Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 19, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Monotype Imaging Holdings Inc. | |
Entity Central Index Key | 0001385292 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | TYPE | |
Entity Common Stock, Shares Outstanding | 41,373,437 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 46,354 | $ 60,106 |
Restricted cash | 6,000 | 6,000 |
Accounts receivable, net of allowance for doubtful accounts of $455 at March 31, 2019 and $492 at December 31, 2018, respectively | 46,083 | 55,943 |
Income tax refunds receivable | 5,726 | 5,122 |
Prepaid expenses and other current assets | 7,672 | 6,473 |
Total current assets | 111,835 | 133,644 |
Right of use asset | 13,432 | |
Property and equipment, net | 12,881 | 14,105 |
Goodwill | 275,466 | 276,222 |
Intangible assets, net | 72,823 | 74,699 |
Other assets | 9,714 | 8,986 |
Total assets | 496,151 | 507,656 |
Current liabilities: | ||
Accounts payable | 2,325 | 1,719 |
Accrued expenses and other current liabilities | 30,182 | 43,840 |
Accrued income taxes payable | 190 | 510 |
Deferred revenue | 11,941 | 10,337 |
Lease liability | 3,621 | |
Total current liabilities | 48,259 | 56,406 |
Revolving line of credit | 70,000 | 75,000 |
Other long-term liabilities | 1,649 | 3,102 |
Deferred income taxes | 35,697 | 35,083 |
Reserve for income taxes | 2,471 | |
Lease liability | 11,229 | |
Accrued pension benefits | 5,829 | 5,888 |
Commitments and contingencies (Note 15) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, Authorized shares: 10,000,000; Issued and outstanding: none | ||
Common stock, $0.001 par value, Authorized shares: 250,000,000; Shares issued 46,397,404 at March 31, 2019 and 45,803,288 at December 31, 2018 | 46 | 46 |
Additional paid-in capital | 324,027 | 319,486 |
Treasury stock, at cost, 4,955,996 shares at March 31, 2019 and 4,504,236 shares at December 31, 2018 | (91,329) | (83,518) |
Retained earnings | 97,458 | 99,605 |
Accumulated other comprehensive loss | (6,714) | (5,913) |
Total stockholders' equity | 323,488 | 329,706 |
Total liabilities and stockholders' equity | $ 496,151 | $ 507,656 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 455 | $ 492 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 46,397,404 | 45,803,288 |
Treasury stock, shares | 4,955,996 | 4,504,236 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Total revenue | $ 51,356 | $ 56,683 |
Cost of revenue-amortization of acquired technology | 857 | 864 |
Total cost of revenue | 10,460 | 13,300 |
Gross profit | 40,896 | 43,383 |
Operating expenses: | ||
Marketing and selling | 17,130 | 20,089 |
Research and development | 7,441 | 9,296 |
General and administrative | 12,019 | 15,618 |
Restructuring | (24) | 194 |
Amortization of other intangible assets | 832 | 1,024 |
Total operating expenses | 37,398 | 46,221 |
Income (loss) from operations | 3,498 | (2,838) |
Other (income) expense: | ||
Interest expense | 908 | 852 |
Interest income | (137) | (124) |
Loss (gain) on foreign exchange | 66 | (34) |
Loss on derivatives | 95 | 136 |
Other | 45 | (4) |
Total other expense, net | 977 | 826 |
Income (loss) before benefit from income taxes | 2,521 | (3,664) |
Benefit from income taxes | (139) | (2,465) |
Net income (loss) | 2,660 | (1,199) |
Net income (loss) available to common stockholders-basic | 2,514 | (1,199) |
Net income (loss) available to common stockholders-diluted | $ 2,514 | $ (1,199) |
Net income (loss) per common share: | ||
Basic | $ 0.06 | $ (0.03) |
Diluted | $ 0.06 | $ (0.03) |
Weighted-average number of shares outstanding-basic | 40,004,354 | 40,005,789 |
Weighted-average number of shares outstanding-diluted | 40,066,059 | 40,005,789 |
License [Member] | ||
Total revenue | $ 41,872 | $ 45,867 |
Total cost of revenue | 6,802 | 9,612 |
Service [Member] | ||
Total revenue | 9,484 | 10,816 |
Total cost of revenue | $ 2,801 | $ 2,824 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 2,660 | $ (1,199) |
Other comprehensive income, net of tax: | ||
Unrecognized actuarial gain, net of tax of $5 and $5, respectively | 16 | 19 |
Foreign currency translation adjustments, net of tax of ($276) and $356, respectively | (817) | 1,325 |
Comprehensive income | $ 1,859 | $ 145 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Unrecognized actuarial gain (loss), tax | $ 5 | $ 5 |
Foreign currency translation adjustments, tax | $ 276 | $ 356 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Beginning Balance at Dec. 31, 2017 | $ 329,368 | $ 44 | $ (64,083) | $ 298,113 | $ 97,815 | $ (2,521) |
Beginning Balance, Shares at Dec. 31, 2017 | 44,934,364 | 3,215,644 | ||||
Net income (loss) | (1,199) | (1,199) | ||||
Issuance of capital shares | ||||||
Restricted share grants, Shares | 392,352 | |||||
Exercised options | 2,648 | 2,648 | ||||
Exercised options, Shares | 186,783 | |||||
Restricted units converted, Shares | 74,484 | |||||
Repurchase of unvested shares of restricted common stock, Shares | 153,344 | |||||
Shares withheld | (1,211) | $ (1,211) | ||||
Shares withheld, Shares | 50,128 | |||||
Stock based compensation | 4,262 | 4,262 | ||||
Dividends declared | (4,893) | (4,893) | ||||
Unrecognized actuarial loss, net of tax | 19 | 19 | ||||
Cumulative translation adjustment, net of tax | 1,325 | 1,325 | ||||
Ending Balance at Mar. 31, 2018 | 339,269 | $ 44 | $ (65,294) | 305,023 | 100,673 | (1,177) |
Ending Balance, Shares at Mar. 31, 2018 | 45,587,983 | 3,419,116 | ||||
Issuance of capital shares | ||||||
Cumulative effect of adoption ASC 718 and ASC 606 | ASC 606 [Member] | 8,950 | 8,950 | ||||
Beginning Balance at Dec. 31, 2018 | 329,706 | $ 46 | $ (83,518) | 319,486 | 99,605 | (5,913) |
Beginning Balance, Shares at Dec. 31, 2018 | 45,803,288 | 4,504,236 | ||||
Net income (loss) | 2,660 | 2,660 | ||||
Issuance of capital shares | ||||||
Restricted share grants, Shares | 483,952 | |||||
Exercised options | 322 | 322 | ||||
Exercised options, Shares | 48,486 | |||||
Restricted units converted, Shares | 61,678 | |||||
Repurchase of unvested shares of restricted common stock, Shares | 19,360 | |||||
Purchase of treasury stock | (6,590) | $ (6,590) | ||||
Purchase of treasury stock, Shares | 370,500 | |||||
Shares withheld | (1,221) | $ (1,221) | ||||
Shares withheld, Shares | 61,900 | |||||
Stock based compensation | 4,219 | 4,219 | ||||
Dividends declared | (4,807) | (4,807) | ||||
Unrecognized actuarial loss, net of tax | 16 | 16 | ||||
Cumulative translation adjustment, net of tax | (817) | (817) | ||||
Ending Balance at Mar. 31, 2019 | $ 323,488 | $ 46 | $ (91,329) | $ 324,027 | $ 97,458 | $ (6,714) |
Ending Balance, Shares at Mar. 31, 2019 | 46,397,404 | 4,955,996 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Retained Earnings [Member] | ||
Dividends declared, per share | $ 0.116 | $ 0.116 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities | ||
Net income (loss) | $ 2,660 | $ (1,199) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 3,169 | 3,249 |
Loss on extinguishment of debt | 34 | |
Loss on retirement of assets | 13 | 9 |
Amortization of deferred financing costs and accretion of interest | 43 | 55 |
Stock based compensation | 4,219 | 4,247 |
Provision for doubtful accounts | 91 | 191 |
Deferred income taxes | 881 | (4,582) |
Unrealized currency gain on foreign denominated intercompany transactions | (265) | (575) |
Changes in operating assets and liabilities, net of effect of acquisitions: | ||
Accounts receivable | 9,789 | 7,783 |
Prepaid expenses and other assets | (1,709) | (1,321) |
Accounts payable | 598 | 1,463 |
Income tax refunds receivable | (604) | (716) |
Accrued income taxes | (2,842) | 26 |
Accrued expenses and other liabilities | (13,054) | (4,179) |
Deferred revenue | 1,072 | 3,045 |
Net cash provided by operating activities | 4,095 | 7,496 |
Cash flows from investing activities | ||
Purchases of property and equipment | (411) | (1,463) |
Purchases of intangible assets | (160) | |
Net cash used in investing activities | (411) | (1,623) |
Cash flows from financing activities | ||
Net payments on revolving line of credit | (5,200) | (3,000) |
Proceeds from line of credit, net of issuance costs | 42 | |
Common stock dividends paid | (4,791) | (4,712) |
Purchase of treasury stock | (6,590) | |
Payments for employee taxes on shares withheld | (1,221) | (1,210) |
Proceeds from exercises of common stock options | 322 | 2,648 |
Net cash used in financing activities | (17,438) | (6,274) |
Effect of exchange rates on cash, cash equivalents and restricted cash | 2 | 943 |
(Decrease) increase in cash, cash equivalents and restricted cash | (13,752) | 542 |
Cash, cash equivalents and restricted cash at beginning of period | 66,106 | 100,809 |
Cash, cash equivalents and restricted cash at end of period | 52,354 | $ 101,351 |
Non cash transactions: | ||
Borrowing under revolving line of credit | $ 158 |
Nature of the Business
Nature of the Business | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business | 1. Nature of the Business Monotype Imaging Holdings Inc. (the “Company” or “we”) is a leading global provider of branded and design assets, technology and expertise for creative professionals and consumer device manufacturers. We provide high-quality creative assets and technology solutions across multiple devices and mediums. Our solutions, which include type, visual content marketing solutions, custom design services, and tools and technologies that enable the creative process are licensed through our direct sales channel, e-commerce platforms and partner platforms. We also provide consumer device manufacturers and independent software vendors, or ISVs, with the right solutions for delivering consistent, compelling user experiences. Our solutions power the visual expression of the leading makers of a wide range of devices, including laser printers, digital copiers and mobile devices, among others, as well as provide a high-quality text experience in numerous software applications and operating systems. We license our design assets and technology to creative professionals, consumer device manufacturers and independent software vendors. We are headquartered in Woburn, Massachusetts and we operate in one business segment: the development, marketing and licensing of design assets and technology. We also maintain various offices worldwide for selling and marketing, research and development and administration. At March 31, 2019, we conduct our operations through four domestic operating subsidiaries, Monotype Imaging Inc., Monotype ITC Inc. (“ITC”), MyFonts Inc. (“MyFonts”) and Olapic, Inc., and six foreign operating subsidiaries, Olapic Argentina S.A., Monotype Ltd. (“Monotype UK”), Monotype GmbH (“Monotype Germany”), Monotype Solutions India Pvt. Ltd. (“Monotype India”), Monotype Hong Kong Ltd. (“Monotype Hong Kong”) and Monotype KK (“Monotype Japan”). |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 2. Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements as of March 31, 2019 and for the three months ended March 31, 2019 and 2018 include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X. Accordingly, such financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. The results for interim periods are not necessarily indicative of results to be expected for the year or for any future periods. In management’s opinion, these unaudited condensed consolidated interim financial statements contain all adjustments of a normal recurring nature necessary for a fair presentation of the financial statements for the interim periods presented We have elected to present the analysis of changes in stockholders’ equity quarterly in statement form for the current and comparative year to date interim periods and state the amount of dividends per share in the aggregate for each class of shares in accordance with the provisions in Regulation S-X, Rule 8-03(a)(5) and 10-01(a)(7). These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2018, as reported in the Company’s Annual Report on Form 10-K. The Company’s significant accounting policies and practices are as described in the Annual Report, except for the adoption of the accounting standards described in Note 3 below. Statement of Operations We classify cloud-based subscriptions and other services, such as font related services, custom font design and post contract support as service revenue on our condensed consolidated statements of operations. All other revenue is classified as license revenue. For the quarter ended March 31, 2018, to conform to current year presentation, we reclassified restructuring charges to disclose the expense amount separately from other operating expenses. Previously the expense amounts were included within the following other operating expense line items: Three Months Marketing and selling $ (24 ) Research and development 146 General and administrative 72 Total 194 See Note 14 for further details. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | 3. Recently Issued Accounting Pronouncements Adopted Leases In February 2016, the Leases (Topic 842): Amendments to the FASB Accounting Standards Codification, ASU 2016-02 must be calculated using the applicable incremental borrowing rate at the date of adoption. This guidance is effective for annual and interim periods beginning after December 15, 2018. We adopted ASU 2016-02 on January 1, 2019. We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things allows us to carryforward the historical lease classification. We also elected the practical expedient that allows an accounting policy election to exclude right of use assets and lease obligations from the balance sheet for all leases with an initial term of 12 months or less. As permitted in the standard, the Company is using a modified retrospective approach, where current periods are shown under the new standard, while comparative periods are shown under Accounting Standard Codification No. 840, Leases (prior to the adoption of ASU 2016-02), where entities recognize a cumulative effect to retained earnings at the date of adoption without restating prior periods’ balances or disclosures. The adoption of ASU 2016-02 on January 1, 2019, had a material impact on our consolidated balance sheet, but did not have a material impact on our consolidated statements of income or cash flows. The most significant impact of the adoption of ASU 2016-02 was the recognition of additional right-of-use assets and lease liabilities for operating leases. At adoption, the Company recognized right-of-use assets of approximately $14.4 million $15.9 million. Derivatives In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. Comprehensive Income In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. 0.6 Pending Internal Use Software In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Topic 350-40): Customer’s Accounting for Implementation of Cost Incurred in a Cloud Computing Arrangement that is Considered a Service Contract, (“ASU 2018-15”) . This update clarifies the accounting for implementation costs related to a cloud computing arrangement that is a service contract previously defined in ASU 2015-05. This guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2018-15; however, we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. Defined Benefit Pension Plan In August 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General: Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, (“ASU 2018-14”) . This guidance eliminates requirements for certain disclosures and requires certain additional disclosures concerning the company’s defined benefit pension plans and other postretirement plans. This guidance is effective for annual and interim reporting periods beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2018-14; however, we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. Fair Value Measurement 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, (“ASU 2018-13”). This guidance is designed to improve the effectiveness of the disclosure. The new standard is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2018-13; however, we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. Goodwill In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminated step 2 from the goodwill impairment test. This guidance is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2017-04; however, we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 4. Revenue Recognition We recognize revenue when a customer obtains control of a promised good or service. The amount of revenue recognized reflects consideration that we expect to be entitled to receive in exchange for these services, and excludes any sales incentives and taxes collected from customers that are subsequently remitted to governmental authorities. Nature of Licenses and Services & Timing of Revenue Recognition Creative Professional Revenue Our Revenue from font licenses is recognized upfront when the font software is delivered or made available to the customer. Custom font design services are generally not a separate distinct performance obligation and are sold with a license for the custom font, in which case revenue is recognized upon completion of the services and when the font is delivered and accepted by the customer. In limited cases, the Company has an enforceable right to payment prior to final delivery and acceptance of custom font design work. In these cases, the Company has determined that the proper treatment is a single over-time performance obligation using input methods (incurred hours towards completion) to measure progress towards completion to determine the pattern of satisfaction of the performance obligation. For our hosted offerings where we provide our customers the right to access our software without taking possession, revenue is recognized over the contract period on a time-elapsed basis, which is consistent with the transfer of service to the customer. Payment terms and conditions for Creative Professional contracts generally require payment within thirty to sixty days of contract inception. An exception exists for certain contracts for our SaaS offerings or a limited number of multi-year term license agreements which have periodic payment terms, generally quarterly or annually, over the term of the contract. In instances where the timing of revenue recognition differs from the respective payment terms, we have considered whether such contracts include a significant financing component, subject to the applicable practical expedient. The purpose of these payment structures is to align with industry and market standards, not to provide customers with financing. We have determined our contracts generally do not include a significant financing component; however, the Company will continue to assess (1) the length of time between when the goods or services are delivered and expected payment and (2) prevailing interest rates in the market to re-evaluate this conclusion. OEM Revenue Our OEM revenue is derived substantially from printer imaging, printer driver and display imaging products and primarily relates to licenses providing our customers the right to embed our fonts and technology in their products over a certain term. Under our OEM licensing arrangements, we either receive a fixed fee as specified under the license arrangement or a royalty for each product unit incorporating our fonts and technology that is shipped by our OEM customers. Although significantly less than royalties from per-unit shipments and fixed fees from OEM customers, we also receive revenue from software application and operating systems vendors, who include our fonts and technology in their products and for font development. Revenue from per-unit royalty contracts is estimated and recognized in the period that the royalty-bearing event or sale by our OEM customer occurs. Revenue from fixed fee licenses is generally recognized upfront at the point in time when the software embodying the font is shipped or made available to the customer. Certain OEM contracts may include customer support services and unspecified updates for our font technology which is a distinct stand-ready performance obligation and recognized ratably over the service period. Many of our per-unit royalty licenses continue for the duration that our OEM customers ship products that include our technology, unless terminated for breach. Other licenses have terms that typically range from one fiscal quarter to five years, and usually provide for automatic or optional renewals. Disaggregated Revenue The following table presents our revenue disaggregated by the timing of revenue recognition as well as by type of product or services offered (see Note 13 for further information regarding revenue by major markets and revenue by geography): March 31, 2019 March 31, 2018 Creative Professional OEM Total Creative Professional OEM Total License revenue: License transferred in point in time $ 24,139 $ 17,733 $ 41,872 $ 24,879 $ 20,333 $ 45,212 License transferred over time — — — 655 — 655 Service revenue: Service transferred in point in time 432 196 628 470 656 1,126 Service transferred over time 8,192 664 8,856 8,994 696 9,690 Total $ 32,763 $ 18,593 $ 51,356 $ 34,998 $ 21,685 $ 56,683 Significant Judgments Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Once we determine the performance obligations, the Company determines the transaction price, which includes estimating the amount of variable consideration to be included in the transaction price, if any. We then allocate the transaction price to each performance obligation in the contract based on a relative stand-alone selling price method. The corresponding revenue is