||||||||||
Far East | 585 | 443 | 300 | ||||||||||
Holland | 317 | 297 | 216 | ||||||||||
Israel | 732 | 917 | 400 | ||||||||||
Other | 771 | 736 | 487 | ||||||||||
$ | 12,003 | $ | 13,126 | $ | 12,472 | ||||||||
Revenues from a major customer accounted for 16%, 23% and $ 33% of total revenues for the years ended December 31, 2011, 2012 and 2013, respectively. | |||||||||||||
December 31, | |||||||||||||
2012 | 2013 | ||||||||||||
Long-lived assets: | |||||||||||||
Israel | $ | 1,586 | $ | 1,348 | |||||||||
United States | 2,892 | 2,876 | |||||||||||
Other | 5 | 5 | |||||||||||
$ | 4,483 | $ | 4,229 |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||||||||||||||||
Use of estimates | ' | ||||||||||||||||
a. | Use of estimates: | ||||||||||||||||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they were made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||||||||
Financial statements in U.S. dollars | ' | ||||||||||||||||
b. | Financial statements in U.S. dollars: | ||||||||||||||||
The majority of the revenues of the Group are generated in or linked to the U.S. dollar ("dollar"). In addition, a substantial portion of the Group's costs are incurred in dollars. The Company's management believes that the dollar is the currency of the primary economic environment in which the Company and certain of its subsidiaries operate. Thus, the functional and reporting currency of the Company and certain of its subsidiaries is the dollar. | |||||||||||||||||
Accordingly, monetary accounts maintained in currencies other than the dollar are re-measured into dollars in accordance with ASC 830, "Foreign Currency Matters." All transaction gains and losses of the re-measurement of monetary balance sheet items are reflected in the consolidated statements of operations as financial income or expenses, as appropriate. | |||||||||||||||||
For those foreign subsidiaries and affiliates, whose functional currency has been determined to be their local currency, assets and liabilities are translated at the year- end exchange rates and statements of operations items are translated at the average exchange rate prevailing during the period. The resulting translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in shareholders' equity. | |||||||||||||||||
Principles of consolidation | ' | ||||||||||||||||
c. | Principles of consolidation: | ||||||||||||||||
The consolidated financial statements include the accounts of the Group. Intercompany transactions and balances, including profits from intercompany sales not yet realized outside the Group, have been eliminated upon consolidation. | |||||||||||||||||
Cash equivalents | ' | ||||||||||||||||
d. | Cash equivalents: | ||||||||||||||||
The Company considers all short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less to be cash equivalents. | |||||||||||||||||
Restricted cash | ' | ||||||||||||||||
e. | Restricted cash: | ||||||||||||||||
Restricted cash is a deposit account which is used only for payments of the Company's customers. | |||||||||||||||||
Marketable securities | ' | ||||||||||||||||
f. | Marketable securities: | ||||||||||||||||
The Company accounts for investments in debt and equity securities (other than those accounted for under the equity method of accounting) in accordance with ASC 320, "Investments - Debt and Equity Securities" ("ASC 320"). | |||||||||||||||||
Management determines the classification of investments in marketable debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. The Company classifies all of its securities as available for sale carried at fair market value. Fair value is determined based on observable market value quotes. Available for sale securities are carried at fair value, with unrealized gains and losses reported in "accumulated other comprehensive income (loss)" in shareholders' equity. Realized gains and losses on sales of investments, are included in earnings and are derived using the specific identification method for determining the cost of securities (see also Note 3). | |||||||||||||||||
Interest and dividends on securities are included in financial income, net. | |||||||||||||||||
ASC 320 provides guidance for determining when an investment in equity securities is considered impaired, whether impairment is other-than-temporary, and for measurement of an impairment loss. An investment is considered impaired if the fair value of the investment is less than its cost. If, after consideration of all available evidence to evaluate the realizable value of its investment, impairment is determined to be other-than-temporary, then an impairment loss should be recognized equal to the difference between the investment's cost and its fair value. | |||||||||||||||||
The Company applies ASC 320-10-65-1, "Recognition and Presentation of Other-Than-Temporary Impairments", according to which other-than-temporary impairment loss is recognized in earnings if the entity has the intent to sell the debt security, or if it is more likely than not that it will be required to sell the debt security before recovery of its amortized cost basis. However, if an entity does not expect to sell a debt security, it still needs to evaluate expected cash flows to be received and determines if a credit loss exists. In the event of a credit loss, only the amount of impairment associated with the credit loss is recognized currently in earnings. Amounts relating to factors other than credit losses are recorded in other comprehensive income (loss). | |||||||||||||||||
The marketable securities held by the Company are pledged to secure future rent payments for the Company's facilities in Israel. | |||||||||||||||||
Property and equipment | ' | ||||||||||||||||
g. | Property 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 depreciation rates: | |||||||||||||||||
% | |||||||||||||||||
Computers and peripheral equipment | 33 | ||||||||||||||||
Office furniture and equipment | 6 - 20 (mainly 7%) | ||||||||||||||||
Leasehold improvements | Shorter of useful life or lease term | ||||||||||||||||
Impairment of long-lived assets | ' | ||||||||||||||||
h. | Impairment of long-lived assets: | ||||||||||||||||
The Company's long-lived assets and certain identifiable intangibles are reviewed for impairment in accordance with ASC 360, "Property, Plant and Equipment" ("ASC 360"), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. As of December 31, 2012 and 2013, no impairment losses were identified. | |||||||||||||||||
Goodwill | ' | ||||||||||||||||
i. | Goodwill: | ||||||||||||||||
Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC 350,"Intangibles-Goodwill and Other" goodwill is subject to an annual impairment test or more frequently if impairment indicators are present. Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. The Company operates in two reporting units: Enterprise and Service providers. As determined in previous years all goodwill balance is assigned to the Enterprise reporting unit. | |||||||||||||||||
In September 2011, the FASB issued ASU 2011-08 which amends the rules for testing goodwill for impairment. Under the new rules, an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. | |||||||||||||||||
The Company engaged a third party specialist in order to perform the 2013 annual impairment test. | |||||||||||||||||
The Company performs its annual impairment tests during the fourth quarter of each year. | |||||||||||||||||
For the period from September 30, 2013 until December 31, 2013, no events occurred or circumstances changed that reduced the fair value of the reporting unit below its carrying value. During 2011, 2012 and 2013, no impairment losses were identified. | |||||||||||||||||
Intangible assets | ' | ||||||||||||||||
j. | Intangible assets: | ||||||||||||||||
Intangible assets are amortized over their useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up in accordance with ASC 350. The Company's identifiable intangibles are reviewed for impairment in accordance with ASC 360 whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. | |||||||||||||||||
The Company's intangible assets were all acquired in connection with historical acquisitions. | |||||||||||||||||
Developed technology is amortized over a period of four-to-eight years, customer relationships are amortized over a period of six to eight years and brand names are amortized over a period of eleven years. During 2011, 2012 and 2013, no impairment losses were identified. | |||||||||||||||||
Severance pay | ' | ||||||||||||||||
k. | Severance pay: | ||||||||||||||||
