Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 01, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AUTOBYTEL INC | |
Entity Central Index Key | 1,023,364 | |
Current Fiscal Year End Date | --12-31 | |
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 | 11,071,584 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Trading Symbol | ABTL |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 39,643 | $ 38,512 |
Short-term investment | 251 | 251 |
Accounts receivable, net of allowances for bad debts and customer credits of $968 and $1,015 at March 31, 2017 and December 31, 2016, respectively | 28,517 | 33,634 |
Deferred tax asset | 0 | 4,669 |
Prepaid expenses and other current assets | 885 | 901 |
Total current assets | 69,296 | 77,967 |
Property and equipment, net | 4,140 | 4,430 |
Investments | 680 | 680 |
Intangible assets, net | 22,395 | 23,783 |
Goodwill | 42,821 | 42,821 |
Long-term deferred tax asset | 25,622 | 14,799 |
Other assets | 757 | 801 |
Total assets | 165,711 | 165,281 |
Current liabilities: | ||
Accounts payable | 7,237 | 9,764 |
Accrued employee-related benefits | 2,246 | 4,530 |
Other accrued expenses and other current liabilities | 7,741 | 8,315 |
Current portion of term loan payable | 4,688 | 6,563 |
Total current liabilities | 21,912 | 29,172 |
Convertible note payable | 1,000 | 1,000 |
Long-term portion of term loan payable | 6,750 | 7,500 |
Borrowings under revolving credit facility | 8,000 | 8,000 |
Total liabilities | 37,662 | 45,672 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.001 par value; 55,000,000 shares authorized and 11,062,688 and 11,012,625 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 11 | 11 |
Additional paid-in capital | 351,490 | 350,022 |
Accumulated deficit | (223,452) | (230,424) |
Total stockholders' equity | 128,049 | 119,609 |
Total liabilities and stockholders' equity | 165,711 | 165,281 |
Preferred Class A [Member] | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 11,445,187 shares authorized; Series A Preferred stock, none issued and outstanding; Series B Preferred stock, 168,007 shares issued and outstanding | 0 | 0 |
Preferred Class B [Member] | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 11,445,187 shares authorized; Series A Preferred stock, none issued and outstanding; Series B Preferred stock, 168,007 shares issued and outstanding | $ 0 | $ 0 |
CONSOLIDATED CONDENSED BALANCE3
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Accounts receivable, allowances for bad debts and customer credits | $ 968 | $ 1,015 |
Stockholders' equity: | ||
Preferred stock, authorized (in shares) | 11,445,187 | 11,445,187 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 55,000,000 | 55,000,000 |
Common stock, issued (in shares) | 11,062,688 | 11,012,625 |
Common stock, outstanding (in shares) | 11,062,688 | 11,012,625 |
Preferred Class A [Member] | ||
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, Issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Preferred Class B [Member] | ||
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, Issued (in shares) | 168,007 | 168,007 |
Preferred stock, outstanding (in shares) | 168,007 | 168,007 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues: | ||
Lead fees | $ 29,092 | $ 31,996 |
Advertising | 7,969 | 3,766 |
Other revenues | 280 | 485 |
Total revenues | 37,341 | 36,247 |
Cost of revenues | 24,430 | 22,612 |
Gross profit | 12,911 | 13,635 |
Operating expenses: | ||
Sales and marketing | 3,763 | 5,677 |
Technology support | 3,253 | 4,188 |
General and administrative | 3,482 | 3,373 |
Depreciation and amortization | 1,229 | 1,286 |
Litigation settlements | (25) | (5) |
Total operating expenses | 11,702 | 14,519 |
Operating income (loss) | 1,209 | (884) |
Interest and other income (expense), net | (100) | (224) |
Income (loss) before income tax provision (benefit) | 1,109 | (1,108) |
Income tax provision (benefit) | 625 | (432) |
Net income (loss) and comprehensive income (loss) | $ 484 | $ (676) |
Basic earnings (loss) per common share | $ 0.04 | $ (0.06) |
Diluted earnings (loss) per common share | $ 0.04 | $ (0.06) |
CONSOLIDATED CONDENSED STATEME5
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 484 | $ (676) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 1,841 | 1,813 |
Provision for bad debts | 43 | 54 |
Provision for customer credits | 94 | 181 |
Share-based compensation | 1,011 | 1,364 |
Change in deferred tax asset | 334 | (595) |
Changes in assets and liabilities: | ||
Accounts receivable | 4,980 | 206 |
Prepaid expenses and other current assets | 16 | 426 |
Other assets | 44 | 76 |
Accounts payable | (2,527) | 1,667 |
Accrued expenses and other current liabilities | (2,858) | (2,969) |
Non-current liabilities | 0 | 13 |
Net cash provided by operating activities | 3,462 | 1,560 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (163) | (899) |
Net cash used in investing activities | (163) | (899) |
Cash flows from financing activities: | ||
Payments on term loan borrowings | (2,625) | (1,313) |
Proceeds from exercise of stock options | 457 | 699 |
Payment of contingent fee arrangement | 0 | (13) |
