Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 23, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | AUTOBYTEL INC | ||
Entity Central Index Key | 1023364 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 8,880,377 | ||
Entity Public Float | $117,000,000 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | |
Current assets: | |||
Cash and cash equivalents | $20,747,000 | $18,930,000 | |
Accounts receivable, net of allowances for bad debts and customer credits of $770 and $405 at December 31, 2014 and 2013, respectively | 18,311,000 | 14,178,000 | |
Deferred tax asset | 5,498,000 | 3,517,000 | |
Prepaid expenses and other current assets | 811,000 | 506,000 | |
Total current assets | 45,367,000 | 37,131,000 | |
Property and equipment, net | 1,904,000 | 1,548,000 | |
Investments | 3,880,000 | 2,650,000 | |
Intangible assets, net | 4,173,000 | 1,821,000 | [1] |
Goodwill | 20,948,000 | 13,602,000 | |
Long-term deferred tax asset | 27,396,000 | 31,135,000 | |
Other assets | 1,081,000 | 306,000 | |
Total assets | 104,749,000 | 88,193,000 | |
Current liabilities: | |||
Accounts payable | 7,685,000 | 5,267,000 | |
Accrued expenses and other current liabilities | 9,495,000 | 7,648,000 | |
Convertible note payable | 5,000,000 | ||
Total current liabilities | 22,180,000 | 12,915,000 | |
Convertible note payable | 1,000,000 | 5,000,000 | [1] |
Term loan payable | 6,750,000 | ||
Borrowings under revolving credit facility | 5,250,000 | 4,250,000 | |
Other non-current liabilities | 311,000 | 1,200,000 | |
Total liabilities | 35,491,000 | 23,365,000 | |
Stockholders' equity: | |||
Preferred stock, $0.001 par value; 11,445,187 shares authorized; none outstanding | |||
Common stock, $0.001 par value; 55,000,000 shares authorized and 8,880,377 and 8,909,737 shares issued and outstanding at December 31, 2014 and 2013, respectively | 9,000 | 9,000 | |
Additional paid-in capital | 308,190,000 | 307,171,000 | |
Accumulated deficit | -238,941,000 | -242,352,000 | |
Total stockholders' equity | 69,258,000 | 64,828,000 | |
Total liabilities and stockholders' equity | $104,749,000 | $88,193,000 | |
[1] | Amounts were derived from audited financial statements |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Current assets: | ||
Accounts receivable, allowances for bad debts and customer credits | $770 | $405 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, authorized (in shares) | 11,445,187 | 11,445,187 |
Preferred stock, outstanding (in shares) | ||
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, authorized (in shares) | 55,000,000 | 55,000,000 |
Common stock, issued (in shares) | 8,880,377 | 8,909,737 |
Common stock, outstanding (in shares) | 8,880,377 | 8,909,737 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Revenues: | ||
Lead fees | $100,744 | $74,732 |
Advertising | 4,171 | 3,289 |
Other revenues | 1,363 | 340 |
Total revenues | 106,278 | 78,361 |
Cost of revenues (excludes depreciation of $28 in 2014 and $76 in 2013) | 64,465 | 47,915 |
Gross profit | 41,813 | 30,446 |
Operating expenses: | ||
Sales and marketing | 14,404 | 9,612 |
Technology support | 8,014 | 7,303 |
General and administrative | 11,538 | 9,554 |
Depreciation and amortization | 1,858 | 1,450 |
Litigation settlements | -143 | -316 |
Total operating expenses | 35,671 | 27,603 |
Operating income | 6,142 | 2,843 |
Interest and other income (expense), net | -694 | 237 |
Income tax provision (benefit) | 2,037 | -35,064 |
Net income and comprehensive income | $3,411 | $38,144 |
Basic income per common share (in dollars per share) | $0.38 | $4.29 |
Diluted income per common share (in dollars per share) | $0.32 | $3.61 |
CONSOLIDATED_STATEMENTS_OF_INC1
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Parenthetical) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Income Statement [Abstract] | ||
Depreciation of $28 in 2014 and $76 | $28 | $76 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Cash flows from operating activities: | ||
Net income | $3,411 | $38,144 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 2,227 | 1,875 |
Provision for bad debts | 354 | 92 |
Provision for customer credits | 1,037 | 511 |
Share-based compensation | 1,421 | 704 |
Gain on long-term strategic investment | -108 | |
Change in deferred tax asset | 1,758 | -35,495 |
Changes in assets and liabilities: | ||
Accounts receivable | -2,590 | -4,610 |
Prepaid expenses and other current assets | -261 | 6 |
Other non-current assets | -625 | -246 |
Accounts payable | 137 | 1,416 |
Accrued expenses and other current liabilities | 1,847 | 1,445 |
Non-current liabilities | -826 | 598 |
Net cash provided by (used in) operating activities | 7,890 | 4,332 |
Cash flows from investing activities: | ||
Purchase of AutoUSA | -10,044 | |
Purchase of Advanced Mobile | -1,824 | |
Investment in AutoWeb | -880 | -2,500 |
Investment in SaleMove | -400 | -150 |
Purchase of intangible assets | -16 | |
Investment in GoMoto | -100 | |
Change in long-term strategic investment | 108 | |
Purchases of property and equipment | -1,124 | -670 |
Net cash used in investing activities | -12,548 | -5,052 |
Cash flows from financing activities: | ||
Repurchase of common stock | -1,779 | |
Borrowings under credit facility | 1,000 | 4,250 |
Borrowings under term loan | 9,000 | |
Payments on term loan borrowings | -2,250 | |
Net proceeds from stock option exercises | 567 | 215 |
Payment of contingent fee arrangement | -63 | -111 |
Net cash provided by financing activities | 6,475 | 4,354 |
Net increase in cash and cash equivalents | 1,817 | 3,634 |
Cash and cash equivalents, beginning of period | 18,930 | 15,296 |
Cash and cash equivalents, end of period | 20,747 | 18,930 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 355 | 135 |
Cash paid for interest | $697 | $324 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
In Thousands, except Share data | ||||
Beginning balance, amount at Dec. 31, 2012 | $9 | $306,252 | ($280,496) | $25,765 |
Beginning balance (shares) at Dec. 31, 2012 | 8,855,400 | |||
Share-based compensation, amount | 705 | 705 | ||
Issuance of common stock upon exercise of stock options, amount | 214 | 214 | ||
Issuance of common stock upon exercise of stock options (shares) | 54,337 | |||
Repurchase of common stock (shares) | ||||
Net income | 38,144 | 38,144 | ||
Ending balance, amount at Dec. 31, 2013 | 9 | 307,171 | -242,352 | 64,828 |
Ending balance (shares) at Dec. 31, 2013 | 8,909,737 | 8,909,737 | ||
Share-based compensation, amount | 1,426 | 1,426 | ||
Issuance of common stock upon exercise of stock options, amount | 562 | 562 | ||
Issuance of common stock upon exercise of stock options (shares) | 134,668 | 134,668 | ||
Issuance of warrants, amount | 510 | 510 | ||
Premium on convertible note, amount | 300 | 300 | ||
Repurchase of common stock, amount | -1,779 | -1,779 | ||
Repurchase of common stock (shares) | -164,028 | |||
Net income | 3,411 | 3,411 | ||
Ending balance, amount at Dec. 31, 2014 | $9 | $308,190 | ($238,941) | $69,258 |
Ending balance (shares) at Dec. 31, 2014 | 880,377 | 8,880,377 |
Organization_and_Operations_of
Organization and Operations of Autobytel | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations of Autobytel | |
Autobytel Inc. (“Autobytel” or the “Company”) is an automotive marketing services company that assists automotive retail dealers (“Dealers”) and automotive manufacturers (“Manufacturers”) market and sell new and used vehicles through its programs for online lead referrals (“Leads”), Dealer marketing products and services, and online advertising programs and mobile products. | |
The Company’s consumer-facing automotive websites (“Company Websites”), including its flagship website Autobytel.com®, provide consumers with information and tools to aid them with their automotive purchase decisions and the ability to submit inquiries requesting Dealers to contact the consumers regarding purchasing or leasing vehicles (“Vehicle Leads”). For consumers who may not be able to secure loans through conventional lending sources, the Company Websites provide these consumers the ability to submit inquiries requesting Dealers or other lenders that may offer vehicle financing to these consumers to contact the consumers regarding vehicle financing (“Finance Leads”). The Company’s mission for consumers is to be “Your Lifetime Automotive Advisor®” by engaging consumers throughout the entire lifecycle of their automotive needs. | |
The Company was incorporated in Delaware on May 17, 1996. Its principal corporate offices are located in Irvine, California. The Company’s common stock is listed on The NASDAQ Capital Market under the symbol ABTL. | |
Effective October 1, 2013 (“Advanced Mobile Acquisition Date”), the Company acquired substantially all of the assets of privately-held Advanced Mobile, LLC, a Delaware limited liability company, and Advanced Mobile Solutions Worldwide, Inc., a Delaware corporation (collectively referred to in this Annual Report on Form 10-K as “Advanced Mobile”). Advanced Mobile provides mobile marketing solutions (e.g., mobile applications, mobile portals, mobile websites, text-chat, mobile text marketing, self-service mobile messaging, quick response codes, text messaging, short message service and multimedia service) for the automotive industry. Text chat provides a web-based portal that allows Dealers to centrally manage text communications. The acquired assets consisted primarily of customer contracts, technology license rights and rights in domain names and short codes used for SMS texting. As a result of the acquisition, the Company will offer Manufacturers and Dealers the ability to connect with consumers using text communication via a secure platform. In addition, Autobytel will offer Dealers a comprehensive suite of mobile products, including mobile apps, mobile websites, Send2Phone capabilities and text message marketing. Advanced Mobile’s results of operations are included in the Company’s consolidated financial statements beginning October 1, 2013. See Note 3 of the “Notes to Consolidated Financial Statements” of this Annual Report on Form 10-K. | |
On January 13, 2014 (“AutoUSA Acquisition Date”), Autobytel, AutoNation, Inc., a Delaware corporation (“Seller Parent”), and AutoNationDirect.com, Inc., a Delaware corporation and subsidiary of Seller Parent (“Seller”), entered into and consummated a Membership Interest Purchase Agreement in which Autobytel acquired all of the issued and outstanding membership interests in AutoUSA, LLC, a Delaware limited liability company and a subsidiary of Seller (“AutoUSA”). AutoUSA was a competitor to the Company and at the time of the acquisition was a (i) lead aggregator purchasing internet-generated automotive consumer leads from third parties and reselling those consumer leads to automotive dealers; and (ii) reseller of third party products and services to automotive Dealers. See Note 3 of the “Notes to Consolidated Financial Statements” of this Annual Report on Form 10-K. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Summary of Significant Accounting Policies | Basis of Presentation. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on t he reported results of operations. | ||||||||
Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include, but are not limited to, allowances for bad debts and customer credits, useful lives of depreciable assets and capitalized software costs, long-lived asset impairments, goodwill and purchased intangible asset valuations, accrued liabilities, contingent payment provisions, debt valuation and valuation allowance for deferred tax assets, warrant valuation and stock-based compensation expense. Actual results could differ from those estimates. | |||||||||
Cash and Cash Equivalents. For purposes of the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows, the Company considers all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents. Cash and cash equivalents represent amounts held by the Company for use by the Company and are recorded at cost, which approximates fair value. | |||||||||
Investments. In August 2010, the Company acquired less than a 5% equity interest in privately-held Driverside, Inc., a Delaware corporation (“Driverside”), for $1.0 million. Driverside provides consumers with a broad set of content, features, tools, technology, systems, products, services and programs related to the efficient ownership of motor vehicles. The Company received 1,352,082 shares of Series C Preferred Stock in Driverside for its investment. The Company made an additional investment in Driverside in 2011 for $16,737. The Company recorded the investments in Driverside at cost because the Company does not have significant influence over Driverside. In 2011, Driverside merged with another entity and the Company received a cash payment of $823,000, representing the Company’s pro rata share of the initial merger consideration. The $823,000 received at closing of the transaction was recorded as a reduction to the Driverside investment on the Company’s consolidated balance sheet. In 2012 the Company received $326,000, which represented its pro rata share of contingent payments upon milestones achieved by Driverside. Of the $326,000 received in 2012, $194,000 was recorded as a complete reduction to the investment in Driverside and $132,000 was recorded as other income. In 2013 the Company received $108,000 from Driverside, which represented its pro rata share of amounts released from an escrow account established to satisfy post-closing indemnification claims. The Company recorded the $108,000 as other income. There are no further amounts due associated with the Driverside investment. | |||||||||
In September 2013, the Company entered into a Contribution Agreement with privately-held AutoWeb, Inc., a Delaware corporation (“AutoWeb”), pursuant to Autobytel contributed to AutoWeb $2.5 million and assigned to AutoWeb all the ownership interests in the autoweb.com domain name and two registered trademarks related to the AutoWeb name and related goodwill in exchange for 8,000 shares of AutoWeb Series A Preferred Stock, $0.01 par value per share. The 8,000 shares of AutoWeb Series A Preferred Stock are convertible into AutoWeb common stock on a one-for-one basis (subject to adjustments for stock splits, stock dividends, combinations and recapitalizations) and represented 16% of all issued and outstanding common stock of AutoWeb, on a fully diluted basis, as of September 18, 2013. The Company also obtained an option to acquire an additional 5,000 shares of AutoWeb Series A Preferred Stock at a per share exercise price of $500, which option expires September 18, 2015. In connection with this investment, the Company also entered into arrangements with AutoWeb to use the AutoWeb pay-per-click, auction-driven automotive marketplace technology platform as both a publisher and as an advertiser. Upon the occurrence of a liquidation event (i.e., a liquidation, dissolution or winding up of AutoWeb; a consolidation or merger where AutoWeb is not the surviving entity; a consolidation or merger where AutoWeb is the surviving entity and either (i) the rights of the Series A Preferred Stock are changed, or (ii) the Series A Preferred Stock is exchanged for cash, securities or property; or a sale or transfer of all or substantially all of AutoWeb’s assets), the Series A Preferred Stock is entitled to a liquidation preference of the greater of (i) $1,000 per share (subject to adjustments for stock splits, stock dividends, combinations and recapitalizations); and (ii) the amount that would be distributed with respect to AutoWeb’s common stock, assuming full conversion of the Series A Preferred Stock into common stock. | |||||||||
In November 2014, the Company entered into a Series B Preferred Stock Purchase Agreement with AutoWeb, pursuant to which we paid $880,394 in exchange for 1,076 shares of AutoWeb Series B Preferred Stock, $0.01 par value per share. The Company’s combined ownership of the issued and outstanding capital stock of AutoWeb was 15.7% as of December 31, 2014. | |||||||||
In September 2013, the Company invested $150,000 in privately-held SaleMove, Inc., a Delaware corporation (“SaleMove”), in the form of a convertible promissory note. The convertible promissory note accrues interest at an annual rate of 6.0% and is due and payable in full on September 1, 2015 unless converted prior to the maturity date. The convertible note will be converted into preferred stock of SaleMove in the event of a preferred stock financing by SaleMove of at least $1.0 million prior to the maturity date of the convertible note. The Company recorded the $150,000 note as an other current asset on the Consolidated Balance Sheet as of December 31, 2014. In October 2013, the Company entered into an agreement with SaleMove to become the exclusive provider to the automotive industry of SaleMove’s technology for enhancing communications with consumers. SaleMove’s patent-pending technology allows Dealers and Manufacturers to enhance the online shopping experience by interacting with consumers in real-time, including live video, audio and text-based chat or by phone. The Company and SaleMove will equally share in revenues from automotive-related sales of the SaleMove products and services. In connection with this reseller arrangement, the Company advanced to SaleMove $1.0 million to fund SaleMove’s fifty percent share of various product development, marketing and sales costs and expenses, with the advanced funds to be recovered by the Company from SaleMove’s share of sales revenue. As of December 31, 2014 and 2013, $1.0 million and $0.2 million had been advanced to SaleMove, respectively. In November 2014 the Company invested an additional $400,000 in SaleMove in the form of a convertible promissory note. The convertible promissory note accrues interest at an annual rate of 6.0% and is due and payable in full on November 18, 2016 unless converted prior to the maturity date. The convertible note will be converted into preferred stock of SaleMove in the event of a preferred stock financing by SaleMove of at least $1.0 million prior to the maturity date of the convertible note. The Company recorded the $400,000 note as an investment on the Consolidated Balance Sheet as of December 31, 2014. | |||||||||
In December 2014, the Company entered into a Series Seed Preferred Stock Purchase Agreement with GoMoto, Inc. (“GoMoto”) in which Autobytel paid $100,000 for 317,460 Series Seed Preferred Stock, $0.001 par value per share. The investment in GoMoto was recorded at cost because the Company does not have significant influence over GoMoto. | |||||||||
Accounts Receivable. Credit is extended to customers based on an evaluation of the customer’s financial condition, and when credit is extended, collateral is generally not required. Interest is not normally charged on receivables. | |||||||||
Allowances for Bad Debts and Customer Credits. The allowance for bad debts is an estimate of bad debt expense that could result from the inability or refusal of customers to pay for services. Additions to the estimated allowance for bad debts are recorded to sales and marketing expenses and are based on factors such as historical write-off percentages, the current business environment and known concerns within the current aging of accounts receivable. Reductions in the estimated allowance for bad debts due to subsequent cash recoveries are recorded as a decrease in sales and marketing expenses. As specific bad debts are identified, they are written-off against the previously established estimated allowance for bad debts with no impact on operating expenses. | |||||||||
The allowance for customer credits is an estimate of adjustments for services that do not meet the customer requirements. Additions to the estimated allowance for customer credits are recorded as a reduction of revenues and are based on the Company’s historical experience of: (i) the amount of credits issued; (ii) the length of time after services are rendered that the credits are issued; (iii) other factors known at the time; and (iv) future expectations. Reductions in the estimated allowance for customer credits are recorded as an increase in revenues. As specific customer credits are identified, they are written-off against the previously established estimated allowance for customer credits with no impact on revenues. | |||||||||
If there is a decline in the general economic environment that negatively affects the financial condition of the Company’s customers or an increase in the number of customers that are dissatisfied with their services, additional estimated allowances for bad debts and customer credits may be required, and the impact on the Company’s business, results of operations, financial condition, earnings per share, cash flow or the trading price of our stock could be material. | |||||||||
Contingencies. From time to time the Company may be subject to proceedings, lawsuits and other claims. The Company assesses the likelihood of any adverse judgments or outcomes of these matters as well as potential ranges of probable losses. The Company records a loss contingency when an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. The amount of allowances required, if any, for these contingencies is determined after analysis of each individual case. The amount of allowances may change in the future if there are new material developments in each matter. Gain contingencies are not recorded until all elements necessary to realize the revenue are present. Any legal fees incurred in connection with a contingency are expensed as incurred. | |||||||||
Fair Value of Financial Instruments. The Company records its financial assets and liabilities at fair value, which is defined under the applicable accounting standards as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measure date. The Company uses valuation techniques to measure fair value, maximizing the use of observable outputs and minimizing the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: | |||||||||
Level 1 – Quoted prices in active markets for identical assets or liabilities. | |||||||||
Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||
Level 3 – Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation. | |||||||||
Cash equivalents, accounts receivable, net of allowance, accounts payable and accrued liabilities, are carried at cost, which management believes approximates fair value because of the short-term maturity of these instruments. | |||||||||