The Company's liability for severance pay for employees located in Israel is calculated pursuant to Israel's Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment, as of the balance sheet date. Employees are entitled to one month's salary for each year of employment or a portion thereof. The Company's severance pay liability for all of its employees is fully provided by monthly deposits with insurance policies and by an accrual. The value of these policies is recorded as an asset in the Company's balance sheet. | |||||||||||||||||
The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to Israel's Severance Pay Law or labor agreements. The value of the deposited funds is based on the cash surrendered value of these policies, and includes immaterial profits. | |||||||||||||||||
Severance expense for the years ended December 31, 2011, 2012 and 2013 amounted to approximately $ 155, $ 165 and $ 160, respectively. | |||||||||||||||||
Revenue recognition | ' | ||||||||||||||||
l. | Revenue recognition: | ||||||||||||||||
The Company generates revenues mainly from licensing the rights to use its software products and from providing maintenance, hosting and managed services, support and training. Certain software licenses require significant customization. The Company sells its products directly to end-users and indirectly through resellers and OEMs (who are considered end users). | |||||||||||||||||
Revenues from software license agreements are recognized when all criteria outlined in ASC 985-605, "Revenue Recognition -Software", are met. Revenue from license fees is recognized when persuasive evidence of an agreement exists, delivery of the product has occurred, no significant obligations with regard to implementation remain, the fee is fixed or determinable and collectability is probable. The Company does not grant a right of return to its customers. | |||||||||||||||||
Where software arrangements involve multiple elements, revenue is allocated to each undelivered element based on vendor specific objective evidence ("VSOE") of the fair values of each undelivered element in the arrangement, in accordance with the "residual method". | |||||||||||||||||
Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered element and is recognized as revenue when all revenue recognition criteria of ASC 985-605, as amended, are satisfied. Under the residual method, any discount in the arrangement is allocated to the delivered element. If sufficient specific objective evidence does not exist for all undelivered elements, revenue is deferred for the entire arrangement until all revenue recognition criteria are met for such undelivered elements. | |||||||||||||||||
The Company has immaterial number of multiple element arrangements, therefore no VSOE is established. | |||||||||||||||||
Revenues from maintenance and support services are recognized over the term of the maintenance and support agreement on a straight line basis. | |||||||||||||||||
Revenues for hosting and managed services are recognized based on SAB 104 and ASC 605-25, when delivery has occurred or services have been rendered, the fee is fixed and determinable, collectability is probable and persuasive evidence of an arrangement exists. These revenues are recognized as one unit of accounting, on a straight-line basis over the term of the last undelivered element. | |||||||||||||||||
Deferred revenues include unearned amounts received under maintenance and support contracts, not yet recognized as revenues. | |||||||||||||||||
Research and development costs | ' | ||||||||||||||||
m. | Research and development costs: | ||||||||||||||||
ASC 985, "Software", requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. | |||||||||||||||||
Based on the Company's product development process, technological feasibility is established upon the completion of a working model. The Company does not incur material costs between the completion of a working model and the point at which the products are ready for general release. Therefore, research and development costs are charged to the statement of operations as incurred. | |||||||||||||||||
Government grants | ' | ||||||||||||||||
n. | Government grants: | ||||||||||||||||
Royalty-bearing grants from the Government of Israel for funding certain approved research and development projects are recognized at the time the Company is entitled to such grants, on the basis of the related costs incurred and recorded as a deduction of research and development costs. The Company recorded a grant in the amount of $ 10 in 2011. The Company did not receive any grants during the years ended December 31, 2012 and 2013, respectively. | |||||||||||||||||
Income taxes | ' | ||||||||||||||||
o. | Income taxes: | ||||||||||||||||
The Company accounts for income taxes in accordance with ASC Topic 740, "Income Taxes" ("ASC 740"). ASC 740 prescribes the use of the liability method, according to which deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are provided to reduce deferred tax assets to their estimated realizable value. | |||||||||||||||||
ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, a company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. | |||||||||||||||||
Accounting for stock-based compensation | ' | ||||||||||||||||
p. | Accounting for stock-based compensation: | ||||||||||||||||
The Company applies ASC 718 "Compensation - Stock Compensation", and ASC 505-50 "Equity-Based Payments to Non-Employees", with respect to options and warrants issued to non-employees. ASC 718 requires the use of an option valuation model to measure the fair value of the options and warrants at the measurement date as defined in ASC 505-50. | |||||||||||||||||
ASC 718 requires companies to estimate the fair value of stock-based awards on the date of grant using an option-pricing model, where applicable. Stock-based compensation expense recognized in the Company's consolidated statements of operations for 2011, 2012 and 2013 include compensation expense for stock-based awards granted based on the grant date fair value estimated in accordance with the provisions of ASC 718. | |||||||||||||||||
The Company recognizes these compensation costs net of a forfeiture rate and recognizes the compensation costs for only those shares expected to vest on an accelerated method over the requisite service period for each separately vesting portion of the award, which is the option vesting term of four years. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. | |||||||||||||||||
The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option pricing model ("Black-Scholes"). No options were granted during 2012. The fair value for options granted in 2011 and 2013 was estimated at the date of grant using the Black-Scholes option pricing model with the following assumptions. | |||||||||||||||||
Year ended December 31, | |||||||||||||||||
Stock options | 2011 | 2012 | 2013 | ||||||||||||||
Expected volatility (1) | 100%-101.4% | - | 91.4%-100.3% | ||||||||||||||
Risk-free interest (2) | 0.37%-0.41% | - | 0.35%-0.78% | ||||||||||||||
Dividend yield (3) | 0% | - | 0% | ||||||||||||||
Expected life (years) (4) | 3.75 | - | 3.34-3.75 | ||||||||||||||
-1 | Expected volatility is estimated based upon actual historical stock price movements over an historical period equivalent to the option's expected term; | ||||||||||||||||
-2 | The risk-free interest rate for purposes of the Black-Scholes price calculation is based on the yield from U.S. Treasury Bonds with an equivalent term; | ||||||||||||||||
-3 | The dividend yield is estimated to be 0% as the Company has historically not paid dividends and has no foreseeable plans to pay dividends. | ||||||||||||||||
-4 | Expected term of options granted represents the period of time that options granted are expected to be outstanding, and is estimated based on the Company's history. | ||||||||||||||||
Fair value of financial instruments | ' | ||||||||||||||||
q. | Fair value of financial instruments: | ||||||||||||||||
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments: | |||||||||||||||||
The carrying amounts of cash and cash equivalents, restricted cash, restricted marketable securities, trade receivables, other accounts receivable and trade payables approximate their fair value, due to the short-term maturity of such instruments. | |||||||||||||||||
The Company applies ASC 820 which clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: | |||||||||||||||||
Level 1 - | Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | ||||||||||||||||
Level 2 - | Include other inputs that are directly or indirectly observable in the marketplace. | ||||||||||||||||