Net cash used in financing activities | (2,168) | (627) |
Net increase in cash and cash equivalents | 1,131 | 34 |
Cash and cash equivalents, beginning of period | 38,512 | 23,993 |
Cash and cash equivalents, end of period | 39,643 | 24,027 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 0 | 0 |
Cash paid for interest | $ 356 | $ 230 |
Organization and Operations
Organization and Operations | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | Autobytel Inc. (“ Autobytel Company Dealers Manufacturers Leads The Company’s consumer-facing automotive websites (“ Company Websites Leads 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. On December 19, 2016, Autobytel and Car.com, Inc., a wholly owned subsidiary of Autobytel (“ Car.com Internet Brands |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated condensed financial statements are presented on the same basis as the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (“ 2016 Form 10-K SEC GAAP |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Issued but not yet adopted by the Company Accounting Standards Codification 606 “Revenue from Contracts with Customers.” ASU Accounting Standards Codification 842 “Leases.” Accounting Standards Codification 805 “Business Combinations.” Accounting Standards Codification 350 “Intangibles – Goodwill and Other.” Recently adopted by the Company Accounting Standards Codification 740 “Income Taxes.” Accounting Standards Codification 323 “Investments-Equity Method and Joint Ventures.” Accounting Standards Codification 718 “Compensation-Stock Compensation.” The changes in the new standard eliminate the accounting for excess tax benefits to be recognized in additional paid-in capital and tax deficiencies recognized either in the income tax provision or in additional paid-in capital. ASU 2016-09 requires recognition of excess tax benefits and tax deficiencies in the income statement on a prospective basis. For the three months ended March 31, 2017, we recognized all excess tax benefits and tax deficiencies as income tax expense or benefit as a discrete event. Income tax expense of approximately $0.2 million was recognized in the quarterly period ended March 31, 2017 as a result of the adoption of ASU 2016-09. The Company adopted the amendments related to the timing of when excess tax benefits are recognized on a modified retrospective transition method. T he Company recognized $6.5 million of deferred tax assets relating to unrealized stock option benefits, resulting in a cumulative $6.5 million adjustment to retained earnings. The treatment of forfeitures has not changed as we are electing to continue our current process of estimating the number of forfeitures. As such, this has no cumulative effect on retained earnings. We have elected to present the cash flow statement on a prospective transition method and no prior periods have been adjusted. The Company calculates diluted earnings (loss) per share using the treasury stock method for share-based payment awards. ASU 2016-09 eliminates excess tax benefits and deficiencies from the calculation of assumed proceeds under the treasury stock method, which the Company adopted on a prospective transition method. Accounting Standards Codification 230 “Statement of Cash Flows.” In August 2016, ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments” was issued. This ASU provides guidance on eight specific cash flow issues with the objective of reducing the existing diversity in practice for those issues. The amendments in this ASU are effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The Company early adopted this ASU in the three months ended March 31, 2017 and it did not have a material effect on the consolidated financial statements. Accounting Standards Codification 810 “Consolidation.” VIE |
Disposal of Specialty Finance L
Disposal of Specialty Finance Leads Product | 3 Months Ended |
Mar. 31, 2017 | |
Disposal Of Specialty Finance Leads Product | |
Disposal of Specialty Finance Leads Product | On December 19, 2016, Autobytel and Car.com entered into an Asset Purchase and Sale Agreement with Internet Brands, pursuant to which Internet Brands acquired substantially all of the assets of the automotive specialty finance leads group of Car.com (“ Acquired Group License Agreement In connection with the transaction, Internet Brands, Car.com and Autobytel entered into the License Agreement pursuant to which Car.com and Autobytel will provide to Internet Brands certain transition services and arrangements. Pursuant to the License Agreement, (i) Internet Brands will pay Autobytel $1.6 million in fees over the five-year term of the License Agreement, and (ii) Car.com will (1) grant Internet Brands a limited, non-exclusive, non-transferable license to use the Car.com logo and name solely for sales and marketing purposes in Internet Brand’s automotive specialty finance leads business; and (2) provide certain redirect linking of consumer traffic from the Acquired Group’s current specialty finance leads application forms to a landing page designated by Internet Brands. The Company received $0.1 million during the three months ended March 31, 2017 related to the License Agreement. The disposal of the automotive specialty finance leads product did not qualify for presentation and disclosure as a discontinued operation because it did not represent a strategic shift that had or will have a major effect on the Company’s operations. The pretax profit of the finance leads product for the three months ended March 31, 2016 was $0.1 million. |
