Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 21, 2013 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AWARE INC /MA/ | |
Entity Central Index Key | 1015739 | |
Trading Symbol | awre | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 22,570,794 | |
Document Type | 10-Q | |
Document Period End Date | 30-Sep-13 | |
Amendment Flag | FALSE | |
Document Fiscal Year Focus | 2013 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $75,418 | $71,074 |
Accounts receivable, net | 2,754 | 3,457 |
Receivable from patent arrangement | 1,121 | |
Deferred tax assets | 916 | 817 |
Prepaid expenses and other current assets | 1,093 | 528 |
Total current assets | 80,181 | 76,997 |
Property and equipment, net | 5,644 | 5,904 |
Investments | 2,962 | 2,010 |
Intangible assets | 201 | |
Long term deferred tax assets | 659 | 943 |
Total assets | 89,647 | 85,854 |
Current liabilities: | ||
Accounts payable | 243 | 328 |
Accrued expenses | 101 | 148 |
Accrued compensation | 589 | 817 |
Accrued professional | 156 | 142 |
Due to customers | 3,732 | |
Deferred revenue | 1,529 | 2,204 |
Total current liabilities | 6,350 | 3,639 |
Long-term deferred revenue | 40 | 319 |
Stockholders' equity: | ||
Preferred stock, $1.00 par value; 1,000,000 shares authorized, none outstanding | ||
Common stock, $.01 par value; 70,000,000 shares authorized; issued and outstanding 22,570,794 as of September 30, 2013 and 22,509,518 as of December 31, 2012 | 226 | 225 |
Additional paid-in capital | 100,917 | 100,561 |
Accumulated other comprehensive loss | -57 | -50 |
Accumulated deficit | -17,829 | -18,840 |
Total stockholders' equity | 83,257 | 81,896 |
Total liabilities and stockholders' equity | $89,647 | $85,854 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $1 | $1 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | ||
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 70,000,000 | 70,000,000 |
Common stock, shares issued | 22,570,794 | 22,509,518 |
Common stock, shares outstanding | 22,570,794 | 22,509,518 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenue: | ||||
Software licenses | $2,334 | $3,387 | $7,704 | $8,070 |
Software maintenance | 1,023 | 661 | 3,187 | 2,471 |
Services | 943 | 724 | 2,179 | 2,100 |
Hardware sales | 1,129 | |||
Royalties | 170 | 484 | 737 | 1,599 |
Total revenue | 4,470 | 5,256 | 14,936 | 14,240 |
Costs and expenses: | ||||
Cost of hardware sales | 813 | |||
Cost of services | 494 | 421 | 1,075 | 1,138 |
Research and development | 1,452 | 1,466 | 4,504 | 4,431 |
Selling and marketing | 931 | 1,069 | 2,998 | 3,143 |
General and administrative | 922 | 854 | 2,580 | 2,915 |
Exit costs | 2,832 | 2,832 | ||
Total costs and expenses; | 6,631 | 3,810 | 14,802 | 11,627 |
Operating income (loss) before patent related income | -2,161 | 1,446 | 134 | 2,613 |
Gain on sale of patent assets | 15,167 | 86,394 | ||
Income from patent arrangement | 780 | |||
Operating income (loss) after patent related income | -2,161 | 16,613 | 914 | 89,007 |
Other income | 27 | 27 | 85 | |
Interest income | 80 | 45 | 239 | 137 |
Income (loss) from continuing operations before income taxes | -2,054 | 16,658 | 1,180 | 89,229 |
Provision for (benefit from) income taxes | -901 | 6,578 | 169 | 23,248 |
Income (loss) from continuing operations | -1,153 | 10,080 | 1,011 | 65,981 |
Income from discontinued operations, net of income taxes | 217 | 360 | ||
Net income (loss) | -1,153 | 10,297 | 1,011 | 66,341 |
Basic net income (loss) per share: | ||||
Basic net income (loss) per share from continuing operations (in dollars per share) | ($0.05) | $0.45 | $0.04 | $3.05 |
Basic net income per share from discontinued operations (in dollars per share) | $0 | $0.01 | $0 | $0.02 |
Basic net income (loss) per share (in dollars per share) | ($0.05) | $0.46 | $0.04 | $3.07 |
Diluted net income (loss) per share: | ||||
Diluted net income (loss) per share from continuing operations (in dollars per share) | ($0.05) | $0.45 | $0.04 | $3.01 |
Diluted net income per share from discontinued operations (in dollars per share) | $0 | $0.01 | $0 | $0.02 |
Diluted net income (loss) per share (in dollars per share) | ($0.05) | $0.46 | $0.04 | $3.03 |
Weighted-average shares - basic (in shares) | 22,571 | 22,339 | 22,533 | 21,609 |
Weighted-average shares - diluted (in shares) | 22,571 | 22,501 | 22,623 | 21,888 |
Comprehensive income (loss): | ||||
Net income (loss) | -1,153 | 10,297 | 1,011 | 66,341 |
Other comprehensive income: | ||||
Unrealized gains (losses) on available for sale securities | -26 | -4 | -6 | 16 |
Comprehensive income (loss) | ($1,179) | $10,293 | $1,005 | $66,357 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ||
Net income | $1,011 | $66,341 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 325 | 343 |
Stock-based compensation | 445 | 299 |
Gain on sale of patent assets | -86,394 | |
Amortization of premium (discount) on investments | 13 | -24 |
Gain on sale of investments | -27 | -85 |
Loss on disposal of property and equipment | 27 | |
Provision for doubtful accounts | 4 | |
Changes in assets and liabilities: | ||
Accounts receivable | 703 | -277 |
Receivable from patent arrangement | 1,121 | |
Inventories | 538 | |
Prepaid expenses and other current assets | -565 | -210 |
Deferred tax assets | 185 | |
Accounts payable | -85 | -1 |
Accrued expenses, compensation, and professional | -261 | -90 |
Accrued income taxes | 5,339 | |
Due to customers | 3,732 | |
Deferred revenue | -954 | 112 |
Net cash provided by (used in) operating activities | 5,670 | -14,105 |
Cash flows from investing activities: | ||
Purchases of property and equipment | -117 | -90 |
Proceeds from sale of property and equipment | 24 | |
Purchases of investments | -2,008 | -1,017 |
Sales of investments | 1,064 | 855 |
Purchase of intangible assets | -201 | |
Proceeds from sale of patent assets, net | 86,394 | |
Net cash provided by (used in) investing activities | -1,238 | 86,142 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 46 | 5,896 |
Payment of dividends | -25,506 | |
Excess tax benefits from stock-based compensation | -63 | 15,761 |
Payments made for taxes of employees who surrendered shares related to unrestricted stock | -71 | -174 |
Net cash used in financing activities | -88 | -4,023 |