Level 3 - | Unobservable inputs which are supported by little or no market activity. | ||||||||||||||||
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. | |||||||||||||||||
Assets measured at fair value under ASC 820 on a recurring basis as of December 31, 2013 were presented in the Company's consolidated balance sheet as follows: | |||||||||||||||||
Total | Quoted prices in active markets for identical assets | Significant other observable inputs | Significant unobservable inputs | ||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Marketable securities | $ | 153 | $ | 153 | - | - | |||||||||||
Concentrations of credit risk | ' | ||||||||||||||||
r. | Concentrations of credit risk: | ||||||||||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, trade receivables, and restricted marketable securities. | |||||||||||||||||
Cash and cash equivalents are deposited with major banks in Israel and in the United States. Such deposits in the United States may be in excess of insured limit and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company's investments are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these investments. | |||||||||||||||||
The Company's customers are located mainly in the United States (see Note 12). The Company performs ongoing credit evaluations of its customers. In certain circumstances, the Company may require letters of credit, other collateral or additional guarantees. The allowance for doubtful accounts is determined with respect to specific debts that are doubtful of collection according to management estimates. | |||||||||||||||||
The Company's restricted marketable securities include investments in equity securities and Israeli government securities. Management believes that the portfolio is well diversified, and accordingly, minimal credit risk exists with respect to these marketable securities. The Company has no off-balance-sheet concentrations of credit risk. | |||||||||||||||||
Basic and diluted net earnings per share | ' | ||||||||||||||||
s. | Basic and diluted net earnings per share: | ||||||||||||||||
The Company accounts for net earnings per share based on ASC 260,"Earning Per Share", which requires companies to compute both basic and diluted earnings per share, and to disclose the methodology used for the calculations. Basic earnings per share are calculated using the weighted average number of shares outstanding during the period. Diluted earnings per share are computed on the basis of the weighted average number of shares outstanding and the effect of their dilutive potential during the period. | |||||||||||||||||
Basic net earnings per share are computed based on the weighted average number of Ordinary shares outstanding during each year. In 2011 all outstanding stock options were excluded from the calculation of the diluted net earnings (loss) per ordinary share since those options were anti-dilutive for the period. In 2012 and in 2013, 52,707 and 61,736, respectively, options have been included in the calculation of the diluted net earnings per Ordinary Share, the effect on the above-mentioned amount was immaterial. | |||||||||||||||||
Derivatives and hedging | ' | ||||||||||||||||
t. | Derivatives and hedging: | ||||||||||||||||
ASC 815, "Derivatives and Hedging", as amended, requires the Company to recognize all derivatives on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value is immediately recognized in earnings. The Company uses derivatives to hedge certain cash flow foreign currency exposures in order to further reduce the Company's exposure to foreign currency risks. | |||||||||||||||||
The Company entered into put option contracts to hedge certain transactions denominated in foreign currencies. The purpose of the Company's foreign currency hedging activities is to protect the Company from risk that the eventual dollar cash flows from international activities will be adversely affected by changes in the exchange rates. The Company's put option contracts did not qualify as hedging instruments under ASC 815. | |||||||||||||||||
Changes in the fair value of put option contracts are reflected in the consolidated statements of operations as financial income or expense. | |||||||||||||||||
During 2011, 2012 and 2013, the Company entered into forward, call and put option contracts in the aggregated notional amount of $ 5,350, $ 3,750 and $ 2,400, respectively, that converted a portion of its floating currency liabilities to a fixed rate basis, thus reducing the impact of the exchange rate fluctuations on the Company's cash flow. In 2011, 2012 and 2013, the revaluation profit from these contracts with respect to the above transactions were $ 10, $ 47 and $ 65, respectively, and are presented in the statements of operations as financial expense, net. As of December 31, 2013, the Company had outstanding call and put option contracts in the amount of $900. | |||||||||||||||||
Comprehensive income | ' | ||||||||||||||||
u. | Comprehensive income: | ||||||||||||||||
The Company accounts for comprehensive income in accordance with ASC Topic 220, "Comprehensive Income". This statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income generally represents all changes in stockholders' equity during the period except those resulting from investments by, or distributions to, stockholders. In May 2011, the FASB issued guidance that changed the requirement for presenting "Comprehensive Income" in the consolidated financial statements. The update requires an entity to present the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The Company adopted this new guidance on January 1, 2012 and elected to present the comprehensive income in two separate but consecutive statements. | |||||||||||||||||
Refer also to Note 2.w.1 below. | |||||||||||||||||
Reclassification | ' | ||||||||||||||||
v. | Reclassification: | ||||||||||||||||
Certain amounts in prior years have been reclassified to conform to the current year's presentation. | |||||||||||||||||
Impact of recently issued accounting standards | ' | ||||||||||||||||
w. | Impact of recently issued accounting standards | ||||||||||||||||
1 | In February 2013, the FASB issued ASU No. 2013-02, "Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income". Under ASU 2013-02, an entity is required to provide information about the amounts reclassified out of Accumulated Other Comprehensive Income ("AOCI") by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in the financial statements. ASU 2013-02 was effective for the Company as of January 1, 2013. This standard only impacts presentation and disclosure requirements. The Company adopted this new guidance on January 1, 2013 and the adoption did not have a material effect on our consolidated financial statements. | ||||||||||||||||
2 | In July 2013, the FASB issued a new accounting standard that will require the presentation of certain unrecognized tax benefits as reductions to deferred tax assets rather than as liabilities in the consolidated balance sheets when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. | ||||||||||||||||
The Company will be required to adopt this new standard on a prospective basis in the first quarter of fiscal 2015; however, early adoption is permitted as a retrospective application. The Company is currently evaluating the impact of this new standard on its consolidated financial statements. |
GENERAL_Tables
GENERAL (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
GENERAL [Abstract] | ' | ||||||||||||
Schedule of Financial Results of Discontinued Operations | ' | ||||||||||||
The summarized results of operations for TABS Brazil Ltda. for the years ended December 31, 2011, 2012 and 2013, which were reported separately as discontinued operations in the consolidated statements of income, are as follows: | |||||||||||||
Year ended December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Total operating expenses (income) | $ | 84 | $ | - | $ | (73 | ) | ||||||
Operating (loss) income | (84 | ) | - | 73 | |||||||||
Net (loss) income from discontinued operations | (84 | ) | - | 73 | |||||||||
Basic and diluted net income (loss) per Ordinary share from discontinued operations | $ | (0.02 | ) | - | $ | 0.02 |
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||||||||||||||||
Schedule of Property and Equipment, Depreciation Rates | ' | ||||||||||||||||
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 depreciation rates: | |||||||||||||||||
% | |||||||||||||||||
Computers and peripheral equipment | 33 | ||||||||||||||||
Office furniture and equipment | 6 - 20 (mainly 7%) | ||||||||||||||||
