Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document and Entity Information [Abstract] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
Entity Registrant Name | Perion Network Ltd. |
Entity Central Index Key | 0001338940 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2018 |
Entity Filer Category | Accelerated Filer |
Entity Shell Company | false |
Entity Emerging Growth Company | false |
Entity Common Stock, Shares Outstanding | 25,850,188 |
Entity Current Reporting Status | Yes |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 39,109 | $ 31,567 |
Short-term bank deposits | 4,000 | 5,913 |
Accounts receivable (net of allowance for doubtful debt of $609 and $607 at December 31, 2017 and 2018, respectively) | 55,557 | 62,830 |
Prepaid expenses and other current assets | 5,227 | 13,955 |
Total Current Assets | 103,893 | 114,265 |
Property and equipment, net | 15,649 | 17,476 |
Intangible assets, net | 6,496 | 11,309 |
Goodwill | 125,051 | 125,051 |
Deferred taxes | 4,414 | 4,798 |
Other assets | 943 | 1,128 |
Total Assets | 256,446 | 274,027 |
Current Liabilities: | ||
Accounts payable | 38,208 | 39,180 |
Accrued expenses and other liabilities | 17,240 | 17,784 |
Short-term loans and current maturities of long-term and convertible debt | 16,059 | 13,989 |
Deferred revenues | 3,794 | 5,271 |
Payment obligation related to acquisitions | 1,813 | 5,146 |
Total Current Liabilities | 77,114 | 81,370 |
Long-Term Liabilities: | ||
Long-term debt, net of current maturities | 16,667 | 30,026 |
Convertible debt, net of current maturities | 7,726 | 16,693 |
Other long-term liabilities | 6,158 | 7,606 |
Total Liabilities | 107,665 | 135,695 |
Commitments and Contingencies | ||
Shareholders' Equity: | ||
Ordinary shares of ILS 0.03 par value - Authorized: 40,000,000 and 43,333,333 shares at December 31, 2017 and 2018, respectively; Issued: 25,965,360 and 25,965,527 shares at December 31, 2017 and 2018, respectively; Outstanding: 25,850,021 and 25,850,188 shares at December 31, 2017 and 2018, respectively | 211 | 211 |
Additional paid-in capital | 239,693 | 236,975 |
Treasury shares at cost (115,339 shares at December 31, 2017 and 2018) | (1,002) | (1,002) |
Accumulated other comprehensive income | 142 | 532 |
Accumulated deficit | (90,263) | (98,384) |
Total Shareholders' Equity | 148,781 | 138,332 |
Total Liabilities and Shareholders' Equity | $ 256,446 | $ 274,027 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 607 | $ 609 |
Ordinary shares, par value per share | $ 0.03 | $ 0.03 |
Ordinary shares, shares authorized | 43,333,333 | 40,000,000 |
Ordinary shares, shares issued | 25,965,527 | 25,965,360 |
Ordinary shares, shares outstanding | 25,850,188 | 25,850,021 |
Treasury shares | 115,339 | 115,339 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||
Total Revenues | $ 252,845 | $ 273,986 | $ 312,794 |
Costs and Expenses: | |||
Cost of revenues | 23,757 | 24,659 | 25,924 |
Customer acquisition costs and media buy | 128,351 | 130,885 | 140,210 |
Research and development | 18,884 | 17,189 | 25,221 |
Selling and marketing | 38,918 | 52,742 | 54,559 |
General and administrative | 16,450 | 21,911 | 28,827 |
Depreciation and amortization | 9,719 | 16,591 | 25,977 |
Impairment, loss of goodwill and intangibles | 85,667 | ||
Restructuring charges | 2,075 | 728 | |
Total Costs and Expenses | 238,154 | 349,644 | 301,446 |
Income (Loss) from Operations | 14,691 | (75,658) | 11,348 |
Financial expenses, net | 3,794 | 5,922 | 8,288 |
Income (Loss) before Taxes on Income | 10,897 | (81,580) | 3,060 |
Taxes on income (benefit) | 2,776 | (8,826) | 212 |
Net Income (Loss) from Continuing Operations | 8,121 | (72,754) | 2,848 |
Net loss from discontinued operations | (2,647) | ||
Net Income (Loss) | $ 8,121 | $ (72,754) | $ 201 |
Net Earnings (Loss) per Share - Basic: | |||
Continuing operations | $ 0.31 | $ (2.81) | $ 0.11 |
Discontinued operations | (0.10) | ||
Net income (Loss) | 0.31 | (2.81) | 0.01 |
Net Earnings (Loss) per Share - Diluted: | |||
Continuing operations | 0.31 | (2.81) | 0.11 |
Discontinued operations | (0.10) | ||
Net income (Loss) | $ 0.31 | $ (2.81) | $ 0.01 |
Weighted average number of shares - Basic: | |||
Continuing and Discontinued operations | 25,850,067 | 25,849,724 | 25,520,151 |
Weighted average number of shares - Diluted: | |||
Continuing and Discontinued operations | 25,855,225 | 25,849,724 | 25,557,934 |
Search and other [Member] | |||
Revenues: | |||
Total Revenues | $ 126,868 | $ 139,505 | $ 172,683 |
Advertising [Member] | |||
Revenues: | |||
Total Revenues | $ 125,977 | $ 134,481 | $ 140,111 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income (loss) | $ 8,121 | $ (72,754) | $ 201 |
Other comprehensive income (loss): | |||
Change in foreign currency translation adjustment | (167) | 717 | 521 |
Cash Flow Hedge: | |||
Unrealized gain (loss) from cash flow hedges | (429) | 605 | 175 |
Less: reclassification adjustment for net gain (loss) included in net income (loss) | 206 | (525) | (167) |
Net change | (223) | 80 | 8 |
Other comprehensive income (loss) | (390) | 797 | 529 |
Comprehensive Income (loss) | $ 7,731 | $ (71,957) | $ 730 |
STATEMENTS OF CHANGES IN SHAREH
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive income (loss) [Member] | Retained earnings (Accumulated deficit) [Member] | Treasury Shares [Member] | Total | ||
Balance at Dec. 31, 2015 | $ 206 | $ 227,258 | $ (794) | $ (25,831) | $ (1,002) | $ 199,837 | ||
Balance, shares at Dec. 31, 2015 | 25,270,495 | |||||||
Issuance of shares related to acquisitions | $ 1 | 674 | 675 | |||||
Issuance of shares related to acquisitions, shares | 96,993 | |||||||
Issuance of shares related to price adjustment of private placement | $ 2 | (2) | ||||||
Issuance of shares related to price adjustment of private placement, shares | 260,993 | |||||||
Share-based compensation | 6,900 | 6,900 | ||||||
Exercise of share options and vesting of restricted share units | $ 1 | 1 | 2 | |||||
Exercise of share options and vesting of restricted share units, shares | 112,540 | |||||||
Other comprehensive income (loss) | 529 | 529 | ||||||
Net income (loss) | 201 | 201 | ||||||
Balance at Dec. 31, 2016 | $ 210 | 234,831 | (265) | (25,630) | (1,002) | 208,144 | ||
Balance, shares at Dec. 31, 2016 | 25,741,021 | |||||||
Issuance of shares related to acquisitions | ||||||||
Share-based compensation | 2,144 | 2,144 | ||||||
Exercise of share options and vesting of restricted share units | $ 1 | 1 | ||||||
Exercise of share options and vesting of restricted share units, shares | 109,000 | |||||||
Other comprehensive income (loss) | 797 | 797 | ||||||
Net income (loss) | (72,754) | (72,754) | ||||||
Balance at Dec. 31, 2017 | $ 211 | 236,975 | 532 | (98,384) | (1,002) | $ 138,332 | ||
Balance, shares at Dec. 31, 2017 | 25,850,021 | 25,850,021 | ||||||
Share-based compensation | 2,718 | $ 2,718 | ||||||
Exercise of share options and vesting of restricted share units | [1] | [1] | ||||||
Exercise of share options and vesting of restricted share units, shares | 167 | |||||||
Other comprehensive income (loss) | (390) | (390) | ||||||
Net income (loss) | 8,121 | 8,121 | ||||||
Balance at Dec. 31, 2018 | $ 211 | $ 239,693 | $ 142 | $ (90,263) | $ (1,002) | $ 148,781 | ||
Balance, shares at Dec. 31, 2018 | 25,850,188 | 25,850,188 | ||||||
[1] | Less than $1 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | |
Operating activities: | ||||
Net income (loss) | $ 8,121 | $ (72,754) | $ 201 | |
Loss from discontinued operations, net | (2,647) | |||
Net income (loss) from continuing operations | 8,121 | (72,754) | 2,848 | |
Adjustments required to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 9,719 | 16,591 | 25,977 | |
Impairment of intangible assets and goodwill | 85,667 | |||
Restructuring costs related to impairment of property and equipment | 462 | 254 | ||
Share-based compensation expense | 2,718 | 2,112 | 6,844 | |
Foreign currency translation | 3 | 83 | 980 | |
Accretion of payment obligation related to acquisition | 43 | 320 | ||
Accrued interest, net | 1,005 | 475 | 406 | |
Deferred taxes, net | 335 | (8,877) | (3,268) | |
Accrued severance pay, net | (783) | 801 | 214 | |
Change in payment obligation related to acquisitions | 983 | |||
Fair value revaluation - convertible debt | (1,585) | 3,785 | 1,350 | |
Loss from sale of property and equipment | 149 | |||
Net changes in operating assets and liabilities: | ||||
Accounts receivable, net | 7,423 | 8,888 | (5,333) | |
Prepaid expenses and other current assets | 9,451 | (3,241) | 8,613 | |
Accounts payable | (1,066) | 1,106 | (1,702) | |
Accrued expenses and other liabilities | (1,524) | 1,429 | (2,486) | |
Deferred revenues | (1,478) | (95) | (2,365) | |
Net cash provided by continuing operating activities | 32,801 | 36,013 | 33,784 | |
Net cash used in discontinued operating activities | (3,329) | |||
Net cash provided by operating activities | 32,801 | 36,013 | 30,455 | |
Investing activities: | ||||
Purchases of property and equipment | (2,038) | (1,606) | (1,504) | |
Proceeds from sale of property and equipment | 59 | 10 | 151 | |
Capitalization of development costs | (1,756) | (5,756) | (4,591) | |
Short-term deposits, net | 1,913 | 2,501 | 34,028 | |
Net cash provided by (used in) investing activities | (1,822) | (4,851) | 28,084 | |
Financing activities: | ||||
Exercise of share options and restricted share units | 1 | 2 | ||
Payments made in connection with acquisition | (3,333) | (2,551) | (29,537) | |
Proceeds from short-term loans | 40,000 | |||
Proceeds from long-term loans | 25,000 | 5,000 | ||
Repayment of short-term loans | (7,000) | (46,000) | ||
Repayment of convertible debt | (8,167) | (7,901) | (7,620) | |
Repayment of long-term loans | (36,509) | (11,389) | (9,452) | |
Net cash used in continuing financing activities | (23,009) | (23,840) | (52,607) | |
Effect of exchange rate changes on cash and cash equivalents | 78 | 287 | (136) | |
Net increase in cash and cash equivalents and restricted cash | 8,048 | 7,609 | 9,125 | |
Decrease in cash and cash equivalents and restricted cash- discontinued activities | (3,329) | |||
Cash and cash equivalents and restricted cash at beginning of year | 32,755 | 25,146 | 19,350 | $ 19,350 |
Cash and cash equivalents and restricted cash at end of year | 40,803 | 32,755 | 25,146 | 32,755 |
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheet | ||||
Cash and cash equivalents | 39,109 | 31,567 | 23,962 | 31,567 |
Restricted cash included in Long-term interest-bearing bank deposits | 1,694 | 1,188 | 1,184 | $ 1,188 |
Cash paid during the year for: | ||||
Income taxes | 1,256 | 2,702 | 3,976 | |
Interest | 3,567 | 4,619 | 5,678 | |
Non-cash investing and financing activities: | ||||
Issuance of shares in connection with acquisitions | 673 | |||
Issuance of shares in private placement | 2 | |||
Share-based compensation capitalized as part of capitalization of software development costs | 31 | 14 | ||
Purchase of property and equipment on credit | $ 1 | $ 322 |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | NOTE 1: GENERAL a. Perion Network Ltd. ("Perion") and its wholly-owned subsidiaries (collectively referred to as the "Company"), is a global technology company that delivers advertising solutions to brands and publishers. Perion is committed to providing data-driven execution, from high-impact ad formats to branded search and a unified social and mobile programmatic platform. b. In March 2016, the Company decided to discontinue the operations of the mobile self-serve side of the business and sell the mobile engagement business. Certain parts of the mobile marketing platform were redeployed so that it no longer functions as an independent business. In August 2016, the Company completed the sale of the mobile engagement business. Accordingly, the statements of income and statements of cash flows, related to the mobile self-serve and mobile engage operations are classified as discontinued operations for all periods presented. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Basis of consolidation The consolidated financial statements include the accounts of Perion and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Use of estimates The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, the Company's management evaluates its estimates, including those related to sales allowances and allowance for doubtful debts, fair value of intangible assets and goodwill, useful lives of intangible assets, fair value of share-based awards, realizability of deferred tax assets, tax uncertainties, and contingent liabilities, among others. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of the Company’s assets and liabilities. Financial statements in U.S. dollars The reporting currency of the Company is the U.S. dollar (“USD”). Major parts of the Company’s operations are carried out by the Company and its subsidiaries in the United States and Israel. The functional currency of these entities is the USD . - Management believes that the USD is the currency of the primary economic environment in which the Company operates. The financial statements of other subsidiaries, whose functional currency is determined to be their local currency, have been translated into USD. All balance sheet accounts have been translated using the exchange rates in effect at the balance sheet date. Statement of operations amounts have been translated using the average exchange rate for each applicable quarter. The resulting translation adjustments are reported as an accumulated other comprehensive income (loss) component of shareholders' equity. Cash and cash equivalents and short-term deposits The Company considers all short-term, highly liquid and unrestricted cash balances, with stated maturities of three months or less from date of purchase, as cash equivalents. Short-term deposits are bank deposits with maturities of more than three months but less than one year. The short-term deposits as of December 31, 2017 and 2018 are denominated primarily in USD and bear interest at an average annual rate of 1.59% and 3.00%, respectively. Restricted cash Restricted cash is comprised primarily of security deposits that are held to secure the Company’s hedging activity, lease obligations and certain letters of credit associated with lease obligations. Restricted cash in the amount of $1,188 and $1,694, as of December 31, 2017 and 2018, respectively, are included under prepaid expenses and other current assets . The Company adopted ASU 2016-18 “ ”, Accounts receivable and allowance for doubtful accounts Trade accounts receivables are stated at realizable value, net of an allowance for doubtful accounts. The Company evaluates its outstanding accounts receivable and establishes an allowance for doubtful accounts based on information available on their credit condition, current aging and historical experience. These allowances are reevaluated and adjusted periodically as additional information is available. Property and equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following annual rates: % Computers and peripheral equipment 33 Office furniture and equipment 6 - 15 Leasehold improvements are amortized using the straight-line method over the term of the lease or the estimated useful life of the improvements, whichever is shorter. Impairment of long-lived assets and intangible assets subject to amortization Property and equipment and intangible assets subject to amortization are reviewed for impairment in accordance with ASC 360, "Accounting for the Impairment or Disposal of Long-Lived Assets", whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The recoverability of these assets is measured by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If property and equipment and intangible assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. In determining the fair values of long-lived assets for the purpose of measuring impairment, the Company's assumptions include those that market participants will consider in valuations of similar assets. In 2017, the Company recorded impairment charges of $19,981, with respect to intangible assets subject to amortization. No such impairment charges were recorded in 2018. Goodwill Goodwill reflects the excess of the purchase price of business acquired over the fair value of net assets acquired. Goodwill is not amortized but instead is tested for impairment, in accordance with ASC 350, “Intangibles – Goodwill and Other”, at the reporting unit level, at least annually at December 31 each year, or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Following the early adoption of ASU 2017-04, "Simplifying the Test for Goodwill Impairment" by the Company in January 2017, any excess of the carrying amount of the reporting unit over its fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. Based on the goodwill assessment for the Undertone reporting unit in 2017, the Company determined that the carrying amount of the Undertone reporting unit exceeds its fair value and recorded an impairment charge of $65,686 to its Goodwill. No such impairment charges were recorded in 2018 and in 2016 . The majority of the inputs used in the discounted cash flow model to determine the fair value of the reporting units are unobservable and thus are considered to be Level 3 inputs. Intangible assets that are not considered to have an indefinite useful life are amortized over their estimated useful lives. The Customer Relationship, technology and trade name are amortized over their estimated useful lives in proportion to the economic benefits realized. This accounting policy results in accelerated amortization of such intangible assets as compared to the straight-line method. Deferred Financing Costs Direct and incremental costs related to the issuance of debt are capitalized as deferred financing costs and are deducted from the carrying amount of that debt in the consolidated balance sheets. The Company amortizes deferred financing costs using the effective-interest method and records such amortization as interest expense. Revenue recognition The Company applies the provisions of Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606" or "Topic 606") The Company adopted the provisions of ASC 606 effective January 1, 2018 using the modified retrospective application method for all uncompleted contracts as of that date. The adoption of ASC 606 did not have a material impact on the Company’s consolidated financial statements. In addition, the adoption of ASC 606 had no impact on the Company's accounts receivable and deferred revenues balance as of December 31, 2018 or on the Company's revenues, cost of sales or its operating expenses during 2018, compared to ASC 605. The Company applies the practical expedient for incremental costs of obtaining contracts when the associated revenues is recognized over less than one year. The Company generates revenues primarily from two major sources: Search Revenues Advertising Revenues For more disaggregated information of revenues refer to Note 18. The Company general payments terms are less than one year. Therefore, no finance component is recognized. The Company evaluates whether Search and Advertising Revenues should be presented on a gross basis, which is the amount that a customer pays for the service, or on a net basis, which is the amount of the customer payment less amounts the Company pays to publishers. In making that evaluation, the Company considers whether it controls the promised good or service before transferring that good or service to the customer. The Company considers indicators such as whether the Company is the primary obligor in the arrangement and assumes risks and rewards as a principal or an agent, including the credit risk, whether the Company has latitude in establishing prices and selecting its suppliers and whether it changes the products or performs part of the service. The evaluation of these factors is subject to significant judgment and subjectivity. Generally, in cases in which the Company is primarily obligated in a transaction, is subject to risk, involved in the determination of the product (or the service) specifications, separately negotiates each revenue service agreement or publisher agreement and can have several additional indicators, revenue is recorded on a gross basis. Remaining performance obligations (RPOs) represent amounts collected on contracted revenues that had not yet been recognized. As of December 31, 2018, the aggregate amount of the RPOs was $3,794. The Company expects the RPO to be recognized as revenues within the next twelve months. Contract balances are presented separately on the consolidated balance sheets as either Accounts receivable or deferred revenues. The Company does not have contract assets. Accounts receivable includes amounts billed and currently due from customers. Deferred revenues are recorded when payments are received from customers in advance of the Company's rendering of services. Revenues recognized during 2018 from amounts included within the deferred revenues balance at the beginning of the period amounted to $5,270. Cost of revenues Cost of revenues consists primarily of expenses associated with the operation of the Company’s data centers, including depreciation, labor, energy and bandwidth costs, as well as content acquisition costs, and customer support. The direct cost relating to search revenues is immaterial. Customer acquisition costs and media buy Customer acquisition costs and media buy consist of amounts paid to publishers who distribute the Company’s search applications and services and other products as well as the costs of advertising inventory incurred to deliver ads. Customer acquisition costs are primarily based on revenue share arrangements with minimum guaranty and are charged as incurred. Research and development costs Research and development costs are charged to the statement of income as incurred, except for certain costs relating to internally developed software, which are capitalized. The Company capitalizes certain internal and external software development costs, consisting primarily of direct labor associated with creating the internally developed software. Software development projects generally include three stages: (i) the preliminary project stage (all costs expensed as incurred); (ii) the application development stage (costs are capitalized) and (iii) the post implementation/operation stage (all costs expensed as incurred). The costs capitalized in the application development stage primarily include the costs of designing the application, coding and testing of the system. Capitalized costs are amortized using the straight-line method over the estimated useful life of the software, generally three years, once it is ready for its intended use. The Company believes that the straight-line recognition method best approximates the manner in which the expected benefit will be derived. