Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 10, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 | |
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 | 12,115,392 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 8,674 | $ 7,562 |
Contract receivables, net of allowance for doubtful accounts of $961 and $970 at March 31, 2018 and December 31, 2017, respectively | 11,018 | 10,151 |
Unbilled work-in-progress, net of allowance for doubtful accounts of $105 and $107 at March 31, 2018 and December 31, 2017, respectively | 5,540 | 5,823 |
Prepaid and other current assets | 1,691 | 2,053 |
Total current assets | 26,923 | 25,589 |
Property and equipment, net | 236 | 258 |
Amortizable intangible assets, net | 5,457 | 5,613 |
Goodwill | 25,871 | 25,216 |
Deferred income taxes | 396 | 274 |
Total assets | 58,883 | 56,950 |
Current liabilities: | ||
Term loan - current portion | 3,182 | 2,805 |
Accounts payable and accrued liabilities | 6,055 | 6,890 |
Contingent earnout | 412 | 396 |
Income taxes payable | 1,377 | 1,107 |
Unearned revenue | 6,822 | 5,397 |
Total current liabilities | 17,848 | 16,595 |
Long-term liabilities: | ||
Term loan, net of current portion | 5,050 | 5,942 |
Total liabilities | 22,898 | 22,537 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 2,000,000 shares authorized; no shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively | ||
Common stock, $0.001 par value; 40,000,000 shares authorized; 12,294,281 shares issued and 12,115,392 outstanding as of March 31, 2018 and 12,119,961 shares issued and 11,941,072 outstanding as of December 31, 2017, respectively | 12 | 12 |
Additional paid-in capital | 98,883 | 98,517 |
Treasury stock 178,889 shares as of March 31, 2018 and December 31, 2017, at cost | (1,253) | (1,253) |
Accumulated other comprehensive loss | (7,480) | (8,202) |
Accumulated deficit | (54,177) | (54,661) |
Total stockholders' equity | 35,985 | 34,413 |
Total liabilities and stockholders' equity | $ 58,883 | $ 56,950 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Condensed Consolidated Balance Sheets [Abstract] | ||
Allowance for doubtful accounts receivable | $ 961 | $ 970 |
Allowance for doubtful unbilled work-in-progress | $ 105 | $ 107 |
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 | 12,294,281 | 12,119,961 |
Common stock, shares outstanding | 12,115,392 | 11,941,072 |
Treasury stock, shares | 178,889 | 178,889 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
REVENUE | ||
Total revenue | $ 8,158 | $ 5,875 |
COSTS OF REVENUE AND OPERATING EXPENSES | ||
Costs of revenue, excluding depreciation and amortization | 2,857 | 1,545 |
Sales and marketing | 1,637 | 1,068 |
General and administrative | 1,740 | 973 |
Product development | 853 | 474 |
Depreciation | 33 | 51 |
Amortization | 242 | 196 |
Total costs of revenue and operating expenses | 7,362 | 4,307 |
Income from operations | 796 | 1,568 |
Other income (expense) | ||
Interest income | 28 | 1 |
Interest expense | (126) | (73) |
Other expense | (31) | |
Foreign currency exchange loss | (88) | (173) |
Other income (expense), net | (217) | (245) |
Income from operations before income taxes | 579 | 1,323 |
Income tax expense | 95 | 350 |
Net income | $ 484 | $ 973 |
Basic income per common share - net income | $ 0.04 | $ 0.08 |
Diluted income per common share - net income | $ 0.04 | $ 0.08 |
Weighted average basic shares outstanding | 12,077 | 11,921 |
Weighted average diluted shares outstanding | 12,165 | 11,944 |
License Fees [Member] | ||
REVENUE | ||
Total revenue | $ 335 | $ 343 |
Services [Member] | ||
REVENUE | ||
Total revenue | $ 7,823 | $ 5,532 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Consolidated Statements Of Comprehensive Income [Abstract] | ||
Net income | $ 484 | $ 973 |
Other comprehensive income | ||
Foreign currency translation income | 722 | 354 |
Comprehensive income | $ 1,206 | $ 1,327 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement Of Changes In Stockholders' Equity - 3 months ended Mar. 31, 2018 - 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, 2017 | $ 12 | $ 98,517 | $ (1,253) | $ (8,202) | $ (54,661) | $ 34,413 |
Balance, shares at Dec. 31, 2017 | 11,941,072 | 11,941,072 | ||||
Stock option exercises, shares | 235 | 0 | ||||
Common stock issued pursuant to the Employee Stock Purchase Plan, shares | 85 | |||||
Restricted stock vested, shares | 174,000 | |||||
Stock based compensation expense | 366 | $ 366 | ||||
Net income | 484 | 484 | ||||
Foreign currency translation adjustment | 722 | 722 | ||||
Balance at Mar. 31, 2018 | $ 12 | $ 98,883 | $ (1,253) | $ (7,480) | $ (54,177) | $ 35,985 |
Balance, shares at Mar. 31, 2018 | 12,115,392 | 12,115,392 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 484 | $ 973 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 33 | 51 |
Amortization of intangible assets | 242 | 196 |
Amortization of debt issuance costs | 5 | 5 |
Stock based compensation | 366 | 81 |
Unrealized foreign currency transaction loss, net | 88 | 173 |
Benefit (provision) for deferred income taxes | (135) | (70) |
Change in operating assets and liabilities: | ||
Contract receivables | (571) | 1,128 |
Unbilled work-in-progress | 461 | (1,343) |
Prepaid and other assets | 453 | (341) |
Accounts payable and accrued liabilities | (784) | 29 |
Unearned revenue | 1,232 | (554) |
Net cash provided by operating activities | 1,874 | 328 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (12) | (3) |
Net cash used in investing activities | (12) | (3) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Capital lease payments | (1) | |
Principal payments on notes payable | (500) | (500) |
Payments for debt issuance costs | (19) | |
Proceeds from the issuance of stock | 7 | |
Net cash used in financing activities | (500) | (513) |
Effect of exchange rate changes on cash and cash equivalents | (250) | 86 |
Net increase (decrease) in cash and cash equivalents | 1,112 | (102) |
Cash and cash equivalents at beginning of period | 7,562 | 7,614 |
Cash and cash equivalents at end of period | 8,674 | 7,512 |
Supplemental disclosure of cash and non-cash transactions: | ||
Interest paid | 122 | |
Income taxes paid | $ 150 | $ 583 |
Basis Of Presentation
Basis Of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Basis Of Presentation [Abstract] | |
Basis Of Presentation | NOTE 1 — BASIS OF PRESENTATION Organization — Evolving Systems Inc. (“we,” “us,” “our,” the “Company”) is a provider of real-time digital engagement solutions and services 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. The Company’s portfolio includes market-leading solutions and services for real-time analytics, customer acquisition and activation, customer value management and loyalty for the telecom industry promoting partnerships into retail and financial services. In 2016, we began a shift from selling technology to offering business solutions. The value proposition has moved from cost savings to revenue increases for the carrier and our business model has moved from classic capex license and services to opex models based on recurring managed services with performance fees. Our software solution platforms enable carriers’ marketing departments to innovate, execute and manage highly-personalized and contextually-relevant, interactive campaigns that engage consumers in real time and enhance customer retention through deploying loyalty programs. 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 as a Software-as-a-Service (“SaaS”). On July 6, 2017 we announced the completion of the acquisition of Business Logic Systems (“BLS”). BLS, headquartered in Newbury, UK, specializes in data-driven customer value management and customer engagement solutions that have been implemented in over 20 mobile operators in Europe, Africa, Asia-Pacific and the Caribbean. BLS solutions turn customer data into actionable insights and personalized contextual offers. Customer engagement occurs through in-bound and out-bound offers and is further extended through a suite of loyalty and retention solutions. On September 7, 2017 we announced the completion of the acquisition of four business operating units of Lumata Holdings Ltd. (“the Lumata Entities”). The Lumata Entities are a leading global provider of real-time, next generation loyalty and customer lifecycle management software and services that helps businesses gain value from their customer data for relevant and contextual insights and actions of value to both customers and enterprises. Its customers include mobile operators including Orange, Telefonica and other Tier-1 and emerging operators in Europe and around the world. The acquisition is expected to be accretive to Evolving Systems' operations once the integration of the business is completed during 2018. We believe the acquisitions of BLS and the Lumata Entities further reinforce our commitment to the customer acquisition and customer value management (“CVM”) domains that began with the acquisition of Sixth Sense Media (“ Evolving Systems NC, Inc.”) . With these recent acquisitions, we now have a customer base of more than 100 customers spanning 59 countries across the world. The experienced team and technology from BLS, which provides actionable insights and relevant offers based on customer data, greatly complements our software portfolio and 25 years of expertise in customer acquisition, activation and retention. The technology further expands our Managed Services platform for delivering on-tap strategic and tactical solutions. The Lumata Entities' value lies in its patented technology, industry expertise and strong customer relationships, in particular, those across Western Europe. Led by the explosive growth in mobile, the next generation of CVM is moving beyond traditional CRM and points-based loyalty systems to highly personalized and contextual, real-time, omni-channel consumer engagement in multiple verticals including telecom, finance, and retail. Interim Condensed 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 consolidated 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 months ended March 31, 2018 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, 2017 included in our Annual Report on Form 10-K. Use of Estimates — The preparation of condensed consolidated 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 consolidated 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 progress toward completion and direct profit or loss on contracts, 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, generally, 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 income (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 (loss) in the period in which they occur. Principles of Consolidation — The unaudited condensed 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 the reporting unit, and determination of the fair value of the reporting unit. Intangible Assets — Amortizable intangible assets consist primarily of purchased software and licenses, customer relationships, trademarks and tradenames, non-competition and purchased software acquired in conjunction with our purchase of Telespree Communications (“Evolving Systems Labs, Inc.”), Evolving Systems NC, Inc., EVOL BLS and the Lumata Entities. 