Leasehold improvements | Shorter of useful life or lease term | ||||||||||||||||
Schedule of Assumptions Used for Stock Options | ' | ||||||||||||||||
The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option pricing model ("Black-Scholes"). No options were granted during 2012. The fair value for options granted in 2011 and 2013 was estimated at the date of grant using the Black-Scholes option pricing model with the following assumptions. | |||||||||||||||||
Year ended December 31, | |||||||||||||||||
Stock options | 2011 | 2012 | 2013 | ||||||||||||||
Expected volatility (1) | 100%-101.4% | - | 91.4%-100.3% | ||||||||||||||
Risk-free interest (2) | 0.37%-0.41% | - | 0.35%-0.78% | ||||||||||||||
Dividend yield (3) | 0% | - | 0% | ||||||||||||||
Expected life (years) (4) | 3.75 | - | 3.34-3.75 | ||||||||||||||
-1 | Expected volatility is estimated based upon actual historical stock price movements over an historical period equivalent to the option's expected term; | ||||||||||||||||
-2 | The risk-free interest rate for purposes of the Black-Scholes price calculation is based on the yield from U.S. Treasury Bonds with an equivalent term; | ||||||||||||||||
-3 | The dividend yield is estimated to be 0% as the Company has historically not paid dividends and has no foreseeable plans to pay dividends. | ||||||||||||||||
-4 | Expected term of options granted represents the period of time that options granted are expected to be outstanding, and is estimated based on the Company's history. | ||||||||||||||||
Schedule of Financial Assets at Fair Value on a Recurring Basis | ' | ||||||||||||||||
Assets measured at fair value under ASC 820 on a recurring basis as of December 31, 2013 were presented in the Company's consolidated balance sheet as follows: | |||||||||||||||||
Total | Quoted prices in active markets for identical assets | Significant other observable inputs | Significant unobservable inputs | ||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Marketable securities | $ | 153 | $ | 153 | - | - |
MARKETABLE_SECURITIES_Tables
MARKETABLE SECURITIES (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
MARKETABLE SECURITIES [Abstract] | ' | ||||||||||||||||||||||||||||||||
Summary of Available-For-Sale Marketable Securities | ' | ||||||||||||||||||||||||||||||||
The following is a summary of the Company's accumulated gross unrealized gains/ losses from investment in marketable securities as of December 31, 2013: | |||||||||||||||||||||||||||||||||
31-Dec-12 | 31-Dec-13 | ||||||||||||||||||||||||||||||||
Amortized | Gross unrealized | Gross unrealized | Fair | Amortized | Gross unrealized | Gross unrealized | Fair | ||||||||||||||||||||||||||
market | Market | ||||||||||||||||||||||||||||||||
cost | gains | losses | value | Cost | gains | losses | Value | ||||||||||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||||||||||||
Equity securities | $ | 81 | $ | 4 | $ | 7 | $ | 78 | $ | 65 | $ | 10 | $ | 1 | $ | 74 | |||||||||||||||||
Corporate bonds | 47 | 2 | - | 49 | 36 | 6 | - | 42 | |||||||||||||||||||||||||
Israeli Government debt | 11 | 1 | - | 12 | 34 | 3 | - | 37 | |||||||||||||||||||||||||
$ | 139 | $ | 7 | $ | 7 | $ | 139 | $ | 135 | $ | 19 | $ | 1 | $ | 153 | ||||||||||||||||||
Schedule of Amortized Cost and Fair Value of Debt and Securities, by Contractual Maturity | ' | ||||||||||||||||||||||||||||||||
The amortized cost and fair value of debt and securities as of December 31, 2012 and 2013, by contractual maturity, are shown below: | |||||||||||||||||||||||||||||||||
31-Dec-12 | 31-Dec-13 | ||||||||||||||||||||||||||||||||
Amortized cost | Fair market value | Amortized cost | Fair market value | ||||||||||||||||||||||||||||||
Matures up to one year | $ | 51 | $ | 54 | $ | 79 | $ | 87 | |||||||||||||||||||||||||
Matures after one year through five years | 41 | 42 | 28 | 32 | |||||||||||||||||||||||||||||
Matures after five years | 14 | 16 | 12 | 15 | |||||||||||||||||||||||||||||
Equity securities - no definite maturity date | 33 | 27 | 16 | 19 | |||||||||||||||||||||||||||||
Total | $ | 139 | $ | 139 | $ | 135 | $ | 153 |
OTHER_ACCOUNTS_RECEIVABLE_AND_1
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES [Abstract] | ' | ||||||||
Schedule of Other Accounts Receivable and Prepaid Expenses | ' | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Government authorities | $ | 32 | $ | 12 | |||||
Prepaid expenses | 23 | 60 | |||||||
Lease deposits | 53 | 41 | |||||||
Related parties | 10 | 6 | |||||||
Others | 57 | 28 | |||||||
$ | 175 | $ | 147 |
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
PROPERTY AND EQUIPMENT [Abstract] | ' | ||||||||
Schedule of Property and Equipment | ' | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Cost: | |||||||||
Computers and peripheral equipment | $ | 752 | $ | 813 | |||||
Office furniture and equipment | 185 | 186 | |||||||
Leasehold improvements | 50 | 50 | |||||||
987 | 1,049 | ||||||||
Accumulated depreciation: | |||||||||
Computers and peripheral equipment | 564 | 678 | |||||||
Office furniture and equipment | 141 | 151 | |||||||
Leasehold improvements | 37 | 37 | |||||||
Accumulated depreciation | 742 | 866 | |||||||
Depreciated cost | $ | 245 | $ | 183 |
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
INTANGIBLE ASSETS [Abstract] | ' | ||||||||
Schedule of Intangible Assets | ' | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Cost: | |||||||||
Development technology | $ | 2,170 | $ | 2,170 | |||||
Customer relationships | 1,015 | 1,015 | |||||||
Brand name | 229 | 229 | |||||||
3,414 | 3,414 | ||||||||
Accumulated amortization: | |||||||||
Development technology | 1,675 | 1,798 | |||||||
Customer relationships | 897 | 945 | |||||||
Brand name | 83 | 104 | |||||||
2,655 | 2,847 | ||||||||
Amortized cost | $ | 759 | $ | 567 | |||||
Schedule of Intangible Assets, Amortization Expenses | ' | ||||||||
Estimated amortization expense for: | |||||||||
Year ended December 31, | |||||||||
2014 | $ | 177 | |||||||
2015 | 167 | ||||||||
2016 | 160 | ||||||||
2017 | 21 | ||||||||
2018-2019 | 42 | ||||||||
$ | 567 |
ACCRUED_EXPENSES_AND_OTHER_LIA1
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract] | ' | ||||||||
Schedule of Accrued Expenses and Other Liabilities | ' | ||||||||
December 31, | |||||||||
2012 | 2013 | ||||||||
Employees and payroll accruals | $ | 999 | $ | 1,013 | |||||
Institutions and income tax payable | 353 | 134 | |||||||
Accrued expenses | 958 | 1,007 | |||||||
Related parties | 83 | 46 | |||||||
$ | 2,393 | $ | 2,200 |
COMMITMENTS_AND_CONTINGENT_LIA1
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | ' | ||||
Schedule of Future Minimum Lease Payments for Operating Leases | ' | ||||
The Company and its subsidiaries lease office space and motor vehicles through operating leases. The facilities of the Company and its subsidiaries are leased for periods ending February 2019. Future minimum lease commitments under non-cancelable operating leases as of December 31, 2013 are as follows: | |||||
2014 | $ | 217 | |||
2015 | 78 | ||||
2016 | 58 | ||||
2017-2019 | 126 | ||||
$ | 479 |
TAXES_ON_INCOME_Tables
TAXES ON INCOME (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
TAXES ON INCOME [Abstract] | ' | ||||||||||||
Schedule of Percentage of Value of Productive Assets | ' | ||||||||||||
The qualifying percentage of the value of the productive assets is as follows: | |||||||||||||
The value of productive | The new proportion that the | ||||||||||||
assets before the expansion | required investment bears to the | ||||||||||||
(NIS in millions) | value of productive assets | ||||||||||||
Up to NIS 140 (app. $ 40) | 12% | ||||||||||||
NIS 140 - NIS 500 | 7% | ||||||||||||
(app. $ 40-$ 144) | |||||||||||||
More than NIS 500(app.$144) | 5% | ||||||||||||
Schedule of Deferred Tax Assets | ' | ||||||||||||
Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax liabilities and assets are as follows: | |||||||||||||
December 31, | |||||||||||||
Deferred tax assets: | 2012 | 2013 | |||||||||||
Tax loss carry-forwards | $ | 4,872 | $ | 5,377 | |||||||||
Allowances for doubtful accounts and accruals for employee benefits | 101 | 95 | |||||||||||
Intangible assets | 118 | 103 | |||||||||||
Depreciation, accruals for interest and other | 724 | 721 | |||||||||||
Deferred tax asset before valuation allowance | 5,815 | 6,296 | |||||||||||
Goodwill | (658 | ) | (674 | ) | |||||||||
Valuation allowance | (4,786 | ) | (5,651 | ) | |||||||||
Deferred tax assets (liability), net | $ | 371 | $ | (29 | ) | ||||||||
Presented as follows: | |||||||||||||
Short-term assets | $ | 371 | $ | - | |||||||||