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Capitalized software development costs, net of accumulated amortization, of $9,195 and $8,212 are included in property and equipment in the consolidated balance sheets as of December 31, 2017 and 2018, respectively (see Note 5). Income taxes The Company accounts for income taxes in accordance with ASC 740, "Income Taxes". This Statement prescribes the use of the liability method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. To the extent necessary, the Company provides a valuation allowance to reduce deferred tax assets to their estimated realizable value. The Company accounts for uncertain tax positions in accordance with ASC 740, which contains a two-step approach for recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company accrued interest and penalties related to unrecognized tax benefits in its financial expenses. Severance pay The majority of the Company's agreements with employees in Israel are in accordance with section 14 of the Severance Pay Law, 1963 (“Section 14”), where the Company's contributions for severance pay is paid to the employee upon termination instead of the severance liability that would otherwise be payable under the law as aforementioned. Upon contribution to a fund, based on the full amount of the employee's monthly salary, and release of the fund to the employee, no additional severance payments are required to be made by the Company to the employee. Therefore, the related obligation and amounts deposited on behalf of such obligation are not stated on the balance sheet, as the Company is legally released from obligation to such employees once the deposit amounts have been paid. The Company's liability for severance pay to its Israel-based employees not under Section 14, is calculated pursuant to Israel's Severance Pay Law based on the most recent monthly salaries of such employees, multiplied by the number of years of their employment, or a portion thereof, as of the balance sheet date. This liability is fully provided for by monthly deposits in insurance policies and by an accrual. The deposited funds include profits and losses accumulated up to the balance sheet date and they may be withdrawn only upon the fulfillment of the obligation pursuant to Israel's Severance Pay Law. Severance expenses from continuing operations for the years ended December 31, 2016, 2017 and 2018 amounted to $2,917, $2,039 and $1,230, respectively. The balances of severance deposits and accrued severance pay are immaterial and included in other assets and other long-term liabilities on the accompanying balance sheets, respectively. Employee benefit plan The Company’s U.S. operations maintain a retirement plan (the “U.S. Plan”) that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Participants in the U.S. Plan may elect to defer a portion of their pre-tax earnings, up to the Internal Revenue Service’s annual contribution limit. The Company matches 100% of each participant’s contributions, up to 3% of employee deferral, and 50% of the next 2% of employee deferral. Contributions to the U.S. Plan are recorded during the year contributed as an expense in the consolidated statement of income. Total employer 401(k) contributions for the years ended December 31, 2016, 2017 and 2018 were $1,018, $2,765 and $2,305, respectively. Comprehensive income (loss) The Company accounts for comprehensive income (loss) in accordance with ASC 220, "Comprehensive Income". This statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its other comprehensive income (loss) relates to hedging derivative instruments and foreign currency translation adjustments. Net earnings per share In accordance with ASC 260, "Earnings Per Share", basic net earnings per share ("Basic EPS") is computed by dividing net earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net earnings per share ("Diluted EPS") reflects the potential dilution that could occur if share options and other commitments to issue ordinary shares were exercised or equity awards vested, resulting in the issuance of ordinary shares that could share in the net earnings of the Company. The weighted average number of ordinary shares related to the outstanding options, restricted shares, convertible debt and warrants excluded from the calculations of diluted net earnings per ordinary share, as these securities are anti-dilutive, was 3,566,788, 5,408,206 and 4,725,618 for the years ended December 31, 2016, 2017 and 2018, respectively. Concentrations of credit risk Financial instruments, which potentially subject the Company to a concentration of credit risk, consist primarily of cash and cash equivalents, bank deposits, restricted cash and accounts receivable. The majority of the Company’s cash and cash equivalents, bank deposits and restricted cash are invested in USD instruments with major banks in the U.S. and Israel. Deposits in the U.S. may be in excess of insured limits and are not insured in other jurisdictions. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal risk. The Company’s major customers are financially sound, and the Company believes low credit risk is associated with these customers. To date, the Company has not experienced any material bad debt losses. Total expenses for doubtful debts during 2016, 2017 and 2018 amounted to $152, $230 and $180, respectively. Share-based compensation The Company accounts for share-based compensation under ASC 718, "Compensation - Stock Compensation", which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to employees and directors. ASC 718 requires companies to estimate the fair value of equity-based awards on the date of grant, using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated statement of income. The Company estimates forfeitures to be estimated at the time of grant, and revised if necessary in subsequent periods, if actual forfeitures differ from those estimates. The Company recognizes compensation expenses for the value of its awards, which have graded vesting based on service conditions, using the straight-line method, over the requisite service period of each of the awards, net of estimated forfeitures. Estimated forfeitures are based on actual historical pre-vesting forfeitures. For performance-based share units, the Company recognizes compensation expenses for the value of such awards, if and when the Company concludes that it is probable that a performance condition will be achieved based on the accelerated attribution method over the requisite service period. The Company should reassess the probability of vesting at each reporting period for awards with performance conditions and adjust compensation cost based on its probability assessment. The Company accounted for changes in award terms as a modification in accordance with ASC 718. A modification to the terms of an award should be treated as an exchange of the original award for a new award with total compensation cost equal to the grant-date fair value of the original award plus the incremental value measured at the same date. Under ASC 718, the calculation of the incremental value is based on the excess of the fair value of the new (modified) award based on current circumstances over the fair value of the original award measured immediately before its terms are modified based on current circumstances. The Company estimates the fair value of its new share-based awards using the Binomial option-pricing model. The following table presents the various assumptions used to estimate the fair value of the Company's share-based awards granted to employees and directors in the periods presented: Year ended December 31 2016 2017 2018 Risk-free interest rate 0.46% - 1.73% 0.81% - 2.08% 1.50% - 3.00% Expected volatility 49.49% - 53.54% 52% - 56% 48% - 57% Early exercise factor 150% - 200% 150% - 200% 150% - 200% Forfeiture rate post vesting 5% - 20% 0% - 23% 0% - 34% Dividend yield 0% 0% 0% The expected volatility is calculated based on the actual historical share price movements of the Company’s share. The expected option term represents the period that the Company’s share options are expected to be outstanding. The early exercise factor and the forfeiture rate post-vesting are calculated based on the Company’s estimated early exercise and post-vesting forfeiture multiples, which are based on comparable companies and on actual historical data. The risk-free interest rate is based on the yield from U.S. Treasury zero-coupon bonds, with a term which is equivalent to the expected term of the share-based awards. The dividend yield is based on the current decision of the Company’s management not to distribute any dividends. The fair value of restricted share units (“RSU”) is based on the market value of the underlying shares on the date of grant. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. The Company adopted ASU 2016-09 on January 1, 2017 and chose to continue to use the current method of estimating forfeitures each period rather than accounting for forfeitures as they occur. The adoption of the new standard had no material impact on the Company's consolidated financial statements. Derivative instruments The Company accounts for derivatives and hedging based on ASC 815, "Derivatives and Hedging", which requires recognizing all derivatives on the balance sheet at fair value. If the derivatives meet the definition of a cash flow hedge and are so designated, depending on the nature of the hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period, or periods, during which the hedged transaction affects earnings. The ineffective portion of a derivative’s change in fair value, if any, is recognized in earnings, as well as gains and losses from a derivative’s change in fair value that are not designated as hedges are recognized in earnings immediately. In order to mitigate the potential adverse impact on cash flows resulting from fluctuations in the exchange rate of the new Israeli shekels (“ILS”), the Company hedges portions of its forecasted expenses denominated in ILS with swap and options contracts. The Company does not speculate in these hedging instruments in order to profit from foreign currency exchanges, nor does it enter into trades for which there are no underlying exposures. To protect against the increase in value of forecasted foreign currency cash flow resulting mainly from salaries and related benefits and taxes paid in ILS during the year, the Company hedges portions of its anticipated payroll denominated in ILS for a period of one to twelve months with forward and options contracts (the “Hedging Contracts”). Accordingly, when the USD strengthens against the ILS, the decline in present value of future ILS currency expenses is offset by losses in the fair value of the Hedging Contracts. Conversely, when the USD weakens, the increase in the present value of future ILS expenses is offset by gains in the fair value of the Hedging Contracts. These Hedging Contracts are designated as cash flow hedges. The Company follows the requirements of ASC No. 815, Derivatives and Hedging Additionally, in order to mitigate the potential adverse impact of the fluctuations in the ILS-USD exchange rate in connection with the convertible debt (see Note 10), the Company has entered into a cross currency interest rate SWAP agreement (the “SWAP”) in order to hedge the future interest and principal payments, which are all denominated in ILS. However, since the convertible debt is measured at fair value at each reporting date, the SWAP does not qualify and was not designated as hedge under ASC 815. Therefore, gains or losses resulting from the change of the SWAP's fair value are recognized immediately as incurred in "financial expenses, net". The Company measured the fair value of these contracts in accordance with ASC 820, "Fair Value Measurement and Disclosures", and they were classified as level 2. In order to limit the Company’s interest expenses derived from the secured credit agreement in which the Company entered concurrently with the closing of the Undertone acquisition (see Note 4), the Company has purchased a Cap Option for the interest amounts expected to be paid till June 2018. The cap option is designated as cash flow hedge under ASC 815. The notional value of the Company’s derivative instruments as of December 31, 2017 and 2018, amounted to $51,504 and $25,691, respectively. Notional values in USD are translated and calculated based on the spot rates for options and swap. Gross notional amounts do not quantify risk or represent assets or liabilities of the Company; however, they are used in the calculation of settlements under the contracts. Fair value of financial instruments The carrying amounts of financial instruments carried at cost, including cash and cash equivalents, short-term deposits, restricted cash, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses and other liabilities approximate their fair value due to the short-term maturities of such instruments. The Company follows the provisions of ASC No. 820, “Fair Value Measurement” (“ASC 820”), which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining a fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability, based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect assumptions that market participants would use in pricing an asset or liability, based on the best information available under given circumstances. The hierarchy is broken down into three levels, based on the observability of inputs and assumptions, as follows: · Level 1 - · Level 2 · Level 3 Treasury shares In the past, the Company repurchased its ordinary shares on the open market. The Company holds the shares as treasury shares and presents their cost as a reduction of shareholders' equity. Business combinations The Company accounted for business combination in accordance with ASC 805, "Business Combinations". ASC 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date, measured at their fair values as of that date. Any excess of the fair value of net assets acquired over purchase price is allocated to goodwill and any subsequent changes in estimated contingencies are to be recorded in earnings. In addition, changes in valuation allowance related to acquired deferred tax assets and in acquired income tax position are to be recognized in earnings. Acquisition related costs are expensed to the statement of income in the period incurred. Discontinued operations Under ASC 205, "Presentation of Financial Statements - Discontinued Operation", when a component of an entity, as defined in ASC 205, has been disposed of or is classified as held for sale, the results of its operations, including the gain or loss on its disposal are classified as discontinued operations and the assets and liabilities of such component are classified as assets and liabilities attributed to discontinued operations, provided that the operations, assets and liabilities and cash flows of the component have been eliminated from the entity’s consolidated operations and the entity will no longer have any significant continuing involvement in the operations of the component. In August 2016, the Company completed the sale of its Grow Mobile Engagement ("GME") business for a total consideration of $1,750, which was included in net loss from discontinued operations in the consolidated statement of income for the year ended December 31, 2016. The results of the discontinued operations, including prior periods' comparable results, which have been retroactively reclassified as a separate line items in the statements of income, are presented below: Year ended December 31, 2016 (*) Costs and expenses 5,192 Impairment of intangible assets and goodwill - Gain on disposal of the discontinued operations (1,750 ) Loss before taxes on income (3,442 ) Taxes on income 795 Total net loss on discontinued operations $ (2,647 ) Depreciation expenses from discontinued operations totaled $71 and $0 and $0, for the years ended December 31, 2016, 2017 and 2018, respectively. (*) Represent the results of the discontinued operations until their disposal. Reclassifications Certain items of expense have been reclassified to conform to current year financial statement presentation. Recent Accounting Pronouncements not yet adopted In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02 (Topic 842) "Leases." Topic 842 supersedes the lease requirements in Accounting Standards Codification (ASC) Topic 840, "Leases." Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. This ASU is effective for annual periods beginning after December 15, 2018. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach. In July 2018, the FASB issued Accounting Standards Update 2018-11, Leases (Topic 842). This update provides entities with an additional (and optional) transition method to adopt the new leases standard. Under this method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, the prior comparative period’s financials will remain the same as those previously presented. The Company has elected to apply the guidance at the beginning of the period of adoption and not restate comparative periods. The Company expects that the adoption of this standard will have a material effect on its consolidated financial statements. While the Company continues to assess all the effects of adoption, it currently believes that the most significant impact will be reflected in: (i) the recognition of new ROU assets and lease liabilities on the consolidated balance sheet for its operating leases of buildings, and vehicles, and (ii) the requirement to provide significant new disclosures regarding the Company's leasing activities. The Company, however, does not expect a material impact to its consolidated statements of income and consolidated statements of cash flow since the expense recognition under this new standard will be similar to current practice. The Company's financial income (expenses), net w |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 3: FAIR VALUE OF FINANCIAL INSTRUMENTS The following table present assets and liabilities measured at fair value on a recurring basis as of December 31, 2018: Fair value measurements using input type Level 1 Level 2 Level 3 Total Assets: Derivative assets $ - $ 871 $ - $ 871 Total financial assets $ - $ 871 $ - $ 871 Liabilities: Derivative liabilities - 153 - 153 Convertible debt 15,453 - - 15,453 Total financial liabilities $ 15,453 $ 153 $ - $ 15,606 The following table present assets and liabilities measured at fair value on a recurring basis as of December 31, 2017: Fair value measurements using input type Level 1 Level 2 Level 3 Total Assets: Derivative assets $ - $ 3,486 $ - $ 3,486 Total financial assets $ - $ 3,486 $ - $ 3,486 Liabilities: Convertible debt 25,353 - - 25,353 Total financial liabilities $ 25,353 $ - $ - $ 25,353 |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 4: ACQUISITIONS a. Interactive Holding Corp. On November 30, 2015, the Company acquired 100% of the shares of Interactive Holding Corp., a Delaware corporation, and its subsidiaries (collectively referred to as "Undertone") for a total preliminary purchase price of $133,101, comprised of (i) immediate cash payment of $89,078; (ii) $6,129 cash payments between 2016 and 2017; (iii) $16,000 holdback for potential claims recorded at fair value ($14,391 at acquisition), and (iv) $20,000 deferred consideration, bearing 10% annual . On August 2, 2016, the Company executed an amendment to the purchase agreement, pursuant to which, the Company paid $22,000 and eliminated $35,546 at fair value, of obligations. As a result of the amendment, the Company reduced the purchase price by $13,546. Final purchase price amounted to $119,768 including a working capital final adjustment of $213 in 2016. b. Make Me Reach SAS On February 10, 2015, the Company consummated the acquisition of 100% of the shares of Make Me Reach SAS, a private French company headquartered in Paris, France ("MMR"). MMR enables advertisers to efficiently and effectively scale their advertising campaigns on social media, with a specific focus on optimizing mobile ad campaigns. MMR is a Facebook Preferred Marketing Developer (“ ”) (“ |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 5: PROPERTY AND EQUIPMENT, NET December 31, 2017 2018 Cost: Computers and peripheral equipment $ 10,295 $ 7,004 Office furniture and equipment 2,811 2,836 Leasehold improvements 7,779 8,712 Capitalized software 10,650 12,645 Total cost 31,535 31,197 Less: accumulated depreciation and amortization (14,059 ) (15,548 ) Property and equipment, net $ 17,476 $ 15,649 Depreciation and amortization from continued operations totaled $4,003, $3,567 and $4,950, for the years ended December 31, 2016, 2017 and 2018, respectively. During 2017 and 2018, the Company capitalized software development costs of $5,756 (including $31 of share-based compensation) and $1,756, respectively. Amortization expense for the related capitalized internally developed software is included in Depreciation and amortization in the consolidated statements of income and amounted to $843 and $2,978 during 2017 and 2018, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | NOTE 6: GOODWILL AND OTHER INTANGIBLE ASSETS, NET a. Goodwill The changes in the net carrying amount of goodwill in 2017 and 2018 were as follows: Balance as of January 1, 2017 $ 190,737 Impairment on Undertone's goodwill (65,686 ) Balance as of December 31, 2017 $ 125,051 Balance as of December 31, 2018 $ 125,051 Goodwill has been recorded as a result of prior acquisitions and represents excess of the consideration over the net fair value of the assets of the businesses acquired. As of December 31, 2018, the Company has two reporting units – Undertone and Search monetization. The Company performs tests for impairment of goodwill at the reporting unit level at least annually, or more frequently if events or changes in circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value. In 2017 the Company recorded an impairment charge of $65,686, classified as “Impairment charges” in the consolidated statements of income. No such impairment charges were recorded in 2018. b. Intangible assets, net The following is a summary of intangible assets as of December 31, 2018: December 31, 2017 Amortization OCI December 31, 2018 Acquired technology $ 30,837 $ - $ (30 ) $ 30,807 Accumulated amortization (19,959 ) (1,301 ) 18 (21,242 ) Impairment (8,749 ) - - (8,749 ) Acquired technology, net 2,129 (1,301 ) (12 ) 816 Customer relationships 31,949 - (9 ) 31,940 Accumulated amortization (18,832 ) (999 ) 6 (19,825 ) Impairment (10,426 ) - - (10,426 ) Customer relationships, net 2,691 (999 ) (3 ) 1,689 Tradename and other 18,457 - (42 ) 18,415 Accumulated amortization (6,858 ) (2,469 ) 13 (9,314 ) Impairment (5,110 ) - - (5,110 ) Tradename and other, net 6,489 (2,469 ) (29 ) 3,991 Intangible assets, net $ 11,309 $ (4,769 ) $ (44 ) $ 6,496 The following is a summary of intangible assets as of December 31, 2017: December 31, 2016 Amortization OCI Impairment December 31, 2017 Acquired technology $ 30,674 $ - $ 163 - $ 30,837 Accumulated amortization (14,490 ) (5,390 ) (79 ) - (19,959 ) Impairment (956 ) - - (7,793 )*) (8,749 ) Acquired technology, net 15,228 (5,390 ) 84 (7,793 ) 2,129 Customer relationships 31,898 - 51 - 31,949 Accumulated amortization (13,905 ) (4,900 ) (27 ) - (18,832 ) Impairment (91 ) - - (10,335 )*) (10,426 ) Customer relationships, net 17,902 (4,900 ) 24 (10,335 ) 2,691 Tradename and other 18,224 - 233 - 18,457 Accumulated amortization (4,079 ) (2,734 ) (45 ) - (6,858 ) Impairment (3,257 ) - - (1,853 )*) (5,110 ) Tradename and other, net 10,888 (2,734 ) 188 (1,853 ) 6,489 Intangible assets, net $ 44,018 $ (13,024 ) $ 296 $ (19,981 ) $ 11,309 *) Calculated based on the Income approach (discounted cash flow model), using a discount rate of 15.7% The estimated useful life of the intangible assets are as follows: Estimated useful life Acquired technology 3-5 years Customer relationships 4-5 years Tradename and other 4-11 years Amortization of intangible assets, net, in each of the succeeding five years and thereafter is estimated as follows: 2019 $ 4,228 2020 1,279 2021 229 2022 240 2023 252 Thereafter 268 $ 6,496 |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | NOTE 7: ACCRUED EXPENSES AND OTHER LIABILITIES December 31, 2017 2018 Employees and payroll accruals $ 8,020 $ 8,528 Government authorities 2,427 2,068 Professional services accruals 1,886 1,480 Other accruals 4,155 4,604 Other overhead related expenses 885 253 Hosting, software and web services accruals 411 307 $ 17,784 $ 17,240 |
DERIVATIVES AND HEDGING ACTIVIT
DERIVATIVES AND HEDGING ACTIVITES | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING ACTIVITES | NOTE 8: DERIVATIVES AND HEDGING ACTIVITES The fair value of the Company’s outstanding derivative instruments is as follows: December 31, Balance sheet 2017 2018 Derivatives designate as hedging instruments: Foreign exchange forward contracts and other derivatives ''Prepaid expenses and other current assets'' $ 140 $ 11 ''Accrued expenses and other liabilities'' - 153 ''Accumulated other comprehensive income'' 116 (106 ) Derivatives not designated as hedging instruments: Cross currency SWAP ''Prepaid expenses and other current assets'' $ 3,346 $ 860 As of December 31, 2018, the Company estimates that $142 of the net derivative losses related to its cash flow hedges included in accumulated other comprehensive income will be reclassified into expenses within the next 12 months when the underlying hedged item impacts earnings. The net losses reclassified from accumulated other comprehensive loss to the operating expenses are as follows: Gain recognized in Statements of Comprehensive Income Gain (loss) recognized in consolidated statements of Income Year ended December 31, Statement of Income Year ended December 31, 2018 2016 2017 2018 Derivatives designated as hedging instruments: Foreign exchange options and forward contracts $ (223 ) "Operating expenses" $ 167 $ 525 $ (206 ) Derivatives not designated as hedging instruments: Foreign exchange options and forward contracts "Financial expenses" (16 ) 132 (186 ) SWAP "Financial expenses" 608 2,373 2,487 Total $ (223 ) $ 759 $ 3,030 $ 2,095 |
SHORT TERM AND LONG-TERM DEBT
SHORT TERM AND LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
SHORT TERM AND LONG-TERM DEBT | NOTE 9: SHORT TERM AND LONG-TERM DEBT 1. On November 30, 2015, concurrently with the closing of the Undertone acquisition, Interactive Holding Corp. entered into a new secured credit agreement for $50,000, due in quarterly installments from March 2016 to November 2019. The installments started at $625 per quarter, increased to $1,250 per quarter in March 2018 and required a final payment upon maturity of $35,000. The interest rate was LIBOR plus 5.5% per annum on the outstanding principal. The loan was secured by substantially all the assets of the companies in the Undertone group and by guarantees of such companies. The debt issuance cost amounted to $1,399, which was deducted from the carrying amount of the loan in the consolidated balance sheets and amortized during the loan's term according to the effective interest method. On March 6, 2018, the Company entered into an amendment to its secured credit agreement which provides for a waiver of the financial covenants of the quarter ending December 31, 2017 as well as certain covenants relief. The Amendment was conditioned upon an $8,000 prepayment of the term loan, which took place on the same date. As of December 31, 2018, the outstanding loan balance of $21,500 (including the accrued interest thereon) was fully repaid (see also 3 below). 2. On May 9, 2017, the Company secured $17,500 under a new credit facility from an Israeli bank of which $12,500 revolving credit line and $5,000 term loan. The $12,500 credit facility had an interest of LIBOR plus 3.5% per annum and was secured, among other, by a lien on the accounts receivable of ClientConnect Ltd., an Israeli subsidiary. Both facilities were guaranteed by Perion. The $5,000 was a long-term loan bearing interest at LIBOR plus 5% per annum, to be repaid in 36 equal installments starting from June 30, 2017. As of December 31, 2018 the outstanding balance of the credit facility was repaid and replaced by another loan from the same bank (see below). 3. On December 17, 2018, the company, executed a new loan facility, in the amount of $25,000. Proceeds of the loan facility were applied to refinancing of the existing debt as well as the debt of Undertone. Principal on the loan is payable in twelve equal quarterly instalments beginning March 2019 and maturing on December 31, 2021. The interest on the loan is at the rate of three-month LIBOR plus 5.7% per annum, payable quarterly. The credit facility is secured by liens on the assets of ClientConnect and Undertone and is guaranteed by Perion and Undertone. Each such guarantee is limited to $33 million. Financial covenants for the loan facility are tested at the level of Perion on a consolidated basis. As of December 2018, Perion meets all of its covenants. As of December 31, 2018, the aggregate principal annual maturities according to all of the above loan agreements were as follows: Repayment amount 2019 $ 8,333 2020 8,333 2021 8,334 Present value of principal payments 25,000 Less: current portion (8,333 ) Long-term debt $ 16,667 |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 12 Months Ended |
Dec. 31, 2018 | |
CONVERTIBLE DEBT [Abstract] | |
CONVERTIBLE DEBT | NOTE 10: CONVERTIBLE DEBT In September 2014, the Company completed a public offering in Israel of its Series L Convertible Bonds (the "Bonds"), with an aggregate par value of approximately ILS 143,500, out of which, as of December 31, 2018, approximately ILS 57,394 was outstanding, (approximately $15,313 as of December 31, 2018). The Bonds were issued at a purchase price equal to 96.5% of their par value and bear annual interest at a rate of 5%, payable semi-annually, subject to a possible increase up to 6% in the event and to the extent the Company’s debt rating is downgraded. The Bonds’ principal, denominated in ILS, is repayable in five equal annual instalments commencing on March 31, 2016. The Bonds are convertible, at the election of each holder, into the Company’s ordinary shares at a conversion price of ILS 100.815 per share ($26.90 on December 31, 2018) from the date of issuance and until March 15, 2020. The ordinary shares issued upon conversion of the Bonds will be listed on the NASDAQ Stock Market (“Nasdaq”) and the Tel-Aviv Stock Exchange (“TASE”), to extent that the Company's ordinary shares are listed thereon at the time of conversion. The conversion price is subject to adjustment in the event that the Company effects a share split or reverse share split, rights offering or a distribution of bonus shares or a cash dividend. The Company may redeem the Bonds upon delisting of the Bonds from the TASE, subject to certain conditions. In addition, the Company may redeem the Bonds or any part thereof at its discretion after December 1, 2014, subject to certain conditions. The Company elected to apply the fair value option in accordance with ASC 825, “Financial Instruments”, to the Bonds and therefore all unrealized gains and losses are recognized in earnings. As of December 31, 2018, the fair value of the Bonds, based on their quoted price at the TASE and including accrued interest of $193, was $15,453 . The changes of the long-term convertible debt in 2017 and 2018 were as follows: Balance as of January 1, 2017 $ 29,526 Change in accrued interest 1,344 Change in fair value 3,785 Payment of interest (1,401 ) Payment of principal (7,901 ) Balance as of December 31, 2017* $ 25,353 Change in accrued interest 863 Change in fair value (1,585 ) Payment of interest (1,011 ) Payment of principal (8,167 ) Balance as of December 31, 2018* $ 15,453 * includes accrued interest of $313 and $193 as of December 31, 2017 and 2018, respectively In order to mitigate the potential adverse impact of the fluctuations in the ILS-USD exchange rate, the Company entered into a cross currency interest rate swap agreement (the “SWAP”) to hedge the future interest and principal payments of the Bonds, which are denominated in ILS. As of December 31, 2018, the Company satisfies all of the financial covenants associated with both the Bonds and the SWAP. As of December 31, 2018, the aggregate principal annual payments of the Bonds were as follows: Repayment amount 2019 $ 7,657 2020 7,656 $ 15,313 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 11: COMMITMENTS AND CONTINGENT LIABILITIES a. Office lease commitments In January 2014, the Company entered into a lease agreement for new corporate offices in Holon, Israel. The lease expires in January 2025, with an option by the Company to extend for two additional terms of 24 months each. Additionally, the Company may exercise an early termination of the lease in November 2019 and will pay the amount of the construction budget which was utilized. In June 2018, Undertone entered into a lease agreement for its office at World Trade Center (WTC) New York. The lease expires in May 2026. Additionally, the Company may choose an early termination in 2023. Certain other facilities of the Company are rented under operating lease agreements, which expire on various dates, the latest of which is in 2028. The Company recognizes rent expense under such arrangements on a straight-line basis. Furthermore, the Company leases motor vehicles for employees under operating lease agreements. Aggregate minimum lease commitments under the aforesaid non-cancelable operating leases as of December 31, 2018, were as follows: Minimum lease payments Minimum sublease rentals Net future minimum lease commitment 2019 $ 5,102 $ 3,248 $ 1,854 2020 5,985 2,940 3,045 2021 5,768 2,880 2,888 2022 5,062 2,325 2,737 2023 4,681 1,987 2,694 Thereafter 9,922 2,153 7,769 $ 36,520 $ 15,533 $ 20,987 Facilities leasing expenses from continued operations in the years 2016, 2017 and 2018 were $5,419, $4,118, and $4,123 respectively. Car leases expenses from continued operations in the years 2016, 2017 and 2018 were $790, $493 and $343, respectively. Sublease income amounted to $703, $1,076 and $2,213 in the years 2016, 2017 and 2018, respectively. b. Contingent purchase obligation On November 30, 2012, the Company completed the acquisition of 100% of Sweet IM’s shares. Pursuant to the terms of the Share Purchase Agreement (“SPA”) between the Company and SweetIM, the Company was obligated to pay SweetIM's shareholders, among other payments, a payment of up to $7,500 in cash in May 2014 if certain milestones were met (the “Contingent Payment”). The milestones were based on the Company's GAAP revenues in 2013, and the absence of certain changes in the industry in which the Company operates. On May 28, 2014, the Company paid $2,500 in respect of the Contingent Payment. Following such payment, on June 22, 2014, SweetIM’s Shareholders’ representative notified the Company claiming that the Company owes SweetIM’s shareholders the entire Contingent Payment. In April 2015, pursuant to the SPA, an arbitration process with respect to this claim has commenced in Israel. Based on the August 2018 ruling of the arbitrator, the remaining balance of the Contingent Payment shall be paid to SweetIM's shareholders in 3 equal installments. As of December 31, 2018, the Company maintains a $1,667 liability in its financial statements, which was fully paid during January 2019. c. Legal Matters On December 22, 2015, Adtile Technologies Inc. filed a lawsuit against the Company and Intercept Interactive Inc. (“Intercept”), a subsidiary of Interactive Holding Corp., in the United States District Court for the District of Delaware. The lawsuit alleges various causes of action against Perion and Undertone related to Undertone’s alleged unauthorized use and misappropriation of Adtile’s proprietary information and trade secrets. Adtile is seeking injunctive relief and, unspecified monetary damages. On June 23, 2016, the court denied Adtile’s motion for a preliminary injunction. On June 24, 2016, the court (i) granted the Company’s motion to dismiss, and (ii) granted Intercept’s motion to stay the action and compel arbitration. In November 2017, the court dismissed the case for administrative reasons, since Adtile had not commenced arbitration proceedings. In addition, from time to time, the Company is party to other various legal proceedings, claims and litigation that arise in the ordinary course of business. It is the opinion of management that the ultimate outcome of these matters will not have a material adverse effect on the Company's financial position, results of operations or cash flows. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 12: SHAREHOLDERS' EQUITY a. Ordinary shares The ordinary shares of the Company entitle their holders to voting rights, the right to receive cash dividend and the right to a share in excess assets upon liquidation of the Company. On August 2, 2018 the Company's Shareholders' approved a 3:1 “Reverse Share Split” of its Ordinary shares, which became effective on August 26, 2018. The accompanying consolidated financial statements and notes give retroactive effect to the reverse share split for all periods presented. All fractional shares created by the Reverse Share Split have been rounded down to the nearest whole share. b. Private placement On December 3, 2015 (the “Effective date”), the Company completed a private placement of 4,436,898 ordinary shares for gross proceeds of $10,125 pursuant to a Securities Purchase Agreement (the “SPA”) with two investors. The purchase price per share was $2.282 per share, which was the average closing price of an ordinary share on the Nasdaq Global Select Market for the 30 trading days ending on December 1, 2015. According to the terms of the SPA, on September 1, 2016, the per share purchase price was adjusted downward to a price per share of $1.939, and the Company issued to the two investors 782,981 additional ordinary shares for no additional consideration. On November 30, 2015, the Company entered into a Registration Rights Agreement (the "Agreement") with the two investors, pursuant to which the Company shall use its commercially reasonable efforts in order to file a registration statement on Form F-3 for the resale of the aforesaid ordinary shares issued within the time frame as detailed in the Agreement. The registration statement was declared effective on March 31, 2016. c. Share Options, Restricted Share Units and Warrants In 2003, the Company's Board of Directors approved the 2003 Equity Incentive Plan (the "Plan") for an initial term of ten years from adoption and on December 9, 2012, extended the term of the Plan for an additional ten years. On August 7, 2013, the Company’s Board of Directors approved amendments to the Plan which include the ability to grant RSUs and restricted shares. The contractual term of the share options is generally no more than five years and the vesting period of the options and RSUs granted under the Plan is between one and three years from the date of grant. The rights of the ordinary shares issued upon the exercise of share options or RSUs are identical to those of the other ordinary shares of the Company. As of December 31, 2018, there were 878,249 ordinary shares reserved for future share-based awards under the Plan. The following table summarizes the activities for the Company’s service-based share options for the year ended December 31, 2018: Weighted average Number of options Exercise price Remaining contractual term (in years) Aggregate intrinsic value Outstanding at January 1, 2018 4,203,888 $ 4. 52 4.27 $ 56 Granted 1,035,481 3.08 - - Exercised (167 ) 3.24 - - Cancelled ( ) 5.20 - - Outstanding at December 31, 2018 3,744,807 $ 3.85 4. 97 $ 27 Exercisable at December 31, 2018 1,314,690 $ 4. 88 3.86 $ 4 Vested and expected to vest at December 31, 2018 2,906,311 $ 4.57 4.11 $ 19 The weighted-average grant-date fair value of options granted during the years ended December 31, 2016, 2017 and 2018 was $0.64, $0.72 and $1.27, respectively. The aggregate intrinsic value of the outstanding share options at December 31, 2018, represents the intrinsic value of 106,332 outstanding options that were in-the-money as of such date. The remaining 3,638,475 outstanding options were out-of-the-money as of December 31, 2018, and their intrinsic value was considered as zero. Total intrinsic value of options exercised during the year ended December 31, 2018 was $1. The number of options expected to vest reflects an estimated forfeiture rate. The following table summarizes the activities for the Company’s performance-based share options for the year ended December 31, 2018: Weighted average Number of Performance based options Exercise price Remaining contractual term (in years) Aggregate intrinsic value Outstanding at January 1, 2018 283,331 $ 4.93 - $ - Cancelled (66,666 ) 6.84 - - Outstanding at December 31, 2018 216,665 4.35 4.12 - Exercisable at December 31, 2018 116,666 5.30 2.55 - Vested and expected to vest at December 31, 2018 116,666 $ 5.30 2.55 $ - The performance based options’ vesting is contingent upon achieving specific financial targets of the Company, set at the grant date. No performance based options were granted during 2016, 2017 and 2018. There is no aggregate intrinsic value of the outstanding performance-based options at 2018, since they were all out-of-the-money as of such date. The number of options expected to vest reflects an estimated forfeiture rate. The following table summarizes additional information regarding outstanding and exercisable options under the Company's share Option Plan as of December 31, 2018: Outstanding Exercisable Range of exercise price Number of options Weighted average remaining contractual life (years) Weighted average exercise price Number of options Weighted average remaining contractual life (years) Weighted average exercise price $ 1.03 – 2.94 206,211 3.74 $ 2.62 69,325 1.33 $ 2.78 3.01 – 3.36 2,909,553 5.64 3.20 802,145 5.14 3.23 4.23 – 6.90 720,937 3.02 4.86 435,115 2.33 5.20 7.08 – 9.81 10,332 1.29 7.24 10,332 1.29 7.24 10.01 – 12.75 72,220 1.49 10.85 72,220 1.49 10.85 $ 13.14 –40.62 42,219 0.44 26.69 42,219 0.44 26.69 3,961,472 4.92 $ 3.87 1,431,356 3.75 $ 4.91 The Company recognized share-based compensation expenses related to its share-based awards in the consolidated statements of operations as follows: Year ended December 31, 2016 2017 2018 Cost of revenues $ 219 $ 36 $ 136 Research and development 708 229 448 Selling and marketing 1,907 744 848 General and administrative 4,010 1,103 1,286 Total $ 6,844 $ 2,112 $ 2,718 Share-based compensation in discontinued operations $ 42 $ - $ - As of December 31, 2018, there was $2,968 of unrecognized compensation cost related to outstanding options and RSUs and $59 related to outstanding warrants. These amounts are expected to be recognized over a weighted-average period of 1.43 years related to outstanding options and RSUs and 1 year related to outstanding warrants. To the extent the actual forfeiture rate is different from what has been estimated, share-based compensation related to these awards will differ from the initial expectations. d. In connection with the Undertone acquisition, the Company granted warrants to purchase 66,666 ordinary shares, at a weighted average exercise price of $9.09 per share, to a third-party vendor that provides development services to Undertone. The warrants are exercisable until December 27, 2020, and its weighted-average grant-date fair value was $1.23. The total expense incurred in 2016, 2017 and 2018 was $62, $61 and $61, respectively. e. In January 2018, the Company executed a repricing of 2,689,669 $3.24 |
