Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 05, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 | |
Entity Registrant Name | EVOLVING SYSTEMS INC | |
Trading Symbol | evol | |
Entity Central Index Key | 1,052,054 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 11,702,768 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 9,410 | $ 9,781 |
Contract receivables, net of allowance for doubtful accounts of $42 at September 30, 2015 and $43 at December 31, 2014 | 9,935 | 9,182 |
Unbilled work-in-progress, net of allowance of $306 at September 30, 2015 and December 31, 2014 | 3,370 | 4,995 |
Deferred income taxes | 80 | |
Prepaid and other current assets | 1,533 | 1,331 |
Total current assets | 24,248 | 25,369 |
Property and equipment, net | 595 | 659 |
Amortizable intangible assets, net | 5,179 | 608 |
Goodwill | 23,553 | 17,010 |
Long-term deferred income taxes | 586 | |
Total assets | 53,575 | 44,232 |
Current liabilities: | ||
Current portion of capital lease obligations | 5 | 5 |
Accounts payable and accrued liabilities | 5,704 | 4,460 |
Income taxes payable | 466 | 1,227 |
Unearned revenue | 4,343 | 3,883 |
Total current liabilities | 10,518 | 9,575 |
Long-term liabilities: | ||
Capital lease obligations, net of current portion | 3 | 7 |
Revolving Line of credit, net of current portion | 10,000 | |
Deferred income taxes | 1,065 | |
Contingent earn-out obligation | 178 | 178 |
Long-term unearned revenue | 420 | |
Total liabilities | $ 21,764 | $ 10,180 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 2,000,000 shares authorized; no shares issued and outstanding as of September 30, 2015 and December 31, 2014 | ||
Common stock, $0.001 par value; 40,000,000 shares authorized; 11,879,407 shares issued and 11,700,518 outstanding as of September 30, 2015 and 11,843,564 shares issued and 11,664,675 outstanding as of December 31, 2014 | $ 12 | $ 12 |
Additional paid-in capital | 96,307 | 96,005 |
Treasury stock 178,889 shares as of September 30, 2015 and December 31, 2014, at cost | (1,253) | (1,253) |
Accumulated other comprehensive loss | (5,443) | (4,534) |
Accumulated deficit | (57,812) | (56,178) |
Total stockholders' equity | 31,811 | 34,052 |
Total liabilities and stockholders' equity | $ 53,575 | $ 44,232 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Condensed Consolidated Balance Sheets [Abstract] | ||
Allowance for doubtful accounts receivable | $ 42 | $ 43 |
Unbilled work-in-progress, allowance | $ 306 | $ 306 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 11,879,407 | 11,843,564 |
Common stock, shares outstanding | 11,700,518 | 11,664,675 |
Treasury Stock, Shares | 178,889 | 178,889 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
REVENUE | ||||
License fees and services | $ 3,228 | $ 5,141 | $ 11,177 | $ 14,690 |
Customer support | 2,545 | 2,419 | 7,327 | 7,391 |
Total revenue | 5,773 | 7,560 | 18,504 | 22,081 |
COSTS OF REVENUE AND OPERATING | ||||
Costs of license fees and services, excluding depreciation and amortization | 1,043 | 1,446 | 3,458 | 4,437 |
Costs of customer support, excluding depreciation and amortization | 396 | 509 | 1,116 | 1,417 |
Sales and marketing | 1,336 | 1,363 | 4,435 | 4,344 |
General and administrative | 1,010 | 877 | 2,943 | 2,654 |
Product development | 913 | 948 | 2,887 | 2,786 |
Depreciation | 97 | 74 | 277 | 172 |
Amortization | 24 | 24 | 71 | 71 |
Restructuring | 237 | |||
Total costs of revenue and operating expenses | 4,819 | 5,241 | 15,187 | 16,118 |
Income from operations | 954 | 2,319 | 3,317 | 5,963 |
Other income (expense) | ||||
Interest income | 5 | 6 | 14 | 13 |
Interest expense | (3) | (4) | (9) | (13) |
Other loss | (27) | |||
Foreign currency exchange (gain) loss | (244) | 185 | (218) | 13 |
Other income (expense), net | (242) | 187 | (213) | (14) |
Income from operations before income taxes | 712 | 2,506 | 3,104 | 5,949 |
Income tax expense | 142 | 827 | 894 | 1,943 |
Net income | $ 570 | $ 1,679 | $ 2,210 | $ 4,006 |
Basic income per common share | $ 0.05 | $ 0.14 | $ 0.19 | $ 0.34 |
Diluted income per common share | 0.05 | 0.14 | 0.19 | 0.34 |
Cash dividend declared per common share | $ 0.11 | $ 0.11 | $ 0.33 | $ 0.31 |
Weighted average basic shares outstanding | 11,687 | 11,647 | 11,677 | 11,635 |
Weighted average diluted shares outstanding | 11,927 | 11,934 | 11,938 | 11,919 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements Of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Consolidated Statements Of Comprehensive (Loss) Income [Abstract] | ||||
Net income | $ 570 | $ 1,679 | $ 2,210 | $ 4,006 |
Other comprehensive loss: | ||||
Foreign currency translation loss | (975) | (1,306) | (909) | (412) |
Other comprehensive loss | (975) | (1,306) | (909) | (412) |
Comprehensive (loss) income | $ (405) | $ 373 | $ 1,301 | $ 3,594 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements Of Changes In Stockholders' Equity - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated (Deficit) [Member] | Total |
Balance at Dec. 31, 2014 | $ 12 | $ 96,005 | $ (1,253) | $ (4,534) | $ (56,178) | $ 34,052 |
Balance, shares at Dec. 31, 2014 | 11,664,675 | |||||
Stock option exercises | 28 | 28 | ||||
Stock option exercises, shares | 10,823 | |||||
Common Stock issued pursuant to the Employee Stock Purchase Plan | 45 | 45 | ||||
Common Stock issued pursuant to the Employee Stock Purchase Plan, shares | 6,052 | |||||
Stock-based compensation expense | 229 | 229 | ||||
Restricted stock issuance, net of cancellations, shares | 18,968 | |||||
Common stock cash dividends | (3,844) | (3,844) | ||||
Net income | 2,210 | 2,210 | ||||
Foreign currency translation adjustment | (909) | (909) | ||||
Balance at Sep. 30, 2015 | $ 12 | $ 96,307 | $ (1,253) | $ (5,443) | $ (57,812) | $ 31,811 |
Balance, shares at Sep. 30, 2015 | 11,700,518 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 2,210 | $ 4,006 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 277 | 172 |
Amortization of intangible assets | 71 | 71 |
Amortization of debt issuance costs | 8 | 13 |
Stock-based compensation | 229 | 309 |
Unrealized foreign currency transaction (gains) losses, net | 218 | (13) |
Provision for deferred income taxes | (25) | (15) |
Change in operating assets and liabilities: | ||
Contract receivables | (137) | 745 |
Unbilled work-in-progress | 1,604 | (3,896) |
Prepaid and other assets | (183) | 133 |
Accounts payable and accrued liabilities | (934) | (295) |
Unearned revenue | (439) | (1,486) |
Net cash provided by (used in) operating activities | 2,899 | (256) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (191) | (275) |
Business combinations, net of cash | (9,014) | |
Net cash used in investing activities | (9,205) | (275) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Capital lease payments | (4) | (7) |
Proceeds from the revolving line of credit | 10,000 | |
Common stock cash dividends | (3,844) | (3,608) |
Excess tax benefits from stock-based compensation | 821 | |
Proceeds from the issuance of stock | 73 | 244 |
Net cash provided by (used in) financing activities | 6,225 | (2,550) |
Effect of exchange rate changes on cash | (290) | 273 |
Net decrease in cash and cash equivalents | (371) | (2,808) |
Cash and cash equivalents at beginning of period | 9,781 | 13,785 |
Cash and cash equivalents at end of period | 9,410 | 10,977 |
Supplemental disclosure of cash and non-cash transactions: | ||
Income taxes paid | 1,092 | 111 |
Property and equipment purchased and included in accounts payable | $ 12 | |
Issuance of common stock related to acquisition | $ 19 |
Basis Of Presentation
Basis Of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Basis Of Presentation [Abstract] | |
Basis Of Presentation | NOTE 1 — BASIS OF PRESENTATION Organization — We are a provider of software solutions and services to the wireless, wireline and cable markets. We maintain long-standing relationships with many of the largest wireless, wireline and cable companies worldwide. Our customers rely on us to develop, deploy, enhance and maintain software solutions that provide a variety of service activation and provisioning functions. Our service activation solution, Tertio ® (“TSA”) is used to activate bundles of voice, video and data services for wireless, wireline and cable network operators; our SIM card activation solution, Dynamic SIM Allocation TM (“DSA”) is used to dynamically allocate and assign resources to Mobile Network Operators ( “ MNOs ” ) devices that rely on SIM cards; our Mobile Data Enablement TM (“MDE”) solution provides a data consumption and policy management solution for wireless carriers and Mobile Virtual Network Operators ( “ MVNOs ” ) that monitor the usage and consumption of data services; our Total Number Management™ ( “ TNM ” ) product is a scalable and fully automated database solution that enables operators to reliably and efficiently manage their telephone numbers as well as other communication identifiers (i.e. SIMs, MSISDNs, IMSIs, ICCIDs, IPs). Our solutions can be deployed on premise or offered as a Software-as-a-Service ( “ SaaS ” ). On September 30, 2015 we announced the acquisition of privately held RateIntegration, Inc., d/b/a Sixth Sense Media (“SSM”) , a provider of real time analytics and marketing solutions to wireless carriers. SSM’s software solution platform , Real-time Lifecycle Marketing ™ (“RLM”), enables carrier s’ marketing departments to innovate, execute and manage highly-personalized and contextually-relevant, interactive campaigns that engage consumers in real time. We believe the addition of SSM’s RLM product to our existing service activation and data enablement products will produce a powerful platform for wireless carriers . A product suite which we refer to as our Mobile Marketing Solutions (“MMS”) will provide sophisticated, highly tailored mobile campaigns which can be executed based on critical subscriber data captured during the initial activation experience (DSA and RLM ) as well as in-life subscriber usage via MDE. We see the opportunity to leverage our technology to provide MNOs with sophisticated mobile marketing campaigns that will extend beyond voice, text and data usage campaigns and provide marketing services that will assist MNOs to market services that include retail mobile marketing, gaming, streaming video as well as social media based campaigns. Interim Consolidated Financial Statements — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in conformity with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, we believe that the disclosures included in these financial statements are adequate to make the information presented not misleading. The unaudited condensed consolidated financial statements included in this document have been prepared on the same basis as the annual consolidated financial statements, and in our opinion reflect all adjustments, which include normal recurring adjustments necessary for a fair presentation in accordance with GAAP and SEC regulations for interim financial statements. The results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that we will have for any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes to those statements for the year ended December 31, 2014 included in our Annual Report on Form 10-K. Use of Estimates — The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. We made estimates with respect to revenue recognition for estimated hours to complete projects accounted for using the percentage-of-completion method, allowance for doubtful accounts, income tax valuation allowance, fair values of long-lived assets, valuation of intangible assets and goodwill, useful lives for property, equipment and intangible assets, business combinations, capitalization of internal software development costs and fair value of stock-based compensation amounts. Actual results could differ from these estimates. Foreign Currency — Our functional currency is the U.S. dollar. The functional currency of our foreign operations is the respective local currency for each foreign subsidiary. Assets and liabilities of foreign operations denominated in local currencies are translated at the spot rate in effect at the applicable reporting date. Our consolidated statements of income are translated at the weighted average rate of exchange during the applicable period. The resulting unrealized cumulative translation adjustment is recorded as a component of accumulated other comprehensive loss in stockholders’ equity. Realized and unrealized transaction gains and losses generated by transactions denominated in a currency different from the functional currency of the applicable entity are recorded in other income (expense) in the consolidated statements of operations in the period in which they occur. Principles of Consolidation — The consolidated financial statements include the accounts of Evolving Systems, Inc. and subsidiaries, all of which are wholly owned. All significant intercompany transactions and balances have been eliminated in consolidation. Goodwill — Goodwill is the excess of acquisition cost of an acquired entity over the fair value of the identifiable net assets acquired. Goodwill is not amortized, but tested for impairment annually or whenever indicators of impairment exist. These indicators may include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. Intangible Assets — Amortizable intangible assets consist primarily of purchased software and licenses, customer contracts and relationships, trademarks and tradenames, non-competition and business partnerships acquired in conjunction with our purchase of Telespree Communications (“Evolving Systems Labs, Inc.” ) and RateIntegration, Inc. d/b/a Sixth Sense Media (“Evolving Systems NC, Inc.”) . These assets are amortized using the straight-line method over their estimated lives. We assess the impairment of identifiable intangibles if events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. If we determine that the carrying value of intangibles and/or long-lived assets may not be recoverable, we compare the estimated undiscounted cash flows expected to result from the use of the asset and its eventual disposition to the asset’s carrying amount. If an amortizable intangible or long-lived asset is not deemed to be recoverable, we recognize an impairment loss representing the excess of the asset’s carrying value over its estimated fair value. Fair Value Measurements — Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. Cash and Cash Equivalents — All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents. Revenue Recognition — We recognize revenue when an agreement is signed, the fee is fixed or determinable and collectability is reasonably assured. We recognize revenue from two primary sources: license fees and services, and customer support. The majority of our license fees and services revenue is generated from fixed-price contracts, which provide for licenses to our software products and services to customize such software to meet our customers’ use. When the customization services are determined to be essential to the functionality of the delivered software, we recognize revenue using the percentage-of-completion method of accounting. In these types of arrangements, we do not typically have Vendor Specific Objective Evidence (“VSOE”) of fair value on the license fee/services portion (services are related to customizing the software) of the arrangement due to the large amount of customization required by our customers; however, we do have VSOE for the warranty/maintenance services based on the renewal rate of the first year of maintenance in the arrangement. The license/services portion is recognized using the percentage-of-completion method of accounting and the warranty/maintenance services are separated based on the renewal rate in the contract and recognized ratably over the warranty or maintenance period. We estimate the percentage-of-completion for each contract based on the ratio of direct labor hours incurred to total estimated direct labor hours and recognize revenue based on the percent complete multiplied by the contract amount allocated to the license fee/services. Since estimated direct labor hours, and changes thereto, can have a significant impact on revenue recognition, these estimates are critical and we review them regularly. If the arrangement includes a customer acceptance provision, the hours to complete the acceptance testing are included in the total estimated direct labor hours; therefore, the related revenue is recognized as the acceptance testing is performed. Revenue is not recognized in full until the customer has provided proof of acceptance on the arrangement. Generally, our contracts are accounted for individually. However, when certain criteria are met, it may be necessary to account for two or more contracts as one to reflect the substance of the group of contracts. We record amounts billed in advance of services being performed as unearned revenue. Unbilled work-in-progress represents revenue earned but not yet billable under the terms of the fixed-price contracts. All such amounts are expected to be billed and collected within 12 months. We may encounter budget and schedule changes or increases on fixed-price contracts caused by increased labor or overhead costs. We make adjustments to cost estimates in the period in which the facts requiring such revisions become known. We record estimated losses, if any, in the period in which current estimates of total contract revenue and contract costs indicate a loss. If revisions to cost estimates are obtained after the balance sheet date but before the issuance of the interim or annual financial statements, we make adjustments to the interim or annual financial statements accordingly. In arrangements where the services are not essential to the functionality of the delivered software, we recognize license revenue when a license agreement has been signed, delivery and acceptance have occurred, the fee is fixed or determinable and collectability is reasonably assured. Where applicable, we unbundle and record as revenue fees from multiple element arrangements as the elements are delivered to the extent that VSOE of fair value of the undelivered elements exist. If VSOE for the undelivered elements does not exist, we defer fees from such arrangements until the earlier of the date that VSOE does exist on the undelivered elements or all of the elements have been delivered. We recognize revenue from fixed-price service contracts using the proportional performance method of accounting, which is similar to the percentage-of-completion method described above. We recognize revenue from professional services provided pursuant to time-and-materials based contracts and training services as the services are performed, as that is when our obligation to our customers under such arrangements is fulfilled. We recognize revenue from our MDE contracts based on the number of transactions per month multiplied by a factor based on a unique table for transaction volumes relating to each account. We recognize customer support, including maintenance revenue, ratably over the service contract period. When maintenance is bundled with the original license fee arrangement, its fair value, based upon VSOE, is deferred and recognized during the periods when services are provided. Stock-based Compensation — We account for stock-based compensation by applying a fair-value-based measurement method to account for share-based payment transactions with employees and directors. We record compensation costs associated with the vesting of unvested options on a straight-line basis over the vesting period. Stock-based compensation is a non-cash expense because we settle these obligations by issuing shares of our common stock instead of settling such obligations with cash payments. We use the Black-Scholes model to estimate the fair value of each option grant on the date of grant. This model requires the use of estimates for expected term of the options and expected volatility of the price of our common stock. Comprehensive Income (Loss) — Comprehensive income (loss) consists of two components, net income and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains, and losses that under GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Other comprehensive income (loss) consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency. Income Taxes — We record deferred tax assets and liabilities for the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the accompanying condensed consolidated balance sheets, as well as operating loss and tax credit carry-forwards. We measure deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. We reduce deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not that these benefits will not be realized. We use a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. Recent Accounting Pronouncements – In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” Topic 606. This Update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. The guidance in this Update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition and most industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to illustrate the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance also includes a cohesive set of dis closure requirements that will pro vide users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a report ing organization’s contracts with customers. This ASU is effective retrospectively for fiscal years, and interim periods within those years beginning after December 15, 2016 for public companies and 2017 for non-public entities, however the FASB has deferred the effective date by one year. We do not expect the adoption of this standard to have a significant impact on the Company’s financial position and results of operations. In August 2014, the FASB issued ASU 2014-15 Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . Management of public and private companies will be required to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued (or available to be issued when applicable) and, if so, disclose that fact. Management will be required to make this evaluation for both annual and interim reporting periods, if applicable. The standard is effective for annual periods ending after December 15, 2016 and interim periods ending after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. We do not expect the adoption of this ASU to impact the consolidated financial statements. |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2015 | |
Acquisition [Abstract] | |
Acquisition | NOTE 2 — ACQUISITION On September 30, 2015 we acquired privately held RateIntegration, Inc. d/b/a Sixth Sense Media (“SSM”), now known as Evolving Systems NC, Inc. for an initial payment of approximately $9.75 million and a $0.5 million working capital adjustment. We also agreed to make a payment on the one year anniversary of the transaction of $250,000 , with such payment being available to secure RateIntegration’s representations and warranties in the agreement. We accounted for this business combination by applying the acquisition method, and accordingly, the purchase price was allocated to the assets and liabilities assumed based upon their fair values at the acquisition date. The excess of the purchase price over the net assets and liabilities, approximately $ 6.9 million, was recorded as goodwill. The Company is in the process of finalizing the purchase allocation, thus the provisional measures of deferred income taxes, intangibles and goodwill are subject to change. The Company expects the purchase price allocation will be finalized in 2016 . The results of RateIntegration’s operations have been included in the consolidated financial statements since the acquisition date. We believe this acquisition complements our activation and SIM management products. C ombining SSM’s real-time analytics and campaign capabilities with our DSA and MDE solutions will allow the c ompany to offer global wireless carriers solutions that utilize the highly valuable contextual data captured from the subscribers’ initial welcome experience via DSA, their network usage via RLM and their on-device app usage via MDE. The combined solutions will create a highly personalized experience that engages subscribers in real time from the first time subscribers power on their new devices right through their day-to-day usage. Our strategic focus is primarily on the wireless markets in the areas of subscriber activation, SIM card management and activation, self—service mobile applications, data enablement solutions, connected device activation, mobile marketing campaigns, advertising and analytics and management of services. Total purchase price is summarized as follows (in thousands): September 30, 2015 Cash Consideration Initial Cash Purchase Price $ Cash/Working Capital Adjustment Total Cash Consideration $ Assumed Liabilities Total purchase price $ The following table summarizes the preliminary estimated fair values of the assets and liabilities assumed at the acquisition date (in thousands): September 30, 2015 Cash and cash equivalents $ Contract receivables Unbilled work-in-progress Intangible assets Prepaid and other current assets Other assets, non-current Total identifiable assets acquired $ Accounts payable and accrued liabilities $ Deferred tax liability Deferred revenue Total identifiable liabilities acquired $ Net identifiable assets acquired Goodwill Net assets acquired $ We recorded $ 4.6 million in intangible assets as of the acquisition date with a weighted-average amortization period of approximately seven years and are amortizing the value of the trade name, technology, non-competition and customer relationships over an estimated useful life of 2 , 8 , 2 and 7 years , respectively. No amortization expense related to the acquired intangible assets was recorded during the period ended September 30, 2015. The $5.4 million of goodwill was assigned to the license and service segment and $ 1.5 million was assigned to the customer support segment. The goodwill recognized is attributed primarily to expected synergies and the assembled workforce of SSM. As of the date of this report there were no changes in the recognized amounts of goodwill resulting from the acquisition of SSM. Intangible assets related to the Evolving Systems NC, Inc.’s acquisition as of September 30, 2015 (in thousands): September 30, 2015 Gross Amount Accumulated Amortization Net Carrying Amount Weighted-Average Amortization Period Purchased software $ $ - $ 8 yrs Trademarks and tradenames - 2 yrs Non-competition 2 yrs Customer relationships - 7 yrs $ $ - $ 7.19 yrs Pro Forma The following unaudited pro forma financial information reflects the consolidated results of operations of as if the acquisition of SSM had taken place on January 1, 2015 and 2014. The pro forma information includes adjustments for the amortization of intangible assets. The pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transaction been effected on the assumed date (in thousands). For the Nine Months ended September 30, 2015 2014 Revenue $ $ Earnings |
Goodwill And Intangible Assets
Goodwill And Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill And Intangible Assets [Abstract] | |
Goodwill And Intangible Assets | NOTE 3 — GOODWILL AND INTANGIBLE ASSETS Changes in the carrying amount of goodwill by reporting unit were as follows (in thousands): License and Services Customer Support Total U.S. India U.K. U.S. U.K. Goodwill Balance as of December 31, 2014 $ $ - $ $ - $ $ Goodwill acquired during the year Effects of changes in foreign currency exchange rates (1) - - - Balance at September 30, 2015 $ $ $ $ $ $ (1) Represents the impact of foreign currency translation for instances when goodwill is recorded in foreign entities whose functional currency is also their local currency. Goodwill balances are translated into U.S. dollars using exchange rates in effect at period end. Adjustments related to foreign currency translation are included in other comprehensive income. We performed our annual goodwill impairment test as of July 31, 2015, which we had $17.0 million of goodwill included the following reporting units, License and Services (“L&S”) — US , Evolving Systems Labs, Inc. of $1.1 million and UK of $7.2 million and Customer Support (“CS”) — UK of $8.7 million. The fair value of each reporting unit was estimated using both market and income based approaches. Specifically, we incorporated observed market multiple data from selected guideline public companies and values arrived at through the application of discounted cash flow analyses which in turn were based upon our financial projections as of the valuation date. In our analysis, we weighted the application of discounted cash flow analysis at 70% and observed market multiple data from selected guideline public companies at 30% . This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit. If the carrying value of a reporting unit were to exceed its fair value, we would then be required to perform a second step of the impairment analysis which could lead to goodwill impairment should the carrying amount exceed the fair value. The excess of carrying amount over fair value would be charged to operations as an impairment loss. If the projected future performance of either of our segments as estimated in the income valuation approach is adjusted downward or is lower than expected in the future, we could be required to record a goodwill impairment charge. As a result of the first step of the 2015 goodwill impairment analysis, the fair value of each reporting unit exceeded its carrying value. Therefore the second step was not necessary. However, a hypothetical decrease of approximately 20% due to lower than estimated future cash flows in the estimated fair value of our L&S-U.S. Evolving Systems Labs, Inc. reporting unit would result in its carrying value exceeding its estimated fair value and therefore require the second step, which could result in impairment for that reporting unit. From July 31, 2015 through the date of this report, no events have occurred that we believe may have impaired goodwill. As a result of the acquisition of SSM, $6.9 million of goodwill was acquired during the period, of which $5.4 million was assigned to the license and service segment and $ 1.5 million was assigned to the customer support segment. We amortized identifiable intangible assets for Evolving Systems Labs, Inc. on a straight-line basis over their estimated lives ranging from one to eight years. As of September 30, 2015 and December 31, 2014, identifiable intangibles were as follows (in thousands): September 30, 2015 December 31, 2014 (2) Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Weighted-Average Amortization Period Purchased software $ $ $ $ $ $ 7.3 yrs Trademarks and tradenames 2.6 yrs Non-competition - - - - 2.0 yrs Customer relationships 6.8 yrs $ $ $ $ $ $ 6.8 yrs (2) Changes in intangible values as of September 30, 2015 compared to December 31, 2014 are the direct result of the acquisition of Evolving Systems NC, Inc. in the third quarter of 2015. Amortization expense of identifiable intangible assets was $ 24,000 for the three months and $ 7 1,000 for the nine months ended September 30, 2015 and 2014, respectively. Expected future amortization expense related to identifiable intangibles based on our carrying amount as of September 30, 2015 was as follows (in thousands): Twelve months ending September 30, 2016 $ 2017 2018 2019 2020 Thereafter $ |