Long-term liability | - | (29 | ) | ||||||||||
Schedule of Reconciliation of the Statutory Tax Rate to the Effective Income Tax Rate | ' | ||||||||||||
A reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company and the actual tax expense as reported in the statements of operations is as follows: | |||||||||||||
Year ended | |||||||||||||
December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Income before taxes on income, net, as reported in the statements of operations from continuing operations | $ | 481 | $ | 2,102 | $ | 1,768 | |||||||
Tax rates | 24 | % | 25 | % | 25 | % | |||||||
Theoretical tax expense (benefit) | $ | 115 | $ | 526 | $ | 442 | |||||||
Increase in taxes resulting from: | |||||||||||||
Effect of different tax rates | 19 | 25 | 27 | ||||||||||
U.S. state tax | 8 | 26 | 35 | ||||||||||
Utilization of carry-forward tax losses for which valuation allowance was provided | (2 | ) | (380 | ) | - | ||||||||
Taxes in respect of previous years as a result of court ruling | - | 1,415 | - | ||||||||||
Changes in provision for uncertain tax positions | 6 | (362 | ) | 1 | |||||||||
Change in valuation allowance | - | (340 | ) | 148 | |||||||||
Deferred taxes for which valuation allowance was provided | (136 | ) | (174 | ) | (218 | ) | |||||||
Taxes on income, net, as reported in the statements of operations | $ | 10 | $ | 736 | $ | 435 | |||||||
Schedule of Income (Loss) Before Income Tax Domestic and Foreign | ' | ||||||||||||
Income before income taxes is comprised as follows: | |||||||||||||
Year ended December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Domestic | $ | 225 | $ | 1,808 | $ | 1,561 | |||||||
Foreign | 256 | 294 | 207 | ||||||||||
$ | 481 | $ | 2,102 | $ | 1,768 | ||||||||
Schedule of Components of Income Taxes | ' | ||||||||||||
Taxes on income are comprised as follows: | |||||||||||||
Year ended December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Current taxes | $ | 8 | $ | 26 | $ | 35 | |||||||
Deferred taxes | 2 | (340 | ) | 400 | |||||||||
Taxes in respect of previous years as a result of court ruling | - | 1,050 | - | ||||||||||
$ | 10 | $ | 736 | $ | 435 | ||||||||
Foreign | $ | 10 | $ | 57 | $ | 64 | |||||||
Reconciliation of Total Unrecognized Tax Benefits | ' | ||||||||||||
As of December 31, 2013, the Company had a liability for unrecognized tax benefits of $ 101. A reconciliation of the opening and closing amounts of unrecognized tax benefits is as follows: | |||||||||||||
December 31, | |||||||||||||
2012 | 2013 | ||||||||||||
Balance as of beginning of the year | $ | 632 | $ | 100 | |||||||||
Additions based on tax positions taken during the current period | 3 | 1 | |||||||||||
Decrease based on tax positions taken during the current period | (535 | ) | - | ||||||||||
Balance at the end of the year | $ | 100 | $ | 101 |
RELATED_PARTY_TRANSACTIONS_AND1
RELATED PARTY TRANSACTIONS AND BALANCES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
RELATED PARTY TRANSACTIONS AND BALANCES [Abstract] | ' | ||||||||||||
Schedule of Related Party Balances and Transactions | ' | ||||||||||||
Balances and transactions with related parties were as follows: | |||||||||||||
1 | Balances with related parties: | ||||||||||||
December 31, | |||||||||||||
2012 | 2013 | ||||||||||||
Other accounts payable and accrued expenses (see Note 7) | $ | 83 | $ | 46 | |||||||||
Other accounts receivable and prepaid expenses (see note 4) | $ | 10 | $ | 6 | |||||||||
2 | Transactions with related parties: | ||||||||||||
Year ended December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Revenues derived from a related party | $ | 103 | $ | 101 | $ | 74 | |||||||
Amounts charged by related parties: | |||||||||||||
Cost of revenues | $ | *54 | $ | 53 | $ | 16 | |||||||
Operating expenses | 323 | 121 | 195 | ||||||||||
$ | 377 | $ | 174 | $ | 211 |
SHAREHOLDERS_EQUITY_Tables
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
SHAREHOLDERS' EQUITY [Abstract] | ' | ||||||||||||||||
Schedule of Stock Options Activity | ' | ||||||||||||||||
A summary of option activity under the Company's stock option plans to its employees as of December 31, 2013 and changes during the year ended December 31, 2013 are as follows: | |||||||||||||||||
Number of options | Weighted-average exercise price | Weighted- average remaining contractual term (in years) | Aggregate intrinsic value | ||||||||||||||
Outstanding at December 31, 2012 | 276,750 | $ | 1.7 | 3.01 | $ | 513 | |||||||||||
Granted | 172,000 | $ | 2.18 | 4.47 | |||||||||||||
Exercised | (30,500 | ) | $ | 1.99 | - | ||||||||||||
Expired and forfeited | (15,000 | ) | $ | 2.15 | - | ||||||||||||
Outstanding at December 31, 2013 | 403,250 | $ | 1.86 | 3.11 | $ | 289.14 | |||||||||||
Vested and expected to vest | 380,290 | $ | 1.86 | 3.08 | $ | 273.88 | |||||||||||
Exercisable at December 31, 2013 | 116,250 | $ | 1.73 | 1.81 | $ | 98.4 | |||||||||||
Schedule of Stock-based Compensation Expenses | ' | ||||||||||||||||
The total stock-based compensation expense related to employees' equity-based awards, recognized for the years ended December 31, 2011, 2012 and 2013, was comprised as follows: | |||||||||||||||||
Year ended December 31, | |||||||||||||||||
2011 | 2012 | 2013 | |||||||||||||||
Cost of revenues | $ | 3 | $ | - | $ | 7 | |||||||||||
Research and development expenses | 8 | 1 | 7 | ||||||||||||||
Selling and marketing | 4 | 1 | - | ||||||||||||||
General and administrative expenses | 50 | 39 | 79 | ||||||||||||||
$ | 65 | $ | 41 | $ | 93 | ||||||||||||
Schedule of Options and Warrants | ' | ||||||||||||||||
Options to non-employees: | |||||||||||||||||
Issuance date | In connection with | Number of options granted | Options exercisable | Exercise price per share | Exercisable through | ||||||||||||
9-Nov-11 | consultant | 2,500 | 2,500 | 1.94 | May-14 | ||||||||||||
8-Aug-13 | consultant | 40,000 | - | 2.08 | Aug-18 |
REPORTABLE_SEGMENTS_AND_GEOGAP1
REPORTABLE SEGMENTS AND GEOGAPHIC INFORMATION (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
REPORTABLE SEGMENTS AND GEOGAPHIC INFORMATION [Abstract] | ' | ||||||||||||
Schedule of Segment Information | ' | ||||||||||||
The following tables present the financial information for the Company's reportable segments. | |||||||||||||
Year ended December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Enterprise: | |||||||||||||
Revenue | $ | 9,232 | $ | 9,041 | $ | 7,817 | |||||||
Adjusted EBITDA (Unaudited) | $ | 555 | $ | 1,701 | $ | 1,231 | |||||||
Service providers: | |||||||||||||
Revenue | $ | 2,771 | $ | 4,085 | $ | 4,655 | |||||||
Adjusted EBITDA (Unaudited) | $ | 360 | $ | 778 | $ | 899 | |||||||
Segments total: | |||||||||||||
Revenue | $ | 12,003 | $ | 13,126 | $ | 12,472 | |||||||
Adjusted EBITDA (Unaudited) | $ | 915 | $ | 2,479 | $ | 2,130 | |||||||
Reconciliation of Total Adjusted EBITDA to Net Income | ' | ||||||||||||
A reconciliation of total adjusted EBITDA to net income for each year is as follows: | |||||||||||||
Year ended December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
Adjusted EBITDA(Unaudited) | $ | 915 | $ | 2,479 | $ | 2,130 | |||||||
Depreciation and amortization expenses | 447 | 393 | 316 | ||||||||||
Stock-based compensation | 67 | 44 | $ | 107 | |||||||||
Capital gain | (78 | ) | - | - | |||||||||
Financial income, net | (2 | ) | (60 | ) | (61 | ) | |||||||
Income tax expenses | 10 | 736 | 435 | ||||||||||
Net income from continuing operations | $ | 471 | $ | 1,366 | $ | 1,333 | |||||||
Schedule of Revenues by Geographic Area | ' | ||||||||||||
The total revenues from external customers are attributed to geographic areas based on the location of the customer: | |||||||||||||
Year ended December 31, | |||||||||||||
2011 | 2012 | 2013 | |||||||||||
United States | $ | 8,915 | $ | 10,251 | $ | 10,817 | |||||||
Germany | 683 | 482 | 252 | ||||||||||
Far East | 585 | 443 | 300 | ||||||||||
Holland | 317 | 297 | 216 | ||||||||||
Israel | 732 | 917 | 400 | ||||||||||
Other | 771 | 736 | 487 | ||||||||||
$ | 12,003 | $ | 13,126 | $ | 12,472 | ||||||||
Schedule of Long-lived Assets by Geographic Area | ' | ||||||||||||
Revenues from a major customer accounted for 16%, 23% and $ 33% of total revenues for the years ended December 31, 2011, 2012 and 2013, respectively. | |||||||||||||
December 31, | |||||||||||||
2012 | 2013 | ||||||||||||
Long-lived assets: | |||||||||||||
Israel | $ | 1,586 | $ | 1,348 | |||||||||
United States | 2,892 | 2,876 | |||||||||||
Other | 5 | 5 | |||||||||||
$ | 4,483 | $ | 4,229 |
GENERAL_Schedule_of_Results_of