Computation of Basic and Dilute
Computation of Basic and Diluted Net Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Earnings (Loss) Per Share | Basic net earnings (loss) per share is computed using the weighted average number of common shares outstanding during the period, excluding any unvested restricted stock. Diluted net earnings (loss) 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 methods, 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, common shares issuable upon conversion of convertible notes and unvested restricted stock. The following are the share amounts utilized to compute the basic and diluted net earnings (loss) per share for the three months ended March 31, 2017 and 2016: Three Months Ended March 31, 2017 2016 Basic Shares: Weighted average common shares outstanding 11,025,864 10,633,907 Weighted average unvested restricted stock (116,667 ) (125,000 ) Basic Shares 10,909,197 10,508,907 Diluted Shares: Basic shares 10,909,197 10,508,907 Weighted average dilutive securities 2,399,938 — Diluted Shares 13,309,135 10,508,907 For the three months ended March 31, 2017, weighted average dilutive securities included dilutive options, restricted stock awards, and the convertible note issued in connection with the acquisition of AutoWeb, Inc. For the three months ended March 31, 2017 and 2016, 2.2 million and 2.8 million of potentially anti-dilutive shares of common stock have been excluded from the calculation of diluted net earnings per share, respectively. Warrants. AutoUSA Acquisition Date AutoUSA Warrant The warrant to purchase up to 148,240 shares of Series B Preferred Stock issued in connection with the acquisition of AutoWeb, Inc. (“ AutoWeb Warrant Weighted Average Closing Price |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-based compensation expense is included in costs and expenses in the accompanying Unaudited Consolidated Condensed Statements of Operation and Comprehensive Income (Loss) as follows: Three Months Ended March 31, 2017 2016 Share-based compensation expense: Cost of revenues $ 20 $ 14 Sales and marketing [1] 412 632 Technology support [2] 128 332 General and administrative 452 388 Share-based compensation costs 1,012 1,366 Amount capitalized to internal use software 1 2 Total share-based compensation costs $ 1,011 $ 1,364 (1) Certain awards were modified in connection with the termination of an executive officer’s employment with the Company and their vesting accelerated in accordance with the terms of the applicable option agreements. The total expense related to these modifications and acceleration of vested awards was approximately $0.3 million in the three months ended March 31, 2016. (2) The vesting of certain awards was accelerated in accordance with the terms of the applicable option agreements in connection with the termination of an executive officer’s employment with the Company. The total expense related to acceleration of vested awards was approximately $0.2 million in the three months ended March 31, 2016. Service-Based Options. Three Months Ended March 31, 2017 2016 Number of service-based options granted 319,250 428,900 Weighted average grant date fair value $ 6.91 $ 8.12 Weighted average exercise price $ 13.81 $ 17.12 These options are valued using a Black-Scholes option pricing model and generally vest one-third on the first anniversary of the grant date and ratably over twenty-four months thereafter. The vesting of these awards is contingent upon the employee’s continued employment with the Company during the vesting period. Market Condition Options. CEO Market Condition Options Stock option exercises Three Months Ended March 31, 2017 2016 Number of stock options exercised 58,959 53,839 Weighted average exercise price $ 7.75 $ 12.97 The grant date fair value of stock options granted during these periods was estimated using the Black-Scholes option pricing model using the following weighted average assumptions: Three Months Ended March 31, 2017 2016 Dividend yield — — Volatility 61 % 58 % Risk-free interest rate 1.8 % 1.3 % Expected life (years) 4.4 4.4 Upon adoption of ASU 2016-09, the Company has elected to estimate the number of forfeitures. Restricted Stock Awards. RSAs Termination Date |
Investments
Investments | 3 Months Ended |
Mar. 31, 2017 | |
Investments [Abstract] | |