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 equivalent s. Revenue Recognition — Effective January 1, 2018, we adopted Financial Accounting Standards Board (“FASB”) Topic 606, Revenue from Contacts with Customers (“ASC 606”). ASC 606 was applied using the modified retrospective method. Accordingly, comparative periods have not been adjusted and continue to be reported under FASB ASC Topic 605, Revenue Recognition (“ASC 605”). There was no cumulative effect of the initial application to be recognized as an adjustment to opening retained earnings at January 1, 2018 as the adoption did not have a material impact on the Company’s results of operations or financial condition. The majority of our license fees and services revenue is generated from fixed-price contracts, this provides for licenses to our software products and services that customize such software to meet our customers’ needs. In most instances, customization services are determined to be essential to the functionality of the delivered software. Under ASC 606, revenue is recognized when our customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We measure revenue based on consideration specified in a contract with a customer and excludes any sales incentives. Furthermore, we recognize revenue when we satisfy a performance obligation by transferring control over the service to our customer. A performance obligation is a promise in a contract to transfer a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as, the customer receives the benefit of the performance obligation. Our customers typically receive the benefit of our services as they are performed. Substantially all customer contracts provide that we are compensated for services performed to date. Losses on fixed-price projects are recorded when identified. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Nature of goods and services The following is a description of our products and services from which we generate revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each: i. License Revenue License fees represent the fees we receive from the licensing of our software products. In most instances, customization services are determined to be essential to the functionality of the delivered software. The license along with the customization services are transferred to our customers over time. In arrangements where the services are not essential to the functionality of the delivered software, we recognize license revenue when the license agreement has been approved and the software has been delivered. We can identify each party’s rights, payment terms, and commercial substance of the content. Where applicable, we identify multiple performance obligations and record as revenue as the performance obligations are fulfilled based on their estimated allocated value. The selection of the method to measure progress towards completion requires judgement and is based on the extent of progress towards completion of the performance obligation. ii. Customer Support Revenue Customer support services includes annual support fees, recurring maintenance fees, warranty support fees and minor product upgrades. The warranty support fees represent a separate performance obligation that is provided for up to a year with initial license purchase. The Company allocates the contract transaction price related to warranty support fees based on pricing consistent with what we would offer to other market participants. Upon the conclusion of the warranty period, the customer can choose to continue to receive support and maintenance services via our customer support offerings. We recognize revenue from our support ratably over the service contract period. iii. Services Revenue We recognize revenue from fixed-price service contracts using the input method of accounting. Under the input method, revenue is recognized revenue on the basis of an entity’s efforts or inputs toward satisfying a performance obligation. 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 performance obligation to our customers under such arrangements is fulfilled. iv. Managed Services We recognize revenue from our managed services contracts primarily over the service contract period. On occasion, our managed services contracts will contain a specified number of hours to work over the term of the contract. Revenue for this type of managed service contract is recognized using the input method of accounting, as previously described. Disaggregation of revenue In the following table, revenue is disaggregated by primary geographical market, major products/service lines, and timing of revenue recognition (in thousands): For the Three Months Ended March 31, 2018 2017 Primary geographical markets United Kingdom $ 1,806 $ 1,029 Switzerland 485 613 Other 5,867 4,233 $ 8,158 $ 5,875 Major products/service lines Licensing $ 335 $ 343 Customer support, including warranty support fees 2,609 2,027 Services 2,951 2,036 Managed services 2,263 1,469 Services 7,823 5,532 Total $ 8,158 $ 5,875 Timing of revenue recognition Products transferred at a point in time $ 160 $ 51 Products and services transferred over time 7,998 5,824 $ 8,158 $ 5,875 Contract balances The following table provides information about receivables, contracts assets, and contract liabilities from contracts with customers (in thousands): March 31, December 31, 2018 2017 Assets Contract receivables, net $ 11,018 $ 10,151 Unbilled work-in-progress, net $ 5,540 $ 5,823 Liabilities Unearned revenue $ 6,822 $ 5,397 Contract receivables are recorded at the invoiced amount and do not bear interest. Credit is extended based on the evaluation of a customer’s financial condition and collateral is not required. Unbilled work-in-progress is revenue which has been earned but not invoiced. The contract assets are transferred to the receivables when invoiced. The contract liabilities primarily relate to unearned revenue. Amounts billed in advance of performance obligations being satisfied are booked as unearned revenue. Transaction price allocated to the remaining performance obligations Remaining performance obligations represent the transaction price of firm orders for which work has not been performed as of the period end date and excludes unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity). As of Ma r ch 31, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations greater than one year was $3.1 million. The Company expects approximately 65% of remaining performance obligations to be recognized into revenue within the next twelve months, with the remaining 35% recognized thereafter. We apply the practical expedient in paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. We apply the transition practical expedient in paragraph 606-10-65-1(f)(3) and does not disclose the amount of the transaction price allocated to the remaining performance obligations and an explanation of when we expect to recognize that amount as revenue. Additionally, applying the practical expedient in paragraph 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts (i.e., commissions) as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. 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. 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. Of the restrictions on the stock awards granted during the three months ended March 31, 2017, 20% vested in January 2018, and 10% annually beginning on the one year anniversary of their offering thereafter for four years. The remaining 40% , will be released evenly over four years beginning in 2018 contingent upon the attainment of annual performance goals established by our Board of Directors. Comprehensive Income — Comprehensive income consists of two components, net income and other comprehensive income. Other comprehensive income 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 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 losses 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. 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 Senior 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 one operating segment which includes two revenue types: license fees revenue and services revenue (as shown on the condensed consolidated statements of income). License fees revenue represents the fees received from the license of software products. Services revenue includes services directly related to the delivery of the licensed products, such as fees for custom development, integration services, SaaS service, managed services, 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. Recent Accounting Pronouncements — In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU“) No. 2016-02, Leases (Topic 842), which requires lessees to put most leases on their balance sheets by recognizing a lessee’s rights and obligations, while expenses will continue to be recognized in a similar manner to today’s legacy lease accounting guidance. This ASU could also significantly affect the financial ratios used for external reporting and other purposes, such as debt covenant compliance. This ASU will be effective for us on January 1, 2019, with early adoption permitted. We are currently in the process of assessing the impact of this ASU on our consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220); Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this ASU allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Act and will improve the usefulness of information reported to financial statement users. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted in any interim period after issuance of the ASU. We are currently in the process of assessing the impact of this ASU on our consolidated financial statements. |