GENERAL (Schedule of Results of Discontinued Operations) (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summarized results of operations for TABS Brazil Ltda.: | ' | ' | ' |
Total operating expenses (income) | ($73) | ' | $84 |
Operating (loss) income | 73 | ' | -84 |
Net (loss) income from discontinued operations | $73 | ' | ($84) |
Basic and diluted net income (loss) per Ordinary share from discontinued operations | $0.02 | ' | ($0.02) |
GENERAL_Narrative_Details
GENERAL (Narrative) (Details) (Sales [Member], Customer A [Member]) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Sales [Member] | Customer A [Member] | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' |
Concentration risk, percentage | 33.00% | 23.00% | 16.00% |
SIGNIFICANT_ACCOUNTING_POLICIE3
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Severance pay: | ' | ' | ' |
Severance expense | $160 | $165 | $155 |
Government grants: | ' | ' | ' |
Amount of royalty-bearing government grants | ' | ' | 10 |
Basic and diluted net earnings (loss) per share: | ' | ' | ' |
Options included in calculation of diluted net earnings per Ordinary Share | 61,736 | 52,707 | ' |
Derivatives and hedging: | ' | ' | ' |
Call and put option contracts | 2,400 | 3,750 | 5,350 |
Profit (expense) on derivatives | -65 | -47 | -10 |
Value of call and put option contracts | $900 | ' | ' |
Developed Technology [Member] | Minimum [Member] | ' | ' | ' |
Intangible assets: | ' | ' | ' |
Amortization period | '4 years | ' | ' |
Developed Technology [Member] | Maximum [Member] | ' | ' | ' |
Intangible assets: | ' | ' | ' |
Amortization period | '8 years | ' | ' |
Customer Relationships [Member] | Minimum [Member] | ' | ' | ' |
Intangible assets: | ' | ' | ' |
Amortization period | '6 years | ' | ' |
Customer Relationships [Member] | Maximum [Member] | ' | ' | ' |
Intangible assets: | ' | ' | ' |
Amortization period | '8 years | ' | ' |
Brand Names [Member] | ' | ' | ' |
Intangible assets: | ' | ' | ' |
Amortization period | '11 years | ' | ' |
SIGNIFICANT_ACCOUNTING_POLICIE4
SIGNIFICANT ACCOUNTING POLICIES (Property and equipment) (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Computers and Peripheral Equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
% | 33.00% |
Office Furniture and Equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
% | 7.00% |
Office Furniture and Equipment [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
% | 6.00% |
Office Furniture and Equipment [Member] | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
% | 20.00% |
SIGNIFICANT_ACCOUNTING_POLICIE5
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Assumptions Used to Value Stock Options) (Details) | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | |||
Vesting term | '4 years | ' | ' | |||
The fair value for options granted is estimated at the date of grant using the Black-Scholes option pricing model with the following assumptions: | ' | ' | ' | |||
Expected volatility | ' | ' | [1] | ' | ||
Expected volatility, minimum | 91.40% | [1] | ' | 100.00% | [1] | |
Expected volatility, maximum | 100.30% | [1] | ' | 101.40% | [1] | |
Risk-free interest | ' | ' | [2] | ' | ||
Risk-free interest, minimum | 0.35% | [2] | ' | 0.37% | [2] | |
Risk-free interest, maximum | 0.78% | [2] | ' | 0.41% | [2] | |
Dividend yield | 0.00% | [3] | ' | [3] | 0.00% | [3] |
Expected life (years) | ' | ' | [4] | '3 years 9 months | [4] | |
Minimum [Member] | ' | ' | ' | |||
The fair value for options granted is estimated at the date of grant using the Black-Scholes option pricing model with the following assumptions: | ' | ' | ' | |||
Expected life (years) | '3 years 4 months 2 days | [4] | ' | ' | ||
Maximum [Member] | ' | ' | ' | |||
The fair value for options granted is estimated at the date of grant using the Black-Scholes option pricing model with the following assumptions: | ' | ' | ' | |||
Expected life (years) | '3 years 9 months | [4] | ' | ' | ||
[1] | Expected volatility is estimated based upon actual historical stock price movements over an historical period equivalent to the option's expected term; | |||||
[2] | The risk-free interest rate for purposes of the Black-Scholes price calculation is based on the yield from U.S. Treasury Bonds with an equivalent term; | |||||
[3] | The dividend yield is estimated to be 0% as the Company has historically not paid dividends and has no foreseeable plans to pay dividends. | |||||
[4] | Expected term of options granted represents the period of time that options granted are expected to be outstanding, and is estimated based on the Company's history. |
SIGNIFICANT_ACCOUNTING_POLICIE6
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Assets Measured at Fair Value) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets measured at fair value: | ' | ' |
Marketable securities | $153 | $139 |
Fair Value, Measurements, Recurring [Member] | ' | ' |
Assets measured at fair value: | ' | ' |
Marketable securities | 153 | ' |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' |
Assets measured at fair value: | ' | ' |
Marketable securities | 153 | ' |
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' |
Assets measured at fair value: | ' | ' |
Marketable securities | ' | ' |
Significant unobservable inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member] | ' | ' |
Assets measured at fair value: | ' | ' |
Marketable securities | ' | ' |
MARKETABLE_SECURITIES_Informat
MARKETABLE SECURITIES (Information Regarding Investment in Marketable Securities) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Available-for-sale: | ' | ' | ' |
Amortized cost | $135 | $139 | ' |
Gross unrealized gains | 19 | 7 | ' |
Gross unrealized losses | 1 | 7 | ' |
Estimated Fair Value | 153 | 139 | ' |
Net realized gains and (losses) on sales of available-for-sale securities | 1 | -6 | 2 |
Equity Securities [Member] | ' | ' | ' |
Available-for-sale: | ' | ' | ' |
Amortized cost | 65 | 81 | ' |
Gross unrealized gains | 10 | 4 | ' |
Gross unrealized losses | 1 | 7 | ' |
Estimated Fair Value | 74 | 78 | ' |
Corporate Bonds [Member] | ' | ' | ' |
Available-for-sale: | ' | ' | ' |
Amortized cost | 36 | 47 | ' |
Gross unrealized gains | 6 | 2 | ' |
Gross unrealized losses | ' | ' | ' |
Estimated Fair Value | 42 | 49 | ' |
Israeli Government Debt [Member] | ' | ' | ' |
Available-for-sale: | ' | ' | ' |
Amortized cost | 34 | 11 | ' |
Gross unrealized gains | 3 | 1 | ' |
Gross unrealized losses | ' | ' | ' |
Estimated Fair Value | $37 | $12 | ' |
MARKETABLE_SECURITIES_Schedule
MARKETABLE SECURITIES (Schedule of Investments, by Contractual Maturity) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Amortized cost | ' | ' |
Matures up to one year | $79 | $51 |
Matures after one year through five years | 28 | 41 |
Matures after five years | 12 | 14 |
Equity securities - no definite maturity date | 16 | 33 |
Total | 135 | 139 |
Fair market value | ' | ' |
Matures up to one year | 87 | 54 |
Matures after one year through five years | 32 | 42 |
Matures after five years | 15 | 16 |
Equity securities - no definite maturity date | 19 | 27 |
Total | $153 | $139 |
OTHER_ACCOUNTS_RECEIVABLE_AND_2
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES [Abstract] | ' | ' |
Government authorities | $12 | $32 |
Prepaid expenses | 60 | 23 |
Lease deposits | 41 | 53 |
Related parties | 6 | 10 |
Others | 28 | 57 |
Total | $147 | $175 |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Cost | $1,049 | $987 | ' |
Accumulated depreciation | 866 | 742 | ' |
Depreciated cost | 183 | 245 | ' |
Depreciation expense | 124 | 102 | 82 |
Computers and Peripheral Equipment [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Cost | 813 | 752 | ' |
Accumulated depreciation | 678 | 564 | ' |
Office Furniture and Equipment [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Cost | 186 | 185 | ' |
Accumulated depreciation | 151 | 141 | ' |
Leasehold Improvements [Member] | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Cost | 50 | 50 | ' |
Accumulated depreciation | $37 | $37 | ' |
INTANGIBLE_ASSETS_Schedule_of_
INTANGIBLE ASSETS (Schedule of Other Intangible Assets) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | $3,414 | $3,414 |
Accumulated amortization | 2,847 | 2,655 |
Amortized cost | 567 | 759 |
Developed Technology [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 2,170 | 2,170 |
Accumulated amortization | 1,798 | 1,675 |
Customer Relationships [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 1,015 | 1,015 |
Accumulated amortization | 945 | 897 |
Brand Names [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Cost | 229 | 229 |
Accumulated amortization | $104 | $83 |
INTANGIBLE_ASSETS_Amortization
