Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | ||
Oct. 31, 2014 | Dec. 01, 2014 | Dec. 01, 2014 | |
Common Class A [Member] | Common Class B [Member] | ||
Entity Information [Line Items] | ' | ' | ' |
Entity Registrant Name | 'QAD INC | ' | ' |
Entity Central Index Key | '0001036188 | ' | ' |
Current Fiscal Year End Date | '--01-31 | ' | ' |
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 | ' | 12,871,714 | 3,190,606 |
Document Fiscal Year Focus | '2015 | ' | ' |
Document Fiscal Period Focus | 'Q3 | ' | ' |
Document Type | '10-Q | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Oct-14 | ' | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (USD $) | Oct. 31, 2014 | Jan. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and equivalents | $71,411 | $75,984 |
Accounts receivable, net of allowances of $2,581 and $2,450 at October 31, 2014 and January 31, 2014, respectively | 46,432 | 71,337 |
Deferred tax assets, net | 8,033 | 8,133 |
Other current assets | 15,904 | 14,980 |
Total current assets | 141,780 | 170,434 |
Property and equipment, net | 33,348 | 33,085 |
Capitalized software costs, net | 2,571 | 3,315 |
Goodwill | 11,214 | 11,377 |
Deferred tax assets, net | 9,884 | 11,788 |
Other assets, net | 3,954 | 4,814 |
Total assets | 202,751 | 234,813 |
Current liabilities: | ' | ' |
Current portion of long-term debt | 401 | 389 |
Accounts payable | 9,516 | 11,042 |
Deferred revenue | 72,703 | 104,160 |
Other current liabilities | 31,181 | 34,199 |
Total current liabilities | 113,801 | 149,790 |
Long-term debt | 14,782 | 15,085 |
Other liabilities | 5,205 | 5,733 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock, $0.001 par value; Authorized 5,000,000 shares; none issued or outstanding | 0 | 0 |
Common stock: | ' | ' |
Additional paid-in capital | 147,804 | 150,837 |
Treasury stock, at cost (1,627,351 shares and 1,930,436 shares at October 31, 2014 and January 31, 2014, respectively) | -23,273 | -28,220 |
Accumulated deficit | -49,294 | -51,472 |
Accumulated other comprehensive loss | -6,292 | -6,958 |
Total stockholders' equity | 68,963 | 64,205 |
Total liabilities and stockholders' equity | 202,751 | 234,813 |
Common Class A [Member] | ' | ' |
Common stock: | ' | ' |
Common Stock Value | 14 | 14 |
Common Class B [Member] | ' | ' |
Common stock: | ' | ' |
Common Stock Value | $4 | $4 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) (USD $) | Oct. 31, 2014 | Jan. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Current assets: | ' | ' |
Accounts receivable, net of allowances | $2,581 | $2,450 |
Stockholders' equity: | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock: | ' | ' |
Treasury stock, at cost (in shares) | 1,627,351 | 1,930,436 |
Common Class A [Member] | ' | ' |
Common stock: | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in shares) | 71,000,000 | 71,000,000 |
Common stock, shares issued (in shares) | 14,152,302 | 14,150,089 |
Common Class B [Member] | ' | ' |
Common stock: | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in shares) | 4,000,000 | 4,000,000 |
Common stock, shares issued (in shares) | 3,537,283 | 3,537,029 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 |
Revenue: | ' | ' | ' | ' |
License fees | $8,616 | $6,761 | $24,231 | $21,583 |
Subscription fees | 7,710 | 5,104 | 20,344 | 13,601 |
Maintenance and other | 35,029 | 35,629 | 107,225 | 105,084 |
Professional services | 22,649 | 18,166 | 63,739 | 52,513 |
Total revenue | 74,004 | 65,660 | 215,539 | 192,781 |
Costs of revenue: | ' | ' | ' | ' |
License fees | 1,217 | 1,158 | 3,270 | 3,171 |
Maintenance, subscription and other | 12,055 | 11,399 | 36,476 | 33,508 |
Professional services | 19,799 | 16,348 | 57,975 | 49,628 |
Total cost of revenue | 33,071 | 28,905 | 97,721 | 86,307 |
Gross profit | 40,933 | 36,755 | 117,818 | 106,474 |
Operating expenses: | ' | ' | ' | ' |
Sales and marketing | 16,421 | 15,183 | 50,319 | 47,089 |
Research and development | 10,152 | 9,817 | 32,249 | 31,131 |
General and administrative | 8,295 | 7,776 | 26,464 | 24,153 |
Amortization of intangibles from acquisitions | 176 | 178 | 535 | 531 |
Total operating expenses | 35,044 | 32,954 | 109,567 | 102,904 |
Operating income | 5,889 | 3,801 | 8,251 | 3,570 |
Other (income) expense: | ' | ' | ' | ' |
Interest income | -56 | -55 | -169 | -225 |
Interest expense | 185 | 218 | 598 | 630 |
Other (income) expense, net | -164 | 209 | -56 | -873 |
Total other (income) expense | -35 | 372 | 373 | -468 |
Income before income taxes | 5,924 | 3,429 | 7,878 | 4,038 |
Income tax expense | 834 | 1,380 | 1,879 | 1,998 |
Net income | 5,090 | 2,049 | 5,999 | 2,040 |
Diluted net income per share | ' | ' | ' | ' |
Net income | 5,090 | 2,049 | 5,999 | 2,040 |
Other comprehensive income (loss), net of tax: | ' | ' | ' | ' |
Foreign currency translation adjustment | 873 | -261 | 666 | 130 |
Total comprehensive income | 5,963 | 1,788 | 6,665 | 2,170 |
Common Class A [Member] | ' | ' | ' | ' |
Other (income) expense: | ' | ' | ' | ' |
Net income | 4,218 | 1,694 | 4,971 | 1,688 |
Basic net income per share | ' | ' | ' | ' |
Earnings per share (in dollars per share) | $0.33 | $0.14 | $0.39 | $0.14 |
Diluted net income per share | ' | ' | ' | ' |
Earnings per share (in dollars per share) | $0.31 | $0.13 | $0.37 | $0.13 |
Net income | 4,218 | 1,694 | 4,971 | 1,688 |
Common Class B [Member] | ' | ' | ' | ' |
Other (income) expense: | ' | ' | ' | ' |
Net income | 872 | 355 | 1,028 | 352 |
Basic net income per share | ' | ' | ' | ' |
Earnings per share (in dollars per share) | $0.27 | $0.11 | $0.32 | $0.11 |
Diluted net income per share | ' | ' | ' | ' |
Earnings per share (in dollars per share) | $0.27 | $0.11 | $0.31 | $0.11 |
Net income | $872 | $355 | $1,028 | $352 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $5,999 | $2,040 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 4,284 | 4,457 |
Provision for doubtful accounts and sales adjustments | 535 | 717 |
Change in fair value of interest rate swap | 321 | -549 |
Stock compensation expense | 3,794 | 3,714 |
Excess tax benefits from share-based payment arrangements | 0 | -82 |
Other | 42 | 1 |
Changes in assets and liabilities: | ' | ' |
Accounts receivable | 23,304 | 26,509 |
Other assets | -1,042 | 2,091 |
Accounts payable | -1,369 | -4,840 |
Deferred revenue | -27,944 | -21,342 |
Other liabilities | -2,893 | -1,141 |
Net cash provided by operating activities | 5,031 | 11,575 |
Cash flows from investing activities: | ' | ' |
Purchase of property and equipment | -3,337 | -3,966 |
Capitalized software costs | -115 | -217 |
Net cash used in investing activities | -3,452 | -4,183 |
Cash flows from financing activities: | ' | ' |
Repayments of debt | -291 | -279 |
Tax payments, net of proceeds, related to stock awards | -2,354 | -894 |
Payment of contingent liability associated with acquisitions | -471 | 0 |
Excess tax benefits from share-based payment arrangements | 0 | 82 |
Repurchase of common stock | 0 | -686 |
Cash dividends paid | -3,334 | -4,209 |
Net cash used in financing activities | -6,450 | -5,986 |
Effect of exchange rates on cash and equivalents | 298 | -616 |
Net (decrease) increase in cash and equivalents | -4,573 | 790 |
Cash and equivalents at beginning of period | 75,984 | 65,009 |
Cash and equivalents at end of period | 71,411 | 65,799 |
Supplemental disclosure of non-cash activities: | ' | ' |
Dividends paid in stock | $0 | $145 |
BASIS_OF_PRESENTATION_AND_RECE
BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended | |
Oct. 31, 2014 | ||
BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | ' | |
BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS | ' | |
1 | BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS | |
Basis of Presentation | ||
In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements fairly present the financial information contained therein. These statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In management’s opinion, all necessary adjustments, consisting of normal, recurring and non-recurring adjustments, have been included in the accompanying Condensed Consolidated Financial Statements to present fairly the financial position and operating results of QAD Inc. (“QAD” or the “Company”). The Condensed Consolidated Financial Statements do not include all disclosures required by accounting principles generally accepted in the United States of America for annual financial statements and should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2014. The Condensed Consolidated Financial Statements include the results of the Company and its wholly owned subsidiaries. The results of operations for the three and nine months ended October 31, 2014 are not necessarily indicative of the results to be expected for the year ending January 31, 2015. | ||
Recent Accounting Pronouncements | ||
In July 2013, the FASB issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists ("ASU 2013-11"), which requires an unrecognized tax benefit to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, similar tax loss, or a tax credit carryforward. To the extent the tax benefit is not available at the reporting date under the governing tax law or if the entity does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit should be presented as a liability and not combined with deferred tax assets. ASU 2013-11 was effective for and adopted by the Company in the first quarter of fiscal 2015 and was applied prospectively to unrecognized tax benefits that existed at the effective date. The adoption of ASU 2013-11 impacted the Company’s financial statement presentation and disclosures, but otherwise did not impact the Company’s condensed consolidated results of operations or cash flows. | ||
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 provides principles for recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 will be effective for the Company’s fiscal year beginning February 1, 2017. Early adoption is not permitted. The standard permits the use of either the retrospective or cumulative transition method. The Company is currently evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption. |