Goodwill And Intangible Assets
Goodwill And Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets [Abstract] | |
Goodwill And Intangible Assets | NOTE 2 — GOODWILL AND INTANGIBLE ASSETS Changes in the carrying amount of goodwill by reporting unit were as follows (in thousands): Total Goodwill Balance at December 31, 2017 $ 25,216 Effects of changes in foreign currency exchange rates (1) 655 Balance at March 31, 2018 $ 25,871 (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, 2017, at which time we had $21.5 million of goodwill. The fair value of the 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. We believe that a market participant would weigh both possibilities without a bias to one or the other. Consequently, we gave equal consideration to both. 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 compare the fair value of the reporting unit’s goodwill to its carrying amount, and any excess of the carrying amount over the fair value would be charged to operations as an impairment loss. If the projected future performance of our segment 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 2017 goodwill impairment analysis, the fair value of the reporting unit exceeded its carrying value. Therefore, the second step was not necessary. From July 31, 2017, through the date of this report, no events have occurred that we believe may have impaired goodwill. We amortized identifiable intangible assets for Evolving Systems Labs, Evolving Systems NC, EVOL BLS, and the Lumata entities on a straight-line basis over their estimated lives ranging from one to eight years. As of March 31, 2018, and December 31, 2017, identifiable intangibles were as follows (in thousands): March 31, 2018 December 31, 2017 Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Weighted-Average Amortization Period Purchased software $ 2,921 $ 809 $ 2,112 $ 2,921 $ 743 $ 2,178 7.7 yrs Trademarks and tradenames 310 194 116 310 189 121 3.7 yrs Non-competition 40 36 4 40 35 5 2.0 yrs Customer relationships 4,363 1,138 3,225 4,363 1,054 3,309 8.7 yrs $ 7,634 $ 2,177 $ 5,457 $ 7,634 $ 2,021 $ 5,613 6.8 yrs Amortization expense of identifiable intangible assets was $ 0 .2 million for the three months ended March 31, 2018 and 2017. Expected future amortization expense related to identifiable intangibles based on our carrying amount as of March 31, 2018 was as follows (in thousands): Twelve months ending March 31, 2019 $ 960 2020 969 2021 959 2022 925 2023 641 Thereafter 1,003 $ 5,457 Pro Forma The following table presents the unaudited pro forma results of the Company for the three months ended March 31, 2018 and 2017 as if the acquisitions of EVOL BLS and Lumata Entities occurred on January 1, 2017. The pro forma results include estimates and assumptions which management believes are necessary. The unaudited pro forma revenue and net loss for EVOL BLS was approximately $0.8 million and $0.9 million, respectively, for the three months ended March 31, 2017. The unaudited pro forma revenue and net profit for the Lumata Entities was approximately $1.4 million and $42,000 , respectively, for the three months ended March 31, 2017. However, pro forma results do not include an anticipated cost savings or their effects of the planned integration of EVOL BLS and Lumata Entities and are not necessarily indicative of the result that would have occurred if the business combination had been in effect on the dates indicated, or which may result in the future. The pro forma information includes adjustments for the amortization of intangible assets. For the Three Months Ended March 31, 2018 2017 Revenue 8,158 8,072 Earnings 484 11 EVOL BLS or the Lumata Entities did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Components [Abstract] | |
Balance Sheet Components | NOTE 3 — BALANCE SHEET COMPONENTS The components of accounts payable and accrued liabilities are as follows (in thousands): March 31, 2018 December 31, 2017 Accounts payable and accrued liabilities: Accounts payable $ 864 $ 1,530 Accrued compensation and related expenses 1,719 1,749 Accrued liabilities 3,472 3,611 $ 6,055 $ 6,890 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per 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 and restricted stock. 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. We exclude unvested restricted stock from our basic earnings per share. Our restricted stock, which vests based on the passage of time is included in dilutive earnings per share. Our restricted stock which vests contingent upon the attainment of annual performance goals is included in dilutive earnings per share as the performance goals are achieved. 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 March 31, 2018 2017 Basic income per common share: Net income $ 484 $ 973 Basic weighted average shares outstanding 12,077 11,921 Basic income per common share: $ 0.04 $ 0.08 Diluted income per common share: Net income $ 484 $ 973 Weighted average shares outstanding 12,077 11,921 Effect of dilutive securities - options and restricted stock 88 23 Diluted weighted average shares outstanding 12,165 11,944 Diluted income per common share: $ 0.04 $ 0.08 For the three months ended March 31, 2018 and 2017, 0.3 million and 0.5 million shares, respectively, underlying stock options 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. All shares of unvested restricted stock were excluded from basic and dilutive earnings per share for the three months ended March 31, 2018 and March 31, 2017, respectively. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
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 recogn ized $ 0.4 million and $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 March 31, 2018 and 2017 , respectively. The following table summarizes stock-based compensation expenses recorded in the consolidated statement of operations (in thousands): For the Three Months Ended March 31, 2018 2017 Cost of revenue, excluding depreciation and amortization $ 13 $ 7 Sales and marketing 16 8 General and administrative 310 51 Product development 27 15 Total share-based compensation $ 366 $ 81 Stock Incentive Plans 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 three years for an initial grant and one year for subsequent grants for directors and expire no more than ten years from the date of grant. At March 31, 2017, no shares were available for grant under the 2007 Stock Plan, as amended. At March 31, 2018 and December 31, 2017, 0.6 million and 0.7 million options were issued and outstanding under the 2007 Stock Plan as amended, respectively. In June 2016, our stockholders approved the 2016 Stock Incentive Plan (the “2016 Stock Plan”) with a maximum of 250,000 shares reserved for issuance. In June 2017, our stockholders approved an amendment to the 2016 Stock Plan which increased the maximum shares that may be awarded under the plan to 650,000 . Awards permitted under the 2016 Stock Plan include: Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Awards and Other Stock-Based Awards. Awards issued under the 2016 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 three years for an initial grant and one year for subsequent grants for directors and expire no more than ten years from the date of grant. At March 31, 2018, there were approximately 0.1 million shares were available for grant under the 2016 Stock Plan. There were no shares of restricted stock were granted to members of our Board of Directors or senior management during the three months ended March 31, 2018 and 542,000 shares granted during the three months ended March 31, 2017. During the three months ended March 31, 2018 and 2017, 175,250 and 1,250 shares of restricted stock vested, respectively. There were 67,000 and 1,000 shares of restricted stock were forfeited during the three months ended March 31, 2018 and 2017, respectively. A large portion of the forfeitures were related to the performance-based shares. 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 $0.3 million and $41,000 for the three months ended March 31, 2018 and 2017, respectively, of expense related to restricted stock grants. Of the restrictions on the stock awards granted during the three months ended March 31, 2017, 20% vested in January 2018, and 10% annually beginning on the one year anniversary of their offering thereafter for four years. The remaining 40% , will be released evenly over four years beginning in 2018 contingent upon the attainment of annual performance goals established by our Board of Directors. The following is a summary of restricted stock activity under the plans for the three months ended March 31, 2018: Restricted Stock Number of Shares (in thousands) Unvested restricted stock at December 31, 2017 597 Restricted stock granted - Less restricted stock forfeited/expired (67) Less restricted stock vested (175) Unvested restricted stock at March 31, 2018 355 The following is a summary of stock option activity under the plans for the three months ended March 31, 2018: 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, 2017 713 $ 5.71 8.23 $ 128 Less options forfeited/cancelled (66) 5.56 Less options exercised 0 1.34 Options outstanding at March 31, 2018 647 $ 5.73 7.99 $ 141 Options exercisable at March 31, 2018 301 $ 6.67 6.74 $ 65 No stock options were granted during the three months ended March 31, 2018 and 2017. As of March 31, 2018, there were approximately $ 2. 