Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 23, 2016 | Jun. 30, 2015 | |
Entity Registrant Name | ReachLocal Inc | ||
Entity Central Index Key | 1,297,336 | ||
Trading Symbol | rloc | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Common Stock, Shares Outstanding (in shares) | 30,070,750 | ||
Entity Public Float | $ 36,685,152 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Convertible Debt [Member] | ||
Current Liabilities: | ||
Convertible notes – related party | $ 5,000,000 | |
Cash and Cash Equivalents, at Carrying Value | 18,833,000 | $ 43,720,000 |
Short-term investments | 359,000 | 904,000 |
Accounts receivable, net of allowance for doubtful accounts of $803 and $961 at December 31, 2015 and December 31, 2014, respectively | 6,278,000 | 7,844,000 |
Prepaid expenses and other current assets | 8,296,000 | 7,855,000 |
Total current assets | 33,766,000 | 60,323,000 |
Property and equipment, net | 13,550,000 | 19,639,000 |
Capitalized software development costs, net | 20,691,000 | $ 21,555,000 |
Restricted cash - term loan | 15,000,000 | |
Restricted cash | 3,502,000 | $ 3,589,000 |
Intangible assets, net | 4,011,000 | 5,492,000 |
Non-marketable investments | 9,000,000 | 9,000,000 |
Other assets | 2,547,000 | 3,601,000 |
Goodwill | 20,129,000 | 48,189,000 |
Total assets | 122,196,000 | 171,388,000 |
Accounts payable | 33,581,000 | 44,874,000 |
Accrued compensation and benefits | 14,478,000 | 15,972,000 |
Deferred revenue | 22,985,000 | 29,016,000 |
Accrued restructuring | 3,329,000 | $ 3,196,000 |
Term loan | 8,352,000 | |
Capital lease | 698,000 | $ 624,000 |
Other current liabilities | 10,166,000 | 12,316,000 |
Liabilities of discontinued operations | 804,000 | 850,000 |
Total current liabilities | 94,393,000 | $ 106,848,000 |
Term loan | 16,194,000 | |
Capital Lease Obligations, Noncurrent | 484,000 | $ 1,103,000 |
Deferred rent and other liabilities | 8,111,000 | 10,513,000 |
Total liabilities | $ 124,182,000 | $ 118,464,000 |
Commitments and contingencies (Note 8) | ||
Stockholders’ Equity (Deficit): | ||
Common stock, $0.00001 par value—140,000 shares authorized; 29,639 and 29,269 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively | $ 0 | $ 0 |
Receivable from stockholder | (55,000) | (65,000) |
Additional paid-in capital | 140,398,000 | 132,080,000 |
Accumulated deficit | (136,084,000) | (74,569,000) |
Accumulated other comprehensive loss | (6,245,000) | (4,522,000) |
Total stockholders’ equity (deficit) | (1,986,000) | 52,924,000 |
Total liabilities and stockholders’ equity (deficit) | $ 122,196,000 | $ 171,388,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Allowance for doubtful accounts | $ 803 | $ 961 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 140,000 | 140,000 |
Common stock, shares issued (in shares) | 29,639 | 29,269 |
Common stock, shares outstanding (in shares) | 29,639 | 29,269 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue | $ 382,597 | $ 474,921 | $ 514,070 |
Cost of revenue | 213,409 | 252,721 | 256,450 |
Operating expenses: | |||
Selling and marketing | 126,966 | 182,720 | 182,854 |
Product and technology | 28,414 | 27,510 | 22,240 |
General and administrative | 39,332 | 52,155 | $ 46,362 |
Amounts accrued | 7,546 | $ 5,927 | |
Goodwill impairment loss | 27,800 | ||
Total operating expenses | 230,058 | $ 268,312 | $ 251,456 |
Operating income (loss) | (60,870) | $ (46,112) | $ 6,164 |
Gain on deconsolidation of subsidiary, net | 2,853 | ||
Interest expense | (2,790) | $ (67) | $ (14) |
Other income (expense), net | (339) | 1,003 | 600 |
Income (loss) from continuing operations before income taxes | (61,146) | (45,176) | 6,750 |
Income tax provision | 369 | 484 | 3,699 |
Income (loss) from continuing operations | $ (61,515) | (45,660) | 3,051 |
Income (loss) from discontinued operations, net of income tax of $11, and $3,036 for the years ended December 31, 2014, and 2013, respectively | 650 | (5,534) | |
Net loss | $ (61,515) | $ (45,010) | $ (2,483) |
Basic: | |||
Income (loss) from continuing operations (in dollars per share) | $ (2.11) | $ (1.60) | $ 0.11 |
Income (loss) from discontinued operations, net of income taxes (in dollars per share) | 0.02 | (0.20) | |
Net loss per share (in dollars per share) | $ (2.11) | (1.58) | (0.09) |
Diluted: | |||
Income (loss) per share from continuing operations, diluted (in dollars per share) | $ (2.11) | (1.60) | 0.11 |
Income (loss) from discontinued operations, net of income taxes (in dollars per share) | 0.02 | (0.20) | |
Net loss per share (in dollars per share) | $ (2.11) | $ (1.58) | $ (0.09) |
Weighted average common shares used in the computation of income (loss) per share: | |||
Basic (in shares) | 29,174 | 28,461 | 27,764 |
Diluted (in shares) | 29,174 | 28,461 | 29,051 |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income (loss) from discontinued operations, tax | $ 11 | $ 3,036 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net loss | $ (61,515) | $ (45,010) | $ (2,483) |
Other comprehensive loss: | |||
Foreign currency translation adjustments | (1,723) | (588) | (2,412) |
Comprehensive loss | $ (63,238) | $ (45,598) | $ (4,895) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) shares in Thousands | Common Stock [Member] | Receivables from Stockholder [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Balance (in shares) at Dec. 31, 2012 | 28,154 | |||||
Balance at Dec. 31, 2012 | $ (89,000) | $ 110,573,000 | $ (27,076,000) | $ (1,522,000) | $ 81,886,000 | |
Issuance of common stock related to stock-based compensation plans (in shares) | 1,495 | |||||
Issuance of common stock related to stock-based compensation plans | 6,681,000 | 6,681,000 | ||||
Stock-based compensation | 12,332,000 | 12,332,000 | ||||
Common and restricted stock issued in business combinations (in shares) | 5 | |||||
Common and restricted stock issued in business combinations | 126,000 | 126,000 | ||||
Common stock repurchase (in shares) | (1,395) | |||||
Common stock repurchase | (18,963,000) | (18,963,000) | ||||
Excess tax benefits from stock-based awards | $ 1,185,000 | 1,185,000 | ||||
Net loss | $ (2,483,000) | (2,483,000) | ||||
Foreign currency translation adjustments | $ 16,000 | $ (2,412,000) | (2,396,000) | |||
Balance (in shares) at Dec. 31, 2013 | 28,259 | |||||
Balance at Dec. 31, 2013 | $ (73,000) | $ 111,934,000 | $ (29,559,000) | $ (3,934,000) | 78,368,000 | |
Issuance of common stock related to stock-based compensation plans (in shares) | 1,010 | |||||
Issuance of common stock related to stock-based compensation plans | 6,438,000 | 6,438,000 | ||||
Stock-based compensation | 13,777,000 | 13,777,000 | ||||
Common stock repurchase | $ (69,000) | (69,000) | ||||
Net loss | $ (45,010,000) | (45,010,000) | ||||
Foreign currency translation adjustments | $ 8,000 | $ (588,000) | $ (580,000) | |||
Balance (in shares) at Dec. 31, 2014 | 29,269 | 29,269 | ||||
Balance at Dec. 31, 2014 | $ (65,000) | $ 132,080,000 | $ (74,569,000) | $ (4,522,000) | $ 52,924,000 | |
Issuance of common stock related to stock-based compensation plans (in shares) | 370 | |||||
Issuance of common stock related to stock-based compensation plans | 7,000 | 7,000 | ||||
Stock-based compensation | 8,068,000 | 8,068,000 | ||||
Common stock repurchase | $ (7,000) | (7,000) | ||||
Net loss | $ (61,515,000) | (61,515,000) | ||||
Foreign currency translation adjustments | $ 10,000 | $ (1,723,000) | $ (1,713,000) | |||
Balance (in shares) at Dec. 31, 2015 | 29,639 | 29,639 | ||||
Balance at Dec. 31, 2015 | $ (55,000) | $ 140,398,000 | $ (136,084,000) | $ (6,245,000) | $ (1,986,000) | |
Issuance of Hercules Warrant | $ 250,000 | $ 250,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Convertible Debt [Member] | |||
Cash flows from financing activities: | |||
Issuance of convertible notes (related party) | $ 5,000,000 | ||
Income (loss) from continuing operations | (61,515,000) | $ (45,660,000) | $ 3,051,000 |
Depreciation and amortization | 19,681,000 | $ 17,394,000 | $ 15,096,000 |
Goodwill impairment loss | 27,800,000 | ||
Stock-based compensation | 8,671,000 | $ 13,260,000 | $ 11,505,000 |
Restructuring charges | 7,546,000 | $ 5,927,000 | |
Gain on deconsolidation of subsidiary | $ (2,853,000) | ||
Excess tax benefits from stock-based awards | $ (1,185,000) | ||
Loss on disposal of property and equipment | $ 168,000 | ||
Provision for doubtful accounts | $ 260,000 | $ 1,649,000 | $ 2,304,000 |
Contingent consideration—fair value adjustment | (416,000) | ||
Non-cash interest expense | $ 641,000 | $ 17,000 | |
Impairment of loan to franchisee | $ 3,279,000 | ||
Deferred taxes, net | $ 93,000 | $ 873,000 | (3,500,000) |
Accounts receivable | 703,000 | (460,000) | (6,317,000) |
Prepaid expenses and other current assets | (1,077,000) | 701,000 | 121,000 |
Other assets | 222,000 | (669,000) | (1,175,000) |
Accounts payable | (9,185,000) | 9,081,000 | 2,906,000 |
Accrued compensation and benefits | (151,000) | (557,000) | 3,292,000 |
Deferred revenue | (4,541,000) | (3,400,000) | $ (255,000) |
Accrued restructuring | (6,510,000) | (2,564,000) | |
Deferred rent and other liabilities | 9,000 | 3,421,000 | $ 1,565,000 |
Net cash provided by (used in) operating activities, continuing operations | (20,038,000) | (1,403,000) | 30,687,000 |
Net cash used in operating activities, discontinued operations | (45,000) | (915,000) | (4,001,000) |
Net cash provided by (used in) operating activities | (20,083,000) | (2,318,000) | 26,686,000 |
Additions to property, equipment and software | $ (13,894,000) | (25,735,000) | (19,748,000) |
Acquisitions, net of acquired cash | $ (7,089,000) | (363,000) | |
Loan to franchisee | (1,221,000) | ||
Investments in non-marketable investments | $ (2,000,000) | (2,500,000) | |
Purchases of certificates of deposits and short-term investments | $ (474,000) | (2,578,000) | |
Maturities of certificates of deposits and short-term investments | $ 124,000 | 2,561,000 | |
Net cash used in investing activities, continuing operations | $ (13,770,000) | $ (35,298,000) | (23,849,000) |
Net cash used in investing activities, discontinued operations | (3,180,000) | ||
Net cash used in investing activities | $ (13,770,000) | $ (35,298,000) | $ (27,029,000) |
Proceeds from term loan, net | 24,700,000 | ||
Restricted cash – term loan | (15,000,000) | ||
Payment of deferred and contingent consideration | (529,000) | ||
Proceeds from exercise of stock options | $ 7,000 | $ 6,438,000 | $ 6,681,000 |
Excess shortfalls from stock-based awards | $ 1,185,000 | ||
Principal payments on capital lease obligations | $ (752,000) | $ (259,000) | |
Term loan costs | (542,000) | ||
Common stock repurchases | (7,000) | $ (69,000) | $ (18,963,000) |
Net cash provided by (used in) financing activities | 12,877,000 | 6,110,000 | (11,097,000) |
Effect of exchange rate changes on cash and cash equivalents | (3,911,000) | (2,288,000) | (3,366,000) |
Net change in cash and cash equivalents | (24,887,000) | (33,794,000) | (14,806,000) |
Cash and cash equivalents—beginning of year | 43,720,000 | 77,514,000 | 92,320,000 |
Cash and cash equivalents—end of year | $ 18,833,000 | $ 43,720,000 | $ 77,514,000 |
Note 1 - Organization and Descr
Note 1 - Organization and Description of Business | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Nature of Operations [Text Block] | 1. Organization and Description of Business ReachLocal, Inc.’s (the “Company”) operations are located in the United States, Canada, Australia, New Zealand, Japan, Germany, the Netherlands, Austria, Brazil, Mexico, and India. The Company’s mission is to provide more customers to local businesses around the world. The Company offers online marketing products and solutions in three categories: digital advertising (including ReachSearch™, ReachRetargeting™, ReachDisplay™, and ReachDisplay InApp TM Liquidity and Capital Resources During 2015, the Company experienced declining revenues as a result of challenging market conditions and worse than expected performance in the Company’s international markets. These conditions, combined with the Company’s initiatives to transform the business and focus on profitable revenue, have had a significant negative impact on its operating results and cash flows. As a result, the Company has taken a number of steps to reduce expenses and improve its results of operations through, for example, its 2015 Restructuring Plan, including cost-saving measures such as workforce reductions, downsizing certain facilities in North America, as well as reductions of general corporate expenses and capital expenditures. In order to provide additional liquidity to meet working capital and capital resource requirements, on April 30, 2015, the Company entered into a Loan and Security Agreement (the “Hercules Loan Agreement”) for a $25.0 million term loan. The Company received $24.7 million of net proceeds from the term loan, $15.0 million of which is considered restricted cash required under the terms of the Hercules Loan Agreement. In addition, on December 17, 2015, the Company entered into a convertible note purchase agreement with affiliates of its largest shareholder for the immediate issuance of $5.0 million of Convertible Second Lien Subordinated Notes (the “VantagePoint Notes”). The note purchase agreement also provides for the issuance and sale of up to an additional $5.0 million aggregate principal amount of convertible notes, upon mutual agreement of ReachLocal and VantagePoint (and Hercules’ consent). The Company is required to make interest-only payments on the Hercules term loan through May 1, 2016, though such payments may be extended through August 1, 2016 and November 1, 2016 if the Company remains in continuous compliance with the financial covenants under the Hercules Loan Agreement through April 1, 2016 and July 1, 2016, respectively, and no default or event of default has occurred and is continuing on such dates. Upon repayment of the term loan, the Company is also required to make an end-of-term payment to the Lenders equal to $1.5 million, which is accrued as interest based on the effective interest method over the 3-year term of the Hercules Loan Agreement. The term loan is secured by substantially all of the Company’s personal property, including the Company’s intellectual property. The Company is required to begin making quarterly interest and principal payments on the VantagePoint Notes on April 15, 2017, subject to a subordination agreement with Hercules. The Hercules Loan Agreement includes covenants applicable to the Company, which include restrictions on transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, selling assets, and undergoing a change in control, in each case subject to certain exceptions, as well as financial covenant requirements to maintain certain minimum levels of revenue and earnings during each three-month period, tested monthly, during the term. These restrictions also include a maximum net new investment in the Company’s foreign subsidiaries, subject to certain exclusions of $8.0 million during 2015, $5.5 million during 2016, $4.0 million annually thereafter, and $18.0 million in the aggregate during the term of the agreement. The Hercules Loan Agreement also contains a subjective acceleration clause that can be triggered if the Company experiences a Material Adverse Effect, as defined in the Hercules Loan Agreement, which would be considered an event of default. On August 3, 2015, the Company entered into an amendment to the Hercules Loan Agreement, which reduced the Hercules Loan Agreement’s covenant thresholds for revenue for the months ending September 30, 2015 through December 31, 2015. On November 9, 2015, the Company entered into an amendment to the Hercules Loan Agreement, which waived compliance with the revenue and earnings covenant thresholds for November and December 2015. In connection with the amendment, the Company (i) paid Hercules a one-time fee of $0.2 million, (ii) reset the schedule of prepayment fees to begin from November 9, 2015, instead of April 30, 2016, and (iii) agreed to amend the Hercules Warrant as described in Note 13, Debt and Other Obligations. The Company is in compliance with all of the Hercules Loan Agreement’s covenants as of December 31, 2015. The Company’s operating losses and capital expenditures more than offset the $15.0 million of net unrestricted cash from the Hercules Loan Agreement and VantagePoint Notes, resulting in cash and cash equivalents of $18.8 million and short-term investments of $0.4 million at December 31, 2015. To date, the Company has experienced no loss of its invested cash, cash equivalents or short-term investments, although some of those balances are subject to foreign currency exchange risk. The Company cannot, however, provide any assurances that access to its invested cash, cash equivalents and short-term investments will not be impacted by adverse conditions in the financial markets. At December 31, 2015, the Company had restricted cash in North America related to the minimum cash balance required to be maintained under the terms of the Hercules Loan Agreement of $15.0 million. If the Company achieves positive “Adjusted EBITDA” as defined in the Hercules Loan Agreement, for three consecutive quarters, the minimum cash balance decreases to $12.5 million. The Company achieved positive “Adjusted EBITDA” as defined, during the quarters ended September 30, 2015 and December 31, 2015, which qualifies as two quarters of the required three consecutive quarters. Also, at December 31, 2015, the Company had restricted cash related to certificates of deposits held at financial institutions that are pledged as collateral for letters of credit related to lease commitments, collateral for merchant accounts, and cash deposits funded to a restricted account determined on a monthly basis in accordance with its employee health care self-insurance plan in the amount of $3.5 million, of which, $0.2 million relate to the employee health care self-insurance plan. The Company’s current liabilities exceeded its current assets by $60.6 million at December 31, 2015, and it incurred an operating loss of $61.5 million for the year then ended. The Company believes that it will be able to maintain compliance with the minimum cash balance in North America in excess of $15.0 million through March 31, 2016, and subsequently maintain a minimum cash balance in North America of $12.5 million in accordance with achievement of positive “Adjusted EBITDA” as defined above. The Company also believes that it will extend its interest-only payments through November 1, 2016 by maintaining continuous compliance and not experiencing a default or event of default through July 1, 2016. In addition, the Company believes that it will be able to maintain compliance with the other financial covenants contained in the Hercules Loan Agreement through 2016 as a result of its implemented cost and capital expenditure control measures. The Company believes that it will be able to achieve the revenue and earnings targets for 2016 under the Hercules Loan Agreement, which equal 90% of the revenue estimated in the Company’s 2016 operating plan and 70% and 80% of the earnings estimated for the first and second six months, respectively, in the Company’s 2016 operating plan as approved by the Company’s board of directors. To meet the Company’s liquidity needs, management expects to minimize increases in personnel until the Company’s business performance has improved and supports additional costs. However, the Company may need to implement further cost reductions in its operating expenses to maintain a sufficient cash balance to fund its operations and maintain compliance with the minimum cash balance requirement under the Hercules Loan Agreement. Should it become necessary, the Company would implement additional cost reductions primarily through forgoing certain discretionary compensation increases, and further constraining identified non-critical product investments, and marketing and other costs, including reductions in personnel related to those activities. These identified potential actions, commencing as soon as May 2016, comprise a developed plan to reduce such costs by $4.6 million, net of implementation costs. In addition, the Company would consider borrowing up to an additional $5.0 million under the current VantagePoint notes purchase agreement, however such borrowings would be subject to VantagePoint’s willingness to lend and Hercules’ consent. The Company will continue to evaluate the extent and effectiveness of its cost-saving measures and monitor expenses compared to revenue and intends to implement additional cost reductions in future periods if and as circumstances warrant. However, there can be no assurance that these actions will be successful or that further adverse events outside of the Company’s control may arise that would result in the Company’s inability to comply with the Hercules Loan Agreement’s covenants. If an event of default were to occur, the Company may be required to obtain a further amendment or a waiver to the Hercules Loan Agreement, refinance the term loan, divest non-core assets or operations and/or obtain additional equity or debt financing. If the Company was unable to obtain such a waiver or amendment, or consummate such a transaction, the administrative agent could exercise remedies against the Company and the collateral securing the term loan, including potential foreclosure against the Company’s assets securing the Hercules Loan Agreement, including the Company’s cash. Further, the VantagePoint Notes and Hercules Loan Agreement contain cross-default provisions whereby a default under one agreement would likely result in cross defaults under agreements covering other borrowings. The occurrence of a default under any of these borrowing arrangements would permit the applicable note holders or the lenders under the term loan to declare all amounts outstanding under those borrowing arrangements to be immediately due and payable. In consideration of these conditions, the Company currently anticipates that funds expected to be generated from operations, including cost-saving measures the Company has taken and intends to take, will be sufficient to meet the Company’s anticipated cash requirements through at least the next twelve months. However, there is no assurance that the results of operations and cash flows expected during that period of time will be achieved. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Significant Accounting Policies [Text Block] | 2. Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of ReachLocal, Inc. and its wholly owned subsidiaries. The Company's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results may differ from those estimates. Reclassifications and Adjustments Certain prior period amounts have been reclassified to conform to the current period presentation. See further discussion below under recent accounting pronouncements and in Note 14, Income Taxes. Foreign Currency Translation The Company’s operations are conducted in several countries around the world, and the financial statements of its foreign subsidiaries are reported in the applicable foreign currencies (functional currencies). Financial information is translated from the applicable functional currency to the U.S. dollar, the reporting currency, for inclusion in the Company’s consolidated financial statements. Revenue and expenses are translated at average exchange rates prevailing during the period, and assets and liabilities are translated at exchange rates in effect at the balance sheet date. Resulting translation adjustments are included as a component of accumulated other comprehensive income (loss), net in stockholders’ equity. Foreign currency translation adjustments are generally not adjusted for income taxes as they are primarily related to indefinite investments in foreign subsidiaries. Foreign exchange transaction gains and losses are included in other income (expense), net in the accompanying consolidated statements of operations. Exchange gains and losses on intercompany balances that are considered permanently invested are also included as a component of accumulated other comprehensive loss in stockholders’ equity. Cash and Cash Equivalents The Company reports all highly liquid short-term investments with original maturities of three months or less at the time of purchase as cash equivalents. As of December 31, 2015 and 2014, cash equivalents consist of demand deposits and money market accounts. Cash equivalents are stated at cost, which approximates fair value. Short-Term Investments The Company classifies investments as short-term when the original maturity is less than one year, or when the Company intends to sell the investment within one year. As of December 31, 2015 and 2014, short-term investments consisted of certificates of deposit. All of the short-term investments are classified as available-for-sale. Short-term investments are stated at cost, which approximates fair value. Accounts Receivable The Company performs ongoing credit evaluations of its customers and adjusts credit limits based upon payment history, the customer’s creditworthiness and various other factors, as determined by its review of their credit information. The Company monitors collections and payments from its customers and maintains an allowance for estimated credit losses based upon its historical experience and any customer-specific collection issues that it has identified. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, short-term investments and accounts receivable. Cash and cash equivalents and certificates of deposit are deposited with a limited number of financial institutions in the United States, Canada, Australia, United Kingdom, India, the Netherlands, Germany, Japan and Brazil. The balances held at any one financial institution are generally in excess of Federal Deposit Insurance Corporation insurance limits or, in foreign territories, local insurance limits, and as a result, access to the Company’s cash and cash equivalents may be impacted by adverse conditions in the global financial markets, including fluctuations in currency exchange rates. As of December 31, 2015, domestic bank balances in excess of insured limits were $23.3 million and foreign bank balances in excess of insured limits were $12.5 million. During March 2016, the Company commenced a process to transition its two primary financial service providers of commercial banking services and merchant services for its credit and debit card processing in North America. The company does not expect a significant impact to its financial position, results of operatin or cash flows in North America as a result of the transition, which is expected to be completed May 2016 The Company’s customers are primarily local businesses, dispersed both geographically and across a broad range of industries. Management performs ongoing evaluation of trade receivables for collectability and provides an allowance for potentially uncollectible accounts. The following table summarizes the change in the Company’s allowance for doubtful accounts for each of the three years ended December 31, 2015, 2014 and 2013 (in thousands): 201 5 201 4 201 3 Allowance for doubtful accounts as of the beginning of the year $ 961 $ 2,212 $ 259 Additions charged to expense 563 2,621 6,080 Write-offs (1,026 ) (4,511 ) (4,396 ) Recoveries 305 639 268 Allowance for doubtful accounts as of the end of the year $ 803 $ 961 $ 2,212 For the years ended December 31, 2015, 2014, and 2013, the Company did not have any individual clients that comprised more than 10% of consolidated revenues. During 2015, 2014, and 2013, the Company’s cost of revenue was primarily for the purchase of media from two of the Company’s vendors. Other receivables and prepaid expenses included $3.6 million and $0.6 million of non-trade receivables from media vendors at December 31, 2015 and 2014, respectively. Accounts payable included $17.3 million and $17.1 million of accrued media expenses from media vendors at December 31, 2015 and 2014, respectively. Property and Equipment Property and equipment are stated at historical cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is generally three years for computer hardware and software, five years for office equipment, and seven years for furniture and fixtures. Leasehold improvements are amortized using the straight-line method over the lesser of the useful life or the lease term. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred. Software Development Costs Costs to develop software for internal use are capitalized when the Company has determined that the development efforts will result in new or additional functionality or new products. Costs incurred prior to meeting these criteria and costs associated with ongoing maintenance are expensed as incurred and included in product and technology expenses, in addition to amortization of capitalized software development costs, in the accompanying consolidated statements of operations. The Company monitors its existing capitalized software costs and reduces its carrying value as the result of releases that render previous features or functions obsolete. Software development costs are evaluated for impairment in accordance with the Company’s policy for finite-lived intangible assets and other long-lived assets. Costs capitalized as internal use software are amortized on a straight-line basis over an estimated useful life of three years. Restricted Cash Term Loan Under the terms of the Hercules Loan Agreement, as amended, the Company is required to maintain, at all times, cash in North America of at least $15.0 million, unless the Company achieves positive “Adjusted EBITDA” as defined in the Loan Agreement for three consecutive quarters, in which case the minimum cash balance decreases to $12.5 million. Restricted cash—term loan represents the required minimum compensating balance to secure the term loan. See Note 13, Debt and Other Obligations, for more information. Restricted Cash Restricted cash represents certificates of deposit held at financial institutions that are pledged as collateral for letters of credit related to lease commitments, collateral for the Company’s merchant accounts, and cash deposits in a restricted account in accordance with the Company’s employee health care self-insurance plan. The letters of credit will lapse at the end of the respective lease terms through 2024 and the certificates of deposit automatically renew for successive one-year periods over the duration of the lease term. The restrictions related to merchant accounts and the Company’s self-insurance plan will lapse upon termination of the respective underlying arrangements. At December 31, 2015 and December 31, 2014, the Company had restricted cash in the amount of $3.5 million and $3.6 million, respectively, of which, $0.2 million, related to the employee health care self-insurance plan. Loan Receivables The Company records loan receivables at carrying value, net of potential allowance for losses. Losses on receivables are recorded when probable and estimable. Interest income on loan receivables is accrued on a monthly basis over the life of the loan, and interest recognition is suspended upon impairment of loan principal. Non-marketable Investments The Company accounts for non-marketable investments under the cost method, which are periodically assessed for other-than-temporary impairment. The fair value of a cost method investment is not evaluated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. However, if a significant adverse event were identified, the Company would estimate the fair value of its cost method investment considering available information at the time of the event, such as current cash position, earnings and cash flow forecasts, recent operational performance and any other readily available data. If the Company determines that an other-than-temporary impairment has occurred, the investment is written-down to its fair value. Variable Interest Entities The Company analyzes its interests, including agreements, loans, guarantees, and equity investments, on a periodic basis to determine if such interests are variable interests. If variable interests are identified, then the related entity is assessed to determine if it is a variable interest entity (“VIE”). The Company’s analysis includes both quantitative and qualitative reviews. The Company bases its quantitative analysis on the forecasted cash flows of the entity, and its qualitative analysis on the design of the entity, its organizational structure including its decision-making authority, and relevant agreements. If the Company determines that the entity is a VIE, the Company then assesses if it must consolidate the VIE as its primary beneficiary. The Company’s determination of whether it is the primary beneficiary is based upon qualitative and quantitative analyses, which assess the purpose and design of the VIE, the nature of the VIE’s risks and the risks that the Company absorbs, the power to direct activities that most significantly impact the economic performance of the VIE, and the obligation to absorb losses or the right to receive benefits that could be significant to the VIE. Finite-Lived Intangible Assets and Other Long-Lived Assets Finite-lived intangible assets are attributable to the various developed technologies, trade names, and customer relationships of the businesses the Company has acquired. The Company reports finite-lived, acquisition-related intangible assets at acquisition date fair value, net of accumulated amortization. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from two to ten years. Straight-line amortization is used as another pattern over which the economic benefits will be consumed cannot be reliably determined. The Company reviews the carrying values of long-lived assets, including intangible assets, for possible impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. In its analysis of other finite lived amortizable intangible assets, the Company applies the guidance of ASC 350-20, Intangibles – Goodwill and Other At December 31, 2015 and 2014, there were no indications of impairment of the Company’s finite-lived intangible assets or other long-lived assets. Goodwill Goodwill represents the excess of the purchase price of the Company’s acquired businesses over the fair value of the net tangible and intangible assets acquired. The Company accounts for goodwill in accordance with ASC 350, Intangibles—Goodwill and Othe r The Company tests the goodwill of its reporting units for impairment annually on the first day of the fourth quarter, and whenever events occur or circumstances change that would more likely than not indicate that the goodwill might be impaired. Events or circumstances which could trigger an impairment review include, but are not limited to, a significant adverse change in the legal or business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key management or other personnel, significant changes in the manner of the Company’s use of the acquired assets or the strategy for the acquired business or the Company’s overall business, significant and sustained decline in market capitalization, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. Testing goodwill for impairment involves a two-step quantitative process. However, prior to performing the two-step quantitative goodwill impairment test, the Company has the option to first assess qualitative factors to determine whether or not it is necessary to perform the two-step quantitative goodwill impairment test for selected reporting units. If the Company chooses the qualitative option, the Company is not required to perform the two-step quantitative goodwill impairment test unless the Company has determined, based on the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The first step of the impairment test involves comparing the estimated fair values of a reporting unit with its respective carrying amount, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying amount, including goodwill, goodwill is considered not to be impaired and no additional steps are necessary. If, however, the estimated fair value of the reporting unit is less than its carrying amount, including goodwill, or if the reporting unit has a negative carrying value and the Company believes it is more likely than not that a goodwill impairment exists, then the second step is performed to compare the carrying amount of the goodwill with its implied fair value, which is determined by deducting the aggregate fair value of the reporting unit's identifiable assets and liabilities from the fair value of the reporting unit. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess. The process of estimating the fair value of goodwill is subjective and requires the Company to make estimates that may significantly impact the outcome of the analyses. The estimated fair value for each reporting unit is determined using both an income-based valuation approach, as well as a market-based valuation approach. Under the income-based approach, each reporting unit’s fair value is estimated using the discounted cash flow method. The discounted cash flow method is dependent upon a number of factors, including projections of the amounts and timing of future revenues and cash flows, assumed discount rates determined to be commensurate with the risks inherent in its business model, and other assumptions. Under the market-based valuation approach, each reporting unit’s fair value is estimated based on industry multiples of revenues and operating earnings. The income-based approach is weighted between 50.0% and 66.7% depending on the amount and timing of projected operating earnings attributable to each reporting unit. The Company operates in one reportable segment, in accordance with ASC 280, Segment Reporting Self-Insurance Beginning July 2, 2014, the Company implemented a self-insurance plan to provide for potential liabilities for employee health care claims in the United States. Liabilities associated with the risks are estimated, in part, by considering historical claims experience, demographic factors, severity factors, and other actuarial assumptions. The Company had insurance liabilities totaling approximately $1.3 million and $0.5 million at December 31, 2015 and December 31, 2014, respectively, which are included in accrued compensation and benefits in the accompanying consolidated balance sheets. Leases The Company leases various facilities under agreements accounted for as operating leases. For leases that contain escalation or rent concessions provisions, management recognizes rent expense during the lease term on a straight-line basis over the term of the lease. The difference between rent paid and straight-line rent expense is recorded as a deferred rent liability in the accompanying consolidated balance sheets. Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or at the fair value of the leased asset at the inception of the lease. Amortization expense is computed using the straight-line method over the shorter of the estimated useful life of the asset or the period of the related lease. Principal payments on capital lease obligations are recorded as reduction of capital lease liability in the accompanying consolidated balance sheets, and interest payments are recorded as interest expense which is included in other income, net in the accompanying consolidated statements of operations. Revenue Recognition The Company recognizes revenue for its products and solutions when persuasive evidence of an arrangement exists, services have been performed, the selling price is fixed or determinable, and collectibility is reasonably assured. The Company recognizes revenue for search engine marketing as clicks are recorded on sponsored links on the various search engines and for its display advertising and retargeting when the display advertisements record impressions or as otherwise provided in its agreement with the applicable publisher. The Company recognizes revenue for lead conversion software, web presence and other products with a defined license or service period on a straight-line basis over the applicable license or service period. The Company recognizes revenue when it charges set-up, management service or other fees on a straight-line basis over the term of the related contract or the completion of any obligation for services, if shorter. The Company accounts for sales and similar taxes imposed on its services on a net basis in the consolidated statements of operations. When the Company receives advance payments from clients, it records these amounts as deferred revenue until the revenue is recognized. From time to time, the Company offers incentives to clients in exchange for minimum commitments. In these circumstances, management estimates the amount of the incentives that will be earned by clients and adjusts the recognition of revenue to reflect such incentives. Estimates are either based upon a statistical analysis of previous campaigns for which such incentives were offered, or calculated on a straight-line basis over the life of the campaign. When the Company sells through agencies, it either receives payment in advance of delivery of its products or solutions or in some cases extends credit. The Company pays each agency an agreed-upon commission based on the revenue it earns or cash it receives. Some agency clients who have been extended credit may offset the amount otherwise due to the Company by any commissions they have earned. Management evaluates whether it is appropriate to record the gross amount of campaign revenue or the net amount earned after commissions. As the Company is generally the primary party obligated in the arrangement, subject to the credit risk, with discretion over both price and media, management typically recognizes the gross amount of such sales as revenue and any commissions are recognized as a selling and marketing expense. The Company also has a small number of resellers. Resellers integrate the Company’s products and solutions, including the Company’s branded search engine marketing, display advertising and online marketing analytics, into their product offerings. In most cases, the resellers integrate with the Company’s technology platform through a custom Application Programming Interface (API). Resellers are responsible for the price and specifications of the integrated product offered to their clients. Resellers pay the Company in arrears, net of commissions and other adjustments. Management recognizes revenue generated under reseller agreements net of the agreed-upon commissions and other adjustments earned or retained by the reseller, as management believes that the reseller has retained sufficient control and bears sufficient risks to be considered the primary obligor in those arrangements. The Company distributes its products and solutions directly through its outside and inside sales force that is focused on serving local businesses in their local markets through a consultative process, which the Company refers to as its Direct Local channel. The Direct Local channel also includes revenue from licensing of the Company’s Kickserv software solution, which is marketed directly to local businesses over the Internet. In addition, the Company employs a separate sales channel targeting national brands, franchises and strategic accounts with operations in multiple local markets and select third-party agencies and resellers. The Company refers to this as its National Brands, Agencies and Resellers channel. Cost of Revenue Cost of revenue consists primarily of the costs of online media acquired from third-party publishers. Media cost is classified as cost of revenue in the period in which the corresponding revenue is recognized. From time to time, publishers offer the Company rebates based upon various factors and operating rules, including the amount of media purchased. Rebates are recorded in the period in which they are earned as a reduction to cost of revenue and the corresponding payable to the applicable publisher, or as an other receivable, as appropriate. Cost of revenue also includes the third-party telephone and information services costs, other third-party service provider costs, data center and third-party hosting costs, credit card processing fees, and other direct costs. In addition, cost of revenue includes costs to manage and operate the Company’s various solutions and technology infrastructure, other than costs associated with the Company’s sales force, which are reflected as selling and marketing expenses. Cost of revenue includes salaries, benefits, bonuses and stock-based compensation for the related staff, and allocated overhead such as depreciation expense, rent and utilities. Cost of revenue also includes the amortization and impairment charges on certain acquired intangible assets. Selling and Marketing Expenses Selling and marketing expenses consist primarily of personnel and related expenses for selling and marketing staff, including salaries and wages, commissions and other variable compensation, benefits, bonuses and stock-based compensation; travel and business costs; training, recruitment, marketing and promotional events; advertising; other brand building and product marketing expenses; and occupancy, technology and other direct overhead costs. A portion of the compensation for employees in the sales organization is based on commissions. In addition, the cost of agency commissions is included in selling and marketing expenses. Generally, commissions are expensed as earned. However, commencing in 2014, the Company began paying commissions to certain sales people for the acquisition of new clients. Client contracts are generally not cancelable without a penalty, and the Company defers those commissions and amortizes them over the term of the initial customer campaign. Unamortized commission expense of $0.2 million and $0.6 million at December 31, 2015 and December 31, 2014, respectively, is included in prepaid expenses and other current assets in the accompanying consolidated balance sheets. Product and Technology Expenses Product and technology expenses consist primarily of personnel and related expenses for product development and engineering professionals, including salaries, benefits, bonuses and stock-based compensation, and the cost of third-party contractors and certain other third-party service providers and other expenses, including occupancy, technology and other direct overhead costs. Technology operations costs, including related personnel and third-party costs, are included in product and technology expenses. Research and development expenses are included in product and technology costs and were $6.9 million, $15.5 million, and $9.5 million during 2015, 2014, and 2013, respectively. The Company capitalizes a portion of its software development costs and, accordingly, includes amortization of those costs as costs of product and technology, as the Company’s technology platform and the Company’s other systems address all aspects of the Company’s activities, including supporting the selling and consultation process, online publisher integration, efficiencies and optimization, providing insight to clients into the results and effects of their online advertising campaigns and supporting all of the financial and other back-office functions of the business. Product and technology expenses also include the amortization of the technology obtained in acquisitions and the expenses of deferred payment obligations related to product and technology personnel. Product and technology costs do not include the costs to operate and deliver the Company’s solutions to clients, which are included in cost of revenue in the consolidated statements of operations. General and Administrative Expenses General and administrative expenses consist primarily of personnel and related expenses for board, executive, legal, finance, human resources and corporate communications, including wages, benefits, bonuses and stock-based compensation, professional fees, insurance premiums, business taxes and other expenses, including occupancy, technology and other direct overhead, public company costs and other corporate expenses. Restructuring Charges The Company records costs associated with exit activities related to restructuring plans in accordance with the ASC Topic 420, Exit or Disposal Obligations Advertising Expenses The Company expenses advertising as incurred. Advertising expense was $2.1 million, $2.9 million and $1.7 million for the years ended December 31, 2015, 2014 and 2013, respectively, and was recorded in sales and marketing expense in the consolidated statements of operations. Stock-Based Compensation The Company accounts for stock-based compensation based on the fair market value of the equity award on the date of grant. The Company follows the attribution method, which reduces current stock-based compensation expenses recorded by the effect of anticipated forfeitures. Management estimates forfeitures based upon its historical experience. The fair value of each award is estimated on the date of the grant and amortized over the requisite service period, which is the vesting period. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option awards on the date of grant. Determining the fair value of stock option awards at the grant date under this model requires judgment, including estimating volatility, expected term and the risk-free interest rate. The fair value of restricted stock and restricted stock unit awards is based on the closing market price of the Company's common stock on the date of grant. In addition, the Company uses a Monte Carlo simulation model to estimate the fair value of market-based performance-vesting restricted stock and restricted stock units. Determining the fair value of these awards at the grant date under this model requires judgment, including estimating volatility, risk-free rate and expected future stock price. The Company determines the probability of achievement of performance milestones for non-market based performance vesting restricted stock and restricted stock units, and recognize expense based on the fair value of the award if it is probable that the performance milestone will be achieved. The assumptions described above rely on management estimates based on judgment and subjective future expectations, which may result in stock-based compensation for future awards that differs significantly from the awards granted previously. The fair value of modifications to stock-based awards is generally estimated using the Black-Scholes option pricing model. If a stock-based compensation award is modified after the grant date, incremental compensation expense is recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. Incremental compensation expense for fully vested awards is recognized immediately. For unvested awards, the sum of the incremental compensation expense and the remaining unrecognized compensation expense for the original award on the modification date is recognized over the modified service period. Income Taxes The Company records income taxes using the asset and liability method which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in its financial statements or tax returns. In estimating future tax consequences, all expected future events other than enactments or changes in the tax law or rates are considered. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. The Company records tax benefits for income tax positions only if it is “more-likely-than-not” to be sustained based solely on its technical merits as of the reporting date. Management considers many factors when evaluating and estimating tax positions and tax benefits, which may require periodic adjustments and which may differ from actual outcomes. The Company follows a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company’s policy is to recognize interest and penalties related to tax in income tax expense. Recent Accounting Pronouncements Adopted in 2015 In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-17, Balance Sheet Classification of Deferred Taxes. In April 2015, the FASB issued ASU No. 2015-03, Interest- Imputation of Interest. In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases. Accounting Standards Codification (“ASC”) 840, Leases ASC 842, Leases In January 2016, the FASB ASU No. 2016-01, Financial Instruments- Overall. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations. In April 2015, the FASB issued ASU No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software. In Febru |
Note 3 - Fair Value of Financia
