Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Apr. 30, 2015 | 31-May-15 | |
Entity Information [Line Items] | ||
Entity Registrant Name | QAD INC | |
Entity Central Index Key | 1036188 | |
Current Fiscal Year End Date | -30 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 30-Apr-15 | |
Common Class A [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 15,377,841 | |
Common Class B [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 3,199,954 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (USD $) | Apr. 30, 2015 | Jan. 31, 2015 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and equivalents | $130,864 | $120,526 |
Accounts receivable, net of allowances of $2,720 and $2,524 at April 30, 2015 and January 31, 2015, respectively | 51,222 | 78,887 |
Deferred tax assets, net | 9,266 | 9,313 |
Other current assets | 15,436 | 14,799 |
Total current assets | 206,788 | 223,525 |
Property and equipment, net | 33,240 | 33,154 |
Capitalized software costs, net | 2,237 | 2,485 |
Goodwill | 10,857 | 10,911 |
Deferred tax assets, net | 10,063 | 9,680 |
Other assets, net | 3,440 | 3,614 |
Total assets | 266,625 | 283,369 |
Current liabilities: | ||
Current portion of long-term debt | 409 | 406 |
Accounts payable | 8,281 | 12,872 |
Deferred revenue | 91,408 | 102,721 |
Other current liabilities | 26,866 | 35,765 |
Total current liabilities | 126,964 | 151,764 |
Long-term debt | 14,575 | 14,680 |
Other liabilities | 4,764 | 5,219 |
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 | 194,039 | 185,546 |
Treasury stock, at cost (1,562,678 shares and 1,609,958 shares at April 30, 2015 and January 31, 2015, respectively) | -22,178 | -22,977 |
Accumulated deficit | -44,215 | -43,465 |
Accumulated other comprehensive loss | -7,345 | -7,418 |
Total stockholders' equity | 120,322 | 111,706 |
Total liabilities and stockholders' equity | 266,625 | 283,369 |
Common Class A [Member] | ||
Common stock: | ||
Common Stock Value | 17 | 16 |
Common Class B [Member] | ||
Common stock: | ||
Common Stock Value | $4 | $4 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) (USD $) | Apr. 30, 2015 | Jan. 31, 2015 |
In Thousands, except Share data, unless otherwise specified | ||
Current assets: | ||
Accounts receivable, net of allowances | $2,720 | $2,524 |
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) | 1,562,678 | 1,609,958 |
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) | 16,602,512 | 16,152,405 |
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) | 3,537,322 | 3,537,298 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Apr. 30, 2015 | Apr. 30, 2014 |
Revenue: | ||
License fees | $6,851 | $6,652 |
Subscription fees | 9,419 | 6,192 |
Maintenance and other | 33,383 | 36,076 |
Professional services | 19,612 | 19,565 |
Total revenue | 69,265 | 68,485 |
Costs of revenue: | ||
License fees | 929 | 900 |
Subscription fees | 5,064 | 3,786 |
Maintenance and other | 7,777 | 8,170 |
Professional services | 18,328 | 18,575 |
Total cost of revenue | 32,098 | 31,431 |
Gross profit | 37,167 | 37,054 |
Operating expenses: | ||
Sales and marketing | 17,145 | 16,477 |
Research and development | 10,657 | 11,195 |
General and administrative | 8,441 | 8,904 |
Amortization of intangibles from acquisitions | 164 | 180 |
Total operating expenses | 36,407 | 36,756 |
Operating income | 760 | 298 |
Other expense (income): | ||
Interest income | -57 | -57 |
Interest expense | 183 | 181 |
Other expense (income), net | -119 | 226 |
Total other expense (income), net | 7 | 350 |
Income (loss) before income taxes | 753 | -52 |
Income tax expense | 204 | 24 |
Net income (loss) | 549 | -76 |
Diluted net income (loss) per share | ||
Net income (loss) | 549 | -76 |
Other comprehensive income, net of tax: | ||
Foreign currency translation adjustments | 73 | 139 |
Total comprehensive income | 622 | 63 |
Common Class A [Member] | ||
Other expense (income): | ||
Net income (loss) | 468 | -64 |
Basic net income (loss) per share | ||
Earnings per share (in dollars per share) | $0.03 | ($0.01) |
Diluted net income (loss) per share | ||
Earnings per share (in dollars per share) | $0.03 | ($0.01) |
Net income (loss) | 468 | -64 |
Common Class B [Member] | ||
Other expense (income): | ||
Net income (loss) | 81 | -12 |
Basic net income (loss) per share | ||
Earnings per share (in dollars per share) | $0.03 | $0 |
Diluted net income (loss) per share | ||
Earnings per share (in dollars per share) | $0.02 | $0 |
Net income (loss) | $81 | ($12) |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Apr. 30, 2015 | Apr. 30, 2014 |
Cash flows from operating activities: | ||
Net income (loss) | $549 | ($76) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 1,454 | 1,419 |
Provision for doubtful accounts and sales adjustments | 311 | 159 |
Stock compensation expense | 1,306 | 876 |
Change in fair value of a derivative instrument | -245 | 46 |
Excess tax benefits from share-based payment arrangements | -151 | -143 |
Other, net | 0 | 12 |
Changes in assets and liabilities: | ||
Accounts receivable | 26,823 | 20,322 |
Other assets | -1,122 | -1,093 |
Accounts payable | -4,456 | -3,314 |
Deferred revenue | -11,157 | -8,073 |
Other liabilities | -8,976 | -6,957 |
Net cash provided by operating activities | 4,336 | 3,178 |
Cash flows from investing activities: | ||
Purchase of property and equipment | -1,140 | -570 |
Capitalized software costs | -28 | -56 |
Net cash used in investing activities | -1,168 | -626 |
Cash flows from financing activities: | ||
Repayments of debt | -102 | -97 |
Tax payments, net of proceeds, related to stock awards | -391 | -577 |
Payment of contingent liability associated with acquisitions | -750 | -471 |
Excess tax benefits from share-based payment arrangements | 151 | 143 |
Proceeds from issuance of common stock, net of issuance of costs | 8,365 | 0 |
Net cash provided by (used in) financing activities | 7,273 | -1,002 |
Effect of exchange rates on cash and equivalents | -103 | 691 |
Net increase in cash and equivalents | 10,338 | 2,241 |
Cash and equivalents at beginning of period | 120,526 | 75,984 |
Cash and equivalents at end of period | 130,864 | 78,225 |
Supplemental disclosure of non-cash activities: | ||
Obligations associated with dividend declaration | $1,299 | $1,103 |
BASIS_OF_PRESENTATION_AND_RECE
BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Apr. 30, 2015 | |
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, 2015. The Condensed Consolidated Financial Statements include the results of the Company and its wholly owned subsidiaries. The results of operations for the three months ended April 30, 2015 are not necessarily indicative of the results to be expected for the year ending January 31, 2016. | |