The Company’s investments at December 31, 2014 and 2013 consist primarily of investments in SaleMove and AutoWeb and are recorded at cost. Although there is no established market for these investments, the Company evaluated the investments for impairment by comparing them to an estimated fair value and determined that no impairment existed. To determine the estimated fair value for the Company’s investment in SaleMove, the Company analyzed the discounted future cash flows of Autobytel’s sales of SaleMove products. To determine the estimated fair value for the investment in AutoWeb, the Company analyzed participants in the Series B round of financing in November 2014. | |||||||||
Variable Interest Entities. The Company has investments in certain entities that are considered variable interest entities (“VIEs”) under GAAP. The Company has concluded that their investment in SaleMove qualifies as a variable interest and SaleMove is a VIE. VIEs are legal entities in which the equity investors do not have sufficient equity at risk for the entity to independently finance its activities or the collective holders do not have the power through voting or similar rights to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the expected losses of the entity, or the right to receive expected residual returns of the entity. Consolidation of a VIE is considered appropriate if a reporting entity is the primary beneficiary, the party that has both significant influence and control over the VIE. Management periodically performs a qualitative analysis to determine if the Company is the primary beneficiary of a VIE. This analysis includes review of the VIEs’ capital structures, contractual terms, and primary activities, including the Company’s ability to direct the activities of the VIEs and obligations to absorb losses, or the right to receive benefits, significant to the VIEs. Additionally, changes in our various equity investments have in the past resulted in a reconsideration event. | |||||||||
Based on Autobytel’s analysis for the periods presented in this report, it is not the primary beneficiary of SaleMove. Accordingly, SaleMove does not meet the criteria for consolidation. The Company’s investment in SaleMove is carried at cost. The $150,000 and $400,000 notes receivable from Sale Move are classified as an other current asset and investment on the consolidated balance sheet, respectively, as of December 31, 2014. The $1.0 million in advances to SaleMove are classified as an other long-term asset on the consolidated balance sheet as of December 31, 2014. As of December 31, 2013, the $150,000 notes receivable and $0.2 million in advances was classified as an investment and an other long-term asset on the consolidated balance sheet, respectively. The carrying value and maximum potential loss exposure of VIEs totaled $1.6 million as of December 31, 2014, and $0.4 million as of December 31, 2013. | |||||||||
Concentration of Credit Risk and Risks Due to Significant Customers. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, investments and accounts receivable. Cash and cash equivalents are primarily maintained with two financial institutions in the United States. Deposits held by banks exceed the amount of insurance provided for such deposits. Generally these deposits may be redeemed upon demand. Accounts receivable are primarily derived from fees billed to automotive Dealers and automotive Manufacturers. | |||||||||
The Company has a concentration of credit risk with its automotive industry related accounts receivable balances, particularly with Urban Science Applications (which represents several Manufacturer programs), General Motors and Jumpstart. During 2014, approximately 27% of the Company’s total revenues were derived from these three customers, and approximately 41% or $7.8 million of gross accounts receivable related to these three customers at December 31, 2014. In 2014, Urban Science Applications accounted for 19% of total revenues and 23% of the total accounts receivable as of December 31, 2014. | |||||||||
During 2013, approximately 30% of the Company’s total revenues were derived from AutoNation, General Motors and Urban Science Applications, and approximately 40% or $5.8 million of gross accounts receivable related to these three customers at December 31, 2013. In 2013, Urban Science Applications accounted for 18% of total revenues and 23% of the total accounts receivable as of December 31, 2013. | |||||||||
Property and Equipment. Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is provided using the straight-line method over the estimated useful lives of the respective assets, generally three years. Amortization of leasehold improvements is provided using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements. Repair and maintenance costs are charged to operating expenses as incurred. Gains or losses resulting from the retirement or sale of property and equipment are recorded as operating income or expenses, respectively. | |||||||||
Operating Leases. The Company leases office space and certain office equipment under operating lease agreements which expire on various dates through 2019, with options to renew on expiration of the original lease terms. | |||||||||
Reimbursed tenant improvements are considered in determining straight-line rent expense and are amortized over the shorter of their estimated useful lives or the lease term. The lease term begins on the date of initial possession of the leased property for purposes of recognizing rent expense on a straight-line basis over the term of the lease. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease term. | |||||||||
Capitalized Internal Use Software and Website Development Costs. The Company capitalizes costs to develop internal use software in accordance with the Internal-Use Software and the Website Development Costs Topics, which require the capitalization of external and internal computer software costs and website development costs, respectively, incurred during the application development stage. The application development stage is characterized by software design and configuration activities, coding, testing and installation. Training and maintenance costs are expensed as incurred while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Capitalized internal use software development costs are amortized using the straight-line method over an estimated useful life of three to five years. Capitalized website development costs, once placed in service, are amortized using the straight-line method over the estimated useful life of the related websites. The Company capitalized $0.6 million and $82,000 of such costs for the years ended December 31, 2014 and 2013, respectively. | |||||||||
Impairment of Long-Lived Assets and Intangible Assets. The Company periodically reviews long-lived assets to determine if there is any impairment of these assets. The Company assesses the impairment of these assets, or the need to accelerate amortization, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Judgments regarding the existence of impairment indicators are based on legal factors, market conditions and operational performance of the long-lived assets and other intangibles. Future events could cause the Company to conclude that impairment indicators exist and that the assets should be reviewed to determine their fair value. The Company assesses the assets for impairment based on the estimated future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying amount over its fair value. Fair value is generally determined based on a valuation process that provides an estimate of a fair value of these assets using a discounted cash flow model, which includes many assumptions and estimates. Once the valuation is determined, the Company would write-down these assets to their determined fair value, if necessary. Any write-down could have a material adverse effect on the Company’s financial condition and results of operations. | |||||||||
Goodwill. Goodwill represents the excess of the purchase price for business acquisitions over the fair value of identifiable assets and liabilities acquired. The Company evaluates the carrying value of enterprise goodwill for impairment. Testing for impairment of goodwill is a two-step process. The first step requires the Company to compare the enterprise’s carrying value to its fair value. If the fair value is less than the carrying value, enterprise goodwill is potentially impaired and the Company then completes the second step to measure the impairment loss, if any. The second step requires the calculation of the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets from the fair value of the reporting unit. If the implied fair value of goodwill is less than the carrying amount of enterprise goodwill, an impairment loss is recognized equal to the difference. The Company evaluates enterprise goodwill, at a minimum, on an annual basis, in the fourth quarter of each year or whenever events or changes in circumstances suggest that the carrying amount of goodwill may be impaired. | |||||||||
Revenue Recognition. Lead fees consist of fees from the sale of Leads for new and used vehicles and Leads for vehicle financing. Fees paid by customers participating in the Company’s Lead programs are comprised of monthly transaction and/or subscription fees. Advertising revenues represent fees for display advertising on Company’s Websites. | |||||||||
The Company recognizes revenues when evidence of an arrangement exists, pricing is fixed and determinable, collection is reasonably assured and delivery or performance of service has occurred. Lead fees are generally recognized as revenues in the period the service is provided. Advertising revenues are generally recognized in the period the advertisements are displayed on Company Websites. Fees billed prior to providing services are deferred, as they do not satisfy all U.S. GAAP revenue recognition criteria. Deferred revenues are recognized as revenue over the periods services are provided. | |||||||||
Cost of Revenues. Cost of revenues consists of Lead and traffic acquisition costs and other cost of revenues. Lead and traffic acquisition costs consist of payments made to the Company’s Lead providers, including internet portals and on-line automotive information providers. Other cost of revenues consists of search engine marketing (“SEM”) and fees paid to third parties for data and content, including search engine optimization (“SEO”) activity, included on the Company’s properties, connectivity costs and development costs related to the Company Websites, compensation related expense and technology license fees, server equipment depreciation and technology amortization directly related to Company Websites. SEM, sometimes referred to as paid search marketing, is the practice of bidding on keywords on search engines to drive traffic to a website. | |||||||||
Income Taxes. The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance, if necessary, to reduce deferred tax assets to an amount it believes is more likely than not to be realized. | |||||||||
Computation of Basic and Diluted Net Earnings per Share. Basic net earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted net earnings per share is computed using the weighted average number of common shares, and if dilutive, potential common shares outstanding, as determined under the treasury stock and if-converted method, during the period. Potential common shares consist of common shares issuable upon the exercise of stock options, common shares issuable upon the exercise of warrants described below and common shares issuable upon conversion of the note described in Note 5. | |||||||||
The following are the share amounts utilized to compute the basic and diluted net earnings per share for the years ended December 31: | |||||||||
2014 | 2013 | ||||||||
Basic Shares: | |||||||||
Weighted average common shares outstanding | 8,998,035 | 8,883,357 | |||||||
Weighted average common shares repurchased | (18,138 | ) | — | ||||||
Basic Shares | 8,979,897 | 8,883,357 | |||||||
Diluted Shares: | |||||||||
Basic Shares | 8,979,897 | 8,883,357 | |||||||
Weighted average dilutive securities | 2,232,011 | 1,732,596 | |||||||
Dilutive Shares | 11,211,908 | 10,615,953 | |||||||
For the years ended December 31, 2014 and 2013, weighted average dilutive securities included dilutive options, warrants and convertible debt. | |||||||||
Potentially dilutive securities representing approximately 1.1 million shares of common stock for both years ended December 31, 2014 and 2013 were excluded from the computation of diluted income per share for these periods because their effect would have been anti-dilutive. | |||||||||
Share-Based Compensation. The Company grants restricted stock and stock option awards (the “Awards”) under several of its share-based compensation Plans (the “Plans”), that are more fully described in Note 9. The Company recognizes share-based compensation based on the Awards’ fair value, net of estimated forfeitures on a straight line basis over the requisite service periods, which is generally over the awards’ respective vesting period, or on an accelerated basis over the estimated performance periods for options with performance conditions. | |||||||||
Restricted stock fair value is measured on the grant date based on the quoted market price of the Company’s common stock, and the stock option fair value is estimated on the grant date using the Black-Scholes option pricing model based on the underlying common stock closing price as of the date of grant, the expected term, stock price volatility and risk-free interest rates. | |||||||||
Business Segment. The Company conducts its business within the United States and within one business segment which is defined as providing automotive and marketing services. The Company’s operations are aggregated into a single reportable operating segment based upon similar economic and operating characteristics as well as similar markets. | |||||||||
Advertising Expense. Advertising costs are expensed in the period incurred. Advertising expense in 2014 and 2013 was $1.6 million and $1.8 million, respectively. | |||||||||
Recent Accounting Pronouncements | |||||||||
Accounting Standards Codification 805 “Business Combinations - Pushdown Accounting, a Consensus of the FASB Emerging Issues Task Force.” In November 2014, Accounting Standards Update (“ASU”) No. 2014-17, “Business Combinations (Topic 805) – Pushdown Accounting, a Consensus of the FASB Emerging Issues Task Force” was issued. The objective of this ASU is to provide guidance on whether and at what threshold an acquired entity that is a business or nonprofit activity can apply pushdown accounting in its separate financial statements. The amendments in this ASU are effective on November 18, 2014. This ASU did not have a material impact on the Company’s consolidated financial results. | |||||||||
Accounting Standards Codification 606 “Revenue from Contracts with Customers.” In May 2014, ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” was issued. This ASU requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on their consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor have they determined the effect of the standard on the ongoing financial reporting. |
Acquisitions
Acquisitions | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Business Combinations [Abstract] | ||||||||||
Acquisitions | Acquisition of AutoUSA | |||||||||
On the AutoUSA Acquisition Date, Autobytel acquired all of the issued and outstanding membership interests in AutoUSA. The Company acquired AutoUSA to expand its reach and influence in the industry by increasing its Dealer network. | ||||||||||
The AutoUSA Acquisition Date fair value of the consideration transferred totaled $11.9 million, which consisted of the following: | ||||||||||
(in thousands) | ||||||||||
Cash (including a working capital adjustment of $44) | $ | 10,044 | ||||||||
Convertible subordinated promissory note | 1,300 | |||||||||
Warrant to purchase $1.0 million of Company common stock | 510 | |||||||||
$ | 11,854 | |||||||||
As part of the consideration paid for the acquisition, the Company issued a convertible subordinated promissory note for $1.0 million (“AutoUSA Note”) to the Seller. The fair value of the AutoUSA Note as of the AutoUSA Acquisition Date was $1.3 million. This valuation was estimated using a binomial option pricing method. Key assumptions used by the Company's outside valuation consultants in valuing the AutoUSA Note include a market yield of 1.6% and stock price volatility of 65.0%. As the AutoUSA Note was issued with a substantial premium, the Company recorded the premium as additional paid-in capital. Interest is payable at an annual interest rate of 6% in quarterly installments. The entire outstanding balance of the AutoUSA Note is to be paid in full on January 31, 2019. At any time after January 31, 2017, the holder of the AutoUSA Note may convert all or any part, but at least 30,600 shares, of the then outstanding and unpaid principal of the AutoUSA Note into fully paid shares of the Company's common stock at a conversion price of $16.34 per share (as adjusted for stock splits, stock dividends, combinations and other similar events). The right to convert the AutoUSA Note into common stock of the Company is accelerated in the event of a change in control of the Company. In the event of default, the entire unpaid balance of the AutoUSA Note will become immediately due and payable and will bear interest at the lower of 8% per year and the highest legal rate permissible under applicable law. | ||||||||||
The warrant to purchase 69,930 shares of Company common stock issued in connection with the acquisition ("AutoUSA Warrant") was valued as of the AutoUSA Acquisition Date at $7.35 per share for a total value of $0.5 million. The Company used an option pricing model to determine the value of the AutoUSA Warrant. Key assumptions used by the Company's outside valuation consultants in valuing the AutoUSA Warrant are as follows: risk-free rate of 1.6%, stock price volatility of 65.0% and a term of 5.0 years. The AutoUSA Warrant was valued based on long-term stock price volatilities of the Company. The exercise price of the AutoUSA Warrant is $14.30 per share (as adjusted for stock splits, stock dividends, combinations and other similar events). The AutoUSA Warrant becomes exercisable on the third anniversary of the issuance date and expires on the fifth anniversary of the issuance date. The right to exercise the AutoUSA Warrant is accelerated in the event of a change in control of the Company. | ||||||||||
The following table summarizes the fair values of the assets acquired and liabilities assumed as of December 31, 2014. Because the transaction was completed in the three months ended March 31, 2014, the Company has not yet finalized the fair values of the assets and liabilities assumed in connection with the acquisition. | ||||||||||
(in thousands) | ||||||||||
Net identifiable assets acquired | $ | 758 | ||||||||
Long-lived intangible assets acquired | 3,750 | |||||||||
Goodwill | 7,346 | |||||||||
$ | 11,854 | |||||||||
The preliminary fair value of the acquired intangible assets was determined using the below valuation approaches. In estimating the preliminary fair value of the acquired intangible assets, the Company utilized the valuation methodology determined to be most appropriate for the individual intangible asset being valued as described below. The acquired intangible assets include the following: | ||||||||||
Estimated | Estimated | |||||||||
Valuation Method | Fair Value | Useful Life (1) | ||||||||
(in thousands) | (years) | |||||||||
Non-compete agreements | Discounted cash flow(2) | $ | 90 | 2 | ||||||
Customer relationships | Excess of earnings(3) | 2,660 | 5 | |||||||
Trademark/trade names | Relief from Royalty(4) | 1,000 | 5 | |||||||
Total purchased intangible assets | $ | 3,750 | ||||||||
(1) | Determination of the estimated useful lives of the individual categories of purchased intangible assets was based on the nature of the applicable intangible asset and the expected future cash flows to be derived from such intangible asset. Amortization of intangible assets with definite lives are recognized over the shorter of the respective lives of the agreement or the period of time the assets are expected to contribute to future cash flows. | |||||||||
-2 | The non-compete agreement fair value was derived by calculating the difference between the present value of the Company's forecasted cash flows with the agreements in place and without the agreements in place. | |||||||||
-3 | The excess of earnings method estimates a purchased intangible asset's value based on the present value of the prospective net cash flows (or excess earnings) attributable to it. The value attributed to these intangibles was based on projected net cash inflows from existing contracts or relationships. | |||||||||
-4 | The relief from royalty method is an earnings approach which assesses the royalty savings an entity realizes since it owns the asset and isn’t required to pay a third party a license fee for its use. | |||||||||
Some of the more significant estimates and assumptions inherent in the estimate of the fair value of the identifiable purchased intangible assets include all assumptions associated with forecasting cash flows and profitability. The primary assumptions used for the determination of the preliminary fair value of the purchased intangible assets were generally based upon the discounted present value of anticipated cash flows. Estimated years of projected earnings generally follow the range of estimated remaining useful lives for each intangible asset class. | ||||||||||
The goodwill recognized of $7.3 million is attributable primarily to expected synergies and the assembled workforce of AutoUSA. The full amount is expected to be amortizable for income tax purposes. | ||||||||||
The Company incurred approximately $1.1 million of acquisition-related costs related to AutoUSA in 2014, all of which were expensed. | ||||||||||