Note 3 - Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | 3. Fair Value of Financial Instruments The Company applies the fair value hierarchy for its financial assets and liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last is considered unobservable, that are used to measure fair value: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table summarizes the basis used to measure certain of the Company’s financial assets and liabilities that are carried at fair value (in thousands): Basis of Fair Value Measurement Balance at December 31, 201 5 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Cash and cash equivalents $ 18,833 $ 18,833 $ — $ — Restricted cash—term loan $ 15,000 $ 15,000 $ — $ — Short-term investments $ 359 $ 359 $ — $ — Restricted cash $ 3,502 $ — $ 3,502 $ — Basis of Fair Value Measurement Balance at December 31, 201 4 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Cash and cash equivalents $ 43,720 $ 43,720 $ — $ — Short-term investments $ 904 $ 904 $ — $ — Restricted cash $ 3,589 $ — $ 3,589 $ — Liabilities Acquisition-related contingent consideration $ 349 $ — $ — $ 349 The Company’s restricted cash is valued using pricing sources and models utilizing market observable inputs, as provided to the Company by its broker. On April 10, 2015, ReachLocal New Zealand Limited (“RL NZ”) paid NZ$0.4 million ($0.3 million) of earn-out consideration due, offset by NZ$0.2 million ($0.1 million) pursuant to a net working capital adjustment in the Company’s favor. On September 18, 2015, RL NZ made the final payment of $0.1 million for the indemnity holdback. The Company also has an investment in a privately held partnership that is one of its service providers. During March 2013, the Company invested $2.5 million for a 4% equity interest in the service provider, and in March 2014, the Company invested $2.0 million for an additional 3.2% equity interest. The Company does not have significant influence over the entity. In addition, the Company has an equity interest of 14.2% in SERVIZ, Inc., the entity that acquired its former ClubLocal business and does not have significant influence over the entity. The carrying amounts of the Company’s cost method investments were each $4.5 million at December 31, 2015 and December 31, 2014, and are included in non-marketable investments in the accompanying consolidated balance sheet. The Company’s maximum exposure to loss is limited to its cost based investments. Financial Instruments Not Recorded at Fair Value on a Recurring Basis The Company carries its financial instruments at fair value with the exception of its debt. Financial instruments that are not recorded at fair value are measured at fair value on a quarterly basis for disclosure purposes. The carrying amounts and estimated fair values of financial instruments not recorded at fair value are as follows: Year Ended December 31, 2015 Carrying Amount Estimated Fair Value (in thousands) Term loan $ 24,546 $ 24,500 Convertible notes- related party $ 5,000 $ 4,600 The Company’s debt relates to its Hercules Loan Agreement and VantagePoint Notes. The term loan and notes are considered Level 3 under ASC 820 because there is no known or accessible market or market indices for these debt instruments to be traded or exchanged. The fair value of the Hercules Loan Agreement and the VantagePoint Notes was determined by discounting their respective cash flows expected to be paid using a discount rate commensurate with the risk, including market participant assumptions about current interest rates and the creditworthiness of the Company. The fair value of the Hercules Loan Agreement includes the discounts attributable to issuance costs as well as the end-of-term payment. The fair value of the VantagePoint Notes includes an estimated value for the embedded conversion feature determined based on its contractual terms as well as the trading information of the Company's common stock into which the notes are convertible. During 2015, the Company recognized a $27.8 million goodwill impairment charge related to the Company’s Asia Pacific reporting unit. The Company recognized an impairment charge to write-down the goodwill to its fair value. The Company utilized unobservable inputs in determining the magnitude of the non-recurring impairment representing level 3 inputs in the fair value hierarchy. The Company did not have any financial instruments not recorded at fair value on a recurring basis as of December 31, 2014. |
Note 4 - Acquisitions
Note 4 - Acquisitions | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | 4. Acquisitions Acquisition of Kickserv On November 21, 2014, the Company acquired Kickserv, Inc. (“Kickserv”) as part of the Company’s continued effort to expand its product offerings. Kickserv is a provider of cloud-based business management software for service businesses. The purchase price consisted of $6.75 million of initial consideration, subject to a holdback and certain adjustments, and up to $4.0 million of earn-out consideration. At closing, the Company paid $5.3 million in cash with the remaining balance of the initial purchase price payable after the 18-month anniversary of the closing date, subject to certain conditions. The Company also issued 250,000 restricted stock units to the hired employees, which are accounted for as stock-based compensation over the period in which they are earned. A liability was not recorded for the earn-out consideration as the financial targets, as defined in the purchase agreement, are not expected to be achieved. Any changes in the fair value of the earn-out consideration will be recorded as other income or expense. There has been no change in the fair value since the date of acquisition. The acquisition was accounted for using the acquisition method of accounting. The Company completed and finalized the purchase price allocation in the fourth quarter of 2014. The Company recorded assets acquired and liabilities assumed at their respective fair values. The following table summarizes the final fair value of assets acquired and liabilities assumed (in thousands): Assets acquired: Cash and cash equivalents $ 58 Intangible assets 4,280 Goodwill 3,985 Total assets acquired 8,323 Liabilities assumed: Non-interest bearing liabilities 24 Long-term debt 350 Deferred tax liabilities 1,249 Total liabilities assumed 1,623 Total fair value of net assets acquired $ 6,700 Intangible assets acquired from Kickserv included software technology of $3.0 million, trade names of $0.6 million and customer relationships of $0.7 million, amortized over eight, ten, and four years, their respective estimated useful lives, using the straight-line method. The estimated useful life of the technology was determined based on assumptions of its remaining economic life. The estimated useful life of trade names was determined based on assumptions of revenue attributable to the trade name, and the estimated useful life of the customer relationships was determined based on assumptions of customer attrition rates. The fair value of the intangible assets were determined by applying the income approach and based on significant inputs that are not observable in the market. Key assumptions include estimated future revenues from acquired customers and a discount rate of 15%, comprised of an estimated internal rate of return for this transaction and a weighted average cost of capital for comparable companies. The goodwill arising from the acquisition consists largely of the synergies expected from combining the operations of Kickserv and the Company. The acquired goodwill is not expected to be deductible for tax purposes. Acquisition costs in connection with the Kickserv acquisition were immaterial. The revenues and results of operations of the acquired businesses for the post-acquisition period were included in the consolidated statements of operations and were immaterial for the periods ended December 31, 2015 and December 31, 2014. The pro forma results are not shown as the impact is not material. Acquisition of SureFire On March 21, 2014, RL NZ acquired certain assets and hired certain employees of SureFire Search Limited (“SureFire”) as part of the Company’s international expansion plan. From 2010 until the acquisition, SureFire was the Company’s exclusive reseller in New Zealand. At closing, RL NZ paid NZ$1.7 million ($1.5 million) in cash of the estimated NZ$2.8 million ($2.4 million) purchase price. The remaining balance of the estimated purchase price was deferred subject to meeting revenue targets and an indemnity holdback, payable, if at all, after the 12-month anniversary of the closing date, and the 12- and 18-month anniversaries of the closing date, respectively. The maximum amount of contingent consideration payable was NZ$2.0 million and the fair value of the contingent consideration was recorded as an accrued expense. The fair value of the earn-out consideration under the income approach was determined at the time of acquisition by using the Black-Scholes option pricing model. This approach is based on significant inputs that are not observable in the market, which are considered Level 3 inputs. Key assumptions include forecasted first year revenue, volatility of 30% based on volatilities of selected comparable companies, and a risk-free rate of 0.14% based on a one-year U.S, treasury yield rate. The liability for the indemnity holdback was recorded based on the assumption that there would be no claims made against the holdback and that 65% ($0.2 million) of the indemnity holdback would be paid April 2015, and the remaining 35% ($0.1 million) would be paid October 2015. The fair value of the indemnity holdback at the date of acquisition was NZ$0.4 million ($0.3 million). On April 10, 2015, RL NZ paid NZ$0.6 million ($0.4 million), which included NZ$0.4 million ($0.3 million) of earn-out consideration and NZ$0.3 million ($0.2 million) for the 12-month indemnity holdback release, offset by NZ$0.2 million ($0.1 million) to a net working capital adjustment in the Company’s favor. On September 18, 2015, RL NZ made the final payment of $0.1 million for the indemnity holdback. The acquisition was accounted for using the acquisition method of accounting. The Company completed a preliminary purchase price allocation in the first quarter of 2014 and finalized the allocation in the third quarter of 2014 with respect to the timing of certain valuation adjustments. The Company recorded acquired assets and liabilities assumed at their respective fair values. The following table summarizes the final fair value of acquired assets and liabilities assumed (in thousands): Assets acquired: Goodwill $ 2,350 Intangible assets 1,280 Accounts receivable 330 Property and equipment 13 Total assets acquired 3,973 Liabilities assumed: Deferred tax liabilities 358 Deferred revenue 284 Accrued compensation and benefits 111 Other 782 Total liabilities assumed 1,535 Total fair value of net assets acquired $ 2,438 Intangible assets acquired from SureFire included customer relationships of $1.3 million which are amortized over three years, their estimated useful life, using the straight line method. The estimated useful life was determined based on assumptions of customer attrition rates. The fair value of the intangible assets was determined by applying the income approach and based on Level 3 inputs. Key assumptions include estimated future revenues from acquired customers and a discount rate of 25%, comprised of an estimated internal rate of return for this transaction and a weighted average cost of capital for comparable companies. The goodwill arising from the acquisition consists largely of the synergies expected from combining the operations of SureFire. The Company expects to increase its presence in the Asia-Pacific region as a result of this acquisition. The acquired goodwill is not expected to be deductible for tax purposes. Acquisition costs in connection with the SureFire acquisition were immaterial. The revenues and results of operations of the acquired businesses for the periods post-acquisition were included in the consolidated statements of operations and were immaterial for the periods ended December 31, 2015 and December 31, 2014. The pro forma results are not shown as the impact is not material. |
Note 5 - Goodwill and Finite-li
Note 5 - Goodwill and Finite-lived Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Goodwill and Intangible Assets Disclosure [Text Block] | 5. Goodwill and Finite-Lived Intangible Assets Goodwill represents the excess of the purchase price of the Company’s acquired businesses over the fair value of the net tangible and intangible assets acquired. The Company accounts for goodwill in accordance with ASC 350, Intangibles—Goodwill and Othe r tests the goodwill of its reporting units for impairment annually on the first day of the fourth quarter, and whenever events occur or circumstances change that would more likely than not indicate that the goodwill might be impaired. The goodwill impairment test involves a two-step process. However, for the annual goodwill assessment prior to performing the two-step quantitative test, the Company has the option to first assess qualitative factors. In the first step, the Company compares the fair value of each reporting unit to its carrying value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value or if the carrying value of the reporting unit is negative, the Company must perform the second step of the impairment test to measure the amount of impairment loss. In the second step, the reporting unit's fair value is allocated to the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit's goodwill is less than the carrying value, the difference is recorded as an impairment loss. Impairment of Goodwill During the quarter ended September 30, 2015, due to a decline in internal projections for the Asia-Pacific reporting unit of both revenue and profitability as a result of recent declines in its financial performance, the Company determined that sufficient indicators of potential impairment existed to require an interim quantitative goodwill impairment test for the Asia-Pacific reporting unit as of August 31, 2015. The amount of goodwill assigned to the Asia-Pacific reporting unit at August 31, 2015 was $34.1 million. Based on the Company’s revised forecasts, the carrying value of goodwill exceeded the implied fair value of goodwill for the Asia-Pacific reporting unit. As a result, the Company recorded an estimated impairment charge of $27.8 million for the goodwill in the Asia-Pacific reporting unit during the third quarter of 2015, which was finalized during the fourth quarter of 2015 without further adjustment and is included in impairment of goodwill in the accompanying consolidated statements of operations. The Company did not identify an impairment of its finite-lived intangible assets or other long-lived assets based on its estimates included in the second step of the quantitative test. The process of estimating the fair value of goodwill is subjective and requires the Company to make estimates that may significantly impact the outcome of the analyses. The estimated fair value of the Asia-Pacific reporting unit as of August 31, 2015 was determined using both an income-based valuation approach, and a market-based valuation approach, each weighted 50%. Under the income approach, fair value of the reporting unit is estimated using the discounted cash flow method. The discounted cash flow method is dependent upon a number of factors, including projections of the amounts and timing of future revenues and cash flows, assumed discount rates determined to be commensurate with the risks inherent in its business model, and other assumptions. The future cash flows for the reporting unit were projected based on the Company’s estimates, at that time, of future revenues, operating income and other factors (such as working capital and capital expenditures). The Company considered expected competitive global industry and market conditions. Under the market-based valuation approach, each reporting unit’s fair value is estimated based on industry multiples of revenues and operating earnings. The inputs of the discounted cash flow method used to determine the fair value of the Asia-Pacific reporting unit included a conservative average 3% growth rate to calculate the terminal value and a discount rate of 17%. Factors that have the potential to create variances in the estimated fair value of the Asia-Pacific reporting unit include, but are not limited to, fluctuations in (i) number of clients and active campaigns, which can be driven by multiple external factors affecting demand, including macroeconomic factors, competitive dynamics and changes in consumer preferences; (ii) marketing costs to generate new campaigns; and (iii) equity valuations of peer companies. As of October 1, 2015, the date of the Company’s annual goodwill impairment assessment, the Company considered the recent interim quantitative goodwill impairment assessment, which included a reconciliation of the Company’s total market capitalization based on the estimated fair value of the Company’s individual reporting units as of August 31, 2015. The Company qualitatively determined that the existing facts and circumstances were considered in the quantitative interim impairment test, such that it was not necessary to perform the two-step quantitative goodwill impairment test for the North America and the Asia-Pacific reporting units as of the annual testing date. As of November 30, 2015, due to the then recent significant declines in the Company’s market capitalization and other changes in the business, including consideration of exiting the U.K. market, and the entrance of ReachLocal UK Limited (“RL UK”), into administration, the Company determined that sufficient indicators existed to perform an interim quantitative goodwill impairment assessment of the North America and the Asia-Pacific reporting units. The first step of the November 30, 2015 quantitative goodwill impairment test resulted in the determination that the estimated fair value of both the North America reporting unit and the Asia-Pacific reporting unit each substantially exceeded its respective carrying amount, including goodwill. Accordingly, the second step was not required. The inputs for the fair value calculations of the North America reporting unit included a conservative 2% growth rate to calculate the terminal value and a discount rate of 18%. The inputs for the fair value calculations of the Asia-Pacific reporting unit included a conservative 2% growth rate to calculate the terminal value and a discount rate of 20.5%. In addition, the Company assumed revenue growth and applied margin and other cost assumptions consistent with each reporting unit's historical trends. Factors that have the potential to create variances in the estimated fair value of the reporting units include, but are not limited to, fluctuations in (i) number of clients and active campaigns, which can be driven by multiple external factors affecting demand, including macroeconomic factors, competitive dynamics and changes in consumer preferences; (ii) marketing costs to generate new campaigns; and (iii) equity valuations of peer companies. The changes in the carrying amount of goodwill for the year ended December 31, 2015 were as follows (in thousands): North America Asia-Pacific Total Balance at December 31, 2013 $ 9,695 $ 32,388 $ 42,083 Goodwill acquired 3,985 2,445 6,430 Acquisition adjustments — (95 ) (95 ) Foreign currency translation — (229 ) (229 ) Balance at December 31, 2014 13,680 34,509 48,189 Accumulated impairment loss — (27,800 ) (27,800 ) Foreign currency translation — (260 ) (260 ) Balance at December 31, 2015 $ 13,680 $ 6,449 $ 20,129 Finite-Lived Intangible Assets At December 31, 2015 and 2014, finite-lived intangible assets consisted of the following (in thousands): December 31, 201 5 Useful Life (years) Gross Value Accumulated Amortization Net Developed technology 3 - 8 $ 5,490 $ 2,920 $ 2,570 Customer contracts and relationships 2 - 4 1,733 799 934 Trade names 10 570 63 507 Total $ 7,793 $ 3,782 $ 4,011 December 31, 2014 Useful Life (years) Gross Value Accumulated Amortization Net Developed technology 3 - 8 $ 5,490 $ 2,130 $ 3,360 Customer contracts and relationships 2 - 4 1,875 306 1,569 Trade names 10 570 7 563 Total $ 7,935 $ 2,443 $ 5,492 Based on the current amount of intangibles subject to amortization, the estimated amortization expense over the remaining lives is as follows (in thousands): Years Ending December 31, 2016 $ 962 2017 681 2018 584 2019 431 2020 431 Thereafter 922 Total $ 4,011 For the year ended December 31, 2015, 2014 and 2013 amortization expense related to acquired intangible assets was $1.4 million, $1.2 million, and $1.2 million, respectively. |
Note 6 - Property and Equipment
Note 6 - Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | 6. Property and Equipment Property and equipment consisted of the following (in thousands): December 31, 201 5 201 4 Computer hardware and licensed software $ 19,783 $ 20,345 Office equipment 3,999 4,229 Furniture and fixtures 4,057 4,976 Leasehold improvements 11,397 13,096 Construction in progress 349 525 39,585 43,171 Less: Accumulated depreciation and amortization (26,035 ) (23,532 ) $ 13,550 $ 19,639 For the years ended December 31, 2015, 2014 and 2013 depreciation expense for property and equipment was $6.4 million, $6.4 million and $5.8 million, respectively. |
Note 7 - Software Development C
Note 7 - Software Development Costs | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Research, Development, and Computer Software Disclosure [Text Block] | 7. Software Development Costs Capitalized software development costs consisted of the following (in thousands): December 31, 201 5 201 4 Capitalized software development costs $ 67,610 $ 56,498 Accumulated amortization (46,919 ) (34,943 ) Capitalized software development costs, net $ 20,691 $ 21,555 For the years ended December 31, 2015, 2014 and 2013, the Company recorded amortization expense of $11.4 million, $9.7 million and $8.1 million, respectively. At December 31, 2015 and 2014, $2.9 million and $5.0 million, respectively, of capitalized software development costs were related to projects still in process of development. |
Note 8 - Commitments and Contin
Note 8 - Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | 8. Commitments and Contingencies Operating Leases The Company leases office facilities under operating lease agreements that expire at various dates through 2024. The terms of the majority of the Company’s lease agreements provide for rental payments on a graduated basis. The Company recognizes rent expense on a straight-line basis over the lease term. Rental expense, principally for leased office space under operating lease commitments, was $9.1 million, $13.0 million and $11.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015, future minimum payments under cancelable and non-cancelable operating leases are as follows (in thousands): Years Ended December 31, 2016 $ 9,070 2017 8,236 2018 6,687 2019 4,927 2020 3,835 Thereafter 8,938 $ 41,693 During 2015 and 2014, the Company recorded facilities restructuring charges related to lease termination costs as a result of closing facilities as part of a restructuring plan. Operating lease payments in the table above, include approximately $2.4 million of lease payments related to terminated or restructured leases, net of actual sublease income of $0.4 million, from operating lease commitments for those facilities. Amounts related to the lease terminations will be paid over the respective lease terms, the longest of which extends through 2024. As part of the Company’s 2015 Restructuring Plan, during March, 2016, the Company entered into an agreement to sublease 21,000 square feet of its Plano, Texas office. Purchase Obligations The Company has long-term purchase obligations outstanding with partners and third-party service providers for enhanced marketing functionality for its clients and for internal business software. As of December 31, 2015, future minimum payments under purchase obligations are as follows (in thousands): Years Ended December 31, 2016 $ 2,556 Letters of Credit and Restricted Certificates of Deposit At December 31, 2015 and 2014, the Company has certificates of deposit held at financial institutions, which are pledged as collateral for letters of credit related to lease commitments or collateral for the Company’s merchant accounts. The letters of credit will lapse at the end of the respective lease terms through 2024 and the certificates of deposit automatically renew for successive one-year periods over the duration of the lease term. The restrictions related to merchant accounts will lapse upon termination of the merchant accounts. At December 31, 2015 and 2014, the Company had restricted certificates of deposit in the amounts of $3.3 million and $3.4 million, respectively. At December 31, 2015, restricted cash also included $0.2 million of cash reserved to provide for potential liabilities for employee health care claims. Litigation From time to time, the Company is involved in legal proceedings arising in the ordinary course of its business. The Company believes that there is no litigation or claims pending or threatened that are likely to have a material adverse effect on its consolidated financial position, results of operations or cash flows. North America On May 2, 2014, a lawsuit, purporting to be a class action, was filed by one of the Company’s former clients in the United States District Court in Los Angeles. The complaint alleged breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of California’s unfair competition law. The complaint sought monetary damages, restitution and attorneys’ fees. The Company filed a motion to dismiss on June 20, 2014, which was denied on December 4, 2014. On February 5, 2016, the Company entered into a confidential settlement agreement and release with plaintiffs to settle all of their claims. The settlement was not material to the Company’s consolidated financial position, results of operations or cash flows. Europe Over the past two years, the Company’s United Kingdom subsidiary (“RL UK”), has been involved in a number of disputes with former clients that allege RL UK made misrepresentations in connection with sales to those clients. The Company resolved a number of these disputes. On June 15, 2015, one former RL UK client filed a lawsuit in the High Court of Justice alleging fraudulent misrepresentations and breach of contract. The Company’s insurance carrier provided a defense under a reservation of rights. On December 16, 2015, RL UK entered administration, to allow for an orderly exit from the market and as a result, any claims against RL UK are stayed, pending the outcome of the administration. Upon entering administration, the Company no longer held a controlling interest, and therefore deconsolidated the subsidiary. Other Commitments The Company engaged a third party facilitator to provide direct support in the execution of its 2015 Restructuring Plan. In addition to fees incurred during 2015, the Company will continue to make payments for the final committed fees based on the future projected value of results achieved by the facilitator-led program. The final payment to the facilitator was made in January 2016. See Note 11, Restructuring Charges, for more information. |
Note 9 - Stockholders' Equity
Note 9 - Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | 9. Stockholder’s Equity Common Stock Repurchases The Company’s Board of Directors previously authorized the repurchase of up to $47.0 million of the Company’s outstanding common stock. At December 31, 2013, the Company had executed repurchases of 3.4 million shares of its common stock under the program for an aggregate of $36.3 million. There were no repurchases under the program during 2014 or 2015. On April 29, 2015, the Board of Directors terminated the Company’s repurchase program. The Company is deemed to repurchase common stock surrendered by participants to cover tax withholding obligations with respect to the vesting of restricted stock and restricted stock units. Shares Reserved For Future Issuance The following table shows the number of shares of common stock reserved for future issuance as of December 31, 2015 (in thousands): Stock options 8,196 Convertible notes 1,000 Warrants 300 Restricted stock units 253 9,749 |
Note 10 - Stock-based Compensat