Recent Accounting Pronouncements | |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. ASU 2014-09 will be effective for the Company’s fiscal year beginning February 1, 2017. On April 29, 2015, the FASB issued an exposure draft proposing a one-year deferral of the effective date for all entities. If approved, this exposure draft would make ASU 2014-09 effective for the Company’s fiscal year beginning February 1, 2018. Under the exposure draft, early adoption would be permitted for the Company’s fiscal year beginning February 1, 2017. 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_LOSS
COMPUTATION OF NET INCOME (LOSS) PER SHARE | 3 Months Ended | ||||||||
Apr. 30, 2015 | |||||||||
COMPUTATION OF NET INCOME (LOSS) PER SHARE [Abstract] | |||||||||
COMPUTATION OF NET INCOME (LOSS) PER SHARE | 2. COMPUTATION OF NET INCOME (LOSS) PER SHARE | ||||||||
The following table sets forth the computation of basic and diluted net income (loss) per share: | |||||||||
Three Months Ended | |||||||||
April 30, | |||||||||
2015 | 2014 | ||||||||
(in thousands except per share data) | |||||||||
Net income (loss) | $ | 549 | $ | (76 | ) | ||||
Less: Dividends declared | (1,299 | ) | (1,103 | ) | |||||
Undistributed net loss | $ | (750 | ) | $ | (1,179 | ) | |||
Net income (loss) per share – Class A Common Stock | |||||||||
Dividends declared | $ | 1,107 | $ | 912 | |||||
Allocation of undistributed net loss | (639 | ) | (976 | ) | |||||
Net income (loss) attributable to Class A common stock | $ | 468 | $ | (64 | ) | ||||
Weighted average shares of Class A common stock outstanding—basic | 15,262 | 12,628 | |||||||
Weighted average potential shares of Class A common stock | 786 | — | |||||||
Weighted average shares of Class A common stock and potential common shares outstanding—diluted | 16,048 | 12,628 | |||||||
Basic net income (loss) per Class A common share | $ | 0.03 | $ | (0.01 | ) | ||||
Diluted net income (loss) per Class A common share | $ | 0.03 | $ | (0.01 | ) | ||||
Net income (loss) per share – Class B Common Stock | |||||||||
Dividends declared | $ | 192 | $ | 191 | |||||
Allocation of undistributed net loss | (111 | ) | (203 | ) | |||||
Net income (loss) attributable to Class B common stock | $ | 81 | $ | (12 | ) | ||||
Weighted average shares of Class B common stock outstanding—basic | 3,196 | 3,168 | |||||||
Weighted average potential shares of Class B common stock | 83 | — | |||||||
Weighted average shares of Class B common stock and potential common shares outstanding—diluted | 3,279 | 3,168 | |||||||
Basic net income (loss) per Class B common share | $ | 0.03 | $ | (0.00 | ) | ||||
Diluted net income (loss) per Class B common share | $ | 0.02 | $ | (0.00 | ) | ||||
Potential common shares consist of the shares issuable upon the release of restricted stock units (“RSUs”) and the exercise of stock options and stock appreciation rights (“SARs”). The Company’s unvested RSUs and unexercised SARs are not considered participating securities as they do not have rights to dividends or dividend equivalents prior to release or exercise. | |||||||||
The following table sets forth the number of potential common shares not included in the calculation of diluted earnings per share because their effects were anti-dilutive: | |||||||||
Three Months Ended | |||||||||
April 30, | |||||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Class A | 326 | 2,778 | |||||||
Class B | 60 | 371 |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended | ||||||||||||
Apr. 30, 2015 | |||||||||||||
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. | ||||||||||||
· | 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. As of January 31, 2015, there was one remaining future payment due April 2015 which consisted of a guaranteed payment of $0.3 million and $0.5 million contingent upon certain milestones. The maximum contingent liability of $0.8 million was paid in March, 2015. | ||||||||||||
The following table sets forth the financial assets, measured at fair value, as of April 30, 2015 and January 31, 2015: | |||||||||||||
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 April 30, 2015 | $ | 109,506 | |||||||||||
Money market mutual funds as of January 31, 2015 | $ | 98,294 | |||||||||||
Liability related to the interest rate swap as of April 30, 2015 | $ | (381 | ) | ||||||||||
Liability related to the interest rate swap as of January 31, 2015 | $ | (626 | ) | ||||||||||
Contingent liability associated with acquisitions as of April 30, 2015 | $ | - | |||||||||||
Contingent liability associated with acquisitions as of January 31, 2015 | $ | (750 | ) | ||||||||||
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 $22 million as of April 30, 2015 and January 31, 2015, respectively. | |||||||||||||
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. | |||||||||||||
There have been no transfers between fair value measurements levels during the three months ended April 30, 2015. | |||||||||||||
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” in the Condensed Consolidated Statements of Operations 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 April 30, 2015 and January 31, 2015 were as follows (in thousands): | |||||||||||||
(Liability) Derivative | |||||||||||||
Fair Value | |||||||||||||
Balance Sheet | April 30, | January 31, | |||||||||||
Location | 2015 | 2015 | |||||||||||
Derivative instrument: | |||||||||||||
Interest rate swap | Other liabilities | $ | (381 | ) | $ | (626 | ) | ||||||
Total | $ | (381 | ) | $ | (626 | ) | |||||||
The change in fair value of the interest rate swap recognized in the Condensed Consolidated Statement of Operations and Comprehensive Income for the three months ended April 30, 2015 and 2014 was $(245,000) and $46,000, respectively. |
CAPITALIZED_SOFTWARE_COSTS
CAPITALIZED SOFTWARE COSTS | 3 Months Ended | ||||||||
Apr. 30, 2015 | |||||||||
CAPITALIZED SOFTWARE COSTS [Abstract] | |||||||||
CAPITALIZED SOFTWARE COSTS | 4. CAPITALIZED SOFTWARE COSTS | ||||||||
Capitalized software costs and accumulated amortization at April 30, 2015 and January 31, 2015 were as follows: | |||||||||
April 30, | January 31, | ||||||||
2015 | 2015 | ||||||||
(in thousands) | |||||||||
Capitalized software costs: | |||||||||
Acquired software technology | $ | 3,458 | $ | 3,458 | |||||
Capitalized software development costs (1) | 1,099 | 1,206 | |||||||
4,557 | 4,664 | ||||||||
Less accumulated amortization | (2,320 | ) | (2,179 | ) | |||||
Capitalized software costs, net | $ | 2,237 | $ | 2,485 | |||||
-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. | |||||||||
Amortization of capitalized software costs was $0.3 million for each of the three months ended April 30, 2015 and 2014. Amortization of capitalized software costs is included in “Cost of license fees” in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. | |||||||||
The following table summarizes the estimated amortization expense relating to the Company’s capitalized software costs as of April 30, 2015: | |||||||||
Fiscal Years | (in thousands) | ||||||||
2016 remaining | $ | 797 | |||||||
2017 | 912 | ||||||||
2018 | 521 | ||||||||
2019 | 7 | ||||||||