Increase in cash and cash equivalents | 4,344 | 68,014 |
Cash and cash equivalents, beginning of period | 71,074 | 46,577 |
Cash and cash equivalents, end of period | 75,418 | 114,591 |
Supplemental disclosure: | ||
Cash paid for income taxes | $535 | $2,388 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended | |
Sep. 30, 2013 | ||
Basis Of Accounting [Abstract] | ||
Basis of Presentation | A) | Basis of Presentation. The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and therefore do not include all information and notes necessary for a complete presentation of our financial position, results of operations and cash flows, in conformity with generally accepted accounting principles. We filed audited financial statements which included all information and notes necessary for such presentation for the three years ended December 31, 2012 in conjunction with our 2012 Annual Report on Form 10-K. This Form 10-Q should be read in conjunction with that Form 10-K. |
The accompanying unaudited consolidated balance sheets, statements of comprehensive income, and statements of cash flows reflect all adjustments (consisting only of normal recurring items) which are, in the opinion of management, necessary for a fair presentation of financial position at September 30, 2013, and of operations and cash flows for the interim periods ended September 30, 2013 and 2012. | ||
The results of operations for the interim period ended September 30, 2013 are not necessarily indicative of the results to be expected for the year. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||
Fair Value Measurements | B) | Fair Value Measurements. The Financial Accounting Standards Board (“FASB”) Codification defines fair value, and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to the unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under the FASB Codification are: i) Level 1 – valuations that are based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date; ii) Level 2 – valuations that are based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly; and iii) Level 3 – valuations that require inputs that are both significant to the fair value measurement and unobservable. | |||||||||||
Cash and cash equivalents, which primarily include money market mutual funds, were $75.4 million and $71.1 million as of September 30, 2013 and December 31, 2012, respectively. We classified our cash equivalents of $70.4 million and $67.1 million as of September 30, 2013 and December 31, 2012, respectively, within Level 1 of the fair value hierarchy because they are valued using quoted market prices. | |||||||||||||
Our investments, which consist of high yield corporate debt securities, are also classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. We categorize our investments as available-for-sale securities, and carry them at fair value in our financial statements. We had $3.0 million and $2.0 million of available-for-sale investments as of September 30, 2013 and December 31, 2012, respectively. | |||||||||||||
As of September 30, 2013, our assets that are measured at fair value on a recurring basis and whose carrying values approximate their respective fair values include the following (in thousands): | |||||||||||||
Fair Value Measurement at September 30, 2013 Using: | |||||||||||||
Quoted Prices in Active Markets for | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||
Identical Assets | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||
Corporate debt securities | $ | 2,962 | $ | - | $ | - | |||||||
Money market funds (included in cash and cash equivalents) | 70,408 | - | - | ||||||||||
Total | $ | 73,370 | $ | - | $ | - | |||||||
As of December 31, 2012, our assets that are measured at fair value on a recurring basis and whose carrying values approximate their respective fair values include the following (in thousands): | |||||||||||||
Fair Value Measurement at December 31, 2012 Using: | |||||||||||||
Quoted Prices in Active Markets for | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||
Identical Assets | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||
Corporate debt securities | $ | 2,010 | $ | - | $ | - | |||||||
Money market funds (included in cash and cash equivalents) | 67,050 | - | - | ||||||||||
Total | $ | 69,060 | $ | - | $ | - | |||||||
Computation_of_Earnings_per_Sh
Computation of Earnings per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||
Computation of Earnings per Share | C) | Computation of Earnings per Share. Basic earnings per share is computed by dividing net income or loss by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing net income or loss by the weighted average number of common shares outstanding plus additional common shares that would have been outstanding if dilutive potential common shares had been issued. For the purposes of this calculation, stock options are considered common stock equivalents in periods in which they have a dilutive effect. Stock options that are anti-dilutive are excluded from the calculation. | |||||||||||||||
Net income per share is calculated as follows (in thousands, except per share data): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net income (loss): | |||||||||||||||||
Income (loss) from continuing operations | ($ | 1,153 | ) | $ | 10,080 | $ | 1,011 | $ | 65,981 | ||||||||
Income from discontinued operations | - | 217 | - | 360 | |||||||||||||
Net income (loss) | ($ | 1,153 | ) | $ | 10,297 | $ | 1,011 | $ | 66,341 | ||||||||
Shares outstanding: | |||||||||||||||||
Weighted-average common shares outstanding | 22,571 | 22,339 | 22,533 | 21,609 | |||||||||||||
Additional dilutive common stock equivalents | - | 162 | 90 | 279 | |||||||||||||
Diluted shares outstanding | 22,571 | 22,501 | 22,623 | 21,888 | |||||||||||||
Basic net income (loss) per share: | |||||||||||||||||
Basic net income (loss) per share from continuing operations | ($ | 0.05 | ) | $ | 0.45 | $ | 0.04 | $ | 3.05 | ||||||||
Basic net income per share from discontinued operations | 0 | 0.01 | 0 | 0.02 | |||||||||||||
Basic net income (loss) per share | ($ | 0.05 | ) | $ | 0.46 | $ | 0.04 | $ | 3.07 | ||||||||
Diluted net income (loss) per share: | |||||||||||||||||