3 million of total unrecognized compensation costs related to unvested stock options and restricted stock. These costs are expected to be recognized over a weighted average period of 3.01 years. Total fair value of stock options vested during the three months ended March 31, 2018 and 2017 was approximately $0.1 million. The deferred income tax benefits from stock option expense related to Evolving Systems U.K. totaled approximately $4,000 and $2,000 for the three months ended March 31, 2018 and 2017, respectively. Cash received from stock option exercises for the three months ended March 31, 2018 and 2017 was a de minimis amount and $ 7,000 , respectively. Exercises during the three months ended March 31, 2018, resulted in 235 shares issued in settlement of shares issued. Net settlement exercises during the three months ended March 31, 2017, resulted in 13,112 shares issued and 70,352 options cancelled in settlement of shares issued. |
Concentration Of Credit Risk
Concentration Of Credit Risk | 3 Months Ended |
Mar. 31, 2018 | |
Concentration Of Credit Risk [Abstract] | |
Concentration Of Credit Risk | NOTE 6 — CONCENTRATION OF CREDIT RISK For the three months ended March 31, 2018, one significant customer (defined as contributing at least 10 %) accounted for 11% of revenue from operations. The significant customer for the three months ended March 31, 2018 is a large telecommunications operator in Europe. For the three months ended March 31, 2017, one significant customer accounted for 10% of revenue from operations. The significant customer for the three months ended March 31, 2017 is a large telecommunications operator in Europe. As of March 31, 2018, one significant customer accounted for approximately 14 % of contract receivables and unbilled work-in-progress. This customer is a large telecommunications operator in Europe. As of December 31, 2017, no customers accounted for 10% of contract receivables and unbilled work-in-progress. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2018 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | NOTE 7 — LONG-TERM DEBT On August 16, 2017, we entered into a Term Loan Facility Agreement with East West Bank as lender in the amount of $4.7 million (the “Loan Facility”). The purpose of the Loan Facility is to provide funds in connection with the Company’s entry into a Share Purchase Agreement with Lumata Holdings Limited for a cash payment totaling €4 million ( $4.8 million) for the Lumata Entities acquisition. The Loan Facility requires the Company to make monthly principal payments of approximately $131,400 commencing July 31, 2018 and interest at the greater of (a) 3.5% or (b) the variable rate of interest that appears in the Wall Street Journal on a monthly measurement date plus in either case 1.5% . As of March 31, 2018, and December 31, 2017 the U.S.A. Prime Rate was 4.75% and 4.50% , respectively. EVOL Inc. entered into the Loan Facility as the Parent Guarantor; Evolving Systems BLS LTD and Evolving Systems Limited entered into the Loan Facility as Original Guarantors (the “Original Guarantors”). The Loan Facility is secured by all of the assets of EVOL Holdings and the Original Guarantors in accordance with the terms of a Debenture entered into by EVOL Holdings and the Original Guarantors in favor of East West Bank. EVOL Holdings, EVOL Inc. and the Original Guarantors also entered into a Subordination Deed whereby each of the parties agreed to subordinate all loans by and among each other to East West Bank. Following completion of the Lumata Acquisition, Lumata France SAS and Lumata UK Ltd are also bound to adhere to the finance documents as additional obligors. The Loan Facility requires the Company to pay an Arrangement Fee (“Origination Fee”) of $23,650 , payable in 4 equal installments, with the first payment due on the date of the Loan Facility and the remaining three payments on the first, second and third anniversary thereof. The Company also agreed to pay East West Bank’s legal fees in connection with the transaction. The Company may prepay the Loan Facility at any time, in a minimum amount of $250,000 and increments of $50,000 , subject to a prepayment fee of 2% of the amount prepaid, on any prepayment made before the second anniversary date of the Agreement. The unpaid balance of the Loan Facility is due on August 16, 2021 . The Loan Facility includes financial covenants to maintain a minimum current ratio, a specified ratio of Total Liabilities to EBITDA and a minimum fixed charge coverage ratio as well as negative covenants that place restrictions on EVOL Holdings, the Parent and Original Guarantors and the additional obligors’ 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; declare dividends, cause or permit a change of control; merge or consolidate with another entity; enter into affiliate transactions; and change the nature of its business materially, subject to standard exceptions. On February 29, 2016, we entered into the Fifth Amendment to the Loan and Security Agreement with East West Bank which provides for a Term Loan (the “Term Loan”) for $6.0 million. The $6.0 million loan bears interest at a floating rate equal to the U.S.A. Prime Rate plus 1.0% . As of March 31, 2017, the U.S.A. Prime Rate was 4.75% . The Term Loan 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. Interest accrues from the date the Term Loan was made at the aforementioned rate and is payable monthly. The Term Loan shall be repaid in 36 equal monthly installments of principal, plus accrued but unpaid interest, commencing on January 1, 2017 and continuing on the first day of each month thereafter through and including January 1, 2020. On the Term Loan maturity date, the outstanding principal amount of the Term Loan and all accrued and unpaid interest thereon shall be immediately due and payable. The Term Loan, once repaid, may not be reborrowed. We must maintain a minimum current ratio, a specified ratio of Total Liabilities to EBITDA and a minimum fixed charge coverage ratio which are as defined in the Term Loan. The Term Loan requires us to pay two annual credit facility fees of $18,750 and legal fee equal to $1,000 . The Term Loan agreement required us to use the term loan’s proceeds and $4.0 million from our cash balances to pay off and terminate a Revolving Facilities Loan and Security Agreement with East West Bank totaling $10.0 million. The Term Loan matures on January 1, 2020 . The Term Loan and the Loan Facility (collectively, “Loans”) include 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; limits the amount of cash distributions to our shareholders; and change the nature of our business materially. Outstanding amounts under the Term Loan may be accelerated by 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 March 31, 2018, we are in compliance with the covenants and have a $8.2 million balance under the Loans net of approximately $2,000 of debt issuance c osts. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | NOTE 8— INCOME TAXES On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted in the United States. The Tax Act includes a number of changes to existing U.S. tax laws that impact the Company including the reduction of the U.S. corporate income tax rate from 35 percent to 21 percent for tax years beginning after December 31, 2017. The Tax Act also provides for a one-time transition tax on indefinitely reinvested foreign earnings and the acceleration of depreciation for certain assets placed into service after September 27, 2017, as well as prospective changes beginning in 2018, including the elimination of certain domestic deductions and credits, capitalization of research and development expenditures, and additional limitations on the deductibility of executive compensation and interest. The income tax effects of the Tax Act in 2017 recognized in the Company’s financial statements are provisional in accordance with Staff Accounting Bulletin No. 118, which provides SEC staff guidance for the application of ASC Topic 740, Income Taxes, in the reporting period in which the Tax Act was signed into law. As such, the Company’s financial results reflect the income tax effects of the Tax Act for which accounting under ASC Topic 740 is incomplete but a reasonable estimate could be determined. The Company did not identify items for which the income tax effects of the Tax Act have not been completed and a reasonable estimate could not be determined as of March 31, 2018 and December 31, 2017. We recorded net income tax expense of $0.1 million and $0.4 million for the three months ended March 31, 2018 and 2017, respectively. The net expense during the three months ended March 31, 2018 consisted of current income tax expense of $ 0.2 million and a deferred tax benefit of ( $0.1 ) million. The current tax expense consists of income tax from our U.K. and India based operations. The deferred tax benefit was related primarily to the amortization of deferred tax liabilities in the U.S. The net expense during the three months ended March 31, 2017 consisted of current income tax expense of $0.4 million and a deferred tax benefit of approximately ( $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. Our effective tax rate was 16% and 27% for the three months ended March 31, 2018 