Earnings Per Common Share
Earnings Per Common Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Common Share [Abstract] | |
Earnings Per Common Share | NOTE 4 — EARNINGS PER COMMON SHARE We compute basic earnings per share (“EPS”) by dividing net income or loss available to common stockholders by the weighted average number of shares outstanding during the period, including common stock issuable under participating securities. We compute diluted EPS using the weighted average number of shares outstanding, including participating securities, plus all potentially dilutive common stock equivalents. Common stock equivalents consist of stock options. Our policy is to treat unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, as participating securities, included in the computation of both basic and diluted earnings per share. The following is the reconciliation of the denominator of the basic and diluted EPS computations (in thousands, except per share data): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Basic income per share: Net income available to common stockholders $ $ $ $ Basic weighted average shares outstanding Basic income per share: $ $ $ $ Diluted income per share: Net income available to common stockholders $ $ $ $ Weighted average shares outstanding Effect of dilutive securities - options Diluted weighted average shares outstanding Diluted income per share: $ $ $ $ For the three months ended September 30, 2015 and 2014, 0.3 million and 0.1 million shares, respectively, of common stock were excluded from the dilutive stock calculation because their exercise prices were greater than the average fair value of our common stock for the period. For the nine months ended September 30, 2015 and 2014, 0.3 million and 0.2 million shares, respectively of common stock were excluded from the dilutive stock calculation because their exercise prices were greater than the average fair value of our common stock for the period. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | NOTE 5 — SHARE-BASED COMPENSATION We account for stock-based compensation by applying a fair-value-based measurement method to account for share-based payment transactions with employees and directors, and record compensation cost for all stock awards granted after January 1, 2006 and awards modified, repurchased, or cancelled after that date, using the modified prospective method. We record compensation costs associated with the vesting of unvested options on a straight-line basis over the vesting period. We recognized $0.1 million of compensation expense in the consolidated statements of operations, with respect to our stock-based compensation plans for the three months ended September 30, 2015 and 2014 and $0.2 million and $0.3 million for the nine months ended September 30, 2015 and 2014 , respectively . The following table summarizes stock-based compensation expenses recorded in the consolidated statement of operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Cost of license fees and services, excluding depreciation and amortization $ $ $ $ Cost of customer support, excluding depreciation and amortization Sales and marketing General and administrative Product development Total share based compensation $ $ $ $ Stock Incentive Plans In January 1996, our stockholders approved an Amended and Restated Stock Option Plan (the “Option Plan”). Under the Option Plan, as amended, 4,175,000 shares were reserved for issuance. Options issued under the Option Plan were at the discretion of the Board of Directors, including the vesting provisions of each stock option granted. Options were granted with an exercise price equal to the closing price of our common stock on the date of grant, generally vest over four years and expire no more than ten years from the date of grant. The Option Plan terminated on January 18, 2006 ; options granted before that date were not affected by the plan termination. At September 30, 2015 and December 31, 2014, 0.1 million options remained outstanding under the Option Plan. In June 2007, our stockholders approved the 2007 Stock Incentive Plan (the “2007 Stock Plan”) with a maximum of 1,000,000 shares reserved for issuance. In June 2010, our stockholders approved an amendment to the 2007 Stock Plan which increased the maximum shares that may be awarded under the plan to 1,250,000 . In June 2013, our stockholders approved an amendment to the 2007 Stock Plan which increased the maximum shares that may be awarded under the plan to 1,502,209 . In June 2015, our stockholders approved an amendment to the 2007 Stock Plan which increased the maximum shares that may be awarded under the plan to 2,002,209 . Awards permitted under the 2007 Stock Plan include: Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Awards and Other Stock-Based Awards. Awards issued under the 2007 Stock Plan are at the discretion of the Board of Directors. As applicable, awards are granted with an exercise price equal to the closing price of our common stock on the date of grant, generally vest over four years for employees and one year for directors and expire no more than ten years from the date of grant. At September 30, 2015 , there were approximately 0.3 million shares available for grant under the 2007 Stock Plan, as amended. At September 30, 2015 and December 31, 2014, 0.8 and 0.6 million were issued and outstanding under the 2007 Stock Plan as amended, respectively. During the three months ended September 30, 2015 there were 20,000 grants of restricted stock to members of our senior management. During the nine months ended September 30, 2015 there were 20,000 grants of restricted stock to members of our senior management. No grants of restricted stock were offered during the nine months ended September 30, 2014. During the three months ended September 30, 2015 and 2014, 0 and 2,000 shares of restricted stock vested, respectively and 94 and 6,000 shares of restricted stock vested, respectively during the nine months ended September 30, 2015 and 2014. No shares of restricted stock were forfeited during the three months ended September 30, 2015 and 2014 . Approximately 1,031 and 938 shares of restricted stock were forfeited during the nine months ended September 30, 2015 and 2014, respectively. The fair market value of restricted shares for share-based compensation expensing is equal to the closing price of our common stock on the date of grant. Stock-based compensation expense includes $ 0 and $ 15,000 for the three months ended September 30, 2015 and 2014, respectively , and $1,000 and $ 46,000 for the nine months ended September 30, 2015 and 2014, respectively, of expense related to restricted stock grants. The restrictions on the stock awards are released quarterly, generally over two and four years for senior management and over one year for board members. The fair value of each option grant is estimated on the date of grant using the Black-Scholes model. The Black-Scholes model uses four assumptions to calculate the fair value of each option grant. The expected term of share options granted is derived using the simplified method, which we adopted in January 2008. The risk-free interest rate is based upon the rate currently available on zero-coupon U.S. Treasury instruments with a remaining term equal to the expected term of the stock options. The expected volatility is based upon historical volatility of our common stock over a period equal to the expected term of the stock options. The expected dividend yield is based upon historical and anticipated payment of dividends. The weighted-average assumptions used in the fair value calculations are as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Expected term (years) * Risk-free interest rate % * % % Expected volatility % * % % Expected dividend yield % * % % ______________________________ * - None granted The following is a summary of stock option activity under the plans for the nine months ended September 30, 2015 : Weighted- Average Weighted- Remaining Aggregate Number of Average Contractual Intrinsic Shares Exercise Term Value (in thousands) Price (Years) (in thousands) Options outstanding at December 31, 2014 $ $ Options granted Less options forfeited Less options expired Less options exercised Options outstanding at September 30, 2015 $ $ Options exercisable at September 30, 2015 $ $ There were 172,000 stock options granted during the three months ended September 30, 2015. No stock options were granted during the three months ended September 30, 2014. The weighted-average grant-date fair value of stock options granted during the three months ended September 30, 2015 was $0.96 . As of September 30, 2015 , there were approximately $ 0.5 million of total unrecognized compensation costs related to unvested stock options. These costs are expected to be recognized over a weighted average period of 2.55 years . The total fair value of stock options vested during the three months ended September 30, 2015 and 2014 was approximately $0 .1 million , respectively . The total fair value of stock options vested during the nine months ended September 30, 2015 and 2014 was approximately $0.3 million and $0.2 million, respectively. The deferred income tax benefits from stock option expense related to Evolving Systems U.K. totaled approximately $5,000 and $ 4,000 for the three months ended September 30, 2015 and 2014, respectively. The deferred income tax benefits from stock option expense related to Evolving Systems U.K. totaled approximately $14,000 and $12,000 for the nine months ended September 30, 2015 and 2014, respectively. Cash received from stock option exercises for the three months ended September 30, 2015 and 2014 was $0 and $ 0.1 million , respectively. Cash received from stock option exercises for the nine months ended September 30, 2015 and 2014 was $27,000 and $0.2 million, respectively. Employee Stock Purchase Plan Under the Employee Stock Purchase Plan (“ESPP”), we are authorized to issue up to 550,000 shares. Employees may elect to have up to 15 % of their gross compensation withheld through payroll deductions to purchase our common stock, capped at $ 25,000 annually and no more than 10,000 shares per offering period. The purchase price of the stock is 85 % of the lower of the market price at the beginning or end of each three-month participation period. As of September 30, 2015 , there were approximately 55,000 shares available for purchase. For the three months ended September 30, 2015 and 2014, we recorded compensation expense of $3,000 , respectively, and $11,000 and $14,000 , for the nine months ended September 30, 2015 and 2014, respectively, associated with grants under the ESPP which includes the fair value of the look-back feature of each grant as well as the 15 % discount on the purchase price. This expense fluctuates each period primarily based on the level of employee participation. The fair value of each purchase made under our ESPP is estimated on the date of purchase using the Black-Scholes model. The Black-Scholes model uses four assumptions to calculate the fair value of each purchase. The expected term of each purchase is based upon the three-month participation period of each offering. The risk-free interest rate is based upon the rate currently available on zero-coupon U.S. Treasury instruments with a remaining term equal to the expected term of each offering. The expected volatility is based upon historical volatility of our common stock. The expected dividend yield is based upon historical and anticipated payment of dividends. The weighted average assumptions used in the fair value calculations are as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Expected term (years) Risk-free interest rate % % % % Expected volatility % % % % Expected dividend yield % % % % Cash received from employee stock plan purchases for the three months ended September 30, 2015 and 2014 was $ 11,000 and $12,000 , respectively. Cash received from employee stock plan purchases for the nine months ended September 30, 2015 and 2014 was $44,000 and $55,000 , respectively. We issued shares related to the ESPP of approximately 2,000 for the three months ended September 30, 2015 and 2014. We issued shares related to the ESPP of approximately 7,000 for the nine months ended September 30, 2015 and 2014 |
Concentration Of Credit Risk
Concentration Of Credit Risk | 9 Months Ended |
Sep. 30, 2015 | |
Concentration Of Credit Risk [Abstract] | |