COMPUTATION_OF_NET_INCOME_PER_
COMPUTATION OF NET INCOME PER SHARE | 9 Months Ended | ||||||||||||||||
Oct. 31, 2014 | |||||||||||||||||
COMPUTATION OF NET INCOME PER SHARE [Abstract] | ' | ||||||||||||||||
COMPUTATION OF NET INCOME (LOSS) PER SHARE | ' | ||||||||||||||||
2 | COMPUTATION OF NET INCOME PER SHARE | ||||||||||||||||
The following table sets forth the computation of basic and diluted net income per share: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
October 31, | October 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in thousands, except per | (in thousands, except per | ||||||||||||||||
share data) | share data) | ||||||||||||||||
Net income | $ | 5,090 | $ | 2,049 | $ | 5,999 | $ | 2,040 | |||||||||
Less: Dividends declared | (1,118 | ) | (1,090 | ) | (3,334 | ) | (3,267 | ) | |||||||||
Undistributed net income (loss) | $ | 3,972 | $ | 959 | $ | 2,665 | $ | (1,227 | ) | ||||||||
Net income per share – Class A Common Stock | |||||||||||||||||
Dividends declared | $ | 926 | $ | 901 | $ | 2,761 | $ | 2,700 | |||||||||
Allocation of undistributed net income (loss) | 3,292 | 793 | 2,210 | (1,012 | ) | ||||||||||||
Net income attributable to Class A common stock | $ | 4,218 | $ | 1,694 | $ | 4,971 | $ | 1,688 | |||||||||
Weighted average shares of Class A common stock outstanding—basic | 12,865 | 12,526 | 12,755 | 12,477 | |||||||||||||
Weighted average potential shares of Class A common stock | 622 | 464 | 719 | 453 | |||||||||||||
Weighted average shares of Class A common stock and potential common shares outstanding—diluted | 13,487 | 12,990 | 13,474 | 12,930 | |||||||||||||
Basic net income per Class A common share | $ | 0.33 | $ | 0.14 | $ | 0.39 | $ | 0.14 | |||||||||
Diluted net income per Class A common share | $ | 0.31 | $ | 0.13 | $ | 0.37 | $ | 0.13 | |||||||||
Net income per share – Class B Common Stock | |||||||||||||||||
Dividends declared | $ | 192 | $ | 189 | $ | 573 | $ | 567 | |||||||||
Allocation of undistributed net income (loss) | 680 | 166 | 455 | (215 | ) | ||||||||||||
Net income attributable to Class B common stock | $ | 872 | $ | 355 | $ | 1,028 | $ | 352 | |||||||||
Weighted average shares of Class B common stock outstanding—basic | 3,189 | 3,149 | 3,180 | 3,146 | |||||||||||||
Weighted average potential shares of Class B common stock | 76 | 86 | 90 | 88 | |||||||||||||
Weighted average shares of Class B common stock and potential common shares outstanding—diluted | 3,265 | 3,235 | 3,270 | 3,234 | |||||||||||||
Basic net income per Class B common share | $ | 0.27 | $ | 0.11 | $ | 0.32 | $ | 0.11 | |||||||||
Diluted net income per Class B common share | $ | 0.27 | $ | 0.11 | $ | 0.31 | $ | 0.11 | |||||||||
Potential common shares consist of the shares issuable upon the release of restricted stock units (“RSUs”) and the exercise of stock appreciation rights (“SARs”). The Company’s unvested RSUs are not considered participating securities as they do not have rights to dividends or dividend equivalents prior to release. In addition, the Company’s unexercised SARs are not considered participating securities as they do not have rights to dividends or dividend equivalents prior to exercise. | |||||||||||||||||
The following table sets forth the number of potential common shares not included in the calculation of diluted net income per share because their effects were anti-dilutive: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
October 31, | October 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||
Class A | 330 | 1,307 | 277 | 1,148 | |||||||||||||
Class B | 67 | 189 | 38 | 183 | |||||||||||||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended | ||||||||||||
Oct. 31, 2014 | |||||||||||||
FAIR VALUE MEASUREMENTS [Abstract] | ' | ||||||||||||
FAIR VALUE MEASUREMENTS | ' | ||||||||||||
3 | FAIR VALUE MEASUREMENTS | ||||||||||||
When determining fair value, the Company uses a three-tier value hierarchy which prioritizes the inputs used in measuring fair value. Whenever possible, the Company uses observable market data. The Company relies on unobservable inputs only when observable market data is not available. Classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. | |||||||||||||
· | Level 1 - Money market mutual funds are recorded at fair value based upon quoted market prices. | ||||||||||||
· | Level 2 - The asset or liability related to the interest rate swap is recorded at fair value based upon a valuation model that uses relevant observable market inputs at quoted intervals, such as forward yield curves. The Company’s line of credit and notes payable both bear a variable market interest rate commensurate with the Company’s credit standing. Therefore, the carrying amounts outstanding under the line of credit and note payable reasonably approximate fair value based on Level 2 inputs. | ||||||||||||
· | Level 3 - The contingent liability associated with the acquisition of CEBOS is recorded at fair value based on significant inputs that are not observable in the market. This measure includes an assessment of the probability of achieving certain milestones and discounting the amount of each potential payment based on expected timing of the payment. Key assumptions include a discount rate of 4.6%, probability of achieving profitability and probability of achieving product development goals. There is one remaining future payment due April 2015 which consists of a guaranteed payment of between $0.3 million and $0.5 million contingent upon certain milestones. | ||||||||||||
The following table sets forth the financial assets, measured at fair value, as of October 31, 2014 and January 31, 2014: | |||||||||||||
Fair value measurement at reporting date using | |||||||||||||
Quoted Prices in | Significant Other | Significant | |||||||||||
Active Markets for | Observable Inputs | Unobservable Inputs | |||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||
(Level 1) | |||||||||||||
(in thousands) | |||||||||||||
Money market mutual funds as of October 31, 2014 | $ | 50,402 | |||||||||||
Money market mutual funds as of January 31, 2014 | $ | 57,204 | |||||||||||
Liability related to the interest rate swap as of October 31, 2014 | $ | (71 | ) | ||||||||||
Asset related to the interest rate swap as of January 31, 2014 | $ | 250 | |||||||||||
Contingent liability associated with acquisitions as of October 31, 2014 | $ | (736 | ) | ||||||||||
Contingent liability associated with acquisitions as of January 31, 2014 | $ | (1,178 | ) | ||||||||||
Money market mutual funds are classified as part of “Cash and equivalents” in the accompanying Condensed Consolidated Balance Sheets. In addition, the amount of cash and equivalents, including cash deposited with commercial banks, was $21 million and $19 million as of October 31, 2014 and January 31, 2014, respectively. | |||||||||||||
There have been no transfers between fair value measurements levels during the nine months ended October 31, 2014. | |||||||||||||
Derivative Instruments | |||||||||||||
The Company entered into an interest rate swap in May 2012 to mitigate the exposure to the variability of one month LIBOR for its floating rate debt described in Note 6 “Debt” within these Notes to Condensed Consolidated Financial Statements. The fair value of the interest rate swap is reflected as an asset or liability in the Condensed Consolidated Balance Sheets and the change in fair value is reported in “Other (income) expense, net” in the Condensed Consolidated Statements of Income and Comprehensive Income. The fair value of the interest rate swap is estimated as the net present value of projected cash flows based upon forward interest rates at the balance sheet date. | |||||||||||||
The fair values of the derivative instrument at October 31, 2014 and January 31, 2014 were as follows (in thousands): | |||||||||||||
( Liability) Asset Derivative | |||||||||||||
Fair Value | |||||||||||||
Balance Sheet | October 31, | January 31, | |||||||||||
Location | 2014 | 2014 | |||||||||||
Derivative instrument: | |||||||||||||
Interest rate swap | Other (liabilities) assets, net | $ | (71 | ) | $ | 250 | |||||||
Total | $ | (71 | ) | $ | 250 | ||||||||
The change in fair value of the interest rate swap recognized in the Condensed Consolidated Statement of Income and Comprehensive Income for the nine months ended October 31, 2014 and 2013 was $0.3 million and $(0.5) million, respectively. |
CAPITALIZED_SOFTWARE_COSTS
CAPITALIZED SOFTWARE COSTS | 9 Months Ended | ||||||||
Oct. 31, 2014 | |||||||||
CAPITALIZED SOFTWARE COSTS [Abstract] | ' | ||||||||
CAPITALIZED SOFTWARE COSTS | ' | ||||||||
4 | CAPITALIZED SOFTWARE COSTS | ||||||||
Capitalized software costs and accumulated amortization at October 31, 2014 and January 31, 2014 were as follows: | |||||||||
October 31, | January 31, | ||||||||
2014 | 2014 | ||||||||
(in thousands) | |||||||||
Capitalized software costs: | |||||||||
Acquired software technology | $ | 3,577 | $ | 3,577 | |||||
Capitalized software development costs (1) | 1,044 | 1,183 | |||||||
4,621 | 4,760 | ||||||||
Less accumulated amortization | (2,050 | ) | (1,445 | ) | |||||
Capitalized software costs, net | $ | 2,571 | $ | 3,315 | |||||
-1 | Capitalized software development costs include the impact of foreign currency translation. | ||||||||
Acquired software technology costs relate to technology purchased as a result of the Company’s fiscal 2013 acquisitions of DynaSys and CEBOS. In addition to the acquired software technology, the Company has capitalized costs related to translations and localizations of QAD Enterprise Applications. | |||||||||
It is the Company’s policy to write off capitalized software development costs once fully amortized. Accordingly, during the first nine months of fiscal 2015, $0.3 million of costs and accumulated amortization were removed from the balance sheet. Amortization of capitalized software costs was $0.9 million for each of the nine months ended October 31, 2014 and 2013. Amortization of capitalized software costs is included in “Cost of license fees” in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. | |||||||||