and 2017, respectively. The decrease in our effective tax rate relates to the effect of the tax reform discussed above and higher proportion of our income being generated in the U.K., for which the statutory corporate tax rate is lower and the utilization of Foreign Tax Credits (“FTC”). As of March 31, 2018, and December 31, 2017 we continued to maintain a valuation allowance on portions of our domestic net deferred tax asset. Such assets primarily consist of Foreign Tax credit carry forwards (“FTC”), state Net Operating Loss (“NOL”) carryforwards, and research and development tax credits. Our deferred tax assets and liabilities as of March 31, 2018 and December 31, 2017, were comprised of the following (in thousands): March 31, 2018 December 31, 2017 Deferred tax assets: Foreign tax credits carryforwards $ 4,731 $ 4,731 Net operating loss carryforwards 3,811 3,294 Research & development credits 303 303 AMT credits 770 770 Stock compensation 652 570 Depreciable assets 46 33 Accrued liabilities and reserves 182 66 Total deferred tax assets 10,495 9,767 Deferred tax liabilities: Intangibles (1,066) (1,045) Accrued liabilities and reserves (196) (120) Total deferred tax liability (1,262) (1,165) Net deferred tax assets, before valuation allowance 9,233 8,602 Valuation allowance (8,837) (8,328) Net deferred tax asset $ 396 $ 274 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 March 31, 2018 and December 31, 2017 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. |
Geographical Information
Geographical Information | 3 Months Ended |
Mar. 31, 2018 | |
Geographical Information [Abstract] | |
Geographical Information | NOTE 9 —GEOGRAPHICAL INFORMATION 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 , EVOL BLS, Lumata Entities and our North Carolina based Evolving Systems NC, Inc. subsidiary. Additionally, personnel in Bangalore and Kolkata, India provide software development and support services to our global operations. Financial information relating to long-lived assets by geographic region is as follows (in thousands): March 31, 2018 December 31, 2017 Long-lived assets, net United States $ 11,098 $ 11,276 United Kingdom 18,599 17,968 Other 1,867 1,843 $ 31,564 $ 31,087 |
Commitments And Contingencies
Commitments And Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies | NOTE 10 — 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 March 31, 2018 or December 31, 2017. 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 March 31, 2018 or December 31, 2017. 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 March 31, 2018 or December 31, 2017. 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 March 31, 2018 or December 31, 2017. In connection with our acquisition of Telespree on October 24, 2013 , we agreed to make a cash payment of $0.5 million on the one year anniversary of the closing. This payment was subject to reduction for certain claims and has not been paid to date. We have made claims against this payment which are currently under dispute. Once settled the final payment will be released. In connection with our acquisition of SSM on September 30, 2015 , we agreed to make a cash payment of $0.3 million on the one year anniversary of the closing. This payment is subject to reduction for certain claims and has not been paid to date. Once settled the final payment will be released. In connection with our acquisition of EVOL BLS on July 3, 2017 , we agreed to an earnout equal to 50% of EVOL BLS based revenue over $4.8 million per year for 3 years after the closing date. The Company also agreed to guarantee EVOL BLS’ obligations under the Purchase Agreement. We have estimated the earnout to be approximately $0.4 million as March 31, 2018 and December 31, 2017. (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. |
Basis Of Presentation (Policy)
Basis Of Presentation (Policy) | 3 Months Ended |
Mar. 31, 2018 | |
Basis Of Presentation [Abstract] | |
Organization | Organization — Evolving Systems Inc. (“we,” “us,” “our,” the “Company”) is a provider of real-time digital engagement solutions and services 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. The Company’s portfolio includes market-leading solutions and services for real-time analytics, customer acquisition and activation, customer value management and loyalty for the telecom industry promoting partnerships into retail and financial services. In 2016, we began a shift from selling technology to offering business solutions. The value proposition has moved from cost savings to revenue increases for the carrier and our business model has moved from classic capex license and services to opex models based on recurring managed services with performance fees. Our software solution platforms enable carriers’ marketing departments to innovate, execute and manage highly-personalized and contextually-relevant, interactive campaigns that engage consumers in real time and enhance customer retention through deploying loyalty programs. 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 as a Software-as-a-Service (“SaaS”). On July 6, 2017 we announced the completion of the acquisition of Business Logic Systems (“BLS”). BLS, headquartered in Newbury, UK, specializes in data-driven customer value management and customer engagement solutions that have been implemented in over 20 mobile operators in Europe, Africa, Asia-Pacific and the Caribbean. BLS solutions turn customer data into actionable insights and personalized contextual offers. Customer engagement occurs through in-bound and out-bound offers and is further extended through a suite of loyalty and retention solutions. On September 7, 2017 we announced the completion of the acquisition of four business operating units of Lumata Holdings Ltd. (“the Lumata Entities”). The Lumata Entities are a leading global provider of real-time, next generation loyalty and customer lifecycle management software and services that helps businesses gain value from their customer data for relevant and contextual insights and actions of value to both customers and enterprises. Its customers include mobile operators including Orange, Telefonica and other Tier-1 and emerging operators in Europe and around the world. The acquisition is expected to be accretive to Evolving Systems' operations once the integration of the business is completed during 2018. We believe the acquisitions of BLS and the Lumata Entities further reinforce our commitment to the customer acquisition and customer value management (“CVM”) domains that began with the acquisition of Sixth Sense Media (“ Evolving Systems NC, Inc.”) . With these recent acquisitions, we now have a customer base of more than 100 customers spanning 59 countries across the world. The experienced team and technology from BLS, which provides actionable insights and relevant offers based on customer data, greatly complements our software portfolio and 25 years of expertise in customer acquisition, activation and retention. The technology further expands our Managed Services platform for delivering on-tap strategic and tactical solutions. The Lumata Entities' value lies in its patented technology, industry expertise and strong customer relationships, in particular, those across Western Europe. Led by the explosive growth in mobile, the next generation of CVM is moving beyond traditional CRM and points-based loyalty systems to highly personalized and contextual, real-time, omni-channel consumer engagement in multiple verticals including telecom, finance, and retail. |
Interim Condensed Consolidated Financial Statements | Interim Condensed 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 consolidated 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 months ended March 31, 2018 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, 2017 included in our Annual Report on Form 10-K. |
Use Of Estimates | Use of Estimates — The preparation of condensed consolidated 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 consolidated 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 progress toward completion and direct profit or loss on contracts, 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, generally, 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 income (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 (loss) in the period in which they occur. |
Principles Of Consolidation | Principles of Consolidation — The unaudited condensed 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 the reporting unit, and determination of the fair value of the reporting unit. |