FINANCIAL INCOME (EXPENSE), NET
FINANCIAL INCOME (EXPENSE), NET | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
FINANCIAL INCOME (EXPENSE), NET | NOTE 13: FINANCIAL INCOME (EXPENSE), NET Year ended December 31, 2016 2017 2018 Financial income: Interest income $ 204 $ 132 $ 296 Foreign currency translation gains, net - 204 1,013 Change in fair value of convertible debt - - 1,585 Change in fair value of SWAP 608 2,373 - Other - 197 355 $ 812 $ 2,906 $ 3,249 Financial expense: Foreign currency translation losses, net $ (779 ) $ - $ - Interest and change in fair value of payment obligation related to acquisitions (1,303 ) (43 ) - Interest expense on debts (5,306 ) (4,794 ) (3,820 ) Change in fair value of SWAP - - (2,487 ) Change in fair value of convertible debt (1,350 ) (3,785 ) - Bank charges and other (362 ) (206 ) (736 ) $ (9,100 ) $ (8,828 ) $ (7,043 ) Financial expense, net $ (8,288 ) $ (5,922 ) $ (3,794 ) |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 14: INCOME TAXES a. Income (Loss) before taxes on income Income (Loss) before taxes on income is comprised as follows: Year ended December 31, 2016 2017 2018 Domestic $ (3,393 ) $ 10,485 $ 9,081 Foreign 6,453 (92,065 ) 1,816 Total $ 3,060 $ (81,580 ) $ 10,897 b. Taxes on income Taxes on income are comprised as follows: Year ended December 31, 2016 2017 2018 Current taxes $ 3,753 $ 1,212 $ 1,706 Taxes in respect of previous years (273 ) (1,179 ) 612 Deferred tax expense (benefit) (3,268 ) (8,859 ) 458 Total $ 212 $ (8,826 ) $ 2,776 Taxes on income by jurisdiction were as follows: Year ended December 31, 2016 2017 2018 Domestic $ 3,396 $ 1,548 $ 2,187 Foreign (3,184 ) (10,374 ) 589 Total $ 212 $ (8,826 ) $ 2,776 Domestic: Current taxes $ 2,800 $ 387 $ 1,121 Deferred tax (benefit) expense 937 2,532 649 Taxes in respect of previous years (341 ) (1,371 ) 417 Total - Domestic $ 3,396 $ 1,548 $ 2,187 Foreign: Current taxes $ 953 $ 825 $ 585 Deferred tax benefit (4,205 ) (11,391 ) (191 ) Taxes in respect of previous years 68 192 195 Total - Foreign $ (3,184 ) $ (10,374 ) $ 589 Total income tax expense $ 212 $ (8,826 ) $ 2,776 c. Deferred Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2017 2018 Deferred tax assets: Net operating loss carry forwards $ 5,809 $ 4,992 Research and development 753 2,216 Intangible assets 829 1,480 Other temporary differences mainly relating to reserve and allowances 1,937 718 Deferred tax assets, before valuation allowance 9,328 9,406 Valuation allowance 4,530 4,992 Total deferred tax assets, net $ 4,798 $ 4,414 Deferred tax liabilities: Intangible assets $ - $ - Property and equipment, net - $ - Total deferred tax liabilities $ - $ - Total deferred tax liability, net $ 4,798 $ 4,414 Domestic: Long term deferred tax asset, net $ 1,536 $ 950 Long term deferred tax liability - - $ 1,536 $ 950 Foreign: Long term deferred tax asset, net $ 3,262 $ 3,464 Long term deferred tax liability - - $ 3,262 $ 3,464 Total deferred tax asset (liability), net $ 4,798 $ 4,414 The $462 change in the total valuation allowance for the year ended December 31, 2018, relates to the increase in deferred taxes on operating loss carry-forwards and temporary differences for which a full valuation allowance was recorded. d. Reconciliation of the Company’s effective tax rate to the statutory tax rate in Israel A reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company, and the actual tax expense as reported in the statement of income is as follows: Year ended December 31, 2016 2017 2018 Income (Loss) before taxes on income $ 3,060 $ (81,580 ) $ 10,897 Statutory tax rate in Israel 25.0 % 24.0 % 23.0 % Theoretical tax expense (income) $ 765 $ (19,579 ) $ 2,506 Increase (decrease) in tax expenses resulting from: "Preferred Enterprise" benefits * (1,356 ) (584 ) (1,301 ) Non-deductible expenses 1,777 1,150 298 Non- deductible Impairment charges - 12,652 - Deferred taxes on losses and other temporary charges for which a valuation allowance was provided, net 527 (209 ) 541 Tax adjustment in respect of different tax rate of foreign subsidiaries (2,032 ) (3,392 ) 511 Change in future tax rate 448 836 - Other 83 300 221 Taxes on income $ 212 $ (8,826 ) $ 2,776 * Benefit per ordinary share from "Preferred Enterprise" status: Basic $ 0.05 $ 0.02 $ 0.05 Diluted $ 0.05 $ 0.02 $ 0.05 e. Income tax rates Taxable income of Israeli companies was generally subject to corporate tax at the rate of 25% for the 2016 tax year. On December 30, 2016, as part of the Economic Efficiency Law (Legislative Amendments for Accomplishment of Budgetary Targets for Budget Years 2017-2018), 5777-2016, the corporate tax rate was reduced to 24% for the 2017 tax year and to 23% in the 2018 tax year. However, the effective tax rate payable by a company that derives income from a Preferred Enterprise (as discussed below) may be considerably lower. Non-Israeli subsidiaries are taxed according to the tax laws in their respective countries of residence. Deferred taxes were not provided for undistributed earnings of the Company’s foreign subsidiaries. Currently, the Company does not intend to distribute any amounts of its undistributed earnings as dividends. The Company intends to reinvest these earnings indefinitely in the foreign subsidiaries and pay down its debt. Accordingly, no deferred income taxes have been provided in respect of these subsidiaries. If these earnings were distributed to Israel in the form of dividends or otherwise, the Company would be subject to additional Israeli income taxes (subject to an adjustment for foreign tax credits) and foreign withholding taxes. The amount of undistributed earnings of foreign subsidiaries is immaterial. f. Law for the Encouragement of Capital Investments, 1959 The Law for Encouragement of Capital Investments, 1959 (the "Investment Law") provides tax benefits for Israeli companies meeting certain requirements and criteria. The Investment Law has undergone certain amendments and reforms in recent years. The Israeli parliament enacted a reform to the Investment Law, effective January 2011 (which was amended in August 2013 The Company’s Israeli operations elected “Preferred Enterprise” status, started in 2011. Benefits granted to a Preferred Enterprise include reduced tax rates. As part of Economic Efficiency Law (Legislative Amendments for Accomplishment of Budgetary Targets for Budget Years 2017-2018), 5777-2016, the tax rate is 16% for all other Areas other than Area A (which was 9% from 2016 onward). Preferred Enterprises in peripheral regions will be eligible for Investment Center grants, as well as the applicable reduced tax rates. A distribution from a Preferred Enterprise out of the "Preferred Income" would be subject to 15% withholding tax for Israeli-resident individuals and non-Israeli residents (subject to applicable treaty rates), or 20% for dividends which are distributed on or after January 1, 2014 and from “Preferred Income” that was produced or accrued after such date. A distribution from a Preferred Enterprise out of the "Preferred Income" would be exempt from withholding tax for an Israeli-resident company. g. The New Technological Enterprise Incentives Regime (Amendment 73 to the Investment Law) In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which includes Amendment 73 to the Law for the Encouragement of Capital Investments ("the 2017 Amendment") was published. According to the 2017 Amendment, Technological preferred enterprise, as defined in the Investment, with total consolidated revenues of less than NIS 10 billion, shall be subject to 12% tax rate on income deriving from intellectual property (in development area A—a tax rate of 7.5%). Any dividends distributed deriving from income from the preferred technological enterprises will be subject to tax at a rate of 20%. The 2017 Amendment further provides that, in certain circumstances, a dividend distributed to a foreign corporate shareholder, would be subject to a 4% tax rate (if the percentage of foreign investors exceeds 90%). The Company assessed the criteria for qualifying to a “Preferred Technological Enterprise,” status and concluded that the Israeli entity is entitled to the above-mentioned benefits. The Company implemented the new incentives in its tax calculations starting 2017. h. Uncertain tax positions A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows: December 31, 2017 2018 Balance at the beginning of the year $ 3,236 $ 4,063 Increase (decrease) related to prior year tax positions, net 153 (658 ) Increase related to current year tax positions 674 82 Balance at the end of the year $ 4,063 $ 3,487 The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in finance expenses. During the years ended December 31, 2016, 2017 and 2018, the Company recognized approximately $227, $344, and $12 in interest and penalties. The Company had $537, and $549 for the payment of interest and penalties accrued at December 31, 2017, and 2018, respectively. The Company does not expect uncertain tax positions to change significantly over the next 12 months, except in the case of settlements with tax authorities, the likelihood and timing of which are difficult to estimate. The Company believes that it has adequately provided for any reasonably foreseeable outcome related to tax audits and settlements, although the final tax outcome of its tax audits could be different from that which is reflected in the Company's income tax provisions and accruals. Such differences could have a material effect on the Company's income tax provision and net income in the period in which such determination is made. The Company’s tax assessments in Israel and the U.S. for tax years prior to 2014 and 2016 respectively are considered final. The Company has net operating losses in the U.S. from prior tax periods beginning in 2005 which may be subject to examination upon utilization in future tax periods i. Tax loss carry-forwards As of December 31, 2018, the Company’s U.S. subsidiaries have net operating loss carry-forwards of $2,555. Net operating losses in the U.S. may be carried forward through periods which will expire in the years starting from 2031 up to 2035. Utilization of U.S. net operating losses may be subject to substantial annual limitation due to the "change in ownership" provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization. As of December 31, 2018, the Company’s European subsidiaries have net operating loss carry-forwards of $6,849. As j. US Tax Reform: On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “TCJA”). The TCJA makes broad and complex changes to the Code. The changes include, but are not limited to: · A corporate income tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017 (“Rate Reduction”); · The transition of U.S international taxation from a worldwide tax system to a territorial system by providing a 100 percent deduction to an eligible U.S. shareholder on foreign sourced dividends received from a foreign subsidiary (“100% Dividend Received Deduction”); · A one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017; In March 2018, the FASB issued Accounting Standards Update No. 2018-05, "Income Taxes Topic (740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118" ("ASU 2018-05") to address situations when a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the TCJA. The Company included a $836 provisional estimate for the expected impact of the TCJA as of December 31, 2017, mainly in respect of the corporate rate reduction. During 2018, the Company completed its analysis of the impacts of the Act with an immaterial impact . |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 15: EARNINGS PER SHARE The table below presents the computation of basic and diluted net earnings per common share: Year ended December 31, 2016 2017 2018 Numerator: Net income (Loss) attributable to ordinary shares - basic $ 2,848 $ (72,754 ) $ 8,121 Net income (Loss) from continuing operations - diluted $ 2,848 $ (72,754 ) $ 8,121 Net loss from discontinued operations – basic and diluted $ (2,647 ) $ - $ - Denominator: Number of ordinary shares outstanding during the year 25,520,151 25,849,724 25,850,067 Weighted average effect of dilutive securities: Employee options and restricted share units 37,783 - 5,158 Diluted number of ordinary shares outstanding - Continuing and discontinued operations 25,557,934 25,849,724 25,855,225 Basic net earnings (loss) per ordinary share Continuing operations 0.11 $ (2.81 ) $ 0.31 Discontinued operations (0.10 ) $ - $ - Net income (loss) 0.01 $ (2.81 ) $ 0.31 Diluted net earnings (loss) per ordinary share Continuing operations 0.11 $ (2.81 ) $ 0.31 Discontinued operations (0.10 ) $ - $ - Net income (loss) 0.01 $ (2.81 ) $ 0.31 Ordinary shares equivalents excluded because their effect would have been anti-dilutive 3,566,788 5,408,206 4,725,618 |
RESTRUCTURING COSTS
RESTRUCTURING COSTS | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING COSTS | NOTE 16: RESTRUCTURING COSTS R estructuring charges were recorded in connection with restructuring plans in order to reduce workforce, close certain facilities, as well as other cost saving measures and amounted to $700, $0, and $2,100 during 2016, 2017 and 2018, respectively. |
MAJOR CUSTOMERS
MAJOR CUSTOMERS | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
MAJOR CUSTOMERS | NOTE 17: MAJOR CUSTOMERS A substantial portion of the Company's revenue is derived from search fees and online advertising, the market for which is highly competitive and rapidly changing. Significant changes in this industry or in customer buying behavior would adversely affect the Company’s operating results. The following table sets forth the customers that represent 10% or more of the Company’s total revenues in each of the years presented below: Year ended December 31, 2016 2017 2018 Customer A 49 % 46 % 45 % |
GEOGRAPHIC INFORMATION
GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
GEOGRAPHIC INFORMATION | NOTE 18: GEOGRAPHIC INFORMATION The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the Chief Operating Decision Maker, who is the Chief Executive Officer, in deciding how to allocate resources and assessing performance. Over the past few years, the Company has completed several acquisitions. These acquisitions have allowed the Company to expand its offerings, presence and reach in various markets. While the Company has offerings in multiple enterprise markets, the Company’s business operates in one segment which is the High Impact Advertising solutions, and the Company’s Chief Operating Decision Maker evaluates the Company’s financial information and resources and assesses the performance of these resources on a consolidated basis. The following table presents the total revenues for the years ended December 31, 2016, 2017 and 2018, allocated to the geographic areas in which they were generated: Year ended December 31, 2016 2017 2018 North America (mainly U.S.) $ 253,960 $ 213,471 $ 197,440 Europe 47,012 48,146 46,858 Other 11,822 12,369 8,547 $ 312,794 $ 273,986 $ 252,845 The total revenues are attributed to geographic areas based on the location of the end-users. The following table presents the locations of the Company’s property and equipment as of December 31, 2017 and 2018: December 31, 2017 2018 Israel $ 12,229 $ 11,193 U.S. 4,064 3,997 Europe 1,183 459 17,476 $ 15,649 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of consolidation | Basis of consolidation The consolidated financial statements include the accounts of Perion and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. |
Use of estimates | Use of estimates The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, the Company's management evaluates its estimates, including those related to sales allowances and allowance for doubtful debts, fair value of intangible assets and goodwill, useful lives of intangible assets, fair value of share-based awards, realizability of deferred tax assets, tax uncertainties, and contingent liabilities, among others. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of the Company’s assets and liabilities. |
Financial statements in U.S. dollars | Financial statements in U.S. dollars The reporting currency of the Company is the U.S. dollar (“USD”). Major parts of the Company’s operations are carried out by the Company and its subsidiaries in the United States and Israel. The functional currency of these entities is the USD . - Management believes that the USD is the currency of the primary economic environment in which the Company operates. The financial statements of other subsidiaries, whose functional currency is determined to be their local currency, have been translated into USD. All balance sheet accounts have been translated using the exchange rates in effect at the balance sheet date. Statement of operations amounts have been translated using the average exchange rate for each applicable quarter. The resulting translation adjustments are reported as an accumulated other comprehensive income (loss) component of shareholders' equity. |
Cash and cash equivalents and short-term deposits | Cash and cash equivalents and short-term deposits The Company considers all short-term, highly liquid and unrestricted cash balances, with stated maturities of three months or less from date of purchase, as cash equivalents. Short-term deposits are bank deposits with maturities of more than three months but less than one year. The short-term deposits as of December 31, 2017 and 2018 are denominated primarily in USD and bear interest at an average annual rate of 1.59% and 3.00%, respectively. |
Restricted cash | Restricted cash Restricted cash is comprised primarily of security deposits that are held to secure the Company’s hedging activity, lease obligations and certain letters of credit associated with lease obligations. Restricted cash in the amount of $1,188 and $1,694, as of December 31, 2017 and 2018, respectively, are included under prepaid expenses and other current assets . The Company adopted ASU 2016-18 “ ”, |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts Trade accounts receivables are stated at realizable value, net of an allowance for doubtful accounts. The Company evaluates its outstanding accounts receivable and establishes an allowance for doubtful accounts based on information available on their credit condition, current aging and historical experience. These allowances are reevaluated and adjusted periodically as additional information is available. |
