Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 30, 2016 | May. 31, 2016 | |
Entity Information [Line Items] | ||
Entity Registrant Name | QAD INC | |
Entity Central Index Key | 1,036,188 | |
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 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Apr. 30, 2016 | |
Common Class A [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 15,609,867 | |
Common Class B [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 3,205,362 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Apr. 30, 2016 | Jan. 31, 2016 |
Current assets: | ||
Cash and equivalents | $ 139,878 | $ 137,731 |
Accounts receivable, net of allowances of $2,518 and $2,642 at April 30, 2016 and January 31, 2016, respectively | 44,829 | 65,512 |
Deferred tax assets, net | 8,527 | 8,203 |
Other current assets | 18,960 | 16,024 |
Total current assets | 212,194 | 227,470 |
Property and equipment, net | 32,269 | 32,080 |
Capitalized software costs, net | 1,321 | 1,553 |
Goodwill | 10,771 | 10,645 |
Deferred tax assets, net | 12,261 | 11,919 |
Other assets, net | 2,560 | 2,679 |
Total assets | 271,376 | 286,346 |
Current liabilities: | ||
Current portion of long-term debt | 428 | 422 |
Accounts payable | 7,867 | 10,811 |
Deferred revenue | 92,640 | 97,911 |
Other current liabilities | 26,624 | 31,535 |
Total current liabilities | 127,559 | 140,679 |
Long-term debt | 14,082 | 14,191 |
Other liabilities | $ 4,387 | $ 4,465 |
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 | 196,596 | 195,420 |
Treasury stock, at cost (1,331,008 shares and 1,365,885 shares at April 30, 2016 and January 31, 2016, respectively) | (18,104) | (18,717) |
Accumulated deficit | (45,041) | (40,983) |
Accumulated other comprehensive loss | (8,123) | (8,729) |
Total stockholders' equity | 125,348 | 127,011 |
Total liabilities and stockholders' equity | 271,376 | 286,346 |
Common Class A [Member] | ||
Common stock: | ||
Common stock value | 16 | 16 |
Common Class B [Member] | ||
Common stock: | ||
Common stock value | $ 4 | $ 4 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands | Apr. 30, 2016 | Jan. 31, 2016 |
Current assets: | ||
Accounts receivable, net of allowances | $ 2,518 | $ 2,642 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
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) | 1,331,008 | 1,365,885 |
Common Class A [Member] | ||
Common stock: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 71,000,000 | 71,000,000 |
Common stock, shares issued (in shares) | 16,603,799 | 16,603,729 |
Common Class B [Member] | ||
Common stock: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 4,000,000 | 4,000,000 |
Common stock, shares issued (in shares) | 3,537,380 | 3,537,366 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
Revenue: | ||
License fees | $ 3,947 | $ 6,851 |
Subscription fees | 11,492 | 9,419 |
Maintenance and other | 32,836 | 33,383 |
Professional services | 17,122 | 19,612 |
Total revenue | 65,397 | 69,265 |
Costs of revenue: | ||
License fees | 725 | 929 |
Subscription fees | 6,197 | 5,064 |
Maintenance and other | 7,763 | 7,777 |
Professional services | 17,425 | 18,328 |
Total cost of revenue | 32,110 | 32,098 |
Gross profit | 33,287 | 37,167 |
Operating expenses: | ||
Sales and marketing | 16,922 | 17,145 |
Research and development | 11,134 | 10,657 |
General and administrative | 8,005 | 8,441 |
Amortization of intangibles from acquisitions | 165 | 164 |
Total operating expenses | 36,226 | 36,407 |
Operating (loss) income | (2,939) | 760 |
Other expense (income): | ||
Interest income | (172) | (57) |
Interest expense | 174 | 183 |
Other expense (income), net | 870 | (119) |
Total other expense (income), net | 872 | 7 |
(Loss) income before income taxes | (3,811) | 753 |
Income tax (benefit) expense | (1,069) | 204 |
Net (loss) income | (2,742) | 549 |
Diluted net (loss) income per share | ||
Net (loss) income | (2,742) | 549 |
Other comprehensive income, net of tax: | ||
Foreign currency translation adjustments | 606 | 73 |
Total comprehensive (loss) income | (2,136) | 622 |
Common Class A [Member] | ||
Other expense (income): | ||
Net (loss) income | $ (2,341) | $ 468 |
Basic net (loss) income per share | ||
Earnings per share (in dollars per share) | $ (0.15) | $ 0.03 |
Diluted net (loss) income per share | ||
Earnings per share (in dollars per share) | $ (0.15) | $ 0.03 |
Net (loss) income | $ (2,341) | $ 468 |
Common Class B [Member] | ||
Other expense (income): | ||
Net (loss) income | $ (401) | $ 81 |
Basic net (loss) income per share | ||
Earnings per share (in dollars per share) | $ (0.13) | $ 0.03 |
Diluted net (loss) income per share | ||
Earnings per share (in dollars per share) | $ (0.13) | $ 0.02 |
Net (loss) income | $ (401) | $ 81 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (2,742) | $ 549 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,476 | 1,454 |
Provision for doubtful accounts and sales adjustments | 49 | 311 |
Stock compensation expense | 1,554 | 1,306 |
Change in fair value of derivative instrument | 31 | (245) |
Excess tax benefits from share-based payment arrangements | (222) | (151) |
Changes in assets and liabilities: | ||
Accounts receivable | 21,430 | 26,823 |
Other assets | (2,960) | (1,122) |
Accounts payable | (3,151) | (4,456) |
Deferred revenue | (7,480) | (11,157) |
Other liabilities | (6,850) | (8,976) |
Net cash provided by operating activities | 1,135 | 4,336 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (1,074) | (1,140) |
Capitalized software costs | (12) | (28) |
Net cash used in investing activities | (1,086) | (1,168) |