Intangible Assets | Intangible Assets — Amortizable intangible assets consist primarily of purchased software and licenses, customer relationships, trademarks and tradenames, non-competition and purchased software acquired in conjunction with our purchase of Telespree Communications (“Evolving Systems Labs, Inc.”), Evolving Systems NC, Inc., EVOL BLS and the Lumata Entities. 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 — Effective January 1, 2018, we adopted Financial Accounting Standards Board (“FASB”) Topic 606, Revenue from Contacts with Customers (“ASC 606”). ASC 606 was applied using the modified retrospective method. Accordingly, comparative periods have not been adjusted and continue to be reported under FASB ASC Topic 605, Revenue Recognition (“ASC 605”). There was no cumulative effect of the initial application to be recognized as an adjustment to opening retained earnings at January 1, 2018 as the adoption did not have a material impact on the Company’s results of operations or financial condition. The majority of our license fees and services revenue is generated from fixed-price contracts, this provides for licenses to our software products and services that customize such software to meet our customers’ needs. In most instances, customization services are determined to be essential to the functionality of the delivered software. Under ASC 606, revenue is recognized when our customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We measure revenue based on consideration specified in a contract with a customer and excludes any sales incentives. Furthermore, we recognize revenue when we satisfy a performance obligation by transferring control over the service to our customer. A performance obligation is a promise in a contract to transfer a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as, the customer receives the benefit of the performance obligation. Our customers typically receive the benefit of our services as they are performed. Substantially all customer contracts provide that we are compensated for services performed to date. Losses on fixed-price projects are recorded when identified. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Nature of goods and services The following is a description of our products and services from which we generate revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each: i. License Revenue License fees represent the fees we receive from the licensing of our software products. In most instances, customization services are determined to be essential to the functionality of the delivered software. The license along with the customization services are transferred to our customers over time. In arrangements where the services are not essential to the functionality of the delivered software, we recognize license revenue when the license agreement has been approved and the software has been delivered. We can identify each party’s rights, payment terms, and commercial substance of the content. Where applicable, we identify multiple performance obligations and record as revenue as the performance obligations are fulfilled based on their estimated allocated value. The selection of the method to measure progress towards completion requires judgement and is based on the extent of progress towards completion of the performance obligation. ii. Customer Support Revenue Customer support services includes annual support fees, recurring maintenance fees, warranty support fees and minor product upgrades. The warranty support fees represent a separate performance obligation that is provided for up to a year with initial license purchase. The Company allocates the contract transaction price related to warranty support fees based on pricing consistent with what we would offer to other market participants. Upon the conclusion of the warranty period, the customer can choose to continue to receive support and maintenance services via our customer support offerings. We recognize revenue from our support ratably over the service contract period. iii. Services Revenue We recognize revenue from fixed-price service contracts using the input method of accounting. Under the input method, revenue is recognized revenue on the basis of an entity’s efforts or inputs toward satisfying a performance obligation. 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 performance obligation to our customers under such arrangements is fulfilled. iv. Managed Services We recognize revenue from our managed services contracts primarily over the service contract period. On occasion, our managed services contracts will contain a specified number of hours to work over the term of the contract. Revenue for this type of managed service contract is recognized using the input method of accounting, as previously described. Disaggregation of revenue In the following table, revenue is disaggregated by primary geographical market, major products/service lines, and timing of revenue recognition (in thousands): For the Three Months Ended March 31, 2018 2017 Primary geographical markets United Kingdom $ 1,806 $ 1,029 Switzerland 485 613 Other 5,867 4,233 $ 8,158 $ 5,875 Major products/service lines Licensing $ 335 $ 343 Customer support, including warranty support fees 2,609 2,027 Services 2,951 2,036 Managed services 2,263 1,469 Services 7,823 5,532 Total $ 8,158 $ 5,875 Timing of revenue recognition Products transferred at a point in time $ 160 $ 51 Products and services transferred over time 7,998 5,824 $ 8,158 $ 5,875 Contract balances The following table provides information about receivables, contracts assets, and contract liabilities from contracts with customers (in thousands): March 31, December 31, 2018 2017 Assets Contract receivables, net $ 11,018 $ 10,151 Unbilled work-in-progress, net $ 5,540 $ 5,823 Liabilities Unearned revenue $ 6,822 $ 5,397 Contract receivables are recorded at the invoiced amount and do not bear interest. Credit is extended based on the evaluation of a customer’s financial condition and collateral is not required. Unbilled work-in-progress is revenue which has been earned but not invoiced. The contract assets are transferred to the receivables when invoiced. The contract liabilities primarily relate to unearned revenue. Amounts billed in advance of performance obligations being satisfied are booked as unearned revenue. Transaction price allocated to the remaining performance obligations Remaining performance obligations represent the transaction price of firm orders for which work has not been performed as of the period end date and excludes unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity). As of Ma r ch 31, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations greater than one year was $3.1 million. The Company expects approximately 65% of remaining performance obligations to be recognized into revenue within the next twelve months, with the remaining 35% recognized thereafter. We apply the practical expedient in paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. We apply the transition practical expedient in paragraph 606-10-65-1(f)(3) and does not disclose the amount of the transaction price allocated to the remaining performance obligations and an explanation of when we expect to recognize that amount as revenue. Additionally, applying the practical expedient in paragraph 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts (i.e., commissions) as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. |
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. 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. Of the restrictions on the stock awards granted during the three months ended March 31, 2017, 20% vested in January 2018, and 10% annually beginning on the one year anniversary of their offering thereafter for four years. The remaining 40% , will be released evenly over four years beginning in 2018 contingent upon the attainment of annual performance goals established by our Board of Directors. |
Comprehensive Income | Comprehensive Income — Comprehensive income consists of two components, net income and other comprehensive income. Other comprehensive income 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 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 losses 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. |
Segment Information | 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 Senior 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 one operating segment which includes two revenue types: license fees revenue and services revenue (as shown on the condensed consolidated statements of income). License fees revenue represents the fees received from the license of software products. Services revenue includes services directly related to the delivery of the licensed products, such as fees for custom development, integration services, SaaS service, managed services, 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements — In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU“) No. 2016-02, Leases (Topic 842), which requires lessees to put most leases on their balance sheets by recognizing a lessee’s rights and obligations, while expenses will continue to be recognized in a similar manner to today’s legacy lease accounting guidance. This ASU could also significantly affect the financial ratios used for external reporting and other purposes, such as debt covenant compliance. This ASU will be effective for us on January 1, 2019, with early adoption permitted. We are currently in the process of assessing the impact of this ASU on our consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220); Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this ASU allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Act and will improve the usefulness of information reported to financial statement users. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted in any interim period after issuance of the ASU. We are currently in the process of assessing the impact of this ASU on our consolidated financial statements. |
Basis Of Presentation (Tables)
Basis Of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Basis Of Presentation [Abstract] | |
Schedule Of Disaggregation Of Revenue | For the Three Months Ended March 31, 2018 2017 Primary geographical markets United Kingdom $ 1,806 $ 1,029 Switzerland 485 613 Other 5,867 4,233 $ 8,158 $ 5,875 Major products/service lines Licensing $ 335 $ 343 Customer support, including warranty support fees 2,609 2,027 Services 2,951 2,036 Managed services 2,263 1,469 Services 7,823 5,532 Total $ 8,158 $ 5,875 Timing of revenue recognition Products transferred at a point in time $ 160 $ 51 Products and services transferred over time 7,998 5,824 $ 8,158 $ 5,875 |
Schedule Of Receivables, Assets And Liabilities From Contracts With Customers | March 31, December 31, 2018 2017 Assets Contract receivables, net $ 11,018 $ 10,151 Unbilled work-in-progress, net $ 5,540 $ 5,823 Liabilities Unearned revenue $ 6,822 $ 5,397 |
Goodwill And Intangible Assets
Goodwill And Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets [Abstract] | |