Property and equipment | Property and equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following annual rates: % Computers and peripheral equipment 33 Office furniture and equipment 6 - 15 Leasehold improvements are amortized using the straight-line method over the term of the lease or the estimated useful life of the improvements, whichever is shorter. |
Impairment of long-lived assets and intangible assets subject to amortization | Impairment of long-lived assets and intangible assets subject to amortization Property and equipment and intangible assets subject to amortization are reviewed for impairment in accordance with ASC 360, "Accounting for the Impairment or Disposal of Long-Lived Assets", whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The recoverability of these assets is measured by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If property and equipment and intangible assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. In determining the fair values of long-lived assets for the purpose of measuring impairment, the Company's assumptions include those that market participants will consider in valuations of similar assets. In 2017, the Company recorded impairment charges of $19,981, with respect to intangible assets subject to amortization. No such impairment charges were recorded in 2018. |
Goodwill | Goodwill Goodwill reflects the excess of the purchase price of business acquired over the fair value of net assets acquired. Goodwill is not amortized but instead is tested for impairment, in accordance with ASC 350, “Intangibles – Goodwill and Other”, at the reporting unit level, at least annually at December 31 each year, or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Following the early adoption of ASU 2017-04, "Simplifying the Test for Goodwill Impairment" by the Company in January 2017, any excess of the carrying amount of the reporting unit over its fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. Based on the goodwill assessment for the Undertone reporting unit in 2017, the Company determined that the carrying amount of the Undertone reporting unit exceeds its fair value and recorded an impairment charge of $65,686 to its Goodwill. No such impairment charges were recorded in 2018 and in 2016 . The majority of the inputs used in the discounted cash flow model to determine the fair value of the reporting units are unobservable and thus are considered to be Level 3 inputs. Intangible assets that are not considered to have an indefinite useful life are amortized over their estimated useful lives. The Customer Relationship, technology and trade name are amortized over their estimated useful lives in proportion to the economic benefits realized. This accounting policy results in accelerated amortization of such intangible assets as compared to the straight-line method. |
Deferred Financing Costs | Deferred Financing Costs Direct and incremental costs related to the issuance of debt are capitalized as deferred financing costs and are deducted from the carrying amount of that debt in the consolidated balance sheets. The Company amortizes deferred financing costs using the effective-interest method and records such amortization as interest expense. |
Revenue recognition | Revenue recognition The Company applies the provisions of Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606" or "Topic 606") The Company adopted the provisions of ASC 606 effective January 1, 2018 using the modified retrospective application method for all uncompleted contracts as of that date. The adoption of ASC 606 did not have a material impact on the Company’s consolidated financial statements. In addition, the adoption of ASC 606 had no impact on the Company's accounts receivable and deferred revenues balance as of December 31, 2018 or on the Company's revenues, cost of sales or its operating expenses during 2018, compared to ASC 605. The Company applies the practical expedient for incremental costs of obtaining contracts when the associated revenues is recognized over less than one year. The Company generates revenues primarily from two major sources: Search Revenues Advertising Revenues For more disaggregated information of revenues refer to Note 18. The Company general payments terms are less than one year. Therefore, no finance component is recognized. The Company evaluates whether Search and Advertising Revenues should be presented on a gross basis, which is the amount that a customer pays for the service, or on a net basis, which is the amount of the customer payment less amounts the Company pays to publishers. In making that evaluation, the Company considers whether it controls the promised good or service before transferring that good or service to the customer. The Company considers indicators such as whether the Company is the primary obligor in the arrangement and assumes risks and rewards as a principal or an agent, including the credit risk, whether the Company has latitude in establishing prices and selecting its suppliers and whether it changes the products or performs part of the service. The evaluation of these factors is subject to significant judgment and subjectivity. Generally, in cases in which the Company is primarily obligated in a transaction, is subject to risk, involved in the determination of the product (or the service) specifications, separately negotiates each revenue service agreement or publisher agreement and can have several additional indicators, revenue is recorded on a gross basis. Remaining performance obligations (RPOs) represent amounts collected on contracted revenues that had not yet been recognized. As of December 31, 2018, the aggregate amount of the RPOs was $3,794. The Company expects the RPO to be recognized as revenues within the next twelve months. Contract balances are presented separately on the consolidated balance sheets as either Accounts receivable or deferred revenues. The Company does not have contract assets. Accounts receivable includes amounts billed and currently due from customers. Deferred revenues are recorded when payments are received from customers in advance of the Company's rendering of services. Revenues recognized during 2018 from amounts included within the deferred revenues balance at the beginning of the period amounted to $5,270. |
Cost of revenues | Cost of revenues Cost of revenues consists primarily of expenses associated with the operation of the Company’s data centers, including depreciation, labor, energy and bandwidth costs, as well as content acquisition costs, and customer support. The direct cost relating to search revenues is immaterial. |
Customer acquisition costs and media buy | Customer acquisition costs and media buy Customer acquisition costs and media buy consist of amounts paid to publishers who distribute the Company’s search applications and services and other products as well as the costs of advertising inventory incurred to deliver ads. Customer acquisition costs are primarily based on revenue share arrangements with minimum guaranty and are charged as incurred. |
Research and development costs | Research and development costs Research and development costs are charged to the statement of income as incurred, except for certain costs relating to internally developed software, which are capitalized. The Company capitalizes certain internal and external software development costs, consisting primarily of direct labor associated with creating the internally developed software. Software development projects generally include three stages: (i) the preliminary project stage (all costs expensed as incurred); (ii) the application development stage (costs are capitalized) and (iii) the post implementation/operation stage (all costs expensed as incurred). The costs capitalized in the application development stage primarily include the costs of designing the application, coding and testing of the system. Capitalized costs are amortized using the straight-line method over the estimated useful life of the software, generally three years, once it is ready for its intended use. The Company believes that the straight-line recognition method best approximates the manner in which the expected benefit will be derived. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Capitalized software development costs, net of accumulated amortization, of $9,195 and $8,212 are included in property and equipment in the consolidated balance sheets as of December 31, 2017 and 2018, respectively (see Note 5). |
Income taxes | Income taxes The Company accounts for income taxes in accordance with ASC 740, "Income Taxes". This Statement prescribes the use of the liability method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. To the extent necessary, the Company provides a valuation allowance to reduce deferred tax assets to their estimated realizable value. The Company accounts for uncertain tax positions in accordance with ASC 740, which contains a two-step approach for recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company accrued interest and penalties related to unrecognized tax benefits in its financial expenses. |
Severance pay | Severance pay The majority of the Company's agreements with employees in Israel are in accordance with section 14 of the Severance Pay Law, 1963 (“Section 14”), where the Company's contributions for severance pay is paid to the employee upon termination instead of the severance liability that would otherwise be payable under the law as aforementioned. Upon contribution to a fund, based on the full amount of the employee's monthly salary, and release of the fund to the employee, no additional severance payments are required to be made by the Company to the employee. Therefore, the related obligation and amounts deposited on behalf of such obligation are not stated on the balance sheet, as the Company is legally released from obligation to such employees once the deposit amounts have been paid. The Company's liability for severance pay to its Israel-based employees not under Section 14, is calculated pursuant to Israel's Severance Pay Law based on the most recent monthly salaries of such employees, multiplied by the number of years of their employment, or a portion thereof, as of the balance sheet date. This liability is fully provided for by monthly deposits in insurance policies and by an accrual. The deposited funds include profits and losses accumulated up to the balance sheet date and they may be withdrawn only upon the fulfillment of the obligation pursuant to Israel's Severance Pay Law. Severance expenses from continuing operations for the years ended December 31, 2016, 2017 and 2018 amounted to $2,917, $2,039 and $1,230, respectively. The balances of severance deposits and accrued severance pay are immaterial and included in other assets and other long-term liabilities on the accompanying balance sheets, respectively. |
Employee benefit plan | Employee benefit plan The Company’s U.S. operations maintain a retirement plan (the “U.S. Plan”) that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Participants in the U.S. Plan may elect to defer a portion of their pre-tax earnings, up to the Internal Revenue Service’s annual contribution limit. The Company matches 100% of each participant’s contributions, up to 3% of employee deferral, and 50% of the next 2% of employee deferral. Contributions to the U.S. Plan are recorded during the year contributed as an expense in the consolidated statement of income. Total employer 401(k) contributions for the years ended December 31, 2016, 2017 and 2018 were $1,018, $2,765 and $2,305, respectively. |
Comprehensive income (loss) | Comprehensive income (loss) The Company accounts for comprehensive income (loss) in accordance with ASC 220, "Comprehensive Income". This statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its other comprehensive income (loss) relates to hedging derivative instruments and foreign currency translation adjustments. |
Net earnings per share | Net earnings per share In accordance with ASC 260, "Earnings Per Share", basic net earnings per share ("Basic EPS") is computed by dividing net earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net earnings per share ("Diluted EPS") reflects the potential dilution that could occur if share options and other commitments to issue ordinary shares were exercised or equity awards vested, resulting in the issuance of ordinary shares that could share in the net earnings of the Company. The weighted average number of ordinary shares related to the outstanding options, restricted shares, convertible debt and warrants excluded from the calculations of diluted net earnings per ordinary share, as these securities are anti-dilutive, was 3,566,788, 5,408,206 and 4,725,618 for the years ended December 31, 2016, 2017 and 2018, respectively. |
Concentrations of credit risk | Concentrations of credit risk Financial instruments, which potentially subject the Company to a concentration of credit risk, consist primarily of cash and cash equivalents, bank deposits, restricted cash and accounts receivable. The majority of the Company’s cash and cash equivalents, bank deposits and restricted cash are invested in USD instruments with major banks in the U.S. and Israel. Deposits in the U.S. may be in excess of insured limits and are not insured in other jurisdictions. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal risk. The Company’s major customers are financially sound, and the Company believes low credit risk is associated with these customers. To date, the Company has not experienced any material bad debt losses. Total expenses for doubtful debts during 2016, 2017 and 2018 amounted to $152, $230 and $180, respectively. |
Stock-based compensation | Share-based compensation The Company accounts for share-based compensation under ASC 718, "Compensation - Stock Compensation", which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to employees and directors. ASC 718 requires companies to estimate the fair value of equity-based awards on the date of grant, using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated statement of income. The Company estimates forfeitures to be estimated at the time of grant, and revised if necessary in subsequent periods, if actual forfeitures differ from those estimates. The Company recognizes compensation expenses for the value of its awards, which have graded vesting based on service conditions, using the straight-line method, over the requisite service period of each of the awards, net of estimated forfeitures. Estimated forfeitures are based on actual historical pre-vesting forfeitures. For performance-based share units, the Company recognizes compensation expenses for the value of such awards, if and when the Company concludes that it is probable that a performance condition will be achieved based on the accelerated attribution method over the requisite service period. The Company should reassess the probability of vesting at each reporting period for awards with performance conditions and adjust compensation cost based on its probability assessment. The Company accounted for changes in award terms as a modification in accordance with ASC 718. A modification to the terms of an award should be treated as an exchange of the original award for a new award with total compensation cost equal to the grant-date fair value of the original award plus the incremental value measured at the same date. Under ASC 718, the calculation of the incremental value is based on the excess of the fair value of the new (modified) award based on current circumstances over the fair value of the original award measured immediately before its terms are modified based on current circumstances. The Company estimates the fair value of its new share-based awards using the Binomial option-pricing model. The following table presents the various assumptions used to estimate the fair value of the Company's share-based awards granted to employees and directors in the periods presented: Year ended December 31 2016 2017 2018 Risk-free interest rate 0.46% - 1.73% 0.81% - 2.08% 1.50% - 3.00% Expected volatility 49.49% - 53.54% 52% - 56% 48% - 57% Early exercise factor 150% - 200% 150% - 200% 150% - 200% Forfeiture rate post vesting 5% - 20% 0% - 23% 0% - 34% Dividend yield 0% 0% 0% The expected volatility is calculated based on the actual historical share price movements of the Company’s share. The expected option term represents the period that the Company’s share options are expected to be outstanding. The early exercise factor and the forfeiture rate post-vesting are calculated based on the Company’s estimated early exercise and post-vesting forfeiture multiples, which are based on comparable companies and on actual historical data. The risk-free interest rate is based on the yield from U.S. Treasury zero-coupon bonds, with a term which is equivalent to the expected term of the share-based awards. The dividend yield is based on the current decision of the Company’s management not to distribute any dividends. The fair value of restricted share units (“RSU”) is based on the market value of the underlying shares on the date of grant. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. The Company adopted ASU 2016-09 on January 1, 2017 and chose to continue to use the current method of estimating forfeitures each period rather than accounting for forfeitures as they occur. The adoption of the new standard had no material impact on the Company's consolidated financial statements. |
Derivative instruments | Derivative instruments The Company accounts for derivatives and hedging based on ASC 815, "Derivatives and Hedging", which requires recognizing all derivatives on the balance sheet at fair value. If the derivatives meet the definition of a cash flow hedge and are so designated, depending on the nature of the hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period, or periods, during which the hedged transaction affects earnings. The ineffective portion of a derivative’s change in fair value, if any, is recognized in earnings, as well as gains and losses from a derivative’s change in fair value that are not designated as hedges are recognized in earnings immediately. In order to mitigate the potential adverse impact on cash flows resulting from fluctuations in the exchange rate of the new Israeli shekels (“ILS”), the Company hedges portions of its forecasted expenses denominated in ILS with swap and options contracts. The Company does not speculate in these hedging instruments in order to profit from foreign currency exchanges, nor does it enter into trades for which there are no underlying exposures. To protect against the increase in value of forecasted foreign currency cash flow resulting mainly from salaries and related benefits and taxes paid in ILS during the year, the Company hedges portions of its anticipated payroll denominated in ILS for a period of one to twelve months with forward and options contracts (the “Hedging Contracts”). Accordingly, when the USD strengthens against the ILS, the decline in present value of future ILS currency expenses is offset by losses in the fair value of the Hedging Contracts. Conversely, when the USD weakens, the increase in the present value of future ILS expenses is offset by gains in the fair value of the Hedging Contracts. These Hedging Contracts are designated as cash flow hedges. The Company follows the requirements of ASC No. 815, Derivatives and Hedging Additionally, in order to mitigate the potential adverse impact of the fluctuations in the ILS-USD exchange rate in connection with the convertible debt (see Note 10), the Company has entered into a cross currency interest rate SWAP agreement (the “SWAP”) in order to hedge the future interest and principal payments, which are all denominated in ILS. However, since the convertible debt is measured at fair value at each reporting date, the SWAP does not qualify and was not designated as hedge under ASC 815. Therefore, gains or losses resulting from the change of the SWAP's fair value are recognized immediately as incurred in "financial expenses, net". The Company measured the fair value of these contracts in accordance with ASC 820, "Fair Value Measurement and Disclosures", and they were classified as level 2. In order to limit the Company’s interest expenses derived from the secured credit agreement in which the Company entered concurrently with the closing of the Undertone acquisition (see Note 4), the Company has purchased a Cap Option for the interest amounts expected to be paid till June 2018. The cap option is designated as cash flow hedge under ASC 815. The notional value of the Company’s derivative instruments as of December 31, 2017 and 2018, amounted to $51,504 and $25,691, respectively. Notional values in USD are translated and calculated based on the spot rates for options and swap. Gross notional amounts do not quantify risk or represent assets or liabilities of the Company; however, they are used in the calculation of settlements under the contracts. |