Concentration Of Credit Risk | NOTE 6 — CONCENTRATION OF CREDIT RISK For the three months ended September 30, 2015 , no significant customer s (defined as contributing at least 10 %) accounted for 10 % of revenue from operations. For the three months ended September 30, 2014, t wo significant customers accounted for 28% ( 16% and 12%) of revenue from operations. The significant customers for the three months ended September 30, 2014 are large telecommunications operators in Mexico and United Kingdom. For the nine months ended September 30, 2015 , no significant customer s accounted for 10% of revenue from operations. For the nine months ended September 30, 2014, three significant customers accounted for 36% (13% , 12% and 11%) of revenue from operations. These customers are large telecommunications operators in the United Kingdom, Mexico and Nigeria. As of September 30, 2015 , one significant customer accounted for approximately 22 % of contract receivables and unbilled work-in-progress. This customer is a large telecommunication operator in Nigeria. As of December 31, 2014, three significant customers accounted for approximately 55% ( 26% , 16% and 13% ) of contract receivables and unbilled work-in-progress. These customers are large telecommunications operators in Nigeria, Mexico and Europe. |
Revolving Line Of Credit
Revolving Line Of Credit | 9 Months Ended |
Sep. 30, 2015 | |
Revolving Line Of Credit [Abstract] | |
Revolving Line Of Credit | NOTE 7 — REVOLVING LINE OF CREDIT On September 28, 2015 , we entered into the Third Amendment to the Loan and Security Agreement with East West Bank to increase the current revolving credit facility from $5.0 million to $10.0 million (the “Revolving Facility”). The additional $5.0 million (“Revolving Line II”) will bear interest at a floating rate equal to the U.S.A. Prime Rate plus 2.25%; the existing $5.0 million credit facility (“Revolving Line”) will continue to bear interest at the greater of 2.75% or the U.S.A Prime Rate minus one half of one percent (0.50%) . The Revolving Facility is secured by substantially all of the assets of Evolving Systems, including a pledge, subject to certain limitations with respect to stock of foreign subsidiaries, of the stock of the existing and future direct subsidiaries of Evolving Systems. There is no mandated borrowing required against the Revolving Facility. To take an advance under the Revolving Facility, the Company must have a balance of $4.0 million in cash on deposit with East West Bank, a minimum current ratio and a specified ratio of Total Liabilities to Tangible Net Worth, which are both as defined in the Revolving Facility. The Revolving Facility requires the Company to pay a one-time credit facility fee of $10,000 for extension of Revolving Line II, an annual credit facility fee of $10,000 and monthly payments of interest, with the unpaid balance due on October 22, 2016 . The Revolving Facility includes negative covenants that place restrictions on the Company’s ability to, among other things: incur additional indebtedness; create liens or other encumbrances on assets; make loans, enter into letters of credit, guarantees, investments and acquisitions; sell or otherwise dispose of assets; cause or permit a change of control; merge or consolidate with another entity; make negative pledges; enter into affiliate transactions; and change the nature of its business materially. Outstanding amounts under the Revolving Facility may be accelerated by notice from East West Bank upon the occurrence and continuance of certain events of default, including without limitation: payment defaults, breach of covenants beyond applicable grace periods, breach of representations and warranties, bankruptcy and insolvency defaults, and the occurrence of a material adverse effect (as defined). Acceleration is automatic upon the occurrence of certain bankruptcy and insolvency defaults. As of September 30, 2015 , we are in compliance with the covenants and have borrowed $10.0 million against th e Revolving Facility . The proceeds from the borrowings against the facilities were used for the initial payment for the RateIntegration acquisition agreement on September 30, 2015 . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes [Abstract] | |
Income Taxes | NOTE 8 — INCOME TAXES We recorded net income tax expense of $ 0 .1 million and $0.8 million for the three months ended September 30, 2015 and 2014, respectively. The net expense during the three months ended September 30, 2015 consisted of current income tax expense of $ 0.1 million. The current tax expense consists of income tax from our U.K. and India based operations and unrecoverable foreign withholding taxes in the U.K. The net expense during the three months ended September 30, 2014 consisted of current income tax expense of $0.8 million and a deferred tax benefit of $10,000 . The current tax expense consists of income tax from our U.S., U.K. and India based operations. The deferred tax benefit was primarily related to distributed foreign earnings, a decrease in deferred tax assets related to accrued liabilities and capitalized expenses for tax purpose related to the acquisition of Evolving Systems Labs, Inc. The decrease in tax expense for the three months ending September 30, 2015 is due to lower income in the current period. We recorded net income tax expense of $ 0 .9 million and $ 1 .9 million for the nine months ended September 30, 2015 and 2014, respectively. The net expense during the nine months ended September 30, 2015 consisted of current income tax expense of $0.9 and a deferred tax benefit of ($25,000) . The current tax expense consists primarily of income tax from our U.K. and India based operations, and unrecoverable foreign withholding taxes in the U.K. The deferred tax benefit was primarily related to the increase of certain deferred tax assets in the U.K. and India. The net expense during the nine months ended September 30, 2014 consisted of current income tax expense of $1.9 million and a deferred tax expense of $29,000 . The current tax expense consists primarily of income tax from our U.S., U.K. and India based operations. The deferred tax expense was primarily related to undistributed foreign earnings, a decrease in deferred tax assets related to accrued liabilities and capitalized expenses for tax purpose related to the acquisition of Evolving Systems Labs, Inc. The decrease in tax expense for the nine months ending September 30, 2015 is due to lower income in the current period. Our effective tax rate was 20% and 33% for the three months ended September 30, 2015 and 2014, respectively. The decrease in our effective tax rate relates to the adjustment of our annual effective tax rate for earnings which are lower than projected. Our effective tax rate was 29% and 33% for the nine months ended September 30, 2015 and 2014, respectively. The decrease in our effective tax rate relates to a higher proportion of our income being generated in the U.K., for which the statutory corporate tax rate was decreased in the second quarter of 2015. As of September 30, 2015 and December 31, 2014 we continued to maintain a valuation allowance on portions of our domestic net deferred tax asset. Such assets primarily consist of certain state Net Operating Loss (“NOL”) carryforwards, research and development tax credits and Alternative Minimum Tax (“AMT”) credits. The $1.1 million of net deferred tax liabilities as of September 30, 2015 , were comprised of the following (in thousands) : September 30, 2015 Deferred tax assets Net operating loss carryforwards $ Research & Development Credits AMT credits Stock Compensation Depreciable assets Accrued liabilities and reserves Total deferred tax assets Deferred tax liabilities Deferred Revenue Undistributed Foreign Earnings $ Intangibles Total deferred tax liability Net deferred tax assets, before valuation allowance $ Valuation allowance Net deferred tax liability $ We have unrecognized tax benefit NOL’s which are comprised of windfall tax benefits related to stock-based compensation. Due to a recently adopted accounting pronouncement, ASU No. 2014-09, topic 740 “Income Tax”, these NOL’s were deducted from our NOL carryforwards and are not included in the above summarized net deferred tax asset. When utilized, windfall tax benefits related to stock-based compensation are recorded as a reduction to our taxes payable when realized, with a corresponding credit to additional paid in capital, not income tax expense. Section 382 of the Internal Revenue Code imposes an annual limitation on the amount of certain tax attributes, including net operating loss and tax credit carryovers, available to be utilized following an "Ownership Change" triggered by a shift of greater than 50% in stock ownership over a three year testing period. We believe SSM likely may have had Ownership Changes prior to its acquisition by Evolving Systems, Inc. However, the amount of the applicable limitation is not known, and cannot be estimated at this time. Accordingly, the Company has not recorded a deferred tax asset associated with SSM's tax attributes in its initial purchase accounting. The Company intends to review the ownership history of SSM to determine the utilizable portion of its tax attributes as soon as practicable, and if appropriate, adjust the deferred tax assets and purchase accounting upon the conclusion of its assessment. Two Indian subsidiaries of SSM, were acquired pursuant to the terms of the Agreement and Plan of Merger dated September 30, 2015. We have reason to believe there is uncertainty related to the lack of historical US International reporting for these two foreign subsidiaries, and are in the process of determining whether either or both of these subsidiaries are controlled foreign corporations (“CFCs”) within the meaning of the Internal Revenue Code and related Regulations, or if a “check-the-box” election has taken place to effectively treat one or both of these subsidiaries as disregarded entities for US federal tax reporting purposes. The Company is in the process of obtaining pertinent information to assess the degree of uncertainty and to quantify related costs or liabilities. As of September 30, 2015 and December 31, 2014 we had no liability for unrecognized tax benefits. We conduct business globally and, as a result, Evolving Systems, Inc. or one or more of our subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Throughout the world, in the normal course of business, we are subject to examination by taxing authorities up until, two years in the U.K. and four years in India, following the end of the accounting period. As of the date of this report, none of our income tax returns are under examination. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | NOTE 9 — STOCKHOLDERS’ EQUITY Common Stock Dividend On August 4, 2015 , our Board of Directors declared a third quarter cash dividend of $0.11 per share, payable August 28, 2015 , to stockholders of record August 21, 2015 . Previously, our Board of Directors declared a first quarter cash dividend of $0.11 per share on March 17, 2015 , payable March 31, 2015 , to stockholders of record March 24, 2015 and a second quarter cash dividend of $0.11 per share on May 5, 2015 , payable May 29, 2015 , to stockholders of May 22, 2015 . Any determination to declare a future quarterly dividend, as well as the amount of any cash dividend which may be declared, will be based on our financial position, earnings, financial covenants to which we are subject, earnings outlook and other relevant factors at that time. Certain Anti-Takeover Provisions/Agreements with Stockholders Our restated certificate of incorporation allows the board of directors to issue up to 2,000,000 shares of preferred stock and to determine the price, rights, preferences and privileges of those shares without any further vote or action by our stockholders. The rights of the holders of our common stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. Issuance of preferred stock, while providing desired flexibility in connection with possible acquisitions and other corporate purposes, could make it more difficult for a third party to acquire a majority of our outstanding voting stock. As of September 30, 2015 and December 31, 2014, no shares of preferred stock were outstanding. In addition, we are subject to the anti-takeover provisions of Section 203 of Delaware General Corporation Law which prohibit us from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in the prescribed manner. The application of Section 203 may have the effect of delaying or preventing changes in control of our management, which could adversely affect the market price of our common stock by discouraging or preventing takeover attempts that might result in the payment of a premium price to our stockholders. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Information [Abstract] | |