$ | 2,237 |
GOODWILL_AND_INTANGIBLE_ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended | ||||||||||||
Apr. 30, 2015 | |||||||||||||
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 three months ended April 30, 2015 were as follows: | |||||||||||||
Gross Carrying | Accumulated | Goodwill, Net | |||||||||||
Amount | Impairment | ||||||||||||
(in thousands) | |||||||||||||
Balance at January 31, 2015 | $ | 26,519 | $ | (15,608 | ) | $ | 10,911 | ||||||
Impact of foreign currency translation | (54 | ) | — | (54 | ) | ||||||||
Balance at April 30, 2015 | $ | 26,465 | $ | (15,608 | ) | $ | 10,857 | ||||||
The Company performed its annual goodwill impairment review during the fourth quarter of fiscal 2015. The analysis compared the Company’s market capitalization to its net assets as of the test date, November 30, 2014. As the market capitalization significantly exceeded the Company’s net assets, there was no indication of goodwill impairment for fiscal 2015. The Company monitors the indicators for goodwill impairment testing between annual tests. No adverse events occurred during the three months ended April 30, 2015, that would cause the Company to test goodwill for impairment. | |||||||||||||
Intangible Assets | |||||||||||||
April 30, | January 31, | ||||||||||||
2015 | 2015 | ||||||||||||
(in thousands) | |||||||||||||
Amortizable intangible assets | |||||||||||||
Customer relationships (1) | $ | 2,771 | $ | 2,793 | |||||||||
Trade name | 515 | 515 | |||||||||||
3,286 | 3,308 | ||||||||||||
Less: accumulated amortization | (1,712 | ) | (1,558 | ) | |||||||||
Net amortizable intangible assets | $ | 1,574 | $ | 1,750 | |||||||||
-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 April 30, 2015, 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 $0.2 million for each of the first quarters of fiscal 2016 and 2015. The following table summarizes the estimated amortization expense relating to the Company’s intangible assets as of April 30, 2015: | |||||||||||||
Fiscal Years | (in thousands) | ||||||||||||
2016 remaining | $ | 495 | |||||||||||
2017 | 661 | ||||||||||||
2018 | 418 | ||||||||||||
$ | 1,574 |
DEBT
DEBT | 3 Months Ended | ||||||||
Apr. 30, 2015 | |||||||||
DEBT [Abstract] | |||||||||
DEBT | 6. DEBT | ||||||||
April 30, | January 31, | ||||||||
2015 | 2015 | ||||||||
(in thousands) | |||||||||
Note payable | $ | 14,984 | $ | 15,086 | |||||
Less current maturities | (409 | ) | (406 | ) | |||||
Long-term debt | $ | 14,575 | $ | 14,680 | |||||
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 0.18% at April 30, 2015. 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 April 30, 2015 was $15.0 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 of 0.25% per annum of the daily average of the unused portion of the $20 million Facility. Borrowings under the Facility bore interest at a rate equal to one month LIBOR plus 0.75%. At April 30, 2015, the effective borrowing rate would have been 0.93%. | |||||||||
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 April 30, 2015, there were no borrowings under the Facility and the Company was in compliance with all financial covenants. |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended | ||||
Apr. 30, 2015 | |||||
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, 2015 | $ | (7,418 | ) | ||
Other comprehensive income | 73 | ||||
Amounts reclassified from accumulated other comprehensive loss | — | ||||
Net current period other comprehensive income | 73 | ||||
Balance as of April 30, 2015 | $ | (7,345 | ) | ||
During the first quarter of fiscal 2016 there were no reclassifications from accumulated other comprehensive loss. |
INCOME_TAXES
INCOME TAXES | 3 Months Ended | ||
Apr. 30, 2015 | |||
INCOME TAXES [Abstract] | |||
INCOME TAXES | 8. INCOME TAXES | ||
The gross amount of unrecognized tax benefits was $1.9 million at April 30, 2015, including interest and penalties. During the first quarter of fiscal 2015 the Company adopted 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. As a result of adoption of ASU 2013-11, the Company reduced its unrecognized tax benefits by $1.4 million with an accompanying reduction of deferred tax assets by $1.4 million. The entire amount of 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 next twelve months, due to potential settlements with domestic tax authorities related to tax credits and lapse in statute of limitations, an estimated $0.3 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 April 30, 2015, 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, 2009, 2010, 2012 and 2013 | ||
· | California for the fiscal year ended 2004 | ||
· | Minnesota for the fiscal years ended 2010, 2011, 2012, 2013 | ||
During the first quarter of fiscal year 2016, QAD India settled its audit for the fiscal year ended March 31, 2008. No adjustments were made as a result of such settlements. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended | ||||||||||||||||
Apr. 30, 2015 | |||||||||||||||||
STOCKHOLDERS' EQUITY [Abstract] | |||||||||||||||||
STOCKHOLDERS' EQUITY | 9. STOCKHOLDERS’ EQUITY | ||||||||||||||||
Issuance of Common Stock | |||||||||||||||||
On January 22, 2015, the Company closed an offering of 2,000,000 shares of Class A common stock. The net proceeds to the Company from the sale of the stock were $37.0 million after deducting underwriting discounts and commissions and offering expenses. On February 18, 2015 the offering underwriters exercised in full an option to purchase additional shares. As a result, 450,000 shares of Class A common stock were issued generating approximately $8.4 million in additional net proceeds. | |||||||||||||||||
Dividends | |||||||||||||||||
The following table sets forth the dividends that were declared by the Company during the first quarter of fiscal 2016: | |||||||||||||||||
Declaration | Record Date | Payable | Dividend | Dividend | Amount | ||||||||||||
Date | Class A | Class B | |||||||||||||||
4/15/15 | 4/29/15 | 5/6/15 | $ | 0.072 | $ | 0.06 | $ | 1,299,000 |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended | ||||||||||||||||
Apr. 30, 2015 | |||||||||||||||||
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 5 “Stock-Based Compensation” in Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended January 31, 2015. | |||||||||||||||||
Stock-Based Compensation | |||||||||||||||||
The following table sets forth reported stock-based compensation expense for the three months ended April 30, 2015 and 2014: | |||||||||||||||||
Three Months Ended | |||||||||||||||||
April 30, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
(in thousands) | |||||||||||||||||
Cost of subscription | $ | 12 | $ | 8 | |||||||||||||
Cost of maintenance and other revenue | 46 | 29 | |||||||||||||||
Cost of professional services | 119 | 87 | |||||||||||||||
Sales and marketing | 261 | 127 | |||||||||||||||
Research and development | 148 | 92 | |||||||||||||||