Diluted net income(loss) per share from continuing operations | ($ | 0.05 | ) | $ | 0.45 | $ | 0.04 | $ | 3.01 | ||||||||
Diluted net income per share from discontinued operations | 0 | 0.01 | 0 | 0.02 | |||||||||||||
Diluted net income (loss) per share | ($ | 0.05 | ) | $ | 0.46 | $ | 0.04 | $ | 3.03 | ||||||||
For the three months ended September 30, 2013, common stock equivalents of 111,349 were not included in the per share calculation for diluted EPS, because we had a net loss and the effect of their inclusion would be anti-dilutive. | |||||||||||||||||
For the three month periods ended September 30, 2013 and 2012, options to purchase 825,338 and 25,000 shares of common stock, respectively, were outstanding, but were not included in the computation of diluted EPS because the options’ exercise prices were greater than the average market price of the common stock and thus would be anti-dilutive. | |||||||||||||||||
For the nine month periods ended September 30, 2013 and 2012, options to purchase 825,338 and 829,504 shares of common stock, respectively, were outstanding, but were not included in the computation of diluted EPS because the options’ exercise prices were greater than the average market price of the common stock and thus would be anti-dilutive. |
StockBased_Compensation
Stock-Based Compensation | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | |||||||||||||||||
Stock-Based Compensation | D) | Stock-Based Compensation. The following table presents stock-based employee compensation expenses included in our unaudited consolidated statements of comprehensive income (in thousands): | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Cost of services | $ | 12 | $ | 2 | $ | 23 | $ | 14 | |||||||||
Research and development | 26 | 6 | 53 | 68 | |||||||||||||
Selling and marketing | 5 | - | 10 | 134 | |||||||||||||
General and administrative | 174 | 13 | 359 | 70 | |||||||||||||
Income from discontinued operations | - | - | - | 13 | |||||||||||||
Stock-based compensation expense | $ | 217 | $ | 21 | $ | 445 | $ | 299 | |||||||||
Stock Option Grants. We grant stock options under our 2001 Nonqualified Stock Plan. We estimate the fair value of stock options using the Black-Scholes valuation model. This valuation model takes into account the exercise price of the award, as well as a variety of significant assumptions. The assumptions used to estimate the fair value of stock options include the expected term, the expected volatility of our stock over the expected term, the risk-free interest rate over the expected term, and our expected annual dividend yield. We believe that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of our stock options. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards. | |||||||||||||||||
Unrestricted Stock Grants. We also grant unrestricted shares of stock under our 2001 Nonqualified Stock Plan. Stock-based compensation expense for stock grants is determined based on the fair market value of our stock on the date of grant, provided the number of shares in the grant is fixed on the grant date. | |||||||||||||||||
The following summarizes stock-based grants during 2013 and 2012: | |||||||||||||||||
● | Stock Option Grants – We did not grant any stock options in the three and nine month periods ended September 30, 2013. We granted stock options for 0 shares and 50,000 shares in the three and nine month periods ended September 30, 2012, respectively. | ||||||||||||||||
● | Unrestricted Stock Grants – We granted shares of unrestricted stock in July 2010 and April 2013. The following summarizes those grants and their related impact on results of operations for the three and nine months ended September 30, 2013 and 2012: | ||||||||||||||||
July 2010 Unrestricted Stock Grant. In July 2010, we granted 575,443 shares of stock to directors, officers and employees. There was no stock-based compensation expense related to this grant in the three and nine month periods ended September 30, 2013. We expensed $0 and $189,000 of stock-based compensation expense related to this grant in the three and nine month periods ended September 30, 2012, respectively. | |||||||||||||||||
April 2013 Unrestricted Stock Grant. In April 2013, we granted 130,000 shares of unrestricted stock to directors, officers and employees. The shares are to be issued in two equal installments shortly after June 30, 2013 and December 31, 2013, provided each grantee is serving as a director, officer or employee on those dates. We expensed $208,000 and $415,000 of stock-based compensation expense related to this grant in the three and nine months ended September 30, 2013, respectively. The unamortized stock-based compensation charge associated with this grant as of September 30, 2013 is $208,000, which we anticipate will be charged to expense in the fourth quarter of 2013. | |||||||||||||||||
Business_Segments
Business Segments | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Business Segments | E) | Business Segments. We organize ourselves into multiple segments reporting to the chief operating decision makers. The following table provides reportable segment financial data for the three and nine month periods ended September 30, 2013 and 2012 (in thousands): | |||||||||||||||
Segments | |||||||||||||||||
Biometrics | DSL Service | Total | |||||||||||||||
& Imaging | Assurance | Corporate | Company | ||||||||||||||
Three Months Ended September 30, 2013 | |||||||||||||||||
Revenue | $ | 4,144 | $ | 156 | $ | 170 | $ | 4,470 | |||||||||
Operating income (loss) before patent related income | 1,515 | (3,457 | ) | (219 | ) | (2,161 | ) | ||||||||||
Other income | 27 | 27 | |||||||||||||||
Interest income | 80 | 80 | |||||||||||||||
Loss from continuing operations before taxes | (2,054 | ) | |||||||||||||||
Benefit from income taxes | (901 | ) | (901 | ) | |||||||||||||
Loss from continuing operations | (1,153 | ) | |||||||||||||||
Income from discontinued operations, net of tax | - | ||||||||||||||||
Net loss | ($ | 1,153 | ) | ||||||||||||||
Three Months Ended September 30, 2012 | |||||||||||||||||
Revenue | $ | 4,287 | $ | 485 | $ | 484 | $ | 5,256 | |||||||||
Operating income (loss) before patent related income | 2,111 | (446 | ) | (219 | ) | 1,446 | |||||||||||