Segment Information | NOTE 10 — SEGMENT INFORMATION We define operating segments as components of our enterprise for which separate financial information is reviewed regularly by the chief operating decision-makers to evaluate performance and to make operating decisions. We have identified our Chief Executive Officer and Vice President of Finance as our chief operating decision-makers (“CODM”). These chief operating decision makers review revenues by segment and review overall results of operations. We currently operate our business as two operating segments based on revenue type: license fees and services revenue, and customer support revenue (as shown on the consolidated statements of operations). License fees and services (“L&S”) revenue represents the fees received from the license of software products and those services directly related to the delivery of the licensed products, such as fees for custom development and integration services. Customer support (“CS”) revenue includes annual support fees, recurring maintenance fees, fees for maintenance upgrades and warranty services. Warranty services that are similar to software maintenance services are typically bundled with a license sale. Total assets by segment have not been disclosed as the information is not available to the chief operating decision-makers. Segment information is as follows (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Revenue License fees and services $ $ $ $ Customer support Total revenue Revenue less costs of revenue, excluding depreciation and amortization License fees and services Customer support Unallocated Costs Other operating expenses Depreciation and amortization Restructuring - - - Interest income Interest expense Other loss - - - Foreign currency exchange loss Income from operations before income taxes $ $ $ $ Geographic Regions We are headquartered in Englewood, a suburb of Denver, Colorado. We use customer locations as the basis for attributing revenues to individual countries. We provide products and services on a global basis through our headquarters, our London-based Evolving Systems U.K. subsidiary and our San Francisco-based Evolving Systems Labs, Inc. subsidiary. Additionally, personnel in Bangalore, India provide software development services to our global operations. Financial information relating to operations by geographic region is as follows (in thousands): For the Three Months Ended September 30, 2015 2014 Revenue L&S CS Total L&S CS Total United Kingdom $ $ $ $ $ $ Indonesia Mexico Other Total revenues $ $ $ $ $ $ For the Nine Months Ended September 30, 2015 2014 Revenue L&S CS Total L&S CS Total United Kingdom $ $ $ $ $ $ Nigeria Mexico Other Total revenues $ $ $ $ $ $ September 30, December 31, Long-lived assets, net 2015 2014 United States $ $ United Kingdom Other $ $ |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies | NOTE 11 — COMMITMENTS AND CONTINGENCIES (a) Other Commitments As permitted under Delaware law, we have agreements with officers and directors under which we agree to indemnify them for certain events or occurrences while the officer or director is, or was, serving at our request in this capacity. The term of the indemnification period is indefinite. There is no limit on the amount of future payments we could be required to make under these indemnification agreements; however, we maintain Director and Officer insurance policies, as well as an Employment Practices Liability Insurance Policy, that may enable us to recover a portion of any amounts paid. As a result of our insurance policy coverage, we believe the estimated fair value of these indemnification agreements is minimal. Accordingly, there were no liabilities recorded for these agreements as of September 30, 2015 or December 31, 2014. We enter into standard indemnification terms with customers and suppliers, in the ordinary course of business, for third party claims arising under our contracts. In addition, as we may subcontract the development of deliverables under customer contracts, we could be required to indemnify customers for work performed by subcontractors. Depending upon the nature of the indemnification, the potential amount of future payments we could be required to make under these indemnification agreements may be unlimited. We may be able to recover damages from a subcontractor or other supplier if the indemnification results from the subcontractor’s or supplier’s failure to perform. To the extent we are unable to recover damages from a subcontractor or other supplier, we could be required to reimburse the indemnified party for the full amount. We have never incurred costs to defend lawsuits or settle claims relating to an indemnification. As a result, we believe the estimated fair value of these agreements is minimal. Accordingly, there were no liabilities recorded for these agreements as of September 30, 2015 or December 31, 2014. Our standard license agreements contain product warranties that the software will be free of material defects and will operate in accordance with the stated requirements for a limited period of time. The product warranty provisions require us to cure any defects through any reasonable means. We believe the estimated fair value of the product warranty provisions in the license agreements in place with our customers is minimal. Accordingly, there were no liabilities recorded for these product warranty provisions as of September 30, 2015 or December 31, 2014. Our software arrangements generally include a product indemnification provision whereby we will indemnify and defend a customer in actions brought against the customer for claims that our products infringe upon a copyright, trade secret, or valid patent of a third party. We have not historically incurred any significant costs related to product indemnification claims. Accordingly, there were no liabilities recorded for these indemnification provisions as of September 30, 2015 or December 31, 2014. (b) Litigation From time to time, we are involved in various legal matters arising in the normal course of business. We do not expect the outcome of such proceedings, either individually or in the aggregate, to have a material effect on our financial position, cash flows or results of operations. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring [Abstract] | |
Restructuring | NOTE 12 – RESTRUCTURING During the first quarter of 2014, we undertook a reduction in workforce involving the termination of employees resulting in an expense of $0.2 million primarily related to severance for the affected employees. The reduction in workforce was related to the consolidations of duplicative functions and alignment of staff with ongoing business activity as a result of the acquisition of Evolving Systems Labs, Inc. in the fourth quarter of 2013. Subsequently, an additional expense of $26,000 was incurred in the second quarter relating to the first quarter 2014 reduction in force. There was no restructuring expense for the three or nine months ended September 30, 2015 . There was no restructuring liability as of September 30, 2015 or December 31, 2014. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 13 — SUBSEQUENT EVENTS On November 10, 2015 , our Board of Directors declared a third quarter cash dividend of $0.11 per share, payable December 4, 2015 , to stockholders of record November 27, 2015 . In October 2015 , we undertook a reduction in workforce involving the termination of employees resulting in an expense of approximately $0.5 million primarily related to severance for the affected employees. The reduction in workforce was related to the consolidations of duplicative functions and alignment of staff with ongoing business activity as a result of the acquisition of Evolving Systems NC , Inc. in the third quarter of 2015 . |
Basis Of Presentation (Policy)
Basis Of Presentation (Policy) | 9 Months Ended |
Sep. 30, 2015 | |
Basis Of Presentation [Abstract] | |
Organization | Organization — We are a provider of software solutions and services to the wireless, wireline and cable markets. We maintain long-standing relationships with many of the largest wireless, wireline and cable companies worldwide. Our customers rely on us to develop, deploy, enhance and maintain software solutions that provide a variety of service activation and provisioning functions. Our service activation solution, Tertio ® (“TSA”) is used to activate bundles of voice, video and data services for wireless, wireline and cable network operators; our SIM card activation solution, Dynamic SIM Allocation TM (“DSA”) is used to dynamically allocate and assign resources to Mobile Network Operators ( “ MNOs ” ) devices that rely on SIM cards; our Mobile Data Enablement TM (“MDE”) solution provides a data consumption and policy management solution for wireless carriers and Mobile Virtual Network Operators ( “ MVNOs ” ) that monitor the usage and consumption of data services; our Total Number Management™ ( “ TNM ” ) product is a scalable and fully automated database solution that enables operators to reliably and efficiently manage their telephone numbers as well as other communication identifiers (i.e. SIMs, MSISDNs, IMSIs, ICCIDs, IPs). Our solutions can be deployed on premise or offered as a Software-as-a-Service ( “ SaaS ” ). On September 30, 2015 we announced the acquisition of privately held RateIntegration, Inc., d/b/a Sixth Sense Media (“SSM”) , a provider of real time analytics and marketing solutions to wireless carriers. SSM’s software solution platform , Real-time Lifecycle Marketing ™ (“RLM”), enables carrier s’ marketing departments to innovate, execute and manage highly-personalized and contextually-relevant, interactive campaigns that engage consumers in real time. We believe the addition of SSM’s RLM product to our existing service activation and data enablement products will produce a powerful platform for wireless carriers . A product suite which we refer to as our Mobile Marketing Solutions (“MMS”) will provide sophisticated, highly tailored mobile campaigns which can be executed based on critical subscriber data captured during the initial activation experience (DSA and RLM ) as well as in-life subscriber usage via MDE. We see the opportunity to leverage our technology to provide MNOs with sophisticated mobile marketing campaigns that will extend beyond voice, text and data usage campaigns and provide marketing services that will assist MNOs to market services that include retail mobile marketing, gaming, streaming video as well as social media based campaigns. |
Interim Consolidated Financial Statements | Interim Consolidated Financial Statements — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in conformity with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, we believe that the disclosures included in these financial statements are adequate to make the information presented not misleading. The unaudited condensed consolidated financial statements included in this document have been prepared on the same basis as the annual consolidated financial statements, and in our opinion reflect all adjustments, which include normal recurring adjustments necessary for a fair presentation in accordance with GAAP and SEC regulations for interim financial statements. The results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that we will have for any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes to those statements for the year ended December 31, 2014 included in our Annual Report on Form 10-K. |
Use Of Estimates | Use of Estimates — The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. We made estimates with respect to revenue recognition for estimated hours to complete projects accounted for using the percentage-of-completion method, allowance for doubtful accounts, income tax valuation allowance, fair values of long-lived assets, valuation of intangible assets and goodwill, useful lives for property, equipment and intangible assets, business combinations, capitalization of internal software development costs and fair value of stock-based compensation amounts. Actual results could differ from these estimates. |
Foreign Currency | Foreign Currency — Our functional currency is the U.S. dollar. The functional currency of our foreign operations is the respective local currency for each foreign subsidiary. Assets and liabilities of foreign operations denominated in local currencies are translated at the spot rate in effect at the applicable reporting date. Our consolidated statements of income are translated at the weighted average rate of exchange during the applicable period. The resulting unrealized cumulative translation adjustment is recorded as a component of accumulated other comprehensive loss in stockholders’ equity. Realized and unrealized transaction gains and losses generated by transactions denominated in a currency different from the functional currency of the applicable entity are recorded in other income (expense) in the consolidated statements of operations in the period in which they occur. |
Principles Of Consolidation | Principles of Consolidation — The consolidated financial statements include the accounts of Evolving Systems, Inc. and subsidiaries, all of which are wholly owned. All significant intercompany transactions and balances have been eliminated in consolidation. |
Goodwill | Goodwill — Goodwill is the excess of acquisition cost of an acquired entity over the fair value of the identifiable net assets acquired. Goodwill is not amortized, but tested for impairment annually or whenever indicators of impairment exist. These indicators may include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. |
Intangible Assets | Intangible Assets — Amortizable intangible assets consist primarily of purchased software and licenses, customer contracts and relationships, trademarks and tradenames, non-competition and business partnerships acquired in conjunction with our purchase of Telespree Communications (“Evolving Systems Labs, Inc.” ) and RateIntegration, Inc. d/b/a Sixth Sense Media (“Evolving Systems NC, Inc.”) . These assets are amortized using the straight-line method over their estimated lives. We assess the impairment of identifiable intangibles if events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. If we determine that the carrying value of intangibles and/or long-lived assets may not be recoverable, we compare the estimated undiscounted cash flows expected to result from the use of the asset and its eventual disposition to the asset’s carrying amount. If an amortizable intangible or long-lived asset is not deemed to be recoverable, we recognize an impairment loss representing the excess of the asset’s carrying value over its estimated fair value. |
Fair Value Measurements | Fair Value Measurements — Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. |
Cash And Cash Equivalents | Cash and Cash Equivalents — All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents. |