Cash flows from financing activities: | ||
Repayments of debt | (106) | (102) |
Tax payments, net of proceeds, related to stock awards | (369) | (391) |
Payment of contingent liability associated with acquisitions | 0 | (750) |
Excess tax benefits from share-based payment arrangements | 222 | 151 |
Proceeds from issuance of common stock, net of issuance of costs | 0 | 8,365 |
Net cash (used in) provided by financing activities | (253) | 7,273 |
Effect of exchange rates on cash and equivalents | 2,351 | (103) |
Net increase in cash and equivalents | 2,147 | 10,338 |
Cash and equivalents at beginning of period | 137,731 | 120,526 |
Cash and equivalents at end of period | 139,878 | 130,864 |
Supplemental disclosure of non-cash activities: | ||
Obligations associated with dividend declaration | $ 1,316 | $ 1,299 |
BASIS OF PRESENTATION AND RECEN
BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Apr. 30, 2016 | |
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, 2016. 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, 2016 are not necessarily indicative of the results to be expected for the year ending January 31, 2017. Recent Accounting Pronouncements In May 2014, the FASB issued accounting standard update, or ASU, 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, In April 2015, the FASB issued ASU 2015-03 - I nterest - Imputation of Interest (Subtopic 2015-03): Simplifying the Presentation of Debt Issuance Costs In August 2015, the FASB issued ASU 2015-15, Interest-Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line of Credit Arrangements In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In March 2016, the FASB issued ASU 2016-09, Compensation — Stock Compensation: Improvements to Employee Share-Based Payment Accounting |
COMPUTATION OF NET (LOSS) INCOM
COMPUTATION OF NET (LOSS) INCOME PER SHARE | 3 Months Ended |
Apr. 30, 2016 | |
COMPUTATION OF NET (LOSS) INCOME PER SHARE [Abstract] | |
COMPUTATION OF NET (LOSS) INCOME PER SHARE | 2. COMPUTATION OF NET (LOSS) INCOME PER SHARE The following table sets forth the computation of basic and diluted net (loss) income per share: Three Months Ended April 30, 2016 2015 (in thousands except per share data) Net (loss) income $ (2,742 ) $ 549 Less: Dividends declared (1,316 ) (1,299 ) Undistributed net loss $ (4,058 ) $ (750 ) Net (loss) income per share – Class A Common Stock Dividends declared $ 1,124 $ 1,107 Allocation of undistributed net loss (3,465 ) (639 ) Net (loss) income attributable to Class A common stock $ (2,341 ) $ 468 Weighted average shares of Class A common stock outstanding— basic 15,594 15,262 Weighted average potential shares of Class A common stock — 786 Weighted average shares of Class A common stock and potential common shares outstanding— diluted 15,594 16,048 Basic net (loss) income per Class A common share $ (0.15 ) $ 0.03 Diluted net (loss) income per Class A common share $ (0.15 ) $ 0.03 Net (loss) income per share – Class B Common Stock Dividends declared $ 192 $ 192 Allocation of undistributed net loss (593 ) (111 ) Net (loss) income attributable to Class B common stock $ (401 ) $ 81 Weighted average shares of Class B common stock outstanding— basic 3,204 3,196 Weighted average potential shares of Class B common stock — 83 Weighted average shares of Class B common stock and potential common shares outstanding— diluted 3,204 3,279 Basic net (loss) income per Class B common share $ (0.13 ) $ 0.03 Diluted net (loss) income per Class B common share $ (0.13 ) $ 0.02 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, 2016 2015 (in thousands) Class A 2,807 326 Class B 349 60 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Apr. 30, 2016 | |
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. The following table sets forth the financial assets and liabilities, measured at fair value, as of April 30, 2016 and January 31, 2016: Fair value measurement at reporting date using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in thousands) Money market mutual funds as of April 30, 2016 (a) $ 112,792 Money market mutual funds as of January 31, 2016 (a) $ 113,984 Liability related to the interest rate swap as of April 30, 2016 (b) $ (706 ) Liability related to the interest rate swap as of January 31, 2016 (b) $ (675 ) (a) Money market mutual funds are recorded at fair value based upon quoted market prices. (b) The 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. 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 $27 million and $24 million as of April 30, 2016 and January 31, 2016, 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, 2016. 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 Operations and Comprehensive (Loss) 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, 2016 and January 31, 2016 were as follows (in thousands): Liability Fair Value Balance Sheet Location April 30, 2016 January 31, 2016 Derivative instrument: Interest rate swap Other liabilities $ (706 ) $ (675 ) Total $ (706 ) $ (675 ) The change in fair value of the interest rate swap recognized in the Condensed Consolidated Statement of Operations and Comprehensive (Loss) Income for the three months ended April 30, 2016 and April 30, 2015 was $(31,000) and $245,000, respectively. |
CAPITALIZED SOFTWARE COSTS
CAPITALIZED SOFTWARE COSTS | 3 Months Ended |
Apr. 30, 2016 | |
CAPITALIZED SOFTWARE COSTS [Abstract] | |