Summary Of Changes In Carrying Amount Of Goodwill | Total Goodwill Balance at December 31, 2017 $ 25,216 Effects of changes in foreign currency exchange rates (1) 655 Balance at March 31, 2018 $ 25,871 (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 | March 31, 2018 December 31, 2017 Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Weighted-Average Amortization Period Purchased software $ 2,921 $ 809 $ 2,112 $ 2,921 $ 743 $ 2,178 7.7 yrs Trademarks and tradenames 310 194 116 310 189 121 3.7 yrs Non-competition 40 36 4 40 35 5 2.0 yrs Customer relationships 4,363 1,138 3,225 4,363 1,054 3,309 8.7 yrs $ 7,634 $ 2,177 $ 5,457 $ 7,634 $ 2,021 $ 5,613 6.8 yrs |
Summary Of Expected Future Amortization Expense Related To Identifiable Intangibles | Twelve months ending March 31, 2019 $ 960 2020 969 2021 959 2022 925 2023 641 Thereafter 1,003 $ 5,457 |
Pro Forma Information Includes Adjustments Amortization Of Intangible Assets | For the Three Months Ended March 31, 2018 2017 Revenue 8,158 8,072 Earnings 484 11 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Components [Abstract] | |
Accounts Payable And Accrued Liabilities | March 31, 2018 December 31, 2017 Accounts payable and accrued liabilities: Accounts payable $ 864 $ 1,530 Accrued compensation and related expenses 1,719 1,749 Accrued liabilities 3,472 3,611 $ 6,055 $ 6,890 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Summary Of Basic And Diluted Earnings Per Share | For the Three Months Ended March 31, 2018 2017 Basic income per common share: Net income $ 484 $ 973 Basic weighted average shares outstanding 12,077 11,921 Basic income per common share: $ 0.04 $ 0.08 Diluted income per common share: Net income $ 484 $ 973 Weighted average shares outstanding 12,077 11,921 Effect of dilutive securities - options and restricted stock 88 23 Diluted weighted average shares outstanding 12,165 11,944 Diluted income per common share: $ 0.04 $ 0.08 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Share-Based Compensation [Abstract] | |
Summary Of Stock-Based Compensation Expenses | For the Three Months Ended March 31, 2018 2017 Cost of revenue, excluding depreciation and amortization $ 13 $ 7 Sales and marketing 16 8 General and administrative 310 51 Product development 27 15 Total share-based compensation $ 366 $ 81 |
Summary Of Restricted Stock Activity | Restricted Stock Number of Shares (in thousands) Unvested restricted stock at December 31, 2017 597 Restricted stock granted - Less restricted stock forfeited/expired (67) Less restricted stock vested (175) Unvested restricted stock at March 31, 2018 355 |
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, 2017 713 $ 5.71 8.23 $ 128 Less options forfeited/cancelled (66) 5.56 Less options exercised 0 1.34 Options outstanding at March 31, 2018 647 $ 5.73 7.99 $ 141 Options exercisable at March 31, 2018 301 $ 6.67 6.74 $ 65 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes [Abstract] | |
Components Of Deferred Tax Assets And Liabilities | March 31, 2018 December 31, 2017 Deferred tax assets: Foreign tax credits carryforwards $ 4,731 $ 4,731 Net operating loss carryforwards 3,811 3,294 Research & development credits 303 303 AMT credits 770 770 Stock compensation 652 570 Depreciable assets 46 33 Accrued liabilities and reserves 182 66 Total deferred tax assets 10,495 9,767 Deferred tax liabilities: Intangibles (1,066) (1,045) Accrued liabilities and reserves (196) (120) Total deferred tax liability (1,262) (1,165) Net deferred tax assets, before valuation allowance 9,233 8,602 Valuation allowance (8,837) (8,328) Net deferred tax asset $ 396 $ 274 |
Geographical Information (Table
Geographical Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Geographical Information [Abstract] | |
Long-Lived Assets, Net By Geographic Region | March 31, 2018 December 31, 2017 Long-lived assets, net United States $ 11,098 $ 11,276 United Kingdom 18,599 17,968 Other 1,867 1,843 $ 31,564 $ 31,087 |
Basis Of Presentation (Narrativ
Basis Of Presentation (Narrative) (Details) $ in Thousands | Sep. 07, 2017item | Jul. 06, 2017item | Mar. 31, 2018USD ($)itemsegmentcustomercountry | Mar. 31, 2017 | Jan. 01, 2018USD ($) |
Number of operating segments | segment | 1 | ||||
Number of customers | customer | 100 | ||||
Number of countries across the world for customer base | country | 59 | ||||
Number of recognized sources for revenue | 2 | ||||
Cumulative effect to retained earnings | $ | $ 0 | ||||
Remaining performance obligations | $ | $ 3,100 | ||||
Percentage of remaining performance obligations, next twelve months | 65.00% | ||||
Percentage of remaining performance obligations, thereafter | 35.00% | ||||
Stock Options [Member] | |||||
Vested period for stock awards granted | 4 years | 4 years | |||
Stock Options [Member] | January 2018 [Member] | |||||
Percentage of vested stock awards granted | 20.00% | 20.00% | |||
Stock Options [Member] | One Year Anniversary Of Offering [Member] | |||||
Percentage of vested stock awards granted | 10.00% | 10.00% | |||
Stock Options [Member] | Evenly Over Four Years [Member] | |||||
Percentage of vested stock awards granted | 40.00% | 40.00% | |||
EVOL BLS [Member] | |||||
Years of expertise in customer acquisition, activation and retention | 25 years | ||||
EVOL BLS [Member] | Europe, Africa, Asia-Pacific And Caribbean [Member] | Minimum [Member] | |||||
Number of mobile operators | 20 | ||||
Lumata Entities [Member] | |||||
Number of business operating units acquired | 4 |
Basis Of Presentation (Schedule
Basis Of Presentation (Schedule Of Disaggregation Of Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 8,158 | $ 5,875 |
Products Transferred At A Point [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 160 | 51 |
Products and Services Transferred Over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 7,998 | 5,824 |
License Fees [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 335 | 343 |
Customer Support Including Warranty Support Fees [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,609 | 2,027 |
Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,951 | 2,036 |
Managed Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,263 | 1,469 |
Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 7,823 | 5,532 |
United Kingdom [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,806 | 1,029 |
Switzerland [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 485 | 613 |
Other [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 5,867 | $ 4,233 |
Basis Of Presentation (Schedu28
Basis Of Presentation (Schedule Of Receivables, Assets And Liabilities From Contracts With Customers) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Contract receivables, net | $ 11,018 | $ 10,151 |
Unbilled work-in-progress, net | 5,540 | 5,823 |
Liabilities | ||
Unearned revenue | $ 6,822 | $ 5,397 |
Goodwill And Intangible Asset29
Goodwill And Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands | Jul. 03, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Jul. 31, 2017 |
Goodwill And Intangible Assets [Line Items] | |||||
Goodwill | $ 25,871 | $ 25,216 | |||
Amortization of intangible assets | $ 242 | $ 196 | |||
EVOL BLS [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Pro forma revenue | 800 | ||||
Pro forma net profit (loss) | (900) | ||||
Lumata Entities [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Pro forma revenue | 1,400 | ||||
Pro forma net profit (loss) | $ 42 | ||||
Annual Goodwill Impairment Test [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Goodwill | $ 21,500 | ||||
Minimum [Member] | EVOL BLS [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Pro forma revenue | $ 4,800 | ||||
Minimum [Member] | Evolving Systems Labs, Evolving System NC, Evolving System BLS LTD, And Lumata [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Estimated useful life of intangible asset | 1 year | ||||
Maximum [Member] | Evolving Systems Labs, Evolving System NC, Evolving System BLS LTD, And Lumata [Member] | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Estimated useful life of intangible asset | 8 years |
Goodwill And Intangible Asset30
Goodwill And Intangible Assets (Summary Of Changes In Carrying Amount Of Goodwill) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($) | ||
Goodwill And Intangible Assets [Abstract] | ||
Balance at beginning of the period | $ 25,216 | |
Effects of changes in foreign currency exchange rates | 655 | [1] |
Balance at ending of the period | $ 25,871 | |
[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 Asset31
Goodwill And Intangible Assets (Summary Of Identifiable Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Net Carrying Amount | $ 5,457 | $ 5,613 |
Evolving Systems Labs And Evolving Systems NC, Inc [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 7,634 | 7,634 |
Accumulated Amortization | 2,177 | 2,021 |
Net Carrying Amount | $ 5,457 | $ 5,613 |
Weighted-Average Amortization Period | 6 years 9 months 18 days | 6 years 9 months 18 days |
Evolving Systems Labs And Evolving Systems NC, Inc [Member] | Purchased Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 2,921 | $ 2,921 |
Accumulated Amortization | 809 | 743 |
Net Carrying Amount | $ 2,112 | $ 2,178 |
Weighted-Average Amortization Period | 7 years 8 months 12 days | 7 years 8 months 12 days |
Evolving Systems Labs And Evolving Systems NC, Inc [Member] | Trademarks And Tradenames [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 310 | $ 310 |
Accumulated Amortization | 194 | 189 |
Net Carrying Amount | $ 116 | $ 121 |
Weighted-Average Amortization Period | 3 years 8 months 12 days | 3 years 8 months 12 days |
Evolving Systems Labs And Evolving Systems NC, Inc [Member] | Non-competition [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 40 | $ 40 |
Accumulated Amortization | 36 | 35 |
Net Carrying Amount | $ 4 | $ 5 |
Weighted-Average Amortization Period | 2 years | 2 years |
Evolving Systems Labs And Evolving Systems NC, Inc [Member] | Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 4,363 | $ 4,363 |