Gain on sale of patent assets | 15,167 | 15,167 | |||||||||||||||
Interest income | 45 | 45 | |||||||||||||||
Income from continuing operations before taxes | 16,658 | ||||||||||||||||
Provision for income taxes | 6,578 | 6,578 | |||||||||||||||
Income from continuing operations | 10,080 | ||||||||||||||||
Income from discontinued operations, net of tax | 217 | ||||||||||||||||
Net income | $ | 10,297 | |||||||||||||||
Nine Months Ended September 30, 2013 | |||||||||||||||||
Revenue | $ | 12,982 | $ | 1,217 | $ | 737 | $ | 14,936 | |||||||||
Operating income (loss) before patent related income | 4,848 | (4,266 | ) | (448 | ) | 134 | |||||||||||
Income from patent arrangement | 780 | 780 | |||||||||||||||
Other income | 27 | 27 | |||||||||||||||
Interest income | 239 | 239 | |||||||||||||||
Income from continuing operations before taxes | 1,180 | ||||||||||||||||
Provision for income taxes | 169 | 169 | |||||||||||||||
Income from continuing operations | 1,011 | ||||||||||||||||
Income from discontinued operations, net of tax | - | ||||||||||||||||
Net income | $ | 1,011 | |||||||||||||||
Nine Months Ended September 30, 2012 | |||||||||||||||||
Revenue | $ | 10,847 | $ | 1,794 | $ | 1,599 | $ | 14,240 | |||||||||
Operating income (loss) before patent related income | 4,725 | (1,062 | ) | (1,050 | ) | 2,613 | |||||||||||
Gain on sale of patent assets | 86,394 | 86,394 | |||||||||||||||
Other income | 85 | 85 | |||||||||||||||
Interest income | 137 | 137 | |||||||||||||||
Income from continuing operations before taxes | 89,229 | ||||||||||||||||
Provision for income taxes | 23,248 | 23,248 | |||||||||||||||
Income from continuing operations | 65,981 | ||||||||||||||||
Income from discontinued operations, net of tax | 360 | ||||||||||||||||
Net income | $ | 66,341 | |||||||||||||||
We conduct our operations in the United States and sell our products and services to domestic and international customers. Revenues were generated from the following geographic regions (in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
United States | $ | 2,588 | $ | 3,350 | $ | 9,944 | $ | 9,302 | |||||||||
Saudi Arabia | 524 | 338 | 613 | 360 | |||||||||||||
Rest of World | 1,358 | 1,568 | 4,379 | 4,578 | |||||||||||||
$ | 4,470 | $ | 5,256 | $ | 14,936 | $ | 14,240 |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 9 Months Ended | |
Sep. 30, 2013 | ||
Accounting Changes and Error Corrections [Abstract] | ||
Recent Accounting Pronouncements | F) | Recent Accounting Pronouncements. There are no recently issued accounting pronouncements applicable to the Company that have not been adopted as of September 30, 2013. |
Gain_on_Sale_of_Patent_Assets
Gain on Sale of Patent Assets | 9 Months Ended | |
Sep. 30, 2013 | ||
Gain On Sale Of Patent Assets [Abstract] | ||
Gain on Sale of Patent Assets | G) | Gain on Sale of Patent Assets. We recorded a $15.2 million gain on the sale of patent assets in the three months ended September 30, 2012. This gain relates to a transaction we completed in September 2012 in which we sold a portion of our patent portfolio pertaining to digital subscriber line (“DSL”) technology for $16.0 million. The proceeds from the sale were reduced by $0.8 million of transaction costs. |
We recorded an $86.4 million gain on the sale of patent assets in the nine months ended September 30, 2012. This gain includes the $15.2 million gain described in the previous paragraph and a $71.2 million gain on the sale of patent assets that occurred in the second quarter of 2012. In June 2012, we completed a transaction to sell patents pertaining to wireless technology for $75 million. The proceeds from that sale were reduced by $3.8 million of transaction costs. |
Income_from_patent_arrangement
Income from patent arrangement | 9 Months Ended | |
Sep. 30, 2013 | ||
Income From Patent Arrangement [Abstract] | ||
Income from patent arrangement | H) | Income from patent arrangement. We entered into an arrangement with an unaffiliated third party in 2010 under which we assigned patents in return for royalties on proceeds from patent monetization efforts by the third party. We recorded $0 and $0.8 million of income from this patent arrangement in the three and nine months ended September 30, 2013, respectively. |
Income_Taxes
Income Taxes | 9 Months Ended | ||
Sep. 30, 2013 | |||
Income Tax Disclosure [Abstract] | |||
Income Taxes | I) | Income Taxes. Income tax expense for the three ended September 30, 2013 was a tax benefit of $901,000. Income tax expense for the nine months ended September 30, 2013 was $169,000. Income tax expense for 2013 was based on the U.S. statutory rate of 34%, increased by state income taxes. Year-to-date tax expense also reflects two items related to 2012, including: | |
1 | a tax benefit of $95,000 related to the 2012 research tax credit. This credit was extended retroactively back to January 1, 2012, by the American Taxpayer Relief Act of 2012, which was enacted on January 2, 2013; and | ||
2 | a tax benefit of $148,000 related to a reduction in the estimate of the 2012 tax expense recorded in our 2012 financial statements. | ||
As of September 30, 2013, we had a total of $1.6 million of deferred tax assets for which we had recorded no valuation allowance. We will continue to assess the level of valuation allowance in future periods. Should evidence regarding the realizability of tax assets change at a future point in time, the valuation allowance will be adjusted accordingly. | |||
In addition to deferred tax assets carried on our balance sheet, we also had net federal and state research and development credit carryforwards available at December 31, 2012 of $5.1 million and $0.7 million. These credits were not recorded as tax assets as they relate to excess stock compensation deductions that may not be recorded as tax assets under generally accepted accounting principles until the amounts have been utilized to reduce our tax liability. To the extent that these assets are used to reduce future taxes, the benefit will be recorded as a reduction to additional paid-in capital. | |||