General and administrative | 720 | 533 | |||||||||||||||
Total stock-based compensation expense | $ | 1,306 | $ | 876 | |||||||||||||
SAR Information | |||||||||||||||||
The weighted average assumptions used to value SARs granted in the three months ended April 30, 2015 and 2014 are shown in the following table: | |||||||||||||||||
Three Months Ended | |||||||||||||||||
April 30, | |||||||||||||||||
2015(5) | 2014 | ||||||||||||||||
Expected life in years (1) | — | 3.75 | |||||||||||||||
Risk free interest rate (2) | — | 1.14 | % | ||||||||||||||
Volatility (3) | — | 49 | % | ||||||||||||||
Dividend rate (4) | — | 2.44 | % | ||||||||||||||
-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 three months ending on April 30, 2015. | ||||||||||||||||
-5 | There were no SARs granted during the three months ended April 30, 2015. | ||||||||||||||||
The following table summarizes the activity for outstanding SARs for the three months ended April 30, 2015: | |||||||||||||||||
Weighted | Weighted | ||||||||||||||||
Average | Average | ||||||||||||||||
Exercise | Remaining | Aggregate | |||||||||||||||
SARs | Price per | Contractual | Intrinsic Value | ||||||||||||||
(in thousands) | Share | Term (years) | (in thousands) | ||||||||||||||
Outstanding at January 31, 2015 | 2,499 | $ | 12.69 | ||||||||||||||
Granted | — | — | |||||||||||||||
Exercised | (118 | ) | 11 | ||||||||||||||
Expired | (10 | ) | 14.76 | ||||||||||||||
Forfeited | — | — | |||||||||||||||
Outstanding at April 30, 2015 | 2,371 | $ | 12.76 | 5 | $ | 26,123 | |||||||||||
Vested and expected to vest at April 30, 2015 (1) | 2,359 | $ | 12.77 | 5 | $ | 25,978 | |||||||||||
Vested and exercisable at April 30, 2015 | 1,198 | $ | 10.48 | 4 | $ | 15,866 | |||||||||||
-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 April 30, 2015, and the exercise price for in-the-money SARs) that would have been received by the holders if all SARs had been exercised on April 30, 2015. The total intrinsic value of SARs exercised in the three months ended April 30, 2015 was $1.5 million. | |||||||||||||||||
The number of SARs exercised includes shares withheld on behalf of employees to satisfy minimum statutory tax withholding requirements. During the quarter ended April 30, 2015, the Company withheld 15,600 shares for payment of these taxes at a value of $0.4 million. | |||||||||||||||||
At April 30, 2015, there was approximately $4.8 million of total unrecognized compensation cost related to unvested SARs. This cost is expected to be recognized over a weighted-average period of approximately 2.4 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 three months ended April 30, 2015: | |||||||||||||||||
Weighted | |||||||||||||||||
Average | |||||||||||||||||
Grant Date | |||||||||||||||||
RSUs | Fair Value | ||||||||||||||||
(in thousands) | |||||||||||||||||
Restricted stock at January 31, 2015 | 503 | $ | 16.27 | ||||||||||||||
Granted | 60 | 21.93 | |||||||||||||||
Released (1) | (2 | ) | 13.09 | ||||||||||||||
Forfeited | (5 | ) | 16.79 | ||||||||||||||
Restricted stock at April 30, 2015 | 556 | $ | 16.88 | ||||||||||||||
-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 April 30, 2015, the Company withheld 600 shares for payment of these taxes at a value of $14,000. | |||||||||||||||||
Total unrecognized compensation cost related to RSUs was approximately $6.7 million as of April 30, 2015. This cost is expected to be recognized over a weighted-average period of approximately 2.6 years. |
DEFERRED_REVENUES
DEFERRED REVENUES | 3 Months Ended | ||||||||
Apr. 30, 2015 | |||||||||
DEFERRED REVENUES [Abstract] | |||||||||
DEFERRED REVENUES | 11. DEFERRED REVENUES | ||||||||
Deferred revenues consisted of the following: | |||||||||
April 30, | January 31, | ||||||||
2015 | 2015 | ||||||||
(in thousands) | |||||||||
Deferred maintenance revenue | $ | 75,744 | $ | 86,381 | |||||
Deferred subscription revenue | 11,622 | 11,563 | |||||||
Deferred services revenue | 2,621 | 2,813 | |||||||
Deferred license revenue | 1,028 | 1,890 | |||||||
Deferred other revenue | 393 | 74 | |||||||
Deferred revenues, current | 91,408 | 102,721 | |||||||
Deferred revenues, non-current (in Other liabilities) | 2,114 | 2,361 | |||||||
Total deferred revenues | $ | 93,522 | $ | 105,082 | |||||
Deferred maintenance and subscription revenues represent customer payments made in advance for support and subscription contracts. Support and subscription are billed in advance with corresponding revenues being recognized ratably over the support and subscription periods. Support is typically billed annually while subscription is typically billed quarterly. Deferred license revenues result from undelivered products or specified enhancements, customer specific acceptance provisions and software license transactions that cannot be segmented from undelivered consulting or other services. Deferred services revenues represent both prepayments for our professional services where revenues for these services are generally recognized as the Company completes the performance obligations for the prepaid services; and services already provided but deferred due to software revenue recognition rules. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Apr. 30, 2015 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 12. 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 | 3 Months Ended | ||||||||
Apr. 30, 2015 | |||||||||
BUSINESS SEGMENT INFORMATION [Abstract] | |||||||||
BUSINESS SEGMENT INFORMATION | 13. 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 | |||||||||
April 30, | |||||||||
2015 | 2014 | ||||||||
Revenue: | (in thousands) | ||||||||
North America (1) | $ | 30,222 | $ | 29,139 | |||||
EMEA | 21,802 | 24,151 | |||||||
Asia Pacific | 11,725 | 11,332 | |||||||
Latin America | 5,516 | 3,863 | |||||||
$ | 69,265 | $ | 68,485 | ||||||
-1 | Sales into Canada accounted for 2% of North America total revenue in each of the three months ended April 30, 2015 and 2014. |
BASIS_OF_PRESENTATION_AND_RECE1
BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 3 Months Ended |
Apr. 30, 2015 | |
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, 2015. The Condensed Consolidated Financial Statements include the results of the Company and its wholly owned subsidiaries. The results of operations for the three months ended April 30, 2015 are not necessarily indicative of the results to be expected for the year ending January 31, 2016. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. ASU 2014-09 will be effective for the Company’s fiscal year beginning February 1, 2017. On April 29, 2015, the FASB issued an exposure draft proposing a one-year deferral of the effective date for all entities. If approved, this exposure draft would make ASU 2014-09 effective for the Company’s fiscal year beginning February 1, 2018. Under the exposure draft, early adoption would be permitted for the Company’s fiscal year beginning February 1, 2017. 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_LOSS1