Investments | SaleMove (“GoMoto”) In September 2013, the Company entered into a Convertible Note Purchase Agreement with SaleMove in which Autobytel invested $150,000 in SaleMove in the form of an interest bearing, convertible promissory note. In November 2014, the Company invested an additional $400,000 in SaleMove in the form of an interest bearing, convertible promissory note. Upon closing of a preferred stock financing by SaleMove in July 2015, these two notes were converted in accordance with their terms into an aggregate of 190,997 Series A Preferred Stock, which shares are classified as a long-term investment on the consolidated balance sheet as of March 31, 2017. In October 2013, the Company entered into a Reseller Agreement with SaleMove to become a reseller of SaleMove’s technology for enhancing communications with consumers. SaleMove’s 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 50% 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. SaleMove advances are repaid to the Company from SaleMove’s share of net revenues and expenses from the Reseller Agreement. As of March 31, 2017, the net advances due from SaleMove totaled $509,000 and are recorded as an other long-term asset on the Unaudited Consolidated Condensed Balance Sheets. In December 2014, the Company entered into a Series Seed Preferred Stock Purchase Agreement with GoMoto in which the Company paid $100,000 for 317,460 shares of Series Seed Preferred Stock, $0.001 par value per share. The $100,000 investment in GoMoto was recorded at cost because the Company does not have significant influence over GoMoto. In October 2015 and May 2016, the Company invested an additional $375,000 and $375,000, respectively, in GoMoto in the form of convertible promissory notes (“ GoMoto Notes |
Selected Balance Sheet Accounts
Selected Balance Sheet Accounts | 3 Months Ended |
Mar. 31, 2017 | |
Selected Balance Sheet Accounts [Abstract] | |
Selected Balance Sheet Accounts | Property and Equipment March 31, 2017 December 31, 2016 (in thousands) Computer software and hardware $ 12,189 $ 12,027 Capitalized internal use software 5,360 5,359 Furniture and equipment 1,332 1,332 Leasehold improvements 1,139 1,139 20,020 19,857 Less—Accumulated depreciation and amortization (15,880 ) (15,427 ) Property and Equipment, net $ 4,140 $ 4,430 The Company periodically reviews long-lived assets to determine if there are any impairment indicators. 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. The Company’s judgments regarding the existence of impairment indicators are based on legal factors, market conditions and operational performance of the Company’s long-lived assets. If such indicators exist, the Company evaluates 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. Should the carrying amount of an asset exceed 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 the fair value of these assets using an undiscounted cash flow model, which includes assumptions and estimates. Concentration of Credit Risk and Risks Due to Significant Customers Accounts receivable are primarily derived from fees billed to Dealers and Manufacturers. The Company generally requires no collateral to support its accounts receivables and maintains an allowance for bad debts for potential credit losses. The Company has a concentration of credit risk with its automotive industry related accounts receivable balances, particularly with Urban Science Applications (which represents Acura, Audi, Honda, Nissan, Infiniti, Subaru, Toyota, Volkswagen and Volvo), Ford Direct and General Motors. During the first three months of 2017, approximately 29% of the Company’s total revenues was derived from these three customers, and approximately 40%, or $11.7 million of gross accounts receivables, related to these three customers at March 31, 2017. During the first three months of 2016, approximately 26% of the Company’s total revenues was derived from General Motors, Urban Science Applications and Jumpstart Automotive, and approximately 41%, or $11.7 million of gross accounts receivables, related to these three customers at March 31, 2016. Intangible Assets. March 31, 2017 December 31, 2016 Definite-lived Intangible Asset Estimated Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Trademarks/trade names/licenses/domains 3 – 6 years $ 5,519 $ (3,152 ) $ 2,367 $ 9,294 $ (6,756 ) $ 2,538 Software and publications 3 years 1,300 (1,300 ) — 1,300 (1,300 ) — Customer relationships 2 - 10 years 19,563 (8,229 ) 11,334 19,563 (7,454 ) 12,109 Employment/non-compete agreements 1-5 years 1,510 (1,375 ) 135 1,510 (1,273 ) 237 Developed technology 5-7 years 8,955 (2,596 ) 6,359 8,955 (2,256 ) 6,699 $ 36,847 $ (16,652 ) $ 20,195 $ 40,622 $ (19,039 ) $ 21,583 March 31, 2017 December 31, 2016 Indefinite-lived Intangible Asset Estimated Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Tradename Indefinite $ 2,200 $ — $ 2,200 $ 2,200 $ — $ 2,200 Amortization expense is included in “Depreciation and amortization” in the Unaudited Consolidated Condensed Statements of Operations. Amortization expense was $1.4 million for both the three months ended March 31, 2017 and 2016, respectively. Amortization expense for the remainder of the year and for future years is as follows: Year Amortization Expense (in thousands) 2017 $ 3,978 2018 5,028 2019 3,655 2020 2,224 2021 2,116 2022 1,518 Thereafter 1,676 $ 20,195 Goodwill. Accrued Expenses and Other Current Liabilities March 31, 2017 December 31, 2016 (in thousands) Accrued employee-related benefits $ 2,246 $ 4,530 Other accrued expenses and other current liabilities: Other accrued expenses and current liabilities 7,197 7,849 Amounts due to customers 544 466 Total other accrued expenses and other current liabilities 7,741 8,315 Total accrued expenses and other current liabilities $ 9,987 $ 12,845 Convertible Notes Payable AutoUSA Note |