Note 10 - Stock-based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 10. Stock-Based Compensation Stock Option Plans On April 21, 2004, the Company adopted the 2004 Stock Plan (the “2004 Plan”), as amended. Grants under the 2004 Plan may be incentive stock options or nonqualified stock options or awards. The 2004 Plan is administered by the Company’s board of directors, which has the authority to designate participants and determine the number and type of awards to be granted, the time at which awards are exercisable, the method of payment and any other terms or conditions of the awards. The vesting of these awards varies subject to the participant’s period of future service, or otherwise at the discretion of the Company’s board of directors. The majority of awards vest over four years and have a term of 10 years. There were no shares available for grant under the 2004 Plan as of December 31, 2015 and 2014. On July 1, 2008, the Company adopted the 2008 Stock Incentive Plan (the “2008 Plan”) and retired the 2004 Plan. Options outstanding under the 2004 Plan are unaffected by the retirement of the 2004 Plan. The aggregate number of shares of the Company’s common stock available for issuance pursuant to awards granted under the 2008 Plan is equal to the sum of (x) 5,471,350 plus (y) any shares of the Company’s common stock subject to awards under the 2004 Plan that terminate, expire or lapse for any reason or are settled in cash after the date the 2008 Plan originally became effective, and (z) an annual increase in shares on the first day of each year beginning in 2011 and ending in 2018. The annual increase will be equal to the lesser of (A) 2,500,000 shares (as adjusted for stock splits, stock combinations, stock dividends and similar matters), (B) 4.5% of the Company’s common stock outstanding on the last day of the prior year or (C) such smaller number of shares as may be determined by the Board. The 2008 Plan is administered by the Company’s Compensation Committee, which has the authority to designate participants and determine the number and type of awards to be granted, the time at which awards are exercisable, the method of payment and any other terms or conditions of the awards. The vesting of these awards vary subject to the participant’s period of future service, or otherwise at the discretion of the Compensation Committee. The majority of awards issued under the 2008 Plan vest over four years and have a term of seven years. There were 2,682,047 shares available for grant under the 2008 Plan as of December 31, 2015. On January 1, 2016, an additional 1,334,000 shares were added to the pool under the evergreen provision. During the second quarter of 2014, the Company granted stock options to certain new employees as “employment inducement” awards pursuant to NASDAQ rules. The inducement awards were not issued under the 2008 Plan and did not decrease the number of shares available thereunder, but 160,000 inducement awards are included in the table of stock options below. On February 29, 2016, the Company granted stock options covering 1,397,000 shares, primarily related to its annual compensation program. Stock Options The following table summarizes stock option activity (in thousands, except years and per share amounts): Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at December 31, 2014 6,096 $ 9.48 Granted 5,801 $ 4.29 Exercised (31 ) $ 0.24 Forfeited (5,318 ) $ 9.33 Outstanding at December 31, 2015 6,548 $ 5.05 6.3 $ — Vested and exercisable at December 31, 2015 1,747 $ 7.83 5.3 $ — Unvested at December 31, 2015, net of estimated forfeitures 3,902 $ 4.06 6.8 $ — The assumptions utilized for purposes of the Black-Scholes pricing model are summarized as follows: • Volatility—As the Company has limited trading history for its common stock, the expected stock price volatility was estimated by taking a combination of 1) the median historic price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the stock option grants and 2) the Company’s own historic price volatility based on daily price observations since May 2010. Industry peers consist of several public companies in the technology industry similar in size, stage of life cycle and financial leverage. Management did not rely on implied volatilities of traded options in its industry peers’ common stock because the volume of activity was relatively low. • Expected term—The expected term was estimated using the simplified method allowed under Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment • Risk free rate—The risk free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the options for each option group. • Dividend yield—The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. Consequently, management used an expected dividend yield of zero. In addition, management estimates the forfeiture rate based on its historical experience with forfeitures and reviews estimated forfeiture rates each period-end, and makes changes as factors affecting the forfeiture rate calculations and assumptions change. The following table summarizes the weighted average assumptions used to estimate the fair value of stock options granted during the years ended December 31, 2015, 2014 and 2013. Years Ended December 31, 201 5 201 4 201 3 Expected dividend yield 0 % 0 % 0 % Risk-free interest rate 1.55 % 1.64 % 0.95 % Expected life (in years) 4.90 4.99 4.81 Expected volatility 57 % 54 % 59 % Weighted average fair value per share $ 2.24 $ 3.63 $ 6.33 The aggregate intrinsic value of stock options exercised during the years ended December 31, 2015, 2014 and 2013 were $0.1 million, $2.7 million and $5.3 million, respectively. The total grant-date fair value of stock options exercised and restricted stock and restricted stock units vested during the years ended December 31, 2015, 2014 and 2013 were $3.7 million, $9.0 million and $4.2 million, respectively. Restricted Stock and Restricted Stock Units The Company issues restricted stock and restricted stock units in conjunction with acquisitions and long-term employee incentive programs from time to time. These shares of restricted stock and restricted stock units generally have vesting periods of 4 years. Stock-based compensation expense related to restricted stock and restricted stock units was $3.3 million, $5.6 million and $3.0 million for the years ended December 31, 2015, 2014, and 2013, respectively. The following table summarizes restricted stock and restricted stock unit awards (in thousands, except per share amounts): Number of shares Weighted Average Grant Date Fair Value Unvested at December 31, 2014 912 $ 5.98 Granted — $ — Forfeited (138 ) $ 10.06 Vested (439 ) $ 8.38 Unvested at December 31, 2015 335 $ 5.37 Stock-Based Compensation Expense The Company records stock-based compensation expense, net of amounts capitalized as software development costs. The following table summarizes stock-based compensation (in thousands): Years Ended December 31, 201 5 201 4 201 3 Stock-based compensation $ 9,061 $ 13,730 $ 11,948 Less: Capitalized stock-based compensation 390 470 443 Stock-based compensation expense, net $ 8,671 $ 13,260 $ 11,505 Stock-based compensation, net of capitalization, is included in the accompanying consolidated statements of operations, within the following captions (in thousands): Years Ended December 31, 201 5 201 4 201 3 Stock-based compensation expense, net Cost of revenue $ 487 $ 932 $ 697 Selling and marketing 1,510 2,959 3,040 Product and technology 725 825 627 General and administrative 5,949 8,544 7,141 $ 8,671 $ 13,260 $ 11,505 At December 31, 2015, there was $11.1 million of unrecognized stock-based compensation related to restricted stock, restricted stock units and outstanding stock options, net of estimated forfeitures. This amount is expected to be recognized over a weighted average period of 1.44 years. Future stock-based compensation expense for these awards may differ to the extent actual forfeitures vary from management estimates. Stock-based compensation for the year ended December 31, 2014 includes $1.9 million of expense related to the modification of grants to 73 participants in March 2014, which extended the time to exercise from seven years to ten years for certain options granted during 2008 and 2009 with a strike price of $10.91. Commencing in 2015, 50% of the Company’s annual corporate bonus plan for certain executives and senior level employees will be settled with fully vested restricted stock units, and is payable in the first quarter of the following fiscal year. The plan does not limit the number of shares that can be issued to settle the obligation. During 2015, the Company has recognized stock-based compensation expense related to this plan of $1.0 million. As of December 31, 2015, 603,000 shares would be required to satisfy the obligation relating to the 2015 annual corporate bonus plan. On February 26, 2016, 414,239 shares (net of 258,255 shares withheld to satisfy tax withholding obligations) were issued to satisfy the 2015 annual corporate bonus plan obligation. Stock Option Exchange On December 2, 2014, the Company commenced an option exchange to permit employee option holders to surrender certain outstanding stock options for cancellation in exchange for the grant of new replacement options to purchase an equal number of shares having an exercise price equal to the greater of $6.00 and the fair market value of the Company’s common stock on the replacement grant date. The option exchange was completed on January 9, 2015. Exchanged options were cancelled at that time and immediately thereafter, the Company granted replacement options under the Amended and Restated ReachLocal 2008 Stock Incentive Plan with exercise prices of $6.00 per share. A total of 2.8 million options were exchanged. The Company is amortizing the incremental expense of $1.5 million in addition to the remaining expense attributable to the exchanged awards over the vesting period of the new awards. |
Note 11 - Restructuring Charges
Note 11 - Restructuring Charges | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Restructuring and Related Activities Disclosure [Text Block] | 11. Restructuring Charges The Company has implemented various restructuring plans to reduce its cost structure, align resources with its product strategy, improve operating efficiency and implement cost savings, which have resulted in workforce reductions and the consolidation of certain real estate facilities and data centers. 201 5 Restructuring Plan In accordance with the Company’s ongoing efforts to reduce expenses and improve the operating performance of its business, the Company commenced its 2015 Restructuring Plan. The initiative is focused on enhancing earnings through an analysis of opportunities to both improve revenue performance and reduce costs. Operational efficiency improvements under the 2015 Restructuring Plan are identified and implemented through strategic realignment and targeted cost reductions, including workforce costs, facility-related expenditures and other operating expenses. The charges incurred during the year ended December 31, 2015 primarily involved down-sizing certain facilities in North America, costs to utilize a third party facilitator to aid execution of the plan, and a reduction of the Company’s North American and international workforces. The Company expects to have continued restructuring activity under this plan, including estimated additional expenses relating to facilitation and execution of the plan of $0.7 million, estimated to be incurred through the third quarter of 2016. A summary of the accrued restructuring liability related to this plan, which is recorded in “Accrued restructuring” on the consolidated balance sheet is as follows (in thousands): Workforce Reduction Costs Facility Closures and Equipment Write-down s Other Associated Costs Total Balance at December 31, 2014 $ — $ — $ — $ — Amounts accrued 2,332 1,268 4,125 7,725 Amounts paid (1,742 ) (157 ) (3,313 ) (5,212 ) Accretion — 69 — 69 Non-cash items (4 ) (574 ) (468 ) (1,046 ) Balance at December 31, 2015 $ 586 $ 606 $ 344 $ 1,536 The Company expects the facility closures and equipment write-downs to be paid through the third quarter of 2024 and the workforce reduction costs to be paid through the fourth quarter of 2016. 2014 Restructuring Plans As a result of declining performance in the Company’s North American operations during the first quarter of 2014, the Company implemented a restructuring plan that primarily involved a reduction of the Company’s North American and international workforces, as well as the closure of facilities in North America and certain international markets. The Company does not expect to have continued restructuring activity under this plan, other than settlement of associated liabilities. A summary of the accrued restructuring liability related to this plan, which is recorded in “Accrued restructuring” on the consolidated balance sheet is as follows (in thousands): Facility Closures Total Balance at December 31, 2014 $ 2,519 $ 2,519 Amounts paid (771 ) (771 ) Accretion 45 45 Balance at December 31, 2015 $ 1,793 $ 1,793 The Company expects the facility closures and equipment write-downs to be paid through the third quarter of 2024. During the second quarter of 2014, the Company implemented a business restructuring plan which involved the elimination of certain senior management positions, a reduction of international workforce, as well as the closure of facilities in certain international markets. The Company does not expect to have continued restructuring activity under this plan, other than settlement of associated liabilities. A summary of the accrued restructuring liability related to this plan, which is recorded in “Accrued restructuring” on the consolidated balance sheet is as follows (in thousands): Workforce Reduction Costs Facility Closures Total Balance at December 31, 2014 $ 51 $ 626 $ 677 Reversal of amount previously accrued — (179 ) (179 ) Amounts paid (50 ) (477 ) (527 ) Non-cash items (1 ) 30 29 Balance at December 31, 2015 $ — $ — $ — The Company does not expect to have continued restructuring activity under this plan. |
Note 12 - Gain on Deconsolidati
Note 12 - Gain on Deconsolidation of Subsidiary | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Deconsolidation of Subsidiary [Text Block] | 12. Gain on Deconsolidation of Subsidiary On December 16, 2015, RL UK entered administration to allow for an orderly exit from the market. Upon entering administration, the Company no longer held a controlling interest, and therefore deconsolidated the subsidiary. As a result, the Company recorded a gain of $2.9 million, which is included in Gain on deconsolidation of subsidiary, net in the Company’s consolidated statement of operations for the year ended December 31, 2015. The gain is primarily comprised of the net reduction in carrying value of the assets and liabilities of RL UK from the consolidated balance sheet and the resulting reduction of the net amounts due from RL UK to the Company and its subsidiaries, including the effects of cumulative translation adjustments of $1.1 million, which was reclassified from accumulated other comprehensive income to Gain on deconsolidation of subsidiary, net in the consolidated statement of operations. |
Note 13 - Debt and Other Obliga
Note 13 - Debt and Other Obligations | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | 13. Debt and Other Obligations Long-term debt consisted of the following (in thousands): Hercules term loan $ 25,244 VantagePoint notes 5,000 Less unamortized debt issuance costs (1) (698 ) Total debt 29,546 Less current portion of long-term debt (8,352 ) Long-term debt $ 21,194 (1) Debt issuance costs are related to the Hercules term loan and are amortized to interest expense over the life of the term loan. Hercules Term Loan On April 30, 2015, the Company entered into the Hercules Loan Agreement with its direct and indirect domestic subsidiaries, as co-borrowers, Hercules Technology Growth Capital, Inc. (“Hercules”), as administrative agent, and the lenders party thereto from time to time (the “Lenders”), including Hercules, pursuant to which the Lenders agreed to make a term loan available to the Company for working capital and general business purposes, in a principal amount of $25.0 million. The term loan has an annual interest rate equal to the greater of (i) 11.75% and (ii) the sum of (a) the prime rate, plus (b) 8.50%. During December 2015, the annual interest rate increased from 11.75% to 12.00%. The annual interest rate on the Hercules Loan was 12.00% at December 31, 2015. On the closing date the Company paid a fee of $0.3 million, which is to be credited against the final payment, and debt issuance costs of $0.2 million. Debt issuance costs will be amortized over the life of the loan of 3 years and calculated using the effective interest method. The Company is required to make interest-only payments on the term loan through May 1, 2016, though such payments may be extended through August 1, 2016 and November 1, 2016 if the Company remains in continuous compliance with the financial covenants under the Hercules Loan Agreement through April 1, 2016 and July 1, 2016, respectively, and no default or event of default has occurred and is continuing on such dates. The term loan will begin amortizing at the end of the applicable interest-only period, with monthly payments of principal and interest to the Lenders in consecutive monthly installments following the end of such interest-only period. The term loan matures on April 1, 2018 or, if the interest-only payments are extended through November 1, 2016, the term loan will mature October 1, 2018. Upon repayment of the term loan, the Company is also required to make an end-of-term payment to the Lenders equal to $1.5 million, which is accrued as interest based on the effective interest method over the 3-year term of the Hercules Loan Agreement. The term loan is secured by substantially all of the Company’s personal property, including its intellectual property. At the Company’s option, the outstanding principal balance of the term loan may be prepaid in whole, or in part in a minimum amount of $2.5 million, subject to a prepayment fee of 3% of any amount prepaid if the prepayment occurs on or prior to April 30, 2016, or 2% of the amount prepaid if the prepayment occurs after April 30, 2016 but on or prior to April 30, 2017. If the prepayment occurs after April 30, 2017, there is no prepayment fee. The Hercules Loan Agreement includes covenants applicable to the Company and its subsidiaries, which include restrictions on transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, selling assets, and undergoing a change in control, in each case subject to certain exceptions. These restrictions also include a maximum net new investment in the Company’s foreign subsidiaries, subject to certain exclusions of $8.0 million during 2015, $5.5 million during 2016, $4.0 million annually thereafter, and $18.0 million in the aggregate during the term of the agreement. Additionally, the Hercules Loan Agreement includes financial covenant requirements to maintain certain minimum levels of revenue and earnings during each three-month period, tested monthly, during the term, as amended on August 3, 2015 from September 30, 2015 through December 31, 2015. These minimum levels of revenue and earnings were waived for compliance for November and December 2015 as amended on November 9, 2015. Under the Hercules Loan Agreement, the Company is also required to maintain minimum cash in North America in an amount equal to $15.0 million at all times, unless the Company achieves positive “Adjusted EBITDA” as defined in the Hercules Loan Agreement for three consecutive quarters, in which case the minimum cash balance decreases to $12.5 million. The Company achieved positive “Adjusted EBITDA” as defined, during the quarters ended September 30, 2015 and December 31, 2015, which qualifies as two quarters of the required three consecutive quarters. The Hercules Loan Agreement also includes events of default, the occurrence and continuation of which provide Hercules, as administrative agent, with the right to exercise remedies against the Company and the collateral securing the term loan, including potential foreclosure against the Company’s assets securing the Hercules Loan Agreement, including the Company’s cash. The Hercules Loan Agreement contains a subjective acceleration clause that can be triggered if the Company experiences a Material Adverse Effect, as defined in the Hercules Loan Agreement, which would be considered an event of default. On August 3, 2015, the Company entered into an amendment to the Hercules Loan Agreement, which reduced the term loan’s covenant thresholds for revenue for the months ending September 30, 2015 through December 31, 2015. On November 9, 2015, the Company entered into a second amendment to the Hercules Loan Agreement, which waives compliance with the term loan’s revenue and earnings covenant thresholds for November and December 2015. In connection with the amendment, the Company (i) paid Hercules a one-time fee of $0.2 million, (ii) reset the schedule of prepayment fees to begin from the November 9, 2015, instead of April 30, 2016, and (iii) agreed to amend the Hercules warrant as described below. On December 17, 2015 the Company entered into the third amendment to the Hercules Loan Agreement, which reduces the amount of restricted cash the Company is required to maintain in North America from $17.5 million to $15.0 million and which amount will further be reduced to $12.5 million if the Company achieves positive “Adjusted EBITDA” as defined in the loan agreement. The Company is in compliance with all of the Hercules Loan Agreement’s covenants as of December 31, 2015. Hercules W arrant Concurrently with entrance into the Hercules Loan Agreement, the Company issued to Hercules, as the sole lender on the closing date, a warrant to purchase up to 177,304 shares of the Company’s common stock at an exercise price of $2.82 per share. In connection with the November 9, 2015 Hercules Loan Agreement amendment, the Company agreed to amend the warrant to increase the number of shares to 300,000 and reduce the exercise price to $0.85. The warrant is exercisable in full and not in part. In addition, if upon the sale of all shares issued upon exercise of the warrant, or in the case of a merger or sale transaction involving other securities in whole or in part, upon the sale of such securities, the absolute return on the warrant exceeds $2.55 per share underlying the warrant, the warrant holder will pay the Company the excess in cash. The warrant may be exercised either for cash or on a cashless basis. The warrant expires April 30, 2022. The Company estimated the fair value of the warrant to be $0.3 million based on its relative fair value to the term loan using a Black-Sholes pricing model and accounted for the warrant as a discount on the carrying amount of the term loan and a component of additional paid-in capital. The fair value of the warrant will be amortized in the statement of operations as a component of interest expense. VantagePoint Convertible Notes (Related Party) On December 17, 2015, the Company entered into a convertible note purchase agreement with affiliates of the Company’s largest shareholder, VantagePoint, for the immediate issuance of $5.0 million of VantagePoint Notes. The note purchase agreement also provides for the issuance and sale of up to an additional $5.0 million aggregate principal amount of convertible notes, upon mutual agreement of ReachLocal and VantagePoint (and Hercules’ consent). The notes bear an annual interest rate of 4%, compounded quarterly. The Company is required to begin making quarterly interest and principal payments on April 15, 2017, subject to a subordination agreement with Hercules. The VantagePoint Notes mature on April 15, 2018, and all principal and unpaid interest is due at that time. The holders of the VantagePoint Notes have the right to convert any portion of the VantagePoint Notes into shares of ReachLocal common stock, par value $0.00001 per share, at an initial conversion rate of 200 shares of common stock per $1,000 principal amount of VantagePoint Notes, which represents an initial conversion price of $5.00 per share. The conversion rate is subject to customary anti-dilution adjustments for stock dividends, splits and combinations, certain distributions on the common stock, including cash dividends, spin-offs and certain tender or exchange offers for the common stock. An event of default, as defined in the agreement, may result in the acceleration of the maturity of the notes. The VantagePoint Notes are included in convertible notes – related party in the accompanying consolidated balance sheet. On February 4, 2016, the Company entered into an amendment to the VantagePoint Notes. The amendment provides that, except in certain circumstances, the convertibility of the VantagePoint Notes is limited such that conversion may not result in the holders collectively acquiring beneficial ownership of more than 1.9% of the Company’s outstanding shares of common stock during any 12-month period. VantagePoint and its affiliates beneficially own approximately 43% of the Company’s common stock and VantagePoint’s Chief Executive Officer and Managing Partner, is a member of the Company’s Board of Directors. The VantagePoint Notes and Hercules Loan Agreement contain cross-default provisions whereby a default under one agreement would likely result in cross defaults under agreements covering other borrowings. The occurrence of a default under any of these borrowing arrangements would permit the applicable note holders or the lenders under the term loan to declare all amounts outstanding under those borrowing arrangements to be immediately due and payable. Future Debt Maturities Aggregate principal payments, exclusive of any unamortized debt issuance costs or discounts, due on debt as of December 31, 2015 are as follows (in thousands): Years Ended December 31, Hercules Term Loan VantagePoint Notes Total 2016 $ 11,647 $ — $ 11,647 2017 14,130 254 14,384 2018 4,806 5,254 10,060 Total minimum payments 30,583 5,508 36,091 Less amount representing interest (5,883 ) (508 ) (6,391 ) Total minimum payments less interest $ 24,700 $ 5,000 $ 29,700 Capital Leases The Company has entered into non-cancelable capital leases for computer equipment. At December 31, 2015, the Company had $1.2 million of capital leases, net of accumulated amortization of $0.8 million, of which $0.7 million is recorded in short-term liabilities and $0.5 million is recorded in long-term liabilities. Amortization of assets recorded under capital leases is included in depreciation expense. The interest rates on these leases range from 4.8% to 5.2%. As of December 31, 2015, future minimum payments under these leases are as follows (in thousands): Years Ended December 31, 2016 $ 734 2017 497 2018 2 Total minimum payments 1,233 Less amount representing interest (51 ) Total minimum payments less interest $ 1,182 |
Note 14 - Income Taxes