The following unaudited pro forma information presents the consolidated results of the Company and AutoUSA for the twelve months ended December 31, 2013, with adjustments to give effect to pro forma events that are directly attributable to the acquisition and have a continuing impact, but excludes the impact of pro forma events that are directly attributable to the acquisition and are one-time occurrences. Proforma results for the year ended December 31, 2014 are immaterial since the acquisition was on January 14, 2014. The unaudited pro forma information is presented for illustrative purposes only and is not necessarily indicative of the results of operations of future periods, the results of operations that actually would have been realized had the entities been a single company during the periods presented or the results of operations that the combined company will experience after the acquisition. The unaudited pro forma information does not give effect to the potential impact of current financial conditions, regulatory matters or any anticipated synergies, operating efficiencies or cost savings that may be associated with the acquisition. The unaudited pro forma information also does not include any integration costs or remaining future transaction costs that the companies may incur as a result of the acquisition and combining the operations of the companies. | ||||||||||
The unaudited pro forma consolidated results of operations, assuming the acquisition had occurred on January 1, 2013, are as follows (in thousands): | ||||||||||
Twelve Months Ended | ||||||||||
31-Dec-13 | ||||||||||
Unaudited pro forma consolidated results: | ||||||||||
Revenues | $ | 104,461 | ||||||||
Net income | 39,614 | |||||||||
Acquisition of Advanced Mobile | ||||||||||
As of the Advanced Mobile Acquisition Date, the Company acquired substantially all of the assets of Advanced Mobile. Advanced Mobile provides mobile marketing solutions (e.g., mobile applications, mobile portals, mobile websites, TextShield®, mobile text marketing, quick response codes, text messaging, short message service and multimedia service) for the automotive industry. The acquired assets consisted primarily of customer contracts, technology license rights and rights in domain names and short codes used for SMS texting. Advanced Mobile was acquired to enable the Company to offer the automotive industry the mobile technology and resources required to exploit the expanding growth in smart phone and tablet use. | ||||||||||
The Advanced Mobile Acquisition Date fair value of the consideration transferred totaled $3.4 million, which consisted of the following: | ||||||||||
(in thousands) | ||||||||||
Cash (including working capital adjustment of $70) | $ | 2,570 | ||||||||
Contingent consideration | 825 | |||||||||
$ | 3,395 | |||||||||
The contingent consideration arrangement (“Contingent Consideration”) requires the Company to pay up to $1.5 million of additional consideration to Advanced Mobile if certain revenue and gross profit targets are met. The fair value of the Contingent Consideration as of the Advanced Mobile Acquisition Date was $825,000. The fair value of the Contingent Consideration was estimated using a Monte Carlo Simulation. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in ASC 820, Fair Value Measurements and Disclosures. The key assumptions used by the Company's outside valuation consultants in applying the Monte Carlo Simulation consisted of volatility inputs for both revenue and gross profit, forecasted gross margin and a weighted-average cost of capital assumption used to adjust forecasted revenue and gross margin for risk. | ||||||||||
The following table summarizes the fair values of the assets acquired and liabilities assumed at the Advanced Mobile Acquisition Date. | ||||||||||
(in thousands) | ||||||||||
Net identifiable assets acquired | $ | 90 | ||||||||
Definite-lived intangible assets acquired | 1,380 | |||||||||
Goodwill | 1,925 | |||||||||
Net assets acquired | $ | 3,395 | ||||||||
The fair value of the acquired intangible assets was determined using the below valuation approaches. In estimating the fair value of the acquired intangible assets, the Company utilized the valuation methodology determined to be most appropriate for the individual intangible asset being valued as described below. The acquired intangible assets include the following: | ||||||||||
Estimated | Estimated | |||||||||
Valuation Method | Fair Value | Useful Life (1) | ||||||||
(in thousands) | (years) | |||||||||
Non-compete agreements | Discounted cash flow (2) | $ | 110 | 5 | ||||||
Customer relationships | Excess of earnings (3) | 450 | 2 | |||||||
Developed technology | Excess of earnings (3) | 820 | 5 | |||||||
Total purchased intangible assets | $ | 1,380 | ||||||||
-1 | Determination of the estimated useful lives of the individual categories of purchased intangible assets was based on the nature of the applicable intangible asset and the expected future cash flows to be derived from such intangible asset. Amortization of intangible assets with definite lives are recognized over the shorter of the respective lives of the agreement or the period of time the assets are expected to contribute to future cash flows. | |||||||||
-2 | The non-compete agreement fair value was derived by calculating the difference between the present value of the Company’s forecasted cash flows with the agreements in place and without the agreements in place. | |||||||||
-3 | The excess of earnings method estimates a purchased intangible asset’s value based on the present value of the prospective net cash flows (or excess earnings) attributable to it. The value attributed to these intangibles was based on projected net cash inflows from existing contracts or relationships. | |||||||||
Some of the more significant estimates and assumptions inherent in the estimate of the fair value of the identifiable purchased intangible assets include all assumptions associated with forecasting cash flows and profitability. The primary assumptions used for the determination of the preliminary fair value of the purchased intangible assets were generally based upon the discounted present value of anticipated cash flows. Estimated years of projected earnings generally follow the range of estimated remaining useful lives for each intangible asset class. | ||||||||||
The goodwill recognized of $1.9 million is attributable primarily to expected synergies and the assembled workforce of Advanced Mobile. The full amount is amortizable for income tax purposes. | ||||||||||
The Company incurred $0.3 million of acquisition-related costs related to Advanced Mobile, all of which were expensed in 2013. | ||||||||||
The following unaudited pro forma information presents the consolidated results of the Company and Advanced Mobile for the twelve months ended December 31, 2013, with adjustments to give effect to pro forma events that are directly attributable to the acquisition and have a continuing impact, but excludes the impact of pro forma events that are directly attributable to the acquisition and are one-time occurrences. The unaudited pro forma information is presented for illustrative purposes only and is not necessarily indicative of the results of operations of future periods, the results of operations that actually would have been realized had the entities been a single company during the periods presented or the results of operations that the combined company will experience after the acquisition. The unaudited pro forma information does not give effect to the potential impact of current financial conditions, regulatory matters or any anticipated synergies, operating efficiencies or cost savings that may be associated with the acquisition. The unaudited pro forma information also does not include any integration costs or remaining future transaction costs that the companies may incur as a result of the acquisition and combining the operations of the companies. | ||||||||||
The unaudited pro forma consolidated results of operations, assuming the acquisition had occurred on January 1, 2013, are as follows (in thousands): | ||||||||||
Twelve Months Ended | ||||||||||
31-Dec-13 | ||||||||||
Unaudited pro forma consolidated results: | ||||||||||
Revenues | $ | 79,083 | ||||||||
Net income | 38,038 | |||||||||
Investments
Investments | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Investments | Investments. The Company’s investments at December 31, 2014 and 2013 consist primarily of investments in SaleMove and AutoWeb and are recorded at cost. Although there is no established market for these investments, the Company evaluated the investments for impairment by comparing them to an estimated fair value and determined that no impairment existed. To determine the estimated fair value for the investment in SaleMove, the Company analyzed the discounted future cash flows of Autobytel’s sales of SaleMove products. To determine the estimated fair value for the investment in AutoWeb, the Company analyzed participants in the Series B round of financing in November 2014. These fair value measurements are based on significant inputs not observable in the market and represent a Level 3 measurement. | ||||||||
The following table presents the Company’s activity for 2014: | |||||||||
Note | |||||||||
receivable- | |||||||||
Description | current | Investments | |||||||
Balance at December 31, 2013 | $ | — | $ | 2,650 | |||||
Total gains or (losses) (realized or unrealized) | — | — | |||||||
Purchases | — | 1,380 | |||||||
Sales | — | — | |||||||
Transfers | 150 | (150 | ) | ||||||
Balance at December 31, 2014 | $ | 150 | $ | 3,880 | |||||
In August 2010, the Company acquired less than a 5% equity interest in Driverside for $1.0 million. Driverside provides consumers with a broad set of content, features, tools, technology, systems, products, services and programs related to the efficient ownership of motor vehicles. The Company received 1,352,082 shares of Series C Preferred Stock in Driverside for its investment. The Company made an additional investment in Driverside in 2011 for $16,737. The Company recorded the investments in Driverside at cost because the Company does not have significant influence over Driverside. In 2011, Driverside merged with another entity and the Company received a cash payment of $823,000, representing the Company’s pro rata share of the initial merger consideration. The $823,000 received at closing of the transaction was recorded as a reduction to the Driverside investment on the Company’s consolidated balance sheet. In 2012, the Company received $326,000, which represented its pro rata share of contingent payments upon milestones achieved by Driverside. Of the $326,000 received in 2012, $194,000 was recorded as a complete reduction to the investment in Driverside and $132,000 was recorded as other income. In 2013 the Company received $108,000 from Driverside, which represented its pro rata share of amounts released from an escrow account established to satisfy post-closing indemnification claims. The Company recorded the $108,000 as other income. There are no further amounts due associated with the Driverside investment. | |||||||||
In September 2013 the Company entered into a Contribution Agreement with AutoWeb pursuant to which Autobytel contributed to AutoWeb $2.5 million and assigned to AutoWeb all the ownership interests in the autoweb.com domain name and two registered trademarks related to the AutoWeb name and related goodwill in exchange for 8,000 shares of AutoWeb Series A Preferred Stock, $0.01 par value per share. The 8,000 shares of AutoWeb Series A Preferred Stock represented 16% of all issued and outstanding common stock of AutoWeb as of September 18, 2013, assuming conversion of the Series A Preferred Stock into AutoWeb common stock as of this date. The Company also obtained an option to acquire an additional 5,000 shares of AutoWeb Series A Preferred Stock at a per share exercise price of $500.00, which option expires September 18, 2015. In connection with this investment, the Company also entered into arrangements with AutoWeb to use the AutoWeb pay-per-click, auction-driven automotive marketplace technology platform as both a publisher and as an advertiser. Upon the occurrence of a liquidation event (i.e., (i) a liquidation, dissolution or winding up of AutoWeb; a consolidation or merger where AutoWeb is not the surviving entity; a consolidation or merger where AutoWeb is the surviving entity and either (1) the rights of the Series A Preferred Stock are changed, or (2) the Series A Preferred Stock is exchanged for cash, securities or property; or (ii) a sale or transfer of all or substantially all of AutoWeb’s assets), the Series A Preferred Stock is entitled to a liquidation preference of the greater of (i) $1,000 per share (subject to adjustments for stock splits, stock dividends combinations and recapitalizations); and (ii) the amount that would be distributed with respect to AutoWeb’s common stock, assuming full conversion of the Series A Preferred Stock into common stock. In November 2014, the Company entered into a Series B Preferred Stock Purchase Agreement with AutoWeb pursuant to which we paid $880,394 in exchange for 1,076 shares of AutoWeb Series B Preferred Stock, $0.01 par value per share. The investments in AutoWeb are recorded at cost because the Company does not have significant influence over AutoWeb. | |||||||||
In September 2013, the Company entered into a Convertible Note Purchase Agreement in which Autobytel invested $150,000 in SaleMove in the form of a convertible promissory note. The convertible promissory note accrues interest an annual rate of 6.0% and is due and payable in full on September 1, 2015 unless converted prior to the maturity date. The convertible note will be converted into preferred stock of SaleMove in the event of a preferred stock financing by SaleMove of at least $1.0 million prior to the maturity date of the convertible note. The $150,000 note is classified as an other current asset on the consolidated balance sheet as of December 31, 2014. In October 2013, the Company entered into an agreement with SaleMove to become the exclusive provider to the automotive industry of SaleMove’s technology for enhancing communications with consumers. SaleMove’s patent-pending technology allows Dealers and Manufacturers to enhance the online shopping experience by interacting with consumers in real-time, including live video, audio and text-based chat or by phone. The Company and SaleMove will equally share in revenues from automotive-related sales of the SaleMove products and services. In connection with this reseller arrangement, the Company advanced to SaleMove $1.0 million to fund SaleMove’s fifty percent share of various product development, marketing and sales costs and expenses, with the advanced funds to be recovered by the Company from SaleMove’s share of sales revenue. As of December 31, 2014 and 2013, $1.0 million and $0.2 million had been advanced to SaleMove, respectively. The $1.0 million in advances is recorded as an other long-term asset on the consolidated balance sheet as of December 31, 2014. In November 2014, the Company invested an additional $400,000 in SaleMove in the form of a convertible promissory note. The convertible promissory note accrues interest at an annual rate of 6.0% and is due and payable in full on November 18, 2016 unless converted prior to the maturity date. The convertible note will be converted into preferred stock of SaleMove in the event of a preferred stock financing by SaleMove of at least $1.0 million prior to the maturity date of the convertible note. The $400,000 note is classified as an investment on the consolidated balance sheet as of December 31, 2014. | |||||||||
In December 2014, the Company entered into a Series Seed Preferred Stock Purchase Agreement with GoMoto, Inc. (“GoMoto”) in which Autobytel paid $100,000 for 317,460 shares of Series Seed Preferred Stock, $0.001 par value per share. The investment in GoMoto was recorded at cost because the Company does not have significant influence over GoMoto. |
Selected_Balance_Sheet_Account
Selected Balance Sheet Accounts | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Selected Balance Sheet Accounts [Abstract] | ||||||||||||||||||||||||||
Selected Balance Sheet Accounts | Property and Equipment | |||||||||||||||||||||||||
Property and equipment consists of the following: | ||||||||||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Computer software and hardware and capitalized internal use software | $ | 12,990 | $ | 11,924 | ||||||||||||||||||||||
Furniture and equipment | 1,271 | 1,256 | ||||||||||||||||||||||||
Leasehold improvements | 957 | 937 | ||||||||||||||||||||||||
15,218 | 14,117 | |||||||||||||||||||||||||
Less—Accumulated depreciation and amortization | (13,314 | ) | (12,569 | ) | ||||||||||||||||||||||
Property and Equipment, net | $ | 1,904 | $ | 1,548 | ||||||||||||||||||||||
As of December 31, 2014 and 2013, capitalized internal use software, net of amortization, was $0.9 million and $0.6 million, respectively. Depreciation and amortization expense related to property and equipment was $0.7 million each for the years ended December 31, 2014 and 2013. Of this amount, $0.2 million was recorded in cost of revenues and $0.5 million was recorded in operating expenses for each of the years ended December 31, 2014 and 2013. | ||||||||||||||||||||||||||
Intangible Assets. The Company amortizes specifically identified intangible assets using the straight-line method over the estimated useful lives of the assets. In connection with the acquisitions of Cyber, Advanced Mobile and AutoUSA, the Company identified $9.7 million of intangible assets. The Company’s intangible assets will be amortized over the following estimated useful lives (in thousands): | ||||||||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||||||||||||||
Intangible Asset | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||||
Estimated Useful Life | ||||||||||||||||||||||||||
Trademarks/trade names/licenses/domains | 5 years | $ | 6,574 | $ | (5,594 | ) | $ | 980 | $ | 5,582 | $ | (5,209 | ) | $ | 373 | |||||||||||
Software and publications | 3 years | 1,300 | (1,300 | ) | — | 1,300 | (1,300 | ) | — | |||||||||||||||||
Customer relationships | 2 - 5 years | 5,074 | (2,696 | ) | 2,378 | 2,320 | (1,926 | ) | 394 | |||||||||||||||||
Employment/non-compete agreements | 5 years | 700 | (500 | ) | 200 | 610 | (335 | ) | 275 | |||||||||||||||||
Developed technology | 5 years | 820 | (205 | ) | 615 | 820 | (41 | ) | 779 | |||||||||||||||||
$ | 14,468 | $ | (10,295 | ) | $ | 4,173 | $ | 10,632 | $ | (8,811 | ) | $ | 1,821 | |||||||||||||
Amortization expense is included in “Depreciation and amortization” in the Statement of Income. Amortization expense for intangible assets for the next five years is as follows: | ||||||||||||||||||||||||||
Year | Amortization Expense | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
2015 | $ | 1,394 | ||||||||||||||||||||||||
2016 | 942 | |||||||||||||||||||||||||
2017 | 926 | |||||||||||||||||||||||||
2018 | 879 | |||||||||||||||||||||||||
2019 | 32 | |||||||||||||||||||||||||
$ | 4,173 | |||||||||||||||||||||||||
Goodwill. Goodwill represents the excess of the purchase price over the fair value of net assets acquired. Goodwill is not amortized and is assessed annually for impairment or whenever events or circumstances indicate that the carrying value of such assets may not be recoverable. The Company did not record any impairment related to goodwill as of December 31, 2014 and 2013. As of December 31, 2014 and 2013, goodwill consisted of the following: | ||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Goodwill as of December 31, 2013 | $ | 13,602 | ||||||||||||||||||||||||
Acquisition of AutoUSA | 7,346 | |||||||||||||||||||||||||
Goodwill as December 31, 2014 | $ | 20,948 | ||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities | ||||||||||||||||||||||||||
As of December 31, 2014 and 2013, accrued expenses and other current liabilities consisted of the following: | ||||||||||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Compensation and related costs and professional fees | $ | 4,989 | $ | 3,540 | ||||||||||||||||||||||
Other accrued expenses | 3,543 | 3,209 | ||||||||||||||||||||||||
Amounts due to customers | 267 | 208 | ||||||||||||||||||||||||
Other current liabilities | 696 | 691 | ||||||||||||||||||||||||
Total accrued expenses and other current liabilities | $ | 9,495 | $ | 7,648 | ||||||||||||||||||||||
Convertible Notes Payable. In connection with the acquisition of Cyber on September 17, 2010 (“Cyber Acquisition Date”), the Company issued a convertible subordinated promissory note for $5.0 million (“Cyber Convertible Note”) to the sellers. The fair value of the Cyber Convertible Note as of the Cyber Acquisition Date was $5.9 million. This valuation was estimated using a binomial option pricing method. Key assumptions used by the Company's outside valuation consultants in valuing the Cyber Convertible Note included a market yield of 15.0% and stock price volatility of 77.5%. As the Cyber Convertible Note was issued with a substantial premium, the Company recorded the premium as additional paid-in capital. Interest is payable at an annual interest rate of 6% in quarterly installments. The entire outstanding balance of the Cyber Convertible Note is to be paid in full on September 30, 2015. At any time after September 30, 2013, the holders of the Cyber Convertible Note may convert all or any part, but in 40,000 minimum share increments, of the then outstanding and unpaid principal of the Cyber Convertible Note into fully paid shares of the Company’s common stock at a conversion price of $4.65 per share (as adjusted for stock splits, stock dividends, combinations and other similar events). The right to convert the Cyber Convertible Note into common stock of the Company is accelerated in the event of a change in control of the Company. In the event of default, the entire unpaid balance of the Cyber Convertible Note will become immediately due and payable and will bear interest at the lower of 8% per year and the highest legal rate permissible under applicable law. | ||||||||||||||||||||||||||