The following table summarizes the estimated amortization expense relating to the Company’s capitalized software costs as of October 31, 2014: | |||||||||
Fiscal Years | (in thousands) | ||||||||
2015 remaining | $ | 278 | |||||||
2016 | 1,011 | ||||||||
2017 | 837 | ||||||||
2018 | 445 | ||||||||
$ | 2,571 | ||||||||
GOODWILL_AND_INTANGIBLE_ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended | ||||||||||||
Oct. 31, 2014 | |||||||||||||
GOODWILL AND INTANGIBLE ASSETS [Abstract] | ' | ||||||||||||
GOODWILL AND INTANGIBLE ASSETS | ' | ||||||||||||
5 | GOODWILL AND INTANGIBLE ASSETS | ||||||||||||
Goodwill | |||||||||||||
The changes in the carrying amount of goodwill for the nine months ended October 31, 2014 were as follows: | |||||||||||||
Gross Carrying | Accumulated | Goodwill, Net | |||||||||||
Amount | Impairment | ||||||||||||
(in thousands) | |||||||||||||
Balance at January 31, 2014 | $ | 26,985 | $ | (15,608 | ) | $ | 11,377 | ||||||
Impact of foreign currency translation | (163 | ) | — | (163 | ) | ||||||||
Balance at October 31, 2014 | $ | 26,822 | $ | (15,608 | ) | $ | 11,214 | ||||||
The Company performed its annual goodwill impairment review during the fourth quarter of fiscal 2014. The analysis compared the Company’s market capitalization to its net assets as of the test date, November 30, 2013. As the market capitalization significantly exceeded the Company’s net assets, there was no indication of goodwill impairment for fiscal 2014. The Company monitors the indicators for goodwill impairment testing between annual tests. No adverse events occurred during the nine months ended October 31, 2014, that would cause the Company to test goodwill for impairment. | |||||||||||||
Intangible Assets | |||||||||||||
October 31, | January 31, | ||||||||||||
2014 | 2014 | ||||||||||||
(in thousands) | |||||||||||||
Amortizable intangible assets | |||||||||||||
Customer relationships (1) | $ | 2,940 | $ | 3,048 | |||||||||
Trade name | 515 | 515 | |||||||||||
3,455 | 3,563 | ||||||||||||
Less: accumulated amortization | (1,463 | ) | (978 | ) | |||||||||
Net amortizable intangible assets | $ | 1,992 | $ | 2,585 | |||||||||
-1 | Customer relationships include the impact of foreign currency translation. | ||||||||||||
The Company’s intangible assets are related to the DynaSys and CEBOS acquisitions completed in fiscal 2013. Intangible assets are included in “Other assets, net” in the accompanying Condensed Consolidated Balance Sheets. As of October 31, 2014, all of the Company’s intangible assets were determined to have finite useful lives, and therefore were subject to amortization. | |||||||||||||
Amortization of intangible assets was $0.5 million for each of the nine months ended October 31, 2014 and October 31, 2013. The following table summarizes the estimated amortization expense relating to the Company’s intangible assets as of October 31, 2014: | |||||||||||||
Fiscal Years | (in thousands) | ||||||||||||
2015 remaining | $ | 174 | |||||||||||
2016 | 694 | ||||||||||||
2017 | 694 | ||||||||||||
2018 | 430 | ||||||||||||
$ | 1,992 | ||||||||||||
DEBT
DEBT | 9 Months Ended | ||||||||
Oct. 31, 2014 | |||||||||
DEBT [Abstract] | ' | ||||||||
DEBT | ' | ||||||||
6 | DEBT | ||||||||
October 31, | January 31, | ||||||||
2014 | 2014 | ||||||||
(in thousands) | |||||||||
Note payable | $ | 15,183 | $ | 15,474 | |||||
Less current maturities | (401 | ) | (389 | ) | |||||
Long-term debt | $ | 14,782 | $ | 15,085 | |||||
Note Payable | |||||||||
Effective May 30, 2012, QAD Ortega Hill, LLC entered into a variable rate credit agreement (the “2012 Mortgage”) with Rabobank, N.A., to refinance a pre-existing mortgage. The 2012 Mortgage has an original principal balance of $16.1 million and bears interest at the one month LIBOR rate plus 2.25%. One month LIBOR was 0.15% at October 31, 2014. The 2012 Mortgage matures in June 2022 and is secured by the Company’s headquarters located in Santa Barbara, California. In conjunction with the 2012 Mortgage, QAD Ortega Hill, LLC entered into an interest rate swap with Rabobank, N.A. The swap agreement has an initial notional amount of $16.1 million and a schedule matching that of the underlying loan that synthetically fixes the interest rate on the debt at 4.31% for the entire term of the 2012 Mortgage. The terms of the 2012 Mortgage provide for QAD Ortega Hill, LLC to make net monthly payments of $88,100 consisting of principal and interest and one final payment of $11.7 million. The unpaid balance as of October 31, 2014 was $15.2 million. | |||||||||
Credit Facility | |||||||||
The Company has an unsecured credit agreement with Rabobank, N.A. (the “Facility”). The Facility provides a commitment through July 15, 2017 for a $20 million line of credit for working capital or other business needs. The Company pays a commitment fee calculated as 0.25% of the unused daily average of the $20 million Facility. Borrowings under the Facility bear interest at a rate equal to one month LIBOR plus 0.75%. At October 31, 2014, the effective borrowing rate would have been 0.90%. | |||||||||
The Facility provides that the Company maintain certain financial and operating ratios which include, among other provisions, minimum liquidity on a consolidated basis of $25 million in cash and equivalents at all times, a current ratio (calculated using current liabilities excluding deferred revenue) of not less than 1.3 to 1.0 determined at the end of each fiscal quarter, a leverage ratio of not more than 1.5 to 1.0 determined at the end of each fiscal quarter, and a debt service coverage ratio of not less than 1.5 to 1.0 determined at the end of each fiscal year. The Facility also contains customary covenants that could restrict the Company’s ability to incur additional indebtedness. | |||||||||
As of October 31, 2014, there were no borrowings under the Facility and the Company was in compliance with all financial covenants. |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended | ||||
Oct. 31, 2014 | |||||
ACCUMULATED OTHER COMPREHENSIVE LOSS [Abstract] | ' | ||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ' | ||||
7 | ACCUMULATED OTHER COMPREHENSIVE LOSS | ||||
The components of accumulated other comprehensive loss, net of taxes, were as follows: | |||||
Foreign Currency | |||||
Translation | |||||
Adjustments | |||||
(in thousands) | |||||
Balance as of January 31, 2014 | $ | (6,958 | ) | ||
Other comprehensive income | 666 | ||||
Amounts reclassified from accumulated other comprehensive loss | — | ||||
Net current period other comprehensive income | 666 | ||||
Balance as of October 31, 2014 | $ | (6,292 | ) | ||
During the first nine months of fiscal 2015 there were no reclassifications from accumulated other comprehensive loss. |
INCOME_TAXES
INCOME TAXES | 9 Months Ended | ||
Oct. 31, 2014 | |||
INCOME TAXES [Abstract] | ' | ||
INCOME TAXES | ' | ||
8 | INCOME TAXES | ||
During the first quarter of fiscal year 2015 QAD adopted ASU 2013-11. The new standard requires the netting of unrecognized tax benefits against deferred tax assets for a loss or credit that would apply in settlement of the uncertain tax position. As of October 31, 2014, the Company net $1.4 million of its uncertain tax benefits against $1.4 million of deferred tax assets on its financial statements and the total amount of unrecognized tax benefits (before netting) was $2.0 million. This amount includes penalties and interest. These unrecognized tax benefits, if recognized, will impact the Company’s effective tax rate. This liability is classified as long-term unless the liability is expected to conclude within twelve months of the reporting date. In the current quarter the Company released $0.6 million of its reserve due to the expiration of the statute of limitations. The entire release was recorded to the income statement as a discrete benefit during the quarter. In the next twelve months, due to potential settlements with a domestic tax authority related to tax credits and a foreign tax authority related to transfer pricing an estimated $0.2 million of unrecognized tax benefits may be recognized. | |||
The Company’s policy is to recognize interest and penalties, if any, related to unrecognized tax benefits as a component of income tax expense. As of October 31, 2014, the Company has accrued approximately $0.2 million of interest and penalty expense relating to unrecognized tax benefits. | |||
The Company files U.S. federal, state, and foreign tax returns that are subject to audit by various tax authorities. The Company is currently under audit in: | |||
· | India for fiscal years ended March 31, 1998, 1999, 2008, 2009, 2010, and 2012 | ||
· | California for the fiscal year ended 2004 | ||
· | Minnesota for the fiscal years ended 2010, 2011, 2012, 2013 | ||
During the first three quarters of fiscal year 2015 the Company settled audits in the following locations: | |||
· | South Africa for the fiscal year ended 2008 | ||
· | Thailand for the fiscal year ended 2012 | ||
· | India for the fiscal year ended March 31, 2011 | ||
· | France for the fiscal years ended 2011, 2012 and 2013 | ||
· | City of Wilmington, Delaware for the calendar years 2009, 2010, 2011, 2012, 2013 | ||
No material adjustments were made as a result of such settlements. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended | ||||||||||||||
Oct. 31, 2014 | |||||||||||||||
STOCKHOLDERS' EQUITY [Abstract] | ' | ||||||||||||||
STOCKHOLDERS' EQUITY | ' | ||||||||||||||
9 | STOCKHOLDERS’ EQUITY | ||||||||||||||
Dividends | |||||||||||||||
The following table sets forth the dividends that were declared by the Company during the first nine months of fiscal 2015: | |||||||||||||||
Declaration | Record Date | Payable | Dividend | Dividend | Amount | ||||||||||
Date | Class A | Class B | |||||||||||||