Note 14 - Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | 14. Income Taxes The components of income (loss) from continuing operations before income taxes were (in thousands): Years Ended December 31, 2015 2014 2013 United States $ (25,495 ) $ (18,997 ) $ 25,044 Foreign (35,651 ) (26,179 ) (18,294 ) $ (61,146 ) $ (45,176 ) $ 6,750 The provision for income taxes for the years ended December 31, 2015, 2014 and 2013, consists primarily of federal, state and foreign income taxes payable in the various jurisdictions in which the Company operates. Significant components of the provision for income taxes are as follows (in thousands): Years Ended December 31, 2015 2014(a) 2013(a) Current: Federal $ (3 ) $ (2,019 ) $ 5,687 State 29 98 1,134 Foreign 242 205 378 268 (1,716 ) 7,199 Deferred: Federal (4,353 ) (422 ) (930 ) State (1,403 ) (1,383 ) (4,048 ) Foreign (6,843 ) (8,769 ) (8,232 ) 12,599 (10,574 ) (13,210 ) Valuation allowance 12,700 12,774 9,710 Income tax provision $ 369 $ 484 $ 3,699 Income taxes payable as of December 31, 2015 amounted to $0.1 million and was classified within “Other current liabilities” in the accompanying consolidated balance sheet. Income taxes receivable as of December 31, 2014 amounted to $2.0 million and was classified within prepaid expenses and other current assets in the accompanying consolidated balance sheet. The provision for income taxes differs from the amount computed by applying the federal statutory income tax rate to income before income taxes as follows (in thousands): Years Ended December 31, 2015 2014(a) 2013(a) Income tax expense (benefit) at the federal statutory rate $ (20,790 ) $ (15,360 ) $ 2,295 State income tax, net of federal tax benefit (931 ) (848 ) (1,923 ) Foreign income taxes, net (2,818 ) 337 (3,189 ) Goodwill impairment 8,340 — — Non-deductible stock-based compensation 3,546 3,765 1,149 Research and development credits (88 ) (325 ) (2,629 ) Change in valuation allowance 12,700 12,774 7,235 Deferred tax adjustments — — 617 Other 410 141 144 $ 369 $ 484 $ 3,699 The components of deferred income tax assets and liabilities are as follows (in thousands): December 31, 2015 2014(a) Deferred tax assets: Net operating loss carryforward $ 23,787 $ 25,315 Federal and state credits 8,189 5,139 Investments 5,422 — Accruals and provisions 5,409 5,743 Stock options 2,500 3,640 Gross deferred tax assets 45,307 39,837 Less: valuation allowance (36,530 ) (28,055 ) Net deferred tax assets 8,777 11,782 Deferred tax liabilities: Capitalized software (7,534 ) (9,187 ) Intangible assets (1,154 ) (1,362 ) Fixed assets (851 ) (1,893 ) Net deferred tax liabilities (9,539 ) (12,442 ) Net deferred tax asset (liabilities) $ (762 ) $ (660 ) (a) For the years ended December 31, 2014 and 2013, the presentation of foreign income tax expense, net operating loss carryforward deferred tax asset, and corresponding valuation allowance have been revised in the above tables due to a prior overstatement of foreign net operating losses in both respective years. As a result of the valuation allowance recorded against the foreign net deferred tax assets, there is no impact to the accompanying consolidated balance sheets or statement of operations. In the accompanying consolidated balance sheets, the non-current portion of deferred tax assets of $0.2 million and $0.1 million as of December 31, 2015 and 2014, respectively, is included in other assets. The non-current portion of net deferred tax liabilities of $0.9 million and $0.7 million as of December 31, 2015 and 2014, is included in deferred rent and other liabilities. The following table summarizes the Company’s net operating loss carryforwards as of December 31, 2015: Net operating loss: Balance at December 31, 2015 (in thousands) Beginning Expiration Year Federal $ 19,216 2033 State $ 30,554 Various jurisdictions from 2019 to 2030 Foreign $ 65,946 Generally do not expire, but are subject to certain limitations The federal net operating loss and research and development credit carryforwards per the income tax returns filed included unrecognized tax benefits taken in prior years, and are larger than the net operating losses and credits for which a deferred tax asset is recognized for financial statement purposes. As of December 31, 2015, the Company had gross federal and state research and development credit carryforwards of approximately $5.3 million and $3.9 million, respectively. The federal carryovers begin to expire in 2024, while the state carryovers have an indefinite carryover period. At December, 31, 2015, the Company had $0.1 million of foreign tax credits carryovers which begin to expire in 2023. As of December 31, 2015, the Company had gross California Enterprise Zone Credits of $1.4 million which begin to expire in 2024. Certain deferred tax assets are not presented that arose directly from tax deductions related to equity compensation greater than the amount of compensation recognized for financial reporting. Equity will be increased by $2.2 million if and when such deferred tax assets are ultimately realized. As of December 31, 2015 and 2014, the Company recorded valuation allowances of $36.5 million and $28.1 million, respectively, as the Company has determined that it is more likely than not that the deferred tax assets will not be realized. Due to the Company’s cumulative losses in U.S. and certain foreign jurisdictions, management has concluded that a full valuation allowance continues to be warranted with respect to the net deferred tax assets in these jurisdictions, excluding indefinite lived assets. In 2015, the net increase in valuation allowance of $8.5 million was primarily due to net operating losses in domestic and foreign jurisdictions and the deconsolidation of RL U.K. In 2014, the net increase in valuation allowance of $12.8 million was primarily due to net operating losses in foreign jurisdictions and the recording of a full valuation allowance against its net domestic deferred tax assets, excluding indefinite lived assets. The book value of the Company’s investments in foreign subsidiaries exceeds its tax basis in those subsidiaries by $1.0 million. However, the deferred income taxes on the associated gain have not been recognized, as gains become taxable upon a repatriation of assets from the subsidiary or a sale or liquidation of the subsidiary, and these amounts are expected to be reinvested indefinitely outside of the U.S. Determination of the amount of any unrecognized deferred income tax liability on this temporary difference is not practicable because of the complexities of the hypothetical calculation. At December 31, 2015, the Company had gross unrecognized tax benefits of approximately $1.6 million. Of this total, approximately $1.5 million would affect the Company’s effective tax rate if recognized. The liabilities for unrecognized tax benefits are primarily recorded as a reduction of gross deferred taxes which are included in deferred rent and other liabilities in the accompanying balance sheets. A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits is as follows (in thousands): December 31, 2015 2014 2013 Unrecognized tax benefits – beginning balance $ 1,570 $ 1,700 $ 824 Gross increases – tax positions taken in prior period — — 642 Gross decreases – tax positions taken in prior period (14 ) (219 ) — Gross increases– tax positions taken in current period 70 89 234 Unrecognized tax benefits – ending balance $ 1,626 $ 1,570 $ 1,700 The Company expects a decrease of $0.8 million of unrecognized tax benefits in the next 12 months due to expiration of the applicable statute of limitations. These unrecognized tax benefits relate to the formation of a foreign joint venture. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. Related to the unrecognized tax benefits noted above, the Company accrued no interest or penalties during 2015 and in total, as of December 31, 2015, has not recognized a liability for interest and penalties. The Company and its subsidiaries file income tax returns in the U.S. federal, various state and foreign jurisdictions. Certain statutes begin to expire as early as 2016. In May of 2015, the Internal Revenue Service initiated an examination of the Company’s U.S. consolidated 2013 and 2014 income tax returns that was finalized in December 2015 with no proposed adjustments. |
Note 15 - Retirement Contributi
Note 15 - Retirement Contribution Plans | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | 15. Retirement Contribution Plans The Company provides a defined contribution savings plan under Section 401(k) of the Internal Revenue Code and certain other plans in other countries. The 401(k) plan is available to all full-time U.S. employees and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company may contribute to the 401(k) plan at the discretion of its board of directors. No contributions have been made to the plan during the years ended December 31, 2015, 2014 and 2013. |
Note 16 - Net Income (Loss) Per
Note 16 - Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | 16. Net Income (Loss) Per Share Basic net income (loss) from continuing operations per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Shares of unvested restricted stock are excluded from the calculation of basic weighted average shares outstanding, but their dilutive impact is added back in the calculation of diluted weighted average shares outstanding. Diluted net income (loss) from continuing operations per share is computed by dividing the net income (loss) for the period by the weighted average number of common and potential dilutive shares outstanding during the period, to the extent such shares are dilutive. Potential dilutive shares are composed of incremental common shares issuable upon the exercise of stock options, warrants and unvested restricted shares using the treasury stock method and shares issuable upon the conversion of convertible debt using the if-converted method. The Company had a loss from continuing operations for the year ended December 31, 2015 and therefore the number of diluted shares was equal to the number of basic shares for the period. The following potentially dilutive securities have been excluded from the calculation of diluted net loss per common share as they would be anti-dilutive for the periods below (in thousands): Years Ended December 31, 201 5 201 4 201 3 Deferred stock consideration and unvested restricted stock 596 768 216 Stock options, convertible notes, and warrant 8,223 6,489 3,534 8,819 7,257 3,750 The following table sets forth the computation of basic and diluted income (loss) from continuing operations per share (in thousands, except per share amounts): Years Ended December 31, 201 5 201 4 201 3 Numerator: Income (loss) from continuing operations $ (61,515 ) $ (45,660 ) $ 3,051 Denominator: Weighted average common shares used in computation of income (loss) per share from continuing operations, basic 29,174 28,461 27,764 Deferred stock consideration and restricted stock — — 199 Stock options and warrants — — 1,088 Weighted average common shares used in computation of income (loss) per share from continuing operations, diluted 29,174 28,461 29,051 Income (loss) per share from continuing operations, basic $ (2.11 ) $ (1.60 ) $ 0.11 Income (loss) per share from continuing operations, diluted $ (2.11 ) $ (1.60 ) $ 0.11 |
Note 17 - Variable Interest Ent
Note 17 - Variable Interest Entities | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Variable Interest Entity Disclosure [Text Block] | 17. Variable Interest Entities In July 2012, the Company entered into a franchise agreement with OxataSMB B.V. permitting it to operate and resell the Company’s services under the ReachLocal brand in Slovakia, Czech Republic, Hungary, Poland and Russia. At the same time, the Company entered into a market development loan agreement with OxataSMB pursuant to which we agreed to provide financing to OxataSMB of up to €2.9 million ($3.7 million), of which €1.45 million ($1.9 million) was immediately advanced and €0.92 million ($1.2 million) was advanced in August 2013. The OxataSMB operations did not perform as contemplated, and as a result, the Company recorded a $3.3 million impairment of the loan receivable and related interest from OxataSMB and a $1.6 million provision for bad debt related to the trade receivable from OxataSMB. Ultimately we terminated OxataSMB’s franchise agreement in the fourth quarter of 2014 and have not been repaid any amounts under the loan. |
Note 18 - Segment Information
Note 18 - Segment Information | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | 18. Segment Information Revenue by geographic region with respect to the Direct Local channel and National Brands, Agencies and Resellers, is based on the physical location of the sales office, and with respect to Agencies and Resellers, is based on the physical location of the agency or reseller. The following summarizes revenue by geographic region (in thousands): Years Ended December 31, 201 5 2014 2013 Revenue: North America $ 249,224 $ 293,096 $ 341,737 International 133,373 181,825 172,333 $ 382,597 $ 474,921 $ 514,070 Long Lived Assets: North America $ 9,033 $ 12,723 International 4,529 6,819 $ 13,562 $ 19,542 The results of the Australia geographic region have been included in the Company’s consolidated financial statements and include revenues of $52.5 million, $80.3 million, and $85.0 million in 2015, 2014 and 2013, respectively. Long-lived assets of the Australia geographic region were $1.7 million at December 31, 2015 and 2014. The Company operates in one operating segment. The Company’s chief operating decision maker manages the Company’s operations on a consolidated basis for purposes of evaluating financial performance and allocating resources. |
Note 19 - Supplemental Cash Flo
Note 19 - Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Cash Flow, Supplemental Disclosures [Text Block] | 19. Supplemental Cash Flow Information The following table sets forth supplemental cash flow disclosures (in thousands): Years Ended December 31, 201 5 201 4 201 3 Cash paid for interest, net $ 1,860 $ 30 $ — Cash paid for (received from) income taxes, net $ (1,836) $ 1,093 $ 3,474 Non-cash investing and financing activities: Capitalized software development costs resulting from stock-based compensation and deferred payment obligations $ 390 $ 470 $ 443 Issuance of Hercules warrant $ 250 $ — $ — Unpaid purchases of property and equipment $ 193 $ 113 $ 83 Assets acquired under capital leases $ 38 $ 1,727 $ — Investment related to the ClubLocal disposition $ — $ 4,500 $ — Deferred payment obligation decrease $ — $ — $ (122 ) |
Note 20 - Discontinued Operatio
Note 20 - Discontinued Operations | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | 20. Discontinued Operations ClubLocal In the fourth quarter of 2013, the Company’s Board of Directors approved a plan to dispose of the Company’s ClubLocal business, and on February 18, 2014, the Company closed a transaction in which it transferred its ClubLocal business to SERVIZ, Inc. in exchange for a minority equity interest. The Company has an equity interest in the new entity of 14.2%, with a recorded fair value of $4.5 million. As a result of the disposition, in the first quarter of 2014 the Company recorded a gain on disposal of $0.8 million, net of income tax of $0.4 million. This business has been accounted for as discontinued operations. |
Note 21 - Quarterly Information
Note 21 - Quarterly Information (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Quarterly Financial Information [Text Block] | 21. Quarterly Information (Unaudited) The following table sets forth unaudited and quarterly financial data for the four quarters of each of 2015 and 2014. Dec 31, 201 5 Sept 30, 201 5 June 30, 201 5 Mar 31, 201 5 Dec 31, 201 4 Sept 30, 201 4 June 30, 201 4 Mar 31, 201 4 Revenue $ 88,977 $ 95,282 $ 98,776 $ 99,563 $ 109,009 $ 117,623 $ 123,553 $ 124,736 Cost of revenue $ 48,131 $ 53,671 $ 55,390 $ 56,217 $ 61,708 $ 64,154 $ 63,461 $ 63,398 Loss from continuing operations $ (2,504 ) $ (35,637 ) $ (10,593 ) $ (12,782 ) $ (17,737 ) $ (11,284 ) $ (10,326 ) $ (6,313 ) Income (loss) from discontinued operations, net of income taxes $ — $ — $ — $ — $ (279 ) $ — $ 31 $ (371 ) Net loss $ (2,504 ) $ (35,637 ) $ (10,593 ) $ (12,782 ) $ (17,458 ) $ (11,284 ) $ (10,295 ) $ (5,973 ) Net income (loss) per share: Basic and diluted: Loss from continuing operations $ (0.09 ) $ (1.22 ) $ (0.36 ) $ (0.44 ) $ (0.62 ) $ (0.40 ) $ (0.36 ) $ (0.22 ) Income (loss) from discontinued operations, net of income taxes — — — — 0.01 — — (0.01 ) Net loss per share $ (0.09 ) $ (1.22 ) $ (0.36 ) $ (0.44 ) $ (0.61 ) $ (0.40 ) $ (0.36 ) $ (0.21 ) |
Note 22 - Subsequent Events
Note 22 - Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | 22. Subsequent Events Amendment to Hercules Loan Agreement On March 25. 2016, the Company and certain of its affiliates entered into a Fourth Amendment to Loan and Security Agreement with Hercules Capital, Inc. (formerly Hercules Technology Capital, Inc.), as administrative agent and lender. The loan amendment amends the Hercules Loan Agreement to increase the maximum net new investment in the Company’s foreign subsidiaries during 2016 from $4.0 million to $5.5 million. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of ReachLocal, Inc. and its wholly owned subsidiaries. The Company's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results may differ from those estimates. |
Reclassification, Policy [Policy Text Block] | Reclassifications and Adjustments Certain prior period amounts have been reclassified to conform to the current period presentation. See further discussion below under recent accounting pronouncements and in Note 14, Income Taxes. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation The Company’s operations are conducted in several countries around the world, and the financial statements of its foreign subsidiaries are reported in the applicable foreign currencies (functional currencies). Financial information is translated from the applicable functional currency to the U.S. dollar, the reporting currency, for inclusion in the Company’s consolidated financial statements. Revenue and expenses are translated at average exchange rates prevailing during the period, and assets and liabilities are translated at exchange rates in effect at the balance sheet date. Resulting translation adjustments are included as a component of accumulated other comprehensive income (loss), net in stockholders’ equity. Foreign currency translation adjustments are generally not adjusted for income taxes as they are primarily related to indefinite investments in foreign subsidiaries. Foreign exchange transaction gains and losses are included in other income (expense), net in the accompanying consolidated statements of operations. Exchange gains and losses on intercompany balances that are considered permanently invested are also included as a component of accumulated other comprehensive loss in stockholders’ equity. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company reports all highly liquid short-term investments with original maturities of three months or less at the time of purchase as cash equivalents. As of December 31, 2015 and 2014, cash equivalents consist of demand deposits and money market accounts. Cash equivalents are stated at cost, which approximates fair value. |
Marketable Securities, Policy [Policy Text Block] | Short-Term Investments The Company classifies investments as short-term when the original maturity is less than one year, or when the Company intends to sell the investment within one year. As of December 31, 2015 and 2014, short-term investments consisted of certificates of deposit. All of the short-term investments are classified as available-for-sale. Short-term investments are stated at cost, which approximates fair value. |
Receivables, Policy [Policy Text Block] | Accounts Receivable The Company performs ongoing credit evaluations of its customers and adjusts credit limits based upon payment history, the customer’s creditworthiness and various other factors, as determined by its review of their credit information. The Company monitors collections and payments from its customers and maintains an allowance for estimated credit losses based upon its historical experience and any customer-specific collection issues that it has identified. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, short-term investments and accounts receivable. Cash and cash equivalents and certificates of deposit are deposited with a limited number of financial institutions in the United States, Canada, Australia, United Kingdom, India, the Netherlands, Germany, Japan and Brazil. The balances held at any one financial institution are generally in excess of Federal Deposit Insurance Corporation insurance limits or, in foreign territories, local insurance limits, and as a result, access to the Company’s cash and cash equivalents may be impacted by adverse conditions in the global financial markets, including fluctuations in currency exchange rates. As of December 31, 2015, domestic bank balances in excess of insured limits were $23.3 million and foreign bank balances in excess of insured limits were $12.5 million. During March 2016, the Company commenced a process to transition its two primary financial service providers of commercial banking services and merchant services for its credit and debit card processing in North America. The company does not expect a significant impact to its financial position, results of operatin or cash flows in North America as a result of the transition, which is expected to be completed May 2016 The Company’s customers are primarily local businesses, dispersed both geographically and across a broad range of industries. Management performs ongoing evaluation of trade receivables for collectability and provides an allowance for potentially uncollectible accounts. The following table summarizes the change in the Company’s allowance for doubtful accounts for each of the three years ended December 31, 2015, 2014 and 2013 (in thousands): 201 5 201 4 201 3 Allowance for doubtful accounts as of the beginning of the year $ 961 $ 2,212 $ 259 Additions charged to expense 563 2,621 6,080 Write-offs (1,026 ) (4,511 ) (4,396 ) Recoveries 305 639 268 Allowance for doubtful accounts as of the end of the year $ 803 $ 961 $ 2,212 For the years ended December 31, 2015, 2014, and 2013, the Company did not have any individual clients that comprised more than 10% of consolidated revenues. During 2015, 2014, and 2013, the Company’s cost of revenue was primarily for the purchase of media from two of the Company’s vendors. Other receivables and prepaid expenses included $3.6 million and $0.6 million of non-trade receivables from media vendors at December 31, 2015 and 2014, respectively. Accounts payable included $17.3 million and $17.1 million of accrued media expenses from media vendors at December 31, 2015 and 2014, respectively. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are stated at historical cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is generally three years for computer hardware and software, five years for office equipment, and seven years for furniture and fixtures. Leasehold improvements are amortized using the straight-line method over the lesser of the useful life or the lease term. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred. |
Research, Development, and Computer Software, Policy [Policy Text Block] | Software Development Costs Costs to develop software for internal use are capitalized when the Company has determined that the development efforts will result in new or additional functionality or new products. Costs incurred prior to meeting these criteria and costs associated with ongoing maintenance are expensed as incurred and included in product and technology expenses, in addition to amortization of capitalized software development costs, in the accompanying consolidated statements of operations. The Company monitors its existing capitalized software costs and reduces its carrying value as the result of releases that render previous features or functions obsolete. Software development costs are evaluated for impairment in accordance with the Company’s policy for finite-lived intangible assets and other long-lived assets. Costs capitalized as internal use software are amortized on a straight-line basis over an estimated useful life of three years. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash Term Loan Under the terms of the Hercules Loan Agreement, as amended, the Company is required to maintain, at all times, cash in North America of at least $15.0 million, unless the Company achieves positive “Adjusted EBITDA” as defined in the Loan Agreement for three consecutive quarters, in which case the minimum cash balance decreases to $12.5 million. Restricted cash—term loan represents the required minimum compensating balance to secure the term loan. See Note 13, Debt and Other Obligations, for more information. Restricted Cash Restricted cash represents certificates of deposit held at financial institutions that are pledged as collateral for letters of credit related to lease commitments, collateral for the Company’s merchant accounts, and cash deposits in a restricted account in accordance with the Company’s employee health care self-insurance plan. The letters of credit will lapse at the end of the respective lease terms through 2024 and the certificates of deposit automatically renew for successive one-year periods over the duration of the lease term. The restrictions related to merchant accounts and the Company’s self-insurance plan will lapse upon termination of the respective underlying arrangements. At December 31, 2015 and December 31, 2014, the Company had restricted cash in the amount of $3.5 million and $3.6 million, respectively, of which, $0.2 million, related to the employee health care self-insurance plan. |
Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block] | Loan Receivables The Company records loan receivables at carrying value, net of potential allowance for losses. Losses on receivables are recorded when probable and estimable. Interest income on loan receivables is accrued on a monthly basis over the life of the loan, and interest recognition is suspended upon impairment of loan principal. |
Investment, Policy [Policy Text Block] | Non-marketable Investments The Company accounts for non-marketable investments under the cost method, which are periodically assessed for other-than-temporary impairment. The fair value of a cost method investment is not evaluated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. However, if a significant adverse event were identified, the Company would estimate the fair value of its cost method investment considering available information at the time of the event, such as current cash position, earnings and cash flow forecasts, recent operational performance and any other readily available data. If the Company determines that an other-than-temporary impairment has occurred, the investment is written-down to its fair value. |
Consolidation, Variable Interest Entity, Policy [Policy Text Block] | Variable Interest Entities The Company analyzes its interests, including agreements, loans, guarantees, and equity investments, on a periodic basis to determine if such interests are variable interests. If variable interests are identified, then the related entity is assessed to determine if it is a variable interest entity (“VIE”). The Company’s analysis includes both quantitative and qualitative reviews. The Company bases its quantitative analysis on the forecasted cash flows of the entity, and its qualitative analysis on the design of the entity, its organizational structure including its decision-making authority, and relevant agreements. If the Company determines that the entity is a VIE, the Company then assesses if it must consolidate the VIE as its primary beneficiary. The Company’s determination of whether it is the primary beneficiary is based upon qualitative and quantitative analyses, which assess the purpose and design of the VIE, the nature of the VIE’s risks and the risks that the Company absorbs, the power to direct activities that most significantly impact the economic performance of the VIE, and the obligation to absorb losses or the right to receive benefits that could be significant to the VIE. |