COMPUTATION OF NET INCOME (LOSS) PER SHARE (Tables) | 3 Months Ended | ||||||||
Apr. 30, 2015 | |||||||||
COMPUTATION OF NET INCOME (LOSS) 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 (loss) per share: | ||||||||
Three Months Ended | |||||||||
April 30, | |||||||||
2015 | 2014 | ||||||||
(in thousands except per share data) | |||||||||
Net income (loss) | $ | 549 | $ | (76 | ) | ||||
Less: Dividends declared | (1,299 | ) | (1,103 | ) | |||||
Undistributed net loss | $ | (750 | ) | $ | (1,179 | ) | |||
Net income (loss) per share – Class A Common Stock | |||||||||
Dividends declared | $ | 1,107 | $ | 912 | |||||
Allocation of undistributed net loss | (639 | ) | (976 | ) | |||||
Net income (loss) attributable to Class A common stock | $ | 468 | $ | (64 | ) | ||||
Weighted average shares of Class A common stock outstanding—basic | 15,262 | 12,628 | |||||||
Weighted average potential shares of Class A common stock | 786 | — | |||||||
Weighted average shares of Class A common stock and potential common shares outstanding—diluted | 16,048 | 12,628 | |||||||
Basic net income (loss) per Class A common share | $ | 0.03 | $ | (0.01 | ) | ||||
Diluted net income (loss) per Class A common share | $ | 0.03 | $ | (0.01 | ) | ||||
Net income (loss) per share – Class B Common Stock | |||||||||
Dividends declared | $ | 192 | $ | 191 | |||||
Allocation of undistributed net loss | (111 | ) | (203 | ) | |||||
Net income (loss) attributable to Class B common stock | $ | 81 | $ | (12 | ) | ||||
Weighted average shares of Class B common stock outstanding—basic | 3,196 | 3,168 | |||||||
Weighted average potential shares of Class B common stock | 83 | — | |||||||
Weighted average shares of Class B common stock and potential common shares outstanding—diluted | 3,279 | 3,168 | |||||||
Basic net income (loss) per Class B common share | $ | 0.03 | $ | (0.00 | ) | ||||
Diluted net income (loss) per Class B common share | $ | 0.02 | $ | (0.00 | ) | ||||
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 earnings per share because their effects were anti-dilutive: | ||||||||
Three Months Ended | |||||||||
April 30, | |||||||||
2015 | 2014 | ||||||||
(in thousands) | |||||||||
Class A | 326 | 2,778 | |||||||
Class B | 60 | 371 |
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended | ||||||||||||
Apr. 30, 2015 | |||||||||||||
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 April 30, 2015 and January 31, 2015: | ||||||||||||
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 April 30, 2015 | $ | 109,506 | |||||||||||
Money market mutual funds as of January 31, 2015 | $ | 98,294 | |||||||||||
Liability related to the interest rate swap as of April 30, 2015 | $ | (381 | ) | ||||||||||
Liability related to the interest rate swap as of January 31, 2015 | $ | (626 | ) | ||||||||||
Contingent liability associated with acquisitions as of April 30, 2015 | $ | - | |||||||||||
Contingent liability associated with acquisitions as of January 31, 2015 | $ | (750 | ) | ||||||||||
Fair values of the derivative instrument | The fair values of the derivative instrument at April 30, 2015 and January 31, 2015 were as follows (in thousands): | ||||||||||||
(Liability) Derivative | |||||||||||||
Fair Value | |||||||||||||
Balance Sheet | April 30, | January 31, | |||||||||||
Location | 2015 | 2015 | |||||||||||
Derivative instrument: | |||||||||||||
Interest rate swap | Other liabilities | $ | (381 | ) | $ | (626 | ) | ||||||
Total | $ | (381 | ) | $ | (626 | ) |
CAPITALIZED_SOFTWARE_COSTS_Tab
CAPITALIZED SOFTWARE COSTS (Tables) | 3 Months Ended | ||||||||
Apr. 30, 2015 | |||||||||
CAPITALIZED SOFTWARE COSTS [Abstract] | |||||||||
Schedule of capitalized software costs | Capitalized software costs and accumulated amortization at April 30, 2015 and January 31, 2015 were as follows: | ||||||||
April 30, | January 31, | ||||||||
2015 | 2015 | ||||||||
(in thousands) | |||||||||
Capitalized software costs: | |||||||||
Acquired software technology | $ | 3,458 | $ | 3,458 | |||||
Capitalized software development costs (1) | 1,099 | 1,206 | |||||||
4,557 | 4,664 | ||||||||
Less accumulated amortization | (2,320 | ) | (2,179 | ) | |||||
Capitalized software costs, net | $ | 2,237 | $ | 2,485 | |||||
-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 April 30, 2015: | ||||||||
Fiscal Years | (in thousands) | ||||||||
2016 remaining | $ | 797 | |||||||
2017 | 912 | ||||||||
2018 | 521 | ||||||||
2019 | 7 | ||||||||
$ | 2,237 |
GOODWILL_AND_INTANGIBLE_ASSETS1
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended | ||||||||||||
Apr. 30, 2015 | |||||||||||||
GOODWILL AND INTANGIBLE ASSETS [Abstract] | |||||||||||||
Changes in carrying amount of goodwill | The changes in the carrying amount of goodwill for the three months ended April 30, 2015 were as follows: | ||||||||||||
Gross Carrying | Accumulated | Goodwill, Net | |||||||||||
Amount | Impairment | ||||||||||||
(in thousands) | |||||||||||||
Balance at January 31, 2015 | $ | 26,519 | $ | (15,608 | ) | $ | 10,911 | ||||||
Impact of foreign currency translation | (54 | ) | — | (54 | ) | ||||||||
Balance at April 30, 2015 | $ | 26,465 | $ | (15,608 | ) | $ | 10,857 | ||||||
Intangible assets | Intangible Assets | ||||||||||||
April 30, | January 31, | ||||||||||||
2015 | 2015 | ||||||||||||
(in thousands) | |||||||||||||
Amortizable intangible assets | |||||||||||||
Customer relationships (1) | $ | 2,771 | $ | 2,793 | |||||||||
Trade name | 515 | 515 | |||||||||||
3,286 | 3,308 | ||||||||||||
Less: accumulated amortization | (1,712 | ) | (1,558 | ) | |||||||||
Net amortizable intangible assets | $ | 1,574 | $ | 1,750 | |||||||||
-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 April 30, 2015: | ||||||||||||
Fiscal Years | (in thousands) | ||||||||||||
2016 remaining | $ | 495 | |||||||||||
2017 | 661 | ||||||||||||
2018 | 418 | ||||||||||||
$ | 1,574 |
DEBT_Tables
DEBT (Tables) | 3 Months Ended | ||||||||
Apr. 30, 2015 | |||||||||
DEBT [Abstract] | |||||||||
Debt | April 30, | January 31, | |||||||
2015 | 2015 | ||||||||
(in thousands) | |||||||||
Note payable | $ | 14,984 | $ | 15,086 | |||||
Less current maturities | (409 | ) | (406 | ) | |||||
Long-term debt | $ | 14,575 | $ | 14,680 |
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended | ||||
Apr. 30, 2015 | |||||
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, 2015 | $ | (7,418 | ) | ||
Other comprehensive income | 73 | ||||
Amounts reclassified from accumulated other comprehensive loss | — | ||||
Net current period other comprehensive income | 73 | ||||
Balance as of April 30, 2015 | $ | (7,345 | ) |
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended | ||||||||||||||||
Apr. 30, 2015 | |||||||||||||||||
STOCKHOLDERS' EQUITY [Abstract] | |||||||||||||||||
Dividends declared and/or paid | The following table sets forth the dividends that were declared by the Company during the first quarter of fiscal 2016: | ||||||||||||||||