CAPITALIZED SOFTWARE COSTS | 4. CAPITALIZED SOFTWARE COSTS Capitalized software costs and accumulated amortization at April 30, 2016 and January 31, 2016 were as follows: April 30, 2016 January 31, 2016 (in thousands) Capitalized software costs: Acquired software technology $ 3,458 $ 3,458 Capitalized software development costs (1) 788 1,029 4,246 4,487 Less accumulated amortization (2,925 ) (2,934 ) Capitalized software costs, net $ 1,321 $ 1,553 (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 three months of fiscal 2017, approximately $0.3 million of costs and accumulated amortization were removed from the balance sheet. Amortization of capitalized software costs was $0.2 million and $0.3 million for the three months ended April 30, 2016 and 2015, respectively. Amortization of capitalized software costs is included in “Cost of license fees” in the accompanying Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income. The following table summarizes the estimated amortization expense relating to the Company’s capitalized software costs as of April 30, 2016: Fiscal Years (in thousands) 2017 remaining $ 710 2018 566 2019 42 2020 3 $ 1,321 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Apr. 30, 2016 | |
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, 2016 were as follows: Gross Carrying Amount Accumulated Impairment Goodwill, Net (in thousands) Balance at January 31, 2016 $ 26,253 $ (15,608 ) $ 10,645 Impact of foreign currency translation 126 — 126 Balance at April 30, 2016 $ 26,379 $ (15,608 ) $ 10,771 The Company performed its annual goodwill impairment review during the fourth quarter of fiscal 2016. The analysis compared the Company’s market capitalization to its net assets as of the test date, November 30, 2015. As the market capitalization significantly exceeded the Company’s net assets, there was no indication of goodwill impairment for fiscal 2016. The Company monitors the indicators for goodwill impairment testing between annual tests. No adverse events occurred during the three months ended April 30, 2016, that would cause the Company to test goodwill for impairment. Intangible Assets April 30, 2016 January 31, 2016 (in thousands) Amortizable intangible assets Customer relationships (1) $ 2,796 $ 2,749 Trade name 515 515 3,311 3,264 Less: accumulated amortization (2,392 ) (2,191 ) Net amortizable intangible assets $ 919 $ 1,073 (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, 2016, 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 2017 and 2016. The following table summarizes the estimated amortization expense relating to the Company’s intangible assets as of April 30, 2016: Fiscal Years (in thousands) 2017 remaining $ 499 2018 420 $ 919 |
DEBT
DEBT | 3 Months Ended |
Apr. 30, 2016 | |
DEBT [Abstract] | |
DEBT | 6. DEBT April 30, 2016 January 31, 2016 (in thousands) Note payable $ 14,574 $ 14,680 Less current maturities (428 ) (422 ) Less loan origination costs, net (64 ) (67 ) Long-term debt $ 14,082 $ 14,191 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 0.44% at April 30, 2016. 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, 2016 was $14.6 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, 2016, the effective borrowing rate would have been 1.19%. 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, 2016, there were no borrowings under the Facility and the Company was in compliance with all financial covenants. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Apr. 30, 2016 | |
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, 2016 $ (8,729 ) Other comprehensive income before reclassifications 606 Amounts reclassified from accumulated other comprehensive loss — Net current period other comprehensive income 606 Balance as of April 30, 2016 $ (8,123 ) During the first quarter of fiscal 2017 there were no reclassifications from accumulated other comprehensive loss. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Apr. 30, 2016 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | 8. INCOME TAXES The Company’s income tax provision for the first quarter of fiscal 2017 and 2016 reflects estimates of the effective tax rates expected to be applicable for the full fiscal years, adjusted for any discrete events which are recorded in the period they occur. The Company recorded income tax (benefit) expense of $(1.1) million and $0.2 million in the first quarter of fiscal 2017 and fiscal 2016, respectively. The effective tax rate was 28% during the first quarter of fiscal 2017 compared to 27% for the same period in the prior year. The difference in rates was primarily due to jurisdictional mix and lower forecasted book income in fiscal 2017. The estimated annual effective tax rate increased to 30% from 28% in the previous fiscal year 2016. The difference in rates is primarily due to jurisdictional mix. The gross amount of unrecognized tax benefits was $1.5 million at April 30, 2016, including interest and penalties. As a result of adoption of ASU 2013-11, the Company reduced its unrecognized tax benefits by $1.0 million with an accompanying reduction of deferred tax assets by $1.0 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 $0.1 million of gross 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, 2016, 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, 2010, 2012, 2013 and 2014 · Thailand for fiscal year ended 2014 During the first three months of fiscal year 2017, QAD has settled the following audits with immaterial or no adjustments made as a result of the settlements: · Italy for the fiscal years ended 2011, 2012, 2013 and 2014 · Wisconsin for the fiscal years ended 2012, 2013 and 2014 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Apr. 30, 2016 | |