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Finite-Lived Intangible Assets and Other Long-Lived Assets Finite-lived intangible assets are attributable to the various developed technologies, trade names, and customer relationships of the businesses the Company has acquired. The Company reports finite-lived, acquisition-related intangible assets at acquisition date fair value, net of accumulated amortization. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from two to ten years. Straight-line amortization is used as another pattern over which the economic benefits will be consumed cannot be reliably determined. The Company reviews the carrying values of long-lived assets, including intangible assets, for possible impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. In its analysis of other finite lived amortizable intangible assets, the Company applies the guidance of ASC 350-20, Intangibles – Goodwill and Other At December 31, 2015 and 2014, there were no indications of impairment of the Company’s finite-lived intangible assets or other long-lived assets. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill represents the excess of the purchase price of the Company’s acquired businesses over the fair value of the net tangible and intangible assets acquired. The Company accounts for goodwill in accordance with ASC 350, Intangibles—Goodwill and Othe r The Company tests the goodwill of its reporting units for impairment annually on the first day of the fourth quarter, and whenever events occur or circumstances change that would more likely than not indicate that the goodwill might be impaired. Events or circumstances which could trigger an impairment review include, but are not limited to, a significant adverse change in the legal or business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key management or other personnel, significant changes in the manner of the Company’s use of the acquired assets or the strategy for the acquired business or the Company’s overall business, significant and sustained decline in market capitalization, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. Testing goodwill for impairment involves a two-step quantitative process. However, prior to performing the two-step quantitative goodwill impairment test, the Company has the option to first assess qualitative factors to determine whether or not it is necessary to perform the two-step quantitative goodwill impairment test for selected reporting units. If the Company chooses the qualitative option, the Company is not required to perform the two-step quantitative goodwill impairment test unless the Company has determined, based on the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The first step of the impairment test involves comparing the estimated fair values of a reporting unit with its respective carrying amount, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying amount, including goodwill, goodwill is considered not to be impaired and no additional steps are necessary. If, however, the estimated fair value of the reporting unit is less than its carrying amount, including goodwill, or if the reporting unit has a negative carrying value and the Company believes it is more likely than not that a goodwill impairment exists, then the second step is performed to compare the carrying amount of the goodwill with its implied fair value, which is determined by deducting the aggregate fair value of the reporting unit's identifiable assets and liabilities from the fair value of the reporting unit. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess. The process of estimating the fair value of goodwill is subjective and requires the Company to make estimates that may significantly impact the outcome of the analyses. The estimated fair value for each reporting unit is determined using both an income-based valuation approach, as well as a market-based valuation approach. Under the income-based approach, each reporting unit’s fair value is estimated using the discounted cash flow method. The discounted cash flow method is dependent upon a number of factors, including projections of the amounts and timing of future revenues and cash flows, assumed discount rates determined to be commensurate with the risks inherent in its business model, and other assumptions. Under the market-based valuation approach, each reporting unit’s fair value is estimated based on industry multiples of revenues and operating earnings. The income-based approach is weighted between 50.0% and 66.7% depending on the amount and timing of projected operating earnings attributable to each reporting unit. The Company operates in one reportable segment, in accordance with ASC 280, Segment Reporting |
Self Insurance Reserve [Policy Text Block] | Self-Insurance Beginning July 2, 2014, the Company implemented a self-insurance plan to provide for potential liabilities for employee health care claims in the United States. Liabilities associated with the risks are estimated, in part, by considering historical claims experience, demographic factors, severity factors, and other actuarial assumptions. The Company had insurance liabilities totaling approximately $1.3 million and $0.5 million at December 31, 2015 and December 31, 2014, respectively, which are included in accrued compensation and benefits in the accompanying consolidated balance sheets. |
Lease, Policy [Policy Text Block] | Leases The Company leases various facilities under agreements accounted for as operating leases. For leases that contain escalation or rent concessions provisions, management recognizes rent expense during the lease term on a straight-line basis over the term of the lease. The difference between rent paid and straight-line rent expense is recorded as a deferred rent liability in the accompanying consolidated balance sheets. Assets held under capital leases are recorded at the lower of the net present value of the minimum lease payments or at the fair value of the leased asset at the inception of the lease. Amortization expense is computed using the straight-line method over the shorter of the estimated useful life of the asset or the period of the related lease. Principal payments on capital lease obligations are recorded as reduction of capital lease liability in the accompanying consolidated balance sheets, and interest payments are recorded as interest expense which is included in other income, net in the accompanying consolidated statements of operations. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition The Company recognizes revenue for its products and solutions when persuasive evidence of an arrangement exists, services have been performed, the selling price is fixed or determinable, and collectibility is reasonably assured. The Company recognizes revenue for search engine marketing as clicks are recorded on sponsored links on the various search engines and for its display advertising and retargeting when the display advertisements record impressions or as otherwise provided in its agreement with the applicable publisher. The Company recognizes revenue for lead conversion software, web presence and other products with a defined license or service period on a straight-line basis over the applicable license or service period. The Company recognizes revenue when it charges set-up, management service or other fees on a straight-line basis over the term of the related contract or the completion of any obligation for services, if shorter. The Company accounts for sales and similar taxes imposed on its services on a net basis in the consolidated statements of operations. When the Company receives advance payments from clients, it records these amounts as deferred revenue until the revenue is recognized. From time to time, the Company offers incentives to clients in exchange for minimum commitments. In these circumstances, management estimates the amount of the incentives that will be earned by clients and adjusts the recognition of revenue to reflect such incentives. Estimates are either based upon a statistical analysis of previous campaigns for which such incentives were offered, or calculated on a straight-line basis over the life of the campaign. When the Company sells through agencies, it either receives payment in advance of delivery of its products or solutions or in some cases extends credit. The Company pays each agency an agreed-upon commission based on the revenue it earns or cash it receives. Some agency clients who have been extended credit may offset the amount otherwise due to the Company by any commissions they have earned. Management evaluates whether it is appropriate to record the gross amount of campaign revenue or the net amount earned after commissions. As the Company is generally the primary party obligated in the arrangement, subject to the credit risk, with discretion over both price and media, management typically recognizes the gross amount of such sales as revenue and any commissions are recognized as a selling and marketing expense. The Company also has a small number of resellers. Resellers integrate the Company’s products and solutions, including the Company’s branded search engine marketing, display advertising and online marketing analytics, into their product offerings. In most cases, the resellers integrate with the Company’s technology platform through a custom Application Programming Interface (API). Resellers are responsible for the price and specifications of the integrated product offered to their clients. Resellers pay the Company in arrears, net of commissions and other adjustments. Management recognizes revenue generated under reseller agreements net of the agreed-upon commissions and other adjustments earned or retained by the reseller, as management believes that the reseller has retained sufficient control and bears sufficient risks to be considered the primary obligor in those arrangements. The Company distributes its products and solutions directly through its outside and inside sales force that is focused on serving local businesses in their local markets through a consultative process, which the Company refers to as its Direct Local channel. The Direct Local channel also includes revenue from licensing of the Company’s Kickserv software solution, which is marketed directly to local businesses over the Internet. In addition, the Company employs a separate sales channel targeting national brands, franchises and strategic accounts with operations in multiple local markets and select third-party agencies and resellers. The Company refers to this as its National Brands, Agencies and Resellers channel. |
Cost of Sales, Policy [Policy Text Block] | Cost of Revenue Cost of revenue consists primarily of the costs of online media acquired from third-party publishers. Media cost is classified as cost of revenue in the period in which the corresponding revenue is recognized. From time to time, publishers offer the Company rebates based upon various factors and operating rules, including the amount of media purchased. Rebates are recorded in the period in which they are earned as a reduction to cost of revenue and the corresponding payable to the applicable publisher, or as an other receivable, as appropriate. Cost of revenue also includes the third-party telephone and information services costs, other third-party service provider costs, data center and third-party hosting costs, credit card processing fees, and other direct costs. In addition, cost of revenue includes costs to manage and operate the Company’s various solutions and technology infrastructure, other than costs associated with the Company’s sales force, which are reflected as selling and marketing expenses. Cost of revenue includes salaries, benefits, bonuses and stock-based compensation for the related staff, and allocated overhead such as depreciation expense, rent and utilities. Cost of revenue also includes the amortization and impairment charges on certain acquired intangible assets. |
Selling and Marketing Expenses [Policy Text Block] | Selling and Marketing Expenses Selling and marketing expenses consist primarily of personnel and related expenses for selling and marketing staff, including salaries and wages, commissions and other variable compensation, benefits, bonuses and stock-based compensation; travel and business costs; training, recruitment, marketing and promotional events; advertising; other brand building and product marketing expenses; and occupancy, technology and other direct overhead costs. A portion of the compensation for employees in the sales organization is based on commissions. In addition, the cost of agency commissions is included in selling and marketing expenses. Generally, commissions are expensed as earned. However, commencing in 2014, the Company began paying commissions to certain sales people for the acquisition of new clients. Client contracts are generally not cancelable without a penalty, and the Company defers those commissions and amortizes them over the term of the initial customer campaign. Unamortized commission expense of $0.2 million and $0.6 million at December 31, 2015 and December 31, 2014, respectively, is included in prepaid expenses and other current assets in the accompanying consolidated balance sheets. |
Product and Technology Expenses [Policy Text Block] | Product and Technology Expenses Product and technology expenses consist primarily of personnel and related expenses for product development and engineering professionals, including salaries, benefits, bonuses and stock-based compensation, and the cost of third-party contractors and certain other third-party service providers and other expenses, including occupancy, technology and other direct overhead costs. Technology operations costs, including related personnel and third-party costs, are included in product and technology expenses. Research and development expenses are included in product and technology costs and were $6.9 million, $15.5 million, and $9.5 million during 2015, 2014, and 2013, respectively. The Company capitalizes a portion of its software development costs and, accordingly, includes amortization of those costs as costs of product and technology, as the Company’s technology platform and the Company’s other systems address all aspects of the Company’s activities, including supporting the selling and consultation process, online publisher integration, efficiencies and optimization, providing insight to clients into the results and effects of their online advertising campaigns and supporting all of the financial and other back-office functions of the business. Product and technology expenses also include the amortization of the technology obtained in acquisitions and the expenses of deferred payment obligations related to product and technology personnel. Product and technology costs do not include the costs to operate and deliver the Company’s solutions to clients, which are included in cost of revenue in the consolidated statements of operations. |
Selling, General and Administrative Expenses, Policy [Policy Text Block] | General and Administrative Expenses General and administrative expenses consist primarily of personnel and related expenses for board, executive, legal, finance, human resources and corporate communications, including wages, benefits, bonuses and stock-based compensation, professional fees, insurance premiums, business taxes and other expenses, including occupancy, technology and other direct overhead, public company costs and other corporate expenses. |
Costs Associated with Exit or Disposal Activities or Restructurings, Policy [Policy Text Block] | Restructuring Charges The Company records costs associated with exit activities related to restructuring plans in accordance with the ASC Topic 420, Exit or Disposal Obligations |
Advertising Costs, Policy [Policy Text Block] | Advertising Expenses The Company expenses advertising as incurred. Advertising expense was $2.1 million, $2.9 million and $1.7 million for the years ended December 31, 2015, 2014 and 2013, respectively, and was recorded in sales and marketing expense in the consolidated statements of operations. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation The Company accounts for stock-based compensation based on the fair market value of the equity award on the date of grant. The Company follows the attribution method, which reduces current stock-based compensation expenses recorded by the effect of anticipated forfeitures. Management estimates forfeitures based upon its historical experience. The fair value of each award is estimated on the date of the grant and amortized over the requisite service period, which is the vesting period. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option awards on the date of grant. Determining the fair value of stock option awards at the grant date under this model requires judgment, including estimating volatility, expected term and the risk-free interest rate. The fair value of restricted stock and restricted stock unit awards is based on the closing market price of the Company's common stock on the date of grant. In addition, the Company uses a Monte Carlo simulation model to estimate the fair value of market-based performance-vesting restricted stock and restricted stock units. Determining the fair value of these awards at the grant date under this model requires judgment, including estimating volatility, risk-free rate and expected future stock price. The Company determines the probability of achievement of performance milestones for non-market based performance vesting restricted stock and restricted stock units, and recognize expense based on the fair value of the award if it is probable that the performance milestone will be achieved. The assumptions described above rely on management estimates based on judgment and subjective future expectations, which may result in stock-based compensation for future awards that differs significantly from the awards granted previously. The fair value of modifications to stock-based awards is generally estimated using the Black-Scholes option pricing model. If a stock-based compensation award is modified after the grant date, incremental compensation expense is recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. Incremental compensation expense for fully vested awards is recognized immediately. For unvested awards, the sum of the incremental compensation expense and the remaining unrecognized compensation expense for the original award on the modification date is recognized over the modified service period. |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company records income taxes using the asset and liability method which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in its financial statements or tax returns. In estimating future tax consequences, all expected future events other than enactments or changes in the tax law or rates are considered. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. The Company records tax benefits for income tax positions only if it is “more-likely-than-not” to be sustained based solely on its technical merits as of the reporting date. Management considers many factors when evaluating and estimating tax positions and tax benefits, which may require periodic adjustments and which may differ from actual outcomes. The Company follows a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company’s policy is to recognize interest and penalties related to tax in income tax expense. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements Adopted in 2015 In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-17, Balance Sheet Classification of Deferred Taxes. In April 2015, the FASB issued ASU No. 2015-03, Interest- Imputation of Interest. In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases. Accounting Standards Codification (“ASC”) 840, Leases ASC 842, Leases In January 2016, the FASB ASU No. 2016-01, Financial Instruments- Overall. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations. In April 2015, the FASB issued ASU No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software. In February 2015, the FASB issued ASU No. 2015-02, Consolidation. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period Compensation – Stock Compensation In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers Revenue Recognition - Construction-Type and Production-Type Contracts Property, Plant, and Equipment, and intangible assets, within the scope of ASC 350 Intangibles - Goodwill and Other |
Note 2 - Summary of Significa32
Note 2 - Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Allowance for Credit Losses on Financing Receivables [Table Text Block] | 201 5 201 4 201 3 Allowance for doubtful accounts as of the beginning of the year $ 961 $ 2,212 $ 259 Additions charged to expense 563 2,621 6,080 Write-offs (1,026 ) (4,511 ) (4,396 ) Recoveries 305 639 268 Allowance for doubtful accounts as of the end of the year $ 803 $ 961 $ 2,212 |
Note 3 - Fair Value of Financ33
Note 3 - Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | Basis of Fair Value Measurement Balance at December 31, 201 5 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Cash and cash equivalents $ 18,833 $ 18,833 $ — $ — Restricted cash—term loan $ 15,000 $ 15,000 $ — $ — Short-term investments $ 359 $ 359 $ — $ — Restricted cash $ 3,502 $ — $ 3,502 $ — Basis of Fair Value Measurement Balance at December 31, 201 4 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Cash and cash equivalents $ 43,720 $ 43,720 $ — $ — Short-term investments $ 904 $ 904 $ — $ — Restricted cash $ 3,589 $ — $ 3,589 $ — Liabilities Acquisition-related contingent consideration $ 349 $ — $ — $ 349 |
Fair Value, Liabilities Measured on Recurring Basis [Table Text Block] | Year Ended December 31, 2015 Carrying Amount Estimated Fair Value (in thousands) Term loan $ 24,546 $ 24,500 Convertible notes- related party $ 5,000 $ 4,600 |
Note 4 - Acquisitions (Tables)
Note 4 - Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | Assets acquired: Cash and cash equivalents $ 58 Intangible assets 4,280 Goodwill 3,985 Total assets acquired 8,323 Liabilities assumed: Non-interest bearing liabilities 24 Long-term debt 350 Deferred tax liabilities 1,249 Total liabilities assumed 1,623 Total fair value of net assets acquired $ 6,700 Assets acquired: Goodwill $ 2,350 Intangible assets 1,280 Accounts receivable 330 Property and equipment 13 Total assets acquired 3,973 Liabilities assumed: Deferred tax liabilities 358 Deferred revenue 284 Accrued compensation and benefits 111 Other 782 Total liabilities assumed 1,535 Total fair value of net assets acquired $ 2,438 |
Note 5 - Goodwill and Finite-35
Note 5 - Goodwill and Finite-lived Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Goodwill [Table Text Block] | North America Asia-Pacific Total Balance at December 31, 2013 $ 9,695 $ 32,388 $ 42,083 Goodwill acquired 3,985 2,445 6,430 Acquisition adjustments — (95 ) (95 ) Foreign currency translation — (229 ) (229 ) Balance at December 31, 2014 13,680 34,509 48,189 Accumulated impairment loss — (27,800 ) (27,800 ) Foreign currency translation — (260 ) (260 ) Balance at December 31, 2015 $ 13,680 $ 6,449 $ 20,129 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | December 31, 201 5 Useful Life (years) Gross Value Accumulated Amortization Net Developed technology 3 - 8 $ 5,490 $ 2,920 $ 2,570 Customer contracts and relationships 2 - 4 1,733 799 934 Trade names 10 570 63 507 Total $ 7,793 $ 3,782 $ 4,011 December 31, 2014 Useful Life (years) Gross Value Accumulated Amortization Net Developed technology 3 - 8 $ 5,490 $ 2,130 $ 3,360 Customer contracts and relationships 2 - 4 1,875 306 1,569 Trade names 10 570 7 563 Total $ 7,935 $ 2,443 $ 5,492 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Years Ending December 31, 2016 $ 962 2017 681 2018 584 2019 431 2020 431 Thereafter 922 Total $ 4,011 |
Note 6 - Property and Equipme36
Note 6 - Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | December 31, 201 5 201 4 Computer hardware and licensed software $ 19,783 $ 20,345 Office equipment 3,999 4,229 Furniture and fixtures 4,057 4,976 Leasehold improvements 11,397 13,096 Construction in progress 349 525 39,585 43,171 Less: Accumulated depreciation and amortization (26,035 ) (23,532 ) $ 13,550 $ 19,639 |
Note 7 - Software Development37
Note 7 - Software Development Costs (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Capitalized Computer Software [Table Text Block] | December 31, 201 5 201 4 Capitalized software development costs $ 67,610 $ 56,498 Accumulated amortization (46,919 ) (34,943 ) Capitalized software development costs, net $ 20,691 $ 21,555 |
Note 8 - Commitments and Cont38
Note 8 - Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Years Ended December 31, 2016 $ 9,070 2017 8,236 2018 6,687 2019 4,927 2020 3,835 Thereafter 8,938 $ 41,693 |
Long-term Purchase Commitment [Table Text Block] | Years Ended December 31, 2016 $ 2,556 |
Note 9 - Stockholders' Equity (
Note 9 - Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Number of Common Stock Reserved for Future Issuances [Table Text Block] | Stock options 8,196 Convertible notes 1,000 Warrants 300 Restricted stock units 253 9,749 |
Note 10 - Stock-based Compens40
Note 10 - Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at December 31, 2014 6,096 $ 9.48 Granted 5,801 $ 4.29 Exercised (31 ) $ 0.24 Forfeited (5,318 ) $ 9.33 Outstanding at December 31, 2015 6,548 $ 5.05 6.3 $ — Vested and exercisable at December 31, 2015 1,747 $ 7.83 5.3 $ — Unvested at December 31, 2015, net of estimated forfeitures 3,902 $ 4.06 6.8 $ — |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | Years Ended December 31, 201 5 201 4 201 3 Expected dividend yield 0 % 0 % 0 % Risk-free interest rate 1.55 % 1.64 % 0.95 % Expected life (in years) 4.90 4.99 4.81 Expected volatility 57 % 54 % 59 % Weighted average fair value per share $ 2.24 $ 3.63 $ 6.33 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | Number of shares Weighted Average Grant Date Fair Value Unvested at December 31, 2014 912 $ 5.98 Granted — $ — Forfeited (138 ) $ 10.06 Vested (439 ) $ 8.38 Unvested at December 31, 2015 335 $ 5.37 |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block] | Years Ended December 31, 201 5 201 4 201 3 Stock-based compensation $ 9,061 $ 13,730 $ 11,948 Less: Capitalized stock-based compensation 390 470 443 Stock-based compensation expense, net $ 8,671 $ 13,260 $ 11,505 |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | Years Ended December 31, 201 5 201 4 201 3 Stock-based compensation expense, net Cost of revenue $ 487 $ 932 $ 697 Selling and marketing 1,510 2,959 3,040 Product and technology 725 825 627 General and administrative 5,949 8,544 7,141 $ 8,671 $ 13,260 $ 11,505 |
Note 11 - Restructuring Charg41
Note 11 - Restructuring Charges (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring Plan 2, 2014 [Member] | |
Notes Tables | |
Restructuring and Related Costs [Table Text Block] | Workforce Reduction Costs Facility Closures Total Balance at December 31, 2014 $ 51 $ 626 $ 677 Reversal of amount previously accrued — (179 ) (179 ) Amounts paid (50 ) (477 ) (527 ) Non-cash items (1 ) 30 29 Balance at December 31, 2015 $ — $ — $ — |
Restructuring Plan 1, 2014 [Member] | |
Notes Tables | |