Credit Facility
Credit Facility | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Credit Facility | On June 1, 2016, the Company entered into a Fourth Amendment to Loan Agreement (“ Credit Facility Amendment Union Bank Credit Facility Agreement Term Loan 1 Term Loan 2 Revolving Loan Term Loan 1 is amortized over a period of four years, with fixed quarterly principal payments of $562,500. Borrowings under Term Loan 1 bear interest at either (i) the bank’s Reference Rate (prime rate) minus 0.50% or (ii) the London Interbank Offering Rate (“ LIBOR Term Loan 2 is amortized over a period of five years, with fixed quarterly principal payments of $750,000. Borrowings under Term Loan 2 bear interest at either (i) LIBOR plus 3.00% or (ii) the bank’s Reference Rate (prime rate), at the option of the Company. Borrowings under the Revolving Loan bear interest at either (i) the LIBOR plus 2.50% or (ii) the bank’s Reference Rate (prime rate) minus 0.50%, at the option of the Company. Interest under both Term Loan 2 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 paid an upfront fee of 0.10% of the Term Loan 2 principal amount upon drawing upon Term Loan 2 and also pays a commitment fee of 0.10% per year on the unused portion of the Revolving Loan, payable quarterly in arrears. Borrowings under Term Loan 2 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. Term Loan 2 matures June 30, 2020, and the maturity date of the Revolving Loan was extended from March 31, 2017 to April 30, 2018. Borrowings under the Revolving Loan may be used as a source to finance working capital, capital expenditures, acquisitions and stock buybacks and for other general corporate purposes. Borrowing under Term Loan 2 was limited to use for the acquisition of Dealix/Autotegrity, and the Company drew down the entire $15.0 million of Term Loan 2, together with $2.75 million under the Revolving Loan and $6.76 million from available cash on hand, in financing this acquisition. The outstanding balances of Term Loan 2 and the Revolving Loan as of March 31, 2017 were $9.8 million and $8.0 million, respectively. The Credit Facility Agreement contains certain customary affirmative and negative covenants and restrictive and financial covenants, including that the Company maintain specified levels of minimum consolidated liquidity and quarterly and annual earnings before interest, taxes and depreciation and amortization, which the Company was in compliance with as of March 31, 2017. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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 by the Company without cause or by the employee 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. The actions filed against the Company and other 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | We have adopted the provisions of ASU 2016-09 as of January 1, 2017 which requires recognition through opening retained earnings of any pre-adoption date net operating loss (“ NOL On an interim basis, the Company estimates what its anticipated annual effective tax rate will be and records a quarterly income tax provision in accordance with the estimated annual rate, plus the tax effect of certain discrete items that arise during the quarter. As the fiscal year progresses, the Company refines its estimates based on actual events and financial results during the year. This process can result in significant changes to the Company’s estimated effective tax rate. When this occurs, the income tax provision (benefit) is adjusted during the quarter in which the estimates are refined so that the year-to-date provision reflects the estimated annual effective tax rate. These changes, along with adjustments to the Company's deferred taxes and related valuation allowance, may create fluctuations in the overall effective tax rate from quarter to quarter. The Company’s effective tax rate for the three months ended March 31, 2017 differed from the U.S. federal statutory rate primarily due to state income taxes and tax deficiencies from stock-based compensation. The total amount of unrecognized tax benefits, excluding associated interest and penalties, was $0.5 million as of March 31, 2017, all of which, if subsequently recognized, would have affected the Company’s tax rate. As of March 31, 2017 and December 31, 2016, the total balance of accrued interest and penalties related to uncertain tax positions was zero. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense, and the accrued interest and penalties are included in deferred and other long-term liabilities in the Company’s condensed consolidated balance sheets. There were no material interest or penalties included in income tax expense (benefit) for the three months ended March 31, 2017 and March, 31, 2016. The Company is subject to taxation in the U.S. and in various foreign and state jurisdictions. Due to expired statutes of limitation, the Company’s federal income tax returns for years prior to calendar year 2013 are not subject to examination by the U.S. Internal Revenue Service. Generally, for the majority of state jurisdictions where the Company does business, periods prior to calendar year 2012 are no longer subject to examination. The Company does not anticipate a significant change to the total amount of unrecognized tax benefits within the next twelve months. Audit outcomes and the timing of settlements are subject to significant uncertainty. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated condensed financial statements are presented on the same basis as the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (“ 2016 Form 10-K SEC GAAP |