As a result of exit costs related to our DSL service assurance software business, we have revised our estimate of 2013 taxable income. As a result, we do not expect to utilize any of our excess stock compensation benefits to reduce our tax liability in 2013. Accordingly, we have not recorded any tax benefit to additional paid-in capital in 2013. As a separate matter, we reduced the benefit we recorded to additional paid-in capital in 2012 as a result of the reduction of our actual 2012 tax liability. The amount of the reduction to additional paid-in capital in 2013 related to 2012 was $63,000. | |||
Income tax expense related to continuing operations was $6.6 million and $23.2 million for the three and nine months ended September 30, 2012, respectively. Income tax expense in 2012 was driven by an $86.4 million gain on sale of patent assets. Income tax expense of $23.2 million for the nine months ended September 30, 2012 consisted of a $7.5 million current income tax liability plus a $15.8 million non-cash adjustment related to cumulative deduction for stock options in excess of book expense that was recorded to equity. |
Discontinued_Operations
Discontinued Operations | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||
Discontinued Operations | J) | Discontinued Operations. In January 2012, our Board of Directors approved the shutdown of our DSL service assurance hardware product line which was previously a component of our DSL Service Assurance Segment. We completed the shutdown in 2012 and no longer have any continuing involvement with or cash flows from this product line. The results of our DSL service assurance hardware product line have been included in discontinued operations in the consolidated statements of comprehensive income. Income from discontinued operations attributable to the DSL service assurance hardware product line was (in thousands): | |||||||||||||||
Three Months Ended | |||||||||||||||||
September 30, | Nine Months Ended | ||||||||||||||||
September 30, | |||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenue | $ | - | $ | 724 | $ | - | $ | 2,809 | |||||||||
Expenses | - | 364 | - | 2,206 | |||||||||||||
Income before income taxes | - | 360 | - | 603 | |||||||||||||
Income taxes | - | 143 | - | 243 | |||||||||||||
Income from discontinued operations | $ | - | $ | 217 | $ | - | $ | 360 |
DSL_Service_Assurance_Software
DSL Service Assurance Software Exit | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Digital Subscriber Line Service Assurance Software Exit [Abstract] | |||||||||||||||||
DSL Service Assurance Software Exit | M) | DSL Service Assurance Software Exit. In August 2013, our Board of Directors approved the shutdown of our DSL service assurance software product line, which is the remaining component of our DSL Service Assurance Segment. We intend to provide limited support to customers until December 31, 2013 at which point we expect to complete the shutdown. The results of operations for the DSL service assurance software product line have been reported in continuing operations for the three and nine month periods ended September 30, 2013 and 2012. We anticipate the results of operations for this product line will be reported in discontinued operations commencing next quarter. | |||||||||||||||
We estimate our total shutdown costs to date to be approximately $3.0 million. Such costs comprise: i) $3.7 million of payments to customers to terminate contracts, which were offset by $1.2 million of deferred revenue obligations that were relieved as a result of such contract terminations; ii) $397,000 of severance and employee-related costs; and iii) $47,000 of asset write-offs. We recorded $2.8 million of those costs in “Exit costs” in the consolidated statements of comprehensive income for the three months ended September 30, 2013. The remaining $165,000 of costs represents employee severance and retention bonuses for employees who have been retained to support customers through December 31, 2013. We intend to charge those costs to expense in the three months ended December 31, 2013, if earned by employees. | |||||||||||||||||
We may incur additional costs or receive additional income related to the termination of customer contracts, however we are unable to estimate those amounts at this time. | |||||||||||||||||
At September 30, 2013, we recorded a liability for exit costs of $3.8 million. This liability comprises: i) $3.7 million of payments due to customers for contract terminations; and ii) $232,000 of severance and employee related costs earned by employees through September 30, 2013, less $176,000 of payments made to such employees before the end of the quarter. | |||||||||||||||||
The following table is a rollforward of our exit costs liability accounts. Customer contract termination costs were included in “Due to customers” and severance and employee-related costs were included in “Accrued compensation” in the consolidated balance sheets. (in thousands): | |||||||||||||||||
Customer | Severance | Other | Total | ||||||||||||||
Contract | and Employee-Related Costs | Costs | |||||||||||||||
Termination Costs | |||||||||||||||||
Balance at June 30, 2013 | $ | - | $ | - | $ | - | $ | - | |||||||||
Amount charged to expense | 2,553 | 232 | 47 | 2,832 | |||||||||||||
Deferred revenue offset | 1,179 | - | - | 1,179 | |||||||||||||
Payments/write-offs | - | (176 | ) | (47 | ) | (223 | ) | ||||||||||
Balance at September 30, 2013 | $ | 3,732 | $ | 56 | $ | - | $ | 3,788 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||
Schedule of assets that are measured at fair value on a recurring basis | |||||||||||||
Fair Value Measurement at September 30, 2013 Using: | |||||||||||||
Quoted Prices in Active Markets for | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||
Identical Assets | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||
Corporate debt securities | $ | 2,962 | $ | - | $ | - | |||||||
Money market funds (included in cash and cash equivalents) | 70,408 | - | - | ||||||||||
Total | $ | 73,370 | $ | - | $ | - | |||||||
Fair Value Measurement at December 31, 2012 Using: | |||||||||||||
Quoted Prices in Active Markets for | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||
Identical Assets | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||
Corporate debt securities | $ | 2,010 | $ | - | $ | - | |||||||