Restructuring and Related Costs [Table Text Block] | Facility Closures Total Balance at December 31, 2014 $ 2,519 $ 2,519 Amounts paid (771 ) (771 ) Accretion 45 45 Balance at December 31, 2015 $ 1,793 $ 1,793 |
Restructuring Plan 2015 [Member] | |
Notes Tables | |
Restructuring and Related Costs [Table Text Block] | Workforce Reduction Costs Facility Closures and Equipment Write-down s Other Associated Costs Total Balance at December 31, 2014 $ — $ — $ — $ — Amounts accrued 2,332 1,268 4,125 7,725 Amounts paid (1,742 ) (157 ) (3,313 ) (5,212 ) Accretion — 69 — 69 Non-cash items (4 ) (574 ) (468 ) (1,046 ) Balance at December 31, 2015 $ 586 $ 606 $ 344 $ 1,536 |
Note 13 - Debt and Other Obli42
Note 13 - Debt and Other Obligations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Debt [Table Text Block] | Hercules term loan $ 25,244 VantagePoint notes 5,000 Less unamortized debt issuance costs (1) (698 ) Total debt 29,546 Less current portion of long-term debt (8,352 ) Long-term debt $ 21,194 |
Schedule of Maturities of Long-term Debt [Table Text Block] | Years Ended December 31, Hercules Term Loan VantagePoint Notes Total 2016 $ 11,647 $ — $ 11,647 2017 14,130 254 14,384 2018 4,806 5,254 10,060 Total minimum payments 30,583 5,508 36,091 Less amount representing interest (5,883 ) (508 ) (6,391 ) Total minimum payments less interest $ 24,700 $ 5,000 $ 29,700 |
Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] | Years Ended December 31, 2016 $ 734 2017 497 2018 2 Total minimum payments 1,233 Less amount representing interest (51 ) Total minimum payments less interest $ 1,182 |
Note 14 - Income Taxes (Tables)
Note 14 - Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | Years Ended December 31, 2015 2014 2013 United States $ (25,495 ) $ (18,997 ) $ 25,044 Foreign (35,651 ) (26,179 ) (18,294 ) $ (61,146 ) $ (45,176 ) $ 6,750 |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Years Ended December 31, 2015 2014(a) 2013(a) Current: Federal $ (3 ) $ (2,019 ) $ 5,687 State 29 98 1,134 Foreign 242 205 378 268 (1,716 ) 7,199 Deferred: Federal (4,353 ) (422 ) (930 ) State (1,403 ) (1,383 ) (4,048 ) Foreign (6,843 ) (8,769 ) (8,232 ) 12,599 (10,574 ) (13,210 ) Valuation allowance 12,700 12,774 9,710 Income tax provision $ 369 $ 484 $ 3,699 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Years Ended December 31, 2015 2014(a) 2013(a) Income tax expense (benefit) at the federal statutory rate $ (20,790 ) $ (15,360 ) $ 2,295 State income tax, net of federal tax benefit (931 ) (848 ) (1,923 ) Foreign income taxes, net (2,818 ) 337 (3,189 ) Goodwill impairment 8,340 — — Non-deductible stock-based compensation 3,546 3,765 1,149 Research and development credits (88 ) (325 ) (2,629 ) Change in valuation allowance 12,700 12,774 7,235 Deferred tax adjustments — — 617 Other 410 141 144 $ 369 $ 484 $ 3,699 |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | December 31, 2015 2014(a) Deferred tax assets: Net operating loss carryforward $ 23,787 $ 25,315 Federal and state credits 8,189 5,139 Investments 5,422 — Accruals and provisions 5,409 5,743 Stock options 2,500 3,640 Gross deferred tax assets 45,307 39,837 Less: valuation allowance (36,530 ) (28,055 ) Net deferred tax assets 8,777 11,782 Deferred tax liabilities: Capitalized software (7,534 ) (9,187 ) Intangible assets (1,154 ) (1,362 ) Fixed assets (851 ) (1,893 ) Net deferred tax liabilities (9,539 ) (12,442 ) Net deferred tax asset (liabilities) $ (762 ) $ (660 ) |
Summary of Operating Loss Carryforwards [Table Text Block] | Net operating loss: Balance at December 31, 2015 (in thousands) Beginning Expiration Year Federal $ 19,216 2033 State $ 30,554 Various jurisdictions from 2019 to 2030 Foreign $ 65,946 Generally do not expire, but are subject to certain limitations |
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | December 31, 2015 2014 2013 Unrecognized tax benefits – beginning balance $ 1,570 $ 1,700 $ 824 Gross increases – tax positions taken in prior period — — 642 Gross decreases – tax positions taken in prior period (14 ) (219 ) — Gross increases– tax positions taken in current period 70 89 234 Unrecognized tax benefits – ending balance $ 1,626 $ 1,570 $ 1,700 |
Note 16 - Net Income (Loss) P44
Note 16 - Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Years Ended December 31, 201 5 201 4 201 3 Deferred stock consideration and unvested restricted stock 596 768 216 Stock options, convertible notes, and warrant 8,223 6,489 3,534 8,819 7,257 3,750 |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Years Ended December 31, 201 5 201 4 201 3 Numerator: Income (loss) from continuing operations $ (61,515 ) $ (45,660 ) $ 3,051 Denominator: Weighted average common shares used in computation of income (loss) per share from continuing operations, basic 29,174 28,461 27,764 Deferred stock consideration and restricted stock — — 199 Stock options and warrants — — 1,088 Weighted average common shares used in computation of income (loss) per share from continuing operations, diluted 29,174 28,461 29,051 Income (loss) per share from continuing operations, basic $ (2.11 ) $ (1.60 ) $ 0.11 Income (loss) per share from continuing operations, diluted $ (2.11 ) $ (1.60 ) $ 0.11 |
Note 18 - Segment Information (
Note 18 - Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | Years Ended December 31, 201 5 2014 2013 Revenue: North America $ 249,224 $ 293,096 $ 341,737 International 133,373 181,825 172,333 $ 382,597 $ 474,921 $ 514,070 Long Lived Assets: North America $ 9,033 $ 12,723 International 4,529 6,819 $ 13,562 $ 19,542 |
Note 19 - Supplemental Cash F46
Note 19 - Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | Years Ended December 31, 201 5 201 4 201 3 Cash paid for interest, net $ 1,860 $ 30 $ — Cash paid for (received from) income taxes, net $ (1,836) $ 1,093 $ 3,474 Non-cash investing and financing activities: Capitalized software development costs resulting from stock-based compensation and deferred payment obligations $ 390 $ 470 $ 443 Issuance of Hercules warrant $ 250 $ — $ — Unpaid purchases of property and equipment $ 193 $ 113 $ 83 Assets acquired under capital leases $ 38 $ 1,727 $ — Investment related to the ClubLocal disposition $ — $ 4,500 $ — Deferred payment obligation decrease $ — $ — $ (122 ) |
Note 21 - Quarterly Informati47
Note 21 - Quarterly Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Tables | |
Schedule of Quarterly Financial Information [Table Text Block] | Dec 31, 201 5 Sept 30, 201 5 June 30, 201 5 Mar 31, 201 5 Dec 31, 201 4 Sept 30, 201 4 June 30, 201 4 Mar 31, 201 4 Revenue $ 88,977 $ 95,282 $ 98,776 $ 99,563 $ 109,009 $ 117,623 $ 123,553 $ 124,736 Cost of revenue $ 48,131 $ 53,671 $ 55,390 $ 56,217 $ 61,708 $ 64,154 $ 63,461 $ 63,398 Loss from continuing operations $ (2,504 ) $ (35,637 ) $ (10,593 ) $ (12,782 ) $ (17,737 ) $ (11,284 ) $ (10,326 ) $ (6,313 ) Income (loss) from discontinued operations, net of income taxes $ — $ — $ — $ — $ (279 ) $ — $ 31 $ (371 ) Net loss $ (2,504 ) $ (35,637 ) $ (10,593 ) $ (12,782 ) $ (17,458 ) $ (11,284 ) $ (10,295 ) $ (5,973 ) Net income (loss) per share: Basic and diluted: Loss from continuing operations $ (0.09 ) $ (1.22 ) $ (0.36 ) $ (0.44 ) $ (0.62 ) $ (0.40 ) $ (0.36 ) $ (0.22 ) Income (loss) from discontinued operations, net of income taxes — — — — 0.01 — — (0.01 ) Net loss per share $ (0.09 ) $ (1.22 ) $ (0.36 ) $ (0.44 ) $ (0.61 ) $ (0.40 ) $ (0.36 ) $ (0.21 ) |
Note 1 - Organization and Des48
Note 1 - Organization and Description of Business (Details Textual) - USD ($) | Dec. 17, 2015 | Nov. 09, 2015 | Apr. 30, 2015 | Apr. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Hercules [Member] | Cash [Member] | ||||||||
Proceeds from Issuance of Long-term Debt | $ 15,000,000 | |||||||
Hercules [Member] | ||||||||
Debt Instrument, Face Amount | 25,000,000 | $ 25,000,000 | ||||||
Proceeds from Issuance of Long-term Debt | 24,700,000 | |||||||
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | $ 1,500,000 | $ 1,500,000 | ||||||
Debt Instrument, Term | 3 years | |||||||
Debt Instrument, Covenant Description, Foreign Subsidiary Exclusion, Current | $ 8,000,000 | |||||||
Debt Instrument, Covenant Description, Foreign Subsidiary Exclusion, Year Two | 5,500,000 | |||||||
Debt Instrument, Covenant Description, Foreign Subsidiary Exclusion, Annually Thereafter | 4,000,000 | |||||||
Debt Instrument, Covenant Description, Aggregate Foreign Subsidiary Exclusion | 18,000,000 | |||||||
Loan Processing Fee | $ 200,000 | |||||||
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents | $ 15,000,000 | |||||||
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents, Positive Earnings Achieved | 12,500,000 | |||||||
VantagePoint Notes [Member] | Convertible Debt [Member] | ||||||||
Notes Payable, Related Parties, Noncurrent | 5,000,000 | |||||||
VantagePoint Notes [Member] | ||||||||
Additional Notes Issuable | $ 5,000,000 | |||||||
Health Care Benefit Reserve [Member] | ||||||||
Restricted Cash and Cash Equivalents | 200,000 | $ 200,000 | ||||||
Convertible Debt [Member] | ||||||||
Notes Payable, Related Parties, Noncurrent | 5,000,000 | |||||||
Proceeds from Issuance of Long-term Debt | 24,700,000 | |||||||
Cash and Cash Equivalents, at Carrying Value | 18,833,000 | $ 43,720,000 | $ 77,514,000 | $ 92,320,000 | ||||
Short-term Investments | 359,000 | 904,000 | ||||||
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents | 15,000,000 | |||||||
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents, Positive Earnings Achieved | 12,500,000 | |||||||
Restricted Cash and Cash Equivalents | 3,500,000 | 3,600,000 | ||||||
Working Capital | 60,600,000 | |||||||
Operating Income (Loss) | $ (60,870,000) | $ (46,112,000) | $ 6,164,000 |
Note 2 - Summary of Significa49
Note 2 - Summary of Significant Accounting Policies (Details Textual) | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Health Care Benefit Reserve [Member] | |||
Restricted Cash and Cash Equivalents | $ 200,000 | $ 200,000 | |
Domestic [Member] | |||
Cash, Uninsured Amount | 23,300,000 | ||
Foreign [Member] | |||
Cash, Uninsured Amount | 12,500,000 | ||
Accrued Media Expense [Member] | |||
Accounts Payable, Current | $ 17,300,000 | 17,100,000 | |
Computer Equipment [Member] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Office Equipment [Member] | |||
Property, Plant and Equipment, Useful Life | 5 years | ||
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment, Useful Life | 7 years | ||
Computer Software, Intangible Asset [Member] | |||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||
Minimum [Member] | |||
Finite-Lived Intangible Asset, Useful Life | 2 years | ||
Fair Value Estimate Income Based Approach Weight | 50.00% | ||
Maximum [Member] | |||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||
Fair Value Estimate Income Based Approach Weight | 66.70% | ||
Employee Related Liabilities, Current [Member] | |||
Self Insurance Reserve, Current | $ 1,300,000 | 500,000 | |
Prepaid Expenses and Other Current Assets [Member] | Reclassification from Current Deferred Tax Assets to Noncurrent Deferred Tax Assets [Member] | December 31, 2014 [Member] | |||
Prior Period Reclassification Adjustment | 1,800,000 | ||
Prepaid Expenses and Other Current Assets [Member] | |||
Deferred Sales Commission | 200,000 | 600,000 | |
Other Assets [Member] | Reclassification from Current Deferred Tax Assets to Noncurrent Deferred Tax Assets [Member] | December 31, 2014 [Member] | |||
Prior Period Reclassification Adjustment | 100,000 | ||
Deferred Rent and Other Liabilities [Member] | Reclassification from Current Deferred Tax Assets to Noncurrent Deferred Tax Assets [Member] | December 31, 2014 [Member] | |||
Prior Period Reclassification Adjustment | 1,700,000 | ||
Product and Technology [Member] | |||
Research and Development Expense | 6,900,000 | 15,500,000 | $ 9,500,000 |
Restricted Cash and Cash Equivalents | $ 3,500,000 | 3,600,000 | |
Number of Vendors | 2 | ||
Accounts and Other Receivables, Net, Current | $ 3,600,000 | 600,000 | |
Accounts Payable, Current | 33,581,000 | 44,874,000 | |
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents | $ 15,000,000 | ||
Debt Instrument, Covenant Description, Number of Consecutive Quarters | 3 | ||
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents, Positive Earnings Achieved | $ 12,500,000 | ||
Certificates of Deposit, Automatic Renewal Period | 1 year | ||
Number of Reportable Segments | 1 | ||
Restructuring Charges, Cash Payment Period | 1 year | ||
Advertising Expense | $ 2,100,000 | $ 2,900,000 | $ 1,700,000 |
Note 2 - Summary of the Allowan
Note 2 - Summary of the Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for doubtful accounts as of the beginning of the year | $ 961 | $ 2,212 | $ 259 |
Additions charged to expense | 563 | 2,621 | 6,080 |
Write-offs | (1,026) | (4,511) | (4,396) |
Recoveries | 305 | 639 | 268 |
Allowance for doubtful accounts as of the end of the year | $ 803 | $ 961 | $ 2,212 |
Note 3 - Fair Value of Financ51
Note 3 - Fair Value of Financial Instruments (Details Textual) NZD in Millions | Sep. 18, 2015USD ($) | Apr. 10, 2015USD ($) | Apr. 10, 2015NZD | Mar. 31, 2014USD ($) | Mar. 31, 2013USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Non-marketable Investments [Member] | Club Local [Member] | |||||||||
Cost Method Investments | $ 4,500,000 | $ 4,500,000 | |||||||
Club Local [Member] | |||||||||
Cost Method Investments | $ 4,500,000 | ||||||||
Cost Method Investment, Ownership Percentage | 14.20% | ||||||||
Investment in Service Provider [Member] | |||||||||
Payments to Acquire Other Investments | $ 2,000,000 | $ 2,500,000 | |||||||
Cost Method Investment, Ownership Percentage Acquired | 3.20% | 4.00% | |||||||
Earnout Consideration Payment [Member] | Sure Fire [Member] | |||||||||
Payments of Merger Related Costs, Financing Activities | $ 300,000 | NZD 0.4 | |||||||
Sure Fire [Member] | |||||||||
Payments of Merger Related Costs, Financing Activities | $ 100,000 | ||||||||
Net Working Capital Adjustments | $ 100,000 | NZD 0.2 | |||||||
Asia Pacific [Member] | |||||||||
Goodwill, Impairment Loss | $ 27,800,000 | $ 27,800,000 | |||||||
Cost Method Investments | 9,000,000 | $ 9,000,000 | |||||||
Payments of Merger Related Costs, Financing Activities | $ 529,000 | ||||||||
Payments to Acquire Other Investments | $ 2,000,000 | $ 2,500,000 | |||||||
Goodwill, Impairment Loss | $ 27,800,000 |
Note 3 - Basis of Fair Value Me
Note 3 - Basis of Fair Value Measurement (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets: | ||
Cash and cash equivalents | $ 18,833,000 | $ 43,720,000 |
Restricted cash—term loan | 15,000,000 | |
Short-term investments | $ 359,000 | $ 904,000 |
Restricted cash | ||
Liabilities: | ||
Acquisition-related contingent consideration | ||
Fair Value, Inputs, Level 2 [Member] | ||
Assets: | ||
Cash and cash equivalents | ||
Restricted cash—term loan | ||
Short-term investments | ||
Restricted cash | $ 3,502,000 | $ 3,589,000 |
Liabilities: | ||
Acquisition-related contingent consideration | ||
Fair Value, Inputs, Level 3 [Member] | ||
Assets: | ||
Cash and cash equivalents | ||
Restricted cash—term loan | ||
Short-term investments | ||
Restricted cash | ||
Liabilities: | ||
Acquisition-related contingent consideration | $ 349,000 | |
Cash and cash equivalents | $ 18,833,000 | $ 43,720,000 |
Restricted cash—term loan | 15,000,000 | |
Short-term investments | 359,000 | $ 904,000 |
Restricted cash | $ 3,502,000 | 3,589,000 |
Acquisition-related contingent consideration | $ 349,000 |
Note 3 - Financial Instruments
Note 3 - Financial Instruments Not Recorded at Fair Value on a Recurring Basis (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Vantage Point [Member] | |
Convertible Notes, Related Party | $ 5,000 |
Convertible notes- related party | 4,600 |
Hercules term loan | 24,546 |
Term loan | $ 24,500 |
Note 4 - Acquisitions (Details
Note 4 - Acquisitions (Details Textual) NZD in Millions | Sep. 18, 2015USD ($) | Apr. 10, 2015USD ($) | Apr. 10, 2015NZD | Nov. 21, 2014USD ($)shares | Mar. 21, 2014USD ($) | Mar. 21, 2014NZD | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Mar. 21, 2014NZD |
Kickserv [Member] | Trade Names [Member] | ||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 600,000 | |||||||||
Kickserv [Member] | Developed Technology Rights [Member] | ||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 8 years | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 3,000,000 | |||||||||
Kickserv [Member] | Customer Relationships [Member] | ||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 700,000 | |||||||||
Kickserv [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 250,000 | |||||||||
Kickserv [Member] | ||||||||||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | $ 0 | |||||||||
Business Combination, Consideration Transferred | 6,750,000 | |||||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 4,000,000 | |||||||||
Payments to Acquire Businesses, Gross | $ 5,300,000 | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 4,280,000 | |||||||||
Fair Value Inputs, Discount Rate | 15.00% | |||||||||
Sure Fire [Member] | Customer Relationships [Member] | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 1,300,000 | |||||||||
Finite-Lived Intangible Asset, Useful Life | 3 years | 3 years | ||||||||
Sure Fire [Member] | Maximum [Member] | ||||||||||
Business Combination, Contingent Consideration, Liability | NZD | NZD 2 | |||||||||
Sure Fire [Member] | Paid April 2015 [Member] | ||||||||||
Business Acquisition, Percentage of Indemnity Holdback | 65.00% | 65.00% | ||||||||
Business Acquisition, Indemnity Holdback, Current | $ 200,000 | |||||||||
Sure Fire [Member] | Paid October 2015 [Member] | ||||||||||
Business Acquisition, Percentage of Indemnity Holdback | 35.00% | 35.00% | ||||||||
Business Acquisition, Indemnity Holdback, Current | $ 100,000 | |||||||||
Sure Fire [Member] | Earnout Consideration Payment [Member] | ||||||||||
Payments of Merger Related Costs, Financing Activities | $ 300,000 | NZD 0.4 | ||||||||
Sure Fire [Member] | Indemnity Holdback Release [Member] | ||||||||||
Payments of Merger Related Costs | 200,000 | 0.3 | ||||||||
Sure Fire [Member] | ||||||||||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | 0 | |||||||||
Business Combination, Consideration Transferred | 2,400,000 | NZD 2.8 | ||||||||
Payments to Acquire Businesses, Gross | $ 1,500,000 | NZD 1.7 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 1,280,000 | |||||||||
Fair Value Inputs, Discount Rate | 25.00% | 25.00% | ||||||||
Fair Value Assumptions, Expected Volatility Rate | 30.00% | 30.00% | ||||||||
Fair Value Assumptions, Risk Free Interest Rate | 0.14% | 0.14% | ||||||||
Business Acquisition, Fair Value of Indemnity Holdback | $ 300,000 | NZD 0.4 | ||||||||
Payments of Merger Related Costs | 400,000 | 0.6 | ||||||||
Payments of Merger Related Costs, Financing Activities | $ 100,000 | |||||||||
Net Working Capital Adjustments | $ 100,000 | NZD 0.2 | ||||||||
Trade Names [Member] | Maximum [Member] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | ||||||||||
Trade Names [Member] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | 10 years | ||||||||
Developed Technology Rights [Member] | Maximum [Member] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 8 years | 8 years | ||||||||
Customer Relationships [Member] | Maximum [Member] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 4 years | 4 years | ||||||||
Maximum [Member] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||||||
Payments of Merger Related Costs, Financing Activities | $ 529,000 |
Note 4 - Assets Acquired and Li
Note 4 - Assets Acquired and Liabilities Assumed (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Kickserv [Member] | |
Assets acquired: | |
Cash and cash equivalents | $ 58 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 4,280 |
Goodwill | 3,985 |
Total assets acquired | 8,323 |
Liabilities assumed: | |
Non-interest bearing liabilities | 24 |
Long-term debt | 350 |
Deferred tax liabilities | 1,249 |
Total liabilities assumed | 1,623 |
Total fair value of net assets acquired | 6,700 |
Sure Fire [Member] | |
Assets acquired: | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 1,280 |
Goodwill | 2,350 |
Total assets acquired | 3,973 |
Accounts receivable | 330 |
Property and equipment | 13 |
Liabilities assumed: | |
Deferred tax liabilities | 358 |
Total liabilities assumed | 1,535 |
Total fair value of net assets acquired | 2,438 |
Deferred revenue | 284 |
Accrued compensation and benefits | 111 |
Other | 782 |
Goodwill | $ 20,129 |
Note 5 - Goodwill and Finite-56
Note 5 - Goodwill and Finite-lived Intangible Assets (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 31, 2015 | |
Income Approach Valuation Technique [Member] | Asia Pacific [Member] | |||||
Goodwill Valuation Approach, Percentage | 50.00% | ||||
Market Approach Valuation Technique [Member] | Asia Pacific [Member] | |||||
Goodwill Valuation Approach, Percentage | 50.00% | ||||
Asia Pacific [Member] | |||||
Goodwill | $ 6,449 | $ 34,509 | $ 32,388 | $ 34,100 | |
Goodwill, Impairment Loss | $ 27,800 | $ 27,800 | |||
Fair Value Inputs, Long-term Revenue Growth Rate | 3.00% | 2.00% | |||
Fair Value Inputs, Discount Rate | 17.00% | 20.50% | |||
North America [Member] | |||||
Goodwill | $ 13,680 | 13,680 | 9,695 | ||
Goodwill, Impairment Loss | |||||
Fair Value Inputs, Long-term Revenue Growth Rate | 2.00% | ||||
Fair Value Inputs, Discount Rate | 18.00% | ||||
Goodwill | $ 20,129 | $ 48,189 | $ 42,083 | ||
Goodwill, Impairment Loss | 27,800 | ||||
Amortization of Intangible Assets | $ 1,400 | $ 1,200 | $ 1,200 |
Note 5 - Goodwill (Details)
Note 5 - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
North America [Member] | ||
Goodwill | $ 13,680 | $ 9,695 |
Goodwill acquired | $ 3,985 | |
Acquisition adjustments | ||
Foreign currency translation | ||
Goodwill | $ 13,680 | $ 13,680 |
Accumulated impairment loss | ||
Asia Pacific [Member] | ||
Goodwill | $ 34,509 | 32,388 |
Goodwill acquired | 2,445 | |
Acquisition adjustments | (95) | |
Foreign currency translation | (260) | (229) |
Goodwill | 6,449 | 34,509 |
Accumulated impairment loss | (27,800) | |
Goodwill | 48,189 | 42,083 |
Goodwill acquired | 6,430 | |
Acquisition adjustments | (95) | |
Foreign currency translation | (260) | (229) |
Goodwill | 20,129 | $ 48,189 |
Accumulated impairment loss | $ (27,800) |
Note 5 - Intangible Assets (Det
Note 5 - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Minimum [Member] | Developed Technology Rights [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | 3 years |
Minimum [Member] | Customer Relationships [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 2 years | 2 years |
Minimum [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 2 years | |
Maximum [Member] | Developed Technology Rights [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 8 years | 8 years |
Maximum [Member] | Customer Relationships [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 4 years | 4 years |
Maximum [Member] | Trade Names [Member] | ||
Finite-Lived Intangible Asset, Useful Life | ||
Maximum [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | |
Developed Technology Rights [Member] | ||
Gross Value | $ 5,490 | $ 5,490 |
Accumulated Amortization | 2,920 | 2,130 |
Net | 2,570 | 3,360 |
Customer Relationships [Member] | ||
Gross Value | 1,733 | 1,875 |
Accumulated Amortization | 799 | 306 |
Net | $ 934 | $ 1,569 |
Trade Names [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | 10 years |
Gross Value | $ 570 | $ 570 |
Accumulated Amortization | 63 | 7 |
Net | 507 | 563 |
Gross Value | 7,793 | 7,935 |
Accumulated Amortization | 3,782 | 2,443 |
Net | $ 4,011 | $ 5,492 |
Note 5 - Estimated Amortization
Note 5 - Estimated Amortization Expense over the Remaining Lives (Details) $ in Thousands | Dec. 31, 2015USD ($) |
2,016 | $ 962 |
2,017 | 681 |
2,018 | 584 |
2,019 | 431 |
2,020 | 431 |
Thereafter | 922 |
Total | $ 4,011 |
Note 6 - Property and Equipme60
Note 6 - Property and Equipment (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Depreciation | $ 6.4 | $ 6.4 | $ 5.8 |
Note 6 - Components of Property
Note 6 - Components of Property and Equipment (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Computer Equipment [Member] | ||
Propert Plant and Equipment | $ 19,783,000 | $ 20,345,000 |
Office Equipment [Member] | ||
Propert Plant and Equipment | 3,999,000 | 4,229,000 |
Furniture and Fixtures [Member] | ||
Propert Plant and Equipment | 4,057,000 | 4,976,000 |
Leasehold Improvements [Member] | ||
Propert Plant and Equipment | 11,397,000 | 13,096,000 |
Construction in Progress [Member] | ||
Propert Plant and Equipment | 349,000 | 525,000 |
Propert Plant and Equipment | 39,585,000 | 43,171,000 |
Less: Accumulated depreciation and amortization | (26,035,000) | (23,532,000) |
$ 13,550,000 | $ 19,639,000 |
Note 7 - Software Development62
Note 7 - Software Development Costs (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Capitalized Computer Software, Amortization | $ 11.4 | $ 9.7 | $ 8.1 |
Capitalized Software Development Costs for Projects in Process | $ 2.9 | $ 5 |
Note 7 - Capitalized Software D
Note 7 - Capitalized Software Development Costs (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Capitalized software development costs | $ 67,610,000 | $ 56,498,000 |
Accumulated amortization | (46,919,000) | (34,943,000) |
Capitalized software development costs, net | $ 20,691,000 | $ 21,555,000 |
Note 8 - Commitments and Cont64
Note 8 - Commitments and Contingencies (Details Textual) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Mar. 30, 2016ft² | |
Facility Closing [Member] | ||||
Operating Lease Commitments | $ 2.4 | |||
Operating Leases, Income Statement, Sublease Revenue | 0.4 | |||
Sublease of Space of Plano, Texas Office [Member] | Subsequent Event [Member] | ||||
Area of Real Estate Property | ft² | 21,000 | |||
Certificates of Deposit [Member] | ||||
Restricted Cash and Cash Equivalents | 3.3 | $ 3.4 | ||
Health Care Benefit Reserve [Member] | ||||
Restricted Cash and Cash Equivalents | 0.2 | 0.2 | ||
Operating Leases, Rent Expense, Net | 9.1 | 13 | $ 11.9 | |
Restricted Cash and Cash Equivalents | $ 3.5 | $ 3.6 |
Note 8 - Operating Leases (Deta
Note 8 - Operating Leases (Details) $ in Thousands | Dec. 31, 2015USD ($) |
2,016 | $ 9,070 |
2,017 | 8,236 |
2,018 | 6,687 |
2,019 | 4,927 |
2,020 | 3,835 |
Thereafter | 8,938 |
$ 41,693 |
Note 8 - Purchase Obligations (
Note 8 - Purchase Obligations (Details) $ in Thousands | Dec. 31, 2015USD ($) |
2,016 | $ 2,556 |
Note 9 - Stockholders' Equity67
Note 9 - Stockholders' Equity (Details Textual) - USD ($) $ in Millions | 12 Months Ended | 50 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | |
Stock Repurchased and Retired During Period, Shares | 0 | 0 | 3,400,000 |
Stock Repurchase Program, Authorized Amount | $ 47 | $ 47 | |
Stock Repurchased and Retired During Period, Value | $ 36.3 |
Note 9 - Number of Common Stock
Note 9 - Number of Common Stock Reserved for Future Issuances (Details) shares in Thousands | Dec. 31, 2015shares |
Employee Stock Option [Member] | |
Stock reserved for future issuance (in shares) | 8,196 |
Restricted Stock Units (RSUs) [Member] | |
Stock reserved for future issuance (in shares) | 253 |
Convertible Debt [Member] | |
Stock reserved for future issuance (in shares) | 1,000 |
Warrant [Member] | |
Stock reserved for future issuance (in shares) | 300 |