Revenue Recognition | Revenue Recognition — We recognize revenue when an agreement is signed, the fee is fixed or determinable and collectability is reasonably assured. We recognize revenue from two primary sources: license fees and services, and customer support. The majority of our license fees and services revenue is generated from fixed-price contracts, which provide for licenses to our software products and services to customize such software to meet our customers’ use. When the customization services are determined to be essential to the functionality of the delivered software, we recognize revenue using the percentage-of-completion method of accounting. In these types of arrangements, we do not typically have Vendor Specific Objective Evidence (“VSOE”) of fair value on the license fee/services portion (services are related to customizing the software) of the arrangement due to the large amount of customization required by our customers; however, we do have VSOE for the warranty/maintenance services based on the renewal rate of the first year of maintenance in the arrangement. The license/services portion is recognized using the percentage-of-completion method of accounting and the warranty/maintenance services are separated based on the renewal rate in the contract and recognized ratably over the warranty or maintenance period. We estimate the percentage-of-completion for each contract based on the ratio of direct labor hours incurred to total estimated direct labor hours and recognize revenue based on the percent complete multiplied by the contract amount allocated to the license fee/services. Since estimated direct labor hours, and changes thereto, can have a significant impact on revenue recognition, these estimates are critical and we review them regularly. If the arrangement includes a customer acceptance provision, the hours to complete the acceptance testing are included in the total estimated direct labor hours; therefore, the related revenue is recognized as the acceptance testing is performed. Revenue is not recognized in full until the customer has provided proof of acceptance on the arrangement. Generally, our contracts are accounted for individually. However, when certain criteria are met, it may be necessary to account for two or more contracts as one to reflect the substance of the group of contracts. We record amounts billed in advance of services being performed as unearned revenue. Unbilled work-in-progress represents revenue earned but not yet billable under the terms of the fixed-price contracts. All such amounts are expected to be billed and collected within 12 months. We may encounter budget and schedule changes or increases on fixed-price contracts caused by increased labor or overhead costs. We make adjustments to cost estimates in the period in which the facts requiring such revisions become known. We record estimated losses, if any, in the period in which current estimates of total contract revenue and contract costs indicate a loss. If revisions to cost estimates are obtained after the balance sheet date but before the issuance of the interim or annual financial statements, we make adjustments to the interim or annual financial statements accordingly. In arrangements where the services are not essential to the functionality of the delivered software, we recognize license revenue when a license agreement has been signed, delivery and acceptance have occurred, the fee is fixed or determinable and collectability is reasonably assured. Where applicable, we unbundle and record as revenue fees from multiple element arrangements as the elements are delivered to the extent that VSOE of fair value of the undelivered elements exist. If VSOE for the undelivered elements does not exist, we defer fees from such arrangements until the earlier of the date that VSOE does exist on the undelivered elements or all of the elements have been delivered. We recognize revenue from fixed-price service contracts using the proportional performance method of accounting, which is similar to the percentage-of-completion method described above. We recognize revenue from professional services provided pursuant to time-and-materials based contracts and training services as the services are performed, as that is when our obligation to our customers under such arrangements is fulfilled. We recognize revenue from our MDE contracts based on the number of transactions per month multiplied by a factor based on a unique table for transaction volumes relating to each account. We recognize customer support, including maintenance revenue, ratably over the service contract period. When maintenance is bundled with the original license fee arrangement, its fair value, based upon VSOE, is deferred and recognized during the periods when services are provided. |
Stock-Based Compensation | Stock-based Compensation — We account for stock-based compensation by applying a fair-value-based measurement method to account for share-based payment transactions with employees and directors. We record compensation costs associated with the vesting of unvested options on a straight-line basis over the vesting period. Stock-based compensation is a non-cash expense because we settle these obligations by issuing shares of our common stock instead of settling such obligations with cash payments. We use the Black-Scholes model to estimate the fair value of each option grant on the date of grant. This model requires the use of estimates for expected term of the options and expected volatility of the price of our common stock. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) — Comprehensive income (loss) consists of two components, net income and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains, and losses that under GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Other comprehensive income (loss) consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency. |
Income Taxes | Income Taxes — We record deferred tax assets and liabilities for the estimated future tax effects of temporary differences between the tax bases of assets and liabilities and amounts reported in the accompanying condensed consolidated balance sheets, as well as operating loss and tax credit carry-forwards. We measure deferred tax assets and liabilities using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. We reduce deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not that these benefits will not be realized. We use a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements – In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” Topic 606. This Update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. The guidance in this Update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition and most industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to illustrate the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance also includes a cohesive set of dis closure requirements that will pro vide users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a report ing organization’s contracts with customers. This ASU is effective retrospectively for fiscal years, and interim periods within those years beginning after December 15, 2016 for public companies and 2017 for non-public entities, however the FASB has deferred the effective date by one year. We do not expect the adoption of this standard to have a significant impact on the Company’s financial position and results of operations. In August 2014, the FASB issued ASU 2014-15 Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . Management of public and private companies will be required to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued (or available to be issued when applicable) and, if so, disclose that fact. Management will be required to make this evaluation for both annual and interim reporting periods, if applicable. The standard is effective for annual periods ending after December 15, 2016 and interim periods ending after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. We do not expect the adoption of this ASU to impact the consolidated financial statements. |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Acquisition [Abstract] | |
Summary Of Total Purchase Price | September 30, 2015 Cash Consideration Initial Cash Purchase Price $ Cash/Working Capital Adjustment Total Cash Consideration $ Assumed Liabilities Total purchase price $ |
Schedule Of Assets Acquired and Liabilities Assumed At Acquisition Date | September 30, 2015 Cash and cash equivalents $ Contract receivables Unbilled work-in-progress Intangible assets Prepaid and other current assets Other assets, non-current Total identifiable assets acquired $ Accounts payable and accrued liabilities $ Deferred tax liability Deferred revenue Total identifiable liabilities acquired $ Net identifiable assets acquired Goodwill Net assets acquired $ |
Intangible Assets Related To Acquisition | September 30, 2015 Gross Amount Accumulated Amortization Net Carrying Amount Weighted-Average Amortization Period Purchased software $ $ - $ 8 yrs Trademarks and tradenames - 2 yrs Non-competition 2 yrs Customer relationships - 7 yrs $ $ - $ 7.19 yrs |
Schedule Of Pro Forma Information | For the Nine Months ended September 30, 2015 2014 Revenue $ $ Earnings |
Goodwill And Intangible Assets
Goodwill And Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill And Intangible Assets [Abstract] | |
Summary Of Changes In Carrying Amount Of Goodwill | License and Services Customer Support Total U.S. India U.K. U.S. U.K. Goodwill Balance as of December 31, 2014 $ $ - $ $ - $ $ Goodwill acquired during the year Effects of changes in foreign currency exchange rates (1) - - - Balance at September 30, 2015 $ $ $ $ $ $ (1) Represents the impact of foreign currency translation for instances when goodwill is recorded in foreign entities whose functional currency is also their local currency. Goodwill balances are translated into U.S. dollars using exchange rates in effect at period end. Adjustments related to foreign currency translation are included in other comprehensive income. |
Summary Of Identifiable Intangible Assets | September 30, 2015 December 31, 2014 (2) Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Weighted-Average Amortization Period Purchased software $ $ $ $ $ $ 7.3 yrs Trademarks and tradenames 2.6 yrs Non-competition - - - - 2.0 yrs Customer relationships 6.8 yrs $ $ $ $ $ $ 6.8 yrs (2) Changes in intangible values as of September 30, 2015 compared to December 31, 2014 are the direct result of the acquisition of Evolving Systems NC, Inc. in the third quarter of 2015. |
Summary Of Expected Future Amortization Expense Related To Identifiable Intangibles | Twelve months ending September 30, 2016 $ 2017 2018 2019 2020 Thereafter $ |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Common Share [Abstract] | |
Summary Of Basic And Diluted Earnings Per Share | For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Basic income per share: Net income available to common stockholders $ $ $ $ Basic weighted average shares outstanding Basic income per share: $ $ $ $ Diluted income per share: Net income available to common stockholders $ $ $ $ Weighted average shares outstanding Effect of dilutive securities - options Diluted weighted average shares outstanding Diluted income per share: $ $ $ $ |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary Of Stock-Based Compensation Expenses | For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Cost of license fees and services, excluding depreciation and amortization $ $ $ $ Cost of customer support, excluding depreciation and amortization Sales and marketing General and administrative Product development Total share based compensation $ $ $ $ |
Summary Of Stock Option Activity | Weighted- Average Weighted- Remaining Aggregate Number of Average Contractual Intrinsic Shares Exercise Term Value (in thousands) Price (Years) (in thousands) Options outstanding at December 31, 2014 $ $ Options granted Less options forfeited Less options expired Less options exercised Options outstanding at September 30, 2015 $ $ Options exercisable at September 30, 2015 $ $ |
Stock Incentive Plans [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Assumptions For Weighted Average Fair Value Of Stock Options | For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Expected term (years) * Risk-free interest rate % * % % Expected volatility % * % % Expected dividend yield % * % % ______________________________ * - None granted |
Employee Stock Purchase Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Assumptions For Weighted Average Fair Value Of Stock Options | For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Expected term (years) Risk-free interest rate % % % % Expected volatility % % % % Expected dividend yield % % % % |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes [Abstract] | |
Components Of Deferred Tax Assets And Liabilities | September 30, 2015 Deferred tax assets Net operating loss carryforwards $ Research & Development Credits AMT credits Stock Compensation Depreciable assets Accrued liabilities and reserves Total deferred tax assets Deferred tax liabilities Deferred Revenue Undistributed Foreign Earnings $ Intangibles Total deferred tax liability Net deferred tax assets, before valuation allowance $ Valuation allowance Net deferred tax liability $ |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Information [Abstract] | |
Segment Information | For the Three Months Ended September 30, For the Nine Months Ended September 30, 2015 2014 2015 2014 Revenue License fees and services $ $ $ $ Customer support Total revenue Revenue less costs of revenue, excluding depreciation and amortization License fees and services Customer support Unallocated Costs Other operating expenses Depreciation and amortization Restructuring - - - Interest income Interest expense Other loss - - - Foreign currency exchange loss Income from operations before income taxes $ $ $ $ |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block] | For the Three Months Ended September 30, 2015 2014 Revenue L&S CS Total L&S CS Total United Kingdom $ $ $ $ $ $ Indonesia Mexico Other Total revenues $ $ $ $ $ $ For the Nine Months Ended September 30, 2015 2014 Revenue L&S CS Total L&S CS Total United Kingdom $ $ $ $ $ $ Nigeria Mexico Other Total revenues $ $ $ $ $ $ September 30, December 31, Long-lived assets, net 2015 2014 United States $ $ United Kingdom Other $ $ |
Basis Of Presentation (Details)
Basis Of Presentation (Details) | 9 Months Ended |
Sep. 30, 2015item | |
Basis Of Presentation [Abstract] | |
Number of recognized sources for revenue | 2 |
Time period for unearned revenue to be billed and collected | 12 months |
Acquisition (Narrative) (Detail
Acquisition (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Jul. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 23,553 | $ 23,553 | $ 23,553 | $ 17,000 | $ 17,010 | ||
Amortization expense | 24 | $ 24 | 71 | $ 71 | |||
Change in goodwill from acquisition | 0 | ||||||
RateIntegration Inc [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash payment in business acquisition | 9,750 | ||||||
Working capital adjustment | 535 | ||||||
Cash payment on anniversary of the transaction | 250 | ||||||
Goodwill | 6,949 | 6,949 | 6,949 | ||||
Intangible assets | 4,642 | 4,642 | $ 4,642 | ||||
Weighted average amortization period | 7 years 2 months 9 days | ||||||
Amortization expense | 0 | ||||||
Maximum [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Weighted average amortization period | 7 years | ||||||
Trademarks And Tradenames [Member] | RateIntegration Inc [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Weighted average amortization period | 2 years | ||||||
Trademarks And Tradenames [Member] | License Fees And Services [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill | 5,400 | 5,400 | $ 5,400 | ||||
Purchased Software [Member] | RateIntegration Inc [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Weighted average amortization period | 8 years | ||||||
Non-competition [Member] | RateIntegration Inc [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Weighted average amortization period | 2 years | ||||||
Customer Relationships [Member] | RateIntegration Inc [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Weighted average amortization period | 7 years | ||||||