Fair value of financial instruments | Fair value of financial instruments The carrying amounts of financial instruments carried at cost, including cash and cash equivalents, short-term deposits, restricted cash, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses and other liabilities approximate their fair value due to the short-term maturities of such instruments. The Company follows the provisions of ASC No. 820, “Fair Value Measurement” (“ASC 820”), which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining a fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability, based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect assumptions that market participants would use in pricing an asset or liability, based on the best information available under given circumstances. The hierarchy is broken down into three levels, based on the observability of inputs and assumptions, as follows: · Level 1 - · Level 2 · Level 3 |
Treasury shares | Treasury shares In the past, the Company repurchased its ordinary shares on the open market. The Company holds the shares as treasury shares and presents their cost as a reduction of shareholders' equity. |
Business combinations | Business combinations The Company accounted for business combination in accordance with ASC 805, "Business Combinations". ASC 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date, measured at their fair values as of that date. Any excess of the fair value of net assets acquired over purchase price is allocated to goodwill and any subsequent changes in estimated contingencies are to be recorded in earnings. In addition, changes in valuation allowance related to acquired deferred tax assets and in acquired income tax position are to be recognized in earnings. Acquisition related costs are expensed to the statement of income in the period incurred. |
Discontinued operations | Discontinued operations Under ASC 205, "Presentation of Financial Statements - Discontinued Operation", when a component of an entity, as defined in ASC 205, has been disposed of or is classified as held for sale, the results of its operations, including the gain or loss on its disposal are classified as discontinued operations and the assets and liabilities of such component are classified as assets and liabilities attributed to discontinued operations, provided that the operations, assets and liabilities and cash flows of the component have been eliminated from the entity’s consolidated operations and the entity will no longer have any significant continuing involvement in the operations of the component. In August 2016, the Company completed the sale of its Grow Mobile Engagement ("GME") business for a total consideration of $1,750, which was included in net loss from discontinued operations in the consolidated statement of income for the year ended December 31, 2016. The results of the discontinued operations, including prior periods' comparable results, which have been retroactively reclassified as a separate line items in the statements of income, are presented below: Year ended December 31, 2016 (*) Costs and expenses 5,192 Impairment of intangible assets and goodwill - Gain on disposal of the discontinued operations (1,750 ) Loss before taxes on income (3,442 ) Taxes on income 795 Total net loss on discontinued operations $ (2,647 ) Depreciation expenses from discontinued operations totaled $71 and $0 and $0, for the years ended December 31, 2016, 2017 and 2018, respectively. (*) Represent the results of the discontinued operations until their disposal. |
Reclassifications | Reclassifications Certain items of expense have been reclassified to conform to current year financial statement presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements not yet adopted In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02 (Topic 842) "Leases." Topic 842 supersedes the lease requirements in Accounting Standards Codification (ASC) Topic 840, "Leases." Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. This ASU is effective for annual periods beginning after December 15, 2018. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach. In July 2018, the FASB issued Accounting Standards Update 2018-11, Leases (Topic 842). This update provides entities with an additional (and optional) transition method to adopt the new leases standard. Under this method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, the prior comparative period’s financials will remain the same as those previously presented. The Company has elected to apply the guidance at the beginning of the period of adoption and not restate comparative periods. The Company expects that the adoption of this standard will have a material effect on its consolidated financial statements. While the Company continues to assess all the effects of adoption, it currently believes that the most significant impact will be reflected in: (i) the recognition of new ROU assets and lease liabilities on the consolidated balance sheet for its operating leases of buildings, and vehicles, and (ii) the requirement to provide significant new disclosures regarding the Company's leasing activities. The Company, however, does not expect a material impact to its consolidated statements of income and consolidated statements of cash flow since the expense recognition under this new standard will be similar to current practice. The Company's financial income (expenses), net will be impacted by the revaluation of the lease liabilities in non-USD denominated currencies. Following adoption of the new standard, the Company expects to recognize additional operating liabilities of $25, 800 The Company expects to elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases, the Company will not recognize ROU assets or lease liabilities. In August 2017, the FASB issued ASU No. 2017-12 (Topic 815) Derivatives and Hedging — Targeted Improvements to Accounting for Hedging Activities, which expands an entity's ability to hedge financial and nonfinancial risk components and amends how companies assess effectiveness as well as changes the presentation and disclosure requirements. The new standard is to be applied on a modified retrospective basis and is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of adoption on the consolidated financial statements. In February 2018, the FASB issued ASU 2018-02 “Income Statement—Reporting Comprehensive Income—Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”. The guidance allows reclassification of stranded tax effects resulting from the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. This guidance is effective for fiscal years beginning after December 15, 2018. The adoption of this guidance has no material impact on the Company’s consolidated financial statements. In June 2018, the FASB issued ASU 2018-07 “Improvement to Nonemployee Share-Based Payments Accounting”. This guidance simplifies the accounting for non-employee share-based payment transactions. The amendments specify that ASC 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The guidance is effective for fiscal years beginning after December 31, 2018. The Company does not expect that the adoption of this guidance will have a significant impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13 “Fair Value Measurement (Topic 820)—Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. This guidance removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements. The new disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Certain disclosures required by this guidance must be applied on a retrospective basis and others on a prospective basis. The guidance will be effective for fiscal years beginning after December 15, 2019, although early adoption is permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives at an Annual Rate | Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following annual rates: % Computers and peripheral equipment 33 Office furniture and equipment 6 - 15 |
Schedule of assumptions used to estimate the fair value of the stock-based awards granted to employees and directors | The following table presents the various assumptions used to estimate the fair value of the Company's share-based awards granted to employees and directors in the periods presented: Year ended December 31 2016 2017 2018 Risk-free interest rate 0.46% - 1.73% 0.81% - 2.08% 1.50% - 3.00% Expected volatility 49.49% - 53.54% 52% - 56% 48% - 57% Early exercise factor 150% - 200% 150% - 200% 150% - 200% Forfeiture rate post vesting 5% - 20% 0% - 23% 0% - 34% Dividend yield 0% 0% 0% |
Pro forma discontinued operations results | The results of the discontinued operations, including prior periods' comparable results, which have been retroactively reclassified as a separate line items in the statements of income, are presented below: Year ended December 31, 2016 (*) Costs and expenses 5,192 Impairment of intangible assets and goodwill - Gain on disposal of the discontinued operations (1,750 ) Loss before taxes on income (3,442 ) Taxes on income 795 Total net loss on discontinued operations $ (2,647 ) |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract] | |
Schedule of Fair Value Measurements | The following table present assets and liabilities measured at fair value on a recurring basis as of December 31, 2018: Fair value measurements using input type Level 1 Level 2 Level 3 Total Assets: Derivative assets $ - $ 871 $ - $ 871 Total financial assets $ - $ 871 $ - $ 871 Liabilities: Derivative liabilities - 153 - 153 Convertible debt 15,453 - - 15,453 Total financial liabilities $ 15,453 $ 153 $ - $ 15,606 The following table present assets and liabilities measured at fair value on a recurring basis as of December 31, 2017: Fair value measurements using input type Level 1 Level 2 Level 3 Total Assets: Derivative assets $ - $ 3,486 $ - $ 3,486 Total financial assets $ - $ 3,486 $ - $ 3,486 Liabilities: Convertible debt 25,353 - - 25,353 Total financial liabilities $ 25,353 $ - $ - $ 25,353 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | December 31, 2017 2018 Cost: Computers and peripheral equipment $ 10,295 $ 7,004 Office furniture and equipment 2,811 2,836 Leasehold improvements 7,779 8,712 Capitalized software 10,650 12,645 Total cost 31,535 31,197 Less: accumulated depreciation and amortization (14,059 ) (15,548 ) Property and equipment, net $ 17,476 $ 15,649 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill | The changes in the net carrying amount of goodwill in 2017 and 2018 were as follows: Balance as of January 1, 2017 $ 190,737 Impairment on Undertone's goodwill (65,686 ) Balance as of December 31, 2017 $ 125,051 Balance as of December 31, 2018 $ 125,051 |
Summary of Intangible Assets | The following is a summary of intangible assets as of December 31, 2018: December 31, 2017 Amortization OCI December 31, 2018 Acquired technology $ 30,837 $ - $ (30 ) $ 30,807 Accumulated amortization (19,959 ) (1,301 ) 18 (21,242 ) Impairment (8,749 ) - - (8,749 ) Acquired technology, net 2,129 (1,301 ) (12 ) 816 Customer relationships 31,949 - (9 ) 31,940 Accumulated amortization (18,832 ) (999 ) 6 (19,825 ) Impairment (10,426 ) - - (10,426 ) Customer relationships, net 2,691 (999 ) (3 ) 1,689 Tradename and other 18,457 - (42 ) 18,415 Accumulated amortization (6,858 ) (2,469 ) 13 (9,314 ) Impairment (5,110 ) - - (5,110 ) Tradename and other, net 6,489 (2,469 ) (29 ) 3,991 Intangible assets, net $ 11,309 $ (4,769 ) $ (44 ) $ 6,496 The following is a summary of intangible assets as of December 31, 2017: December 31, 2016 Amortization OCI Impairment December 31, 2017 Acquired technology $ 30,674 $ - $ 163 - $ 30,837 Accumulated amortization (14,490 ) (5,390 ) (79 ) - (19,959 ) Impairment (956 ) - - (7,793 )*) (8,749 ) Acquired technology, net 15,228 (5,390 ) 84 (7,793 ) 2,129 Customer relationships 31,898 - 51 - 31,949 Accumulated amortization (13,905 ) (4,900 ) (27 ) - (18,832 ) Impairment (91 ) - - (10,335 )*) (10,426 ) Customer relationships, net 17,902 (4,900 ) 24 (10,335 ) 2,691 Tradename and other 18,224 - 233 - 18,457 Accumulated amortization (4,079 ) (2,734 ) (45 ) - (6,858 ) Impairment (3,257 ) - - (1,853 )*) (5,110 ) Tradename and other, net 10,888 (2,734 ) 188 (1,853 ) 6,489 Intangible assets, net $ 44,018 $ (13,024 ) $ 296 $ (19,981 ) $ 11,309 *) Calculated based on the Income approach (discounted cash flow model), using a discount rate of 15.7% |
Schedule of Estimated Useful Life of the Intangible Assets | The estimated useful life of the intangible assets are as follows: Estimated useful life Acquired technology 3-5 years Customer relationships 4-5 years Tradename and other 4-11 years |
Schedule of Estimated Future Amortization Expense | Amortization of intangible assets, net, in each of the succeeding five years and thereafter is estimated as follows: 2019 $ 4,228 2020 1,279 2021 229 2022 240 2023 252 Thereafter 268 $ 6,496 |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | December 31, 2017 2018 Employees and payroll accruals $ 8,020 $ 8,528 Government authorities 2,427 2,068 Professional services accruals 1,886 1,480 Other accruals 4,155 4,604 Other overhead related expenses 885 253 Hosting, software and web services accruals 411 307 $ 17,784 $ 17,240 |
DERIVATIVES AND HEDGING ACTIV_2
DERIVATIVES AND HEDGING ACTIVITES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value of the Companys outstanding derivative instruments | The fair value of the Company’s outstanding derivative instruments is as follows: December 31, Balance sheet 2017 2018 Derivatives designate as hedging instruments: Foreign exchange forward contracts and other derivatives ''Prepaid expenses and other current assets'' $ 140 $ 11 ''Accrued expenses and other liabilities'' - 153 ''Accumulated other comprehensive income'' 116 (106 ) Derivatives not designated as hedging instruments: Cross currency SWAP ''Prepaid expenses and other current assets'' $ 3,346 $ 860 |
Schedule of net losses reclassified from accumulated other comprehensive loss to the operating expenses | The net losses reclassified from accumulated other comprehensive loss to the operating expenses are as follows: Gain recognized in Statements of Comprehensive Income Gain (loss) recognized in consolidated statements of Income Year ended December 31, Statement of Income Year ended December 31, 2018 2016 2017 2018 Derivatives designated as hedging instruments: Foreign exchange options and forward contracts $ (223 ) "Operating expenses" $ 167 $ 525 $ (206 ) Derivatives not designated as hedging instruments: Foreign exchange options and forward contracts "Financial expenses" (16 ) 132 (186 ) SWAP "Financial expenses" 608 2,373 2,487 Total $ (223 ) $ 759 $ 3,030 $ 2,095 |
SHORT TERM AND LONG TERM DEBT (
SHORT TERM AND LONG TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable to Banks [Member] | |
Debt Instrument Line Items | |
Schedule of aggregate principal annual payments of the bonds | As of December 31, 2018, the aggregate principal annual maturities according to all of the above loan agreements were as follows: Repayment amount 2019 $ 8,333 2020 8,333 2021 8,334 Present value of principal payments 25,000 Less: current portion (8,333 ) Long-term debt $ 16,667 |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Instrument Line Items | |
Schedule of Changes of Long-term Convertible Debt | The changes of the long-term convertible debt in 2017 and 2018 were as follows: Balance as of January 1, 2017 $ 29,526 Change in accrued interest 1,344 Change in fair value 3,785 Payment of interest (1,401 ) Payment of principal (7,901 ) Balance as of December 31, 2017* $ 25,353 Change in accrued interest 863 Change in fair value (1,585 ) Payment of interest (1,011 ) Payment of principal (8,167 ) Balance as of December 31, 2018* $ 15,453 * includes accrued interest of $313 and $193 as of December 31, 2017 and 2018, respectively |
Series L Convertible Bonds [Member] | |
Debt Instrument Line Items | |
Schedule of aggregate principal annual payments of the bonds | As of December 31, 2018, the aggregate principal annual payments of the Bonds were as follows: Repayment amount 2019 $ 7,657 2020 7,656 $ 15,313 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Aggregate Minimum Lease Commitments | Aggregate minimum lease commitments under the aforesaid non-cancelable operating leases as of December 31, 2018, were as follows: Minimum lease payments Minimum sublease rentals Net future minimum lease commitment 2019 $ 5,102 $ 3,248 $ 1,854 2020 5,985 2,940 3,045 2021 5,768 2,880 2,888 2022 5,062 2,325 2,737 2023 4,681 1,987 2,694 Thereafter 9,922 2,153 7,769 $ 36,520 $ 15,533 $ 20,987 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Stock Option Activity | The following table summarizes the activities for the Company’s service-based share options for the year ended December 31, 2018: Weighted average Number of options Exercise price Remaining contractual term (in years) Aggregate intrinsic value Outstanding at January 1, 2018 4,203,888 $ 4. 52 4.27 $ 56 Granted 1,035,481 3.08 - - Exercised (167 ) 3.24 - - Cancelled ( ) 5.20 - - Outstanding at December 31, 2018 3,744,807 $ 3.85 4. 97 $ 27 Exercisable at December 31, 2018 1,314,690 $ 4. 88 3.86 $ 4 Vested and expected to vest at December 31, 2018 2,906,311 $ 4.57 4.11 $ 19 |
Schedule of Option Activity by Price Range | The following table summarizes additional information regarding outstanding and exercisable options under the Company's share Option Plan as of December 31, 2018: Outstanding Exercisable Range of exercise price Number of options Weighted average remaining contractual life (years) Weighted average exercise price Number of options Weighted average remaining contractual life (years) Weighted average exercise price $ 1.03 – 2.94 206,211 3.74 $ 2.62 69,325 1.33 $ 2.78 3.01 – 3.36 2,909,553 5.64 3.20 802,145 5.14 3.23 4.23 – 6.90 720,937 3.02 4.86 435,115 2.33 5.20 7.08 – 9.81 10,332 1.29 7.24 10,332 1.29 7.24 10.01 – 12.75 72,220 1.49 10.85 72,220 1.49 10.85 $ 13.14 –40.62 42,219 0.44 26.69 42,219 0.44 26.69 3,961,472 4.92 $ 3.87 1,431,356 3.75 $ 4.91 |
Schedule of Stock-Based Compensation Expense | The Company recognized share-based compensation expenses related to its share-based awards in the consolidated statements of operations as follows: Year ended December 31, 2016 2017 2018 Cost of revenues $ 219 $ 36 $ 136 Research and development 708 229 448 Selling and marketing 1,907 744 848 General and administrative 4,010 1,103 1,286 Total $ 6,844 $ 2,112 $ 2,718 Share-based compensation in discontinued operations $ 42 $ - $ - |
Performance-based Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Stock Option Activity | The following table summarizes the activities for the Company’s performance-based share options for the year ended December 31, 2018: Weighted average Number of Performance based options Exercise price Remaining contractual term (in years) Aggregate intrinsic value Outstanding at January 1, 2018 283,331 $ 4.93 - $ - Cancelled (66,666 ) 6.84 - - Outstanding at December 31, 2018 216,665 4.35 4.12 - Exercisable at December 31, 2018 116,666 5.30 2.55 - Vested and expected to vest at December 31, 2018 116,666 $ 5.30 2.55 $ - |
FINANCIAL INCOME (EXPENSE), N_2
FINANCIAL INCOME (EXPENSE), NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of Financial Income (Expense), Net | Year ended December 31, 2016 2017 2018 Financial income: Interest income $ 204 $ 132 $ 296 Foreign currency translation gains, net - 204 1,013 Change in fair value of convertible debt - - 1,585 Change in fair value of SWAP 608 2,373 - Other - 197 355 $ 812 $ 2,906 $ 3,249 Financial expense: Foreign currency translation losses, net $ (779 ) $ - $ - Interest and change in fair value of payment obligation related to acquisitions (1,303 ) (43 ) - Interest expense on debts (5,306 ) (4,794 ) (3,820 ) Change in fair value of SWAP - - (2,487 ) Change in fair value of convertible debt (1,350 ) (3,785 ) - Bank charges and other (362 ) (206 ) (736 ) $ (9,100 ) $ (8,828 ) $ (7,043 ) Financial expense, net $ (8,288 ) $ (5,922 ) $ (3,794 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income (Loss) Before Taxes | Income (Loss) before taxes on income is comprised as follows: Year ended December 31, 2016 2017 2018 Domestic $ (3,393 ) $ 10,485 $ 9,081 Foreign 6,453 (92,065 ) 1,816 Total $ 3,060 $ (81,580 ) $ 10,897 |
Schedule of Income Taxes | Taxes on income are comprised as follows: Year ended December 31, 2016 2017 2018 Current taxes $ 3,753 $ 1,212 $ 1,706 Taxes in respect of previous years (273 ) (1,179 ) 612 Deferred tax expense (benefit) (3,268 ) (8,859 ) 458 Total $ 212 $ (8,826 ) $ 2,776 |
Schedule of Income Taxes by Jurisdiction | Taxes on income by jurisdiction were as follows: Year ended December 31, 2016 2017 2018 Domestic $ 3,396 $ 1,548 $ 2,187 Foreign (3,184 ) (10,374 ) 589 Total $ 212 $ (8,826 ) $ 2,776 Domestic: Current taxes $ 2,800 $ 387 $ 1,121 Deferred tax (benefit) expense 937 2,532 649 Taxes in respect of previous years (341 ) (1,371 ) 417 Total - Domestic $ 3,396 $ 1,548 $ 2,187 Foreign: Current taxes $ 953 $ 825 $ 585 Deferred tax benefit (4,205 ) (11,391 ) (191 ) Taxes in respect of previous years 68 192 195 Total - Foreign $ (3,184 ) $ (10,374 ) $ 589 Total income tax expense $ 212 $ (8,826 ) $ 2,776 |