recognized as the related performance obligations are satisfied as discussed in the revenue categories above. Judgment is required to determine the standalone selling price for each distinct performance obligation. We determine standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, we estimate the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. With the exception of OEM royalty licenses, our contracts do not generally include a variable component to the transaction price. If royalties are not yet reported to us for the period in which the subsequent sale is expected to occur, we are required to estimate such royalties. When a new contract is signed for the licensing of IP on a per-unit basis, we deliver the licenses and based on ongoing discussions with the customer, will estimate when the distribution will begin and estimate royalties based on distribution forecasts provided by the customer. For ongoing arrangements, we have developed a process to estimate per-unit royalties based on historical data, trends, seasonality, knowledge of changes in contracts/rates, and quarterly discussions with sales personnel to identify significant changes in the customer’s distribution forecast (via seasonality, introduction of new products, discontinuation or products, etc.). Revenue related to the estimation of per-unit royalties was $5.7 million and $4.3 million for the three months ended March 31, 2019 and 2018, respectively. As discussed above, certain of our Creative Professional contracts have payment terms that differ from the timing of revenue recognition which requires us to assess whether the transaction price for those contracts include a significant financing component. We have elected the practical expedient which permits an entity to not adjust for the effects of a significant financing component if we expect that at the contract inception, the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. For those contracts in which the period exceeds the one year threshold, this assessment, as well as the quantitative estimate of the financing component and its relative significance, requires judgment. We estimate the significant financing component provided to our customers with extended payment terms by determining the present value of the future payments by applying a discount rate that reflects the customer’s creditworthiness. Transaction Price Allocated to Future Performance Obligations The aggregate amount of transaction price allocated to performance obligations consists principally of amounts billed for undelivered services that are included in deferred revenue, as well as unbilled backlog, which is the amount of transaction price allocated to unsatisfied or partially unsatisfied performance obligations, for enforceable contracts when there is not a present unconditional right to invoice (a receivable). Substantially all the long-term amount is expected to be recognized as revenue within the following 24 month period. The aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied or are partially satisfied as of March 31, 2019 and December 31, 2018 are in the table below (in thousands): March 31, 2019 December 31, 2018 Current Long-term Total Current Long-term Total Deferred revenue $ 11,941 $ 1,018 $ 12,959 $ 10,337 $ 1,552 $ 11,889 Unbilled backlog 4,490 1,406 5,896 5,666 1,837 7,503 Total $ 16,431 $ 2,424 $ 18,855 $ 16,003 $ 3,389 $ 19,392 Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. We record an unbilled receivable, or contract asset, when revenue is recognized prior to invoicing when we have an enforceable right to payment. When invoicing occurs prior to revenue recognition, we have unearned revenue, or contract liabilities, presented on our condensed consolidated balance sheet as “deferred revenue” within deferred revenue and other long-term liabilities, as appropriate at March 31, 2019 and December 31, 2018. When invoicing occurs after revenue recognition, we have earned revenue, or contract assets, presented on our condensed consolidated balance sheet as “unbilled receivables” within accounts receivable and other assets, as appropriate at March 31, 2019 and December 31, 2018. Revenue recognized during the three months ended March 31, 2019 and March 31, 2018 from amounts included in deferred revenue at the beginning of the periods were approximately $5.7 million and $6.8 million, respectively. Revenue recognized during the three month ended March 31, 2019 and March 31, 2018 from performance obligations satisfied or partially satisfied in previous periods, mainly due to changes in the estimate of royalty revenues, is approximately $5.7 million and $4.3 million, respectively. During the three months ended March 31, 2019 and March 31, 2018, the change in contract assets reclassified to receivables as a result of the right to the transaction consideration becoming unconditional was not material. The contract modifications entered into during the three months ended March 31, 2019 and March 31, 2018 did not have a significant impact on the Company’s contract assets or deferred revenue. Costs to Obtain and Fulfill a Contract We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain commissions paid under our sales incentive programs meet the requirements to be capitalized. The amount capitalized for incremental costs to obtain contracts as of March 31, 2019 was $3.8 million, of which $0.7 million was short-term and has been included in prepaid expenses and other current assets and $3.1 million was long term and has been included in other assets in our condensed consolidated balance sheet. The amount capitalized for incremental costs to obtain contracts as of December 31, 2018 was $3.6 million, of which $0.7 million was short-term and has been included in prepaid expenses and other current assets and $2.9 million was long term and has been included in other assets in our condensed consolidated balance sheet. Costs to obtain a contract are amortized as sales and marketing expense over the expected period of benefit in a manner that is consistent with the transfer of the related goods or services to which the asset relates. The judgments made in determining the amount of costs incurred include whether the commissions are in fact incremental and would not have occurred absent the customer contract and the estimate of the amortization period, which ranges between three and ten years depending on the nature of the performance obligations within the contract. These costs are periodically reviewed for impairment; however, no impairment existed as of March 31, 2019 or as of December 31, 2018. The amount of capitalized costs related to contracts which were terminated on or before March 31, 2019, due to the customer exercising an opt-out clause or the cancellation of an anticipated renewal was not material and was charged to operating expenses in the first quarter of 2019. We have elected to apply the practical expedient and recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. We capitalize incremental costs incurred to fulfill our contracts that (i) relate directly to the contract, (ii) are expected to generate resources that will be used to satisfy the Company’s performance obligation under the contract, and (iii) are expected to be recovered through revenue generated under the contract. Contract fulfillment costs primarily relate to font license fees that we pay on certain fonts that are owned by third parties. These fees are related to license revenue that is satisfied at a point in time and payable again upon license renewal, and as a result are incurred immediately upon contract execution. Accordingly, there are no capitalized costs related to costs to fulfill a contract as of March 31, 2019 or as of December 31, 2018. |
Restricted Cash
Restricted Cash | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Restricted Assets Disclosure [Text Block] | 5. Restricted Cash Cash and cash equivalents that are restricted as to withdrawal or use under the terms of contractual agreements are classified on our balance sheet based on relevant restrictions. At March 31, 2019 and December 31, 2018, we had $6.0 million and $6.0 million, respectively, of cash held in escrow to be used for payments due in 2019 in connection with the Olapic, Inc. acquisition. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheet that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands): Three Months Ended March 31, 2019 2018 Consolidated balance sheet classification: Cash and cash equivalents $ 46,354 $ 85,351 Restricted cash, short term 6,000 10,000 Restricted cash, long term — 6,000 Total cash, cash equivalents and restricted cash $ 52,354 $ 101,351 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. Fair Value Measurements The following table presents our financial assets and liabilities that are carried at fair value (in thousands): Fair Value Measurement at March 31, 2019 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents—money market funds $ 14,038 $ 14,038 $ — $ — Restricted cash equivalents—money market fund 6,000 6,000 — — Total current assets $ 20,038 $ 20,038 $ — $ — Total assets $ 20,038 $ 20,038 $ — $ — Fair Value Measurement at December 31, 2018 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents—money market funds $ 28,940 $ 28,940 $ — $ — Restricted cash equivalents—money market fund 6,000 6,000 — — Total current assets $ 34,940 $ 34,940 $ — $ — Total assets $ 34,940 $ 34,940 $ — $ — The Company’s recurring fair value measures relate to short-term investments, which are classified as cash equivalents, derivative instruments and from time-to-time as contingent consideration. The fair value of our cash equivalents are either based on quoted prices for similar assets or other observable inputs such as yield curves at commonly quoted intervals and other market corroborated inputs. The fair value of our derivatives is based on quoted market prices from various banking institutions or an independent third-party provider for similar instruments. In determining the fair value, we consider our non-performance risk and that of our counterparties. At March 31, 2019, we had one 30-day forward contract to sell 2.6 million British pounds sterling and purchase $3.4 million that together, had an immaterial fair value. At December 31, 2018, we had one 30-day forward contract to sell 2.7 million British pounds sterling and purchase $3.4 million that together, had an immaterial fair value. The Company’s non-financial assets and non-financial liabilities subject to non-recurring measurements include goodwill and intangible assets. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | 7. Intangible Assets Intangible assets as of March 31, 2019 and December 31, 2018 were as follows (dollar amounts in thousands): Weighted- March 31, 2019 December 31, 2018 Gross Accumulated Net Gross Accumulated Net Customer relationships 10 $ 64,711 $ (55,797 ) $ 8,914 $ 64,822 $ (55,288 ) $ 9,534 Acquired technology 11 68,745 (53,693 ) 15,052 68,823 (52,747 ) 16,076 Non-compete 4 13,611 (13,136 ) 475 13,636 (13,073 ) 563 Indefinite-lived intangible assets: Trademarks 43,982 — 43,982 44,126 — 44,126 Domain names 4,400 — 4,400 4,400 — 4,400 Total $ 195,449 $ (122,626 ) $ 72,823 $ 195,807 $ (121,108 ) $ 74,699 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lessee, Operating Leases | 8. Leases We have operating leases for corporate offices and certain equipment. Our leases have remaining lease terms of 1 year to 6 years, some of which contain options to extend the leases for up to 5 years and some which include options to terminate the leases within 1 year. We have lease agreements with lease and non-lease components, which are generally accounted for separately. We determine if an arrangement is a lease at inception. Operating leases are included in the operating lease right-of-use (“ROU”) assets and the short-term and long-term lease liabilities on our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Pursuant to the terms of the lease agreement for the Company’s NY office, the Company obtained a standby letter-of-credit in the amount of approximately $0.5 million as security on the lease obligation. The letter-of credit is a reduction of the available borrowings under the Credit facility. The components of lease expense were as follows (in thousands): Three Months Ended March 31, 2019 2018 Finance lease cost $ — $ — Operating lease cost 1,154 — Short-term lease cost — — Variable lease cost 52 — Total lease cost 1,206 — Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended March 31, 2019 2018 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,224 — Right-of-use assets obtained in exchange for lease obligations: Operating leases — — Supplemental balance sheet information related to leases was as follows (in thousands except remaining lease term and discount rate): Three Months Ended March 31, 2019 2018 Weighted average remaining lease term Operating leases 4.72 — Weighted average discount rate Operating leases 3.93 % — As of March 31, 2019, we have additional operating leases, primarily for corporate offices, that have not yet commenced of $1.8 million. These operating leases will commence in 2019 with lease terms of 2 to 5 years. Maturities of operating lease liabilities were as follows (in thousands): Twelve months ending March 31: 2019 $ 4,144 2020 3,409 2021 3,237 2022 2,650 2023 1,145 Thereafter 1,718 Total future minimum lease payments $ 16,303 Less: amounts representing interest (1,145 ) Total lease liabilities $ 14,850 Less: current operating lease liability (3,621 ) Long-term operating lease liability $ 11,229 Maturities of lease liabilities as of December 31, 2018 were as follows: Years ending December 31: 2019 $ 4,728 2020 3,131 2021 2,806 2022 2,652 2023 1,256 Thereafter 2,004 Total $ 16,577 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 9 . Debt On March 22, 2019, the Company entered into a new credit agreement (the “New Credit Agreement”) by and among the Company, the Company’s subsidiary, Monotype Imaging Inc., (“the Borrower”), any financial institution that becomes a Lender and Bank of America, N.A., as administrative agent. Pursuant to the New Credit Agreement the Lenders have agreed to provide the Borrower with a five-year $200.0 million senior secured revolving credit facility (the “Credit Facility”). The Credit Facility permits the Company to request that the Lenders, at their election, increase the secured credit facility to a maximum of $300.0 borrowings under the Credit Facility have been reduced by approximately $0.5 million for one standby letter of credit issued in connection with a facility lease agreement, leaving $129.5 million available for borrowings at March 31, 2019. Borrowings under the Credit Facility bear interest through March 21, 2024 at a variable rate per annum equal to LIBOR plus between 1.0% and 1.625%, or at the Borrower’s option, the higher of (i) the prime rate as announced by Bank of America and (ii) 0.5% plus the overnight federal funds rate, plus in each case, between 0.0% and 0.625%, with the exact interest rate margin determined based on the consolidated leverage ratio. The Company is required to pay a commitment fee, based on the consolidated leverage ratio, equal to 0.175%, 0.20%, 0.225% or 0.25% per annum on the undrawn portion available under the revolving credit facility and variable per annum fees in respect of outstanding letters of credit. In connection with the New Credit Agreement, the Company incurred closing and legal fees of approximately $0.9 0.3 The New Credit Agreement includes financial covenants which require the Company to maintain (i) a consolidated leverage ratio of no greater than 3.25 to 1.0 or, upon a qualified acquisition subject to certain conditions, 3.75 to 1.0 and (ii) a minimum consolidated interest coverage ratio of 3.00 to 1.0. At March 31, 2019, our consolidated leverage ratio was 0.72 to 1.0 and our consolidated interest coverage ratio was 18.61 to 1.0. The New Credit Agreement also contains customary affirmative and negative covenants for transactions of this type and other affirmative and negative covenants agreed to by the parties, including, among others, limits on the Company and its subsidiaries’ ability to incur debt or liens, engage in sale-leaseback transactions, make loans, investments and acquisitions, incur additional indebtedness, engage in mergers, enter into asset sales, transact with affiliates and alter its business. Adjusted EBITDA, under the Credit Facility, is defined as consolidated net earnings (or loss), plus net interest expense, income taxes, depreciation and amortization, and share based compensation expense, plus acquisition expenses not to exceed $2.0 million, minus capitalized research and development expense, plus restructuring, issuance costs, cash non-operating costs and other expenses or losses minus cash non-operating gains and other non-cash gains; provided, however that the aggregate of all cash non-operating expense shall not exceed 10% of Consolidated EBITDA. The New Credit Agreement also provides for a number of customary events of default, including, among others, payment, bankruptcy, covenant, representation and warranty, change of control and judgment defaults. Failure to comply with these covenants, or the occurrence of an event of default, could permit the Lenders under the New Credit Agreement to declare all amounts borrowed under the New Credit Agreement, together with accrued interest and fees, to be immediately due and payable. The obligations of the Borrower under the Credit Facilities are unconditionally guaranteed by the Company and certain subsidiaries and secured by a lien on substantially all of the present and future property and assets of the Company and such subsidiaries, in each case, subject to limited exceptions and exclusions. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes A reconciliation of income taxes computed at federal statutory rates to income tax expense (benefit) is as follows (dollar amounts in thousands): Three Months Ended March 31, 2019 2018 Provision (benefit) from income taxes at statutory rate $ 529 21.0 % $ (770 ) 21.0 % State and local income taxes, net of federal tax benefit 53 2.1 % (78 ) 2.1 % Impact of foreign income (loss) 90 3.6 % (1,237 ) 33.8 % Foreign tax credit valuation allowance (258 ) (10.2 )% — — Permanent non-deductible acquisition-related expense 60 2.4 % (301 ) 8.2 % Net shortfall (windfall) on stock based compensation 108 4.3 % (117 ) 3.2 % Reversal of reserve for income taxes (734 ) (29.1 )% 22 (0.6 )% Other, net 13 0.4 % 16 (0.4 )% Reported income tax benefit $ (139 ) (5.5 )% $ (2,465 ) 67.3 % As of March 31, 2019, the reserve for unrecognized tax benefits was approximately $4.0 |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | 11. Net Income (Loss) Per Share For the three months ended March 31, 2019 and 2018, The following presents a reconciliation of the numerator and denominator used in the calculation of basic net income (loss) per share and a reconciliation of the numerator and denominator used in the calculation of diluted net income (loss) per share (in thousands, except share and per share data): Three Months Ended March 31, 2019 2018 Numerator: Net income (loss), as reported $ 2,660 $ (1,199 ) Less: net income attributable to participating securities (146 ) — Net income (loss) available to common shareholders—basic $ 2,514 $ (1,199 ) Denominator: Basic: Weighted-average shares of common stock outstanding 41,263,669 41,846,619 Less: weighted-average shares of unvested restricted common stock outstanding (1,259,315 ) (1,840,830 ) Weighted-average number of common shares used in computing basic and diluted net income (loss) per common share 40,004,354 40,005,789 Net income (loss) per share applicable to common shareholders—basic $ 0.06 $ (0.03 ) Numerator: Net income (loss) available to common shareholders - basic $ 2,514 $ (1,199 ) Add-back: undistributed earnings allocated to unvested shareholders — — Less: undistributed earnings reallocated to unvested shareholders — — Net income (loss) available to common shareholders—diluted $ 2,514 $ (1,199 ) Denominator: Diluted: Weighted-average shares of common stock outstanding 41,263,669 41,846,619 Less: weighted-average shares of unvested restricted common stock outstanding (1,259,315 ) (1,840,830 ) Weighted-average number of common shares issuable upon exercise of outstanding stock options 61,705 — Weighted-average number of common shares used in computing diluted net income (loss) per share 40,066,059 40,005,789 Net income (loss) per share applicable to common shareholders—diluted $ 0.06 $ (0.03 ) The following common share equivalents have been excluded from the computation of diluted weighted-average shares outstanding, as their effect would have been anti-dilutive: Three Months Ended March 31, 2019 2018 Options 490,897 620,312 Unvested restricted common stock 912,271 685,719 Unvested restricted stock units 81,854 64,024 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 12. Stockholders’ Equity Stock purchases On May 3, 2018, the Company’s Board of Directors approved a share purchase program permitting repurchases of up to $25.0 million of the Company’s outstanding shares of common stock through June 7, 2019. During the quarter ended March 31, 2019, the Company purchased a total of 370,500 shares of its common stock for an aggregate purchase price of $6.6 million, including brokers’ fees. To date, 1,261,400 shares have been purchased under the plan for an aggregate purchase price of $ 23.9 Stock Based Compensation We account for stock based compensation in accordance with ASC Topic No. 718, Compensation – Stock Compensation, which requires the measurement of compensation costs at fair value on the date of grant and recognition of compensation expense over the service period for awards expected to vest. The following presents the impact of stock based compensation expense on our condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2019 2018 Marketing and selling $ 1,770 $ 1,734 Research and development 722 988 General and administrative 1,727 1,525 Total expensed 4,219 4,247 Property and equipment — 14 Total stock based compensation $ 4,219 $ 4,261 As of March 31, 2019, the Company had $30.5 million of unrecognized compensation expense related to employees and unvested stock awards and stock units that are expected to be recognized over a weighted average period of 2.3 years. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | 13. Segment Reporting We view our operations and manage our business as one segment: the development, marketing and licensing of technologies and fonts. Factors used to identify our single segment include the financial information available for evaluation by our chief operating decision maker, our president and chief executive officer, in determining how to allocate resources and assess performance. While our technologies and services are sold into two principal markets, Creative Professional and OEM, assets and expenses are not formally allocated to these market segments, and operating results are assessed on an aggregate basis to make decisions about the allocation of resources. The following table presents revenue for these two major markets (in thousands): Three Months Ended March 31, 2019 2018 Creative Professional $ 32,763 $ 34,998 OEM 18,593 21,685 Total $ 51,356 $ 56,683 Geographic segment information We market our products and services through offices in the United States, United Kingdom, Germany, China, Republic of Korea and Japan. We report revenue based on the geographic location of our customers. For example, licenses may be sold to large international companies, which may be headquartered in the Republic of Korea, such revenues would be reported in the Republic of Korea and included in the revenue for Rest Of World in the table below. The following table summarizes revenue by customer location (in thousands of dollars, except percentages): Three Months Ended March 31, 2019 2018 Revenue % of Total Revenue % of Total United States $ 23,216 45.2 % $ 24,823 43.8 % Japan 9,634 18.8 11,652 20.5 Europe, Middle East, and Africa (EMEA) 13,457 26.2 15,066 26.6 Rest of the World 5,049 9.8 5,142 9.1 Total $ 51,356 100.0 % $ 56,683 100.0 % Long-lived assets, which includes right of use assets, property and equipment, goodwill and intangibles, but exclude other assets, long-term investments and deferred tax assets, are attributed to geographic areas in which Company assets reside and is shown below (in thousands): March 31, 2019 December 31, 2018 Long-lived assets: United States $ 311,124 $ 303,046 United Kingdom 4,198 3,484 Germany 53,615 54,357 Asia (including Japan) 5,665 4,139 Total $ 374,602 $ 365,026 |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | 14. Restructuring In December 2017, the Company implemented a restructuring plan to accelerate the integration of the Olapic business into the core of Monotype in an effort to improve operational efficiencies and to align its investment in the Olapic business to better support it over time. The plan provided for the elimination of 89 positions worldwide. As part of this plan, the Company recorded charges of approximately $3.0 million for severance and termination benefits and $0.2 million of facilities and associated costs. This restructuring was completed in the third quarter of 2018. On June 6, 2018, the Company implemented a restructuring plan, under which the Company reduced headcount in certain areas of the Company, made the decision to cease sales and marketing of the Swyft product and service line and to close a regional office, all in an effort to improve operational efficiencies. The plan provided for the elimination of approximately 50 positions worldwide across a variety of functions, with a concentration within engineering, as well as sales and marketing. The Company recorded net charges totaling $6.8 million related to severance and termination benefits, net of stock based compensation reversal, the write off of goodwill and intangible assets attributable to Swyft, the acceleration of the final deferred compensation payment to the founders of Swyft, and charges associated with the office closure. We reversed $1.4 15 $1.0 million for severance and termination benefits associated with this plan and $0.9 million of accelerated expense associated with the final deferred compensation payment in connection with the departure of those founders. In addition, $0.9 million was recorded for additional stock based compensation expense associated with the acceleration of the vesting of those departing founders’ equity grants in accordance with the separation agreements. We expect this restructuring plan to be completed by the second quarter of 2019, other than the payment of deferred termination benefits to certain terminated employees. The following presents the details of the restructuring expense line item within our condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2019 2018 Severance and termination benefits $ (24 ) $ 194 Total restructuring $ (24 ) $ 194 The following presents a roll forward of the restructuring reserves and provision activity (in thousands): Personnel related Total Restructuring reserve at December 31, 2018 $ 2,968 $ 2,968 Restructuring charges (24 ) (24 ) Cash payments (1,595 ) (1,595 ) Foreign currency exchange rate changes (9 ) (9 ) Restructuring reserve at March 31, 2019 1,340 1,340 Future cash expenditures related to the restructuring are expected to be approximately $1.0 million, net of tax savings. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. Commitments and Contingencies Legal Proceedings From time-to-time, we may be a party to various claims, suits and complaints. We do not believe that there are claims or legal proceedings that, if determined adversely to us, would have a material adverse effect on our business, results of operations or financial condition. Licensing Warranty Under our standard license agreement with OEM customers, we warrant that the licensed technologies are free of infringement claims of intellectual property rights and will meet the specifications as defined in the licensing agreement for a one-year period. Under the licensing agreements, liability for such indemnity obligations is limited, generally to the total arrangement fee; however, exceptions have been made on a case-by-case basis, increasing the maximum potential liability to agreed-upon amounts at the time the contract is entered into or unlimited liability. We have never incurred costs payable to a customer or business partner to defend lawsuits or settle claims related to these warranties, and as a result, management believes the estimated fair value of these warranties is minimal. Accordingly, there are no liabilities recorded for these warranties as of March 31, 2019 or December 31, 2018. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events Stock Purchase Program Subsequent to March 31, 2019, the Company purchased 44,600 shares of common stock for $0.9 million, at an average price per share of $20.19 through April 19, 2019. The Company purchased these shares on the open market at prevailing market prices and in accordance with its previously announced share purchase program. At April 19, 2019, $0.3 million remains for future purchase under the Plan. Dividend Declaration On April 18, 2019, the Company’s Board of Directors declared an $0.116 per share quarterly cash dividend on our outstanding common stock. The record date is set for July 1, 2019, and the dividend is payable to shareholders of record on July 19, 2019. Dividends are declared at the discretion of the Company’s Board of Directors and depend on actual cash from operations, the Company’s financial condition and capital requirements and any other factors the Company’s Board of Directors may consider relevant. Future dividend declarations, as well as the record and payment dates for such dividends, will be determined by the Company’s Board of Directors on a quarterly basis. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Schedule of Reclassification of Restructuring Charges | Previously the expense amounts were included within the following other operating expense line items: Three Months Marketing and selling $ (24 ) Research and development 146 General and administrative 72 Total 194 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue Disaggregated by Timing of Revenue Recognition and Reportable Segments as well as by Type of Product or Services Offered | The following table presents our revenue disaggregated by the timing of revenue recognition as well as by type of product or services offered (see Note 13 for further information regarding revenue by major markets and revenue by geography): March 31, 2019 March 31, 2018 Creative Professional OEM Total Creative Professional OEM Total License revenue: License transferred in point in time $ 24,139 $ 17,733 $ 41,872 $ 24,879 $ 20,333 $ 45,212 License transferred over time — — — 655 — 655 Service revenue: Service transferred in point in time 432 196 628 470 656 1,126 Service transferred over time 8,192 664 8,856 8,994 696 9,690 Total $ 32,763 $ 18,593 $ 51,356 $ 34,998 $ 21,685 $ 56,683 |
Summary of Transaction Price Allocated to Future Performance Obligations | The aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied or are partially satisfied as of March 31, 2019 and December 31, 2018 are in the table below (in thousands): March 31, 2019 December 31, 2018 Current Long-term Total Current Long-term Total Deferred revenue $ 11,941 $ 1,018 $ 12,959 $ 10,337 $ 1,552 $ 11,889 Unbilled backlog 4,490 1,406 5,896 5,666 1,837 7,503 Total $ 16,431 $ 2,424 $ 18,855 $ 16,003 $ 3,389 $ 19,392 |
Restricted Cash (Tables)
Restricted Cash (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |
Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheet that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands): Three Months Ended March 31, 2019 2018 Consolidated balance sheet classification: Cash and cash equivalents $ 46,354 $ 85,351 Restricted cash, short term 6,000 10,000 Restricted cash, long term — 6,000 Total cash, cash equivalents and restricted cash $ 52,354 $ 101,351 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value | The following table presents our financial assets and liabilities that are carried at fair value (in thousands): Fair Value Measurement at March 31, 2019 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents—money market funds $ 14,038 $ 14,038 $ — $ — Restricted cash equivalents—money market fund 6,000 6,000 — — Total current assets $ 20,038 $ 20,038 $ — $ — Total assets $ 20,038 $ 20,038 $ — $ — Fair Value Measurement at December 31, 2018 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents—money market funds $ 28,940 $ 28,940 $ — $ — Restricted cash equivalents—money market fund 6,000 6,000 — — Total current assets $ 34,940 $ 34,940 $ — $ — Total assets $ 34,940 $ 34,940 $ — $ — |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible assets as of March 31, 2019 and December 31, 2018 were as follows (dollar amounts in thousands): Weighted- March 31, 2019 December 31, 2018 Gross Accumulated Net Gross Accumulated Net Customer relationships 10 $ 64,711 $ (55,797 ) $ 8,914 $ 64,822 $ (55,288 ) $ 9,534 Acquired technology 11 68,745 (53,693 ) 15,052 68,823 (52,747 ) 16,076 Non-compete 4 13,611 (13,136 ) 475 13,636 (13,073 ) 563 Indefinite-lived intangible assets: Trademarks 43,982 — 43,982 44,126 — 44,126 Domain names 4,400 — 4,400 4,400 — 4,400 Total $ 195,449 $ (122,626 ) $ 72,823 $ 195,807 $ (121,108 ) $ 74,699 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Disclosure of Lease Expense | The components of lease expense were as follows (in thousands): Three Months Ended March 31, 2019 2018 Finance lease cost $ — $ — Operating lease cost 1,154 — Short-term lease cost — — Variable lease cost 52 — Total lease cost 1,206 — |
Amount of cash paid included in measurement of lease liabilities | Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended March 31, 2019 2018 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,224 — Right-of-use assets obtained in exchange for lease obligations: Operating leases — — |
Disclosure of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows (in thousands except remaining lease term and discount rate): Three Months Ended March 31, 2019 2018 Weighted average remaining lease term Operating leases 4.72 — Weighted average discount rate Operating leases 3.93 % — |
Finance Lease, Liability, Maturity | Maturities of operating lease liabilities were as follows (in thousands): Twelve months ending March 31: 2019 $ 4,144 2020 3,409 2021 3,237 2022 2,650 2023 1,145 Thereafter 1,718 Total future minimum lease payments $ 16,303 Less: amounts representing interest (1,145 ) Total lease liabilities $ 14,850 Less: current operating lease liability (3,621 ) Long-term operating lease liability $ 11,229 Maturities of lease liabilities as of December 31, 2018 were as follows: Years ending December 31: 2019 $ 4,728 2020 3,131 2021 2,806 2022 2,652 2023 1,256 Thereafter 2,004 Total $ 16,577 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax Reconciliation Computed at Federal Statutory Rates to Income Tax Expense | A reconciliation of income taxes computed at federal statutory rates to income tax expense (benefit) is as follows (dollar amounts in thousands): Three Months Ended March 31, 2019 2018 Provision (benefit) from income taxes at statutory rate $ 529 21.0 % $ (770 ) 21.0 % State and local income taxes, net of federal tax benefit 53 2.1 % (78 ) 2.1 % Impact of foreign income (loss) 90 3.6 % (1,237 ) 33.8 % Foreign tax credit valuation allowance (258 ) (10.2 )% — — Permanent non-deductible acquisition-related expense 60 2.4 % (301 ) 8.2 % Net shortfall (windfall) on stock based compensation 108 4.3 % (117 ) 3.2 % Reversal of reserve for income taxes (734 ) (29.1 )% 22 (0.6 )% Other, net 13 0.4 % 16 (0.4 )% Reported income tax benefit $ (139 ) (5.5 )% $ (2,465 ) 67.3 % |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following presents a reconciliation of the numerator and denominator used in the calculation of basic net income (loss) per share and a reconciliation of the numerator and denominator used in the calculation of diluted net income (loss) per share (in thousands, except share and per share data): Three Months Ended March 31, 2019 2018 Numerator: Net income (loss), as reported $ 2,660 $ (1,199 ) Less: net income attributable to participating securities (146 ) — Net income (loss) available to common shareholders—basic $ 2,514 $ (1,199 ) Denominator: Basic: Weighted-average shares of common stock outstanding 41,263,669 41,846,619 Less: weighted-average shares of unvested restricted common stock outstanding (1,259,315 ) (1,840,830 ) Weighted-average number of common shares used in computing basic and diluted net income (loss) per common share 40,004,354 40,005,789 Net income (loss) per share applicable to common shareholders—basic $ 0.06 $ (0.03 ) Numerator: Net income (loss) available to common shareholders - basic $ 2,514 $ (1,199 ) Add-back: undistributed earnings allocated to unvested shareholders — — Less: undistributed earnings reallocated to unvested shareholders — — Net income (loss) available to common shareholders—diluted $ 2,514 $ (1,199 ) Denominator: Diluted: Weighted-average shares of common stock outstanding 41,263,669 41,846,619 Less: weighted-average shares of unvested restricted common stock outstanding (1,259,315 ) (1,840,830 ) Weighted-average number of common shares issuable upon exercise of outstanding stock options 61,705 — Weighted-average number of common shares used in computing diluted net income (loss) per share 40,066,059 40,005,789 Net income (loss) per share applicable to common shareholders—diluted $ 0.06 $ (0.03 ) |
Schedule of Anti-Dilutive Securities Excluded from Computation of Earnings Per Share | The following common share equivalents have been excluded from the computation of diluted weighted-average shares outstanding, as their effect would have been anti-dilutive: Three Months Ended March 31, 2019 2018 Options 490,897 620,312 Unvested restricted common stock 912,271 685,719 Unvested restricted stock units 81,854 64,024 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Schedule of Stock Based Compensation Expense | The following presents the impact of stock based compensation expense on our condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2019 2018 Marketing and selling $ 1,770 $ 1,734 Research and development 722 988 General and administrative 1,727 1,525 Total expensed 4,219 4,247 Property and equipment — 14 Total stock based compensation $ 4,219 $ 4,261 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Revenue for Major Markets | The following table presents revenue for these two major markets (in thousands): Three Months Ended March 31, 2019 2018 Creative Professional $ 32,763 $ 34,998 OEM 18,593 21,685 Total $ 51,356 $ 56,683 |
Schedule of Revenue by Geographic Segments | The following table summarizes revenue by customer location (in thousands of dollars, except percentages): Three Months Ended March 31, 2019 2018 Revenue % of Total Revenue % of Total United States $ 23,216 45.2 % $ 24,823 43.8 % Japan 9,634 18.8 11,652 20.5 Europe, Middle East, and Africa (EMEA) 13,457 26.2 15,066 26.6 Rest of the World 5,049 9.8 5,142 9.1 Total $ 51,356 100.0 % $ 56,683 100.0 % |
Schedule of Assets by Geographic Segments | Long-lived assets, which includes right of use assets, property and equipment, goodwill and intangibles, but exclude other assets, long-term investments and deferred tax assets, are attributed to geographic areas in which Company assets reside and is shown below (in thousands): March 31, 2019 December 31, 2018 Long-lived assets: United States $ 311,124 $ 303,046 United Kingdom 4,198 3,484 Germany 53,615 54,357 Asia (including Japan) 5,665 4,139 Total $ 374,602 $ 365,026 |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Details of Restructuring Expense | The following presents the details of the restructuring expense line item within our condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2019 2018 Severance and termination benefits $ (24 ) $ 194 Total restructuring $ (24 ) $ 194 |
Summary of Restructuring Reserves and Provision Activity | The following presents a roll forward of the restructuring reserves and provision activity (in thousands): Personnel related Total Restructuring reserve at December 31, 2018 $ 2,968 $ 2,968 Restructuring charges (24 ) (24 ) Cash payments (1,595 ) (1,595 ) Foreign currency exchange rate changes (9 ) (9 ) Restructuring reserve at March 31, 2019 1,340 1,340 |
Nature of the Business - Additi
Nature of the Business - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2019SegmentSubsidiary | |
Nature Of Business [Abstract] | |
Number of business segments | Segment | 1 |
Number of subsidiaries, domestic | 4 |
Number of subsidiaries, foreign | 6 |
Basis of Presentation - Schedul
Basis of Presentation - Schedule of Reclassification of Restructuring Charges (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ (24) | $ 194 |
Marketing and Selling [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | (24) | |
Research and Development [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 146 | |
General and Administrative [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 72 |
Recently Issued Accounting Pr_2
Recently Issued Accounting Pronouncements Additional Information (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Operating Lease, Right-of-Use Asset | $ 13,432 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 600 |
Accounting Standards Update 2016-02 [Member] | Maximum [Member] | |
Operating Lease, Right-of-Use Asset | 15,900 |
Accounting Standards Update 2016-02 [Member] | Minimum [Member] | |
Operating Lease, Right-of-Use Asset | $ 14,400 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Revenue related to the estimation of per-unit royalties | $ 51,356 | $ 56,683 | |
Royalty [Member] | |||
Revenue related to the estimation of per-unit royalties | 5,700 | 4,300 | |
Accounting Standards Update 2014-09 [Member] | |||
Deferred revenue expected to be recognized in future | 5,700 | 6,800 | |
Revenue recognition performance obligation settled | 5,700 | $ 4,300 | |
Capitalized incremental costs to obtain contracts | $ 3,800 | $ 3,600 | |
Accounting Standards Update 2014-09 [Member] | Maximum [Member] | |||
Capitalized Contract Cost Amortization Period Maximum | 10 years | ||
Accounting Standards Update 2014-09 [Member] | Minimum [Member] | |||
Capitalized Contract Cost Amortization Period Minimum | 3 years | ||
Accounting Standards Update 2014-09 [Member] | Prepaid Expenses and Other Current Assets [Member] | |||
Capitalized Contract Cost, Net, Current | $ 700 | 700 | |
Accounting Standards Update 2014-09 [Member] | Other Assets [Member] | |||
Capitalized Contract Cost, Net, Noncurrent | $ 3,100 | $ 2,900 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Revenue Disaggregated by Timing of Revenue Recognition and Reportable Segments as well as by Type of Product or Services Offered (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 51,356 | $ 56,683 |