Customer Relationships [Member] | Customer Support [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill | $ 1,500 | $ 1,500 | $ 1,500 |
Acquisition (Summary Of Total P
Acquisition (Summary Of Total Purchase Price) (Details) - RateIntegration Inc [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Business Acquisition [Line Items] | |
Initial Cash Purchase Price | $ 9,750 |
Cash/Working Capital Adjustment | 535 |
Total Cash Consideration | 10,285 |
Assumed Liabilities | 250 |
Total purchase price | $ 10,535 |
Acquisition (Schedule Of Assets
Acquisition (Schedule Of Assets Acquired and Liabilities Assumed At Acquisition Date) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Jul. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||
Goodwill | $ 23,553 | $ 17,000 | $ 17,010 |
RateIntegration Inc [Member] | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | 1,521 | ||
Contract receivables | 1,057 | ||
Unbilled work-in-progress | 89 | ||
Intangible assets | 4,642 | ||
Prepaid and other current assets | 68 | ||
Other assets, non-current | 32 | ||
Total identifiable assets acquired | 7,409 | ||
Accounts payable and accrued liabilities | 1,506 | ||
Deferred tax liability | 1,760 | ||
Deferred revenue | 557 | ||
Total identifiable liabilities acquired | 3,823 | ||
Net identifiable assets acquired | 3,586 | ||
Goodwill | 6,949 | ||
Net assets acquired | $ 10,535 |
Acquisition (Intangible Assets
Acquisition (Intangible Assets Related To Acquisition) (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2015 | Dec. 31, 2014 | |||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Gross Amount | $ 5,360 | [1] | $ 718 | |
Accumulated Amortization | 181 | 110 | ||
Net Carrying Amount | 5,179 | 608 | ||
Purchased Software [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Gross Amount | 2,118 | [1] | 439 | |
Accumulated Amortization | 105 | 64 | ||
Net Carrying Amount | 2,013 | 375 | ||
Trademarks And Tradenames [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Gross Amount | 185 | [1] | 63 | |
Accumulated Amortization | 24 | 15 | ||
Net Carrying Amount | 161 | 48 | ||
Non-competition [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Gross Amount | [1] | 33 | ||
Net Carrying Amount | 33 | |||
Customer Relationships [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Gross Amount | 3,024 | [1] | 216 | |
Accumulated Amortization | 52 | 31 | ||
Net Carrying Amount | 2,972 | $ 185 | ||
RateIntegration Inc [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Gross Amount | $ 4,642 | |||
Accumulated Amortization | ||||
Net Carrying Amount | $ 4,642 | |||
Weighted average amortization period | 7 years 2 months 9 days | |||
RateIntegration Inc [Member] | Purchased Software [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Gross Amount | $ 1,679 | |||
Accumulated Amortization | ||||
Net Carrying Amount | $ 1,679 | |||
Weighted average amortization period | 8 years | |||
RateIntegration Inc [Member] | Trademarks And Tradenames [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Gross Amount | $ 122 | |||
Accumulated Amortization | ||||
Net Carrying Amount | $ 122 | |||
Weighted average amortization period | 2 years | |||
RateIntegration Inc [Member] | Non-competition [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Gross Amount | $ 33 | |||
Accumulated Amortization | ||||
Net Carrying Amount | $ 33 | |||
Weighted average amortization period | 2 years | |||
RateIntegration Inc [Member] | Customer Relationships [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Gross Amount | $ 2,808 | |||
Accumulated Amortization | ||||
Net Carrying Amount | $ 2,808 | |||
Weighted average amortization period | 7 years | |||
[1] | Changes in intangible values as of September 30, 2015 compared to December 31, 2014 are the direct result of the acquisition of Evolving Systems NC, Inc. in the third quarter of 2015. |
Acquisition (Schedule Of Pro Fo
Acquisition (Schedule Of Pro Forma Information) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Acquisition [Abstract] | ||
Revenue | $ 23,118 | $ 26,637 |
Earnings | $ 2,559 | $ 4,415 |
Goodwill And Intangible Asset34
Goodwill And Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Goodwill And Intangible Assets [Line Items] | ||||||
Goodwill | $ 17,000 | $ 23,553 | $ 23,553 | $ 17,010 | ||
Amortization of intangible assets | 24 | $ 24 | 71 | $ 71 | ||
Market Approach Valuation Technique [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Fair value inputs, comparability adjustments | 70.00% | |||||
Income Approach Valuation Technique [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Fair value inputs, comparability adjustments | 30.00% | |||||
License Fees And Services [Member] | United States [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Goodwill | 6,306 | 6,306 | 1,097 | |||
License Fees And Services [Member] | United Kingdom [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Goodwill | 6,936 | 6,936 | 7,118 | |||
Customer Support [Member] | United States [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Goodwill | 1,556 | 1,556 | ||||
Customer Support [Member] | United Kingdom [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Goodwill | $ 8,571 | $ 8,571 | $ 8,795 | |||
Evolving Systems U.K. [Member] | License Fees And Services [Member] | United Kingdom [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Goodwill | $ 7,200 | |||||
Evolving Systems U.K. [Member] | Customer Support [Member] | United Kingdom [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Goodwill | 8,700 | |||||
Evolving Systems Labs [Member] | License Fees And Services [Member] | United States [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Goodwill | $ 1,100 | |||||
Percentage of hypothetical decrease in estimated fair value | 20.00% | |||||
Minimum [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Estimated useful life of intangible asset | 1 year | |||||
Maximum [Member] | ||||||
Goodwill And Intangible Assets [Line Items] | ||||||
Estimated useful life of intangible asset | 8 years |
Goodwill And Intangible Asset35
Goodwill And Intangible Assets (Summary Of Changes In Carrying Amount Of Goodwill) (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015USD ($) | ||
Goodwill And Intangible Assets [Line Items] | ||
Beginning Balance | $ 17,010 | |
Goodwill aquired during the year | 6,949 | |
Effects of changes in foreign currency exchange rates | (406) | [1] |
Ending Balance | 23,553 | |
United States [Member] | License Fees And Services [Member] | ||
Goodwill And Intangible Assets [Line Items] | ||
Beginning Balance | 1,097 | |
Goodwill aquired during the year | $ 5,209 | |
Effects of changes in foreign currency exchange rates | [1] | |
Ending Balance | $ 6,306 | |
United States [Member] | Customer Support [Member] | ||
Goodwill And Intangible Assets [Line Items] | ||
Goodwill aquired during the year | $ 1,556 | |
Effects of changes in foreign currency exchange rates | [1] | |
Ending Balance | $ 1,556 | |
United Kingdom [Member] | License Fees And Services [Member] | ||
Goodwill And Intangible Assets [Line Items] | ||
Beginning Balance | 7,118 | |
Effects of changes in foreign currency exchange rates | (182) | [1] |
Ending Balance | 6,936 | |
United Kingdom [Member] | Customer Support [Member] | ||
Goodwill And Intangible Assets [Line Items] | ||
Beginning Balance | 8,795 | |
Effects of changes in foreign currency exchange rates | (224) | [1] |
Ending Balance | 8,571 | |
India [Member] | License Fees And Services [Member] | ||
Goodwill And Intangible Assets [Line Items] | ||
Goodwill aquired during the year | $ 184 | |
Effects of changes in foreign currency exchange rates | [1] | |
Ending Balance | $ 184 | |
[1] | Represents the impact of foreign currency translation for instances when goodwill is recorded in foreign entities whose functional currency is also their local currency. Goodwill balances are translated into U.S. dollars using exchange rates in effect at period end. Adjustments related to foreign currency translation are included in other comprehensive income. |
Goodwill And Intangible Asset36
Goodwill And Intangible Assets (Summary Of Identifiable Intangible Assets) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | |||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Amount | $ 5,360 | [1] | $ 718 | |
Accumulated Amortization | 181 | 110 | ||
Net Carrying Amount | $ 5,179 | $ 608 | ||
Weighted-Average Amortization Period | 6 years 9 months 18 days | 6 years 9 months 18 days | ||
Purchased Software [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Amount | $ 2,118 | [1] | $ 439 | |
Accumulated Amortization | 105 | 64 | ||
Net Carrying Amount | $ 2,013 | $ 375 | ||
Weighted-Average Amortization Period | 7 years 3 months 18 days | 7 years 3 months 18 days | ||
Trademarks And Tradenames [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Amount | $ 185 | [1] | $ 63 | |
Accumulated Amortization | 24 | 15 | ||
Net Carrying Amount | $ 161 | $ 48 | ||
Weighted-Average Amortization Period | 2 years 7 months 6 days | 2 years 7 months 6 days | ||
Non-competition [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Amount | [1] | $ 33 | ||
Net Carrying Amount | $ 33 | |||
Weighted-Average Amortization Period | 2 years | 2 years | ||
Customer Relationships [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Amount | $ 3,024 | [1] | $ 216 | |
Accumulated Amortization | 52 | 31 | ||
Net Carrying Amount | $ 2,972 | $ 185 | ||
Weighted-Average Amortization Period | 6 years 9 months 18 days | 6 years 9 months 18 days | ||
[1] | Changes in intangible values as of September 30, 2015 compared to December 31, 2014 are the direct result of the acquisition of Evolving Systems NC, Inc. in the third quarter of 2015. |
Goodwill And Intangible Asset37
Goodwill And Intangible Assets (Summary Of Expected Future Amortization Expense Related To Identifiable Intangibles) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Goodwill And Intangible Assets [Abstract] | ||
2,016 | $ 783 | |
2,017 | 783 | |
2,018 | 705 | |
2,019 | 694 | |
2,020 | 693 | |
Thereafter | 1,521 | |
Net Carrying Amount | $ 5,179 | $ 608 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Basic income per share: | ||||
Net income available to common stockholders | $ 570 | $ 1,679 | $ 2,210 | $ 4,006 |
Basic weighted average shares outstanding | 11,687 | 11,647 | 11,677 | 11,635 |
Basic income per share | $ 0.05 | $ 0.14 | $ 0.19 | $ 0.34 |
Diluted income per share: | ||||
Net income available to common stockholders | $ 570 | $ 1,679 | $ 2,210 | $ 4,006 |
Weighted average basic shares outstanding | 11,687 | 11,647 | 11,677 | 11,635 |
Effect of dilutive securities - options | 240 | 287 | 261 | 284 |
Diluted weighted average shares outstanding | 11,927 | 11,934 | 11,938 | 11,919 |
Diluted income per share | $ 0.05 | $ 0.14 | $ 0.19 | $ 0.34 |
Common stock excluded from dilutive stock calculation | 300 | 100 | 300 | 200 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2013 | Jun. 30, 2010 | Jun. 30, 2007 | Jan. 31, 1996 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Recognized compensation expense | $ 69,000 | $ 108,000 | $ 229,000 | $ 309,000 | ||||||
Restricted stock expense | $ 0 | $ 15,000 | $ 1,000 | $ 46,000 | ||||||
Stock Incentive Plans [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted non-qualified options | 172,000 | 0 | ||||||||
Stock option shares of restricted stock vested | 0 | 2,000 | 94 | 6,000 | ||||||
Forfeited restricted stock | 0 | 0 | 1,031 | 938 | ||||||
Options remained outstanding under option plan | 890,000 | 890,000 | 630,000 | |||||||
Weighted-average grant-date fair value of stock options granted | $ 0.96 | |||||||||
Total unrecognized compensation costs related to unvested stock options | $ 500,000 | $ 500,000 | ||||||||
Weighted average recognition period | 2 years 6 months 18 days | |||||||||
Fair value of stock options vested | 100,000 | $ 100,000 | $ 300,000 | $ 200,000 | ||||||
Cash received from exercise of stock options | $ 0 | 100,000 | $ 27,000 | 200,000 | ||||||
2007 Stock Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares authorized | 2,002,209 | 1,502,209 | 1,250,000 | 1,000,000 | ||||||
Shares available for grant | 300,000 | 300,000 | ||||||||
Options remained outstanding under option plan | 800,000 | 800,000 | 600,000 | |||||||
Employee Stock Purchase Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Recognized compensation expense | $ 3,000 | 3,000 | $ 11,000 | 14,000 | ||||||
Number of shares authorized | 550,000 | 550,000 | ||||||||
Cash received from exercise of stock options | $ 11,000 | $ 12,000 | $ 44,000 | $ 55,000 | ||||||
Maximum employee subscription rate | 15.00% | 15.00% | ||||||||
Maximum value of shares per employee | $ 25,000 | |||||||||
Maximum number of shares per employee | 10,000 | |||||||||
Purchase price of stock | 85.00% | |||||||||
Shares available for purchase under ESPP | 55,000 | 55,000 | ||||||||
Discount on the purchase price of stock option | 15.00% | |||||||||
Issued shares related to the ESPP | 2,000 | 2,000 | 7,000 | 7,000 | ||||||
Option Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Amended and restated stock option plan, reserved for issuance | 4,175,000 | |||||||||
Vesting period | 4 years | |||||||||
Option plan termination date | Jan. 18, 2006 | |||||||||
Options remained outstanding under option plan | 100,000 | 100,000 | 100,000 | |||||||
Maximum [Member] | 2007 Stock Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Option expiration period | 10 years | |||||||||
Maximum [Member] | Option Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Option expiration period | 10 years | |||||||||
Employees [Member] | 2007 Stock Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 4 years | |||||||||
Directors [Member] | 2007 Stock Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 1 year | |||||||||
Senior Management [Member] | Stock Incentive Plans [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Restricted stock granted in period | 20,000 | 20,000 | 0 | |||||||
Senior Management [Member] | Minimum [Member] | Stock Incentive Plans [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Release period for restricted stock options | 2 years | |||||||||
Senior Management [Member] | Maximum [Member] | Stock Incentive Plans [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Release period for restricted stock options | 4 years | |||||||||
Board Members [Member] | Stock Incentive Plans [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Release period for restricted stock options | 1 year | |||||||||
Evolving Systems U.K. [Member] | Stock Incentive Plans [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Deferred income tax benefits from stock option expense | $ 5,000 | $ 4,000 | $ 14,000 | $ 12,000,000 |
Share-Based Compensation (Summa