INTANGIBLE ASSETS (Amortization Disclosures) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
INTANGIBLE ASSETS [Abstract] | ' | ' | ' |
Amortization expense | $192 | $291 | $365 |
Estimated amortization expense: | ' | ' | ' |
2014 | 177 | ' | ' |
2015 | 167 | ' | ' |
2016 | 160 | ' | ' |
2017 | 21 | ' | ' |
2018-2019 | 42 | ' | ' |
Amortized cost | $567 | $759 | ' |
ACCRUED_EXPENSES_AND_OTHER_LIA2
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract] | ' | ' |
Employees and payroll accruals | $1,013 | $999 |
Institutions and income tax payable | 134 | 353 |
Accrued expenses | 1,007 | 958 |
Related parties | 46 | 83 |
Total | $2,200 | $2,393 |
COMMITMENTS_AND_CONTINGENT_LIA2
COMMITMENTS AND CONTINGENT LIABILITIES (Lease Commitments) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Future minimum lease commitments under non-cancelable operating leases as of December 31, 2013 are as follows: | ' | ' | ' |
2014 | $217 | ' | ' |
2015 | 78 | ' | ' |
2016 | 58 | ' | ' |
2017-2019 | 126 | ' | ' |
Total | 479 | ' | ' |
Lease expense | $480 | $462 | $573 |
COMMITMENTS_AND_CONTINGENT_LIA3
COMMITMENTS AND CONTINGENT LIABILITIES (Royalty Commitments) (Details) (Royalty Commitment with the Office of the Chief Scientist [Member], USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Unrecorded Unconditional Purchase Obligation [Line Items] | ' | ' | ' |
Contingent royalty liabilities | $8,638 | ' | ' |
Royalties included in cost of revenue | $136 | $200 | $219 |
Minimum [Member] | ' | ' | ' |
Unrecorded Unconditional Purchase Obligation [Line Items] | ' | ' | ' |
Royalty percentage | 3.00% | ' | ' |
Total royalties as a percent of grants received | 100.00% | ' | ' |
Maximum [Member] | ' | ' | ' |
Unrecorded Unconditional Purchase Obligation [Line Items] | ' | ' | ' |
Royalty percentage | 5.00% | ' | ' |
Total royalties as a percent of grants received | 150.00% | ' | ' |
COMMITMENTS_AND_CONTINGENT_LIA4
COMMITMENTS AND CONTINGENT LIABILITIES (Claims and Demands and Guarantees) (Details) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | ||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Aug. 31, 2007 | Apr. 30, 2000 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2000 | Dec. 31, 2013 | Dec. 31, 2013 |
USD ($) | USD ($) | USD ($) | Threatened Litigation [Member] | Threatened Litigation [Member] | Claim by Israeli Tax Authorities [Member] | Claim by Israeli Tax Authorities [Member] | Claim by Israeli Tax Authorities [Member] | Claims Related to Discontinued Operations [Member] | Patent Infringement Case [Member] | |
USD ($) | USD ($) | USD ($) | USD ($) | ILS | USD ($) | USD ($) | ||||
Claims and demands: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum loss due to litigation | ' | ' | ' | ' | $226 | ' | $1,607 | 6,000 | $362 | ' |
Amount of final assessment | ' | ' | ' | ' | ' | 1,430 | ' | ' | ' | ' |
Income taxes paid | 274 | 1,210 | 8 | ' | ' | 240 | 1,190 | ' | ' | ' |
Litigation loss | ' | ' | ' | -71 | ' | ' | ' | ' | ' | ' |
Interest rate on litigation demand | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' |
Cost of revenues, expenses with respect to Asentinel royalties | ' | ' | ' | ' | ' | ' | ' | ' | ' | 48 |
Guarantees: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Bank guarantee | $68 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
TAXES_ON_INCOME_Narrative_Deta
TAXES ON INCOME (Narrative) (Details) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Operating Loss Carryforwards [Line Items] | ' |
Liability for unrecognized tax benefits | 101 |
Domestic Country [Member] | ' |
Operating Loss Carryforwards [Line Items] | ' |
Available carryforward tax losses | 19,454 |
Capital loss carryforwards | 417 |
Foreign Country [Member] | ' |
Operating Loss Carryforwards [Line Items] | ' |
Available carryforward tax losses | 285 |
Internal Revenue Service (IRS) [Member] | ' |
Operating Loss Carryforwards [Line Items] | ' |
Available carryforward tax losses | 539 |
Internal Revenue Service (IRS) [Member] | Minimum [Member] | ' |
Operating Loss Carryforwards [Line Items] | ' |
Net operating loss carryforward expiration date | 31-Dec-21 |
Internal Revenue Service (IRS) [Member] | Maximum [Member] | ' |
Operating Loss Carryforwards [Line Items] | ' |
Net operating loss carryforward expiration date | 31-Dec-28 |
TAXES_ON_INCOME_Schedule_of_De
TAXES ON INCOME (Schedule of Deferred Income Taxes) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
TAXES ON INCOME [Abstract] | ' | ' |
Tax loss carry-forwards | $5,377 | $4,872 |
Allowances for doubtful accounts and accruals for employee benefits | 95 | 101 |
Intangible assets | 103 | 118 |
Depreciation, accruals for interest and other | 721 | 724 |
Net deferred tax asset before valuation allowance | 6,296 | 5,815 |
Goodwill | -674 | -658 |
Valuation allowance | -5,651 | -4,786 |
Deferred tax assets (liability), net | -29 | 371 |
Short-term assets | ' | 371 |
Long-term liability | $29 | ' |
TAXES_ON_INCOME_Reconciliation
TAXES ON INCOME (Reconciliation of Income Tax Expense) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
TAXES ON INCOME [Abstract] | ' | ' | ' |
Income before taxes on income, net, as reported in the statements of operations from continuing operations | $1,768 | $2,102 | $481 |
Tax rates | 25.00% | 25.00% | 24.00% |
Theoretical tax expense (benefit) | 442 | 526 | 115 |
Effect of different tax rates | 27 | 25 | 19 |
U.S. state tax | 35 | 26 | 8 |
Utilization of carry-forward tax losses for which valuation allowance was provided | ' | -380 | -2 |
Taxes in respect of previous years as a result of court ruling | ' | 1,415 | ' |
Changes in provision for uncertain tax positions | 1 | -362 | 6 |
Change in valuation allowance | 148 | -340 | ' |
Deferred taxes for which valuation allowance was provided | -218 | -174 | -136 |
Taxes on income, net, as reported in the statements of operations | $435 | $736 | $10 |
TAXES_ON_INCOME_Schedule_of_In
TAXES ON INCOME (Schedule of Income (Loss) Before Income Taxes) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income (loss) before income taxes is comprised as follows: | ' | ' | ' |
Domestic | $1,561 | $1,808 | $225 |
Foreign | 207 | 294 | 256 |
Loss before equity in loss of affiliate | $1,768 | $2,102 | $481 |
TAXES_ON_INCOME_Schedule_of_Ta
TAXES ON INCOME (Schedule of Taxes on Income) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
TAXES ON INCOME [Abstract] | ' | ' | ' |
Current taxes | $35 | $26 | $8 |
Deferred taxes | 400 | -340 | 2 |
Taxes in respect of previous years as a result of court ruling | ' | 1,050 | ' |
Taxes on income, net, as reported in the statements of operations | 435 | 736 | 10 |
Foreign | $64 | $57 | $10 |
TAXES_ON_INCOME_Reconciliation1
TAXES ON INCOME (Reconciliation of Unrecognized Tax Benefits) (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
TAXES ON INCOME [Abstract] | ' | ' |
Balance as of beginning of the year | $100 | $632 |
Additions based on tax positions taken during the current period | 1 | 3 |
Decrease based on tax positions taken during the current period | ' | -535 |
Balance at the end of the year | $101 | $100 |
RELATED_PARTY_TRANSACTIONS_AND2
RELATED PARTY TRANSACTIONS AND BALANCES (Narrative) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Related Party Transaction [Line Items] | ' | ' | ' |
Expenses from related party transactions | $211,000 | $174,000 | $377,000 |
Lease expense | 480,000 | 462,000 | 573,000 |
Revenues derived from a related party | 74,000 | 101,000 | 103,000 |
C. Mer Industries Ltd. [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Expenses from related party transactions | 16,000 | 13,000 | 16,000 |
Revenues derived from a related party | 29,000 | 0 | ' |
Mr. Roger Challen [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Ownership interest | 23.50% | ' | ' |
Lease expense | 56,000 | ' | ' |
Data Distributors Inc. [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Expenses from related party transactions | 0 | 0 | 195,000 |
Mer & Co. (1982) Ltd. [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Revenues derived from a related party | $45,000 | ' | ' |
RELATED_PARTY_TRANSACTIONS_AND3
RELATED PARTY TRANSACTIONS AND BALANCES (Schedules of Balances and Transactions with Related Parties) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Balances with related parties: | ' | ' | ' |
Other accounts payable and accrued expenses (see Note 7) | $46 | $83 | ' |
Other accounts receivable and prepaid expenses (see note 4) | 6 | 10 | ' |
Transactions with related parties: | ' | ' | ' |
Revenues derived from a related party | 74 | 101 | 103 |