Stock reserved for future issuance (in shares) | 9,749 |
Note 10 - Stock-based Compens69
Note 10 - Stock-based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Feb. 29, 2016 | Feb. 26, 2016 | Jan. 01, 2016 | Jan. 09, 2015 | Jul. 01, 2008 | Jun. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 02, 2014 |
The 2004 Plan [Member] | Minimum [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |||||||||
The 2004 Plan [Member] | Maximum [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 10 years | |||||||||
The 2004 Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 0 | 0 | ||||||||
The 2008 Plan [Member] | Subsequent Event [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 1,334,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,397,000 | |||||||||
The 2008 Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 2,682,047 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 5,471,350 | |||||||||
Share-based Compensation Arrangement By Share-based Payment Award, Annual Increase in Shares | 2,500,000 | |||||||||
Percent of Common Stock Outstanding | 4.50% | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 7 years | |||||||||
Employee Inducement [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 160,000 | |||||||||
Minimum [Member] | Certain Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 7 years | |||||||||
Maximum [Member] | Certain Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |||||||||
Subsequent Event [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||
Restricted Stock, Shares Issued Net of Shares for Tax Withholdings | 414,239 | |||||||||
Shares Paid for Tax Withholding for Share Based Compensation | 258,255 | |||||||||
Restricted Stock and Restricted Stock Units [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |||||||||
Allocated Share-based Compensation Expense | $ 3,300 | $ 5,600 | $ 3,000 | |||||||
Certain Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Incremental Compensation Cost | $ 1,900 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Number of Employees Affected | 73 | |||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 10.91 | |||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||
Allocated Share-based Compensation Expense | $ 1,000 | |||||||||
Stock Option Exchange [Member] | ||||||||||
Allocated Share-based Compensation Expense | $ 1,500 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 5,801,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | 0.00% | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 100 | $ 2,700 | $ 5,300 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | 3,700 | 9,000 | 4,200 | |||||||
Allocated Share-based Compensation Expense | 8,671 | $ 13,260 | $ 11,505 | |||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 11,100 | |||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 160 days | |||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 6 | $ 4.29 | ||||||||
Annual Corporate Bonus Plan, Percentage to be Settled With Restricted Stock Units | 50.00% | |||||||||
Annual Corporate Bonus Plan, Shares Required to Satisfy Bonus Obligation | 603,000 | |||||||||
Option Exchange Share Price | $ 6 | |||||||||
Options Exchanged in Option Exchange | 2,800,000 |
Note 10 - Summary of Vested and
Note 10 - Summary of Vested and Unvested Options Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Outstanding, number of shares (in shares) | shares | 6,096 |
Outstanding, weighted average exercise price per share (in dollars per share) | $ / shares | $ 9.48 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares | 5,801 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares | $ 4.29 |
Exercised, number of shares (in shares) | shares | (31) |
Exercised, weighted average exercise price per share (in dollars per share) | $ / shares | $ 0.24 |
Forfeited, number of shares (in shares) | shares | (5,318) |
Forfeited, weighted average exercise price per share (in dollars per share) | $ / shares | $ 9.33 |
Outstanding, number of shares (in shares) | shares | 6,548 |
Outstanding, weighted average exercise price per share (in dollars per share) | $ / shares | $ 5.05 |
Outstanding, weighted average remaining contractual life (in years) | 6 years 109 days |
Vested and exercisable at June 30, 2015, number of shares (in shares) | shares | 1,747 |
Vested and exercisable at June 30, 2015, weighted average exercise price per share (in dollars per share) | $ / shares | $ 7.83 |
Vested and exercisable at June 30, 2015, weighted average remaining contractual life (in years) | 5 years 109 days |
Unvested at June 30, 2015, net of estimated forfeitures, number of shares (in shares) | shares | 3,902 |
Unvested at June 30, 2015, net of estimated forfeitures, weighted average exercise price per share (in dollars per share) | $ / shares | $ 4.06 |
Unvested at June 30, 2015, net of estimated forfeitures, weighted average remaining contractual life (in years) | 6 years 292 days |
Note 10 - Weighted Average Assu
Note 10 - Weighted Average Assumptions Used to Estimate Fair Value of Stock Options Granted (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 1.55% | 1.64% | 0.95% |
Expected life (in years) | 4 years 328 days | 4 years 361 days | 4 years 295 days |
Expected volatility | 57.00% | 54.00% | 59.00% |
Weighted average fair value per share (in dollars per share) | $ 2.24 | $ 3.63 | $ 6.33 |
Note 10 - Summary of Restricted
Note 10 - Summary of Restricted Stock Awards and Restricted Stock Unit Awards (Details) - Restricted Stock and Restricted Stock Units [Member] | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Unvested at December 31, 2014, number of shares (in shares) | 912,000 |
Unvested at December 31, 2014, weighted average grant date fair value (in dollars per share) | $ / shares | $ 5.98 |
Granted, number of shares (in shares) | 0 |
Forfeited, number of shares (in shares) | (138,000) |
Forfeited, weighted average grant date fair value (in dollars per share) | $ / shares | $ 10.06 |
Vested, number of shares (in shares) | (439,000) |
Vested, weighted average grant date fair value (in dollars per share) | $ / shares | $ 8.38 |
Unvested at September 30, 2015, number of shares (in shares) | 335,000 |
Unvested at September 30, 2015, weighted average grant date fair value (in dollars per share) | $ / shares | $ 5.37 |
Note 10 - Summary of Stock Base
Note 10 - Summary of Stock Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock-based compensation | $ 9,061 | $ 13,730 | $ 11,948 |
Less: Capitalized stock-based compensation | 390 | 470 | 443 |
Stock-based compensation expense, net | $ 8,671 | $ 13,260 | $ 11,505 |
Note 10 - Stock-based Compens74
Note 10 - Stock-based Compensation Expense, Net of Capitalization, Included in the Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cost of Sales [Member] | |||
Stock-based compensation expense, net | |||
Allocated Share-based Compensation Expense | $ 487 | $ 932 | $ 697 |
Selling and Marketing Expense [Member] | |||
Stock-based compensation expense, net | |||
Allocated Share-based Compensation Expense | 1,510 | 2,959 | 3,040 |
Product and Technology [Member] | |||
Stock-based compensation expense, net | |||
Allocated Share-based Compensation Expense | 725 | 825 | 627 |
General and Administrative Expense [Member] | |||
Stock-based compensation expense, net | |||
Allocated Share-based Compensation Expense | 5,949 | 8,544 | 7,141 |
Allocated Share-based Compensation Expense | $ 8,671 | $ 13,260 | $ 11,505 |
Note 11 - Restructuring Charg75
Note 11 - Restructuring Charges (Details Textual) $ in Millions | Dec. 31, 2015USD ($) |
Restructuring Plan 2015 [Member] | Expenses Relating to Facilitation and Execution of the Plan [Member] | |
Restructuring and Related Cost, Expected Cost | $ 0.7 |
Note 11 - Summary of the 2015 A
Note 11 - Summary of the 2015 Accrued Restructuring Liability (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Severance [Member] | Restructuring Plan 2015 [Member] | ||
Balance at December 31, 2014 | $ 0 | |
Amounts accrued | 2,332,000 | |
Amounts paid | $ (1,742,000) | |
Accretion | ||
Non-cash items | $ (4,000) | |
Balance at December 31, 2015 | 586,000 | $ 0 |
Facility Closing [Member] | Restructuring Plan 2015 [Member] | ||
Balance at December 31, 2014 | 0 | |
Amounts accrued | 1,268,000 | |
Amounts paid | (157,000) | |
Accretion | 69,000 | |
Non-cash items | (574,000) | |
Balance at December 31, 2015 | 606,000 | 0 |
Other Restructuring [Member] | Restructuring Plan 2015 [Member] | ||
Balance at December 31, 2014 | 0 | |
Amounts accrued | 4,125,000 | |
Amounts paid | $ (3,313,000) | |
Accretion | ||
Non-cash items | $ (468,000) | |
Balance at December 31, 2015 | 344,000 | 0 |
Restructuring Plan 2015 [Member] | ||
Balance at December 31, 2014 | 0 | |
Amounts accrued | 7,725,000 | |
Amounts paid | (5,212,000) | |
Accretion | 69,000 | |
Non-cash items | (1,046,000) | |
Balance at December 31, 2015 | 1,536,000 | 0 |
Balance at December 31, 2014 | 3,196,000 | |
Amounts accrued | 7,546,000 | 5,927,000 |
Balance at December 31, 2015 | $ 3,329,000 | $ 3,196,000 |
Note 11 - Summary of the 2014 A
Note 11 - Summary of the 2014 Accrued Restructuring Liability (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Facility Closing [Member] | Restructuring Plan 1, 2014 [Member] | |
Balance at December 31, 2014 | $ 2,519,000 |
Amounts paid | (771,000) |
Accretion | 45,000 |
Balance at December 31, 2015 | 1,793,000 |
Restructuring Plan 1, 2014 [Member] | |
Balance at December 31, 2014 | 2,519,000 |
Amounts paid | (771,000) |
Accretion | 45,000 |
Balance at December 31, 2015 | 1,793,000 |
Balance at December 31, 2014 | 3,196,000 |
Balance at December 31, 2015 | $ 3,329,000 |
Note 11 - Summary of the Accrue
Note 11 - Summary of the Accrued Restructuring Liability (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Restructuring Plan 2, 2014 [Member] | Employee Severance [Member] | |
Balance at December 31, 2014 | $ 51,000 |
Reversal of amount previously accrued | |
Amounts paid | $ (50,000) |
Non-cash items | $ (1,000) |
Balance at December 31, 2015 | |
Restructuring Plan 2, 2014 [Member] | Facility Closing [Member] | |
Balance at December 31, 2014 | $ 626,000 |
Reversal of amount previously accrued | (179,000) |
Amounts paid | (477,000) |
Non-cash items | $ 30,000 |
Balance at December 31, 2015 | |
Restructuring Plan 2, 2014 [Member] | |
Balance at December 31, 2014 | $ 677,000 |
Reversal of amount previously accrued | (179,000) |
Amounts paid | (527,000) |
Non-cash items | $ 29,000 |
Balance at December 31, 2015 | |
Balance at December 31, 2014 | $ 3,196,000 |
Balance at December 31, 2015 | $ 3,329,000 |
Note 12 - Gain on Deconsolida79
Note 12 - Gain on Deconsolidation of Subsidiary (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | |||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, Tax | $ 1,100 | ||
Deconsolidation, Gain (Loss), Amount | $ 2,853 |
Note 13 - Debt and Other Obli80
Note 13 - Debt and Other Obligations (Details Textual) | Mar. 25, 2016USD ($) | Mar. 24, 2016USD ($) | Dec. 17, 2015USD ($)$ / shares | Nov. 09, 2015USD ($)$ / sharesshares | Apr. 30, 2015USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2015USD ($)$ / shares | Feb. 04, 2016 | Dec. 31, 2014USD ($)$ / shares |
Hercules [Member] | If Prepayment Occurs After April 30, 2017 [Member] | |||||||||
Debt Instrument Prepayment Fee, Percentage | 0.00% | ||||||||
Hercules [Member] | If Prepayment Occurs on or Prior to April 30, 2016 [Member] | |||||||||
Debt Instrument Prepayment Fee, Percentage | 3.00% | ||||||||
Hercules [Member] | If Prepayment Occurs After April 30, 2016 but on or Prior to April 30, 2017 [Member] | |||||||||
Debt Instrument Prepayment Fee, Percentage | 2.00% | ||||||||
Hercules [Member] | Prime Rate [Member] | |||||||||
Debt Instrument, Basis Spread on Variable Rate | 8.50% | ||||||||
Hercules [Member] | Subsequent Event [Member] | |||||||||
Debt Instrument, Covenant Description, Foreign Subsidiary Exclusion, Year Two | $ 5,500,000 | $ 4,000,000 | |||||||
Hercules [Member] | |||||||||
Debt Instrument, Face Amount | $ 25,000,000 | ||||||||
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Minimum | 11.75% | 12.00% | |||||||
Debt Instrument, Interest Rate, Effective Percentage | 12.00% | 12.00% | |||||||
Debt Instrument, Fee Amount | $ 300,000 | ||||||||
Debt Issuance Cost | $ 200,000 | ||||||||
Debt Instrument, Term | 3 years | ||||||||
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | $ 1,500,000 | ||||||||
Debt Instrument Minimum Prepayment, Amount | 2,500,000 | ||||||||
Debt Instrument, Covenant Description, Foreign Subsidiary Exclusion, Current | $ 8,000,000 | ||||||||
Debt Instrument, Covenant Description, Foreign Subsidiary Exclusion, Year Two | 5,500,000 | ||||||||
Debt Instrument, Covenant Description, Foreign Subsidiary Exclusion, Annually Thereafter | 4,000,000 | ||||||||
Debt Instrument, Covenant Description, Aggregate Foreign Subsidiary Exclusion | $ 18,000,000 | ||||||||
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents | $ 15,000,000 | 17,500,000 | |||||||
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents, Positive Earnings Achieved | 12,500,000 | $ 12,500,000 | |||||||
Debt Instrument, Covenant Description, Number of Consecutive Quarters | 2 | 3 | |||||||
Loan Processing Fee | $ 200,000 | ||||||||
VantagePoint Notes [Member] | Vantage Point [Member] | Subsequent Event [Member] | |||||||||
Maximum Percentage of Oustanding shares that may Be Converted | 1.90% | ||||||||
VantagePoint Notes [Member] | Vantage Point [Member] | |||||||||
Convertible Notes, Related Party | 5,000,000 | ||||||||
Additional Notes Issuable | $ 5,000,000 | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | ||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.00001 | ||||||||
Debt Instrument, Convertible, Conversion Ratio | 200 | ||||||||
Debt Instrument, Convertible, Amount of Principal for Conversion of Stock | $ 1,000 | ||||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 5 | ||||||||
Vantage Point [Member] | |||||||||
Convertible Notes, Related Party | $ 5,000,000 | $ 5,000,000 | |||||||
Vantage Point [Member] | |||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 43.00% | 43.00% | |||||||
Minimum [Member] | |||||||||
Capital Lease Obligations Interest Rate | 4.80% | 4.80% | |||||||
Maximum [Member] | |||||||||
Capital Lease Obligations Interest Rate | 5.20% | 5.20% | |||||||
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents | $ 15,000,000 | $ 15,000,000 | |||||||
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents, Positive Earnings Achieved | $ 12,500,000 | $ 12,500,000 | |||||||
Debt Instrument, Covenant Description, Number of Consecutive Quarters | 3 | ||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 300,000 | 177,304 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.85 | $ 2.82 | |||||||
Class of Warrant or Right, Absolute Return Per Share, Maximum | $ / shares | $ 2.55 | ||||||||
Warrants and Rights Outstanding | $ 300,000 | ||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||
Capital Lease Obligations | $ 1,200,000 | $ 1,200,000 | |||||||
Capital Leases, Lessee Balance Sheet, Assets by Major Class, Accumulated Depreciation | 800,000 | 800,000 | |||||||
Capital Lease Obligations, Current | 698,000 | 698,000 | $ 624,000 | ||||||
Capital Lease Obligations, Noncurrent | $ 484,000 | $ 484,000 | $ 1,103,000 |
Note 13 - Long-term Debt (Detai
Note 13 - Long-term Debt (Details) $ in Thousands | Dec. 31, 2015USD ($) | |
Hercules [Member] | Term Loan [Member] | ||
Hercules term loan | $ 25,244 | |
VantagePoint Notes [Member] | Vantage Point [Member] | ||
VantagePoint notes | 5,000 | |
Hercules term loan | 24,546 | |
Less unamortized debt issuance costs (1) | (698) | [1] |
Total debt | 29,546 | |
Less current portion of long-term debt | (8,352) | |
Long-term debt | $ 21,194 | |
[1] | Debt issuance costs are related to the Hercules term loan and are amortized to interest expense over the life of the term loan. |
Note 13 - Future Payments on To
Note 13 - Future Payments on Total Debt (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Hercules [Member] | Term Loan [Member] | |
2,016 | $ 11,647 |
2,017 | 14,130 |
2,018 | 4,806 |
Total minimum payments | 30,583 |
Less amount representing interest | (5,883) |
Total minimum payments less interest | $ 24,700 |
VantagePoint Notes [Member] | Vantage Point [Member] | |
2,016 | |
2,017 | $ 254 |
2,018 | 5,254 |
Total minimum payments | 5,508 |
Less amount representing interest | (508) |
Total minimum payments less interest | 5,000 |
2,016 | 11,647 |
2,017 | 14,384 |
2,018 | 10,060 |
Total minimum payments | 36,091 |
Less amount representing interest | (6,391) |
Total minimum payments less interest | $ 29,700 |
Note 13 - Capital Leases (Detai
Note 13 - Capital Leases (Details) $ in Thousands | Dec. 31, 2015USD ($) |
2,016 | $ 734 |
2,017 | 497 |
2,018 | 2 |
Total minimum payments | 1,233 |
Less amount representing interest | (51) |
Total minimum payments less interest | $ 1,182 |
Note 14 - Income Taxes (Details
Note 14 - Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Other Current Liabilities [Member] | ||||
Accrued Income Taxes | $ 100,000 | |||
Prepaid Expenses and Other Current Assets [Member] | ||||
Income Taxes Receivable | $ 2,000,000 | |||
Other Assets [Member] | ||||
Deferred Tax Assets, Net of Valuation Allowance, Noncurrent | 200,000 | 100,000 | ||
Deferred Rent and Other Liabilities [Member] | ||||
Deferred Tax Liabilities, Net, Noncurrent | 900,000 | 700,000 | ||
Domestic Tax Authority [Member] | Research Tax Credit Carryforward [Member] | ||||
Tax Credit Carryforward, Amount | 5,300,000 | |||
State and Local Jurisdiction [Member] | Research Tax Credit Carryforward [Member] | ||||
Tax Credit Carryforward, Amount | 3,900,000 | |||
State and Local Jurisdiction [Member] | California Enterprise Zone Credits [Member] | ||||
Tax Credit Carryforward, Amount | 1,400,000 | |||
Foreign Tax Authority [Member] | ||||
Tax Credit Carryforward, Amount | 100,000 | |||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 0 | |||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | 0 | |||
Unrealized Deferred Tax Assets | 2,200,000 | |||
Deferred Tax Assets, Valuation Allowance | 36,530,000 | 28,055,000 | ||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 8,500,000 | 12,800,000 | ||
Investments in Foreign Subsidiaries in Excess of Tax Basis | 1,000,000 | |||
Unrecognized Tax Benefits | 1,626,000 | $ 1,570,000 | $ 1,700,000 | $ 824,000 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 1,500,000 | |||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | $ 800,000 |
Note 14 - Components of Income
Note 14 - Components of Income (Loss) Domestic and Foreign (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
United States | $ (25,495) | $ (18,997) | $ 25,044 |
Foreign | (35,651) | (26,179) | (18,294) |
$ (61,146) | $ (45,176) | $ 6,750 |
Note 14 - Components of Incom86
Note 14 - Components of Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||
Federal | $ (3) | $ (2,019) | $ 5,687 |
State | 29 | 98 | 1,134 |
Foreign | 242 | 205 | 378 |
268 | (1,716) | 7,199 | |
Deferred: | |||
Federal | (4,353) | (422) | (930) |
State | (1,403) | (1,383) | (4,048) |
Foreign | (6,843) | (8,769) | (8,232) |
12,599 | (10,574) | (13,210) | |
Valuation allowance | 12,700 | 12,774 | 9,710 |
Income tax provision | $ 369 | $ 484 | $ 3,699 |
Note 14 - Income Tax Rate Recon
Note 14 - Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income tax expense (benefit) at the federal statutory rate | $ (20,790) | $ (15,360) | $ 2,295 |
State income tax, net of federal tax benefit | (931) | (848) | (1,923) |
Foreign income taxes, net | (2,818) | $ 337 | $ (3,189) |
Goodwill impairment | 8,340 | ||
Non-deductible stock-based compensation | 3,546 | $ 3,765 | $ 1,149 |
Research and development credits | (88) | (325) | (2,629) |
Change in valuation allowance | $ 12,700 | $ 12,774 | 7,235 |
Deferred tax adjustments | 617 | ||
Other | $ 410 | $ 141 | 144 |
$ 369 | $ 484 | $ 3,699 |
Note 14 - Deferred Tax Assets a
Note 14 - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 23,787 | $ 25,315 |
Federal and state credits | 8,189 | $ 5,139 |
Investments | 5,422 | |
Accruals and provisions | 5,409 | $ 5,743 |
Stock options | 2,500 | 3,640 |
Gross deferred tax assets | 45,307 | 39,837 |
Less: valuation allowance | (36,530) | (28,055) |
Net deferred tax assets | 8,777 | 11,782 |
Deferred tax liabilities: | ||
Capitalized software | (7,534) | (9,187) |
Intangible assets | (1,154) | (1,362) |
Fixed assets | (851) | (1,893) |
Net deferred tax liabilities | (9,539) | (12,442) |
Net deferred tax asset (liabilities) | $ (762) | $ (660) |
Note 14 - Summary of Net Operat
Note 14 - Summary of Net Operating Loss Carryforwards (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Domestic Tax Authority [Member] | |
Operating Loss Carryforwards | $ 19,216 |
State and Local Jurisdiction [Member] | |
Operating Loss Carryforwards | 30,554 |
Foreign Tax Authority [Member] | |
Operating Loss Carryforwards | $ 65,946 |
Note 14 - Summary of Unrecogniz
Note 14 - Summary of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Unrecognized tax benefits – beginning balance | $ 1,570 | $ 1,700 | $ 824 |
Gross increases – tax positions taken in prior period | $ 642 | ||
Gross decreases – tax positions taken in prior period | $ (14) | $ (219) | |
Gross increases– tax positions taken in current period | 70 | 89 | $ 234 |
Unrecognized tax benefits – ending balance | $ 1,626 | $ 1,570 | $ 1,700 |
Note 15 - Retirement Contribu91
Note 15 - Retirement Contribution Plans (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 0 | $ 0 | $ 0 |
Note 16 - Antidilutive Securiti
Note 16 - Antidilutive Securities Excluded in Earnings Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred Stock Consideration and Unvested Restricted Stock [Member] | |||
Antidilutive securities (in shares) | 596 | 768 | 216 |
Stock Option and Warrant [Member] | |||
Antidilutive securities (in shares) | 8,223 | 6,489 | 3,534 |
Antidilutive securities (in shares) | 8,819 | 7,257 | 3,750 |
Note 16 - Earnings Per Share (D
Note 16 - Earnings Per Share (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator: | |||
Income (loss) from continuing operations | $ (61,515) | $ (45,660) | $ 3,051 |
Denominator: | |||
Weighted average common shares used in computation of income (loss) per share from continuing operations, basic (in shares) | 29,174 | 28,461 | 27,764 |
Deferred stock consideration and restricted stock (in shares) | 199 | ||
Stock options and warrants (in shares) | 1,088 | ||
Weighted average common shares used in computation of income (loss) per share from continuing operations, diluted (in shares) | 29,174 | 28,461 | 29,051 |
Income (loss) per share from continuing operations, basic (in dollars per share) | $ (2.11) | $ (1.60) | $ 0.11 |
Income (loss) per share from continuing operations, diluted (in dollars per share) | $ (2.11) | $ (1.60) | $ 0.11 |
Note 17 - Variable Interest E94
Note 17 - Variable Interest Entities (Details Textual) € in Thousands, $ in Thousands | Jul. 06, 2012EUR (€) | Jul. 06, 2012USD ($) | Aug. 31, 2013EUR (€) | Aug. 31, 2013USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012EUR (€) | Dec. 31, 2012USD ($) |
Oxata SMB [Member] | Maximum [Member] | |||||||||
Loan to Franchisee | € 2,900 | $ 3,700 | |||||||
Oxata SMB [Member] | |||||||||
Loan to Franchisee | € 920 | $ 1,200 | € 1,450 | $ 1,900 | |||||
Asset Impairment Charges | $ 3,300 | ||||||||
Provision for Doubtful Accounts | $ 1,600 | ||||||||
Asset Impairment Charges | 3,279 | ||||||||
Provision for Doubtful Accounts | $ 260 | $ 1,649 | $ 2,304 |
Note 18 - Segment Information95
Note 18 - Segment Information (Details Textual) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
AUSTRALIA | |||||||||||
Long-Lived Assets | $ 1,700 | $ 1,700 | $ 1,700 | $ 1,700 | |||||||
Revenues | 52,500 | 80,300 | $ 85,000 | ||||||||
Long-Lived Assets | 13,562 | 19,542 | 13,562 | 19,542 | |||||||
Revenues | $ 88,977 | $ 95,282 | $ 98,776 | $ 99,563 | $ 109,009 | $ 117,623 | $ 123,553 | $ 124,736 | $ 382,597 | $ 474,921 | $ 514,070 |
Number of Operating Segments | 1 |
Note 18 - Revenue and Long Live
Note 18 - Revenue and Long Lived Assets by Geographic Area (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
North America [Member] | |||
Revenue | $ 249,224 | $ 293,096 | $ 341,737 |
Long Lived Assets | 9,033 | 12,723 | |
International [Member] | |||
Revenue | 133,373 | 181,825 | $ 172,333 |
Long Lived Assets | 4,529 | 6,819 | |
Revenue | 382,597 | 474,921 | $ 514,070 |
Long Lived Assets | $ 13,562 | $ 19,542 |
Note 19 - Supplemental Cash F97
Note 19 - Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash paid for interest, net | $ 1,860 | $ 30 | |
Cash paid for (received from) income taxes, net | (1,836) | 1,093 | $ 3,474 |
Non-cash investing and financing activities: | |||
Capitalized software development costs resulting from stock-based compensation and deferred payment obligations | 390 | $ 470 | $ 443 |
Issuance of Hercules warrant | 250 | ||
Unpaid purchases of property and equipment | 193 | $ 113 | $ 83 |
Assets acquired under capital leases | $ 38 | 1,727 | |
Investment related to the ClubLocal disposition | $ 4,500 | ||
Deferred payment obligation decrease | $ (122) |
Note 20 - Discontinued Operat98
Note 20 - Discontinued Operations (Details Textual) - USD ($) | 3 Months Ended | |||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | |
Club Local [Member] | ||||||||
Cost Method Investment, Ownership Percentage | 14.20% | |||||||
Cost Method Investments | $ 4,500,000 | |||||||
Club Local [Member] | ||||||||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | $ 800,000 | |||||||
Discontinued Operation, Tax (Expense) Benefit from Provision for (Gain) Loss on Disposal | 400,000 | |||||||
Cost Method Investments | $ 9,000,000 | $ 9,000,000 | ||||||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | $ (279,000) | $ 31,000 | $ (371,000) |
Note 21 - Quarterly Financial D
Note 21 - Quarterly Financial Data (Details) - USD ($) $ in Thousands | 3 Months Ended | |||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | |
Revenues | $ 88,977 | $ 95,282 | $ 98,776 | $ 99,563 | $ 109,009 | $ 117,623 | $ 123,553 | $ 124,736 |
Cost of revenue | 48,131 | 53,671 | 55,390 | 56,217 | 61,708 | 64,154 | 63,461 | 63,398 |
Loss from continuing operations | $ (2,504) | $ (35,637) | $ (10,593) | $ (12,782) | (17,737) | $ (11,284) | (10,326) | (6,313) |
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | (279) | 31 | (371) | |||||
Net loss | $ (2,504) | $ (35,637) | $ (10,593) | $ (12,782) | $ (17,458) | $ (11,284) | $ (10,295) | $ (5,973) |
Basic and diluted: | ||||||||
Loss from continuing operations (in dollars per share) | $ (0.09) | $ (1.22) | $ (0.36) | $ (0.44) | $ (0.62) | $ (0.40) | $ (0.36) | $ (0.22) |
Income (loss) from discontinued operations, net of income taxes (in dollars per share) | 0.01 | (0.01) | ||||||
Net loss per share (in dollars per share) | $ (0.09) | $ (1.22) | $ (0.36) | $ (0.44) | $ (0.61) | $ (0.40) | $ (0.36) | $ (0.21) |
Note 22 - Subsequent Events (De
Note 22 - Subsequent Events (Details Textual) - Hercules [Member] - USD ($) | Mar. 25, 2016 | Mar. 24, 2016 | Dec. 31, 2015 |
Subsequent Event [Member] | |||
Debt Instrument, Covenant Description, Foreign Subsidiary Exclusion, Year Two | $ 5,500,000 | $ 4,000,000 | |
Debt Instrument, Covenant Description, Foreign Subsidiary Exclusion, Year Two | $ 5,500,000 |