9/9/14 | 9/23/14 | 9/30/14 | $ | 0.072 | $ | 0.06 | $ | 1,118,000 | |||||||
6/11/14 | 6/25/14 | 7/2/14 | $ | 0.072 | $ | 0.06 | $ | 1,113,000 | |||||||
4/16/14 | 4/30/14 | 5/7/14 | $ | 0.072 | $ | 0.06 | $ | 1,103,000 |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended | ||||||||||||||||
Oct. 31, 2014 | |||||||||||||||||
STOCK-BASED COMPENSATION [Abstract] | ' | ||||||||||||||||
STOCK-BASED COMPENSATION | ' | ||||||||||||||||
10 | STOCK-BASED COMPENSATION | ||||||||||||||||
The Company’s equity awards consist of SARs and RSUs. For a description of the Company’s stock-based compensation plans, see Note 13 “Stock-Based Compensation” in Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended January 31, 2014. | |||||||||||||||||
Stock-Based Compensation | |||||||||||||||||
The following table sets forth reported stock-based compensation expense for the three and nine months ended October 31, 2014 and 2013: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
October 31, | October 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||
Cost of maintenance, subscription and other revenue | $ | 51 | $ | 58 | $ | 150 | $ | 161 | |||||||||
Cost of professional services | 121 | 124 | 364 | 388 | |||||||||||||
Sales and marketing | 203 | 236 | 587 | 687 | |||||||||||||
Research and development | 132 | 160 | 400 | 512 | |||||||||||||
General and administrative | 702 | 642 | 2,293 | 1,966 | |||||||||||||
Total stock-based compensation expense | $ | 1,209 | $ | 1,220 | $ | 3,794 | $ | 3,714 | |||||||||
Option/SAR Information | |||||||||||||||||
The weighted average assumptions used to value SARs granted in the nine months ended October 31, 2014 and 2013 are shown in the following table: | |||||||||||||||||
Nine Months Ended | |||||||||||||||||
October 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Expected life in years (1) | 4.98 | 4.57 | |||||||||||||||
Risk free interest rate (2) | 1.58 | % | 1 | % | |||||||||||||
Volatility (3) | 47 | % | 53 | % | |||||||||||||
Dividend rate (4) | 1.32 | % | 2.42 | % | |||||||||||||
-1 | The expected life of SARs granted under the stock-based compensation plans is based on historical vested SAR exercise and post-vest forfeiture patterns and includes an estimate of the expected term for SARs that were fully vested and outstanding. | ||||||||||||||||
-2 | The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of SARs in effect at the time of grant. | ||||||||||||||||
-3 | The Company estimates the volatility of its common stock at the date of grant based on the historical volatility of the Company’s common stock for a period equivalent to the expected life of the SARs, which it believes is representative of the expected volatility over the expected life of the SARs. | ||||||||||||||||
-4 | The Company expects to continue paying quarterly dividends at the same rate as the nine months ending on October 31, 2014. | ||||||||||||||||
The following table summarizes the activity for outstanding SARs for the nine months ended October 31, 2014: | |||||||||||||||||
Stock Options/ | Weighted | Weighted | Aggregate | ||||||||||||||
SARs | Average | Average | Intrinsic Value | ||||||||||||||
(in thousands) | Exercise | Remaining | (in thousands) | ||||||||||||||
Price per | Contractual | ||||||||||||||||
Share | Term (years) | ||||||||||||||||
Outstanding at January 31, 2014 | 2,842 | $ | 11.19 | ||||||||||||||
Granted | 387 | 21.61 | |||||||||||||||
Exercised | (603 | ) | 11.65 | ||||||||||||||
Expired | (20 | ) | 12.92 | ||||||||||||||
Forfeited | (49 | ) | 12.36 | ||||||||||||||
Outstanding at October 31, 2014 | 2,557 | $ | 12.62 | 5.3 | $ | 21,964 | |||||||||||
Vested and expected to vest at October 31, 2014 (1) | 2,538 | $ | 12.62 | 5.3 | $ | 21,786 | |||||||||||
Vested and exercisable October 31, 2014 | 1,303 | $ | 10.51 | 4.2 | $ | 13,735 | |||||||||||
-1 | The expected-to-vest SARs are the result of applying the pre-vesting forfeiture rate assumptions to total outstanding SARs. | ||||||||||||||||
The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the aggregate difference between the closing stock price of the Company’s common stock based on the last trading day as of October 31, 2014, and the exercise price for in-the-money SARs) that would have been received by the holders if all SARs had been exercised on October 31, 2014. The total intrinsic value of SARs exercised in the nine months ended October 31, 2014 was $5.1 million. | |||||||||||||||||
The number of SARs exercised includes shares withheld on behalf of employees to satisfy minimum statutory tax withholding requirements. During the three months ended October 31, 2014, the Company withheld 5,000 shares for payment of these taxes at a value of $0.1 million. During the nine months ended October 31, 2014, the Company withheld 78,000 shares for payment of these taxes at a value of $1.6 million. | |||||||||||||||||
At October 31, 2014, there was approximately $6.0 million of total unrecognized compensation cost related to unvested SARs. This cost is expected to be recognized over a weighted-average period of approximately 2.8 years. | |||||||||||||||||
RSU Information | |||||||||||||||||
The estimated fair value of RSUs was calculated based on the closing price of the Company’s common stock on the date of grant, reduced by the present value of dividends foregone during the vesting period. | |||||||||||||||||
The following table summarizes the activity for RSUs for the nine months ended October 31, 2014: | |||||||||||||||||
Weighted | |||||||||||||||||
Average | |||||||||||||||||
Grant Date | |||||||||||||||||
RSUs | Fair Value | ||||||||||||||||
(in thousands) | |||||||||||||||||
Restricted stock at January 31, 2014 | 430 | $ | 11.02 | ||||||||||||||
Granted | 285 | 21.25 | |||||||||||||||
Released (1) | (167 | ) | 11.91 | ||||||||||||||
Forfeited | (42 | ) | 13.73 | ||||||||||||||
Restricted stock at October 31, 2014 | 506 | $ | 16.27 | ||||||||||||||
-1 | The number of RSUs released includes shares withheld on behalf of employees to satisfy statutory tax withholding requirements. | ||||||||||||||||
The Company withholds, at the employee’s election, a portion of the released shares as consideration for the Company’s payment of applicable employee income taxes. During the three months ended October 31, 2014, the Company withheld 1,000 shares for payment of these taxes at a value of $12,000. During the nine months ended October 31, 2014, the Company withheld 45,000 shares for payment of these taxes at a value of $1.0 million. | |||||||||||||||||
Total unrecognized compensation cost related to RSUs was approximately $6.7 million as of October 31, 2014. This cost is expected to be recognized over a weighted-average period of approximately 3.1 years. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | |
Oct. 31, 2014 | ||
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | |
COMMITMENTS AND CONTINGENCIES | ' | |
11 | COMMITMENTS AND CONTINGENCIES | |
Indemnifications | ||
The Company sells software licenses and services to its customers under written agreements. Each agreement contains the relevant terms of the contractual arrangement with the customer and generally includes certain provisions for indemnifying the customer against losses, expenses and liabilities from damages that may be awarded against the customer in the event the Company’s software is found to infringe upon certain intellectual property rights of a third party. The agreements generally limit the scope of and remedies for such indemnification obligations in a variety of industry-standard respects. | ||
The Company believes its internal development processes and other policies and practices limit its exposure related to the indemnification provisions of the agreements. For several reasons, including the lack of prior indemnification claims and the lack of a monetary liability limit for certain infringement cases under the agreements, the Company cannot determine the maximum amount of potential future payments, if any, related to such indemnification provisions. | ||
Legal Actions | ||
The Company is subject to various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. While the outcome of these claims cannot be predicted with certainty, management does not believe that the outcome of any of these legal matters will have a material adverse effect on the Company’s consolidated results of operations, financial position or liquidity. |
BUSINESS_SEGMENT_INFORMATION
BUSINESS SEGMENT INFORMATION | 9 Months Ended | ||||||||||||||||
Oct. 31, 2014 | |||||||||||||||||
BUSINESS SEGMENT INFORMATION [Abstract] | ' | ||||||||||||||||
BUSINESS SEGMENT INFORMATION | ' | ||||||||||||||||
12 | BUSINESS SEGMENT INFORMATION | ||||||||||||||||
The Company markets its products and services worldwide, primarily to companies in the manufacturing industry, including automotive, consumer products, food and beverage, high technology, industrial products and life sciences industries. The Company sells and licenses its products through its direct sales force in four geographic regions: North America; Europe, the Middle East and Africa (“EMEA”); Asia Pacific; and Latin America and through distributors where third parties can extend sales reach more effectively or efficiently. The North America region includes the United States and Canada. The EMEA region includes Europe, the Middle East and Africa. The Asia Pacific region includes Asia and Australia. The Latin America region includes South America, Central America and Mexico. The Company’s Chief Operating Decision Maker, the Chief Executive Officer, reviews the consolidated results within one operating segment. | |||||||||||||||||
License and subscription revenues are assigned to the geographic regions based on both the proportion of users in each region and sales effort. Maintenance revenue is allocated to the region where the end user customer is located. Services revenue is assigned based on the region where the services are performed. | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