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 2017: Declaration Date Record Date Payable Dividend Class A Dividend Class B Amount 4/12/2016 4/26/2016 5/3/2016 $ 0.072 $ 0.06 $ 1,316,000 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Apr. 30, 2016 | |
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, 2016. Stock-Based Compensation The following table sets forth reported stock-based compensation expense for the three months ended April 30, 2016 and 2015: Three Months Ended April 30, 2016 2015 (in thousands) Cost of subscription $ 19 $ 12 Cost of maintenance and other revenue 61 46 Cost of professional services 155 119 Sales and marketing 261 261 Research and development 227 148 General and administrative 831 720 Total stock-based compensation expense $ 1,554 $ 1,306 SAR Information The following table summarizes the activity for outstanding SARs for the three months ended April 30, 2016: SARs (in thousands) Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at January 31, 2016 2,596 $ 14.74 Granted — — Exercised (20 ) 10.44 Expired — — Forfeited (6 ) 12.16 Outstanding at April 30, 2016 2,570 $ 14.78 4.6 $ 14,640 Vested and expected to vest at April 30, 2016 (1) 2,566 $ 14.78 4.6 $ 14,616 Vested and exercisable at April 30, 2016 1,503 $ 11.52 3.6 $ 11,773 (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, 2016, 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, 2016. The total intrinsic value of SARs exercised in the three months ended April 30, 2016 was $0.2 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, 2016, the Company withheld 3,400 shares for payment of these taxes at a value of $69,000. At April 30, 2016, there was approximately $5.0 million of total unrecognized compensation cost related to unvested SARs. This cost is expected to be recognized over a weighted-average period of approximately 2.4 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, 2016: RSUs Weighted Average Grant Date Fair Value (in thousands) Restricted stock at January 31, 2016 617 $ 20.91 Granted — — Released (1) (45 ) 20.41 Forfeited (16 ) 21.15 Restricted stock at April 30, 2016 556 $ 20.94 (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, 2016, the Company withheld 16,000 shares for payment of these taxes at a value of $0.3 million. Total unrecognized compensation cost related to RSUs was approximately $8.2 million as of April 30, 2016. 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, 2016 | |
DEFERRED REVENUES [Abstract] | |
DEFERRED REVENUES | 11. DEFERRED REVENUES Deferred revenues consisted of the following: April 30, 2016 January 31, 2016 (in thousands) Deferred maintenance revenue $ 73,594 $ 79,533 Deferred subscription revenue 15,397 14,194 Deferred services revenue 1,984 2,332 Deferred license revenue 1,248 1,549 Deferred other revenue 417 303 Deferred revenues, current 92,640 97,911 Deferred revenues, non-current (in Other liabilities) 1,486 1,690 Total deferred revenues $ 94,126 $ 99,601 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 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. 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. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Apr. 30, 2016 | |
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, 2016 | |
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, 2016 2015 Revenue: (in thousands) North America (1) $ 29,519 $ 30,222 EMEA 19,792 21,802 Asia Pacific 11,680 11,725 Latin America 4,406 5,516 $ 65,397 $ 69,265 (1) Sales into Canada accounted for 2% of North America total revenue in each of the three months ended April 30, 2016 and 2015. |
BASIS OF PRESENTATION AND REC19
BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 3 Months Ended |
Apr. 30, 2016 | |
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, 2016. 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, 2016 are not necessarily indicative of the results to be expected for the year ending January 31, 2017. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued accounting standard update, or ASU, 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, In April 2015, the FASB issued ASU 2015-03 - I nterest - Imputation of Interest (Subtopic 2015-03): Simplifying the Presentation of Debt Issuance Costs In August 2015, the FASB issued ASU 2015-15, Interest-Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line of Credit Arrangements In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In March 2016, the FASB issued ASU 2016-09, Compensation — Stock Compensation: Improvements to Employee Share-Based Payment Accounting |
COMPUTATION OF NET (LOSS) INC20
COMPUTATION OF NET (LOSS) INCOME PER SHARE (Tables) | 3 Months Ended |
Apr. 30, 2016 | |
COMPUTATION OF NET (LOSS) INCOME PER SHARE [Abstract] | |
Computation of basic and diluted net income per share | The following table sets forth the computation of basic and diluted net (loss) income per share: Three Months Ended April 30, 2016 2015 (in thousands except per share data) Net (loss) income $ (2,742 ) $ 549 Less: Dividends declared (1,316 ) (1,299 ) Undistributed net loss $ (4,058 ) $ (750 ) Net (loss) income per share – Class A Common Stock Dividends declared $ 1,124 $ 1,107 Allocation of undistributed net loss (3,465 ) (639 ) Net (loss) income attributable to Class A common stock $ (2,341 ) $ 468 Weighted average shares of Class A common stock outstanding— basic 15,594 15,262 Weighted average potential shares of Class A common stock — 786 Weighted average shares of Class A common stock and potential common shares outstanding— diluted 15,594 16,048 Basic net (loss) income per Class A common share $ (0.15 ) $ 0.03 Diluted net (loss) income per Class A common share $ (0.15 ) $ 0.03 Net (loss) income per share – Class B Common Stock Dividends declared $ 192 $ 192 Allocation of undistributed net loss (593 ) (111 ) Net (loss) income attributable to Class B common stock $ (401 ) $ 81 Weighted average shares of Class B common stock outstanding— basic 3,204 3,196 Weighted average potential shares of Class B common stock — 83 Weighted average shares of Class B common stock and potential common shares outstanding— diluted 3,204 3,279 Basic net (loss) income per Class B common share $ (0.13 ) $ 0.03 Diluted net (loss) income per Class B common share $ (0.13 ) $ 0.02 |