Recent Accounting Pronounceme18
Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Issued but not yet adopted by the Company Accounting Standards Codification 606 “Revenue from Contracts with Customers.” ASU Accounting Standards Codification 842 “Leases.” Accounting Standards Codification 805 “Business Combinations.” Accounting Standards Codification 350 “Intangibles – Goodwill and Other.” Recently adopted by the Company Accounting Standards Codification 740 “Income Taxes.” Accounting Standards Codification 323 “Investments-Equity Method and Joint Ventures.” Accounting Standards Codification 718 “Compensation-Stock Compensation.” The changes in the new standard eliminate the accounting for excess tax benefits to be recognized in additional paid-in capital and tax deficiencies recognized either in the income tax provision or in additional paid-in capital. ASU 2016-09 requires recognition of excess tax benefits and tax deficiencies in the income statement on a prospective basis. For the three months ended March 31, 2017, we recognized all excess tax benefits and tax deficiencies as income tax expense or benefit as a discrete event. Income tax expense of approximately $0.2 million was recognized in the quarterly period ended March 31, 2017 as a result of the adoption of ASU 2016-09. The Company adopted the amendments related to the timing of when excess tax benefits are recognized on a modified retrospective transition method. T The treatment of forfeitures has not changed as we are electing to continue our current process of estimating the number of forfeitures. As such, this has no cumulative effect on retained earnings. We have elected to present the cash flow statement on a prospective transition method and no prior periods have been adjusted. The Company calculates diluted earnings (loss) per share using the treasury stock method for share-based payment awards. ASU 2016-09 eliminates excess tax benefits and deficiencies from the calculation of assumed proceeds under the treasury stock method, which the Company adopted on a prospective transition method. Accounting Standards Codification 230 “Statement of Cash Flows.” Accounting Standards Codification 810 “Consolidation.” VIE |
Computation of Basic and Dilu19
Computation of Basic and Diluted Net Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income Per Share | Three Months Ended March 31, 2017 2016 Basic Shares: Weighted average common shares outstanding 11,025,864 10,633,907 Weighted average unvested restricted stock (116,667 ) (125,000 ) Basic Shares 10,909,197 10,508,907 Diluted Shares: Basic shares 10,909,197 10,508,907 Weighted average dilutive securities 2,399,938 — Diluted Shares 13,309,135 10,508,907 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based compensation expense included in costs and expenses | Three Months Ended March 31, 2017 2016 Share-based compensation expense: Cost of revenues $ 20 $ 14 Sales and marketing [1] 412 632 Technology support [2] 128 332 General and administrative 452 388 Share-based compensation costs 1,012 1,366 Amount capitalized to internal use software 1 2 Total share-based compensation costs $ 1,011 $ 1,364 (1) Certain awards were modified in connection with the termination of an executive officer’s employment with the Company and their vesting accelerated in accordance with the terms of the applicable option agreements. The total expense related to these modifications and acceleration of vested awards was approximately $0.3 million in the three months ended March 31, 2016. (2) The vesting of certain awards was accelerated in accordance with the terms of the applicable option agreements in connection with the termination of an executive officer’s employment with the Company. The total expense related to acceleration of vested awards was approximately $0.2 million in the three months ended March 31, 2016. |
Service based options granted during period | Three Months Ended March 31, 2017 2016 Number of service-based options granted 319,250 428,900 Weighted average grant date fair value $ 6.91 $ 8.12 Weighted average exercise price $ 13.81 $ 17.12 |
Stock option exercises | Three Months Ended March 31, 2017 2016 Number of stock options exercised 58,959 53,839 Weighted average exercise price $ 7.75 $ 12.97 |
Fair value of stock options granted using the following weighted average assumptions | Three Months Ended March 31, 2017 2016 Dividend yield — — Volatility 61 % 58 % Risk-free interest rate 1.8 % 1.3 % Expected life (years) 4.4 4.4 |