October 31, | October 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||
Revenue: | |||||||||||||||||
North America (1) | $ | 33,069 | $ | 28,571 | $ | 93,115 | $ | 82,675 | |||||||||
EMEA | 23,362 | 21,707 | 73,244 | 63,344 | |||||||||||||
Asia Pacific | 12,485 | 11,236 | 35,688 | 34,379 | |||||||||||||
Latin America | 5,088 | 4,146 | 13,492 | 12,383 | |||||||||||||
$ | 74,004 | $ | 65,660 | $ | 215,539 | $ | 192,781 | ||||||||||
(1) Sales into Canada accounted for 2% of North America total revenue for both the three and nine months ended October 31, 2014 and 2013. |
BASIS_OF_PRESENTATION_AND_RECE1
BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 9 Months Ended |
Oct. 31, 2014 | |
BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements fairly present the financial information contained therein. These statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In management’s opinion, all necessary adjustments, consisting of normal, recurring and non-recurring adjustments, have been included in the accompanying Condensed Consolidated Financial Statements to present fairly the financial position and operating results of QAD Inc. (“QAD” or the “Company”). The Condensed Consolidated Financial Statements do not include all disclosures required by accounting principles generally accepted in the United States of America for annual financial statements and should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2014. The Condensed Consolidated Financial Statements include the results of the Company and its wholly owned subsidiaries. The results of operations for the three and nine months ended October 31, 2014 are not necessarily indicative of the results to be expected for the year ending January 31, 2015. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In July 2013, the FASB issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists ("ASU 2013-11"), which requires an unrecognized tax benefit to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, similar tax loss, or a tax credit carryforward. To the extent the tax benefit is not available at the reporting date under the governing tax law or if the entity does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit should be presented as a liability and not combined with deferred tax assets. ASU 2013-11 was effective for and adopted by the Company in the first quarter of fiscal 2015 and was applied prospectively to unrecognized tax benefits that existed at the effective date. The adoption of ASU 2013-11 impacted the Company’s financial statement presentation and disclosures, but otherwise did not impact the Company’s condensed consolidated results of operations or cash flows. | |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 provides principles for recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 will be effective for the Company’s fiscal year beginning February 1, 2017. Early adoption is not permitted. The standard permits the use of either the retrospective or cumulative transition method. The Company is currently evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption. |
COMPUTATION_OF_NET_INCOME_PER_1
COMPUTATION OF NET INCOME PER SHARE (Tables) | 9 Months Ended | ||||||||||||||||
Oct. 31, 2014 | |||||||||||||||||
COMPUTATION OF NET INCOME PER SHARE [Abstract] | ' | ||||||||||||||||
Computation of basic and diluted net income (loss) per share | ' | ||||||||||||||||
The following table sets forth the computation of basic and diluted net income per share: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
October 31, | October 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in thousands, except per | (in thousands, except per | ||||||||||||||||
share data) | share data) | ||||||||||||||||
Net income | $ | 5,090 | $ | 2,049 | $ | 5,999 | $ | 2,040 | |||||||||
Less: Dividends declared | (1,118 | ) | (1,090 | ) | (3,334 | ) | (3,267 | ) | |||||||||
Undistributed net income (loss) | $ | 3,972 | $ | 959 | $ | 2,665 | $ | (1,227 | ) | ||||||||
Net income per share – Class A Common Stock | |||||||||||||||||
Dividends declared | $ | 926 | $ | 901 | $ | 2,761 | $ | 2,700 | |||||||||
Allocation of undistributed net income (loss) | 3,292 | 793 | 2,210 | (1,012 | ) | ||||||||||||
Net income attributable to Class A common stock | $ | 4,218 | $ | 1,694 | $ | 4,971 | $ | 1,688 | |||||||||
Weighted average shares of Class A common stock outstanding—basic | 12,865 | 12,526 | 12,755 | 12,477 | |||||||||||||
Weighted average potential shares of Class A common stock | 622 | 464 | 719 | 453 | |||||||||||||
Weighted average shares of Class A common stock and potential common shares outstanding—diluted | 13,487 | 12,990 | 13,474 | 12,930 | |||||||||||||
Basic net income per Class A common share | $ | 0.33 | $ | 0.14 | $ | 0.39 | $ | 0.14 | |||||||||
Diluted net income per Class A common share | $ | 0.31 | $ | 0.13 | $ | 0.37 | $ | 0.13 | |||||||||
Net income per share – Class B Common Stock | |||||||||||||||||
Dividends declared | $ | 192 | $ | 189 | $ | 573 | $ | 567 | |||||||||
Allocation of undistributed net income (loss) | 680 | 166 | 455 | (215 | ) | ||||||||||||
Net income attributable to Class B common stock | $ | 872 | $ | 355 | $ | 1,028 | $ | 352 | |||||||||
Weighted average shares of Class B common stock outstanding—basic | 3,189 | 3,149 | 3,180 | 3,146 | |||||||||||||
Weighted average potential shares of Class B common stock | 76 | 86 | 90 | 88 | |||||||||||||
Weighted average shares of Class B common stock and potential common shares outstanding—diluted | 3,265 | 3,235 | 3,270 | 3,234 | |||||||||||||
Basic net income per Class B common share | $ | 0.27 | $ | 0.11 | $ | 0.32 | $ | 0.11 | |||||||||
Diluted net income per Class B common share | $ | 0.27 | $ | 0.11 | $ | 0.31 | $ | 0.11 | |||||||||
Number of potential common shares not included in the calculation of diluted net income per share | ' | ||||||||||||||||
The following table sets forth the number of potential common shares not included in the calculation of diluted net income per share because their effects were anti-dilutive: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
October 31, | October 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||
Class A | 330 | 1,307 | 277 | 1,148 | |||||||||||||
Class B | 67 | 189 | 38 | 183 |
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | ||||||||||||
Oct. 31, 2014 | |||||||||||||
FAIR VALUE MEASUREMENTS [Abstract] | ' | ||||||||||||
Summary of financial assets and liabilities, measured at fair value | ' | ||||||||||||
The following table sets forth the financial assets, measured at fair value, as of October 31, 2014 and January 31, 2014: | |||||||||||||
Fair value measurement at reporting date using | |||||||||||||
Quoted Prices in | Significant Other | Significant | |||||||||||
Active Markets for | Observable Inputs | Unobservable Inputs | |||||||||||
Identical Assets | (Level 2) | (Level 3) | |||||||||||
(Level 1) | |||||||||||||
(in thousands) | |||||||||||||
Money market mutual funds as of October 31, 2014 | $ | 50,402 | |||||||||||
Money market mutual funds as of January 31, 2014 | $ | 57,204 | |||||||||||
Liability related to the interest rate swap as of October 31, 2014 | $ | (71 | ) | ||||||||||
Asset related to the interest rate swap as of January 31, 2014 | $ | 250 | |||||||||||
Contingent liability associated with acquisitions as of October 31, 2014 | $ | (736 | ) | ||||||||||
Contingent liability associated with acquisitions as of January 31, 2014 | $ | (1,178 | ) | ||||||||||
Fair values of the derivative instrument | ' | ||||||||||||
The fair values of the derivative instrument at October 31, 2014 and January 31, 2014 were as follows (in thousands): | |||||||||||||
( Liability) Asset Derivative | |||||||||||||
Fair Value | |||||||||||||
Balance Sheet | October 31, | January 31, | |||||||||||
Location | 2014 | 2014 | |||||||||||
Derivative instrument: | |||||||||||||
Interest rate swap | Other (liabilities) assets, net | $ | (71 | ) | $ | 250 | |||||||
Total | $ | (71 | ) | $ | 250 |
CAPITALIZED_SOFTWARE_COSTS_Tab
CAPITALIZED SOFTWARE COSTS (Tables) | 9 Months Ended | ||||||||
Oct. 31, 2014 | |||||||||
CAPITALIZED SOFTWARE COSTS [Abstract] | ' | ||||||||
Schedule of capitalized software costs | ' | ||||||||
Capitalized software costs and accumulated amortization at October 31, 2014 and January 31, 2014 were as follows: | |||||||||
October 31, | January 31, | ||||||||
2014 | 2014 | ||||||||
(in thousands) | |||||||||
Capitalized software costs: | |||||||||
Acquired software technology | $ | 3,577 | $ | 3,577 | |||||
Capitalized software development costs (1) | 1,044 | 1,183 | |||||||
4,621 | 4,760 | ||||||||
Less accumulated amortization | (2,050 | ) | (1,445 | ) | |||||
Capitalized software costs, net | $ | 2,571 | $ | 3,315 | |||||
-1 | Capitalized software development costs include the impact of foreign currency translation. | ||||||||
Estimated amortization expense | ' | ||||||||
The following table summarizes the estimated amortization expense relating to the Company’s capitalized software costs as of October 31, 2014: | |||||||||
Fiscal Years | (in thousands) | ||||||||
2015 remaining | $ | 278 | |||||||
2016 | 1,011 | ||||||||
2017 | 837 | ||||||||
2018 | 445 | ||||||||
$ | 2,571 |
GOODWILL_AND_INTANGIBLE_ASSETS1
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended | ||||||||||||
Oct. 31, 2014 | |||||||||||||
GOODWILL AND INTANGIBLE ASSETS [Abstract] | ' | ||||||||||||
Changes in carrying amount of goodwill | ' | ||||||||||||
The changes in the carrying amount of goodwill for the nine months ended October 31, 2014 were as follows: | |||||||||||||
Gross Carrying | Accumulated | Goodwill, Net | |||||||||||
Amount | Impairment | ||||||||||||
(in thousands) | |||||||||||||
Balance at January 31, 2014 | $ | 26,985 | $ | (15,608 | ) | $ | 11,377 | ||||||
Impact of foreign currency translation | (163 | ) | — | (163 | ) | ||||||||
Balance at October 31, 2014 | $ | 26,822 | $ | (15,608 | ) | $ | 11,214 | ||||||
Intangible assets | ' | ||||||||||||