Amounts charged by related parties: | ' | ' | ' |
Cost of revenues | 16 | 53 | 54 |
Operating expenses | 195 | 121 | 323 |
Total amounts charged by related parties | $211 | $174 | $377 |
SHAREHOLDERS_EQUITY_Narrative_
SHAREHOLDERS' EQUITY (Narrative) (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Nov. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Aug. 31, 2013 | Dec. 31, 2013 | Aug. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2006 | Dec. 31, 2013 |
Consultant and Service Provider [Member] | Consultant and Service Provider [Member] | Consultant and Service Provider [Member] | Consultant and Service Provider [Member] | 1996 Plan [Member] | 2003 Plan [Member] | 2003 Plan [Member] | 2006 Plan [Member] | 2006 Plan [Member] | 2006 Plan [Member] | 2006 Plan [Member] | 2006 and 2003 Plans [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of ordinary shares authorized for issuance | ' | ' | ' | ' | ' | ' | ' | 750,000 | ' | 946,957 | ' | 550,000 | ' | 200,000 | ' |
Exercisable term | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vesting term | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ordinary shares available for future option grants | 844,536 | ' | ' | ' | ' | ' | ' | ' | ' | 446,958 | ' | ' | ' | ' | ' |
Number of Ordinary shares with respect to which options may be granted thereunder to any eligible employee | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 150,000 | ' | ' | ' |
Additional number of shares authorized for issuance | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | 150,000 | ' | 200,000 | ' | ' |
Exercise of stock options, shares | ' | ' | ' | ' | 4,750 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35,250 |
Weighted average grant-date fair value of options granted | $1.45 | ' | $0.87 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total compensation cost related to options granted | $93 | $41 | $65 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total unrecognized compensation cost related to non-vested share-based compensation arrangements | 182 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total unrecognized compensation cost related to non-vested share-based compensation arrangements, recognition period | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Goods and Nonemployee Services Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of options granted | ' | ' | ' | 7,250 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensation expense related to the grant of stock options | ' | ' | ' | ' | $14 | $3 | $2 | ' | ' | ' | ' | ' | ' | ' | ' |
SHAREHOLDERS_EQUITY_Schedule_o
SHAREHOLDERS' EQUITY (Schedule of Stock Option Activity) (Details) (Employee Stock Option [Member], USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Employee Stock Option [Member] | ' | ' |
Number of options | ' | ' |
Outstanding at December 31, 2012 | 276,750 | ' |
Granted | 172,000 | ' |
Exercised | -30,500 | ' |
Expired and forfeited | -15,000 | ' |
Outstanding at December 31, 2013 | 403,250 | 276,750 |
Vested and expected to vest | 380,290 | ' |
Exercisable at December 31, 2013 | 116,250 | ' |
Weighted-average exercise price | ' | ' |
Outstanding at December 31, 2012 | $1.70 | ' |
Granted | $2.18 | ' |
Exercised | $1.99 | ' |
Expired and forfeited | $2.15 | ' |
Outstanding at December 31, 2013 | $1.86 | $1.70 |
Vested and expected to vest | $1.86 | ' |
Exercisable at December 31, 2013 | $1.73 | ' |
Weighted- average remaining contractual term (in years) | ' | ' |
Outstanding at December 31, 2012 | '3 years 1 month 10 days | '3 years 4 days |
Granted | '4 years 5 months 19 days | ' |
Exercised | ' | ' |
Expired and forfeited | ' | ' |
Outstanding at December 31, 2013 | '3 years 1 month 10 days | '3 years 4 days |
Vested and expected to vest | '3 years 29 days | ' |
Exercisable at December 31, 2013 | '1 year 9 months 22 days | ' |
Aggregate intrinsic value | ' | ' |
Outstanding at December 31, 2013 | $289,140 | $513,000 |
Vested and expected to vest | 273,880 | ' |
Exercisable at December 31, 2013 | $98,400 | ' |
SHAREHOLDERS_EQUITY_Schedule_o1
SHAREHOLDERS' EQUITY (Schedule of Stock-Based Compensation Expense) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Total stock-based compensation expenses recognized: | ' | ' | ' |
Stock-based compensation expense | $93 | $41 | $65 |
Cost of Revenues [Member] | ' | ' | ' |
Total stock-based compensation expenses recognized: | ' | ' | ' |
Stock-based compensation expense | 7 | ' | 3 |
Research and Development Expenses [Member] | ' | ' | ' |
Total stock-based compensation expenses recognized: | ' | ' | ' |
Stock-based compensation expense | 7 | 1 | 8 |
Selling and Marketing [Member] | ' | ' | ' |
Total stock-based compensation expenses recognized: | ' | ' | ' |
Stock-based compensation expense | ' | 1 | 4 |
General and Administrative Expenses [Member] | ' | ' | ' |
Total stock-based compensation expenses recognized: | ' | ' | ' |
Stock-based compensation expense | $79 | $39 | $50 |
SHAREHOLDERS_EQUITY_Schedule_o2
SHAREHOLDERS' EQUITY (Schedule of Options and Warrants to Non-Employees) (Details) (USD $) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | |
Consultant and Service Provider [Member] | Consultant and Service Provider [Member] | Consultant and Service Provider [Member] | Consultant [Member] | |
Option Tranche One [Member] | ||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | ' | ' | ' | ' |
Number of options granted | 7,250 | ' | 2,500 | 40,000 |
Options exercisable | ' | ' | 2,500 | ' |
Exercise price per share | ' | ' | $1.94 | $2.08 |
Exercisable through | ' | ' | 'May 2014 | 'August 2018 |
Exercise of stock options, shares | ' | 4,750 | ' | ' |
REPORTABLE_SEGMENTS_AND_GEOGAP2
REPORTABLE SEGMENTS AND GEOGAPHIC INFORMATION (Schedule Segment Information) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
segments | |||
Segment Reporting Information [Line Items] | ' | ' | ' |
Number of reportable units | 2 | ' | ' |
Revenues | $12,472 | $13,126 | $12,003 |
Adjusted EBITDA | 2,130 | 2,479 | 915 |
Enterprise Segment [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Revenues | 7,817 | 9,041 | 9,232 |
Adjusted EBITDA | 1,231 | 1,701 | 555 |
Service Providers Segment [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Revenues | 4,655 | 4,085 | 2,771 |
Adjusted EBITDA | $899 | $778 | $360 |
REPORTABLE_SEGMENTS_AND_GEOGAP3
REPORTABLE SEGMENTS AND GEOGAPHIC INFORMATION (Reconciliation of Total Adjusted EBITDA to Net Income) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Segment Reporting Information [Line Items] | ' | ' | ' |
Adjusted EBITDA | $2,130 | $2,479 | $915 |
Depreciation and amortization expenses | 316 | 393 | 447 |
Stock-based compensation | 107 | 44 | 67 |
Capital gain | ' | ' | -78 |
Financial income, net | -61 | -60 | -2 |
Income tax expenses | 435 | 736 | 10 |
Net income from continuing operations | $1,333 | $1,366 | $471 |
REPORTABLE_SEGMENTS_AND_GEOGAP4
REPORTABLE SEGMENTS AND GEOGAPHIC INFORMATION (Schedule of Revenues within Geographic Areas) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues by geographic areas: | ' | ' | ' |
Revenues | $12,472 | $13,126 | $12,003 |
United States [Member] | ' | ' | ' |
Revenues by geographic areas: | ' | ' | ' |
Revenues | 10,817 | 10,251 | 8,915 |
Germany [Member] | ' | ' | ' |
Revenues by geographic areas: | ' | ' | ' |
Revenues | 252 | 482 | 683 |
Far East [Member] | ' | ' | ' |
Revenues by geographic areas: | ' | ' | ' |
Revenues | 300 | 443 | 585 |
Holland [Member] | ' | ' | ' |
Revenues by geographic areas: | ' | ' | ' |
Revenues | 216 | 297 | 317 |
Israel [Member] | ' | ' | ' |
Revenues by geographic areas: | ' | ' | ' |
Revenues | 400 | 917 | 732 |
Other [Member] | ' | ' | ' |
Revenues by geographic areas: | ' | ' | ' |
Revenues | $487 | $736 | $771 |
REPORTABLE_SEGMENTS_AND_GEOGAP5
REPORTABLE SEGMENTS AND GEOGAPHIC INFORMATION (Major Customer Information) (Details) (Sales [Member], Customer A [Member]) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Sales [Member] | Customer A [Member] | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' |
Concentration risk, percentage | 33.00% | 23.00% | 16.00% |
REPORTABLE_SEGMENTS_AND_GEOGAP6
REPORTABLE SEGMENTS AND GEOGAPHIC INFORMATION (Schedule of Long-Lived Assets) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Long-lived assets: | ' | ' |
Long-lived assets | $4,229 | $4,483 |
Israel [Member] | ' | ' |
Long-lived assets: | ' | ' |
Long-lived assets | 1,348 | 1,586 |
United States [Member] | ' | ' |
Long-lived assets: | ' | ' |
Long-lived assets | 2,876 | 2,892 |
Other [Member] | ' | ' |
Long-lived assets: | ' | ' |
Long-lived assets | $5 | $5 |