Declaration | Record Date | Payable | Dividend | Dividend | Amount | ||||||||||||
Date | Class A | Class B | |||||||||||||||
4/15/15 | 4/29/15 | 5/6/15 | $ | 0.072 | $ | 0.06 | $ | 1,299,000 |
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended | ||||||||||||||||
Apr. 30, 2015 | |||||||||||||||||
STOCK-BASED COMPENSATION [Abstract] | |||||||||||||||||
Allocation of stock-based compensation expense | The following table sets forth reported stock-based compensation expense for the three months ended April 30, 2015 and 2014: | ||||||||||||||||
Three Months Ended | |||||||||||||||||
April 30, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
(in thousands) | |||||||||||||||||
Cost of subscription | $ | 12 | $ | 8 | |||||||||||||
Cost of maintenance and other revenue | 46 | 29 | |||||||||||||||
Cost of professional services | 119 | 87 | |||||||||||||||
Sales and marketing | 261 | 127 | |||||||||||||||
Research and development | 148 | 92 | |||||||||||||||
General and administrative | 720 | 533 | |||||||||||||||
Total stock-based compensation expense | $ | 1,306 | $ | 876 | |||||||||||||
Weighted average assumptions used to value SARs | The weighted average assumptions used to value SARs granted in the three months ended April 30, 2015 and 2014 are shown in the following table: | ||||||||||||||||
Three Months Ended | |||||||||||||||||
April 30, | |||||||||||||||||
2015(5) | 2014 | ||||||||||||||||
Expected life in years (1) | — | 3.75 | |||||||||||||||
Risk free interest rate (2) | — | 1.14 | % | ||||||||||||||
Volatility (3) | — | 49 | % | ||||||||||||||
Dividend rate (4) | — | 2.44 | % | ||||||||||||||
-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 three months ending on April 30, 2015. | ||||||||||||||||
-5 | There were no SARs granted during the three months ended April 30, 2015. | ||||||||||||||||
Activity for outstanding SARs | The following table summarizes the activity for outstanding SARs for the three months ended April 30, 2015: | ||||||||||||||||
Weighted | Weighted | ||||||||||||||||
Average | Average | ||||||||||||||||
Exercise | Remaining | Aggregate | |||||||||||||||
SARs | Price per | Contractual | Intrinsic Value | ||||||||||||||
(in thousands) | Share | Term (years) | (in thousands) | ||||||||||||||
Outstanding at January 31, 2015 | 2,499 | $ | 12.69 | ||||||||||||||
Granted | — | — | |||||||||||||||
Exercised | (118 | ) | 11 | ||||||||||||||
Expired | (10 | ) | 14.76 | ||||||||||||||
Forfeited | — | — | |||||||||||||||
Outstanding at April 30, 2015 | 2,371 | $ | 12.76 | 5 | $ | 26,123 | |||||||||||
Vested and expected to vest at April 30, 2015 (1) | 2,359 | $ | 12.77 | 5 | $ | 25,978 | |||||||||||
Vested and exercisable at April 30, 2015 | 1,198 | $ | 10.48 | 4 | $ | 15,866 | |||||||||||
-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 three months ended April 30, 2015: | ||||||||||||||||
Weighted | |||||||||||||||||
Average | |||||||||||||||||
Grant Date | |||||||||||||||||
RSUs | Fair Value | ||||||||||||||||
(in thousands) | |||||||||||||||||
Restricted stock at January 31, 2015 | 503 | $ | 16.27 | ||||||||||||||
Granted | 60 | 21.93 | |||||||||||||||
Released (1) | (2 | ) | 13.09 | ||||||||||||||
Forfeited | (5 | ) | 16.79 | ||||||||||||||
Restricted stock at April 30, 2015 | 556 | $ | 16.88 | ||||||||||||||
-1 | The number of RSUs released includes shares withheld on behalf of employees to satisfy statutory tax withholding requirements. |
DEFERRED_REVENUES_Tables
DEFERRED REVENUES (Tables) | 3 Months Ended | ||||||||
Apr. 30, 2015 | |||||||||
DEFERRED REVENUES [Abstract] | |||||||||
Deferred revenues | April 30, | January 31, | |||||||
2015 | 2015 | ||||||||
(in thousands) | |||||||||
Deferred maintenance revenue | $ | 75,744 | $ | 86,381 | |||||
Deferred subscription revenue | 11,622 | 11,563 | |||||||
Deferred services revenue | 2,621 | 2,813 | |||||||
Deferred license revenue | 1,028 | 1,890 | |||||||
Deferred other revenue | 393 | 74 | |||||||
Deferred revenues, current | 91,408 | 102,721 | |||||||
Deferred revenues, non-current (in Other liabilities) | 2,114 | 2,361 | |||||||
Total deferred revenues | $ | 93,522 | $ | 105,082 |
BUSINESS_SEGMENT_INFORMATION_T
BUSINESS SEGMENT INFORMATION (Tables) | 3 Months Ended | ||||||||
Apr. 30, 2015 | |||||||||
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 | |||||||||
April 30, | |||||||||
2015 | 2014 | ||||||||
Revenue: | (in thousands) | ||||||||
North America (1) | $ | 30,222 | $ | 29,139 | |||||
EMEA | 21,802 | 24,151 | |||||||
Asia Pacific | 11,725 | 11,332 | |||||||
Latin America | 5,516 | 3,863 | |||||||
$ | 69,265 | $ | 68,485 | ||||||
-1 | Sales into Canada accounted for 2% of North America total revenue in each of the three months ended April 30, 2015 and 2014. |
COMPUTATION_OF_NET_INCOME_LOSS2
COMPUTATION OF NET INCOME (LOSS) PER SHARE (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Apr. 30, 2015 | Apr. 30, 2014 |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Net income (loss) | $549 | ($76) |
Less: Dividends declared | -1,299 | -1,103 |
Undistributed net loss | -750 | -1,179 |
Net income (loss) per share [Abstract] | ||
Dividends declared | 1,299 | 1,103 |
Allocation of undistributed net loss | -750 | -1,179 |
Net income (loss) attributable to common stock | 549 | -76 |
Common Class A [Member] | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Net income (loss) | 468 | -64 |
Less: Dividends declared | -1,107 | -912 |
Undistributed net loss | -639 | -976 |
Net income (loss) per share [Abstract] | ||
Dividends declared | 1,107 | 912 |
Allocation of undistributed net loss | -639 | -976 |
Net income (loss) attributable to common stock | 468 | -64 |
Weighted average shares of common stock outstanding-basic (in shares) | 15,262 | 12,628 |
Weighted average potential shares of common stock (in shares) | 786 | 0 |
Weighted average shares of common stock and potential common shares outstanding-diluted (in shares) | 16,048 | 12,628 |
Basic net income (loss) per common share (in dollars per share) | $0.03 | ($0.01) |
Diluted net income (loss) per common share (in dollars per share) | $0.03 | ($0.01) |
Antidilutive securities excluded from computation of net income (loss) per share (in shares) | 326 | 2,778 |
Common Class B [Member] | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Net income (loss) | 81 | -12 |
Less: Dividends declared | -192 | -191 |
Undistributed net loss | -111 | -203 |
Net income (loss) per share [Abstract] | ||
Dividends declared | 192 | 191 |
Allocation of undistributed net loss | -111 | -203 |
Net income (loss) attributable to common stock | $81 | ($12) |
Weighted average shares of common stock outstanding-basic (in shares) | 3,196 | 3,168 |
Weighted average potential shares of common stock (in shares) | 83 | 0 |
Weighted average shares of common stock and potential common shares outstanding-diluted (in shares) | 3,279 | 3,168 |