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, 2016 2015 (in thousands) Class A 2,807 326 Class B 349 60 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Apr. 30, 2016 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
Summary of financial assets and liabilities, measured at fair value | The following table sets forth the financial assets and liabilities, measured at fair value, as of April 30, 2016 and January 31, 2016: Fair value measurement at reporting date using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in thousands) Money market mutual funds as of April 30, 2016 (a) $ 112,792 Money market mutual funds as of January 31, 2016 (a) $ 113,984 Liability related to the interest rate swap as of April 30, 2016 (b) $ (706 ) Liability related to the interest rate swap as of January 31, 2016 (b) $ (675 ) (a) Money market mutual funds are recorded at fair value based upon quoted market prices. (b) The 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. |
Fair values of the derivative instrument | The fair values of the derivative instrument at April 30, 2016 and January 31, 2016 were as follows (in thousands): Liability Fair Value Balance Sheet Location April 30, 2016 January 31, 2016 Derivative instrument: Interest rate swap Other liabilities $ (706 ) $ (675 ) Total $ (706 ) $ (675 ) |
CAPITALIZED SOFTWARE COSTS (Tab
CAPITALIZED SOFTWARE COSTS (Tables) | 3 Months Ended |
Apr. 30, 2016 | |
CAPITALIZED SOFTWARE COSTS [Abstract] | |
Capitalized software costs and amortization | Capitalized software costs and accumulated amortization at April 30, 2016 and January 31, 2016 were as follows: April 30, 2016 January 31, 2016 (in thousands) Capitalized software costs: Acquired software technology $ 3,458 $ 3,458 Capitalized software development costs (1) 788 1,029 4,246 4,487 Less accumulated amortization (2,925 ) (2,934 ) Capitalized software costs, net $ 1,321 $ 1,553 (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, 2016: Fiscal Years (in thousands) 2017 remaining $ 710 2018 566 2019 42 2020 3 $ 1,321 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Apr. 30, 2016 | |
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, 2016 were as follows: Gross Carrying Amount Accumulated Impairment Goodwill, Net (in thousands) Balance at January 31, 2016 $ 26,253 $ (15,608 ) $ 10,645 Impact of foreign currency translation 126 — 126 Balance at April 30, 2016 $ 26,379 $ (15,608 ) $ 10,771 |
Intangible assets | April 30, 2016 January 31, 2016 (in thousands) Amortizable intangible assets Customer relationships (1) $ 2,796 $ 2,749 Trade name 515 515 3,311 3,264 Less: accumulated amortization (2,392 ) (2,191 ) Net amortizable intangible assets $ 919 $ 1,073 (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, 2016: Fiscal Years (in thousands) 2017 remaining $ 499 2018 420 $ 919 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Apr. 30, 2016 | |
DEBT [Abstract] | |
Debt | April 30, 2016 January 31, 2016 (in thousands) Note payable $ 14,574 $ 14,680 Less current maturities (428 ) (422 ) Less loan origination costs, net (64 ) (67 ) Long-term debt $ 14,082 $ 14,191 |
ACCUMULATED OTHER COMPREHENSI25
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Apr. 30, 2016 | |
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, 2016 $ (8,729 ) Other comprehensive income before reclassifications 606 Amounts reclassified from accumulated other comprehensive loss — Net current period other comprehensive income 606 Balance as of April 30, 2016 $ (8,123 ) |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Apr. 30, 2016 | |
STOCKHOLDERS' EQUITY [Abstract] | |
Dividends declared | The following table sets forth the dividends that were declared by the Company during the first quarter of fiscal 2017: Declaration Date Record Date Payable Dividend Class A Dividend Class B Amount 4/12/2016 4/26/2016 5/3/2016 $ 0.072 $ 0.06 $ 1,316,000 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Apr. 30, 2016 | |
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, 2016 and 2015: Three Months Ended April 30, 2016 2015 (in thousands) Cost of subscription $ 19 $ 12 Cost of maintenance and other revenue 61 46 Cost of professional services 155 119 Sales and marketing 261 261 Research and development 227 148 General and administrative 831 720 Total stock-based compensation expense $ 1,554 $ 1,306 |
Activity for outstanding SARs | The following table summarizes the activity for outstanding SARs for the three months ended April 30, 2016: SARs (in thousands) Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at January 31, 2016 2,596 $ 14.74 Granted — — Exercised (20 ) 10.44 Expired — — Forfeited (6 ) 12.16 Outstanding at April 30, 2016 2,570 $ 14.78 4.6 $ 14,640 Vested and expected to vest at April 30, 2016 (1) 2,566 $ 14.78 4.6 $ 14,616 Vested and exercisable at April 30, 2016 1,503 $ 11.52 3.6 $ 11,773 (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, 2016: RSUs Weighted Average Grant Date Fair Value (in thousands) Restricted stock at January 31, 2016 617 $ 20.91 Granted — — Released (1) (45 ) 20.41 Forfeited (16 ) 21.15 Restricted stock at April 30, 2016 556 $ 20.94 (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, 2016 | |