In connection with the acquisition of AutoUSA, the Company issued the AutoUSA Note to the Seller. The fair value of the AutoUSA Note as of the AutoUSA Acquisition Date was $1.3 million. This valuation was estimated using a binomial option pricing method. Key assumptions used by the Company's outside valuation consultants in valuing the AutoUSA Note include a market yield of 1.6% and stock price volatility of 65.0%. As the AutoUSA Note was issued with a substantial premium, the Company recorded the premium as additional paid-in capital. Interest is payable at an annual interest rate of 6% in quarterly installments. The entire outstanding balance of the AutoUSA Note is to be paid in full on January 31, 2019. At any time after January 31, 2017, the holder of the AutoUSA Note may convert all or any part, but at least 30,600 shares, of the then outstanding and unpaid principal of the AutoUSA Note into fully paid shares of the Company's common stock at a conversion price of $16.34 per share (as adjusted for stock splits, stock dividends, combinations and other similar events). The right to convert the AutoUSA Note into common stock of the Company is accelerated in the event of a change in control of the Company. In the event of default, the entire unpaid balance of the AutoUSA Note will become immediately due and payable and will bear interest at the lower of 8% per year and the highest legal rate permissible under applicable law. |
Credit_Facility
Credit Facility | 12 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
Credit Facility | On January 13, 2014, the Company entered into a Credit Facility Amendment with Union Bank that amended the Company's existing Loan Agreement with Union Bank initially entered into on February 26, 2013, and as amended on September 10, 2013 (the existing Loan Agreement, as amended to date, is referred to herein collectively as the “Credit Facility Agreement”). The amendment to the original Credit Facility Agreement provided for (i) a new $9.0 million term loan (“Term Loan”); and (ii) amendments to the Company’s existing $8.0 million revolving line of credit (“Revolving Loan”). |
The Term Loan is amortized over a period of four years, with fixed quarterly principal payments of $562,500. Borrowings under the Term Loan or under the Revolving Loan bear interest at either (i) the bank's Reference Rate (prime rate) minus 0.50% or (ii) the LIBOR plus 2.50%, at the option of the Company. Interest under both the Term Loan and the Revolving Loan adjust (i) at the end of each LIBOR rate period (1, 2, 3, 6 or 12 months terms) selected by the Company, if the LIBOR rate is selected; or (ii) with changes in Union Bank's Reference Rate, if the Reference Rate is selected. The Company pays a commitment fee of 0.10% per year on the unused portion of the Revolving Loan payable quarterly in arrears. Borrowings under the Term Loan and the Revolving Loan are secured by a first priority security interest on all of the Company's personal property (including, but not limited to, accounts receivable) and proceeds thereof. The Term Loan matures December 31, 2017, and the maturity date of the Revolving Loan is March 31, 2017. Borrowings under the Revolving Loan may be used as a source to finance capital expenditures, acquisitions and stock buybacks and for other general corporate purposes. Borrowing under the Term Loan was limited to use for the acquisition of AutoUSA, and the Company drew down the entire $9.0 million of the Term Loan, together with $1.0 million under the Revolving Loan, in financing this acquisition. The outstanding balances of the Term Loan and Revolving Loan as of December 31, 2014 were $6.75 million and $5.25 million, respectively. | |
The Credit Facility Agreement contains certain customary affirmative and negative covenants and restrictive and financial covenants, including that the Company maintain a minimum consolidated liquidity, quarterly and annual EBITDA and tangible net worth, with which the Company was in compliance as of December 31, 2014. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies | |||||
The Company leases its facilities and certain office equipment under operating leases which expire on various dates through 2019. The Company’s headquarters are located in Irvine, California and consist of approximately 26,000 square feet of leased office space. The headquarters lease expires July 31, 2017, but the Company retains rights to terminate the lease for the lease year beginning August 1, 2016. The Company also maintains offices located in Troy, Michigan, which consist of approximately 5,400 square feet of leased office space under a lease that expires July 31, 2015, with an option to extend the term for an additional one-year term; Tampa, Florida, which consists of approximately 2,800 square feet of leased office space under a lease that expires May 31, 2015; and King of Prussia, Pennsylvania, which consists of approximately 2,600 square feet of leased office space under a lease that expires January 1, 2019. The Company’s future minimum lease payments on leases with non-cancelable terms in excess of one year were as follows (in thousands): | |||||
Years Ending December 31, | |||||
2015 | $ | 678 | |||
2016 | 614 | ||||
Thereafter | 442 | ||||
$ | 1,734 | ||||
Rent expense included in operating expenses was $0.7 million for both of the years ended December 31, 2014 and 2013. | |||||
Employment Agreements | |||||
The Company has employment agreements and retention agreements with certain key employees. A number of these agreements require severance payments, continuation of certain insurance benefits and acceleration of vesting of stock options in the event of a termination of employment without cause or for good reason. | |||||
Litigation | |||||
From time to time, the Company may be involved in litigation matters arising from the normal course of its business activities. Such litigation, even if not meritorious, could result in substantial costs and diversion of resources and management attention, and an adverse outcome in litigation could materially adversely affect its business, results of operations, financial condition and cash flows. |
Retirement_Savings_Plan
Retirement Savings Plan | 12 Months Ended |
Dec. 31, 2014 | |
Postemployment Benefits [Abstract] | |
Retirement Savings Plan | The Company has a retirement savings plan which qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code of 1986, as amended (“IRC”) (the “401(k) Plan”). The 401(k) Plan covers all employees of the Company who are over 21 years of age and is effective on the first day of the month following date of hire. Under the 401(k) Plan, participating employees are allowed to defer up to 100% of their pretax salaries not to exceed the maximum IRC deferral amount. The Company contributions to the 401(k) Plan are discretionary. The Company did not make a contribution in the year ended December 31, 2013. The Company contribution in the year ended December 31, 2014 was $0.2 million. |
Stockholders_Equity
Stockholdersb Equity | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Stockholders' Equity | Stock-Based Incentive Plans | ||||||||||||||||
The Company has established several plans that provide for stock-based awards (“Awards”) primarily in the form of stock options and restricted stock awards (“RSAs”). Certain of these plans provide for awards to employees, the Company’s Board of Directors and independent consultants. The Awards were granted under the 1996 Stock Incentive Plan, the 1998 Stock Option Plan, the 1999 Stock Option Plan, the 1999 Employee and Acquisition Related Stock Option Plan, the 2000 Stock Option Plan, the Amended and Restated 2001 Restricted Stock and Option Plan, the 2004 Restricted Stock and Option Plan, the 2006 Inducement Stock Option Plan, 2010 Equity Incentive Plan and the 2014 Equity Incentive Plan. As of June 19, 2014, awards may only be granted under the 2014 Equity Incentive Plan. An aggregate of 1.1 million shares of Company common stock are reserved for future issuance under the 2014 Equity Incentive Plan at December 31, 2014. | |||||||||||||||||
In addition to Awards under the foregoing plans, during the year December 31, 2014 in connection with the acquisition of AutoUSA, the Company granted 40,000 performance-based inducement stock options (“2014 AutoUSA Inducement Options”) to a new employee. In addition to Awards under the foregoing plans, during the year ended December 31, 2013 in connection with the acquisition of Advanced Mobile, the Company granted 88,641 performance-based inducement stock options (“2013 Advanced Mobile Inducement Options”) to a new employee. The 2013 Advanced Mobile Inducement Options were allocated in three equal grants of 29,547 options each, with the actual amount of each grant that may be awarded being determined based upon the revenues and gross profit achievement of the Autobytel Mobile business for the years 2014, 2015 and 2016, respectively. | |||||||||||||||||
Share-based compensation expense is included in costs and expenses in the Consolidated Statements of Income and Comprehensive Income as follows: | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(in thousands) | |||||||||||||||||
Share-based compensation expense: | |||||||||||||||||
Cost of revenues | $ | 69 | $ | 50 | |||||||||||||
Sales and marketing | 544 | 153 | |||||||||||||||
Technology support | 251 | 206 | |||||||||||||||
General and administrative | 562 | 297 | |||||||||||||||
Share-based compensation expense | 1,426 | 706 | |||||||||||||||
Amount capitalized to internal use software | 5 | 2 | |||||||||||||||
Total share-based compensation expense | $ | 1,421 | $ | 704 | |||||||||||||
As of December 31, 2014 and December 31, 2013, there was approximately $2.3 million and $0.6 million, respectively, of unrecognized compensation expense related to unvested stock options. This expense is expected to be recognized over a weighted average period of approximately 2.0 years. | |||||||||||||||||
Stock Options | |||||||||||||||||
The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model based on the underlying common stock closing price as of the date of grant, the expected term, stock price volatility and risk-free interest rates. The expected risk-free interest rate is based on United States treasury yield for a term consistent with the expected life of the stock option in effect at the time of grant. Expected volatility is based on the Company’s historical experience for a period equal to the expected life. The Company has used historical volatility because it has limited or no options traded on its common stock to support the use of an implied volatility or a combination of both historical and implied volatility. The Company estimates the expected life of options granted based on historical experience, which it believes is representative of future behavior. The dividend yield is not considered in the option-pricing formula since the Company has not paid dividends in the past and has no current plans to do so in the future. The estimated forfeiture rate used is based on historical experience and is adjusted based on actual experience. | |||||||||||||||||
The Company grants its options at exercise prices that are not less than the fair market value of the Company’s common stock on the date of grant. Stock options generally have a seven or ten year maximum contractual term and generally vest one-third on the first anniversary of the grant date and ratably over twenty-four months, thereafter. The vesting of certain stock options is accelerated under certain conditions, including upon a change in control of the Company, termination without cause of an employee and voluntary termination by an employee with good reason. | |||||||||||||||||
Awards granted under the Company’s stock option plans, the 2013 Advanced Mobile Inducement Options and 2014 AutoUSA Inducement Options were estimated to have a weighted average grant date fair value per share of $6.86 and $2.57 for the years ended December 31, 2014 and 2013, respectively, based on the Black-Scholes option-pricing model on the date of grant using the following weighted average assumptions: | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Expected volatility | 56 | % | 65 | % | |||||||||||||
Expected risk-free interest rate | 1.4 | % | 0.8 | % | |||||||||||||
Expected life (years) | 4.3 | 4.3 | |||||||||||||||
A summary of the Company’s outstanding stock options as of December 31, 2014, and changes during the year then ended is presented below: | |||||||||||||||||
Number of | Weighted Average | Weighted | Aggregate | ||||||||||||||
Options | Exercise Price | Average | Intrinsic | ||||||||||||||
per Share | Remaining | Value | |||||||||||||||
Contractual | |||||||||||||||||
Term | |||||||||||||||||
(years) | (thousands) | ||||||||||||||||
Outstanding at December 31, 2013 | 1,631,803 | $ | 5.59 | 4.5 | |||||||||||||
Granted | 513,750 | 15.26 | |||||||||||||||
Exercised | (134,668 | ) | 4.18 | ||||||||||||||
Forfeited or expired | (39,616 | ) | 28.94 | ||||||||||||||
Outstanding at December 31, 2014 | 1,971,269 | $ | 7.73 | 4.5 | $ | 9,274 | |||||||||||
Vested and expected to vest at December 31, 2014 | 1,909,670 | $ | 7.6 | 4.5 | $ | 9,167 | |||||||||||
Exercisable at December 31, 2014 | 1,318,440 | $ | 5.11 | 3.8 | $ | 8,346 | |||||||||||
Service-Based Options. During the years ended December 31, 2014 and 2013, the Company granted 473,750 and 113,500 service-based stock options, which had weighted average grant date fair values of $6.92 and $2.37, respectively. | |||||||||||||||||
Performance-Based Options. During the year ended December 31, 2014, the Company granted the 2014 AutoUSA Inducement Options, which had a weighted average grant date fair value of $6.08, using a Black-Scholes option pricing model and weighted average exercise price of $13.62. The 2014 AutoUSA Inducement Options are subject to two vesting requirements and conditions: (i) level of achievement of performance goals based on revenue and gross margin of the Company’s retail dealer services group for 2014 and (ii) service vesting. Based on the performance of the Company’s retail dealer services group for 2014, all 40,000 of the 2014 AutoUSA Inducement Options were awarded under the performance vesting conditions, with one-third of these options vested on January 21, 2015 and the remainder vesting ratably over twenty four months from that date thereafter. | |||||||||||||||||
During the year ended December 31, 2013, the Company granted 87,177 performance-based stock options (“2013 Performance-Based Options”) to certain employees with a weighted average grant date fair value and exercise price of $2.19 and $4.00, respectively, using a Black-Scholes option pricing model. The 2013 Performance-Based Options are subject to two vesting requirements and conditions: i) percentage achievement of 2013 revenues and earnings before interest, taxes, depreciation and amortization (“EBITDA”) goals and ii) service vesting. Based on the Company’s 2013 revenues and EBITDA performance, 83,398 of the 2013 Performance-Based Options were awarded under the performance vesting condition, with one-third of these awarded options vested on the first anniversary of the grant date and the remainder vesting ratably over twenty four months from that date thereafter. | |||||||||||||||||
During the year ended December 31, 2013, the Company also granted the 2013 Advanced Mobile Inducement Options, which had a weighted average grant date fair value of $3.21, using a Black-Scholes option pricing model and weighted average exercise price of $7.17. The 2013 Advanced Mobile Inducement Options are subject to two vesting requirements and conditions: (i) percentage achievement of 2014, 2015 and 2016 revenues and gross profit goals for the Autobytel Mobile business and (ii) time vesting. Of the 29,547 2013 Advanced Mobile Inducement Options originally granted and allocated to the 2014 revenues and gross profit performance of the Autobytel Mobile business, 2,955 of these options were awarded based on the revenues and gross profit achieved by the business for 2014, with one-third of these awarded options vested on January 21, 2015 and the remainder vesting ratably over twenty-four months from that date thereafter. The remaining 26,592 of the 2013 Advanced Mobile Inducement Options allocated to 2014 performance were canceled. | |||||||||||||||||
Market Condition Options | |||||||||||||||||
In 2009, the Company granted 213,650 stock options to substantially all employees at exercise prices equal to the price of the stock on the grant date of $1.75, with a fair market value per option granted of $0.97, using a Black-Scholes option pricing model. One-third of these options vested on the first anniversary of the grant date and the remaining two-thirds vest ratably over twenty-four months thereafter. In addition, the remaining two-thirds of the awards must meet additional conditions in order to be exercisable. One-third of the remaining options must also satisfy the condition that the closing price of Autobytel’s common stock over any 30 consecutive trading days is at least two times the option exercise price to be exercisable (“Market Condition A”). The final one-third of the remaining options must also satisfy the condition that the closing price of Autobytel’s common stock over any 30 consecutive trading days is at least three times the option exercise price to be exercisable (“Market Condition B”). Certain of these options will accelerate vesting upon a change in control of the Company. Market Condition A was achieved during 2009 and Market Condition B was achieved in 2010. During 2014, 17,431 stock options were exercised related to these market condition options. | |||||||||||||||||
During 2014, 134,668 options were exercised (inclusive of 17,431 market condition stock options exercised during 2014), with an aggregate weighted average exercise price of $4.18. During 2013, 54,337 options were exercised (inclusive of the 5,879 market condition stock options exercised during 2013), with an aggregate weighted average exercise price of $3.92. The total intrinsic value of options exercised during 2014 and 2013 was $1.3 million and $60,000, respectively. | |||||||||||||||||
Tax Benefit Preservation Plan | |||||||||||||||||
The Company’s Tax Benefit Preservation Plan dated as of May 26, 2010 between Autobytel and Computershare Trust Company, N.A., as rights agent, as amended by Amendment No. 1 to Tax Benefit Preservation Plan dated as of April 14, 2014 (collectively, the “Tax Benefit Preservation Plan”) was adopted by the Company’s Board of Directors to protect stockholder value by preserving the Company’s net operating loss carryovers and other tax attributes that the Tax Benefit Preservation Plan is intended to preserve (“Tax Benefits”). Under the Tax Benefit Preservation Plan, rights to purchase capital stock of the Company (“Rights”) have been distributed as a dividend at the rate of five Rights for each share of common stock. Each Right entitles its holder, upon triggering of the Rights, to purchase one one-hundredth of a share of Series A Junior Participating Preferred Stock of the Company at a price of $75.00 (as such price may be adjusted under the Tax Benefit Preservation Plan) or, in certain circumstances, to instead acquire shares of common stock. The Rights will convert into a right to acquire common stock or other capital stock of the Company in certain circumstances and subject to certain exceptions. The Rights will be triggered upon the acquisition of 4.9% or more of the Company’s outstanding common stock or future acquisitions by any existing holder of 4.9% or more of the Company’s outstanding common stock. If a person or group acquires 4.9% or more of the Company’s common stock, all rights holders, except the acquirer, will be entitled to acquire, at the then exercise price of a Right, that number of shares of the Company common stock which, at the time, has a market value of two times the exercise price of the Right. The Rights will expire upon the earliest of: (i) the close of business on May 26, 2017 unless that date is advanced or extended, (ii) the time at which the Rights are redeemed or exchanged under the Tax Benefit Preservation Plan, (iii) the repeal of Section 382 or any successor statute if the Board determines that the Tax Benefit Preservation Plan is no longer necessary for the preservation of the Company’s Tax Benefits, (iv) the beginning of a taxable year of the Company to which the Board determines that no Tax Benefits may be carried forward, or (v) such time as the Board determines that a limitation on the use of the Tax Benefits under Section 382 would no longer be material to the Company. The Tax Benefit Preservation Plan was reapproved by the Company’s stockholders at the Company’s 2014 Annual Meeting of Stockholders. | |||||||||||||||||
Warrant | |||||||||||||||||
As part of the acquisition of Cyber on the Cyber Acquisition Date, the Company issued a warrant to purchase 400,000 shares of Company common stock (“Warrant”) at an exercise price of $4.65 per share (as adjusted for stock splits, stock dividends, combinations and other similar events). The Warrant became exercisable on September 16, 2013 and expires on the eighth anniversary of the issuance date. As of December 31, 2014, the Warrant had not been exercised. The right to exercise the Warrant is accelerated in the event of a change in control of the Company. As of the Cyber Acquisition Date the warrant was valued at $3.15 per share for a total value of $1,260,000, which is recorded as additional paid-in-capital. The Company used an option pricing model with the following key assumptions: risk-free rate of 2.3%, stock price volatility of 77.5% and a term of 8.04 years. | |||||||||||||||||
The AutoUSA Warrant issued in connection with the acquisition described in Note3 was valued at $7.35 per share for a total value of $0.5 million. The Company used an option pricing model to determine the value of the AutoUSA Warrant. Key assumptions used in valuing the AutoUSA Warrant are as follows: risk-free rate of 1.6%, stock price volatility of 65.0% and a term of 5.0 years. The AutoUSA Warrant was valued based on long-term stock price volatilities of the Company. The exercise price of the AutoUSA Warrant is $14.30 per share (as adjusted for stock splits, stock dividends, combinations and other similar events). The AutoUSA Warrant becomes exercisable on the third anniversary of the issuance date and expires on the fifth anniversary of the issuance date. The right to exercise the AutoUSA Warrant is accelerated in the event of a change in control of the Company. | |||||||||||||||||
Shares Reserved for Future Issuance | |||||||||||||||||
The Company had the following shares of common stock reserved for future issuance upon the exercise or issuance of equity instruments as of December 31, 2014: | |||||||||||||||||
Number of Shares | |||||||||||||||||
Stock options outstanding | 1,971,269 | ||||||||||||||||
Authorized for future grants under stock-based incentive plans | 1,054,066 | ||||||||||||||||
Reserved for exercise of Warrants | 469,930 | ||||||||||||||||