Creative Professional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 32,763 | 34,998 |
Original Equipment Manufacturers [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 18,593 | 21,685 |
License Revenue [Member] | Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 41,872 | 45,212 |
License Revenue [Member] | Transferred at Point in Time [Member] | Creative Professional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 24,139 | 24,879 |
License Revenue [Member] | Transferred at Point in Time [Member] | Original Equipment Manufacturers [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 17,733 | 20,333 |
License Revenue [Member] | Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 655 |
License Revenue [Member] | Transferred over Time [Member] | Creative Professional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | 655 |
License Revenue [Member] | Transferred over Time [Member] | Original Equipment Manufacturers [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 0 | |
Service Revenue [Member] | Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 628 | 1,126 |
Service Revenue [Member] | Transferred at Point in Time [Member] | Creative Professional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 432 | 470 |
Service Revenue [Member] | Transferred at Point in Time [Member] | Original Equipment Manufacturers [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 196 | 656 |
Service Revenue [Member] | Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 8,856 | 9,690 |
Service Revenue [Member] | Transferred over Time [Member] | Creative Professional [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 8,192 | 8,994 |
Service Revenue [Member] | Transferred over Time [Member] | Original Equipment Manufacturers [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 664 | $ 696 |
Revenue Recognition - Summary_2
Revenue Recognition - Summary of Transaction Price Allocated to Future Performance Obligations (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Total | $ 18,855 | $ 19,392 |
Deferred Revenue [Member] | ||
Total | 12,959 | 11,889 |
Unbilled Revenues [Member] | ||
Total | 5,896 | 7,503 |
Current Period [Member] | ||
Total | 16,431 | 16,003 |
Current Period [Member] | Deferred Revenue [Member] | ||
Total | 11,941 | 10,337 |
Current Period [Member] | Unbilled Revenues [Member] | ||
Total | 4,490 | 5,666 |
Long Term [Member] | ||
Total | 2,424 | 3,389 |
Long Term [Member] | Deferred Revenue [Member] | ||
Total | 1,018 | 1,552 |
Long Term [Member] | Unbilled Revenues [Member] | ||
Total | $ 1,406 | $ 1,837 |
Restricted Cash - Additional In
Restricted Cash - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Receivables [Abstract] | |||
Restricted Cash, Current | $ 6,000 | $ 6,000 | $ 10,000 |
Restricted Cash (Detail)
Restricted Cash (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Consolidated balance sheet classification: | ||||
Cash and cash equivalents | $ 46,354 | $ 60,106 | $ 85,351 | |
Restricted cash, short term | 6,000 | 6,000 | 10,000 | |
Restricted cash, long term | 6,000 | |||
Total cash, cash equivalents and restricted cash | $ 52,354 | $ 66,106 | $ 101,351 | $ 100,809 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 20,038 | $ 34,940 |
Current Asset [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 20,038 | 34,940 |
Current Asset [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 14,038 | 28,940 |
Restricted cash equivalents | 6,000 | 6,000 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 20,038 | 34,940 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Current Asset [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 20,038 | 34,940 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Current Asset [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 14,038 | 28,940 |
Restricted cash equivalents | $ 6,000 | $ 6,000 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) | 3 Months Ended | |||
Mar. 31, 2019USD ($)Contract | Mar. 31, 2019GBP (£)Contract | Dec. 31, 2018USD ($)Contract | Dec. 31, 2018GBP (£)Contract | |
Forward Contract to Purchase [Member] | ||||
Derivative [Line Items] | ||||
Number of forward contract outstanding | 1 | 1 | 1 | 1 |
Forward contract outstanding | $ | $ 3,400,000 | $ 3,400,000 | ||
Forward Contract to Sell [Member] | ||||
Derivative [Line Items] | ||||
Number of forward contract outstanding | 1 | 1 | 1 | 1 |
Forward contract outstanding | £ | £ 2,600,000 | £ 2,700,000 | ||
Forward Contracts [Member] | ||||
Derivative [Line Items] | ||||
Forward contract terms | 30-day forward contract |
Intangible Assets - Intangible
Intangible Assets - Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Finite-lived intangible assets: | ||
Customer relationships, Gross Carrying Amount | $ 64,711 | $ 64,822 |
Acquired technology, Gross Carrying Amount | 68,745 | 68,823 |
Non-compete agreements, Gross Carrying Amount | 13,611 | 13,636 |
Gross Carrying Amount | 195,449 | 195,807 |
Accumulated Amortization | (122,626) | (121,108) |
Indefinite-lived intangible assets: | ||
Net Balance | 72,823 | 74,699 |
Trademarks [Member] | ||
Indefinite-lived intangible assets: | ||
Net Balance, Indefinite-Lived Intangible Assets | 43,982 | 44,126 |
Net Balance | 43,982 | 44,126 |
Domain Names [Member] | ||
Indefinite-lived intangible assets: | ||
Net Balance, Indefinite-Lived Intangible Assets | 4,400 | 4,400 |
Net Balance | $ 4,400 | 4,400 |
Customer Relationships [Member] | ||
Finite-lived intangible assets: | ||
Intangible assets, Weighted-Average Amortization Period (Years) | 10 years | |
Accumulated Amortization | $ (55,797) | (55,288) |
Net Balance, Finite-Lived Intangible Assets | $ 8,914 | 9,534 |
Acquired Technology [Member] | ||
Finite-lived intangible assets: | ||
Intangible assets, Weighted-Average Amortization Period (Years) | 11 years | |
Accumulated Amortization | $ (53,693) | (52,747) |
Net Balance, Finite-Lived Intangible Assets | $ 15,052 | 16,076 |
Non-compete Agreements [Member] | ||
Finite-lived intangible assets: | ||
Intangible assets, Weighted-Average Amortization Period (Years) | 4 years | |
Accumulated Amortization | $ (13,136) | (13,073) |
Net Balance, Finite-Lived Intangible Assets | $ 475 | $ 563 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Operating lease term of contract | 4 years 8 months 19 days |
Lessee, Operating Lease, Option to Extend | options to extend the leases for up to 5 years |
Lessee, Operating Lease, Option to Terminate | options to terminate the leases within 1 year |
Lessee Operating Lease Lease Not yet Commenced value | $ 1.8 |
Standby Letters of Credit [Member] | |
Standby letter-of-credit | $ 0.5 |
Minimum [Member] | |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 2 years |
Minimum [Member] | Office Equipment [Member] | |
Operating lease term of contract | 1 year |
Maximum [Member] | |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 5 years |
Maximum [Member] | Office Equipment [Member] | |
Operating lease term of contract | 6 years |
Leases - Components of lease ex
Leases - Components of lease expense (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Finance lease cost | |
Operating lease cost | 1,154 |
Short-term lease cost | 0 |
Variable lease cost | 52 |
Total lease cost | $ 1,206 |
Leases - Supplemental cash flow
Leases - Supplemental cash flow (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Amount of cash paid included in measurement of lease liabilities | |
Operating cash flows from operating leases | $ 1,224 |
Right-of-use assets obtained in exchange for lease obligations | |
Operating leases |
Leases - Supplemental balance s
Leases - Supplemental balance sheet information (Detail) | Mar. 31, 2019 |
Operating leases | 4 years 8 months 19 days |
Operating leases | 3.93% |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
2019 | $ 4,144 | |
2019 | $ 4,728 | |
2020 | 3,409 | 3,131 |
2021 | 3,237 | 2,806 |
2022 | 2,650 | 2,652 |
2023 | 1,145 | 1,256 |
Thereafter | 1,718 | 2,004 |
Total | 16,303 | $ 16,577 |
Less: amounts representing interest | (1,145) | |
Total lease liabilities | 14,850 | |
Less: current operating lease liability | (3,621) | |
Long-term operating lease liability | $ 11,229 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Sep. 15, 2015 | Mar. 31, 2019 | Mar. 22, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||
Revolving line of credit | $ 70,000,000 | $ 75,000,000 | ||
Secured revolving credit facility, available borrowing capacity | $ 74,500,000 | |||
Closing and legal fees | 900,000 | |||
Deferred Finance Costs, Own-share Lending Arrangement, Issuance Costs, Gross | 34,000 | |||
Debt Issuance Costs, Gross | 300,000 | |||
Silicon Valley Bank [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
New credit agreement entering date | Sep. 15, 2015 | |||
Line of credit facility, current borrowing capacity | $ 200,000,000 | |||
Maximum increase in secured credit facility | $ 2,000,000 | 300,000,000 | ||
Interest rate on outstanding borrowings | Borrowings under the Credit Facility bear interest through March 21, 2024 at a variable rate per annum equal to LIBOR plus between 1.0% and 1.625%, or at the Borrower's option, the higher of (i) the prime rate as announced by Bank of America and (ii) 0.5% plus the overnight federal funds rate, plus in each case, between 0.0% and 0.625%, with the exact interest rate margin determined based on the consolidated leverage ratio. The Company is required to pay a commitment fee, based on the consolidated leverage ratio, equal to 0.175%, 0.20%, 0.225% or 0.25% per annum on the undrawn portion available under the revolving credit facility and variable per annum fees in respect of outstanding letters of credit. In connection with the New Credit Agreement, the Company incurred closing and legal fees of approximately $0.9 million, which have been accounted for as deferred financing costs and will be amortized to interest expense over the term of the New Credit Agreement. In addition, $34.0 thousand of unamortized deferred financing costs associated with the pro-rata share of prior loan syndicate lenders that did not participate in the new facility were written off and charged to other expense in the first quarter of 2019. | |||
Secured revolving credit facility, expiration date | Sep. 15, 2020 | |||
Silicon Valley Bank [Member] | Revolving Credit Facility [Member] | LIBOR Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Variable interest rate | 3.60% | 3.10% | ||
Credit facility basis spread on variable rate LIBOR | 0.50% | |||
Silicon Valley Bank [Member] | Revolving Credit Facility [Member] | New Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Secured revolving credit facility term, years | 5 years | |||
Line of credit facility, current borrowing capacity | $ 150,000,000 | |||
Revolving line of credit | $ 0 | $ 75,000,000 | ||
Secured revolving credit facility, available borrowing capacity | $ 129,500,000 | |||