Schedule of Deferred Tax Assets (Liabilities) | The significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2017 2018 Deferred tax assets: Net operating loss carry forwards $ 5,809 $ 4,992 Research and development 753 2,216 Intangible assets 829 1,480 Other temporary differences mainly relating to reserve and allowances 1,937 718 Deferred tax assets, before valuation allowance 9,328 9,406 Valuation allowance 4,530 4,992 Total deferred tax assets, net $ 4,798 $ 4,414 Deferred tax liabilities: Intangible assets $ - $ - Property and equipment, net - $ - Total deferred tax liabilities $ - $ - Total deferred tax liability, net $ 4,798 $ 4,414 Domestic: Long term deferred tax asset, net $ 1,536 $ 950 Long term deferred tax liability - - $ 1,536 $ 950 Foreign: Long term deferred tax asset, net $ 3,262 $ 3,464 Long term deferred tax liability - - $ 3,262 $ 3,464 Total deferred tax asset (liability), net $ 4,798 $ 4,414 |
Schedule of the Reconciliation of the Effective Tax Rate | A reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company, and the actual tax expense as reported in the statement of income is as follows: Year ended December 31, 2016 2017 2018 Income (Loss) before taxes on income $ 3,060 $ (81,580 ) $ 10,897 Statutory tax rate in Israel 25.0 % 24.0 % 23.0 % Theoretical tax expense (income) $ 765 $ (19,579 ) $ 2,506 Increase (decrease) in tax expenses resulting from: "Preferred Enterprise" benefits * (1,356 ) (584 ) (1,301 ) Non-deductible expenses 1,777 1,150 298 Non- deductible Impairment charges - 12,652 - Deferred taxes on losses and other temporary charges for which a valuation allowance was provided, net 527 (209 ) 541 Tax adjustment in respect of different tax rate of foreign subsidiaries (2,032 ) (3,392 ) 511 Change in future tax rate 448 836 - Other 83 300 221 Taxes on income $ 212 $ (8,826 ) $ 2,776 * Benefit per ordinary share from "Preferred Enterprise" status: Basic $ 0.05 $ 0.02 $ 0.05 Diluted $ 0.05 $ 0.02 $ 0.05 |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows: December 31, 2017 2018 Balance at the beginning of the year $ 3,236 $ 4,063 Increase (decrease) related to prior year tax positions, net 153 (658 ) Increase related to current year tax positions 674 82 Balance at the end of the year $ 4,063 $ 3,487 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of the computation of basic and diluted net earnings per common share | The table below presents the computation of basic and diluted net earnings per common share: Year ended December 31, 2016 2017 2018 Numerator: Net income (Loss) attributable to ordinary shares - basic $ 2,848 $ (72,754 ) $ 8,121 Net income (Loss) from continuing operations - diluted $ 2,848 $ (72,754 ) $ 8,121 Net loss from discontinued operations – basic and diluted $ (2,647 ) $ - $ - Denominator: Number of ordinary shares outstanding during the year 25,520,151 25,849,724 25,850,067 Weighted average effect of dilutive securities: Employee options and restricted share units 37,783 - 5,158 Diluted number of ordinary shares outstanding - Continuing and discontinued operations 25,557,934 25,849,724 25,855,225 Basic net earnings (loss) per ordinary share Continuing operations 0.11 $ (2.81 ) $ 0.31 Discontinued operations (0.10 ) $ - $ - Net income (loss) 0.01 $ (2.81 ) $ 0.31 Diluted net earnings (loss) per ordinary share Continuing operations 0.11 $ (2.81 ) $ 0.31 Discontinued operations (0.10 ) $ - $ - Net income (loss) 0.01 $ (2.81 ) $ 0.31 Ordinary shares equivalents excluded because their effect would have been anti-dilutive 3,566,788 5,408,206 4,725,618 |
MAJOR CUSTOMERS (Tables)
MAJOR CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Schedule of Revenues and Receivables by Major Customer | The following table sets forth the customers that represent 10% or more of the Company’s total revenues in each of the years presented below: Year ended December 31, 2016 2017 2018 Customer A 49 % 46 % 45 % |
GEOGRAPHIC INFORMATION (Tables)
GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of total revenues attributed to geographic areas | The following table presents the total revenues for the years ended December 31, 2016, 2017 and 2018, allocated to the geographic areas in which they were generated: Year ended December 31, 2016 2017 2018 North America (mainly U.S.) $ 253,960 $ 213,471 $ 197,440 Europe 47,012 48,146 46,858 Other 11,822 12,369 8,547 $ 312,794 $ 273,986 $ 252,845 |
Schedule of property and equipment attributed to geographic areas | The following table presents the locations of the Company’s property and equipment as of December 31, 2017 and 2018: December 31, 2017 2018 Israel $ 12,229 $ 11,193 U.S. 4,064 3,997 Europe 1,183 459 17,476 $ 15,649 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Line Items] | |||
Short-term deposits average rate (as a percent) | 3.00% | 1.59% | |
Restricted cash, current | $ 1,694 | $ 1,188 | |
Impairment charges recorded in connection with the restructuring plans, related to its property and equipment | 19,981 | ||
Goodwill impairment loss | 65,686 | ||
Severance expenses from continuing operations | 1,230 | 2,039 | 2,917 |
Total employer 401(k) contributions | $ 2,305 | $ 2,765 | $ 1,018 |
Weighted average number of anti-dilutive securities excluded from diluted earnings per share | 4,725,618 | 5,408,206 | 3,566,788 |
Total expenses for doubtful debts | $ 180 | $ 230 | $ 152 |
Notional value of derivative instruments | 25,691 | 51,504 | |
Total consideration | 1,750 | ||
Property and equipment, net | 15,649 | 17,476 | |
Depreciation expenses from discontinued operations | 0 | 0 | $ 71 |
Leased assets and corresponding liabilities | 25,800 | ||
Deferred revenues | 5,270 | ||
Aggregate amount of Remaining performance obligations | 3,794 | ||
Capitalized software [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Property and equipment, net | $ 8,212 | $ 9,195 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Estimated Useful Lives at Annual Rates) (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Computers and peripheral equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives, annual rate | 33.00% |
Office furniture and equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives, annual rate | 6.00% |
Office furniture and equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives, annual rate | 15.00% |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Stock-Based Compensation Assumptions) (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate, minimum | 1.50% | 0.81% | 0.46% |
Risk-free interest rate, maximum | 3.00% | 2.08% | 1.73% |
Expected volatility, minimum | 48.00% | 52.00% | 49.49% |
Expected volatility, maximum | 57.00% | 56.00% | 53.54% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Early exercise factor (as a percent) | 150.00% | 150.00% | 150.00% |
Forfeiture rate post vesting | 0.00% | 0.00% | 5.00% |
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Early exercise factor (as a percent) | 200.00% | 200.00% | 200.00% |
Forfeiture rate post vesting | 34.00% | 23.00% | 20.00% |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES (Schedule of discontinued operations including prior periods) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($) | [1] | |
Accounting Policies [Abstract] | ||
Costs and expenses | $ 5,192 | |
Impairment of intangible assets and goodwill | ||
Gain on disposal of the discontinued operations | (1,750) | |
Loss before taxes on income | (3,442) | |
Taxes on income | 795 | |
Total net loss on discontinued operations | $ (2,647) | |
[1] | Represent the results of the discontinued operations until their disposal. |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Schedule of Fair Value Measurements) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets: | ||
Derivative assets | $ 871 | $ 3,486 |
Total financial assets | 871 | 3,486 |
Liabilities: | ||
Derivative liabilities | 153 | |
Convertible bonds | 15,453 | 25,353 |
Total financial liabilities | 15,606 | 25,353 |
Level 1 [Member] | ||
Assets: | ||
Derivative assets | ||
Total financial assets | ||
Liabilities: | ||
Derivative liabilities | ||
Convertible bonds | 15,453 | 25,353 |
Total financial liabilities | 15,453 | 25,353 |
Level 2 [Member] | ||
Assets: | ||
Derivative assets | 871 | 3,486 |
Total financial assets | 871 | 3,486 |
Liabilities: | ||
Derivative liabilities | 153 | |
Convertible bonds | ||
Total financial liabilities | 153 | |
Level 3 [Member] | ||
Assets: | ||
Derivative assets | ||
Total financial assets | ||
Liabilities: | ||
Derivative liabilities | ||
Convertible bonds | ||
Total financial liabilities |
ACQUISITIONS (Narrative) (Detai
ACQUISITIONS (Narrative) (Details) - USD ($) $ in Thousands | Feb. 29, 2016 | Nov. 30, 2015 | Feb. 10, 2015 | Feb. 10, 2015 | Feb. 29, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Aug. 02, 2016 |
Business Acquisition [Line Items] | ||||||||||
Consideration paid with cash | $ 3,333 | $ 2,551 | $ 29,537 | |||||||
Value of shares of common stock paid in acquisition | 675 | |||||||||
Undertone [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Percent of equity acquired | 100.00% | |||||||||
Consideration paid with cash | $ 89,078 | $ 6,129 | ||||||||
Retained amount as holdback to cover potential claims | 16,000 | |||||||||
Contingent consideration liability | 14,391 | |||||||||
Installments amount paid | $ 22,000 | |||||||||
Fair value of obligations eliminated | 35,546 | |||||||||
Deferred consideration payment | $ 20,000 | |||||||||
Interest rate (as a percent) | 10.00% | |||||||||
Deferred consideration payment due amount | $ 22,005 | |||||||||
Expected maximum period to finalize valuation and purchase price allocation | 1 year | |||||||||
Working Captial adjustment | 1,498 | 213 | 1,498 | |||||||
Reduce purchase price merger | $ 13,546 | |||||||||
Final purchase price amount | $ 133,101 | $ 119,768 | $ 133,101 | |||||||
MMR [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration paid with cash | $ 6,394 | |||||||||
Value of shares of common stock paid in acquisition | $ 4,378 | |||||||||
Shares issued for acquisition | 1,437,510 | |||||||||
MMR [Member] | MakeMeReach SAS Employee [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration paid with cash | $ 144 | |||||||||
Additional consideration required to be paid with cash subject to retention conditions | $ 708 | 708 | ||||||||
Value of shares of common stock paid or to be paid in acquisition subject to retention conditions | 650 | $ 650 | ||||||||
Value of shares of common stock paid in acquisition | $ 63 | |||||||||
Shares issued for acquisition | 18,998 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 31,197 | $ 31,535 | |
Less: accumulated depreciation and amortization | (15,548) | (14,059) | |
Property and equipment, net | 15,649 | 17,476 | |
Depreciation and amortization expenses, continued operations | 4,950 | 3,567 | $ 4,003 |
Impairment charges of asset that will no longer be in use | 19,981 | ||
Capitalized software development costs | 1,756 | 5,756 | |
Stock-based compensation expense | 31 | ||
Amortization expense | 2,978 | 843 | |
Impaired leasehold | 462 | $ 254 | |
Computers and peripheral equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 7,004 | 10,295 | |
Office furniture and equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 2,836 | 2,811 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 8,712 | 7,779 | |
Capitalized software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 12,645 | 10,650 | |
Property and equipment, net | $ 8,212 | $ 9,195 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Schedule of Changes in Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Balance as of January 1 | $ 125,051 | $ 190,737 | |
Impairment | (65,686) | ||
Balance as of December 31 | $ 125,051 | $ 125,051 | $ 190,737 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Summary of Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Impairment | |||
Impairment | $ (19,981) | ||
Intangible assets, Net | |||
Balance at beginning of period | $ 11,309 | 44,018 | |
Amortization | (4,769) | (13,024) | |
OCI | (44) | 296 | |
Impairment | (19,981) | ||
Disposals | |||
Balance at end of period | 6,496 | 11,309 | |
Acquired technology [Member] | |||
Intangible assets, Gross | |||
Balance at beginning of period | 30,837 | 30,674 | |
Amortization | |||
OCI | (30) | 163 | |
Impairment | |||
Disposals | |||
Balance at end of period | 30,807 | 30,837 | |
Accumulated amortization | |||
Balance at beginning of period | (19,959) | (14,490) | |
Amortization | (1,301) | (5,390) | |
OCI | 18 | (79) | |
Impairment | |||
Balance at end of period | (21,242) | (19,959) | |
Impairment | |||
Balance at beginning of period | (8,749) | (956) | |
Amortization | |||
OCI | |||
Impairment | [1] | (7,793) | |
Balance at end of period | (8,749) | (8,749) | |
Intangible assets, Net | |||
Balance at beginning of period | 2,129 | 15,228 | |
Amortization | (1,301) | (5,390) | |
OCI | (12) | 84 | |
Impairment | [1] | (7,793) | |
Disposals | |||
Balance at end of period | 816 | 2,129 | |
Customer Relationships [Member] | |||
Intangible assets, Gross | |||
Balance at beginning of period | 31,949 | 31,898 | |
Amortization | |||
OCI | (9) | 51 | |
Impairment | |||
Disposals | |||
Balance at end of period | 31,940 | 31,949 | |
Accumulated amortization | |||
Balance at beginning of period | (18,832) | (13,905) | |
Amortization | (999) | (4,900) | |
OCI | 6 | (27) | |
Impairment | |||
Balance at end of period | (19,825) | (18,832) | |
Impairment | |||
Balance at beginning of period | (10,426) | (91) | |
Amortization | |||
OCI | |||
Impairment | [1] | (10,335) | |
Balance at end of period | (10,426) | (10,426) | |
Intangible assets, Net | |||
Balance at beginning of period | 2,691 | 17,902 | |
Amortization | (999) | (4,900) | |
OCI | (3) | 24 | |
Impairment | [1] | (10,335) | |
Disposals | |||
Balance at end of period | 1,689 | 2,691 | |
Tradename and other [Member] | |||
Intangible assets, Gross | |||
Balance at beginning of period | 18,457 | 18,224 | |
Amortization | |||
OCI | (42) | 233 | |
Impairment | |||
Disposals | |||
Balance at end of period | 18,415 | 18,457 | |
Accumulated amortization | |||
Balance at beginning of period | (6,858) | (4,079) | |
Amortization | (2,469) | (2,734) | |
OCI | 13 | (45) | |
Impairment | |||
Balance at end of period | (9,314) | (6,858) | |
Impairment | |||
Balance at beginning of period | (5,110) | (3,257) | |
Amortization | |||
OCI | |||
Impairment | [1] | (1,853) | |
Balance at end of period | (5,110) | (5,110) | |
Intangible assets, Net | |||
Balance at beginning of period | 6,489 | 10,888 | |
Amortization | (2,469) | (2,734) | |
OCI | (29) | 188 | |
Impairment | [1] | (1,853) | |
Disposals | |||
Balance at end of period | $ 3,991 | $ 6,489 | |
[1] | Calculated based on the Income approach (discounted cash flow model), using a discount rate of 15.7% |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Schedule of Estimated Useful Life of Intangible Assets) (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Acquired technology [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Avarage Useful Life | 3 years |
Acquired technology [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Avarage Useful Life | 5 years |
Customer Relationships [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Avarage Useful Life | 4 years |
Customer Relationships [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Avarage Useful Life | 5 years |
Tradename and other [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Avarage Useful Life | 4 years |
Tradename and other [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Avarage Useful Life | 11 years |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Schedule Of Estimated Future Amortization Expense) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
2019 | $ 4,228 | ||
2020 | 1,279 | ||
2021 | 229 | ||
2022 | 240 | ||
2023 | 252 | ||
Thereafter | 268 | ||
Net carrying amount | $ 6,496 | $ 11,309 | $ 44,018 |
GOODWILL AND OTHER INTANGIBLE_7
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Discount rate | 15.70% | ||
Impairment charges | $ 19,981 |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Employees and payroll accruals | $ 8,528 | $ 8,020 |
Government authorities | 2,068 | 2,427 |
Professional services accruals | 1,480 | 1,886 |
Other accruals | 4,604 | 4,155 |
Other overhead related expenses | 253 | 885 |
Hosting, software and web services accruals | 307 | 411 |
Accrued expenses and other liabilities, total | $ 17,240 | $ 17,784 |
DERIVATIVES AND HEDGING ACTIV_3
DERIVATIVES AND HEDGING ACTIVITES (Schedule of Fair Value of Company's Outstanding Derivative Instruments) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivatives designate as hedging instruments: | ||
Foreign exchange forward contracts and other derivatives - Prepaid expenses and other current assets | $ 11 | $ 140 |
Foreign exchange forward contracts and other derivatives - Accrued expenses and other liabilities | 153 | |
Foreign exchange forward contracts and other derivatives - Accumulated other comprehensive income | (106) | 116 |
Derivatives not designated as hedging instruments: | ||
Cross currency SWAP - Prepaid expenses and other current assets | $ 860 | $ 3,346 |
DERIVATIVES AND HEDGING ACTIV_4
DERIVATIVES AND HEDGING ACTIVITES (Schedule of Net (Gains) Losses Reclassified from Accumulated Other Comprehensive Income (Loss) to Operating Expenses) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivatives not designated as hedging instruments: | |||
Total | $ 2,095 | $ 3,030 | $ 759 |
Financial expenses [Member] | SWAP [Member] | |||
Derivatives not designated as hedging instruments: | |||
Gain (loss) recognized in Consolidated Statements of Income | 2,487 | 2,373 | 608 |
Foreign exchange options and forward contracts [Member] | |||
Derivatives designated as hedging instruments: | |||
Gain recognized in Statements of Comprehensive Income | (223) | ||
Derivatives not designated as hedging instruments: | |||
Total | (223) | ||
Foreign exchange options and forward contracts [Member] | Operating expenses [Member] | |||
Derivatives designated as hedging instruments: | |||
Gain (loss) recognized in Consolidated Statements of Income | (206) | 525 | 167 |
Foreign exchange options and forward contracts [Member] | Financial expenses [Member] | |||
Derivatives not designated as hedging instruments: | |||
Gain (loss) recognized in Consolidated Statements of Income | $ (186) | $ 132 | $ (16) |
DERIVATIVES AND HEDGING ACTIV_5
DERIVATIVES AND HEDGING ACTIVITES (Narrative) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Net derivative gains related to cash flow hedges | $ 142 |
SHORT TERM AND LONG TERM DEBT_2
SHORT TERM AND LONG TERM DEBT (Narrative) (Details) - USD ($) $ in Thousands | May 09, 2017 | Dec. 31, 2018 | Dec. 17, 2018 | Mar. 31, 2018 | Nov. 30, 2017 | Nov. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Mar. 06, 2018 |
Israeli Banks [Member] | ||||||||||
Debt Instrument Line Items | ||||||||||
Debt instrument, face amount | $ 17,500 | |||||||||
New secured credit agreement [Member] | ||||||||||
Debt Instrument Line Items | ||||||||||
Debt instrument, face amount | $ 50,000 | |||||||||
Debt instrument, starting per quarter installment amount | $ 1,250 | 625 | ||||||||
Final payment required to be made upon maturity | $ 35,000 | |||||||||
Debt instrument, description of variable rate basis | LIBOR | |||||||||
Debt instrument, basis spread on variable rate | 5.50% | |||||||||
Debt issuance cost, deducted from the carrying amount of that debt in the consolidated balance sheets | $ 1,399 | |||||||||
Repayments of debt | $ 21,500 | $ 1,580 | $ 5,000 | $ 5,000 | $ 10,000 | |||||
Prepayment amount | $ 8,000 | |||||||||
New secured credit agreement [Member] | Exercise of Equity Cure [Member] | ||||||||||
Debt Instrument Line Items | ||||||||||
Repayments of debt | $ 264 | |||||||||
Line of Credit [Member] | Israeli Banks [Member] | ||||||||||
Debt Instrument Line Items | ||||||||||
Debt instrument, face amount | $ 12,500 | |||||||||
Debt instrument, description of variable rate basis | LIBOR | |||||||||
Debt instrument, basis spread on variable rate | 3.50% | |||||||||
Term Loan [Member] | Israeli Banks [Member] | ||||||||||
Debt Instrument Line Items | ||||||||||
Debt instrument, face amount | $ 5,000 | |||||||||
Debt instrument, description of variable rate basis | LIBOR | |||||||||
Debt instrument, basis spread on variable rate | 5.00% | |||||||||
New loan facility [Member] | ||||||||||
Debt Instrument Line Items | ||||||||||
Debt instrument, face amount | $ 25,000 | |||||||||
Debt instrument, description of variable rate basis | LIBOR | |||||||||
Debt instrument, basis spread on variable rate | 5.70% | |||||||||
Debt instrument, maturity date | Dec. 31, 2021 |
SHORT TERM AND LONG TERM DEBT_3
SHORT TERM AND LONG TERM DEBT (Schedule of Aggregate Annual Maturities) (Details) - Debt Instrument [Line Items] $ in Thousands | Dec. 31, 2018USD ($) |
Debt Instrument Line Items | |
2019 | $ 8,333 |
2020 | 8,333 |
2021 | 8,334 |
Present value of principal payments | 25,000 |