Reserved for conversion of promissory notes | 1,136,468 | ||||||||||||||||
Total | 4,631,733 | ||||||||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Income Taxes | Income tax expense (benefit) from continuing operations consists of the following for the years ended December 31: | ||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Current: | |||||||||
Federal | $ | 129 | $ | 95 | |||||
State | 150 | 113 | |||||||
279 | 208 | ||||||||
Deferred: | |||||||||
Federal | 1,714 | 1,353 | |||||||
State | 385 | 902 | |||||||
2,099 | 2,255 | ||||||||
Valuation allowance release | (341 | ) | (37,527 | ) | |||||
Total income tax expense (benefit) | $ | 2,037 | $ | (35,064 | ) | ||||
The reconciliations of the U.S. federal statutory rate to the effective income tax rate for the years ended December 31, 2014 and 2013 are as follows: | |||||||||
2014 | 2013 | ||||||||
Tax provision at U.S. federal statutory rates | 34 | % | 34 | % | |||||
State taxes | 2.6 | 3.5 | |||||||
Federal rate adjustment | — | 34.6 | |||||||
State rate adjustment | — | 0.5 | |||||||
Deferred tax asset adjustments | 6.4 | 5.9 | |||||||
Non-deductible permanent items | 0.4 | 0.6 | |||||||
Stock options | — | 0.4 | |||||||
Other | 0.3 | 0.5 | |||||||
Change in valuation allowance | (6.3 | ) | (1,219.1 | ) | |||||
Effective income tax rate | 37.4 | % | (1,139.1 | %) | |||||
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred taxes as of December 31, 2014 and 2013 are as follows: | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Deferred tax assets: | |||||||||
Allowance for doubtful accounts | $ | 284 | $ | 149 | |||||
Accrued liabilities | 1,473 | 832 | |||||||
Net operating loss carry-forwards | 34,473 | 37,426 | |||||||
Fixed assets | 83 | 111 | |||||||
Intangible assets | 744 | 2,006 | |||||||
Share-based compensation expense | 1,566 | 1,143 | |||||||
Other | 286 | 184 | |||||||
Total gross deferred tax assets | 38,909 | 41,851 | |||||||
Valuation allowance | (6,015 | ) | (6,356 | ) | |||||
32,894 | 35,495 | ||||||||
Deferred tax liabilities: | |||||||||
Tax deductible goodwill | — | (843 | ) | ||||||
Total gross deferred tax liabilities | — | (843 | ) | ||||||
Net deferred tax assets | $ | 32,894 | $ | 34,652 | |||||
The Company's deferred taxes related to goodwill have been included in the intangible assets classification for the tax year ended December 31, 2014. | |||||||||
During 2014, management assessed the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. Significant pieces of objective positive evidence evaluated were the cumulative earnings generated over the three-year period ended December 31, 2014 and the Company’s strong future earnings projections. Based on this evaluation, as of December 31, 2014, the Company reversed $0.3 million of its valuation allowance. We believe, however, that it is more likely than not that $1.4 million in state net operating loss carryforwards will not be realized. Accordingly, a valuation allowance has been placed on these state net operating losses. In addition, included in the NOL deferred tax asset above is approximately $13.5 million and $0.3 million for federal and state, respectively, of deferred tax assets attributable to excess stock option deductions. Due to a provision within ASC Topic 718, Compensation – Stock Compensation (“ASC 718”) concerning when tax benefits related to excess stock option deductions can be credited to paid-in-capital, the related valuation allowance of $4.6 million cannot be reversed, even if the facts and circumstances indicate that it is more likely than not that the deferred tax asset can be realized. The valuation allowance will only be reversed as the related deferred tax asset is applied to reduce taxes payable. The Company follows ASC 740 ordering to determine when such NOL has been realized. | |||||||||
During 2013 management assessed the available positive and negative evidence to estimate if sufficient future taxable income would be generated to utilize the existing deferred tax assets. Significant pieces of objective positive evidence evaluated were the cumulative earnings generated over the three-year period ended December 31, 2013 and the Company’s strong future earnings projections. Based on this evaluation, as of December 31, 2013, the Company reversed $37.5 million of its valuation allowance. | |||||||||
At December 31, 2014, the Company had federal and state net operating loss carry-forwards (“NOLs”) of approximately $94.5 million and $59.4 million, respectively. The federal NOLs expire through 2031 as follows (in millions): | |||||||||
2021 | $15.20 | ||||||||
2022 | 1.7 | ||||||||
2023 | — | ||||||||
2024 | 4.1 | ||||||||
2025 | 7.7 | ||||||||
2026 | 25.5 | ||||||||
2027 | 15.5 | ||||||||
2028 | 5.2 | ||||||||
2029 | 7.7 | ||||||||
2030 | 10.6 | ||||||||
2031 | 1.3 | ||||||||
$94.50 | |||||||||
The state NOLs expire through 2031 as follows (in millions): | |||||||||
2015 | $ | 6.5 | |||||||
2016 | 20.6 | ||||||||
2017 | 3.2 | ||||||||
2028 | 2.7 | ||||||||
2029 | 5.8 | ||||||||
2030 | 11 | ||||||||
2031 | 1.2 | ||||||||
California NOLs | 51 | ||||||||
Other State NOLs | 8.4 | ||||||||
Total State NOLs | $ | 59.4 | |||||||
Utilization of the net operating loss and tax credit carry-forwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the IRC, as well as similar state provisions. These ownership changes may limit the amount of NOLs and research and development credit carry-forwards that can be utilized annually to offset future taxable income and tax, respectively. A Section 382 ownership change occurred in 2006 and any changes have been reflected in the NOLs presented above as of December 31, 2014. As a result of an acquisition in 2001, approximately $9.9 million of the NOLs are subject to an annual limitation of approximately $0.5 million per year. | |||||||||
The federal and state NOLs begin to expire in 2021 and 2015, respectively. Approximately $10.8 million and $5.0 million, respectively, of the federal and state net operating loss carry-forwards were incurred by subsidiaries prior to the date of the Company’s acquisition of such subsidiaries. The Company established a valuation allowance of $4.1 million at the date of acquisitions related to these subsidiaries. During 2013, the valuation allowance has been reversed. The tax benefits associated with the realization of such NOLs will be credited to the provision for income taxes. In addition, federal and state NOLs of approximately $13.5 million and $0.3 million, respectively, relate to stock option deductions. Therefore, once the stock option deductions reduce income taxes payable in the future in accordance with ASC 718, approximately $4.6 million and $0.0 million, respectively, will be credited to stockholders’ equity rather than to income tax benefit. | |||||||||
At December 31, 2014, deferred tax assets exclude approximately $0.9 million and $0.2 million of tax-effected federal and state NOLs pertaining to tax deductions from stock-based compensation. Upon future realization of these benefits, the Company expects to increase additional paid-in capital and reduce income taxes payable. The benefit of excess stock option deductions is not recorded until such time that the deductions reduce income taxes payable. For purposes of determining when the stock options reduce income taxes payable, the Company has adopted the “with and without” approach whereby the Company considers NOLs arising from continuing operations prior to NOLs attributable to excess stock option deductions. | |||||||||
At December 31, 2014, the Company has federal and state research and development tax credit carry-forwards of $0.3 million and $0.2 million, respectively. The federal credits begin to expire in 2021. The state credits do not expire. | |||||||||
As of December 31, 2014 and 2013, the Company had unrecognized tax benefits of approximately $0.6 million and $0.6 million, respectively, all of which, if subsequently recognized, would have affected the Company’s tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Balance at January 1, | $ | 636 | $ | 636 | |||||
Additions based on tax positions related to prior years | — | — | |||||||
Balance at December 31, | $ | 636 | $ | 636 | |||||
The Company files income tax returns in the United States and various state jurisdictions. In general, the Company is no longer subject to U.S. federal and state income tax examinations for years prior to 2009 (except for the use of tax losses generated prior to 2009 that may be used to offset taxable income in subsequent years). The Company has estimated that $0.1 million of unrecognized tax benefits related to income tax positions may be affected by expiring statutes of limitation within the next twelve months. | |||||||||
The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company accrued $28,000 and $20,000 of interest, respectively, associated with its unrecognized tax benefits in the years ended December 31, 2014 and 2013. | |||||||||
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Quarterly Financial Data (Unaudited) | Below is a summary table of the Company’s quarterly data for the years ended December 31, 2014 and December 31, 2013. | ||||||||||||||||||||||||||||||||
Quarter Ended | |||||||||||||||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | ||||||||||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2013 | 2013 | 2013 | 2013 | ||||||||||||||||||||||||||
(in thousands, except per-share amounts) | |||||||||||||||||||||||||||||||||
Total net revenues | $ | 26,041 | $ | 27,364 | $ | 25,913 | $ | 26,959 | $ | 20,693 | $ | 21,635 | $ | 17,771 | $ | 18,261 | |||||||||||||||||
Gross profit | $ | 10,404 | $ | 11,008 | $ | 10,316 | $ | 10,085 | $ | 8,089 | $ | 8,809 | $ | 6,956 | $ | 6,592 | |||||||||||||||||
Net income | $ | 1,117 | $ | 1,124 | $ | 801 | $ | 370 | $ | 36,150 | $ | 1,273 | $ | 386 | $ | 334 | |||||||||||||||||
Basic earnings per share | $ | 0.12 | $ | 0.12 | $ | 0.09 | $ | 0.04 | $ | 4.06 | $ | 0.14 | $ | 0.04 | $ | 0.04 | |||||||||||||||||
Diluted earnings per share | $ | 0.11 | $ | 0.11 | $ | 0.08 | $ | 0.04 | $ | 3.26 | $ | 0.13 | $ | 0.04 | $ | 0.04 | |||||||||||||||||
SCHEDULE_II_VALUATION_AND_QUAL
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | |||||||||
AUTOBYTEL INC. | |||||||||
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS | |||||||||
Years Ended December 31, | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Allowance for bad debts: | |||||||||
Beginning balance | $ | 294 | $ | 268 | |||||
Additions | 354 | 92 | |||||||
Write-offs | (158 | ) | (66 | ) | |||||
Ending balance | $ | 490 | $ | 294 | |||||
Allowance for customer credits: | |||||||||
Beginning balance | $ | 111 | $ | 158 | |||||
Additions | 1,037 | 511 | |||||||
Write-offs | (868 | ) | (558 | ) | |||||
Ending balance | $ | 280 | $ | 111 | |||||
Tax valuation allowance: | |||||||||
Beginning balance | $ | 6,356 | $ | 43,883 | |||||
Charged (credited) to tax expense | (341 | ) | (37,527 | ) | |||||
Ending balance | $ | 6,015 | $ | 6,356 | |||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Basis of Presentation | Basis of Presentation. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on t he reported results of operations. | ||||||||
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include, but are not limited to, allowances for bad debts and customer credits, useful lives of depreciable assets and capitalized software costs, long-lived asset impairments, goodwill and purchased intangible asset valuations, accrued liabilities, contingent payment provisions, debt valuation and valuation allowance for deferred tax assets, warrant valuation and stock-based compensation expense. Actual results could differ from those estimates. | ||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents. For purposes of the Consolidated Balance Sheets and the Consolidated Statements of Cash Flows, the Company considers all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents. Cash and cash equivalents represent amounts held by the Company for use by the Company and are recorded at cost, which approximates fair value. | ||||||||
Investments | Investments. In August 2010, the Company acquired less than a 5% equity interest in privately-held Driverside, Inc., a Delaware corporation (“Driverside”), for $1.0 million. Driverside provides consumers with a broad set of content, features, tools, technology, systems, products, services and programs related to the efficient ownership of motor vehicles. The Company received 1,352,082 shares of Series C Preferred Stock in Driverside for its investment. The Company made an additional investment in Driverside in 2011 for $16,737. The Company recorded the investments in Driverside at cost because the Company does not have significant influence over Driverside. In 2011, Driverside merged with another entity and the Company received a cash payment of $823,000, representing the Company’s pro rata share of the initial merger consideration. The $823,000 received at closing of the transaction was recorded as a reduction to the Driverside investment on the Company’s consolidated balance sheet. In 2012 the Company received $326,000, which represented its pro rata share of contingent payments upon milestones achieved by Driverside. Of the $326,000 received in 2012, $194,000 was recorded as a complete reduction to the investment in Driverside and $132,000 was recorded as other income. In 2013 the Company received $108,000 from Driverside, which represented its pro rata share of amounts released from an escrow account established to satisfy post-closing indemnification claims. The Company recorded the $108,000 as other income. There are no further amounts due associated with the Driverside investment. | ||||||||
In September 2013, the Company entered into a Contribution Agreement with privately-held AutoWeb, Inc., a Delaware corporation (“AutoWeb”), pursuant to Autobytel contributed to AutoWeb $2.5 million and assigned to AutoWeb all the ownership interests in the autoweb.com domain name and two registered trademarks related to the AutoWeb name and related goodwill in exchange for 8,000 shares of AutoWeb Series A Preferred Stock, $0.01 par value per share. The 8,000 shares of AutoWeb Series A Preferred Stock are convertible into AutoWeb common stock on a one-for-one basis (subject to adjustments for stock splits, stock dividends, combinations and recapitalizations) and represented 16% of all issued and outstanding common stock of AutoWeb, on a fully diluted basis, as of September 18, 2013. The Company also obtained an option to acquire an additional 5,000 shares of AutoWeb Series A Preferred Stock at a per share exercise price of $500, which option expires September 18, 2015. In connection with this investment, the Company also entered into arrangements with AutoWeb to use the AutoWeb pay-per-click, auction-driven automotive marketplace technology platform as both a publisher and as an advertiser. Upon the occurrence of a liquidation event (i.e., a liquidation, dissolution or winding up of AutoWeb; a consolidation or merger where AutoWeb is not the surviving entity; a consolidation or merger where AutoWeb is the surviving entity and either (i) the rights of the Series A Preferred Stock are changed, or (ii) the Series A Preferred Stock is exchanged for cash, securities or property; or a sale or transfer of all or substantially all of AutoWeb’s assets), the Series A Preferred Stock is entitled to a liquidation preference of the greater of (i) $1,000 per share (subject to adjustments for stock splits, stock dividends, combinations and recapitalizations); and (ii) the amount that would be distributed with respect to AutoWeb’s common stock, assuming full conversion of the Series A Preferred Stock into common stock. | |||||||||
In November 2014, the Company entered into a Series B Preferred Stock Purchase Agreement with AutoWeb, pursuant to which we paid $880,394 in exchange for 1,076 shares of AutoWeb Series B Preferred Stock, $0.01 par value per share. The Company’s combined ownership of the issued and outstanding capital stock of AutoWeb was 15.7% as of December 31, 2014. | |||||||||
In September 2013, the Company invested $150,000 in privately-held SaleMove, Inc., a Delaware corporation (“SaleMove”), in the form of a convertible promissory note. The convertible promissory note accrues interest at an annual rate of 6.0% and is due and payable in full on September 1, 2015 unless converted prior to the maturity date. The convertible note will be converted into preferred stock of SaleMove in the event of a preferred stock financing by SaleMove of at least $1.0 million prior to the maturity date of the convertible note. The Company recorded the $150,000 note as an other current asset on the Consolidated Balance Sheet as of December 31, 2014. In October 2013, the Company entered into an agreement with SaleMove to become the exclusive provider to the automotive industry of SaleMove’s technology for enhancing communications with consumers. SaleMove’s patent-pending technology allows Dealers and Manufacturers to enhance the online shopping experience by interacting with consumers in real-time, including live video, audio and text-based chat or by phone. The Company and SaleMove will equally share in revenues from automotive-related sales of the SaleMove products and services. In connection with this reseller arrangement, the Company advanced to SaleMove $1.0 million to fund SaleMove’s fifty percent share of various product development, marketing and sales costs and expenses, with the advanced funds to be recovered by the Company from SaleMove’s share of sales revenue. As of December 31, 2014 and 2013, $1.0 million and $0.2 million had been advanced to SaleMove, respectively. In November 2014 the Company invested an additional $400,000 in SaleMove in the form of a convertible promissory note. The convertible promissory note accrues interest at an annual rate of 6.0% and is due and payable in full on November 18, 2016 unless converted prior to the maturity date. The convertible note will be converted into preferred stock of SaleMove in the event of a preferred stock financing by SaleMove of at least $1.0 million prior to the maturity date of the convertible note. The Company recorded the $400,000 note as an investment on the Consolidated Balance Sheet as of December 31, 2014. | |||||||||
In December 2014, the Company entered into a Series Seed Preferred Stock Purchase Agreement with GoMoto, Inc. (“GoMoto”) in which Autobytel paid $100,000 for 317,460 Series Seed Preferred Stock, $0.001 par value per share. The investment in GoMoto was recorded at cost because the Company does not have significant influence over GoMoto. | |||||||||
Accounts Receivable | Accounts Receivable. Credit is extended to customers based on an evaluation of the customer’s financial condition, and when credit is extended, collateral is generally not required. Interest is not normally charged on receivables. | ||||||||
Allowances for Bad Debts and Customer Credits | Allowances for Bad Debts and Customer Credits. The allowance for bad debts is an estimate of bad debt expense that could result from the inability or refusal of customers to pay for services. Additions to the estimated allowance for bad debts are recorded to sales and marketing expenses and are based on factors such as historical write-off percentages, the current business environment and known concerns within the current aging of accounts receivable. Reductions in the estimated allowance for bad debts due to subsequent cash recoveries are recorded as a decrease in sales and marketing expenses. As specific bad debts are identified, they are written-off against the previously established estimated allowance for bad debts with no impact on operating expenses. | ||||||||
The allowance for customer credits is an estimate of adjustments for services that do not meet the customer requirements. Additions to the estimated allowance for customer credits are recorded as a reduction of revenues and are based on the Company’s historical experience of: (i) the amount of credits issued; (ii) the length of time after services are rendered that the credits are issued; (iii) other factors known at the time; and (iv) future expectations. Reductions in the estimated allowance for customer credits are recorded as an increase in revenues. As specific customer credits are identified, they are written-off against the previously established estimated allowance for customer credits with no impact on revenues. | |||||||||
If there is a decline in the general economic environment that negatively affects the financial condition of the Company’s customers or an increase in the number of customers that are dissatisfied with their services, additional estimated allowances for bad debts and customer credits may be required, and the impact on the Company’s business, results of operations, financial condition, earnings per share, cash flow or the trading price of our stock could be material. | |||||||||
Contingencies | Contingencies. From time to time the Company may be subject to proceedings, lawsuits and other claims. The Company assesses the likelihood of any adverse judgments or outcomes of these matters as well as potential ranges of probable losses. The Company records a loss contingency when an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. The amount of allowances required, if any, for these contingencies is determined after analysis of each individual case. The amount of allowances may change in the future if there are new material developments in each matter. Gain contingencies are not recorded until all elements necessary to realize the revenue are present. Any legal fees incurred in connection with a contingency are expensed as incurred. | ||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments. The Company records its financial assets and liabilities at fair value, which is defined under the applicable accounting standards as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measure date. The Company uses valuation techniques to measure fair value, maximizing the use of observable outputs and minimizing the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: | ||||||||
Level 1 – Quoted prices in active markets for identical assets or liabilities. | |||||||||
Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||
Level 3 – Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation. | |||||||||