Intangible Assets | |||||||||||||
October 31, | January 31, | ||||||||||||
2014 | 2014 | ||||||||||||
(in thousands) | |||||||||||||
Amortizable intangible assets | |||||||||||||
Customer relationships (1) | $ | 2,940 | $ | 3,048 | |||||||||
Trade name | 515 | 515 | |||||||||||
3,455 | 3,563 | ||||||||||||
Less: accumulated amortization | (1,463 | ) | (978 | ) | |||||||||
Net amortizable intangible assets | $ | 1,992 | $ | 2,585 | |||||||||
-1 | Customer relationships include the impact of foreign currency translation. | ||||||||||||
Estimated amortization expense | ' | ||||||||||||
The following table summarizes the estimated amortization expense relating to the Company’s intangible assets as of October 31, 2014: | |||||||||||||
Fiscal Years | (in thousands) | ||||||||||||
2015 remaining | $ | 174 | |||||||||||
2016 | 694 | ||||||||||||
2017 | 694 | ||||||||||||
2018 | 430 | ||||||||||||
$ | 1,992 |
DEBT_Tables
DEBT (Tables) | 9 Months Ended | ||||||||
Oct. 31, 2014 | |||||||||
DEBT [Abstract] | ' | ||||||||
Debt | ' | ||||||||
October 31, | January 31, | ||||||||
2014 | 2014 | ||||||||
(in thousands) | |||||||||
Note payable | $ | 15,183 | $ | 15,474 | |||||
Less current maturities | (401 | ) | (389 | ) | |||||
Long-term debt | $ | 14,782 | $ | 15,085 |
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended | ||||
Oct. 31, 2014 | |||||
ACCUMULATED OTHER COMPREHENSIVE LOSS [Abstract] | ' | ||||
Components of accumulated other comprehensive loss, net of taxes | ' | ||||
The components of accumulated other comprehensive loss, net of taxes, were as follows: | |||||
Foreign Currency | |||||
Translation | |||||
Adjustments | |||||
(in thousands) | |||||
Balance as of January 31, 2014 | $ | (6,958 | ) | ||
Other comprehensive income | 666 | ||||
Amounts reclassified from accumulated other comprehensive loss | — | ||||
Net current period other comprehensive income | 666 | ||||
Balance as of October 31, 2014 | $ | (6,292 | ) |
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended | ||||||||||||||
Oct. 31, 2014 | |||||||||||||||
STOCKHOLDERS' EQUITY [Abstract] | ' | ||||||||||||||
Dividends declared and/or paid | ' | ||||||||||||||
The following table sets forth the dividends that were declared by the Company during the first nine months of fiscal 2015: | |||||||||||||||
Declaration | Record Date | Payable | Dividend | Dividend | Amount | ||||||||||
Date | Class A | Class B | |||||||||||||
9/9/14 | 9/23/14 | 9/30/14 | $ | 0.072 | $ | 0.06 | $ | 1,118,000 | |||||||
6/11/14 | 6/25/14 | 7/2/14 | $ | 0.072 | $ | 0.06 | $ | 1,113,000 | |||||||
4/16/14 | 4/30/14 | 5/7/14 | $ | 0.072 | $ | 0.06 | $ | 1,103,000 |
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended | ||||||||||||||||
Oct. 31, 2014 | |||||||||||||||||
STOCK-BASED COMPENSATION [Abstract] | ' | ||||||||||||||||
Allocation of stock-based compensation expense | ' | ||||||||||||||||
The following table sets forth reported stock-based compensation expense for the three and nine months ended October 31, 2014 and 2013: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
October 31, | October 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||
Cost of maintenance, subscription and other revenue | $ | 51 | $ | 58 | $ | 150 | $ | 161 | |||||||||
Cost of professional services | 121 | 124 | 364 | 388 | |||||||||||||
Sales and marketing | 203 | 236 | 587 | 687 | |||||||||||||
Research and development | 132 | 160 | 400 | 512 | |||||||||||||
General and administrative | 702 | 642 | 2,293 | 1,966 | |||||||||||||
Total stock-based compensation expense | $ | 1,209 | $ | 1,220 | $ | 3,794 | $ | 3,714 | |||||||||
Weighted average assumptions used to value SARs | ' | ||||||||||||||||
The weighted average assumptions used to value SARs granted in the nine months ended October 31, 2014 and 2013 are shown in the following table: | |||||||||||||||||
Nine Months Ended | |||||||||||||||||
October 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Expected life in years (1) | 4.98 | 4.57 | |||||||||||||||
Risk free interest rate (2) | 1.58 | % | 1 | % | |||||||||||||
Volatility (3) | 47 | % | 53 | % | |||||||||||||
Dividend rate (4) | 1.32 | % | 2.42 | % | |||||||||||||
-1 | The expected life of SARs granted under the stock-based compensation plans is based on historical vested SAR exercise and post-vest forfeiture patterns and includes an estimate of the expected term for SARs that were fully vested and outstanding. | ||||||||||||||||
-2 | The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of SARs in effect at the time of grant. | ||||||||||||||||
-3 | The Company estimates the volatility of its common stock at the date of grant based on the historical volatility of the Company’s common stock for a period equivalent to the expected life of the SARs, which it believes is representative of the expected volatility over the expected life of the SARs. | ||||||||||||||||
-4 | The Company expects to continue paying quarterly dividends at the same rate as the nine months ending on October 31, 2014. | ||||||||||||||||
Activity for outstanding stock options and SARs | ' | ||||||||||||||||
The following table summarizes the activity for outstanding SARs for the nine months ended October 31, 2014: | |||||||||||||||||
Stock Options/ | Weighted | Weighted | Aggregate | ||||||||||||||
SARs | Average | Average | Intrinsic Value | ||||||||||||||
(in thousands) | Exercise | Remaining | (in thousands) | ||||||||||||||
Price per | Contractual | ||||||||||||||||
Share | Term (years) | ||||||||||||||||
Outstanding at January 31, 2014 | 2,842 | $ | 11.19 | ||||||||||||||
Granted | 387 | 21.61 | |||||||||||||||
Exercised | (603 | ) | 11.65 | ||||||||||||||
Expired | (20 | ) | 12.92 | ||||||||||||||
Forfeited | (49 | ) | 12.36 | ||||||||||||||
Outstanding at October 31, 2014 | 2,557 | $ | 12.62 | 5.3 | $ | 21,964 | |||||||||||
Vested and expected to vest at October 31, 2014 (1) | 2,538 | $ | 12.62 | 5.3 | $ | 21,786 | |||||||||||
Vested and exercisable October 31, 2014 | 1,303 | $ | 10.51 | 4.2 | $ | 13,735 | |||||||||||
-1 | The expected-to-vest SARs are the result of applying the pre-vesting forfeiture rate assumptions to total outstanding SARs. | ||||||||||||||||
Summary of activity for RSUs | ' | ||||||||||||||||
The following table summarizes the activity for RSUs for the nine months ended October 31, 2014: | |||||||||||||||||
Weighted | |||||||||||||||||
Average | |||||||||||||||||
Grant Date | |||||||||||||||||
RSUs | Fair Value | ||||||||||||||||
(in thousands) | |||||||||||||||||
Restricted stock at January 31, 2014 | 430 | $ | 11.02 | ||||||||||||||
Granted | 285 | 21.25 | |||||||||||||||
Released (1) | (167 | ) | 11.91 | ||||||||||||||
Forfeited | (42 | ) | 13.73 | ||||||||||||||
Restricted stock at October 31, 2014 | 506 | $ | 16.27 | ||||||||||||||
-1 | The number of RSUs released includes shares withheld on behalf of employees to satisfy statutory tax withholding requirements. |
BUSINESS_SEGMENT_INFORMATION_T
BUSINESS SEGMENT INFORMATION (Tables) | 9 Months Ended | ||||||||||||||||
Oct. 31, 2014 | |||||||||||||||||
BUSINESS SEGMENT INFORMATION [Abstract] | ' | ||||||||||||||||
License and subscription revenues assigned to geographic regions | ' | ||||||||||||||||
License and subscription revenues are assigned to the geographic regions based on both the proportion of users in each region and sales effort. Maintenance revenue is allocated to the region where the end user customer is located. Services revenue is assigned based on the region where the services are performed. | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
October 31, | October 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||
Revenue: | |||||||||||||||||
North America (1) | $ | 33,069 | $ | 28,571 | $ | 93,115 | $ | 82,675 | |||||||||
EMEA | 23,362 | 21,707 | 73,244 | 63,344 | |||||||||||||
Asia Pacific | 12,485 | 11,236 | 35,688 | 34,379 | |||||||||||||
Latin America | 5,088 | 4,146 | 13,492 | 12,383 | |||||||||||||
$ | 74,004 | $ | 65,660 | $ | 215,539 | $ | 192,781 | ||||||||||
(1) Sales into Canada accounted for 2% of North America total revenue for both the three and nine months ended October 31, 2014 and 2013. |
COMPUTATION_OF_NET_INCOME_PER_2
COMPUTATION OF NET INCOME PER SHARE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ' | ' | ' | ' |
Net income | $5,090 | $2,049 | $5,999 | $2,040 |
Less: Dividends declared | -1,118 | -1,090 | -3,334 | -3,267 |
Undistributed net income (loss) | 3,972 | 959 | 2,665 | -1,227 |
Net income per share [Abstract] | ' | ' | ' | ' |
Dividends declared | 1,118 | 1,090 | 3,334 | 3,267 |
Undistributed net income (loss) | 3,972 | 959 | 2,665 | -1,227 |
Net income attributable to common stock | 5,090 | 2,049 | 5,999 | 2,040 |
Common Class A [Member] | ' | ' | ' | ' |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ' | ' | ' | ' |
Net income | 4,218 | 1,694 | 4,971 | 1,688 |
Less: Dividends declared | -926 | -901 | -2,761 | -2,700 |
Undistributed net income (loss) | 3,292 | 793 | 2,210 | -1,012 |
Net income per share [Abstract] | ' | ' | ' | ' |
Dividends declared | 926 | 901 | 2,761 | 2,700 |
Undistributed net income (loss) | 3,292 | 793 | 2,210 | -1,012 |
Net income attributable to common stock | 4,218 | 1,694 | 4,971 | 1,688 |
Weighted average shares of common stock outstanding-basic (in shares) | 12,865 | 12,526 | 12,755 | 12,477 |
Weighted average potential shares of common stock (in shares) | 622 | 464 | 719 | 453 |
Weighted average shares of common stock and potential common shares outstanding-diluted (in shares) | 13,487 | 12,990 | 13,474 | 12,930 |
Basic net income per common share (in dollars per share) | $0.33 | $0.14 | $0.39 | $0.14 |
Diluted net income per common share (in dollars per share) | $0.31 | $0.13 | $0.37 | $0.13 |
Antidilutive securities excluded from computation of net income (loss) per share (in shares) | 330 | 1,307 | 277 | 1,148 |
Common Class B [Member] | ' | ' | ' | ' |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ' | ' | ' | ' |
Net income | 872 | 355 | 1,028 | 352 |