Money market funds (included in cash and cash equivalents) | 67,050 | - | - | ||||||||||
Total | $ | 69,060 | $ | - | $ | - |
Computation_of_Earnings_per_Sh1
Computation of Earnings per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||
Schedule of net income per share | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net income (loss): | |||||||||||||||||
Income (loss) from continuing operations | ($ | 1,153 | ) | $ | 10,080 | $ | 1,011 | $ | 65,981 | ||||||||
Income from discontinued operations | - | 217 | - | 360 | |||||||||||||
Net income (loss) | ($ | 1,153 | ) | $ | 10,297 | $ | 1,011 | $ | 66,341 | ||||||||
Shares outstanding: | |||||||||||||||||
Weighted-average common shares outstanding | 22,571 | 22,339 | 22,533 | 21,609 | |||||||||||||
Additional dilutive common stock equivalents | - | 162 | 90 | 279 | |||||||||||||
Diluted shares outstanding | 22,571 | 22,501 | 22,623 | 21,888 | |||||||||||||
Basic net income (loss) per share: | |||||||||||||||||
Basic net income (loss) per share from continuing operations | ($ | 0.05 | ) | $ | 0.45 | $ | 0.04 | $ | 3.05 | ||||||||
Basic net income per share from discontinued operations | 0 | 0.01 | 0 | 0.02 | |||||||||||||
Basic net income (loss) per share | ($ | 0.05 | ) | $ | 0.46 | $ | 0.04 | $ | 3.07 | ||||||||
Diluted net income (loss) per share: | |||||||||||||||||
Diluted net income(loss) per share from continuing operations | ($ | 0.05 | ) | $ | 0.45 | $ | 0.04 | $ | 3.01 | ||||||||
Diluted net income per share from discontinued operations | 0 | 0.01 | 0 | 0.02 | |||||||||||||
Diluted net income (loss) per share | ($ | 0.05 | ) | $ | 0.46 | $ | 0.04 | $ | 3.03 | ||||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | |||||||||||||||||
Schedule of stock-based employee compensation expense included in statements of comprehensive income | Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Cost of services | $ | 12 | $ | 2 | $ | 23 | $ | 14 | |||||||||
Research and development | 26 | 6 | 53 | 68 | |||||||||||||
Selling and marketing | 5 | - | 10 | 134 | |||||||||||||
General and administrative | 174 | 13 | 359 | 70 | |||||||||||||
Income from discontinued operations | - | - | - | 13 | |||||||||||||
Stock-based compensation expense | $ | 217 | $ | 21 | $ | 445 | $ | 299 |
Business_Segments_Tables
Business Segments (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Schedule of results of operations for reportable segments | |||||||||||||||||
Segments | |||||||||||||||||
Biometrics | DSL Service | Total | |||||||||||||||
& Imaging | Assurance | Corporate | Company | ||||||||||||||
Three Months Ended September 30, 2013 | |||||||||||||||||
Revenue | $ | 4,144 | $ | 156 | $ | 170 | $ | 4,470 | |||||||||
Operating income (loss) before patent related income | 1,515 | (3,457 | ) | (219 | ) | (2,161 | ) | ||||||||||
Other income | 27 | 27 | |||||||||||||||
Interest income | 80 | 80 | |||||||||||||||
Loss from continuing operations before taxes | (2,054 | ) | |||||||||||||||
Benefit from income taxes | (901 | ) | (901 | ) | |||||||||||||
Loss from continuing operations | (1,153 | ) | |||||||||||||||
Income from discontinued operations, net of tax | - | ||||||||||||||||
Net loss | ($ | 1,153 | ) | ||||||||||||||
Three Months Ended September 30, 2012 | |||||||||||||||||
Revenue | $ | 4,287 | $ | 485 | $ | 484 | $ | 5,256 | |||||||||
Operating income (loss) before patent related income | 2,111 | (446 | ) | (219 | ) | 1,446 | |||||||||||
Gain on sale of patent assets | 15,167 | 15,167 | |||||||||||||||
Interest income | 45 | 45 | |||||||||||||||
Income from continuing operations before taxes | 16,658 | ||||||||||||||||
Provision for income taxes | 6,578 | 6,578 | |||||||||||||||
Income from continuing operations | 10,080 | ||||||||||||||||
Income from discontinued operations, net of tax | 217 | ||||||||||||||||
Net income | $ | 10,297 | |||||||||||||||
Nine Months Ended September 30, 2013 | |||||||||||||||||
Revenue | $ | 12,982 | $ | 1,217 | $ | 737 | $ | 14,936 | |||||||||
Operating income (loss) before patent related income | 4,848 | (4,266 | ) | (448 | ) | 134 | |||||||||||
Income from patent arrangement | 780 | 780 | |||||||||||||||
Other income | 27 | 27 | |||||||||||||||
Interest income | 239 | 239 | |||||||||||||||
Income from continuing operations before taxes | 1,180 | ||||||||||||||||
Provision for income taxes | 169 | 169 | |||||||||||||||
Income from continuing operations | 1,011 | ||||||||||||||||
Income from discontinued operations, net of tax | - | ||||||||||||||||
Net income | $ | 1,011 | |||||||||||||||
Nine Months Ended September 30, 2012 | |||||||||||||||||
Revenue | $ | 10,847 | $ | 1,794 | $ | 1,599 | $ | 14,240 | |||||||||
Operating income (loss) before patent related income | 4,725 | (1,062 | ) | (1,050 | ) | 2,613 | |||||||||||
Gain on sale of patent assets | 86,394 | 86,394 | |||||||||||||||
Other income | 85 | 85 | |||||||||||||||
Interest income | 137 | 137 | |||||||||||||||
Income from continuing operations before taxes | 89,229 | ||||||||||||||||
Provision for income taxes | 23,248 | 23,248 | |||||||||||||||
Income from continuing operations | 65,981 | ||||||||||||||||
Income from discontinued operations, net of tax | 360 | ||||||||||||||||
Net income | $ | 66,341 | |||||||||||||||
Schedule of revenues generated from geographic regions | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
United States | $ | 2,588 | $ | 3,350 | $ | 9,944 | $ | 9,302 | |||||||||
Saudi Arabia | 524 | 338 | 613 | 360 | |||||||||||||
Rest of World | 1,358 | 1,568 | 4,379 | 4,578 | |||||||||||||
$ | 4,470 | $ | 5,256 | $ | 14,936 | $ | 14,240 |
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||
Schedule of income (loss) from discontinued operations | Three Months Ended | ||||||||||||||||
September 30, | Nine Months Ended | ||||||||||||||||
September 30, | |||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenue | $ | - | $ | 724 | $ | - | $ | 2,809 | |||||||||
Expenses | - | 364 | - | 2,206 | |||||||||||||
Income before income taxes | - | 360 | - | 603 | |||||||||||||
Income taxes | - | 143 | - | 243 | |||||||||||||
Income from discontinued operations | $ | - | $ | 217 | $ | - | $ | 360 |
DSL_Service_Assurance_Software1