Basic net income (loss) per common share (in dollars per share) | $0.03 | $0 |
Diluted net income (loss) per common share (in dollars per share) | $0.02 | $0 |
Antidilutive securities excluded from computation of net income (loss) per share (in shares) | 60 | 371 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | 3 Months Ended | ||
Apr. 30, 2015 | Apr. 30, 2014 | Jan. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents deposited with commercial banks | $21,000,000 | $22,000,000 | |
Derivatives, Fair Value [Line Items] | |||
The fair values of derivative instrument | -381,000 | -626,000 | |
Key Assumptions [Abstract] | |||
Discount rate (in hundredths) | 4.60% | ||
Guaranteed Payment [Member] | |||
Key Assumptions [Abstract] | |||
Contingent consideration payable | 300,000 | ||
Contingent upon Certain Milestones [Member] | |||
Key Assumptions [Abstract] | |||
Contingent consideration payable | 500,000 | ||
Interest Rate Swap [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Description of variable rate basis | one month LIBOR | ||
Change in fair value recognized in net income | -245,000 | 46,000 | |
Interest Rate Swap [Member] | Other Liabilities [Member] | |||
Derivatives, Fair Value [Line Items] | |||
The fair values of derivative instrument | -381,000 | -626,000 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Recurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Money market mutual funds | 109,506,000 | 98,294,000 | |
Significant Other Observable Inputs (Level 2) [Member] | Recurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liability related to interest rate swap | -381,000 | -626,000 | |
Significant Unobservable Inputs (Level 3) [Member] | Recurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent liability associated with acquisitions | $0 | ($750,000) |
CAPITALIZED_SOFTWARE_COSTS_Det
CAPITALIZED SOFTWARE COSTS (Details) (USD $) | 3 Months Ended | |||
Apr. 30, 2015 | Jan. 31, 2015 | |||
CAPITALIZED SOFTWARE COSTS [Abstract] | ||||
Acquired software technology | $3,458,000 | $3,458,000 | ||
Capitalized software development costs | 1,099,000 | [1] | 1,206,000 | [1] |
Capitalized software, gross | 4,557,000 | 4,664,000 | ||
Less accumulated amortization | -2,320,000 | -2,179,000 | ||
Capitalized software costs, net | 2,237,000 | 2,485,000 | ||
Capitalized computer software amortization | 300,000 | |||
Capitalized Software [Member] | ||||
Estimated Amortization Expense [Abstract] | ||||
2016 remaining | 797,000 | |||
2017 | 912,000 | |||
2018 | 521,000 | |||
2019 | 7,000 | |||
Total | $2,237,000 | |||
[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 | ||||
In Thousands, unless otherwise specified | Apr. 30, 2015 | Apr. 30, 2014 | Jan. 31, 2015 | ||
Gross Carrying Amount [Abstract] | |||||
Balance, beginning of period | $26,519 | ||||
Impact of foreign currency translation | -54 | ||||
Balance, end of period | 26,465 | ||||
Accumulated Impairment [Abstract] | |||||
Balance, beginning of period | -15,608 | ||||
Impact of foreign currency translation | 0 | ||||
Balance, end of period | -15,608 | ||||
Goodwill, Net [Abstract] | |||||
Balance, beginning of period | 10,911 | ||||
Impact of foreign currency translation | -54 | ||||
Balance, end of period | 10,857 | ||||
Amortizable intangible assets, gross | 3,286 | 3,308 | |||
Less: accumulated amortization | -1,712 | -1,558 | |||
Net amortizable intangible assets | 1,574 | 1,750 | |||
Amortization of intangible assets | 164 | 180 | |||
Estimated Amortization Expense [Abstract] | |||||
2016 remaining | 495 | ||||
2017 | 661 | ||||
2018 | 418 | ||||
Total | 1,574 | ||||
Customer Relationships [Member] | |||||
Goodwill, Net [Abstract] | |||||
Amortizable intangible assets, gross | 2,771 | [1] | 2,793 | [1] | |
Trade Names [Member] | |||||
Goodwill, Net [Abstract] | |||||
Amortizable intangible assets, gross | $515 | $515 | |||
[1] | Customer relationships include the impact of foreign currency translation. |
DEBT_Details
DEBT (Details) (USD $) | 3 Months Ended | |
Apr. 30, 2015 | Jan. 31, 2015 | |
Debt Instrument [Line Items] | ||
Note payable | $14,984,000 | $15,086,000 |
Less current maturities | -409,000 | -406,000 |
Long-term debt | 14,575,000 | 14,680,000 |
Rabobank N.A [Member] | Unsecured Credit Agreement [Member] | ||
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% | |
Basis spread on variable rate (in hundredths) | 0.75% | |
Liquidity on a consolidated basis, Minimum | 25,000,000 | |
Current ratio, Minimum | 1.3 | |
Leverage ratio, Maximum | 1.5 | |
Debt service coverage ratio, Minimum | 1.5 | |
Effective borrowing rate (in hundredths) | 0.93% | |
Borrowings outstanding | 0 | |
2012 Mortgage [Member] | Rabobank N.A [Member] | Credit Agreement [Member] | Quad Ortega Hill LLC [Member] | ||
Notes Payable [Abstract] | ||
Original principal amount | 16,100,000 | |
Principal and interest | 88,100 | |
Final principal payment | 11,700,000 | |
Unpaid balance | $15,000,000 | |
Maturity date | 30-Jun-22 | |
Basis spread on variable rate (in hundredths) | 2.25% | |
One month LIBOR (in hundredths) | 0.18% | |
Fixed interest rate (in hundredths) | 4.31% | |
Credit Facility [Abstract] | ||
Variable rate basis | One month LIBOR plus 2.25% |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Apr. 30, 2015 | Apr. 30, 2014 |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance as of beginning of period | ($7,418) | |
Other comprehensive income | 73 | 139 |
Balance as of end of period | -7,345 | |
Foreign Currency Translation Adjustments [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance as of beginning of period | -7,418 | |
Other comprehensive income | 73 | |
Amounts reclassified from accumulated other comprehensive loss | 0 | |
Net current period other comprehensive income | 73 | |
Balance as of end of period | ($7,345) |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Apr. 30, 2015 |
Income Tax Contingency [Line Items] | |
Unrecognized tax benefits | $1.90 |
Reduction of unrecognized tax benefits | -1.4 |
Reduction of deferred tax assets | -1.4 |
Unrecognized tax benefits recognized in next twelve months | 0.3 |
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, 2012 and 2013 |
Years for which the company settled audits | fiscal year ended March 31, 2008 |
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 |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||
Apr. 30, 2015 | Apr. 30, 2014 | Feb. 18, 2015 | Jan. 22, 2015 | |
Issuance of common stock [Abstract] | ||||
Net proceeds from stock issued | $8,365,000 | $0 | ||
Dividends [Abstract] | ||||
Declaration date | 15-Apr-15 | |||
Record date | 29-Apr-15 | |||
Payable | 6-May-15 | |||
Amount Paid in Cash | 1,299,000 | |||
Common Class A [Member] | ||||
Issuance of common stock [Abstract] | ||||
Stock issued (in shares) | 450,000 | 2,000,000 | ||
Net proceeds from stock issued | $8,400,000 | $37,000,000 | ||
Dividends [Abstract] | ||||