Less: Dividends declared | -192 | -189 | -573 | -567 |
Undistributed net income (loss) | 680 | 166 | 455 | -215 |
Net income per share [Abstract] | ' | ' | ' | ' |
Dividends declared | 192 | 189 | 573 | 567 |
Undistributed net income (loss) | 680 | 166 | 455 | -215 |
Net income attributable to common stock | $872 | $355 | $1,028 | $352 |
Weighted average shares of common stock outstanding-basic (in shares) | 3,189 | 3,149 | 3,180 | 3,146 |
Weighted average potential shares of common stock (in shares) | 76 | 86 | 90 | 88 |
Weighted average shares of common stock and potential common shares outstanding-diluted (in shares) | 3,265 | 3,235 | 3,270 | 3,234 |
Basic net income per common share (in dollars per share) | $0.27 | $0.11 | $0.32 | $0.11 |
Diluted net income per common share (in dollars per share) | $0.27 | $0.11 | $0.31 | $0.11 |
Antidilutive securities excluded from computation of net income (loss) per share (in shares) | 67 | 189 | 38 | 183 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | 9 Months Ended | 9 Months Ended | ||||||||||||
Oct. 31, 2014 | Jan. 31, 2014 | Oct. 31, 2014 | Oct. 31, 2014 | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Jan. 31, 2014 | Oct. 31, 2014 | Jan. 31, 2014 | Oct. 31, 2014 | Jan. 31, 2014 | Oct. 31, 2014 | Jan. 31, 2014 | |
Guaranteed Payment [Member] | Contingent upon Certain Milestones [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Significant Other Observable Inputs (Level 2) [Member] | Significant Other Observable Inputs (Level 2) [Member] | Significant Unobservable Inputs (Level 3) [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Payment April 2015 [Member] | Payment April 2015 [Member] | Other Assets, Net [Member] | Other Assets, Net [Member] | Recurring [Member] | Recurring [Member] | Recurring [Member] | Recurring [Member] | Recurring [Member] | Recurring [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Money market mutual funds | ' | ' | ' | ' | ' | ' | ' | ' | $50,402,000 | $57,204,000 | ' | ' | ' | ' |
Asset related to the interest rate swap | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -71,000 | 250,000 | ' | ' |
Contingent liability associated with acquisitions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -736,000 | -1,178,000 |
Cash deposited with commercial banks | 21,000,000 | 19,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Description of variable rate basis | ' | ' | ' | ' | 'one month LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | -71,000 | 250,000 | ' | ' | ' | ' | -71,000 | 250,000 | ' | ' | ' | ' | ' | ' |
Change in fair value recognized in net income | ' | ' | ' | ' | 300,000 | -500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Key Assumptions [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount rate (in hundredths) | 4.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Contingent Consideration [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contingent consideration payable | ' | ' | $300,000 | $500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
CAPITALIZED_SOFTWARE_COSTS_Det
CAPITALIZED SOFTWARE COSTS (Details) (USD $) | 9 Months Ended | ||||
Oct. 31, 2014 | Oct. 31, 2013 | Jan. 31, 2014 | |||
CAPITALIZED SOFTWARE COSTS [Abstract] | ' | ' | ' | ||
Acquired software technology | $3,577,000 | ' | $3,577,000 | ||
Capitalized software development costs | 1,044,000 | [1] | ' | 1,183,000 | [1] |
Capitalized software, gross | 4,621,000 | ' | 4,760,000 | ||
Less accumulated amortization | -2,050,000 | ' | -1,445,000 | ||
Capitalized software costs, net | 2,571,000 | ' | 3,315,000 | ||
Capitalized software, development costs, write-off | 300,000 | ' | ' | ||
Capitalized computer software amortization | 900,000 | 900,000 | ' | ||
Capitalized Software [Member] | ' | ' | ' | ||
Estimated Amortization Expense [Abstract] | ' | ' | ' | ||
2015 remaining | 278,000 | ' | ' | ||
2016 | 1,011,000 | ' | ' | ||
2017 | 837,000 | ' | ' | ||
2018 | 445,000 | ' | ' | ||
Total | $2,571,000 | ' | ' | ||
[1] | Capitalized software development costs include the impact of foreign currency translation. |
GOODWILL_AND_INTANGIBLE_ASSETS2
GOODWILL AND INTANGIBLE ASSETS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 | Jan. 31, 2014 | |||
Gross Carrying Amount [Abstract] | ' | ' | ' | ' | ' | |||
Balance, beginning of period | ' | ' | $26,985 | ' | ' | |||
Impact of foreign currency translation | ' | ' | -163 | ' | ' | |||
Balance, end of period | 26,822 | ' | 26,822 | ' | ' | |||
Accumulated Impairment [Abstract] | ' | ' | ' | ' | ' | |||
Balance, beginning of period | ' | ' | -15,608 | ' | ' | |||
Impact of foreign currency translation | ' | ' | 0 | ' | ' | |||
Balance, end of period | -15,608 | ' | -15,608 | ' | ' | |||
Goodwill, Net [Abstract] | ' | ' | ' | ' | ' | |||
Balance, beginning of period | ' | ' | 11,377 | ' | ' | |||
Impact of foreign currency translation | ' | ' | -163 | ' | ' | |||
Balance, end of period | 11,214 | ' | 11,214 | ' | ' | |||
Amortizable intangible assets, gross | 3,455 | ' | 3,455 | ' | 3,563 | |||
Less: accumulated amortization | -1,463 | ' | -1,463 | ' | -978 | |||
Net amortizable intangible assets | 1,992 | ' | 1,992 | ' | 2,585 | |||
Amortization of intangible assets | 176 | 178 | 535 | 531 | ' | |||
Estimated Amortization Expense [Abstract] | ' | ' | ' | ' | ' | |||
2015 remaining | 174 | ' | 174 | ' | ' | |||
2016 | 694 | ' | 694 | ' | ' | |||
2017 | 694 | ' | 694 | ' | ' | |||
2018 | 430 | ' | 430 | ' | ' | |||
Total | 1,992 | ' | 1,992 | ' | ' | |||
Customer Relationships [Member] | ' | ' | ' | ' | ' | |||
Goodwill, Net [Abstract] | ' | ' | ' | ' | ' | |||
Amortizable intangible assets, gross | 2,940 | [1] | ' | 2,940 | [1] | ' | 3,048 | [1] |
Trade Names [Member] | ' | ' | ' | ' | ' | |||
Goodwill, Net [Abstract] | ' | ' | ' | ' | ' | |||
Amortizable intangible assets, gross | $515 | ' | $515 | ' | $515 | |||
[1] | Customer relationships include the impact of foreign currency translation. |
DEBT_Details
DEBT (Details) (USD $) | Oct. 31, 2014 | Jan. 31, 2014 | Oct. 31, 2014 | 30-May-12 | Oct. 31, 2014 |
Rabobank N.A [Member] | 2012 Mortgage [Member] | 2012 Mortgage [Member] | |||
Unsecured Credit Agreement [Member] | Rabobank N.A [Member] | Rabobank N.A [Member] | |||
Quad Ortega Hill LLC [Member] | Credit Agreement [Member] | ||||
Quad Ortega Hill LLC [Member] | |||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' |
Note payable | $15,183,000 | $15,474,000 | ' | ' | ' |
Less current maturities | -401,000 | -389,000 | ' | ' | ' |
Long-term debt | 14,782,000 | 15,085,000 | ' | ' | ' |
Notes Payable [Abstract] | ' | ' | ' | ' | ' |
Original principal amount | ' | ' | ' | 16,100,000 | ' |
Principal and interest | ' | ' | ' | ' | 88,100 |
Final principal payment | ' | ' | ' | ' | 11,700,000 |
Unpaid balance | ' | ' | ' | ' | 15,200,000 |
Maturity date | ' | ' | ' | ' | 30-Jun-22 |
Basis spread on variable rate (in hundredths) | ' | ' | ' | ' | 2.25% |
One month LIBOR (in hundredths) | ' | ' | ' | ' | 0.15% |
Fixed interest rate (in hundredths) | ' | ' | ' | ' | 4.31% |
Credit Facility [Abstract] | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | 20,000,000 | ' | ' |
Maturity date | ' | ' | 15-Jul-17 | ' | ' |
Unused capacity commitment fee (in hundredths) | ' | ' | 0.25% | ' | ' |
Variable rate basis | ' | ' | 'One month LIBOR plus 0.75% | ' | 'One month LIBOR |
Basis spread on variable rate (in hundredths) | ' | ' | 0.75% | ' | ' |
Covenant terms | ' | ' | 'The Facility provides that the Company maintain certain financial and operating ratios which include, among other provisions, minimum liquidity on a consolidated basis of $25 million in cash and equivalents at all times, a current ratio (calculated using current liabilities excluding deferred revenue) of not less than 1.3 to 1.0 determined at the end of each fiscal quarter, a leverage ratio of not more than 1.5 to 1.0 determined at the end of each fiscal quarter, and a debt service coverage ratio of not less than 1.5 to 1.0 determined at the end of each fiscal year. The Facility also contains customary covenants that could restrict the Company's ability to incur additional indebtedness. | ' | ' |
Liquidity on a consolidated basis, Minimum | ' | ' | 25,000,000 | ' | ' |
Current ratio, Minimum | ' | ' | 1.3 | ' | ' |
Leverage ratio, Minimum | ' | ' | 1.5 | ' | ' |
Debt service coverage ratio, Minimum | ' | ' | 1.5 | ' | ' |
Effective borrowing rate (in hundredths) | ' | ' | 0.90% | ' | ' |
Borrowings outstanding | ' | ' | $0 | ' | ' |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' | ' |
Balance as of beginning of period | ' | ' | ($6,958) | ' |
Other comprehensive income | 873 | -261 | 666 | 130 |
Balance as of end of period | -6,292 | ' | -6,292 | ' |
Foreign Currency Translation Adjustments [Member] | ' | ' | ' | ' |
Accumulated Other Comprehensive Income Loss [Line Items] | ' | ' | ' | ' |
Balance as of beginning of period | ' | ' | -6,958 | ' |
Other comprehensive income | ' | ' | 666 | ' |
Amounts reclassified from accumulated other comprehensive loss | ' | ' | 0 | ' |
Net current period other comprehensive income | ' | ' | 666 | ' |
Balance as of end of period | ($6,292) | ' | ($6,292) | ' |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Oct. 31, 2014 |
Income Tax Contingency [Line Items] | ' |
Reduction of unrecognized tax benefits | ($1.40) |
Reduction of deferred tax assets | -1.4 |
Discrete tax benefit | 0.6 |
Unrecognized tax benefits that will impact effective tax rate | 2 |
Unrecognized tax benefits recognized in next twelve months | 0.2 |
Unrecognized tax benefits, income tax penalties and interest accrued | $0.20 |
India [Member] | ' |
Income Tax Contingency [Line Items] | ' |
Years in which the company is currently under audit | 'fiscal years ended March 31, 1998, 1999, 2008, 2009, 2010 and 2012 |
Years for which the company settled audits | 'fiscal year ended March 31, 2011 |
California [Member] | ' |
Income Tax Contingency [Line Items] | ' |
Years in which the company is currently under audit | 'fiscal year ended 2004 |
Minnesota [Member] | ' |