DSL Service Assurance Software Exit (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Digital Subscriber Line Service Assurance Software Exit [Abstract] | |||||||||||||||||
Schedule of roll forward of exit costs liability | |||||||||||||||||
Customer | Severance | Other | Total | ||||||||||||||
Contract | and Employee-Related Costs | Costs | |||||||||||||||
Termination Costs | |||||||||||||||||
Balance at June 30, 2013 | $ | - | $ | - | $ | - | $ | - | |||||||||
Amount charged to expense | 2,553 | 232 | 47 | 2,832 | |||||||||||||
Deferred revenue offset | 1,179 | - | - | 1,179 | |||||||||||||
Payments/write-offs | - | (176 | ) | (47 | ) | (223 | ) | ||||||||||
Balance at September 30, 2013 | $ | 3,732 | $ | 56 | $ | - | $ | 3,788 | |||||||||
Fair_Value_Measurements_Assets
Fair Value Measurements - Assets measured at fair value on a recurring basis and whose carrying values approximate their respective fair values (Details) (Fair value on recurring basis, USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value Measurement, Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | $73,370 | $69,060 |
Fair Value Measurement, Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | ||
Fair Value Measurement, Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | ||
Corporate debt securities | Fair Value Measurement, Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate debt securities, fair value | 2,962 | 2,010 |
Corporate debt securities | Fair Value Measurement, Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate debt securities, fair value | ||
Corporate debt securities | Fair Value Measurement, Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Corporate debt securities, fair value | ||
Money market funds (included in cash and cash equivalents) | Fair Value Measurement, Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds (included in cash and cash equivalents) | 70,408 | 67,050 |
Money market funds (included in cash and cash equivalents) | Fair Value Measurement, Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds (included in cash and cash equivalents) | ||
Money market funds (included in cash and cash equivalents) | Fair Value Measurement, Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds (included in cash and cash equivalents) |
Fair_Value_Measurements_Detail
Fair Value Measurements (Detail Textuals) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents, primarily include money market funds | $75,418 | $71,074 | $114,591 | $46,577 |
Corporate debt securities | Fair Value Measurement, Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value on recurring basis | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investments | 2,962 | 2,010 | ||
Money market funds (included in cash and cash equivalents) | Fair Value Measurement, Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value on recurring basis | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash equivalents, primarily include money market funds | $70,408 | $67,050 |
Computation_of_Earnings_per_Sh2
Computation of Earnings per Share - Summary of net income per share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net income (loss): | ||||
Income (loss) from continuing operations | ($1,153) | $10,080 | $1,011 | $65,981 |
Income from discontinued operations | 217 | 360 | ||
Net income (loss) | ($1,153) | $10,297 | $1,011 | $66,341 |
Shares outstanding: | ||||
Weighted-average common shares outstanding (in shares) | 22,571 | 22,339 | 22,533 | 21,609 |
Additional dilutive common stock equivalents (in shares) | 162 | 90 | 279 | |
Diluted shares outstanding (in shares) | 22,571 | 22,501 | 22,623 | 21,888 |
Basic net income (loss) per share: | ||||
Basic net income (loss) per share from continuing operations (in dollars per share) | ($0.05) | $0.45 | $0.04 | $3.05 |
Basic net income per share from discontinued operations (in dollars per share) | $0 | $0.01 | $0 | $0.02 |
Basic net income (loss) per share (in dollars per share) | ($0.05) | $0.46 | $0.04 | $3.07 |
Diluted net income (loss) per share: | ||||
Diluted net income (loss) per share from continuing operations (in dollars per share) | ($0.05) | $0.45 | $0.04 | $3.01 |
Diluted net income per share from discontinued operations (in dollars per share) | $0 | $0.01 | $0 | $0.02 |
Diluted net income (loss) per share (in dollars per share) | ($0.05) | $0.46 | $0.04 | $3.03 |
Computation_of_Earnings_per_Sh3
Computation of Earnings per Share (Detail Textuals) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Common stock equivalents | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive common stock Share purchase (in shares) | 111,349 | |||
Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive common stock Share purchase (in shares) | 825,338 | 25,000 | 825,338 | 829,504 |
StockBased_Compensation_Summar
Stock-Based Compensation - Summary of stock-based employee compensation expenses (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $217 | $21 | $445 | $299 |
Cost of services | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 12 | 2 | 23 | 14 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 26 | 6 | 53 | 68 |
Selling and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 5 | 10 | 134 | |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 174 | 13 | 359 | 70 |
Income from discontinued operations | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $13 |
StockBased_Compensation_Detail
Stock-Based Compensation (Detail Textuals) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2013 | Jul. 31, 2010 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $217,000 | $21,000 | $445,000 | $299,000 | ||
Stock Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted Stock options (in shares) | 0 | 50,000 | ||||
Unrestricted Stock Grants | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted Stock options (in shares) | 130,000 | 575,443 | ||||
Stock-based compensation expense | 208,000 | 0 | 415,000 | 189,000 | ||
Unamortized stock-based compensation | $208,000 | $208,000 |
Business_Segment_Results_of_op
Business Segment - Results of operations for reportable segments (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Segment Reporting Information [Line Items] | ||||
Revenue | $4,470 | $5,256 | $14,936 | $14,240 |