Share-Based Compensation (Summary Of Stock-Based Compensation Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share based compensation | $ 69 | $ 108 | $ 229 | $ 309 |
Cost Of License Fees And Services, Excluding Depreciation And Amortization [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share based compensation | 17 | 20 | 56 | 56 |
Cost Of Customer Support, Excluding Depreciation And Amortization [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share based compensation | 3 | 2 | 8 | 6 |
Sales And Marketing [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share based compensation | 10 | 5 | 26 | 26 |
General And Administrative [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share based compensation | 23 | 49 | 76 | 138 |
Product Development [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share based compensation | $ 16 | $ 32 | $ 63 | $ 83 |
Share-Based Compensation (Assum
Share-Based Compensation (Assumptions For Weighted Average Fair Value Of Stock Options) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Stock Incentive Plans [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (years) | 6 years | 6 years | 6 years | |
Risk-free interest rate | 1.37% | 1.37% | 1.69% | |
Expected volatility | 37.76% | 42.47% | 55.88% | |
Expected dividend yield | 7.33% | 6.32% | 3.99% | |
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (years) | 3 months | 3 months | 3 months | 3 months |
Risk-free interest rate | 0.01% | 0.02% | 0.03% | 0.03% |
Expected volatility | 41.51% | 36.78% | 38.20% | 41.90% |
Expected dividend yield | 7.33% | 4.37% | 5.77% | 4.50% |
Share-Based Compensation (Sum42
Share-Based Compensation (Summary Of Stock Option Activity) (Details) - Stock Incentive Plans [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Options outstanding at December 31, 2014 | 630 | |
Number of Shares, Options granted | 298 | |
Number of Shares, Less options forfeited | (19) | |
Number of Shares, Less options expired | (8) | |
Number of Shares, Less options exercised | (11) | |
Number of Shares, Options outstanding at September 30, 2015 | 890 | 630 |
Number of Shares, Option exercisable at September 30, 2015 | 532 | |
Weighted-Average Exercise Price, Options outstanding at December 31, 2014 | $ 4.94 | |
Weighted-Average Exercise Price, Options granted | 7.25 | |
Weighted Average Exercise Price, Less options forfeited | 9.39 | |
Weighted Average Exercise Price, Less options expired | 9.39 | |
Weighted-Average Exercise Price, Less options exercised | 2.57 | |
Weighted-Average Exercise Price, Options outstanding at September 30, 2015 | 5.61 | $ 4.94 |
Weighted-Average Exercise Price, Options exercisable at September 30, 2015 | $ 4.20 | |
Weighted-Average Remaining Contractual Term (Years), Options outstanding | 6 years 5 months 16 days | 5 years 8 months 9 days |
Weighted-Average Remaining Contractual Term (Years), Option exercisable | 4 years 6 months | |
Aggregate Intrinsic Value, Options outstanding at December 31, 2014 | $ 2,959 | |
Aggregate Intrinsic Value, Options outstanding at September 30, 2015 | 1,425 | $ 2,959 |
Aggregate Intrinsic Value, Options exercisable at September 30, 2015 | $ 1,418 |
Concentration Of Credit Risk (D
Concentration Of Credit Risk (Details) - customer | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Sales Revenue Net [Member] | Customer Concentration Risk [Member] | |||||
Concentration Risk [Line Items] | |||||
Number of significant customers | 0 | 2 | 0 | 3 | |
Concentration risk, percentage | 10.00% | 28.00% | 10.00% | 36.00% | |
Sales Revenue Net [Member] | Customer One [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 10.00% | ||||
Sales Revenue Net [Member] | Customer One [Member] | Mexico [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 16.00% | ||||
Sales Revenue Net [Member] | Customer One [Member] | United Kingdom [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 13.00% | ||||
Sales Revenue Net [Member] | Customer Two [Member] | Mexico [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 12.00% | ||||
Sales Revenue Net [Member] | Customer Two [Member] | United Kingdom [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 12.00% | ||||
Sales Revenue Net [Member] | Customer Three [Member] | Nigeria [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 11.00% | ||||
Contract Receivables And Unbilled Work-In-Progress [Member] | Customer Concentration Risk [Member] | |||||
Concentration Risk [Line Items] | |||||
Number of significant customers | 1 | 3 | |||
Concentration risk, percentage | 55.00% | ||||
Contract Receivables And Unbilled Work-In-Progress [Member] | Customer Concentration Risk [Member] | Nigeria [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 22.00% | ||||
Contract Receivables And Unbilled Work-In-Progress [Member] | Customer One [Member] | Nigeria [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 26.00% | ||||
Contract Receivables And Unbilled Work-In-Progress [Member] | Customer Two [Member] | Mexico [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 16.00% | ||||
Contract Receivables And Unbilled Work-In-Progress [Member] | Customer Three [Member] | Europe [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 13.00% |
Revolving Line Of Credit (Detai
Revolving Line Of Credit (Details) - Revolving Facility [Member] | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Debt Instrument [Line Items] | |
Line of credit initiation date | Sep. 28, 2015 |
Line of credit facility, interest rate terms, description | The additional $5.0 million ("Revolving Line II") will bear interest at a floating rate equal to the U.S.A. Prime Rate plus 2.25%; the existing $5.0 million credit facility ("Revolving Line") will continue to bear interest at the greater of 2.75% or the U.S.A Prime Rate minus one half of one percent (0.50%). |
Line of credit facility, covenant terms | To take an advance under the Revolving Facility, the Company must have a balance of $4.0 million in cash on deposit with East West Bank, a minimum current ratio and a specified ratio of Total Liabilities to Tangible Net Worth, which are both as defined in the Revolving Facility. The Revolving Facility requires the Company to pay a one-time credit facility fee of $10,000 for extension of Revolving Line II, an annual credit facility fee of $10,000 and monthly payments of interest, with the unpaid balance due on October 22, 2016. |
Line of credit facility, cash deposit requirements for advance | $ 4,000,000 |
Line of credit facility, annual commitment fee | $ 10,000 |
Line of credit facility, interest payment frequency | monthly |
Line of credit facility, maturity date | Oct. 22, 2016 |
Line of Credit Facility, Amount Outstanding | $ 10,000,000 |
East West Bank Line 1 [Member] | |
Debt Instrument [Line Items] | |
Line of credit facility, borrowing capacity, maximum | $ 5,000,000 |
Line of credit facility, interest rate | 2.75% |
Discount on prime rate, percentage | 0.50% |
East West Bank Line 2 [Member] | |
Debt Instrument [Line Items] | |
Line of credit facility, borrowing capacity, maximum | $ 5,000,000 |
Line of credit facility, interest rate | 2.25% |
Line of credit facility, one-time commitment fee | $ 10,000 |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Line of credit facility, current borrowing capacity | 10,000,000 |
Minimum [Member] | |
Debt Instrument [Line Items] | |
Line of credit facility, current borrowing capacity | $ 5,000,000 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Income Taxes [Line Items] | |||||
Income tax expense | $ 142,000 | $ 827,000 | $ 894,000 | $ 1,943,000 | |
Current income tax expense (benefit) | $ 100,000 | 800,000 | 900,000 | 1,900,000 | |
Deferred tax expense (benefit) | $ 10,000 | $ (25,000) | $ 29,000 | ||
Effective tax rate | 20.00% | 33.00% | 29.00% | 33.00% | |
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 | ||
Net deferred tax liabilities | $ 1,065,000 | $ 1,065,000 | |||
Cumulative stock ownership change over three year period that could limit federal net operating loss carry forwards | 50.00% | ||||
Number of income tax returns under examination | item | 0 | 0 | |||
Indian Operations [Member] | |||||
Income Taxes [Line Items] | |||||
Number of subsidiaries to be determined as Controlled Foreign Corporations for tax reporting | item | 2 | 2 | |||
Number of years subject to income tax examination | 4 years | ||||
U.K. Operations [Member] | |||||
Income Taxes [Line Items] | |||||
Number of years subject to income tax examination | 2 years |
Income Taxes (Components Of Def
Income Taxes (Components Of Deferred Tax Assets And Liabilities) (Details) $ in Thousands | Sep. 30, 2015USD ($) |
Income Taxes [Abstract] | |
Net operating loss carryforwards | $ 530 |
Research & Development Credits | 303 |
AMT credits | 941 |
Stock Compensation | 700 |
Depreciable assets | 107 |
Accrued liabilities and reserves | 423 |
Total deferred tax assets | 3,004 |
Undistributed Foreign Earnings | (723) |
Intangibles | (1,572) |
Total deferred tax liability | (2,295) |
Net deferred tax assets, before valuation allowance | 709 |
Valuation allowance | (1,774) |
Net deferred tax liability | $ (1,065) |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Stockholders' Equity [Abstract] | |||||||
Dividend declared date | Aug. 4, 2015 | May 5, 2015 | Mar. 17, 2015 | ||||
Cash dividend declared per common share | $ 0.11 | $ 0.11 | $ 0.11 | $ 0.11 | $ 0.33 | $ 0.31 | |
Dividends payable, payable date | Aug. 28, 2015 | May 29, 2015 | Mar. 31, 2015 | ||||
Dividends payable, record date | Aug. 21, 2015 | May 22, 2015 | Mar. 24, 2015 | ||||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | 2,000,000 | ||||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||||
Anti-takeover provisions period | 3 years |
Segment Information (Segment In
Segment Information (Segment Information) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) | |
Revenue | ||||
Total revenue | $ 5,773 | $ 7,560 | $ 18,504 | $ 22,081 |
Revenue less costs of revenue, excluding depreciation and amortization | ||||
Revenue less costs of revenue, excluding depreciation and amortization | 4,334 | 5,605 | 13,930 | 16,227 |
Unallocated Costs | ||||
Other operating expenses | 3,259 | 3,188 | 10,265 | 9,784 |
Depreciation and amortization | 121 | 98 | 348 | 243 |
Restructuring | 237 | |||
Interest income | (5) | (6) | (14) | (13) |
Interest expense | 3 | 4 | 9 | 13 |
Other loss | 27 | |||
Foreign currency exchange loss | 244 | (185) | 218 | (13) |
Income from operations before income taxes | 712 | 2,506 | $ 3,104 | 5,949 |
Number of operating segments based on revenue type | segment | 2 | |||
License Fees And Services [Member] | ||||
Revenue | ||||
Total revenue | 3,228 | 5,141 | $ 11,177 | 14,690 |
Revenue less costs of revenue, excluding depreciation and amortization | ||||
Revenue less costs of revenue, excluding depreciation and amortization | 2,185 | 3,695 | 7,719 | 10,253 |
Customer Support [Member] | ||||
Revenue | ||||
Total revenue | 2,545 | 2,419 | 7,327 | 7,391 |
Revenue less costs of revenue, excluding depreciation and amortization | ||||
Revenue less costs of revenue, excluding depreciation and amortization | $ 2,149 | $ 1,910 | $ 6,211 | $ 5,974 |
Segment Information (Financial
Segment Information (Financial Information Relating To Operations By Geographic Region) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||
Total revenue | $ 5,773 | $ 7,560 | $ 18,504 | $ 22,081 | |
Long-lived assets, net | 29,327 | 29,327 | $ 18,277 | ||
United States [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Long-lived assets, net | 13,278 | 13,278 | 1,998 | ||
Nigeria [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 885 | 2,933 | |||
United Kingdom [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 1,067 | 1,275 | 2,943 | 4,244 | |
Long-lived assets, net | 15,720 | 15,720 | 16,091 | ||
Mexico [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 362 | 1,218 | 1,426 | 2,729 | |
Indonesia [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 591 | 84 | |||
Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 3,753 | 4,983 | 13,250 | 12,175 | |
Long-lived assets, net | 329 | 329 | $ 188 | ||
License Fees And Services [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 3,228 | 5,141 | 11,177 | 14,690 | |
License Fees And Services [Member] | Nigeria [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 531 | 2,604 | |||
License Fees And Services [Member] | United Kingdom [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 638 | 761 | 1,599 | 2,714 | |
License Fees And Services [Member] | Mexico [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 254 | 1,082 | 1,077 | 2,156 | |
License Fees And Services [Member] | Indonesia [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 488 | 4 | |||
License Fees And Services [Member] | Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 1,848 | 3,294 | 7,970 | 7,216 | |
Customer Support [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 2,545 | 2,419 | 7,327 | 7,391 | |
Customer Support [Member] | Nigeria [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 354 | 329 | |||
Customer Support [Member] | United Kingdom [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 429 | 514 | 1,344 | 1,530 | |
Customer Support [Member] | Mexico [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 108 | 136 | 349 | 573 | |
Customer Support [Member] | Indonesia [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 103 | 80 | |||
Customer Support [Member] | Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | $ 1,905 | $ 1,689 | $ 5,280 | $ 4,959 |
Restructuring (Details)
Restructuring (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2015 | Dec. 31, 2014 | |
Restructuring [Abstract] | |||||
Expense of termination employees | $ 26,000 | $ 200,000 | |||
Restructuring costs paid | $ 0 | $ 0 | |||
Restructuring liability | $ 0 | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Oct. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Subsequent Event [Line Items] | |||||||||
Cash dividend declared per common share | $ 0.11 | $ 0.11 | $ 0.11 | $ 0.11 | $ 0.33 | $ 0.31 | |||
Dividends payable, payable date | Aug. 28, 2015 | May 29, 2015 | Mar. 31, 2015 | ||||||
Dividends payable, record date | Aug. 21, 2015 | May 22, 2015 | Mar. 24, 2015 | ||||||
Dividend declared date | Aug. 4, 2015 | May 5, 2015 | Mar. 17, 2015 | ||||||
Expense of termination employees | $ 26,000 | $ 200,000 | |||||||
Subsequent Event [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Cash dividend declared per common share | $ 0.11 | ||||||||
Dividends payable, payable date | Dec. 4, 2015 | ||||||||
Dividends payable, record date | Nov. 27, 2015 | ||||||||
Dividend declared date | Nov. 10, 2015 | ||||||||
Expense of termination employees | $ 500,000 |