DEFERRED REVENUES [Abstract] | |
Deferred revenues | Deferred revenues consisted of the following: April 30, 2016 January 31, 2016 (in thousands) Deferred maintenance revenue $ 73,594 $ 79,533 Deferred subscription revenue 15,397 14,194 Deferred services revenue 1,984 2,332 Deferred license revenue 1,248 1,549 Deferred other revenue 417 303 Deferred revenues, current 92,640 97,911 Deferred revenues, non-current (in Other liabilities) 1,486 1,690 Total deferred revenues $ 94,126 $ 99,601 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 3 Months Ended |
Apr. 30, 2016 | |
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, 2016 2015 Revenue: (in thousands) North America (1) $ 29,519 $ 30,222 EMEA 19,792 21,802 Asia Pacific 11,680 11,725 Latin America 4,406 5,516 $ 65,397 $ 69,265 (1) Sales into Canada accounted for 2% of North America total revenue in each of the three months ended April 30, 2016 and 2015. |
COMPUTATION OF NET (LOSS) INC30
COMPUTATION OF NET (LOSS) INCOME PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Net (loss) income | $ (2,742) | $ 549 |
Less: Dividends declared | (1,316) | (1,299) |
Undistributed net loss | (4,058) | (750) |
Net (loss) income per share [Abstract] | ||
Dividends declared | 1,316 | 1,299 |
Allocation of undistributed net loss | (4,058) | (750) |
Net (loss) income attributable to common stock | (2,742) | 549 |
Common Class A [Member] | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Net (loss) income | (2,341) | 468 |
Less: Dividends declared | (1,124) | (1,107) |
Undistributed net loss | (3,465) | (639) |
Net (loss) income per share [Abstract] | ||
Dividends declared | 1,124 | 1,107 |
Allocation of undistributed net loss | (3,465) | (639) |
Net (loss) income attributable to common stock | $ (2,341) | $ 468 |
Weighted average shares of common stock outstanding-basic (in shares) | 15,594 | 15,262 |
Weighted average potential shares of common stock (in shares) | 0 | 786 |
Weighted average shares of common stock and potential common shares outstanding-diluted (in shares) | 15,594 | 16,048 |
Basic net (loss) income per common share (in dollars per share) | $ (0.15) | $ 0.03 |
Diluted net (loss) income per common share (in dollars per share) | $ (0.15) | $ 0.03 |
Antidilutive securities excluded from computation of net income per share (in shares) | 2,807 | 326 |
Common Class B [Member] | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Net (loss) income | $ (401) | $ 81 |
Less: Dividends declared | (192) | (192) |
Undistributed net loss | (593) | (111) |
Net (loss) income per share [Abstract] | ||
Dividends declared | 192 | 192 |
Allocation of undistributed net loss | (593) | (111) |
Net (loss) income attributable to common stock | $ (401) | $ 81 |
Weighted average shares of common stock outstanding-basic (in shares) | 3,204 | 3,196 |
Weighted average potential shares of common stock (in shares) | 0 | 83 |
Weighted average shares of common stock and potential common shares outstanding-diluted (in shares) | 3,204 | 3,279 |
Basic net (loss) income per common share (in dollars per share) | $ (0.13) | $ 0.03 |
Diluted net (loss) income per common share (in dollars per share) | $ (0.13) | $ 0.02 |
Antidilutive securities excluded from computation of net income per share (in shares) | 349 | 60 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Apr. 30, 2016 | Jan. 31, 2016 | Apr. 30, 2015 | Jan. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Liability related to interest rate swap | $ (706) | $ (675) | |||
Cash and cash equivalents deposited with commercial banks | 139,878 | 137,731 | $ 130,864 | $ 120,526 | |
Reported Value Measurement [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash and cash equivalents deposited with commercial banks | 27,000 | 24,000 | |||
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 | [1] | 112,792 | 113,984 | ||
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 | [2] | $ (705) | $ (675) | ||
[1] | Money market mutual funds are recorded at fair value based upon quoted market prices. | ||||
[2] | The 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. |
FAIR VALUE MEASUREMENTS, Deriva
FAIR VALUE MEASUREMENTS, Derivative Instruments (Details) - USD ($) | 3 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Jan. 31, 2016 | |
Derivatives, Fair Value [Line Items] | |||
Fair value of derivative instrument | $ (706,000) | $ (675,000) | |
Interest Rate Swap [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Change in fair value recognized in net income (loss) | (31,000) | $ 245,000 | |
Interest Rate Swap [Member] | Other Liabilities [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Fair value of derivative instrument | $ (706,000) | $ (675,000) |
CAPITALIZED SOFTWARE COSTS (Det
CAPITALIZED SOFTWARE COSTS (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Apr. 30, 2016 | Apr. 30, 2015 | Jan. 31, 2016 | ||
CAPITALIZED SOFTWARE COSTS [Abstract] | ||||
Acquired software technology | $ 3,458 | $ 3,458 | ||
Capitalized software development costs | [1] | 788 | 1,029 | |
Capitalized software, gross | 4,246 | 4,487 | ||
Less accumulated amortization | (2,925) | (2,934) | ||
Capitalized software costs, net | 1,321 | 1,553 | ||
Capitalized software development costs, write-off | 300 | |||