Operating income (loss) before patent related income | -2,161 | 1,446 | 134 | 2,613 |
Gain on sale of patent assets | 15,167 | 86,394 | ||
Income from patent arrangement | 780 | |||
Other income | 27 | 27 | 85 | |
Interest income | 80 | 45 | 239 | 137 |
Income (loss) from continuing operations before taxes | -2,054 | 16,658 | 1,180 | 89,229 |
Provision for (benefit from) income taxes | -901 | 6,578 | 169 | 23,248 |
Income (loss) from continuing operations | -1,153 | 10,080 | 1,011 | 65,981 |
Income from discontinued operations, net of tax | 217 | 360 | ||
Net income (loss) | -1,153 | 10,297 | 1,011 | 66,341 |
Reportable Segment | Biometrics & Imaging | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 4,144 | 4,287 | 12,982 | 10,847 |
Operating income (loss) before patent related income | 1,515 | 2,111 | 4,848 | 4,725 |
Reportable Segment | DSL Service Assurance | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 156 | 485 | 1,217 | 1,794 |
Operating income (loss) before patent related income | -3,457 | -446 | -4,266 | -1,062 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 170 | 484 | 737 | 1,599 |
Operating income (loss) before patent related income | -219 | -219 | -448 | -1,050 |
Gain on sale of patent assets | 15,167 | 86,394 | ||
Income from patent arrangement | 780 | |||
Other income | 27 | 27 | 85 | |
Interest income | 80 | 45 | 239 | 137 |
Provision for (benefit from) income taxes | ($901) | $6,578 | $169 | $23,248 |
Business_Segments_Revenues_wer
Business Segments - Revenues were generated from following geographic regions (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Segment Reporting Information [Line Items] | ||||
Revenue | $4,470 | $5,256 | $14,936 | $14,240 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,588 | 3,350 | 9,944 | 9,302 |
Saudi Arabia | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 524 | 338 | 613 | 360 |
Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $1,358 | $1,568 | $4,379 | $4,578 |
Gain_on_Sale_of_Patent_Assets_
Gain on Sale of Patent Assets (Detail Textuals) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | |
Sep. 30, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Sep. 30, 2012 | |
Wireless patent | DSL patent | |||
Finite-Lived Intangible Assets [Line Items] | ||||
Gain on sale of patent assets | $15,167,000 | $86,394,000 | $71,200,000 | $15,200,000 |
Sale of patent | 75,000,000 | 16,000,000 | ||
Transaction cost | $3,800,000 | $800,000 |
Income_from_patent_arrangement1
Income from patent arrangement (Detail Textuals) (USD $) | 3 Months Ended | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 |
Income From Patent Arrangement [Abstract] | |||
Income from patent arrangement | $780 |
Income_Taxes_Detail_Textuals
Income Taxes (Detail Textuals) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | ($901,000) | $6,578,000 | $169,000 | $23,248,000 | |
Income tax U.S. statutory rate | 34.00% | ||||
Tax benefit related to research tax credit | 95,000 | ||||
Tax benefit related to a reduction in the estimate of tax expense | 148,000 | ||||
Deferred tax assets | 1,600,000 | 1,600,000 | |||
Total deferred tax assets of federal research and development credit carryforwards | 5,100,000 | ||||
Total deferred tax assets of state research and development credit carryforwards | 700,000 | ||||
Equity adjustment to additional paid-in capital | 63,000 | ||||
Gain on sale of patent assets | 86,400,000 | ||||
Current income tax liability | 7,500,000 | 7,500,000 | |||
Non cash adjustment related to cumulative deduction for stock options in excess of book expense | $15,800,000 | $15,800,000 |
Discontinued_Operations_Income
Discontinued Operations - Income from discontinued operations attributable to the DSL service assurance hardware product line (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Revenue | $724 | $2,809 | ||
Expenses | 364 | 2,206 | ||
Income before income taxes | 360 | 603 | ||
Income taxes | 143 | 243 | ||
Income from discontinued operations | $217 | $360 |
DSL_Service_Assurance_Software2
DSL Service Assurance Software Exit - A rollforward of our exit costs liability accounts (Details) (USD $) | 3 Months Ended | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Restructuring Reserve [Roll Forward] | ||
Balance at June 30, 2013 | ||
Amount charged to expense | 2,832 | 2,832 |
Deferred revenue obligations | 1,179 | |
Payments/write-offs | -223 | |
Balance at September 30, 2013 | 3,788 | 3,788 |
Customer Contract Termination Costs | ||
Restructuring Reserve [Roll Forward] | ||
Balance at June 30, 2013 | ||
Amount charged to expense | 2,553 | |
Deferred revenue obligations | 1,179 | |
Payments/write-offs | ||
Balance at September 30, 2013 | 3,732 | 3,732 |
Severance and Employee-Related Costs | ||
Restructuring Reserve [Roll Forward] | ||
Balance at June 30, 2013 | ||
Amount charged to expense | 232 | |
Deferred revenue obligations | ||
Payments/write-offs | -176 | |
Balance at September 30, 2013 | 56 | 56 |
Other Costs | ||
Restructuring Reserve [Roll Forward] | ||
Balance at June 30, 2013 | ||
Amount charged to expense | 47 | |
Deferred revenue obligations | ||
Payments/write-offs | -47 | |
Balance at September 30, 2013 |
DSL_Service_Assurance_Software3
DSL Service Assurance Software Exit (Detail Textuals) (USD $) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | |
Restructuring Cost and Reserve [Line Items] | |||
Estimated shutdown cost | $3,000,000 | ||
Liability for exit costs | 3,788,000 | 3,788,000 | |
Deferred revenue obligations | 1,179,000 | ||
Amount charged to expense | 2,832,000 | 2,832,000 | |
Asset write-offs | 47,000 | ||
Payments to employees | 176,000 | ||
Severance and Employee-Related Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Liability for exit costs | 56,000 | 56,000 | |
Deferred revenue obligations | |||
Amount charged to expense | 232,000 | ||
Severance and employee-related costs | 397,000 | ||
Customer Contract Termination Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Liability for exit costs | 3,732,000 | 3,732,000 | |
Deferred revenue obligations | 1,179,000 | ||
Amount charged to expense | 2,553,000 | ||
Employee Severance And Retention Bonus | |||
Restructuring Cost and Reserve [Line Items] | |||
Employee severance and retention bonuses | $165,000 |