Dividend (in dollars per share) | $0.07 | |||
Common Class B [Member] | ||||
Dividends [Abstract] | ||||
Dividend (in dollars per share) | $0.06 |
STOCKBASED_COMPENSATION_Detail
STOCK-BASED COMPENSATION (Details) (USD $) | 3 Months Ended | |||
Apr. 30, 2015 | Apr. 30, 2014 | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation | $1,306,000 | $876,000 | ||
Weighted Average Assumptions Used to Value SAR [Abstract] | ||||
Expected life in years | 0 years | [1],[2] | 3 years 9 months | [1] |
Risk free interest rate (in hundredths) | 0.00% | [2],[3] | 1.14% | [3] |
Volatility (in hundredths) | 0.00% | [2],[4] | 49.00% | [4] |
Dividend rate (in hundredths) | 0.00% | [2],[5] | 2.44% | [5] |
Stock Appreciation Rights (SARs) [Member] | ||||
Stock Appreciation Rights (SARs) [Roll Forward] | ||||
Outstanding at beginning of period (in shares) | 2,499,000 | |||
Granted (in shares) | 0 | |||
Exercised (in shares) | -118,000 | |||
Expired (in shares) | -10,000 | |||
Forfeited (in shares) | 0 | |||
Outstanding at end of period (in shares) | 2,371,000 | |||
Vested and expected to vest (in shares) | 2,359,000 | [6] | ||
Vested and exercisable (in shares) | 1,198,000 | |||
Weighted Average Exercise Price per Share [Abstract] | ||||
Outstanding at beginning of period (in dollars per shares) | $12.69 | |||
Granted (in dollars per share) | $0 | |||
Exercised (in dollars per shares) | $11 | |||
Expired (in dollars per shares) | $14.76 | |||
Forfeited (in dollars per shares) | $0 | |||
Outstanding at end of period (in dollars per shares) | $12.76 | |||
Vested and expected to vest (in dollars per share) | $12.77 | [6] | ||
Vested and exercisable (in dollars per share) | $10.48 | |||
Additional Disclosures [Abstract] | ||||
Weighted average remaining contractual term, outstanding at end of period | 5 years | |||
Weighted average remaining contractual term, vested and expected to vest at end of period | 5 years | [6] | ||
Weighted average remaining contractual term, vested and exercisable at end of period | 4 years | |||
Aggregate intrinsic value, outstanding at end of period | 26,123,000 | |||
Aggregate intrinsic value, vested and expected to vest at end of period | 25,978,000 | [6] | ||
Aggregate intrinsic value, vested and exercisable at end of period | 15,866,000 | |||
Total intrinsic value of SARs exercised | 1,500,000 | |||
Number of shares withheld for payment of taxes (in shares) | 15,600 | |||
Value of shares withheld for payment of taxes | 400,000 | |||
Total unrecognized compensation cost | 4,800,000 | |||
Weighted-average period to recognize total unrecognized compensation cost | 2 years 4 months 24 days | |||
Restricted Stock Units (RSUs) [Member] | ||||
Additional Disclosures [Abstract] | ||||
Number of shares withheld for payment of taxes (in shares) | 600 | |||
Value of shares withheld for payment of taxes | 14,000 | |||
Total unrecognized compensation cost | 6,700,000 | |||
Weighted-average period to recognize total unrecognized compensation cost | 2 years 7 months 6 days | |||
Summary of Activity of RSUs [Roll Forward] | ||||
Restricted stock at beginning of period (in shares) | 503,000 | |||
Granted (in shares) | 60,000 | |||
Released (in shares) | -2,000 | [7] | ||
Forfeited (in shares) | -5,000 | |||
Restricted stock at end of period (in shares) | 556,000 | |||
Weighted Average Grant Date Fair Value [Abstract] | ||||
Restricted stock at beginning of period (in dollars per share) | $16.27 | |||
Granted (in dollars per share) | $21.93 | |||
Released (in dollars per share) | $13.09 | [7] | ||
Forfeited (in dollars per share) | $16.79 | |||
Restricted stock at end of period (in dollars per share) | $16.88 | |||
Cost of Subscription [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation | 12,000 | 8,000 | ||
Cost of Maintenance and Other Revenue [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation | 46,000 | 29,000 | ||
Cost of Professional Services [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation | 119,000 | 87,000 | ||
Sales and Marketing [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation | 261,000 | 127,000 | ||
Research and Development [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation | 148,000 | 92,000 | ||
General and Administrative [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation | $720,000 | $533,000 | ||
[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] | There were no SARs granted during the three months ended April 30, 2015. | |||
[3] | 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. | |||
[4] | 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. | |||
[5] | The Company expects to continue paying quarterly dividends at the same rate as the three months ending on April 30, 2015. | |||
[6] | The expected-to-vest SARs are the result of applying the pre-vesting forfeiture rate assumptions to total outstanding SARs. | |||
[7] | The number of RSUs released includes shares withheld on behalf of employees to satisfy statutory tax withholding requirements. |
DEFERRED_REVENUES_Details
DEFERRED REVENUES (Details) (USD $) | Apr. 30, 2015 | Jan. 31, 2015 |
In Thousands, unless otherwise specified | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues, current | $91,408 | $102,721 |
Deferred revenues, non-current (in Other liabilities) | 2,114 | 2,361 |
Total deferred revenues | 93,522 | 105,082 |
Deferred Maintenance Revenue [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues, current | 75,744 | 86,381 |
Deferred Subscription Revenue [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues, current | 11,622 | 11,563 |
Deferred Services Revenue [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues, current | 2,621 | 2,813 |
Deferred License Revenue [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues, current | 1,028 | 1,890 |
Deferred Other Revenue [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues, current | $393 | $74 |
BUSINESS_SEGMENT_INFORMATION_D
BUSINESS SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Apr. 30, 2015 | Apr. 30, 2014 | ||
Segment | ||||
Region | ||||
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 | $69,265 | $68,485 | ||
Percentage of sales into Canada of North America total revenue (in hundredths) | 2.00% | 2.00% | ||
North America [Member] | Reportable Geographical Components [Member] | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | 30,222 | [1] | 29,139 | [1] |
EMEA [Member] | Reportable Geographical Components [Member] | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | 21,802 | 24,151 | ||
Asia Pacific [Member] | Reportable Geographical Components [Member] | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | 11,725 | 11,332 | ||
Latin America [Member] | Reportable Geographical Components [Member] | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | $5,516 | $3,863 | ||
[1] | Sales into Canada accounted for 2% of North America total revenue in each of the three months ended April 30, 2015 and 2014. |