Cash equivalents, accounts receivable, net of allowance, accounts payable and accrued liabilities, are carried at cost, which management believes approximates fair value because of the short-term maturity of these instruments. | |||||||||
The Company’s investments at December 31, 2014 and 2013 consist primarily of investments in SaleMove and AutoWeb and are recorded at cost. Although there is no established market for these investments, the Company evaluated the investments for impairment by comparing them to an estimated fair value and determined that no impairment existed. To determine the estimated fair value for the Company’s investment in SaleMove, the Company analyzed the discounted future cash flows of Autobytel’s sales of SaleMove products. To determine the estimated fair value for the investment in AutoWeb, the Company analyzed participants in the Series B round of financing in November 2014. | |||||||||
Variable Interest Entities | Variable Interest Entities. The Company has investments in certain entities that are considered variable interest entities (“VIEs”) under GAAP. The Company has concluded that their investment in SaleMove qualifies as a variable interest and SaleMove is a VIE. VIEs are legal entities in which the equity investors do not have sufficient equity at risk for the entity to independently finance its activities or the collective holders do not have the power through voting or similar rights to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the expected losses of the entity, or the right to receive expected residual returns of the entity. Consolidation of a VIE is considered appropriate if a reporting entity is the primary beneficiary, the party that has both significant influence and control over the VIE. Management periodically performs a qualitative analysis to determine if the Company is the primary beneficiary of a VIE. This analysis includes review of the VIEs’ capital structures, contractual terms, and primary activities, including the Company’s ability to direct the activities of the VIEs and obligations to absorb losses, or the right to receive benefits, significant to the VIEs. Additionally, changes in our various equity investments have in the past resulted in a reconsideration event. | ||||||||
Based on Autobytel’s analysis for the periods presented in this report, it is not the primary beneficiary of SaleMove. Accordingly, SaleMove does not meet the criteria for consolidation. The Company’s investment in SaleMove is carried at cost. The $150,000 and $400,000 notes receivable from Sale Move are classified as an other current asset and investment on the consolidated balance sheet, respectively, as of December 31, 2014. The $1.0 million in advances to SaleMove are classified as an other long-term asset on the consolidated balance sheet as of December 31, 2014. As of December 31, 2013, the $150,000 notes receivable and $0.2 million in advances was classified as an investment and an other long-term asset on the consolidated balance sheet, respectively. The carrying value and maximum potential loss exposure of VIEs totaled $1.6 million as of December 31, 2014, and $0.4 million as of December 31, 2013. | |||||||||
Concentration of Credit Risk and Risks Due to Significant Customers | Concentration of Credit Risk and Risks Due to Significant Customers. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, investments and accounts receivable. Cash and cash equivalents are primarily maintained with two financial institutions in the United States. Deposits held by banks exceed the amount of insurance provided for such deposits. Generally these deposits may be redeemed upon demand. Accounts receivable are primarily derived from fees billed to automotive Dealers and automotive Manufacturers. | ||||||||
The Company has a concentration of credit risk with its automotive industry related accounts receivable balances, particularly with Urban Science Applications (which represents several Manufacturer programs), General Motors and Jumpstart. During 2014, approximately 27% of the Company’s total revenues were derived from these three customers, and approximately 41% or $7.8 million of gross accounts receivable related to these three customers at December 31, 2014. In 2014, Urban Science Applications accounted for 19% of total revenues and 23% of the total accounts receivable as of December 31, 2014. | |||||||||
During 2013, approximately 30% of the Company’s total revenues were derived from AutoNation, General Motors and Urban Science Applications, and approximately 40% or $5.8 million of gross accounts receivable related to these three customers at December 31, 2013. In 2013, Urban Science Applications accounted for 18% of total revenues and 23% of the total accounts receivable as of December 31, 2013. | |||||||||
Property and Equipment | Property and Equipment. Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is provided using the straight-line method over the estimated useful lives of the respective assets, generally three years. Amortization of leasehold improvements is provided using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements. Repair and maintenance costs are charged to operating expenses as incurred. Gains or losses resulting from the retirement or sale of property and equipment are recorded as operating income or expenses, respectively. | ||||||||
Operating Leases | Operating Leases. The Company leases office space and certain office equipment under operating lease agreements which expire on various dates through 2019, with options to renew on expiration of the original lease terms. | ||||||||
Reimbursed tenant improvements are considered in determining straight-line rent expense and are amortized over the shorter of their estimated useful lives or the lease term. The lease term begins on the date of initial possession of the leased property for purposes of recognizing rent expense on a straight-line basis over the term of the lease. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease term. | |||||||||
Capitalized Internal Use Software and Website Development Costs | Capitalized Internal Use Software and Website Development Costs. The Company capitalizes costs to develop internal use software in accordance with the Internal-Use Software and the Website Development Costs Topics, which require the capitalization of external and internal computer software costs and website development costs, respectively, incurred during the application development stage. The application development stage is characterized by software design and configuration activities, coding, testing and installation. Training and maintenance costs are expensed as incurred while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. Capitalized internal use software development costs are amortized using the straight-line method over an estimated useful life of three to five years. Capitalized website development costs, once placed in service, are amortized using the straight-line method over the estimated useful life of the related websites. The Company capitalized $0.6 million and $82,000 of such costs for the years ended December 31, 2014 and 2013, respectively. | ||||||||
Impairment of Long-Lived Assets and Intangible Assets | Impairment of Long-Lived Assets and Intangible Assets. The Company periodically reviews long-lived assets to determine if there is any impairment of these assets. The Company assesses the impairment of these assets, or the need to accelerate amortization, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Judgments regarding the existence of impairment indicators are based on legal factors, market conditions and operational performance of the long-lived assets and other intangibles. Future events could cause the Company to conclude that impairment indicators exist and that the assets should be reviewed to determine their fair value. The Company assesses the assets for impairment based on the estimated future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying amount over its fair value. Fair value is generally determined based on a valuation process that provides an estimate of a fair value of these assets using a discounted cash flow model, which includes many assumptions and estimates. Once the valuation is determined, the Company would write-down these assets to their determined fair value, if necessary. Any write-down could have a material adverse effect on the Company’s financial condition and results of operations. | ||||||||
Goodwill | Goodwill. Goodwill represents the excess of the purchase price for business acquisitions over the fair value of identifiable assets and liabilities acquired. The Company evaluates the carrying value of enterprise goodwill for impairment. Testing for impairment of goodwill is a two-step process. The first step requires the Company to compare the enterprise’s carrying value to its fair value. If the fair value is less than the carrying value, enterprise goodwill is potentially impaired and the Company then completes the second step to measure the impairment loss, if any. The second step requires the calculation of the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets from the fair value of the reporting unit. If the implied fair value of goodwill is less than the carrying amount of enterprise goodwill, an impairment loss is recognized equal to the difference. The Company evaluates enterprise goodwill, at a minimum, on an annual basis, in the fourth quarter of each year or whenever events or changes in circumstances suggest that the carrying amount of goodwill may be impaired. | ||||||||
Revenue Recognition | Revenue Recognition. Lead fees consist of fees from the sale of Leads for new and used vehicles and Leads for vehicle financing. Fees paid by customers participating in the Company’s Lead programs are comprised of monthly transaction and/or subscription fees. Advertising revenues represent fees for display advertising on Company’s Websites. | ||||||||
The Company recognizes revenues when evidence of an arrangement exists, pricing is fixed and determinable, collection is reasonably assured and delivery or performance of service has occurred. Lead fees are generally recognized as revenues in the period the service is provided. Advertising revenues are generally recognized in the period the advertisements are displayed on Company Websites. Fees billed prior to providing services are deferred, as they do not satisfy all U.S. GAAP revenue recognition criteria. Deferred revenues are recognized as revenue over the periods services are provided. | |||||||||
Cost of Revenues | Cost of Revenues. Cost of revenues consists of Lead and traffic acquisition costs and other cost of revenues. Lead and traffic acquisition costs consist of payments made to the Company’s Lead providers, including internet portals and on-line automotive information providers. Other cost of revenues consists of search engine marketing (“SEM”) and fees paid to third parties for data and content, including search engine optimization (“SEO”) activity, included on the Company’s properties, connectivity costs and development costs related to the Company Websites, compensation related expense and technology license fees, server equipment depreciation and technology amortization directly related to Company Websites. SEM, sometimes referred to as paid search marketing, is the practice of bidding on keywords on search engines to drive traffic to a website. | ||||||||
Income Taxes | Income Taxes. The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance, if necessary, to reduce deferred tax assets to an amount it believes is more likely than not to be realized. | ||||||||
Computation of Basic and Diluted Net Earnings per Share | Computation of Basic and Diluted Net Earnings per Share. Basic net earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted net earnings per share is computed using the weighted average number of common shares, and if dilutive, potential common shares outstanding, as determined under the treasury stock and if-converted method, during the period. Potential common shares consist of common shares issuable upon the exercise of stock options, common shares issuable upon the exercise of warrants described below and common shares issuable upon conversion of the note described in Note 5. | ||||||||
The following are the share amounts utilized to compute the basic and diluted net earnings per share for the years ended December 31: | |||||||||
2014 | 2013 | ||||||||
Basic Shares: | |||||||||
Weighted average common shares outstanding | 8,998,035 | 8,883,357 | |||||||
Weighted average common shares repurchased | (18,138 | ) | — | ||||||
Basic Shares | 8,979,897 | 8,883,357 | |||||||
Diluted Shares: | |||||||||
Basic Shares | 8,979,897 | 8,883,357 | |||||||
Weighted average dilutive securities | 2,232,011 | 1,732,596 | |||||||
Dilutive Shares | 11,211,908 | 10,615,953 | |||||||
For the years ended December 31, 2014 and 2013, weighted average dilutive securities included dilutive options, warrants and convertible debt. | |||||||||
Potentially dilutive securities representing approximately 1.1 million shares of common stock for both years ended December 31, 2014 and 2013 were excluded from the computation of diluted income per share for these periods because their effect would have been anti-dilutive. | |||||||||
Share-Based Compensation | Share-Based Compensation. The Company grants restricted stock and stock option awards (the “Awards”) under several of its share-based compensation Plans (the “Plans”), that are more fully described in Note 9. The Company recognizes share-based compensation based on the Awards’ fair value, net of estimated forfeitures on a straight line basis over the requisite service periods, which is generally over the awards’ respective vesting period, or on an accelerated basis over the estimated performance periods for options with performance conditions. | ||||||||
Restricted stock fair value is measured on the grant date based on the quoted market price of the Company’s common stock, and the stock option fair value is estimated on the grant date using the Black-Scholes option pricing model based on the underlying common stock closing price as of the date of grant, the expected term, stock price volatility and risk-free interest rates. | |||||||||
Business Segment | Business Segment. The Company conducts its business within the United States and within one business segment which is defined as providing automotive and marketing services. The Company’s operations are aggregated into a single reportable operating segment based upon similar economic and operating characteristics as well as similar markets. | ||||||||
Advertising Expense | Advertising Expense. Advertising costs are expensed in the period incurred. Advertising expense in 2014 and 2013 was $1.6 million and $1.8 million, respectively. | ||||||||
Recent Accounting Pronouncements | Accounting Standards Codification 805 “Business Combinations - Pushdown Accounting, a Consensus of the FASB Emerging Issues Task Force.” In November 2014, Accounting Standards Update (“ASU”) No. 2014-17, “Business Combinations (Topic 805) – Pushdown Accounting, a Consensus of the FASB Emerging Issues Task Force” was issued. The objective of this ASU is to provide guidance on whether and at what threshold an acquired entity that is a business or nonprofit activity can apply pushdown accounting in its separate financial statements. The amendments in this ASU are effective on November 18, 2014. This ASU did not have a material impact on the Company’s consolidated financial results. | ||||||||
Accounting Standards Codification 606 “Revenue from Contracts with Customers.” In May 2014, ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” was issued. This ASU requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on their consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor have they determined the effect of the standard on the ongoing financial reporting. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Computation of basic and diluted net earnings (loss) per share | The following are the share amounts utilized to compute the basic and diluted net earnings per share for the years ended December 31: | ||||||||
2014 | 2013 | ||||||||
Basic Shares: | |||||||||
Weighted average common shares outstanding | 8,998,035 | 8,883,357 | |||||||
Weighted average common shares repurchased | (18,138 | ) | — | ||||||
Basic Shares | 8,979,897 | 8,883,357 | |||||||
Diluted Shares: | |||||||||
Basic Shares | 8,979,897 | 8,883,357 | |||||||
Weighted average dilutive securities | 2,232,011 | 1,732,596 | |||||||
Dilutive Shares | 11,211,908 | 10,615,953 | |||||||
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2014 | ||||||||||
Auto USA [Member] | ||||||||||
Fair value of consideration transferred | The AutoUSA Acquisition Date fair value of the consideration transferred totaled $11.9 million, which consisted of the following: | |||||||||
(in thousands) | ||||||||||
Cash (including a working capital adjustment of $44) | $ | 10,044 | ||||||||
Convertible subordinated promissory note | 1,300 | |||||||||
Warrant to purchase $1.0 million of Company common stock | 510 | |||||||||
$ | 11,854 | |||||||||
Fair value of assets and liabilities assumed | ||||||||||
(in thousands) | ||||||||||
Net identifiable assets acquired | $ | 758 | ||||||||
Long-lived intangible assets acquired | 3,750 | |||||||||
Goodwill | 7,346 | |||||||||
$ | 11,854 | |||||||||
Acquired intangible assets | The acquired intangible assets include the following: | |||||||||
Estimated | Estimated | |||||||||
Valuation Method | Fair Value | Useful Life (1) | ||||||||
(in thousands) | (years) | |||||||||
Non-compete agreements | Discounted cash flow(2) | $ | 90 | 2 | ||||||
Customer relationships | Excess of earnings(3) | 2,660 | 5 | |||||||
Trademark/trade names | Relief from Royalty(4) | 1,000 | 5 | |||||||
Total purchased intangible assets | $ | 3,750 | ||||||||
(1) | Determination of the estimated useful lives of the individual categories of purchased intangible assets was based on the nature of the applicable intangible asset and the expected future cash flows to be derived from such intangible asset. Amortization of intangible assets with definite lives are recognized over the shorter of the respective lives of the agreement or the period of time the assets are expected to contribute to future cash flows. | |||||||||
-2 | The non-compete agreement fair value was derived by calculating the difference between the present value of the Company's forecasted cash flows with the agreements in place and without the agreements in place. | |||||||||
-3 | The excess of earnings method estimates a purchased intangible asset's value based on the present value of the prospective net cash flows (or excess earnings) attributable to it. The value attributed to these intangibles was based on projected net cash inflows from existing contracts or relationships. | |||||||||
-4 | The relief from royalty method is an earnings approach which assesses the royalty savings an entity realizes since it owns the asset and isn’t required to pay a third party a license fee for its use. | |||||||||
Unaudited pro forma consolidated results of operations | The unaudited pro forma consolidated results of operations, assuming the acquisition had occurred on January 1, 2013, are as follows (in thousands): | |||||||||
Twelve Months Ended | ||||||||||
31-Dec-13 | ||||||||||
Unaudited pro forma consolidated results: | ||||||||||
Revenues | $ | 104,461 | ||||||||
Net income | 39,614 | |||||||||
Advanced Mobile [Member] | ||||||||||
Fair value of consideration transferred | The Advanced Mobile Acquisition Date fair value of the consideration transferred totaled $3.4 million, which consisted of the following: | |||||||||
(in thousands) | ||||||||||
Cash (including working capital adjustment of $70) | $ | 2,570 | ||||||||
Contingent consideration | 825 | |||||||||
$ | 3,395 | |||||||||
Fair value of assets and liabilities assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed at the Advanced Mobile Acquisition Date. | |||||||||
(in thousands) | ||||||||||
Net identifiable assets acquired | $ | 90 | ||||||||
Definite-lived intangible assets acquired | 1,380 | |||||||||
Goodwill | 1,925 | |||||||||
Net assets acquired | $ | 3,395 | ||||||||
Acquired intangible assets | The acquired intangible assets include the following: | |||||||||
Estimated | Estimated | |||||||||
Valuation Method | Fair Value | Useful Life (1) | ||||||||
(in thousands) | (years) | |||||||||
Non-compete agreements | Discounted cash flow (2) | $ | 110 | 5 | ||||||
Customer relationships | Excess of earnings (3) | 450 | 2 | |||||||
Developed technology | Excess of earnings (3) | 820 | 5 | |||||||
Total purchased intangible assets | $ | 1,380 | ||||||||
-1 | Determination of the estimated useful lives of the individual categories of purchased intangible assets was based on the nature of the applicable intangible asset and the expected future cash flows to be derived from such intangible asset. Amortization of intangible assets with definite lives are recognized over the shorter of the respective lives of the agreement or the period of time the assets are expected to contribute to future cash flows. | |||||||||
-2 | The non-compete agreement fair value was derived by calculating the difference between the present value of the Company’s forecasted cash flows with the agreements in place and without the agreements in place. | |||||||||
-3 | The excess of earnings method estimates a purchased intangible asset’s value based on the present value of the prospective net cash flows (or excess earnings) attributable to it. The value attributed to these intangibles was based on projected net cash inflows from existing contracts or relationships. | |||||||||
Unaudited pro forma consolidated results of operations | ||||||||||
The unaudited pro forma consolidated results of operations, assuming the acquisition had occurred on January 1, 2013, are as follows (in thousands): | ||||||||||
Twelve Months Ended | ||||||||||
31-Dec-13 | ||||||||||
Unaudited pro forma consolidated results: | ||||||||||
Revenues | $ | 79,083 | ||||||||
Net income | 38,038 | |||||||||
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Schedule of Fair Value of Investments | |||||||||
Note | |||||||||
receivable- | |||||||||
Description | current | Investments | |||||||
Balance at December 31, 2013 | $ | — | $ | 2,650 | |||||
Total gains or (losses) (realized or unrealized) | — | — | |||||||
Purchases | — | 1,380 | |||||||
Sales | — | — | |||||||