Capitalized computer software amortization | 200 | $ 300 | ||
Estimated Amortization Expense [Abstract] | ||||
2017 remaining | 499 | |||
2,018 | 420 | |||
Total | 919 | $ 1,073 | ||
Capitalized Software [Member] | ||||
Estimated Amortization Expense [Abstract] | ||||
2017 remaining | 710 | |||
2,018 | 566 | |||
2,019 | 42 | |||
2,020 | 3 | |||
Total | $ 1,321 | |||
[1] | Capitalized software development costs include the impact of foreign currency translation. |
GOODWILL AND INTANGIBLE ASSET34
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Apr. 30, 2016 | Apr. 30, 2015 | Jan. 31, 2016 | ||
Gross Carrying Amount [Abstract] | ||||
Balance, beginning of period | $ 26,253 | |||
Impact of foreign currency translation | 126 | |||
Balance, end of period | 26,379 | |||
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 | 10,645 | |||
Impact of foreign currency translation | 126 | |||
Balance, end of period | 10,771 | |||
Intangible Assets [Abstract] | ||||
Amortizable intangible assets, gross | 3,311 | $ 3,264 | ||
Less: accumulated amortization | (2,392) | (2,191) | ||
Total | 919 | 1,073 | ||
Amortization of intangible assets | 165 | $ 164 | ||
Estimated Amortization Expense [Abstract] | ||||
2017 remaining | 499 | |||
2,018 | 420 | |||
Total | 919 | |||
Customer Relationships [Member] | ||||
Intangible Assets [Abstract] | ||||
Amortizable intangible assets, gross | [1] | 2,796 | 2,749 | |
Trade Name [Member] | ||||
Intangible Assets [Abstract] | ||||
Amortizable intangible assets, gross | $ 515 | $ 515 | ||
[1] | Customer relationships include the impact of foreign currency translation. |
DEBT, Long-term (Details)
DEBT, Long-term (Details) - USD ($) $ in Thousands | Apr. 30, 2016 | Jan. 31, 2016 |
Long-term Debt [Abstract] | ||
Note payable | $ 14,574 | $ 14,680 |
Less current maturities | (428) | (422) |
Less loan origination costs, net | (64) | (67) |
Long-term debt | $ 14,082 | $ 14,191 |
DEBT, Note Payable (Details)
DEBT, Note Payable (Details) - 2012 Mortgage [Member] - Rabobank N.A [Member] - Quad Ortega Hill LLC [Member] - USD ($) | May. 30, 2012 | Apr. 30, 2016 |
Notes Payable [Abstract] | ||
Original principal amount | $ 16,100,000 | |
Principal and interest | 88,100 | |
Final principal payment | $ 11,700,000 | |
Unpaid balance | $ 14,600,000 | |
LIBOR [Member] | ||
Notes Payable [Abstract] | ||
Basis spread on variable rate | 2.25% | |
One month LIBOR | 0.44% | |
Swap Agreement [Member] | ||
Notes Payable [Abstract] | ||
Initial notional amount of swap agreement | $ 16,100,000 | |
Fixed interest rate | 4.31% |
DEBT, Credit Facility (Details)
DEBT, Credit Facility (Details) - Rabobank N.A [Member] - Unsecured Credit Agreement [Member] | 3 Months Ended |
Apr. 30, 2016USD ($) | |
Credit Facility [Abstract] | |
Maximum borrowing capacity | $ 20,000,000 |
Unused capacity commitment fee | 0.25% |
Effective borrowing rate | 1.19% |
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 |
Borrowings outstanding | $ 0 |
LIBOR [Member] | |
Credit Facility [Abstract] | |
Basis spread on variable rate | 0.75% |
ACCUMULATED OTHER COMPREHENSI38
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) $ in Thousands | 3 Months Ended |
Apr. 30, 2016USD ($) | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance as of beginning of period | $ (8,729) |
Balance as of end of period | (8,123) |
Foreign Currency Translation Adjustments [Member] | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Balance as of beginning of period | (8,729) |
Other comprehensive income before reclassifications | 606 |
Amounts reclassified from accumulated other comprehensive loss | 0 |
Net current period other comprehensive loss | 606 |
Balance as of end of period | $ (8,123) |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | Jan. 31, 2016 | Jan. 31, 2015 | |
Income Tax Contingency [Line Items] | ||||
Income tax (benefit) expense | $ (1,069) | $ 204 | ||
Effective tax rate | 28.00% | 27.00% | 30.00% | 28.00% |
Unrecognized tax benefits | $ 1,500 | |||
Reduction of unrecognized tax benefits | 1,000 | |||
Reduction of deferred tax assets | 1,000 | |||
Unrecognized tax benefits recognized in next twelve months | 100 | |||
Unrecognized tax benefits, income tax penalties and interest accrued | $ 200 | |||
India [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Years in which the company is currently under audit | fiscal years ended March 31, 1998, 1999, 2010, 2012 , 2013 and 2014 | |||
Thailand [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Years for which the company settled audits | fiscal year ended 2014 | |||
Italy [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Years in which the company is currently under audit | fiscal years ended 2011, 2012, 2013 and 2014 | |||
Wisconsin [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Years for which the company settled audits | fiscal years ended 2012, 2013 and 2014 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | Feb. 18, 2015 | Jan. 22, 2015 | Apr. 30, 2016 | Apr. 30, 2015 |
Issuance of common stock [Abstract] | ||||
Net proceeds from stock issued | $ 0 | $ 8,365,000 | ||
Dividends Declaration Date One [Member] | ||||
Dividends [Abstract] | ||||
Declaration date | Apr. 12, 2016 | |||
Record date | Apr. 26, 2016 | |||
Payable | May 3, 2016 | |||
Amount paid in cash | $ 1,316,000 | |||
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 | ||
Common Class A [Member] | Dividends Declaration Date One [Member] | ||||
Dividends [Abstract] | ||||
Dividend (in dollars per share) | $ 0.072 | |||
Common Class B [Member] | Dividends Declaration Date One [Member] | ||||