Selected Balance Sheet Accoun21
Selected Balance Sheet Accounts (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Selected Balance Sheet Accounts [Abstract] | |
Property and equipment | March 31, 2017 December 31, 2016 (in thousands) Computer software and hardware $ 12,189 $ 12,027 Capitalized internal use software 5,360 5,359 Furniture and equipment 1,332 1,332 Leasehold improvements 1,139 1,139 20,020 19,857 Less—Accumulated depreciation and amortization (15,880 ) (15,427 ) Property and Equipment, net $ 4,140 $ 4,430 |
Intangible assets amortized over the estimated useful lives | March 31, 2017 December 31, 2016 Definite-lived Intangible Asset Estimated Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Trademarks/trade names/licenses/domains 3 – 6 years $ 5,519 $ (3,152 ) $ 2,367 $ 9,294 $ (6,756 ) $ 2,538 Software and publications 3 years 1,300 (1,300 ) — 1,300 (1,300 ) — Customer relationships 2 - 10 years 19,563 (8,229 ) 11,334 19,563 (7,454 ) 12,109 Employment/non-compete agreements 1-5 years 1,510 (1,375 ) 135 1,510 (1,273 ) 237 Developed technology 5-7 years 8,955 (2,596 ) 6,359 8,955 (2,256 ) 6,699 $ 36,847 $ (16,652 ) $ 20,195 $ 40,622 $ (19,039 ) $ 21,583 March 31, 2017 December 31, 2016 Indefinite-lived Intangible Asset Estimated Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Tradename Indefinite $ 2,200 $ — $ 2,200 $ 2,200 $ — $ 2,200 |
Amortization expense for the remainder of the year and for the next four years | Year Amortization Expense (in thousands) 2017 $ 3,978 2018 5,028 2019 3,655 2020 2,224 2021 2,116 2022 1,518 Thereafter 1,676 $ 20,195 |
Accrued expenses and other current liabilities | March 31, 2017 December 31, 2016 (in thousands) Accrued employee-related benefits $ 2,246 $ 4,530 Other accrued expenses and other current liabilities: Other accrued expenses and current liabilities 7,197 7,849 Amounts due to customers 544 466 Total other accrued expenses and other current liabilities 7,741 8,315 Total accrued expenses and other current liabilities $ 9,987 $ 12,845 |
Organization and Operations (De
Organization and Operations (Details Narrative) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
State of incorporation | Delaware |
Date of incorporation | May 17, 1996 |
Trading Symbol | ABTL |
Date of acquisition/merger | Dec. 31, 2016 |
Computation of Basic and Dilu23
Computation of Basic and Diluted Net Earnings (Loss) Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Basic Shares: | ||
Weighted average common shares outstanding | 11,025,864 | 10,633,907 |
Weighted average unvested restricted stock | (116,667) | (125,000) |
Basic shares | 10,909,197 | 10,508,907 |
Dilutive Shares: | ||
Basic shares | 10,909,197 | 10,508,907 |
Weighted average dilutive securities | 2,399,938 | 0 |
Dilutive Shares | 13,309,135 | 10,508,907 |
Computation of Basic and Dilu24
Computation of Basic and Diluted Net Earnings (Loss) Per Share (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Dilutive Shares: | ||
Anti-dilutive potential shares of common stock | 2,200,000 | 2,800,000 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based compensation expense: | ||
Share-based compensation costs | $ 1,012 | $ 1,366 |
Amount capitalized to internal use software | 1 | 2 |
Total share-based compensation costs | 1,011 | 1,364 |
Cost of revenues [Member] | ||
Share-based compensation expense: | ||
Share-based compensation costs | 20 | 14 |
Sales and marketing [Member] | ||
Share-based compensation expense: | ||
Share-based compensation costs | 412 | 632 |
Technology support [Member] | ||
Share-based compensation expense: | ||
Share-based compensation costs | 128 | 332 |
General and administrative [Member] | ||
Share-based compensation expense: | ||
Share-based compensation costs | $ 452 | $ 388 |
Share-Based Compensation (Det26
Share-Based Compensation (Details 1) - $ / shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock Issued or Granted During Period, Share-based Compensation [Abstract] | ||
Number of service-based options granted | 319,250 | 428,900 |
Weighted average grant date fair value | $ 6.91 | $ 8.12 |
Weighted average exercise price | $ 13.81 | $ 17.12 |
Share-Based Compensation (Det27
Share-Based Compensation (Details 2) - $ / shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Number of stock options exercised | 58,959 | 53,839 |
Weighted average exercise price | $ 7.75 | $ 12.97 |
Share-Based Compensation (Det28
Share-Based Compensation (Details 3) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Fair value of stock options granted using the following weighted average assumptions | ||
Dividend yield | 0.00% | 0.00% |
Volatility (in hundredths) | 61.00% | 58.00% |
Risk-free interest rate (in hundredths) | 1.80% | 1.30% |
Expected life (years) | 4 years 4 months 24 days | 4 years 4 months 24 days |
Share-Based Compensation (Det29
Share-Based Compensation (Details Narrative) - $ / shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock Issued or Granted During Period, Share-based Compensation [Abstract] | ||