Income Tax Contingency [Line Items] | ' |
Years in which the company is currently under audit | 'fiscal years ended 2010, 2011, 2012, 2013 |
South Africa [Member] | ' |
Income Tax Contingency [Line Items] | ' |
Years for which the company settled audits | 'fiscal year ended 2008 |
Thailand [Member] | ' |
Income Tax Contingency [Line Items] | ' |
Years for which the company settled audits | 'fiscal year ended 2012 |
France [Member] | ' |
Income Tax Contingency [Line Items] | ' |
Years for which the company settled audits | 'fiscal years ended 2011, 2012 and 2013 |
Wilmington [Member] | ' |
Income Tax Contingency [Line Items] | ' |
Years for which the company settled audits | 'calendar years 2009, 2010, 2011, 2012, 2013 |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 9 Months Ended |
Oct. 31, 2014 | |
Dividends Declaration Date One [Member] | ' |
Dividends [Abstract] | ' |
Declaration date | 9-Sep-14 |
Record date | 23-Sep-14 |
Payable | 30-Sep-14 |
Amount Paid in Cash | $1,118,000 |
Dividends Declaration Date Two [Member] | ' |
Dividends [Abstract] | ' |
Declaration date | 11-Jun-14 |
Record date | 25-Jun-14 |
Payable | 2-Jul-14 |
Amount Paid in Cash | 1,113,000 |
Dividends Declaration Date Three [Member] | ' |
Dividends [Abstract] | ' |
Declaration date | 16-Apr-14 |
Record date | 30-Apr-14 |
Payable | 7-May-14 |
Amount Paid in Cash | $1,103,000 |
Common Class A [Member] | Dividends Declaration Date One [Member] | ' |
Dividends [Abstract] | ' |
Dividend (in dollars per share) | $0.07 |
Common Class A [Member] | Dividends Declaration Date Two [Member] | ' |
Dividends [Abstract] | ' |
Dividend (in dollars per share) | $0.07 |
Common Class A [Member] | Dividends Declaration Date Three [Member] | ' |
Dividends [Abstract] | ' |
Dividend (in dollars per share) | $0.07 |
Common Class B [Member] | Dividends Declaration Date One [Member] | ' |
Dividends [Abstract] | ' |
Dividend (in dollars per share) | $0.06 |
Common Class B [Member] | Dividends Declaration Date Two [Member] | ' |
Dividends [Abstract] | ' |
Dividend (in dollars per share) | $0.06 |
Common Class B [Member] | Dividends Declaration Date Three [Member] | ' |
Dividends [Abstract] | ' |
Dividend (in dollars per share) | $0.06 |
STOCKBASED_COMPENSATION_Detail
STOCK-BASED COMPENSATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||
Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' | |||
Share-based compensation | $1,209,000 | $1,220,000 | $3,794,000 | $3,714,000 | |||
Options/SARs [Member] | ' | ' | ' | ' | |||
Weighted average assumptions used to value Option/SAR [Abstract] | ' | ' | ' | ' | |||
Expected life in years | ' | ' | '4 years 11 months 23 days | [1] | '4 years 6 months 25 days | [1] | |
Risk free interest rate (in hundredths) | ' | ' | 1.58% | [2] | 1.00% | [2] | |
Volatility (in hundredths) | ' | ' | 47.00% | [3] | 53.00% | [3] | |
Dividend rate (in hundredths) | ' | ' | 1.32% | [4] | 2.42% | [4] | |
Stock Options/SARs [Roll Forward] | ' | ' | ' | ' | |||
Outstanding at beginning of period (in shares) | ' | ' | 2,842,000 | ' | |||
Granted (in shares) | ' | ' | 387,000 | ' | |||
Exercised (in shares) | ' | ' | -603,000 | ' | |||
Expired (in shares) | ' | ' | -20,000 | ' | |||
Forfeited (in shares) | ' | ' | -49,000 | ' | |||
Outstanding at end of period (in shares) | 2,557,000 | ' | 2,557,000 | ' | |||
Vested and expected to vest (in shares) | 2,538,000 | [5] | ' | 2,538,000 | [5] | ' | |
Vested and exercisable (in shares) | 1,303,000 | ' | 1,303,000 | ' | |||
Weighted Average Exercise Price per Share [Abstract] | ' | ' | ' | ' | |||
Outstanding at beginning of period (in dollars per shares) | ' | ' | $11.19 | ' | |||
Granted (in dollars per share) | ' | ' | $21.61 | ' | |||
Exercised (in dollars per shares) | ' | ' | $11.65 | ' | |||
Expired (in dollars per shares) | ' | ' | $12.92 | ' | |||
Forfeited (in dollars per shares) | ' | ' | $12.36 | ' | |||
Outstanding at end of period (in dollars per shares) | $12.62 | ' | $12.62 | ' | |||
Vested and expected to vest (in dollars per share) | $12.62 | [5] | ' | $12.62 | [5] | ' | |
Vested and exercisable (in dollars per share) | $10.51 | ' | $10.51 | ' | |||
Additional disclosures [Abstract] | ' | ' | ' | ' | |||
Weighted average remaining contractual term, outstanding at end of period | ' | ' | '5 years 3 months 18 days | ' | |||
Weighted average remaining contractual term, vested and expected to vest at end of period | ' | ' | '5 years 3 months 18 days | [5] | ' | ||
Weighted average remaining contractual term, vested and exercisable at end of period | ' | ' | '4 years 2 months 12 days | ' | |||
Aggregate intrinsic value, outstanding at end of period | 21,964,000 | ' | 21,964,000 | ' | |||
Aggregate intrinsic value, vested and expected to vest at end of period | 21,786,000 | [5] | ' | 21,786,000 | [5] | ' | |
Aggregate intrinsic value, vested and exercisable at end of period | 13,735,000 | ' | 13,735,000 | ' | |||
Total intrinsic value of stock options or SARs exercised | 5,100,000 | ' | ' | ' | |||
Number of shares withheld for payment of taxes (in shares) | 5,000 | ' | 78,000 | ' | |||
Value of shares withheld for payment of taxes | 100,000 | ' | 1,600,000 | ' | |||
Total unrecognized compensation cost | 6,000,000 | ' | 6,000,000 | ' | |||
Weighted-average period to recognize total unrecognized compensation cost | ' | ' | '2 years 9 months 18 days | ' | |||
RSUs [Member] | ' | ' | ' | ' | |||
Additional disclosures [Abstract] | ' | ' | ' | ' | |||
Number of shares withheld for payment of taxes (in shares) | 1,000 | ' | 45,000 | ' | |||
Value of shares withheld for payment of taxes | 12,000 | ' | 1,000,000 | ' | |||
Total unrecognized compensation cost | 6,700,000 | ' | 6,700,000 | ' | |||
Weighted-average period to recognize total unrecognized compensation cost | ' | ' | '3 years 1 month 6 days | ' | |||
Summary of activity of RSUs [Roll Forward] | ' | ' | ' | ' | |||
Restricted stock at beginning of period (in shares) | ' | ' | 430,000 | ' | |||
Granted (in shares) | ' | ' | 285,000 | ' | |||
Released (in shares) | ' | ' | -167,000 | [6] | ' | ||
Forfeited (in shares) | ' | ' | -42,000 | ' | |||
Restricted stock at end of period (in shares) | 506,000 | ' | 506,000 | ' | |||
Weighted Average Grant Date Fair Value [Abstract] | ' | ' | ' | ' | |||
Restricted stock at beginning of period (in dollars per share) | ' | ' | $11.02 | ' | |||
Granted (in dollars per share) | ' | ' | $21.25 | ' | |||
Released (in dollars per share) | ' | ' | $11.91 | [6] | ' | ||
Forfeited (in dollars per share) | ' | ' | $13.73 | ' | |||
Restricted stock at end of period (in dollars per share) | $16.27 | ' | $16.27 | ' | |||
Cost of Maintenance, Subscription and Other Revenue [Member] | ' | ' | ' | ' | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' | |||
Share-based compensation | 51,000 | 58,000 | 150,000 | 161,000 | |||
Cost of Professional Services [Member] | ' | ' | ' | ' | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' | |||
Share-based compensation | 121,000 | 124,000 | 364,000 | 388,000 | |||
Sales and Marketing [Member] | ' | ' | ' | ' | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' | |||
Share-based compensation | 203,000 | 236,000 | 587,000 | 687,000 | |||
Research and Development [Member] | ' | ' | ' | ' | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' | |||
Share-based compensation | 132,000 | 160,000 | 400,000 | 512,000 | |||
General and Administrative [Member] | ' | ' | ' | ' | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' | |||
Share-based compensation | $702,000 | $642,000 | $2,293,000 | $1,966,000 | |||
[1] | The expected life of SARs granted under the stock-based compensation plans is based on historical vested SAR exercise and post-vest forfeiture patterns and includes an estimate of the expected term for SARs that were fully vested and outstanding. | ||||||
[2] | The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of SARs in effect at the time of grant. | ||||||
[3] | The Company estimates the volatility of its common stock at the date of grant based on the historical volatility of the Company's common stock for a period equivalent to the expected life of the SARs, which it believes is representative of the expected volatility over the expected life of the SARs. | ||||||
[4] | The Company expects to continue paying quarterly dividends at the same rate as the nine months ending on October 31, 2014. | ||||||
[5] | The expected-to-vest SARs are the result of applying the pre-vesting forfeiture rate assumptions to total outstanding SARs. | ||||||
[6] | The number of RSUs released includes shares withheld on behalf of employees to satisfy statutory tax withholding requirements. |
BUSINESS_SEGMENT_INFORMATION_D
BUSINESS SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 | ||||
Region | ||||||||
Segment | ||||||||
BUSINESS SEGMENT INFORMATION [Abstract] | ' | ' | ' | ' | ||||
Number of geographic regions | ' | ' | 4 | ' | ||||
Number of operating segments | ' | ' | 1 | ' | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ' | ' | ' | ' | ||||
Revenue | $74,004 | $65,660 | $215,539 | $192,781 | ||||
Percentage of sales into Canada to North America total revenue (in hundredths) | 2.00% | 2.00% | 2.00% | 2.00% | ||||
North America [Member] | ' | ' | ' | ' | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ' | ' | ' | ' | ||||
Revenue | 33,069 | [1] | 28,571 | [1] | 93,115 | [1] | 82,675 | [1] |
EMEA [Member] | ' | ' | ' | ' | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ' | ' | ' | ' | ||||
Revenue | 23,362 | 21,707 | 73,244 | 63,344 | ||||
Asia Pacific [Member] | ' | ' | ' | ' | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ' | ' | ' | ' | ||||
Revenue | 12,485 | 11,236 | 35,688 | 34,379 | ||||
Latin America [Member] | ' | ' | ' | ' | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ' | ' | ' | ' | ||||
Revenue | $5,088 | $4,146 | $13,492 | $12,383 | ||||
[1] | Sales into Canada accounted for 2% of North America total revenue for both the three and nine months ended October 31, 2014 and 2013. |