Percentage of fee payment on unused line of credit facility, lower end | 0.25% | |||
Percentage of fee payment on unused line of credit facility | 0.50% | |||
Percentage of fee payment on unused line of credit facility, higher end | 0.75% | |||
Credit facility financial covenants terms | (i) a consolidated leverage ratio of no greater than 3.25 to 1.0 or, upon a qualified acquisition subject to certain conditions, 3.75 to 1.0 and (ii) a minimum consolidated interest coverage ratio of 3.00 to 1.0. | |||
Percentage of equity interest in direct foreign subsidiaries pledged | 65.00% | |||
Silicon Valley Bank [Member] | Revolving Credit Facility [Member] | New Credit Agreement [Member] | LIBOR Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Applicable leverage ratio, lower end | 1.25% | |||
Applicable leverage ratio | 1.50% | |||
Applicable leverage ratio, higher end | 1.75% | |||
Silicon Valley Bank [Member] | Revolving Credit Facility [Member] | New Credit Agreement [Member] | Base Rate [Member] | ||||
Debt Instrument [Line Items] | ||||
Applicable leverage ratio, lower end | 0.175% | |||
Applicable leverage ratio | 0.20% | |||
Applicable leverage ratio, higher end | 0.225% | |||
Silicon Valley Bank [Member] | Stand-by letter of credit [Member] | New Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, current restriction on borrowing capacity | $ 500,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) $ in Millions | Mar. 31, 2019USD ($) |
Schedule Of Income Taxes [Line Items] | |
Unrecognized tax benefits | $ 4 |
Income Taxes - Income Tax Recon
Income Taxes - Income Tax Reconciliation Computed at Federal Statutory Rates to Income Tax Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Provision (benefit) from income taxes at statutory rate | $ 529 | $ (770) |
State and local income taxes, net of federal tax benefit | 53 | (78) |
Impact of foreign income (loss) | 90 | (1,237) |
Foreign tax credit valuation allowance | (258) | |
Permanent non-deductible acquisition-related expense | 60 | (301) |
Net shortfall (windfall) on stock based compensation | 108 | (117) |
Reversal of reserve for income taxes | (734) | 22 |
Other, net | 13 | 16 |
Reported income tax benefit | $ (139) | $ (2,465) |
Provision (benefit) from income taxes at statutory rate, tax rate | 21.00% | 21.00% |
State and local income taxes, net of federal tax benefit, tax rate | 2.10% | 2.10% |
Impact of foreign income (loss), tax rate | 3.60% | 33.80% |
Foreign tax credit valuation allowance, tax rate | (10.20%) | |
Permanent non-deductible acquisition-related expense, tax rate | 2.40% | 8.20% |
Net shortfall (windfall) on stock based compensation, tax rate | 4.30% | 3.20% |
Reversal of reserve for income taxes, tax rate | (29.10%) | (0.60%) |
Other, net, tax rate | 0.40% | (0.40%) |
Reported income tax benefit, tax rate | (5.50%) | 67.30% |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Earnings Per Share, Basic and Diluted (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net income (loss), as reported | $ 2,660 | $ (1,199) |
Less: net income attributable to participating securities | (146) | |
Net income (loss) available to common shareholders—basic | 2,514 | (1,199) |
Add-back: undistributed earnings allocated to unvested shareholders | 0 | |
Less: undistributed earnings reallocated to unvested shareholders | 0 | |
Net income (loss) available to common shareholders—diluted | $ 2,514 | $ (1,199) |
Weighted-average shares of common stock outstanding | 41,263,669 | 41,846,619 |
Less: weighted-average shares of unvested restricted common stock outstanding | (1,259,315) | (1,840,830) |
Weighted-average number of common shares used in computing basic and diluted net income (loss) per common share | 40,004,354 | 40,005,789 |
Net income (loss) per share applicable to common shareholders—basic | $ 0.06 | $ (0.03) |
Net income (loss) available to common shareholders—basic | $ 2,514 | $ (1,199) |
Weighted-average shares of common stock outstanding | 41,263,669 | 41,846,619 |
Less: weighted-average shares of unvested restricted common stock outstanding | (1,259,315) | (1,840,830) |
Weighted-average number of common shares issuable upon exercise of outstanding stock options | 61,705 | |
Weighted-average number of common shares used in computing diluted net income (loss) per share | 40,066,059 | 40,005,789 |
Net income (loss) per share applicable to common shareholders—diluted | $ 0.06 | $ (0.03) |
Net Income (Loss) Per Share -_2
Net Income (Loss) Per Share - Schedule of Anti-Dilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share | 490,897 | 620,312 |
Unvested Restricted Common Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share | 912,271 | 685,719 |
Unvested Restricted Stock Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share | 81,854 | 64,024 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 11 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2019 | May 03, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Unrecognized compensation expense | $ 30.5 | $ 30.5 | |
Weighted-average period, years | 2 years 3 months 18 days | ||
Stock Repurchase Program [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total amount authorized under repurchase program | $ 25 | ||
Stock repurchase program expiration date | Jun. 7, 2019 | ||
Number of shares repurchased under stock repurchase program | 370,500 | 1,261,400 | |
Total common stock aggregate purchase price | $ 6.6 | $ 23.9 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock based compensation, Total expensed | $ 4,219 | $ 4,247 |
Property and equipment | 14 | |
Total stock based compensation | 4,219 | 4,261 |
Marketing and Selling [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock based compensation, Total expensed | 1,770 | 1,734 |
Research and Development [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock based compensation, Total expensed | 722 | 988 |
General and Administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock based compensation, Total expensed | $ 1,727 | $ 1,525 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2019SegmentMarkets | |
Segment Reporting [Abstract] | |
Number of operating segment | Segment | 1 |
Number of principal markets, segment reporting | Markets | 2 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Revenue for Major Markets (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Total | $ 51,356 | $ 56,683 |
Creative Professional [Member] | ||
Segment Reporting Information [Line Items] | ||
Total | 32,763 | 34,998 |
OEM [Member] | ||
Segment Reporting Information [Line Items] | ||
Total | $ 18,593 | $ 21,685 |
Segment Reporting - Schedule _2
Segment Reporting - Schedule of Revenue by Geographic Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Total | $ 51,356 | $ 56,683 |
% of Total | 100.00% | 100.00% |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Total | $ 23,216 | $ 24,823 |
% of Total | 45.20% | 43.80% |
Japan [Member] | ||
Segment Reporting Information [Line Items] | ||
Total | $ 9,634 | $ 11,652 |
% of Total | 18.80% | 20.50% |
Europe Middle East Africa [Member] | ||
Segment Reporting Information [Line Items] | ||
Total | $ 13,457 | $ 15,066 |
% of Total | 26.20% | 26.60% |
Rest of the World [Member] | ||
Segment Reporting Information [Line Items] | ||
Total | $ 5,049 | $ 5,142 |
% of Total | 9.80% | 9.10% |
Segment Reporting - Schedule _3
Segment Reporting - Schedule of Assets by Geographic Segments (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Long-lived assets: | ||
Total | $ 374,602 | $ 365,026 |
United States [Member] | ||
Long-lived assets: | ||
Total | 311,124 | 303,046 |
United Kingdom [Member] | ||
Long-lived assets: | ||
Total | 4,198 | 3,484 |
Germany [Member] | ||
Long-lived assets: | ||
Total | 53,615 | 54,357 |
Asia (Including Japan) [Member] | ||
Long-lived assets: | ||
Total | $ 5,665 | $ 4,139 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018USD ($)Position | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($)Position | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($)Position | |
Restructuring Cost and Reserve [Line Items] | |||||
Number of Eliminated positions | Position | 15 | 89 | 50 | ||
Restructuring charges | $ (24) | $ 194 | |||
Restructuring charges recorded to date | $ 6,800 | $ 6,800 | |||
Stock based compensation expense | 4,219 | $ 4,247 | |||
Future cash expenditures | $ 1,000 | ||||
Olapic Business [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of Eliminated positions | Position | 2 | ||||
Reversal of Stock Based Compensation Expense [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 1,400 | ||||
Severance and Termination Benefits [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 1,000 | $ 3,000 | |||
Facilities and Associated Costs [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 200 | ||||
Deferred Compensation Payment [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 900 | ||||
Stock based compensation expense | $ 900 |
Restructuring - Schedule of Det
Restructuring - Schedule of Details of Restructuring Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring | $ (24) | $ 194 |
Severance And Termination Benefits [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring | $ (24) | $ 194 |
Restructuring - Summary of Rest
Restructuring - Summary of Restructuring Reserves and Provision Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve, beginning balance | $ 2,968 | |
Restructuring charges | (24) | $ 194 |
Cash payments | (1,595) | |
Foreign currency exchange rate changes | (9) | |
Restructuring reserve, ending balance | 1,340 | |
Personnel Related [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring reserve, beginning balance | 2,968 | |
Restructuring charges | (24) | |
Cash payments | (1,595) | |
Foreign currency exchange rate changes | (9) | |
Restructuring reserve, ending balance | $ 1,340 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Period of licensing agreement term | 1 year | |
Warranty liabilities | $ 0 | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Apr. 19, 2019 | Apr. 18, 2019 | |
Subsequent Event [Line Items] | |||
Dividend payable, date declared | Apr. 23, 2019 | ||
Dividend payable, date of record | Jul. 1, 2019 | ||
Dividend payable, date to be paid | Jul. 19, 2019 | ||
Stock Repurchase Program [Member] | |||
Subsequent Event [Line Items] | |||
Number of shares repurchased under stock repurchase program | 44,600 | ||
Total common stock aggregate purchase price | $ 0.9 | ||
Purchase of common stock, average price per share | $ 20.19 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Dividend approved, amount per share | $ 0.116 | ||
Subsequent Event [Member] | Stock Repurchase Program [Member] | |||
Subsequent Event [Line Items] | |||
Stock repurchase program, remaining repurchase amount | $ 0.3 |