Options granted (in shares) | 319,250 | 428,900 |
Options weighted average grant date fair value (in dollars per share) | $ 6.91 | $ 8.12 |
Options weighted average exercise price (in dollars per share) | $ 13.81 | $ 17.12 |
Investments (Details Narrative)
Investments (Details Narrative) $ in Thousands | Mar. 31, 2017USD ($) |
SaleMove Inc [Member] | |
Advances to affiliate | $ 509 |
GoMoto [Member] | |
Reserve for notes receivable | $ 800 |
Selected Balance Sheet Accoun31
Selected Balance Sheet Accounts (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Property and Equipment | ||
Computer software and hardware | $ 12,189 | $ 12,027 |
Capitalized internal use software | 5,360 | 5,359 |
Furniture and equipment | 1,332 | 1,332 |
Leasehold improvements | 1,139 | 1,139 |
Property and equipment, gross | 20,020 | 19,857 |
Less - Accumulated depreciation and amortization | (15,880) | (15,427) |
Property and equipment, net | $ 4,140 | $ 4,430 |
Selected Balance Sheet Accoun32
Selected Balance Sheet Accounts (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Intangible Assets | ||
Gross | $ 36,847 | $ 40,622 |
Accumulated Amortization | (16,652) | (19,039) |
Net | 22,395 | 23,783 |
Employment/non-compete agreements [Member] | ||
Intangible Assets | ||
Gross | 1,510 | 1,510 |
Accumulated Amortization | (1,375) | (1,273) |
Net | $ 135 | 237 |
Employment/non-compete agreements [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets | ||
Estimated Useful Life | 1 year | |
Employment/non-compete agreements [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets | ||
Estimated Useful Life | 5 years | |
Trademarks and Trade Names [Member] | ||
Intangible Assets | ||
Gross | $ 5,519 | 9,294 |
Accumulated Amortization | (3,152) | (6,756) |
Net | $ 2,367 | 2,538 |
Trademarks and Trade Names [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets | ||
Estimated Useful Life | 3 years | |
Trademarks and Trade Names [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets | ||
Estimated Useful Life | 6 years | |
Customer Relationships [Member] | ||
Intangible Assets | ||
Gross | $ 19,563 | 19,563 |
Accumulated Amortization | (8,229) | (7,454) |
Net | $ 11,334 | 12,109 |
Customer Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets | ||
Estimated Useful Life | 2 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets | ||
Estimated Useful Life | 10 years | |
Developed Technology Rights [Member] | ||
Intangible Assets | ||
Gross | $ 8,955 | 8,955 |
Accumulated Amortization | (2,596) | (2,256) |
Net | $ 6,359 | 6,699 |
Developed Technology Rights [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets | ||
Estimated Useful Life | 5 years | |
Developed Technology Rights [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets | ||
Estimated Useful Life | 7 years | |
Software and publications [Member] | ||
Finite-Lived Intangible Assets | ||
Estimated Useful Life | 3 years | |
Intangible Assets | ||
Gross | $ 1,300 | 1,300 |
Accumulated Amortization | (1,300) | (1,300) |
Net | 0 | 0 |
Tradename [Member] | ||
Intangible Assets | ||
Gross | 2,200 | 2,200 |
Accumulated Amortization | 0 | 0 |
Net | $ 2,200 | $ 2,200 |
Selected Balance Sheet Accoun33
Selected Balance Sheet Accounts (Details 2) $ in Thousands | Mar. 31, 2017USD ($) |
Amortization expense for the remainder of the year and for the next five years | |
2,017 | $ 3,978 |
2,018 | 5,028 |
2,019 | 3,655 |
2,020 | 2,224 |
2,021 | 2,116 |
2,022 | 1,518 |
Thereafter | 1,676 |
Total | $ 20,195 |
Selected Balance Sheet Accoun34
Selected Balance Sheet Accounts (Details 3) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Accrued expenses and other current liabilities | ||
Compensation and related costs and professional fees | $ 2,246 | $ 4,530 |
Other accrued expenses | 7,197 | 7,849 |
Amounts due to customers | 544 | 466 |
Total other accrued expenses and other current liabilities | 7,741 | 8,315 |
Total accrued expenses and other current liabilities | $ 9,987 | $ 12,845 |
Selected Balance Sheet Accoun35
Selected Balance Sheet Accounts (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Amortization expense | $ 1,400 | $ 1,400 |
Sales Revenue Net [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Concentration risk | 29.00% | |
Accounts Receivable [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Concentration risk | 40.00% | |
Concentration risk, amount | $ 11,700 |
Credit Facility (Details Narrat
Credit Facility (Details Narrative) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Revolving loan current balance | $ 8,000 |
Term Loan 1 | |
Term loan | $ 9,000 |
Term loan amortization period | 4 years |
Quarterly principal payment | $ 562,500 |
Term loan maturity date | Dec. 31, 2017 |
Term loan balance | $ 1,700 |
Revolving loan limit | 9,000 |
Revolving loan draw | 9,000 |
Term Loan 2 | |
Term loan | $ 15,000 |
Term loan amortization period | 5 years |
Quarterly principal payment | $ 750,000 |
Term loan maturity date | Jun. 30, 2020 |
Term loan balance | $ 9,800 |
Revolving loan limit | 15,000 |
Revolving loan draw | $ 15,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits | $ 500 | |
Accrued interest and penalties | $ 0 | $ 0 |