Transfers | 150 | (150 | ) | ||||||
Balance at December 31, 2014 | $ | 150 | $ | 3,880 | |||||
Selected_Balance_Sheet_Account1
Selected Balance Sheet Accounts (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Selected Balance Sheet Accounts [Abstract] | ||||||||||||||||||||||||||
Property and equipment | Property and equipment consists of the following: | |||||||||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Computer software and hardware and capitalized internal use software | $ | 12,990 | $ | 11,924 | ||||||||||||||||||||||
Furniture and equipment | 1,271 | 1,256 | ||||||||||||||||||||||||
Leasehold improvements | 957 | 937 | ||||||||||||||||||||||||
15,218 | 14,117 | |||||||||||||||||||||||||
Less—Accumulated depreciation and amortization | (13,314 | ) | (12,569 | ) | ||||||||||||||||||||||
Property and Equipment, net | $ | 1,904 | $ | 1,548 | ||||||||||||||||||||||
Amortization of intangible assets, estimated useful lives | The Company’s intangible assets will be amortized over the following estimated useful lives (in thousands): | |||||||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||||||||||||||
Intangible Asset | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||||
Estimated Useful Life | ||||||||||||||||||||||||||
Trademarks/trade names/licenses/domains | 5 years | $ | 6,574 | $ | (5,594 | ) | $ | 980 | $ | 5,582 | $ | (5,209 | ) | $ | 373 | |||||||||||
Software and publications | 3 years | 1,300 | (1,300 | ) | — | 1,300 | (1,300 | ) | — | |||||||||||||||||
Customer relationships | 2 - 5 years | 5,074 | (2,696 | ) | 2,378 | 2,320 | (1,926 | ) | 394 | |||||||||||||||||
Employment/non-compete agreements | 5 years | 700 | (500 | ) | 200 | 610 | (335 | ) | 275 | |||||||||||||||||
Developed technology | 5 years | 820 | (205 | ) | 615 | 820 | (41 | ) | 779 | |||||||||||||||||
$ | 14,468 | $ | (10,295 | ) | $ | 4,173 | $ | 10,632 | $ | (8,811 | ) | $ | 1,821 | |||||||||||||
Amortization expense | Amortization expense for intangible assets for the next five years is as follows: | |||||||||||||||||||||||||
Year | Amortization Expense | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
2015 | $ | 1,394 | ||||||||||||||||||||||||
2016 | 942 | |||||||||||||||||||||||||
2017 | 926 | |||||||||||||||||||||||||
2018 | 879 | |||||||||||||||||||||||||
2019 | 32 | |||||||||||||||||||||||||
$ | 4,173 | |||||||||||||||||||||||||
Goodwill | As of December 31, 2014 and 2013, goodwill consisted of the following: | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Goodwill as of December 31, 2013 | $ | 13,602 | ||||||||||||||||||||||||
Acquisition of AutoUSA | 7,346 | |||||||||||||||||||||||||
Goodwill as December 31, 2014 | $ | 20,948 | ||||||||||||||||||||||||
Accrued expenses and other current liabilities | As of December 31, 2014 and 2013, accrued expenses and other current liabilities consisted of the following: | |||||||||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||
Compensation and related costs and professional fees | $ | 4,989 | $ | 3,540 | ||||||||||||||||||||||
Other accrued expenses | 3,543 | 3,209 | ||||||||||||||||||||||||
Amounts due to customers | 267 | 208 | ||||||||||||||||||||||||
Other current liabilities | 696 | 691 | ||||||||||||||||||||||||
Total accrued expenses and other current liabilities | $ | 9,495 | $ | 7,648 | ||||||||||||||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Future minimum lease payments | The Company’s future minimum lease payments on leases with non-cancelable terms in excess of one year were as follows (in thousands): | ||||
Years Ending December 31, | |||||
2015 | $ | 678 | |||
2016 | 614 | ||||
Thereafter | 442 | ||||
$ | 1,734 | ||||
Stockholders_Equity_Tables
Stockholdersb Equity (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Share-based compensation expense included in costs and expenses | Share-based compensation expense is included in costs and expenses in the Consolidated Statements of Income and Comprehensive Income as follows: | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(in thousands) | |||||||||||||||||
Share-based compensation expense: | |||||||||||||||||
Cost of revenues | $ | 69 | $ | 50 | |||||||||||||
Sales and marketing | 544 | 153 | |||||||||||||||
Technology support | 251 | 206 | |||||||||||||||
General and administrative | 562 | 297 | |||||||||||||||
Share-based compensation expense | 1,426 | 706 | |||||||||||||||
Amount capitalized to internal use software | 5 | 2 | |||||||||||||||
Total share-based compensation expense | $ | 1,421 | $ | 704 | |||||||||||||
Fair value of stock options granted using the following weighted average assumptions | Awards granted under the Company’s stock option plans, the 2013 Advanced Mobile Inducement Options and 2014 AutoUSA Inducement Options were estimated to have a weighted average grant date fair value per share of $6.86 and $2.57 for the years ended December 31, 2014 and 2013, respectively, based on the Black-Scholes option-pricing model on the date of grant using the following weighted average assumptions: | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Expected volatility | 56 | % | 65 | % | |||||||||||||
Expected risk-free interest rate | 1.4 | % | 0.8 | % | |||||||||||||
Expected life (years) | 4.3 | 4.3 | |||||||||||||||
Outstanding stock options | A summary of the Company’s outstanding stock options as of December 31, 2014, and changes during the year then ended is presented below: | ||||||||||||||||
Number of | Weighted Average | Weighted | Aggregate | ||||||||||||||
Options | Exercise Price | Average | Intrinsic | ||||||||||||||
per Share | Remaining | Value | |||||||||||||||
Contractual | |||||||||||||||||
Term | |||||||||||||||||
(years) | (thousands) | ||||||||||||||||
Outstanding at December 31, 2013 | 1,631,803 | $ | 5.59 | 4.5 | |||||||||||||
Granted | 513,750 | 15.26 | |||||||||||||||
Exercised | (134,668 | ) | 4.18 | ||||||||||||||
Forfeited or expired | (39,616 | ) | 28.94 | ||||||||||||||
Outstanding at December 31, 2014 | 1,971,269 | $ | 7.73 | 4.5 | $ | 9,274 | |||||||||||
Vested and expected to vest at December 31, 2014 | 1,909,670 | $ | 7.6 | 4.5 | $ | 9,167 | |||||||||||
Exercisable at December 31, 2014 | 1,318,440 | $ | 5.11 | 3.8 | $ | 8,346 | |||||||||||
Shares reserved for issuance | The Company had the following shares of common stock reserved for future issuance upon the exercise or issuance of equity instruments as of December 31, 2014: | ||||||||||||||||
Number of Shares | |||||||||||||||||
Stock options outstanding | 1,971,269 | ||||||||||||||||
Authorized for future grants under stock-based incentive plans | 1,054,066 | ||||||||||||||||
Reserved for exercise of Warrants | 469,930 | ||||||||||||||||
Reserved for conversion of promissory notes | 1,136,468 | ||||||||||||||||
Total | 4,631,733 | ||||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Income tax expense (benefit) from continuing operations | Income tax expense (benefit) from continuing operations consists of the following for the years ended December 31: | ||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Current: | |||||||||
Federal | $ | 129 | $ | 95 | |||||
State | 150 | 113 | |||||||
279 | 208 | ||||||||
Deferred: | |||||||||
Federal | 1,714 | 1,353 | |||||||
State | 385 | 902 | |||||||
2,099 | 2,255 | ||||||||
Valuation allowance release | (341 | ) | (37,527 | ) | |||||
Total income tax expense (benefit) | $ | 2,037 | $ | (35,064 | ) | ||||
The reconciliations of the U.S. federal statutory rate to the effective income tax rate | The reconciliations of the U.S. federal statutory rate to the effective income tax rate for the years ended December 31, 2014 and 2013 are as follows: | ||||||||
2014 | 2013 | ||||||||
Tax provision at U.S. federal statutory rates | 34 | % | 34 | % | |||||
State taxes | 2.6 | 3.5 | |||||||
Federal rate adjustment | — | 34.6 | |||||||
State rate adjustment | — | 0.5 | |||||||
Deferred tax asset adjustments | 6.4 | 5.9 | |||||||
Non-deductible permanent items | 0.4 | 0.6 | |||||||
Stock options | — | 0.4 | |||||||
Other | 0.3 | 0.5 | |||||||
Change in valuation allowance | (6.3 | ) | (1,219.1 | ) | |||||
Effective income tax rate | 37.4 | % | (1,139.1 | %) | |||||
Deferred income taxes | Significant components of the Company’s deferred taxes as of December 31, 2014 and 2013 are as follows: | ||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Deferred tax assets: | |||||||||
Allowance for doubtful accounts | $ | 284 | $ | 149 | |||||
Accrued liabilities | 1,473 | 832 | |||||||
Net operating loss carry-forwards | 34,473 | 37,426 | |||||||
Fixed assets | 83 | 111 | |||||||
Intangible assets | 744 | 2,006 | |||||||
Share-based compensation expense | 1,566 | 1,143 | |||||||
Other | 286 | 184 | |||||||
Total gross deferred tax assets | 38,909 | 41,851 | |||||||
Valuation allowance | (6,015 | ) | (6,356 | ) | |||||
32,894 | 35,495 | ||||||||
Deferred tax liabilities: | |||||||||
Tax deductible goodwill | — | (843 | ) | ||||||
Total gross deferred tax liabilities | — | (843 | ) | ||||||
Net deferred tax assets | $ | 32,894 | $ | 34,652 | |||||
Federal and state net operating loss carry-forwards | The federal NOLs expire through 2031 as follows (in millions): | ||||||||
2021 | $15.20 | ||||||||
2022 | 1.7 | ||||||||
2023 | — | ||||||||
2024 | 4.1 | ||||||||
2025 | 7.7 | ||||||||
2026 | 25.5 | ||||||||
2027 | 15.5 | ||||||||
2028 | 5.2 | ||||||||
2029 | 7.7 | ||||||||
2030 | 10.6 | ||||||||
2031 | 1.3 | ||||||||
$94.50 | |||||||||
The state NOLs expire through 2031 as follows (in millions): | |||||||||
2015 | $ | 6.5 | |||||||
2016 | 20.6 | ||||||||
2017 | 3.2 | ||||||||
2028 | 2.7 | ||||||||
2029 | 5.8 | ||||||||
2030 | 11 | ||||||||
2031 | 1.2 | ||||||||
California NOLs | 51 | ||||||||
Other State NOLs | 8.4 | ||||||||
Total State NOLs | $ | 59.4 | |||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | ||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Balance at January 1, | $ | 636 | $ | 636 | |||||
Additions based on tax positions related to prior years | — | — | |||||||
Balance at December 31, | $ | 636 | $ | 636 | |||||
Quarterly_Financial_Data_Unaud1
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Schedule of quarterly financial information | Below is a summary table of the Company’s quarterly data for the years ended December 31, 2014 and December 31, 2013. | ||||||||||||||||||||||||||||||||
Quarter Ended | |||||||||||||||||||||||||||||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Jun 30, | Mar 31, | ||||||||||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2013 | 2013 | 2013 | 2013 | ||||||||||||||||||||||||||
(in thousands, except per-share amounts) | |||||||||||||||||||||||||||||||||
Total net revenues | $ | 26,041 | $ | 27,364 | $ | 25,913 | $ | 26,959 | $ | 20,693 | $ | 21,635 | $ | 17,771 | $ | 18,261 | |||||||||||||||||
Gross profit | $ | 10,404 | $ | 11,008 | $ | 10,316 | $ | 10,085 | $ | 8,089 | $ | 8,809 | $ | 6,956 | $ | 6,592 | |||||||||||||||||
Net income | $ | 1,117 | $ | 1,124 | $ | 801 | $ | 370 | $ | 36,150 | $ | 1,273 | $ | 386 | $ | 334 | |||||||||||||||||
Basic earnings per share | $ | 0.12 | $ | 0.12 | $ | 0.09 | $ | 0.04 | $ | 4.06 | $ | 0.14 | $ | 0.04 | $ | 0.04 | |||||||||||||||||
Diluted earnings per share | $ | 0.11 | $ | 0.11 | $ | 0.08 | $ | 0.04 | $ | 3.26 | $ | 0.13 | $ | 0.04 | $ | 0.04 | |||||||||||||||||
SCHEDULE_II_VALUATION_AND_QUAL1
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | |||||||||
Years Ended December 31, | |||||||||
2014 | 2013 | ||||||||
(in thousands) | |||||||||
Allowance for bad debts: | |||||||||
Beginning balance | $ | 294 | $ | 268 | |||||
Additions | 354 | 92 | |||||||
Write-offs | (158 | ) | (66 | ) | |||||
Ending balance | $ | 490 | $ | 294 | |||||
Allowance for customer credits: | |||||||||
Beginning balance | $ | 111 | $ | 158 | |||||
Additions | 1,037 | 511 | |||||||
Write-offs | (868 | ) | (558 | ) | |||||
Ending balance | $ | 280 | $ | 111 | |||||
Tax valuation allowance: | |||||||||
Beginning balance | $ | 6,356 | $ | 43,883 | |||||
Charged (credited) to tax expense | (341 | ) | (37,527 | ) | |||||
Ending balance | $ | 6,015 | $ | 6,356 | |||||
Organization_and_Operations_of1
Organization and Operations of Autobytel (Details Narrative) | 12 Months Ended | 1 Months Ended |
Dec. 31, 2014 | Oct. 31, 2013 | |
Date of incorporation | 17-May-96 | |
Advanced Mobile [Member] | ||
Date of acquisition | 1-Oct-13 | |
Auto USA [Member] | ||
Date of acquisition | 13-Jan-14 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Weighted average common shares outstanding, basic | ||
Weighted average common shares outstanding, basic | 8,998,035 | 8,883,357 |
Weighted average common shares outstanding, basic, repurchased | -18,138 | |
Weighted average common shares outstanding, basic, total | 8,979,897 | 8,883,357 |
Weighted average dilutive securities | ||
Weighted average common shares outstanding, basic, total | 8,979,897 | 8,883,357 |
Weighted average dilutive securities (in shares) | 2,232,011 | 1,732,596 |
Dilutive Shares (in shares) | 11,211,908 | 10,615,953 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details Narratives) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 01, 2015 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 01, 2013 | Nov. 30, 2013 | Aug. 16, 2010 | |
Investment [Line Items] | ||||||||
Investments acquired | $3,880,000 | $2,650,000 | ||||||
Carrying value of VIE | 1,600,000 | 400,000 | ||||||
Capitalized software and website development costs | 600,000 | 82,000 | ||||||
Antidilutive shares excluded for EPS computation | 1,100,000 | 1,100,000 | ||||||
Advertising expense | 1,600,000 | 1,800,000 | ||||||
Sales Revenue, Net [Member] | ||||||||
Investment [Line Items] | ||||||||
Concentration risk | 27.00% | 30.00% | ||||||
Sales Revenue, Net [Member] | Urban Science [Member] | ||||||||
Investment [Line Items] | ||||||||
Concentration risk | 19.00% | 18.00% | ||||||
Accounts Receivable [Member] | ||||||||
Investment [Line Items] | ||||||||
Concentration risk | 41.00% | 40.00% | ||||||
Accounts receivable | 7,800,000 | 5,800,000 | ||||||
Accounts Receivable [Member] | Urban Science [Member] | ||||||||
Investment [Line Items] | ||||||||
Concentration risk | 23.00% | 23.00% | ||||||
SaleMove Inc [Member] | ||||||||
Investment [Line Items] | ||||||||
Convertible promissory note | 150,000 | |||||||
Annual interest rate (in hundredths) | 6.00% | |||||||
Advances to affiliate | 200,000 | 1,000,000 | ||||||
Other current asset | 150,000 | |||||||
Investment | 400,000 | 150,000 | ||||||
Other long-term asset | 1,000,000 | 200,000 | ||||||
SaleMove Note 2 Inc [Member] | ||||||||
Investment [Line Items] | ||||||||
Convertible promissory note | 400,000 | |||||||
Annual interest rate (in hundredths) | 6.00% | |||||||
GoMoto [Member] | ||||||||
Investment [Line Items] | ||||||||
Payment to acquire investments | 100,000 | |||||||
Preferred stock acquired (in shares) | 317,460 | |||||||
Driverside [Member] | ||||||||
Investment [Line Items] | ||||||||
Equity Interest in Driverside Inc (in hundredths) | 5.00% | |||||||
Payment to acquire investments | 1,000,000 | |||||||
Proceeds from sale of business | 108,000 | 326,000 | 823,000 | |||||
Reduction to investment | 194,000 | |||||||
Other income | 108,000 | 132,000 | ||||||
Driverside Second Inv [Member] | ||||||||
Investment [Line Items] | ||||||||
Payment to acquire investments | 16,737 | |||||||
Preferred stock acquired (in shares) | 1,352,082 | |||||||
Autoweb [Member] | ||||||||
Investment [Line Items] | ||||||||
Equity Interest in Driverside Inc (in hundredths) | 15.70% | 16.00% | ||||||
Payment to acquire investments | $2,500,000 | $880,394 | ||||||
Preferred stock acquired (in shares) | 8,000 | 1,076 | ||||||
Option acquired | 5,000 |
Acquisitions_Details
Acquisitions (Details) (Auto USA [Member], USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Consideration transferred | $11,854 |
Cash [Member] | |
Consideration transferred | 10,044 |
Working Capital [Member] | |
Consideration transferred | 44 |
Convertible Notes Payable [Member] | |
Consideration transferred | 1,300 |
Warrant [Member] | |
Consideration transferred | $510 |
Acquisitions_Details_1
Acquisitions (Details 1) (Auto USA [Member], USD $) | Dec. 31, 2014 |
Auto USA [Member] | |
Assets Acquired (Liabilities Assumed), Net | |
Net identifiable assets acquired | $758,000 |
Definite-lived intangible assets acquired | 3,750,000 |
Goodwill | 7,346,000 |
Net assets acquired | $11,854,000 |
Acquisitions_Details_2
Acquisitions (Details 2) (Auto USA [Member], USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | |
Acquired Definite-Lived Intangible Assets | ||
Estimated Fair Value | $3,750 | |
Noncompete Agreements [Member] | ||
Acquired Definite-Lived Intangible Assets | ||
Valuation Method | Discounted cash flow | [1] |
Estimated Fair Value | 90 | |
Estimated Useful Life | 2 years | [2] |
Customer Relationships [Member] | ||
Acquired Definite-Lived Intangible Assets | ||
Valuation Method | Excess of earnings | [3] |
Estimated Fair Value | 2,660 | |
Estimated Useful Life | 5 years | [2] |
Trademarks and Trade Names [Member] | ||
Acquired Definite-Lived Intangible Assets | ||
Valuation Method | Relief from Royalty | [4] |
Estimated Fair Value | $1,000 | |
Estimated Useful Life | 5 years | [2] |
[1] | The non-compete agreement fair value was derived by calculating the difference between the present value of the Company's forecasted cash flows with the agreements in place and without the agreements in place. | |
[2] | Determination of the estimated useful lives of the individual categories of purchased intangible assets was based on the nature of the applicable intangible asset and the expected future cash flows to be derived from such intangible asset. Amortization of intangible assets with definite lives are recognized over the shorter of the respective lives of the agreement or the period of time the assets are expected to contribute to future cash flows. | |
[3] | The excess of earnings method estimates a purchased intangible asset's value based on the present value of the prospective net cash flows (or excess earnings) attributable to it. The value attributed to these intangibles was based on projected net cash inflows from existing contracts or relationships. | |
[4] | The relief from royalty method is an earnings approach which assesses the royalty savings an entity realizes since it owns the asset and isn't required to pay a third party a license fee for its use. |
Acquisitions_Details_3
Acquisitions (Details 3) (Auto USA [Member], USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Auto USA [Member] | |
Unaudited pro forma consolidated results | |
Revenue | $104,461 |
Net Income | $39,614 |
Acquisitions_Details_4
Acquisitions (Details 4) (Advanced Mobile [Member], USD $) | Oct. 31, 2013 |
In Thousands, unless otherwise specified | |
Consideration transferred | $3,395 |
Cash [Member] | |
Consideration transferred | 2,570 |
Working Capital [Member] | |
Consideration transferred | 70 |
Contingent Consideration [Member] | |
Consideration transferred | $825 |
Acquisitions_Details_5
Acquisitions (Details 5) (Advanced Mobile [Member], USD $) | Oct. 31, 2013 |
Advanced Mobile [Member] | |
Assets Acquired (Liabilities Assumed), Net | |
Net identifiable assets acquired | $90,000 |
Definite-lived intangible assets acquired | 1,380,000 |
Goodwill | 1,925,000 |
Net assets acquired | $3,395,000 |
Acquisitions_Details_6
Acquisitions (Details 6) (Advanced Mobile [Member], USD $) | 1 Months Ended | |
In Thousands, unless otherwise specified | Oct. 31, 2013 | |
Acquired Definite-Lived Intangible Assets | ||
Estimated Fair Value | $1,380 | |
Noncompete Agreements [Member] | ||
Acquired Definite-Lived Intangible Assets | ||
Valuation Method | Discounted cash flow | [1] |
Estimated Fair Value | 110 | |
Estimated Useful Life | 5 years | [2] |
Customer Relationships [Member] | ||
Acquired Definite-Lived Intangible Assets | ||
Valuation Method | Excess of earnings | [3] |
Estimated Fair Value | 450 | |
Estimated Useful Life | 2 years | [2] |
Developed Technology Rights [Member] | ||
Acquired Definite-Lived Intangible Assets | ||
Valuation Method | Excess of earnings | [3] |
Estimated Fair Value | $820 | |
Estimated Useful Life | 5 years | [2] |
[1] | The non-compete agreement fair value was derived by calculating the difference between the present value of the Company's forecasted cash flows with the agreements in place and without the agreements in place. | |
[2] | Determination of the estimated useful lives of the individual categories of purchased intangible assets was based on the nature of the applicable intangible asset and the expected future cash flows to be derived from such intangible asset. Amortization of intangible assets with definite lives are recognized over the shorter of the respective lives of the agreement or the period of time the assets are expected to contribute to future cash flows. | |
[3] | The excess of earnings method estimates a purchased intangible asset's value based on the present value of the prospective net cash flows (or excess earnings) attributable to it. The value attributed to these intangibles was based on projected net cash inflows from existing contracts or relationships. |
Acquisitions_Details_7
Acquisitions (Details 7) (Advanced Mobile [Member], USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Advanced Mobile [Member] | |
Unaudited pro forma consolidated results | |
Revenue | $79,083 |
Net Income | $38,038 |
Acquisitions_Details_Narrative
Acquisitions (Details Narratives) (USD $) | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Convertible subordinated promissory note | $5,000,000 | ||
Advanced Mobile [Member] | |||
Contingent consideration | |||
Contingent consideration, fair value | 825,000 | ||
Contingent consideration, potential payments | 1,500,000 | ||
Assets Acquired | |||
Goodwill | 1,925,000 | ||
Acquisition related costs | 300,000 | ||
Net assets acquired | 3,395,000 | ||
Auto USA [Member] | |||
Convertible subordinated promissory note fair value | 1,300,000 | ||
Convertible subordinated promissory note | 1,000,000 | ||
Conversion price per share | $16.34 | ||
Default interest rate maximum | 8.00% | ||
Warrant per share price | $7.35 | ||
Valuation assumptions | |||
Risk free rate | 1.60% | ||
Warrant term | 5 years | ||
Warrant exercise price | $14.30 | ||
Assets Acquired | |||
Goodwill | 7,346,000 | ||
Acquisition related costs | 1,100,000 | ||
Net assets acquired | 11,854,000 | ||
Auto USA [Member] | Convertible Notes Payable [Member] | |||