Dividends [Abstract] | ||||
Dividend (in dollars per share) | $ 0.06 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | ||
Apr. 30, 2016 | Apr. 30, 2015 | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 1,554,000 | $ 1,306,000 | |
Cost of Subscription [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 19,000 | 12,000 | |
Cost of Maintenance and Other Revenue [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 61,000 | 46,000 | |
Cost of Professional Services [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 155,000 | 119,000 | |
Sales and Marketing [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 261,000 | 261,000 | |
Research and Development [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 227,000 | 148,000 | |
General and Administrative [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 831,000 | $ 720,000 | |
Stock Appreciation Rights (SARs) [Member] | |||
Stock Appreciation Rights (SARs) [Roll Forward] | |||
Outstanding at beginning of period (in shares) | 2,596,000 | ||
Granted (in shares) | 0 | ||
Exercised (in shares) | (20,000) | ||
Expired (in shares) | 0 | ||
Forfeited (in shares) | (6,000) | ||
Outstanding at end of period (in shares) | 2,570,000 | ||
Vested and expected to vest (in shares) | [1] | 2,566,000 | |
Vested and exercisable (in shares) | 1,503,000 | ||
Weighted Average Exercise Price per Share [Abstract] | |||
Outstanding at beginning of period (in dollars per share) | $ 14.74 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 10.44 | ||
Expired (in dollars per share) | 0 | ||
Forfeited (in dollars per share) | 12.16 | ||
Outstanding at end of period (in dollars per share) | 14.78 | ||
Vested and expected to vest (in dollars per share) | [1] | 14.78 | |
Vested and exercisable (in dollars per share) | $ 11.52 | ||
Additional Disclosures [Abstract] | |||
Weighted average remaining contractual term, outstanding at end of period | 4 years 7 months 6 days | ||
Weighted average remaining contractual term, vested and expected to vest at end of period | [1] | 4 years 7 months 6 days | |
Weighted average remaining contractual term, vested and exercisable at end of period | 3 years 7 months 6 days | ||
Aggregate intrinsic value, outstanding at end of period | $ 14,640,000 | ||
Aggregate intrinsic value, vested and expected to vest at end of period | [1] | 14,616,000 | |
Aggregate intrinsic value, vested and exercisable at end of period | 11,773,000 | ||
Total intrinsic value of SARs exercised | $ 200,000 | ||
Number of shares withheld for payment of taxes (in shares) | 3,400 | ||
Value of shares withheld for payment of taxes | $ 69,000 | ||
Total unrecognized compensation cost | $ 5,000,000 | ||
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) | 16,000 | ||
Value of shares withheld for payment of taxes | $ 300,000 | ||
Total unrecognized compensation cost | $ 8,200,000 | ||
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) | 617,000 | ||
Granted (in shares) | 0 | ||
Released (in shares) | [2] | (45,000) | |
Forfeited (in shares) | (16,000) | ||
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) | $ 20.91 | ||
Granted (in dollars per share) | 0 | ||
Released (in dollars per share) | [2] | 20.41 | |
Forfeited (in dollars per share) | 21.15 | ||
Restricted stock at end of period (in dollars per share) | $ 20.94 | ||
[1] | The expected-to-vest SARs are the result of applying the pre-vesting forfeiture rate assumptions to total outstanding SARs. | ||
[2] | 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 ($) $ in Thousands | Apr. 30, 2016 | Jan. 31, 2016 |
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues, current | $ 92,640 | $ 97,911 |
Deferred revenues, non-current (in Other liabilities) | 1,486 | 1,690 |
Total deferred revenues | 94,126 | 99,601 |
Deferred Maintenance Revenue [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues, current | 73,594 | 79,533 |
Deferred Subscription Revenue [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues, current | 15,397 | 14,194 |
Deferred Services Revenue [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues, current | 1,984 | 2,332 |
Deferred License Revenue [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues, current | 1,248 | 1,549 |
Deferred Other Revenue [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenues, current | $ 417 | $ 303 |
BUSINESS SEGMENT INFORMATION (D
BUSINESS SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | ||
Apr. 30, 2016USD ($)RegionSegment | Apr. 30, 2015USD ($) | ||
BUSINESS SEGMENT INFORMATION [Abstract] | |||
Number of geographic regions | Region | 4 | ||
Number of operating segments | Segment | 1 | ||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenue | $ 65,397 | $ 69,265 | |
Percentage of sales into Canada of North America total revenue | 2.00% | 2.00% | |
North America [Member] | Reportable Geographical Components [Member] | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenue | [1] | $ 29,519 | $ 30,222 |
EMEA [Member] | Reportable Geographical Components [Member] | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenue | 19,792 | 21,802 | |
Asia Pacific [Member] | Reportable Geographical Components [Member] | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenue | 11,680 | 11,725 | |
Latin America [Member] | Reportable Geographical Components [Member] | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenue | $ 4,406 | $ 5,516 | |
[1] | Sales into Canada accounted for 2% of North America total revenue in each of the three months ended April 30, 2016 and 2015. |