Less: current portion | (8,333) |
Long-term debt | $ 16,667 |
CONVERTIBLE DEBT (Narrative) (D
CONVERTIBLE DEBT (Narrative) (Details) ₪ / shares in Units, $ / shares in Units, ₪ in Thousands, $ in Thousands | Dec. 03, 2015USD ($) | Dec. 31, 2018USD ($)$ / shares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018ILS (₪) | Sep. 30, 2014ILS (₪)₪ / shares |
Debt Instrument Line Items | ||||||
Proceeds from private placement | $ 10,125 | |||||
Convertible debt | $ 15,453 | $ 25,353 | ||||
Sublease income amount | 2,213 | 1,076 | $ 703 | |||
Series L Convertible Bonds [Member] | ||||||
Debt Instrument Line Items | ||||||
Convertible bonds, aggregate par value | $ 15,313 | ₪ 143,500 | ||||
Bond purchase price expressed as a percentage of par value | 96.50% | |||||
Convertible bonds, annual interest rate | 5.00% | 5.00% | ||||
Date of first required payment | Mar. 31, 2016 | |||||
Convertible bonds, conversion price | (per share) | $ 26.90 | ₪ 100.815 | ||||
Accrued interest | $ 193 | $ 313 | ||||
Convertible debt | $ 15,453 | |||||
Series L Convertible Bonds [Member] | Israel, New Shekels [Member] | ||||||
Debt Instrument Line Items | ||||||
Convertible bonds, aggregate par value | ₪ | ₪ 57,394 | |||||
Series L Convertible Bonds [Member] | Maximum [Member] | ||||||
Debt Instrument Line Items | ||||||
Convertible bonds, annual interest rate | 6.00% | 6.00% |
CONVERTIBLE DEBT (Schedule of C
CONVERTIBLE DEBT (Schedule of Changes of Long-term Convertible Debt) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | |||
Convertible Debt [Roll Forward] | ||||
Balance at the beginning of period | $ 16,693 | $ 21,862 | ||
Change in fair value | ||||
Balance at the end of period | 7,726 | 16,693 | ||
Series L Convertible Bonds [Member] | ||||
Convertible Debt [Roll Forward] | ||||
Balance at the beginning of period | 25,353 | [1] | 29,526 | |
Change in accrued interest | 863 | 1,344 | ||
Change in fair value | (1,585) | 3,785 | ||
Payment of interest | (1,011) | (1,401) | ||
Payment of principal | (8,167) | (7,901) | ||
Balance at the end of period | [1] | 15,453 | $ 25,353 | |
2019 | 7,657 | |||
2020 | 7,656 | |||
Fair value of principal payments | $ 15,313 | |||
[1] | includes accrued interest of $313 and $193 as of December 31, 2017 and 2018, respectively. |
COMMITMENTS AND CONTINGENT LI_3
COMMITMENTS AND CONTINGENT LIABILITIES (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Nov. 30, 2015 | May 28, 2014 | Nov. 30, 2012 |
Sweet Im Ltd [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage of shares acquired | 100.00% | |||
Maximum subsequent consideration due for acquisition | $ 7,500 | |||
Estimated contingent payment | $ 2,500 | |||
Liability to be maintained | $ 1,667 | |||
Undertone [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage of shares acquired | 100.00% |
COMMITMENTS AND CONTINGENT LI_4
COMMITMENTS AND CONTINGENT LIABILITIES (Schedule of Aggregate minimum lease commitments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Future minimum payments, operating leases: | |||
Sublease income | $ 2,213 | $ 1,076 | $ 703 |
Company Offices Worldwide [Member] | |||
Future minimum payments, operating leases: | |||
Lease expense | 4,123 | 4,118 | 5,419 |
Company Offices Worldwide [Member] | Minimum Lease Payments [Member] | |||
Future minimum payments, operating leases: | |||
2019 | 5,102 | ||
2020 | 5,985 | ||
2021 | 5,768 | ||
2022 | 5,062 | ||
2023 | 4,681 | ||
Thereafter | 9,922 | ||
Total | 36,520 | ||
Company Offices Worldwide [Member] | Minimum Sublease Rentals [Member] | |||
Future minimum payments, operating leases: | |||
2019 | 3,248 | ||
2020 | 2,940 | ||
2021 | 2,880 | ||
2022 | 2,325 | ||
2023 | 1,987 | ||
Thereafter | 2,153 | ||
Total | 15,533 | ||
Company Offices Worldwide [Member] | Net future minimum lease commitment [Member] | |||
Future minimum payments, operating leases: | |||
2019 | 1,854 | ||
2020 | 3,045 | ||
2021 | 2,888 | ||
2022 | 2,737 | ||
2023 | 2,694 | ||
Thereafter | 7,769 | ||
Total | 20,987 | ||
Vehicles [Member] | |||
Future minimum payments, operating leases: | |||
Lease expense | $ 343 | $ 493 | $ 790 |
SHAREHOLDERS' EQUITY (Narrative
SHAREHOLDERS' EQUITY (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 01, 2016 | Dec. 03, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Ordinary shares, shares authorized | 43,333,333 | 40,000,000 | |||
Ordinary shares, par value per share | $ 0.03 | $ 0.03 | |||
Ordinary shares issued in private placement | 782,981 | 4,436,898 | |||
Gross proceeds from private placement | $ 10,125 | ||||
Purchase price per share (in dollars per share) | $ 2.282 | ||||
Period taken to calculate the average closing price of an ordinary share | 30 days | ||||
Share price | $ 1.939 | ||||
Option expiration term | 7 years | ||||
Weighted average fair value of stock options granted | $ 1.27 | $ 0.72 | $ 0.64 | ||
Options outstanding, in-the-money | 106,332 | ||||
Options outstanding, out of the money | 3,638,475 | ||||
Total intrinsic value of options exercised | $ 1 | ||||
Total expense incurred | $ 2,718 | $ 2,112 | $ 6,844 | ||
Option exercise under repricing | 2,689,669 | ||||
Exercised price | $ 3.24 | ||||
Incremental fair value | $ 1,471 | ||||
Stock Option Plan 2003 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for grant | 878,249 | ||||
Undertone [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Warrants to purchase ordinary shares granted | 66,666 | ||||
Weighted average exercise price of warrants | $ 9.09 | ||||
Weighted-average grant-date fair value | $ 1.23 | ||||
Total expense incurred | $ 61 | $ 61 | $ 62 | ||
Warrant [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost related to outstanding stock options and RSUs, expected period of recognition | 1 year 5 months 5 days | ||||
Stock Options And Restricted Stock Units RSU [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost related to outstanding stock options and RSUs | $ 59 | ||||
Restricted Stock Units (RSUs) [Member] | Stock Option Plan 2003 [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period for plan | 3 years | ||||
Performance-based Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost related to outstanding stock options and RSUs, expected period of recognition | 1 year | ||||
Employee Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost related to outstanding stock options and RSUs | $ 2,968 |
SHAREHOLDERS' EQUITY (Schedule
SHAREHOLDERS' EQUITY (Schedule of Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of options | ||
Outstanding at January 1, 2018 | 4,203,888 | |
Granted | 1,035,481 | |
Exercised | (167) | |
Cancelled | (1,494,395) | |
Outstanding at December 31, 2018 | 3,744,807 | 4,203,888 |
Exercisable at December 31, 2018 | 1,314,690 | |
Vested and expected to vest at December 31, 2018 | 2,906,311 | |
Weighted average Exercise price | ||
Outstanding at January 1, 2018 | $ 4.52 | |
Granted | 3.08 | |
Exercised | 3.24 | |
Cancelled | 5.20 | |
Outstanding at December 31, 2018 | 3.85 | $ 4.52 |
Exercisable at December 31, 2018 | 4.88 | |
Vested and expected to vest at December 31, 2018 | $ 4.57 | |
Weighted average Remaining contractual term | ||
Outstanding | 4 years 11 months 19 days | 4 years 3 months 8 days |
Exercisable at December 31, 2018 | 3 years 10 months 10 days | |
Vested and expected to vest at December 31, 2018 | 4 years 1 month 9 days | |
Aggregate intrinsic value | ||
Outstanding at January 1, 2018 | $ 56 | |
Outstanding at December 31, 2018 | 27 | $ 56 |
Exercisable at December 31, 2018 | 4 | |
Vested and expected to vest at December 31, 2018 | $ 19 | |
Performance-based Stock Options [Member] | ||
Number of options | ||
Outstanding at January 1, 2018 | 283,331 | |
Cancelled | (66,666) | |
Outstanding at December 31, 2018 | 216,665 | 283,331 |
Exercisable at December 31, 2018 | 116,666 | |
Vested and expected to vest at December 31, 2018 | 116,666 | |
Weighted average Exercise price | ||
Outstanding at January 1, 2018 | $ 4.93 | |
Cancelled | 6.84 | |
Outstanding at December 31, 2018 | 4.35 | $ 4.93 |
Exercisable at December 31, 2018 | 5.30 | |
Vested and expected to vest at December 31, 2018 | $ 5.30 | |
Weighted average Remaining contractual term | ||
Outstanding | 4 years 1 month 13 days | |
Exercisable at December 31, 2018 | 2 years 6 months 18 days | |
Vested and expected to vest at December 31, 2018 | 2 years 6 months 18 days | |
Aggregate intrinsic value | ||
Outstanding at January 1, 2018 | ||
Outstanding at December 31, 2018 | ||
Exercisable at December 31, 2018 | ||
Vested and expected to vest at December 31, 2018 |
SHAREHOLDERS' EQUITY (Schedul_2
SHAREHOLDERS' EQUITY (Schedule of Option Activity by Price Range) (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Outstanding | |
Number of options | shares | 3,961,472 |
Weighted average remaining contractual life (years) | 4 years 11 months 1 day |
Weighted average exercise price | $ 3.87 |
Exercisable | |
Number of options | shares | 1,431,356 |
Weighted average remaining contractual life (years) | 3 years 9 months |
Weighted average exercise price | $ 4.91 |
$1.03-$2.94 [Member] | |
Outstanding | |
Range of exercise price, minimum | 1.03 |
Range of exercise price, maximum | $ 2.94 |
Number of options | shares | 206,211 |
Weighted average remaining contractual life (years) | 3 years 8 months 26 days |
Weighted average exercise price | $ 2.62 |
Exercisable | |
Number of options | shares | 69,325 |
Weighted average remaining contractual life (years) | 1 year 3 months 29 days |
Weighted average exercise price | $ 2.78 |
$3.01-$3.36 [Member] | |
Outstanding | |
Range of exercise price, minimum | 3.01 |
Range of exercise price, maximum | $ 3.36 |
Number of options | shares | 2,909,553 |
Weighted average remaining contractual life (years) | 5 years 7 months 21 days |
Weighted average exercise price | $ 3.2 |
Exercisable | |
Number of options | shares | 802,145 |
Weighted average remaining contractual life (years) | 5 years 1 month 20 days |
Weighted average exercise price | $ 3.23 |
$4.23-$6.90 [Member] | |
Outstanding | |
Range of exercise price, minimum | 4.23 |
Range of exercise price, maximum | $ 6.90 |
Number of options | shares | 720,937 |
Weighted average remaining contractual life (years) | 3 years 7 days |
Weighted average exercise price | $ 4.86 |
Exercisable | |
Number of options | shares | 435,115 |
Weighted average remaining contractual life (years) | 2 years 3 months 29 days |
Weighted average exercise price | $ 5.2 |
$7.08-$9.81 [Member] | |
Outstanding | |
Range of exercise price, minimum | 7.08 |
Range of exercise price, maximum | $ 9.81 |
Number of options | shares | 10,332 |
Weighted average remaining contractual life (years) | 1 year 3 months 15 days |
Weighted average exercise price | $ 7.24 |
Exercisable | |
Number of options | shares | 10,332 |
Weighted average remaining contractual life (years) | 1 year 3 months 15 days |
Weighted average exercise price | $ 7.24 |
$10.01-$12.75 [Member] | |
Outstanding | |
Range of exercise price, minimum | 10.01 |
Range of exercise price, maximum | $ 12.75 |
Number of options | shares | 72,220 |
Weighted average remaining contractual life (years) | 1 year 5 months 27 days |
Weighted average exercise price | $ 10.85 |
Exercisable | |
Number of options | shares | 72,220 |
Weighted average remaining contractual life (years) | 1 year 5 months 27 days |
Weighted average exercise price | $ 10.85 |
$13.14-$40.62 [Member] | |
Outstanding | |
Range of exercise price, minimum | 13.14 |
Range of exercise price, maximum | $ 40.62 |
Number of options | shares | 42,219 |
Weighted average remaining contractual life (years) | 5 months 9 days |
Weighted average exercise price | $ 26.69 |
Exercisable | |
Number of options | shares | 42,219 |
Weighted average remaining contractual life (years) | 5 months 9 days |
Weighted average exercise price | $ 26.69 |
SHAREHOLDERS' EQUITY (Schedul_3
SHAREHOLDERS' EQUITY (Schedule of Stock Based Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $ 2,718 | $ 2,112 | $ 6,844 |
Share-based compensation in discontinued operations | 42 | ||
Cost of revenues [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 136 | 36 | 219 |
Research and Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 448 | 229 | 708 |
Selling and Marketing [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | 848 | 744 | 1,907 |
General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation expense | $ 1,286 | $ 1,103 | $ 4,010 |
FINANCIAL INCOME (EXPENSE), N_3
FINANCIAL INCOME (EXPENSE), NET (Schedule of Financial Income (Expense), Net) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Financial income: | |||
Interest income | $ 296 | $ 132 | $ 204 |
Foreign currency translation gains, net | 1,013 | 204 | |
Change in fair value of convertible debt | 1,585 | ||
Change in fair value of SWAP | 2,373 | 608 | |
Other | 355 | 197 | |
Financial income | 3,249 | 2,906 | 812 |
Financial expense: | |||
Foreign currency translation losses, net | (779) | ||
Interest and change in fair value of payment obligation related to acquisitions | (43) | (1,303) | |
Interest expense on debts | (3,820) | (4,794) | (5,306) |
Change in fair value of SWAP | (2,487) | ||
Change in fair value of convertible debt | (3,785) | (1,350) | |
Bank charges and other | (736) | (206) | (362) |
Financial expenses | (7,043) | (8,828) | (9,100) |
Financial expense, net | $ (3,794) | $ (5,922) | $ (8,288) |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Taxes On Income [Line Items] | |||
Income tax rate | 23.00% | 24.00% | 25.00% |
Dividend distrubutions, withholding tax rate | 15.00% | ||
Net operating loss carry forward | $ 2,555 | ||
Company recognized interest and penalties | 12 | $ 344 | $ 227 |
Company recognized interest and penalties accrued | 549 | 537 | |
Deferred tax benefit | $ 458 | (8,859) | $ (3,268) |
Minimum [Member] | |||
Taxes On Income [Line Items] | |||
Income tax rate | 21.00% | ||
Maximum [Member] | |||
Taxes On Income [Line Items] | |||
Income tax rate | 35.00% | ||
Internal Revenue Service (IRS) [Member] | |||
Taxes On Income [Line Items] | |||
Net operating loss carry forward | $ 12,518 | ||
Internal Revenue Service (IRS) [Member] | Latest Tax Year [Member] | |||
Taxes On Income [Line Items] | |||
Expiration of operating loss carry forwards | Dec. 31, 2035 | ||
Internal Revenue Service (IRS) [Member] | Earliest Tax Year [Member] | |||
Taxes On Income [Line Items] | |||
Expiration of operating loss carry forwards | Dec. 31, 2031 | ||
European Subsidiaries [Member] | Israel [Member] | |||
Taxes On Income [Line Items] | |||
Net operating loss carry forward | $ 6,849 | ||
TCJA [Member] | |||
Taxes On Income [Line Items] | |||
Deferred tax benefit | $ 836 | ||
Peripheral Regions Development Area A [Member] | |||
Taxes On Income [Line Items] | |||
Preferred Enterprise tax rate | 9.00% | 9.00% |
INCOME TAXES (Schedule of Incom
INCOME TAXES (Schedule of Income (Loss) Before Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 9,081 | $ 10,485 | $ (3,393) |
Foreign | 1,816 | (92,065) | 6,453 |
Income (Loss) before Taxes on Income | $ 10,897 | $ (81,580) | $ 3,060 |
INCOME TAXES (Schedule of Taxes
INCOME TAXES (Schedule of Taxes on Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Current taxes | $ 1,706 | $ 1,212 | $ 3,753 |
Taxes in respect of previous years | 612 | (1,179) | (273) |
Deferred tax expense (benefit) | 458 | (8,859) | (3,268) |
Taxes on income | $ 2,776 | $ (8,826) | $ 212 |
INCOME TAXES (Schedule of Tax_2
INCOME TAXES (Schedule of Taxes on Income by Jurisdiction (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Taxes on income by jurisdiction | |||
Domestic | $ 2,187 | $ 1,548 | $ 3,396 |
Foreign | 589 | (10,374) | (3,184) |
Taxes on income | 2,776 | (8,826) | 212 |
Domestic: | |||
Current taxes | 1,121 | 387 | 2,800 |
Deferred tax (benefit) expense | 649 | 2,532 | 937 |
Taxes in respect of previous years | 417 | (1,371) | (341) |
Total - Domestic | 2,187 | 1,548 | 3,396 |
Foreign: | |||
Current taxes | 585 | 825 | 953 |
Deferred tax benefit | (191) | (11,391) | (4,205) |
Taxes in respect of previous years | 195 | 192 | 68 |
Total - Foreign | 589 | (10,374) | (3,184) |
Total income tax expense | $ 2,776 | $ (8,826) | $ 212 |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Assets (Liabilities)) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss carry forwards | $ 4,992 | $ 5,809 |
Research and development | 2,216 | 753 |
Intangible assets | 1,480 | 829 |
Other temporary differences mainly relating to reserve and allowances | 718 | 1,937 |
Deferred tax assets, before valuation allowance | 9,406 | 9,328 |
Valuation allowance | 4,992 | 4,530 |
Total deferred tax assets, net | 4,414 | 4,798 |
Intangible assets | ||
Property and equipment, net | ||
Total deferred tax liabilities | ||
Total deferred tax asset (liability), net | 4,414 | 4,798 |
Foreign Tax Authority [Member] | ||
Deferred tax assets: | ||
Long term deferred tax asset, net | 3,464 | 3,262 |
Long term deferred tax liability | ||
Total deferred tax asset (liability), net | 3,464 | 3,262 |
Domestic Tax Authority [Member] | ||
Deferred tax assets: | ||
Long term deferred tax asset, net | 950 | 1,536 |
Long term deferred tax liability | ||
Total deferred tax asset (liability), net | $ 950 | $ 1,536 |
INCOME TAXES (Schedule of the R
INCOME TAXES (Schedule of the Reconciliation of the Effective Tax Rate) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Income Tax Disclosure [Abstract] | ||||
Income (loss) before taxes on income | $ 10,897 | $ (81,580) | $ 3,060 | |
Statutory tax rate in Israel | 23.00% | 24.00% | 25.00% | |
Theoretical tax expense (income) | $ 2,506 | $ (19,579) | $ 765 | |
Increase (decrease) in tax expenses resulting from: | ||||
"Preferred Enterprise" benefits | [1] | (1,301) | (584) | (1,356) |
Non-deductible expenses | 298 | 1,150 | 1,777 | |
Non-deductible Impairment charges | 12,652 | |||
Deferred taxes on losses and other temporary charges for which a valuation allowance was provided, net | 541 | (209) | 527 | |
Tax adjustment in respect of different tax rate of foreign subsidiaries | 511 | (3,392) | (2,032) | |
Change in future tax rate | 836 | 448 | ||
Other | 221 | 300 | 83 | |
Taxes on income | $ 2,776 | $ (8,826) | $ 212 | |
Benefit per ordinary share from "Preferred Enterprise" status: | ||||
Basic | $ 0.05 | $ 0.02 | $ 0.05 | |
Diluted | $ 0.05 | $ 0.02 | $ 0.05 | |
[1] | Benefit per ordinary share from "Preferred Enterprise" |
INCOME TAXES (Schedule of Unrec
INCOME TAXES (Schedule of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Balance at the beginning of the year | $ 4,063 | $ 3,236 |
Increase (decrease) related to prior year tax positions, net | (658) | 153 |
Increase related to current year tax positions | 82 | 674 |
Balance at the end of the year | $ 3,487 | $ 4,063 |
EARNINGS PER SHARE (Schedule of
EARNINGS PER SHARE (Schedule of Computation of Basic and Diluted Net Earnings Per Common Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | |||
Net income (Loss) attributable to ordinary shares - basic | $ 8,121 | $ (72,754) | $ 2,848 |
Net income (Loss) from continuing operations - diluted | 8,121 | (72,754) | 2,848 |
Net loss from discontinued operations - basic and diluted | $ 2,647 | ||
Denominator: | |||
Number of ordinary shares outstanding during the year | 25,850,067 | 25,849,724 | 25,520,151 |
Weighted average effect of dilutive securities: | |||
Employee options and restricted share units | 5,158 | 37,783 | |
Diluted number of ordinary shares outstanding - Continuing and discontinued operations | 25,855,225 | 25,849,724 | 25,557,934 |
Basic net earnings (loss) per ordinary share | |||
Continuing operations | $ 0.31 | $ (2.81) | $ 0.11 |
Discontinued operations | (0.10) | ||
Net income (Loss) | 0.31 | (2.81) | 0.01 |
Diluted net earnings (loss) per ordinary share | |||
Continuing operations | 0.31 | (2.81) | 0.11 |
Discontinued operations | (0.10) | ||
Net income (Loss) | $ 0.31 | $ (2.81) | $ 0.01 |
Ordinary shares equivalents excluded because their effect would have been anti-dilutive | 4,725,618 | 5,408,206 | 3,566,788 |
RESTRUCTURING COSTS (Details)
RESTRUCTURING COSTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Development Project [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring costs | $ 2,100 | $ 0 | $ 700 |
MAJOR CUSTOMERS (Details)
MAJOR CUSTOMERS (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Credit Concentration Risk [Member] | Sales Revenue, Net [Member] | Customer A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 45.00% | 46.00% | 49.00% |
GEOGRAPHIC INFORMATION (Details
GEOGRAPHIC INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total Revenues | $ 252,845 | $ 273,986 | $ 312,794 |
Property and equipment, net | 15,649 | 17,476 | |
North America (mainly U.S.) [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total Revenues | 197,440 | 213,471 | 253,960 |
Property and equipment, net | 3,997 | 4,064 | |
Europe [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total Revenues | 46,858 | 48,146 | 47,012 |
Property and equipment, net | 459 | 1,183 | |
Other [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total Revenues | 8,547 | 12,369 | $ 11,822 |
Israel [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property and equipment, net | $ 11,193 | $ 12,229 |