Principal convertible into shares of common stock upon meeting threshold | 30,600 | ||
Conversion price per share | $16.34 | ||
Default interest rate maximum | 8.00% | ||
Warrant issued | 69,930 | ||
Warrant value | $500,000 | ||
Valuation assumptions | |||
Market yield | 1.60% | ||
Volatilty | 65.00% |
Investments_Details
Investments (Details) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Notes Receivable Current [Member] | |
Balance at beginning of period | |
Total gains or (losses) (realized or unrealized) | |
Purchases | |
Sales | |
Transfers | 150 |
Balance at end of period | 150 |
Investments [Member] | |
Balance at beginning of period | 2,650 |
Total gains or (losses) (realized or unrealized) | |
Purchases | 1,380 |
Sales | |
Transfers | -150 |
Balance at end of period | $3,880 |
Investments_Details_Narrative
Investments (Details Narrative) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | |||||
Dec. 01, 2015 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 01, 2013 | Nov. 30, 2013 | Dec. 31, 2014 | Aug. 16, 2010 | |
SaleMove Inc [Member] | ||||||||
Convertible promissory note | $150,000 | |||||||
Annual interest rate (in hundredths) | 6.00% | |||||||
Advances to affiliate | 1,000,000 | 200,000 | ||||||
SaleMove Note 2 Inc [Member] | ||||||||
Convertible promissory note | 400,000 | |||||||
Annual interest rate (in hundredths) | 6.00% | |||||||
GoMoto [Member] | ||||||||
Payment to acquire investments | 100,000 | |||||||
Preferred stock acquired (in shares) | 317,460 | |||||||
Driverside [Member] | ||||||||
Equity Interest in Driverside Inc (in hundredths) | 5.00% | |||||||
Payment to acquire investments | 1,000,000 | |||||||
Proceeds from sale of business | 108,000 | 326,000 | 823,000 | |||||
Reduction to investment | 194,000 | |||||||
Other income | 108,000 | 132,000 | ||||||
Driverside Second Inv [Member] | ||||||||
Payment to acquire investments | 16,737 | |||||||
Preferred stock acquired (in shares) | 1,352,082 | |||||||
Autoweb [Member] | ||||||||
Equity Interest in Driverside Inc (in hundredths) | 16.00% | 15.70% | ||||||
Payment to acquire investments | $2,500,000 | $880,394 | ||||||
Preferred stock acquired (in shares) | 8,000 | 1,076 | ||||||
Option acquired | 5,000 | |||||||
Option exercise price | $500 |
Selected_Balance_Sheet_Account2
Selected Balance Sheet Accounts (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property and Equipment | ||
Computer software and hardware and capitalized internal use software | $12,990 | $11,924 |
Furniture and equipment | 1,271 | 1,256 |
Leasehold improvements | 957 | 937 |
Property and equipment, gross | 15,218 | 14,117 |
Less - Accumulated depreciation and amortization | -13,314 | -12,569 |
Property and equipment, net | $1,904 | $1,548 |
Selected_Balance_Sheet_Account3
Selected Balance Sheet Accounts (Details 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | |
Intangible Assets | |||
Intangible assets, gross | $14,468 | $10,632 | |
Accumulated amortization | -10,295 | -8,811 | |
Intangible assets, net | 4,173 | 1,821 | [1] |
Trademarks and Trade Names [Member] | |||
Intangible Assets | |||
Intangible assets, gross | 6,574 | 5,582 | |
Accumulated amortization | -5,594 | -5,209 | |
Intangible assets, net | 980 | 373 | |
Finite-Lived Intangible Assets | |||
Estimated Useful Life (in years) | 5 years | ||
Software and publications [Member] | |||
Intangible Assets | |||
Intangible assets, gross | 1,300 | 1,300 | |
Accumulated amortization | -1,300 | -1,300 | |
Intangible assets, net | |||
Finite-Lived Intangible Assets | |||
Estimated Useful Life (in years) | 3 years | ||
Customer Relationships [Member] | |||
Intangible Assets | |||
Intangible assets, gross | 5,074 | 2,320 | |
Accumulated amortization | -2,696 | -1,926 | |
Intangible assets, net | 2,378 | 394 | |
Customer Relationships [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets | |||
Estimated Useful Life (in years) | 2 years | ||
Customer Relationships [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets | |||
Estimated Useful Life (in years) | 5 years | ||
Noncompete Agreements [Member] | |||
Intangible Assets | |||
Intangible assets, gross | 700 | 610 | |
Accumulated amortization | -500 | -335 | |
Intangible assets, net | 200 | 275 | |
Developed Technology Rights [Member] | |||
Intangible Assets | |||
Intangible assets, gross | 820 | 820 | |
Accumulated amortization | -205 | -41 | |
Intangible assets, net | $615 | $779 | |
Finite-Lived Intangible Assets | |||
Estimated Useful Life (in years) | 5 years | ||
Employment/non-compete agreements [Member] | |||
Finite-Lived Intangible Assets | |||
Estimated Useful Life (in years) | 5 years | ||
[1] | Amounts were derived from audited financial statements |
Selected_Balance_Sheet_Account4
Selected Balance Sheet Accounts (Details 2) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Selected Balance Sheet Accounts [Abstract] | |
2015 | $1,394 |
2016 | 942 |
2017 | 926 |
2018 | 879 |
2019 | 32 |
Total | $4,173 |
Selected_Balance_Sheet_Account5
Selected Balance Sheet Accounts (Details 3) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Goodwill | |
Goodwill, beginning of period | $13,602 |
Goodwill acquired during period | 7,346 |
Goodwill, end of period | $20,948 |
Selected_Balance_Sheet_Account6
Selected Balance Sheet Accounts (Details 4) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Selected Balance Sheet Accounts [Abstract] | ||
Compensation and related costs | $4,989 | $3,540 |
Other accrued expenses | 3,543 | 3,209 |
Amounts due to customers | 267 | 208 |
Other current liabilities | 696 | 691 |
Total accrued expenses and other current liabilities | $9,495 | $7,648 |
Selected_Balance_Sheet_Account7
Selected Balance Sheet Accounts (Details Narrative) (USD $) | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 17, 2010 | ||
Property, Plant and Equipment [Line Items] | ||||
Capitalized internal use software, net of amortization | $900,000 | $600,000 | ||
Depreciation and amortization expense, property and equipment | 700,000 | 700,000 | ||
Depreciation and amortization, cost of revenues | 200,000 | 200,000 | ||
Depreciation and amortization, operating expenses | 500,000 | 500,000 | ||
Intangible assets acquired in business acquisitions | 9,700,000 | |||
Convertible note payable | 1,000,000 | 5,000,000 | [1] | |
Note maturity date | 31-Mar-17 | |||
Cyber [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Convertible note payable | 5,000,000 | |||
Fair value of note | 5,900,000 | |||
Market yield (in hundredths) | 15.00% | |||
Stock price volatility (in hundredths) | 77.50% | |||
Interest is payable at an annual interest rate (in hundredths) | 6.00% | |||
Note maturity date | 30-Sep-15 | |||
Date after which notes can be converted | 30-Sep-13 | |||
Minimum share increments into which the notes can be converted (in shares) | 40,000 | |||
Conversion price (in dollars per share) | $4.65 | |||
Interest payable on note in case of default (in hundredths) | 8.00% | |||
Auto USA [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Conversion price (in dollars per share) | $16.34 | |||
Interest payable on note in case of default (in hundredths) | 8.00% | |||
Auto USA [Member] | Convertible Notes Payable [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Fair value of note | 1,300,000 | |||
Market yield (in hundredths) | 1.60% | |||
Stock price volatility (in hundredths) | 65.00% | |||
Interest is payable at an annual interest rate (in hundredths) | 6.00% | |||
Principal convertible into shares of common stock upon meeting threshold | $30,600 | |||
Conversion price (in dollars per share) | $16.34 | |||
Interest payable on note in case of default (in hundredths) | 8.00% | |||
[1] | Amounts were derived from audited financial statements |
Credit_Facility_Details_Narrat
Credit Facility (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Term loan | $9,000,000 |
Term loan amortization period | 4 years |
Term loan maturity date | 31-Mar-17 |
Term loan balance | 6,750,000 |
Revolving loan limit | 8,000,000 |
Revolving loan draw | 1,000,000 |
Revolving loan current balance | 5,250,000 |
Minimum [Member] | |
Quarterly principal payment | $562,500 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | |
2013 | $678 |
2014 | 614 |
Thereafter | 442 |
Total | $1,734 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Detail Narratives) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Leased Assets [Line Items] | ||
Rent expense included in operating expenses | $700,000 | $700,000 |
Irvine, California [Member] | ||
Operating Leased Assets [Line Items] | ||
Area of real estate property | 26,000 | |
Lease Expiration Date | 31-Jul-14 | |
Extension period of lease | 3 years | |
Troy, Michigan [Member] | ||
Operating Leased Assets [Line Items] | ||
Area of real estate property | 5400 | |
Lease Expiration Date | 31-Jul-14 | |
Extension period of lease | 1 year | |
Tampa, Florida [Member] | ||
Operating Leased Assets [Line Items] | ||
Area of real estate property | 2800 | |
Lease Expiration Date | 31-May-15 | |
Prussa Penn [Member] | ||
Operating Leased Assets [Line Items] | ||
Area of real estate property | 26000 | |
Lease Expiration Date | 1-Jan-19 |
Retirement_Savings_Plan_Detail
Retirement Savings Plan (Details Narratives) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Age of employee to be covered under pension plan, minimum | 21 years | |
Employer Discretionary Contribution Amount | $200 | $0 |
Maximum [Member] | ||
Pretax salaries not to exceed the maximum IRC deferral amount (in hundredths) | $1 |
Stockholders_Equity_Details
Stockholdersb Equity (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation | ||
Total share-based compensation costs | $1,421 | $704 |
Cost of revenues [Member] | ||
Share-based Compensation | ||
Share-based compensation costs | 69 | 50 |
Sales and marketing [Member] | ||
Share-based Compensation | ||
Share-based compensation costs | 544 | 153 |
Technology support [Member] | ||
Share-based Compensation | ||
Share-based compensation costs | 251 | 206 |
General and administrative [Member] | ||
Share-based Compensation | ||
Share-based compensation costs | 562 | 297 |
Share-based Compensation Costs [Member] | ||
Share-based Compensation | ||
Share-based compensation costs | 1,426 | 706 |
Amount capitalized to internal use software | 5 | 2 |
Total share-based compensation costs | $1,421 | $704 |
Stockholders_Equity_Details_1
Stockholdersb Equity (Details 1) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Fair value of stock options granted using the following weighted average assumptions | ||
Volatility (in hundredths) | 56.00% | 65.00% |
Risk-free interest rate (in hundredths) | 1.40% | 0.80% |
Expected life (years) | 4 years 3 months 18 days | 4 years 3 months 18 days |
Stockholders_Equity_Details_2
Stockholdersb Equity (Details 2) (USD $) | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock options outstanding at beginning of period | 1,631,808 |
Granted | 513,750 |
Exercised | -134,668 |
Forfeited or expired | -39,616 |
Stock options outstanding | 1,971,269 |
Vested and expected to vest at end of period | 1,909,670 |
Exercisable at end of period | 1,318,440 |
Weighted Average Exercise Price per Share | |
Outstanding at beginning of period | $5.59 |
Granted (in dollars per share) | $15.26 |
Exercised (in dollars per share) | $4.18 |
Forfeited or expired (in dollars per share) | $28.94 |
Outstanding at end of period | $7.73 |
Vested and expected to vest at end of period | $7.60 |
Exercisable at end of period | $5.11 |
Weighted Average Remaining Contractual Term | |
Outstanding at beginning of period | 4 years 6 months |
Vested and expected to vest at end of period | 4 years 6 months |
Exercisable at end of period | 3 years 918 days |
Aggregate Intrinsic Value | |
Outstanding at end of period | $9,274 |
Vested and expected to vest at end of period | 9,167 |
Exercisable at end of period | $8,346 |
Stockholders_Equity_Details_3
Stockholdersb Equity (Details 3) | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock options outstanding | 1,971,269 | 1,631,808 |
Authorized for future grants | 1,054,066 | |
Total reserved for future issuance | 4,631,733 | |
Convertible Notes Payable [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total reserved for future issuance | 1,136,468 | |
Warrant [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total reserved for future issuance | 469,930 |
Stockholders_Equity_Details_Na
Stockholdersb Equity (Details Narrative) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 17, 2010 | Dec. 31, 2009 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options granted (in shares) | 513,750 | |||
Unrecognized compensation expense | $2,300,000 | $600,000 | ||
Unrecognized compensation expense, period for recognition | 2 years | |||
Options, date of grant, weighted average grant date fair value (in dollars per share) | $6.86 | $2.57 | ||
Options weighted average exercise price (in dollars per share) | $15.26 | |||
Stock options exercised (in shares) | 134,668 | |||
Intrinsic value of options exercised | 1,300,000 | 60,000 | ||
Options exercised weighted average exercise price (in dollars per share) | $4.18 | |||
Cyber [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Warrant issued | 400,000 | |||
Warrant exercise price | $4.65 | |||
Fair value, warrant, per share | $3.15 | |||
Fair value of warrant issued | 1,260,000 | |||
Warrant Valuation assumptions: risk-free rate | 2.30% | |||
Warrant Valuation assumptions: stock volatility | 77.50% | |||
Warrant Valuation assumptions: term | 8 years 14 days | |||
Equity Incentive Plan 2014 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Shares reserved for future issuance | 1,100,000 | |||
AutoUSA Inducement Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options granted (in shares) | 40,000 | |||
Options, date of grant, weighted average grant date fair value (in dollars per share) | $6.08 | |||
Options weighted average exercise price (in dollars per share) | $13.62 | |||
Vesting period | 24 months | |||
Warrant exercise price | $14.30 | |||
Fair value, warrant, per share | $7.35 | |||
Fair value of warrant issued | $500,000 | |||
Warrant Valuation assumptions: risk-free rate | 1.60% | |||
Warrant Valuation assumptions: stock volatility | 65.00% | |||
Warrant Valuation assumptions: term | 5 years | |||
Inducement Options 2013 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options granted (in shares) | 88,641 | |||
Options, weighted average fair value at grant date | $3.21 | |||
Options, date of grant, weighted average grant date fair value (in dollars per share) | $6.86 | |||
Options weighted average exercise price (in dollars per share) | $7.17 | |||
Inducement Options 2013 [Member] | Per Grant [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options granted (in shares) | 29,547 | |||
Options vested following performance | 2,955 | |||
Options cancelled | 26,592 | |||
Service Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options granted (in shares) | 473,750 | 113,500 | ||
Options, date of grant, weighted average grant date fair value (in dollars per share) | $6.92 | $2.37 | ||
2013 Performance Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options granted (in shares) | 87,177 | |||
Options, date of grant, weighted average grant date fair value (in dollars per share) | $2.19 | |||
Options weighted average exercise price (in dollars per share) | $4 | |||
Vesting period | 24 months | |||
Options vested following performance | 83,398 | |||
Market Condition Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options granted (in shares) | 213,650 | |||
Options, date of grant, weighted average grant date fair value (in dollars per share) | $0.97 | |||
Options weighted average exercise price (in dollars per share) | $3.92 | $1.75 | ||
Stock options exercised (in shares) | 17,431 | 54,337 | ||
Market Condition Options 2 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Options weighted average exercise price (in dollars per share) | $4.18 | |||
Stock options exercised (in shares) | 134,668 |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Decrease in valuation allowance | ($341) | ($37,527) | |
Nonreversable valuation allowance, stock options | 4,600 | ||
Unrecognized tax benefits | 636 | 636 | 636 |
Unrecognized tax benefits expiring next twelve months | 100 | ||
Accrued interest | 200 | 280 | |
Acquisition-related Limitation [Member] | |||
NOL subject to limit | 9,900 | ||
Valuation allowance, subsidiaries | 4,100 | ||
Federal [Member] | |||
Deferred tax assets attributable to stock option deductions | 13,500 | ||
NOL carry-forwards incurred by subsidiaries | 10,800 | ||
Future transfer from income tax benefit to stockholders' equity | -4,600 | ||
Tax-effected federal and state NOLs pertaining to tax deductions from stock-based compensation | 900 | ||
Research and development tax credit carry-forwards | 300 | ||
State [Member] | |||
Deferred tax assets attributable to stock option deductions | 300 | ||
NOL carry-forwards incurred by subsidiaries | 5,000 | ||
Future transfer from income tax benefit to stockholders' equity | 0 | ||
Tax-effected federal and state NOLs pertaining to tax deductions from stock-based compensation | 200 | ||
Research and development tax credit carry-forwards | 200 | ||
Maximum [Member] | |||
Maximum state net operating loss carryforwards not recognized | -1,400 | ||
Maximum [Member] | Acquisition-related Limitation [Member] | |||
NOL Limitation | $500 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Income Tax Disclosure [Abstract] | ||
Current income tax expense (benefit), Federal | $129 | $95 |
Current income tax expense (benefit), State | 150 | 113 |
Total current income tax expense (benefit) | 279 | 208 |
Deferred income tax expense (benefit), Federal | 1,714 | 1,353 |
Deferred income tax expense (benefit), State | 385 | 902 |
Total deferred income tax expense (benefit) | 2,099 | 2,255 |
Valuation allowance release | -341 | -37,527 |
Total income tax expense (benefit) | $2,037 | ($35,064) |
Income_Taxes_Details_1
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
The reconciliations of the U.S. federal statutory rate to the effective income tax rate | ||
Tax provision at U.S. federal statutory rates | 34.00% | 34.00% |
State taxes | 2.60% | 3.50% |
Federal rate adjustment | 34.60% | |
State rate adjustment | 0.50% | |
Deferred tax asset adjustments | 6.40% | 5.90% |
Non-deductible permanent items | 0.40% | 0.60% |
Stock options | 0.40% | |
Other | 0.30% | 0.50% |
Change in valuation allowance | -6.30% | -1219.10% |
Effective income tax rate | 37.40% | -1139.10% |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ||
Allowance for doubtful accounts | $284 | $149 |
Accrued liabilities | 1,473 | 832 |
Net operating loss carry-forwards | 34,473 | 37,426 |
Fixed assets | 83 | 111 |
Intangible assets | 744 | 2,006 |
Share-based compensation expense | 1,566 | 1,143 |
Other | 286 | 184 |
Total gross deferred tax assets | 38,909 | 41,851 |
Valuation allowance | -6,015 | -6,356 |
Deferred tax assets, net of valuation allowance | 32,894 | 35,495 |
Deferred tax liabilities: | ||
Tax deductible goodwill | -843 | |
Total gross deferred tax liabilities | -843 | |
Net deferred tax assets | $32,894 | $34,652 |
Income_Taxes_Details_3
Income Taxes (Details 3) (Federal [Member], USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Net operating loss carry-forwards | $94,500 |
Expiration 2021 [Member] | |
Net operating loss carry-forwards | 15,200 |
Expiration 2022 [Member] | |
Net operating loss carry-forwards | 1,700 |
Expiration 2023 [Member] | |
Net operating loss carry-forwards | |
Expiration 2024 [Member] | |
Net operating loss carry-forwards | 4,100 |
Expiration 2025 [Member] | |
Net operating loss carry-forwards | 7,700 |
Expiration 2026 [Member] | |
Net operating loss carry-forwards | 25,500 |
Expiration 2027 [Member] | |
Net operating loss carry-forwards | 15,500 |
Expiration 2028 [Member] | |
Net operating loss carry-forwards | 5,200 |
Expiration 2029 [Member] | |
Net operating loss carry-forwards | 7,700 |
Expiration 2030 [Member] | |
Net operating loss carry-forwards | 10,600 |
Expiration 2031 [Member] | |
Net operating loss carry-forwards | $1,300 |
Income_Taxes_Details_4
Income Taxes (Details 4) (State [Member], USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Net operating loss carryfowards, state | $59,400 |
stpr:CA | |
Net operating loss carryfowards, state | 51,000 |
Other State [Member] | |
Net operating loss carryfowards, state | 8,400 |
Expiration 2015 [Member] | |
Net operating loss carryfowards, state | 500 |
Expiration 2016 [Member] | |
Net operating loss carryfowards, state | 20,600 |
Expiration 2017 [Member] | |
Net operating loss carryfowards, state | 3,200 |
Expiration 2028 [Member] | |
Net operating loss carryfowards, state | 2,700 |
Expiration 2029 [Member] | |
Net operating loss carryfowards, state | 5,800 |
Expiration 2030 [Member] | |
Net operating loss carryfowards, state | 11,000 |
Expiration 2031 [Member] | |
Net operating loss carryfowards, state | $1,200 |
Income_Taxes_Details_5
Income Taxes (Details 5) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Unrecognized tax benefits | $636 | $636 |
Additions based on tax positions related to prior years | ||
Unrecognized tax benefits | $636 | $636 |
Quarterly_Financial_Data_Unaud2
Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||
Total net revenues | $26,041 | $27,364 | $25,913 | $26,959 | $20,693 | $21,635 | $17,771 | $18,261 | ||
Gross Profit | 10,404 | 11,008 | 10,316 | 10,085 | 8,089 | 8,809 | 6,956 | 6,592 | 41,813 | 30,446 |
Net income | $1,117 | $1,124 | $801 | $370 | $36,150 | $1,273 | $386 | $334 | $3,411 | $38,144 |
Earnings Per Share, Basic | $0.12 | $0.12 | $0.09 | $0.04 | $4.06 | $0.14 | $0.04 | $0.04 | $0.38 | $4.29 |
Earnings Per Share, Diluted | $0.11 | $0.11 | $0.08 | $0.04 | $3.26 | $0.13 | $0.04 | $0.04 | $0.32 | $3.61 |
SCHEDULE_II_VALUATION_AND_QUAL2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Allowance for Bad Debts [Member] | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Beginning Balance | $294 | $268 |
Additions | 354 | 92 |
Write-offs | 158 | 66 |
Ending Balance | 490 | 294 |
Allowance for Customer Credits [Member] | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Beginning Balance | 111 | 158 |
Additions | 1,037 | 511 |
Write-offs | 868 | 558 |
Ending Balance | 280 | 111 |
Tax Valuation Allowance [Member] | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Beginning Balance | 6,356 | 43,883 |
Charged (credit) to tax expense | -341 | -37,527 |
Ending Balance | $6,015 | $6,356 |