Accumulated Amortization | 1,138 | 1,054 |
Net Carrying Amount | $ 3,225 | $ 3,309 |
Weighted-Average Amortization Period | 8 years 8 months 12 days | 8 years 8 months 12 days |
Goodwill And Intangible Asset32
Goodwill And Intangible Assets (Summary Of Expected Future Amortization Expense Related To Identifiable Intangibles) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Twelve months ending September 30, | ||
2,019 | $ 960 | |
2,020 | 969 | |
2,021 | 959 | |
2,022 | 925 | |
2,023 | 641 | |
Thereafter | 1,003 | |
Net Carrying Amount | $ 5,457 | $ 5,613 |
Goodwill And Intangible Asset33
Goodwill And Intangible Assets (Pro Forma Information Includes Adjustments Amortization Of Intangible Assets) (Details) - EVOL BLS And Lumata Entities [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | $ 8,158 | $ 8,072 |
Earnings | $ 484 | $ 11 |
Balance Sheet Components (Accou
Balance Sheet Components (Accounts Payable And Accrued Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Components [Abstract] | ||
Accounts payable | $ 864 | $ 1,530 |
Accrued compensation and related expenses | 1,719 | 1,749 |
Accrued liabilities | 3,472 | 3,611 |
Accounts payable and accrued liabilities | $ 6,055 | $ 6,890 |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Common Stock [Member] | Dilutive [Member] | ||
Shares excluded from earnings per share calculation | 0.3 | 0.5 |
Earnings Per Share (Summary Of
Earnings Per Share (Summary Of Basic And Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Basic income per common share: | ||
Net income | $ 484 | $ 973 |
Basic weighted average shares outstanding | 12,077 | 11,921 |
Basic income per common share: | $ 0.04 | $ 0.08 |
Diluted income per common share: | ||
Net income | $ 484 | $ 973 |
Weighted average shares outstanding | 12,077 | 11,921 |
Effect of dilutive securities - options and restricted stock | 88 | 23 |
Diluted weighted average shares outstanding | 12,165 | 11,944 |
Diluted income per common share: | $ 0.04 | $ 0.08 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2013 | Jun. 30, 2010 | Jun. 30, 2007 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Compensation expense | $ 366 | $ 81 | |||||||
Restricted Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares restricted stock vested | 175,250 | 1,250 | |||||||
Number of shares restricted stock forfeited | 67,000 | 1,000 | |||||||
Restricted stock-based compensation expense | $ 300 | $ 41 | |||||||
Stock Options [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock options granted | 0 | 0 | |||||||
Vested period for stock awards granted | 4 years | 4 years | |||||||
Weighted average recognition period | 3 years 4 days | ||||||||
Fair value of stock options vested | $ 100 | $ 100 | |||||||
Cash received from exercise of stock options | $ 7 | ||||||||
Net settlement exercises shares issued | 235 | 13,112 | |||||||
Net settlement exercises shares cancelled | 70,352 | ||||||||
Stock Options [Member] | January 2018 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Percentage of vested stock awards granted | 20.00% | 20.00% | |||||||
Stock Options [Member] | One Year Anniversary Of Offering [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Percentage of vested stock awards granted | 10.00% | 10.00% | |||||||
Stock Options [Member] | Evenly Over Four Years [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Percentage of vested stock awards granted | 40.00% | 40.00% | |||||||
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 | 0 | ||||||||
Shares issued and outstanding | 600,000 | 700,000 | |||||||
2007 Stock Plan [Member] | Initial [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 3 years | ||||||||
2016 Stock Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized | 650,000 | 250,000 | |||||||
Shares available for grant | 100,000 | ||||||||
2016 Stock Plan [Member] | Initial [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 3 years | ||||||||
Stock Options And Restricted Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Total unrecognized compensation costs | $ 2,300 | ||||||||
Maximum [Member] | 2007 Stock Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Option expiration period | 10 years | ||||||||
Maximum [Member] | 2016 Stock 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 | ||||||||
Employees [Member] | 2016 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 | ||||||||
Directors [Member] | 2016 Stock Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period | 1 year | ||||||||
Board Members And Senior Management [Member] | Restricted Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Restricted stock granted in period | 0 | 542,000 | |||||||
Evolving Systems U.K. [Member] | Stock Options [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Deferred income tax benefits from stock option expense | $ 4 | $ 2 |
Share-Based Compensation (Summa
Share-Based Compensation (Summary Of Stock-Based Compensation Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share based compensation | $ 366 | $ 81 |
Cost Of Revenue, Excluding Depreciation And Amortization [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share based compensation | 13 | 7 |
Sales And Marketing [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share based compensation | 16 | 8 |
General And Administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share based compensation | 310 | 51 |
Product Development [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share based compensation | $ 27 | $ 15 |
Share-Based Compensation (Sum39
Share-Based Compensation (Summary Of Restricted Stock Activity) (Details) - Restricted Stock [Member] shares in Thousands | 3 Months Ended |
Mar. 31, 2018shares | |
Unvested restricted stock at December 31, 2017 | 597 |
Restricted stock granted | |
Less restricted stock forfeited/expired | 67 |
Less restricted stock vested | 175 |
Unvested restricted stock at March 31, 2018 | 355 |
Share-Based Compensation (Sum40
Share-Based Compensation (Summary Of Stock Option Activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Share-Based Compensation [Abstract] | ||
Number of Shares, Outstanding at beginning | 713 | |
Number of Shares, Less forfeited and cancelled | (66) | |
Number of Shares, Less options vested/exercised | 0 | |
Number of Shares, Outstanding at ending | 647 | 713 |
Number of Shares, Option exercisable at March 31, 2018 | 301 | |
Weighted-Average Exercise Price, Options outstanding at beginning | $ 5.71 | |
Weighted-Average Exercise Price, Less options forfeited and cancelled | 5.56 | |
Weighted-Average Exercise Price, Less options exercised | 1.34 | |
Weighted-Average Exercise Price, Options outstanding at ending | 5.73 | $ 5.71 |
Weighted-Average Exercise Price, Options exercisable at March 31, 2018 | $ 6.67 | |
Weighted-Average Remaining Contractual Term (Years), Options outstanding | 7 years 11 months 27 days | 8 years 2 months 23 days |
Weighted-Average Remaining Contractual Term (Years), Option exercisable at March 31, 2018 | 6 years 8 months 27 days | |
Aggregate Intrinsic Value, Options outstanding | $ 141 | $ 128 |
Aggregate Intrinsic Value, Options exercisable at March 31, 2018 | $ 65 |
Concentration Of Credit Risk (N
Concentration Of Credit Risk (Narrative) (Details) - customer | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Sales Revenue Net [Member] | Customer Concentration Risk [Member] | Minimum [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | ||
Sales Revenue Net [Member] | Customer One [Member] | Europe [Member] | |||
Concentration Risk [Line Items] | |||
Number of significant customers | 1 | 1 | |
Concentration risk, percentage | 11.00% | 10.00% | |
Contract Receivables And Unbilled Work-In-Progress [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Number of significant customers | 0 | ||
Concentration risk, percentage | 10.00% | ||
Contract Receivables And Unbilled Work-In-Progress [Member] | Customer One [Member] | Europe [Member] | |||
Concentration Risk [Line Items] | |||
Number of significant customers | 1 | ||
Concentration risk, percentage | 14.00% |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) € in Millions | Jul. 31, 2018USD ($) | Aug. 16, 2017EUR (€) | Aug. 16, 2017USD ($)item | Feb. 29, 2016USD ($)item | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017 | Jan. 01, 2017item |
Debt Instrument [Line Items] | ||||||||
Payments for debt issuance costs | $ 19,000 | |||||||
Term Loan [Member] | East West Bank [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Loan amount | $ 6,000,000 | |||||||
Rate plus prime rate | 1.00% | |||||||
Number of monthly installments of principal | item | 36 | |||||||
Number of payment for annual credit facility fees | item | 2 | |||||||
Credit facility fees | $ 18,750 | |||||||
Legal fee | 1,000 | |||||||
Cash balances to pay off revolving facilities | $ 4,000,000 | |||||||
Maturity date | Jan. 1, 2020 | |||||||
Term Loan [Member] | East West Bank [Member] | Prime Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 4.75% | |||||||
Loan Facility [Member] | Lumata Entities [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Business combination payment | € 4 | $ 4,800,000 | ||||||
Loan Facility [Member] | East West Bank [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of monthly installments of principal | item | 4 | |||||||
Maturity date | Aug. 16, 2021 | Aug. 16, 2021 | ||||||
Origination fee | $ 23,650 | |||||||
Increment amount | $ 50,000 | |||||||
Prepayment fee percentage | 2.00% | 2.00% | ||||||
Loan Facility [Member] | East West Bank [Member] | Forecast [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Monthly principal payment | $ 131,400 | |||||||
Interest rate | 3.50% | |||||||
Rate plus prime rate | 1.50% | |||||||
Loan Facility [Member] | East West Bank [Member] | Lumata Entities [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Loan amount | $ 4,700,000 | |||||||
Loan Facility [Member] | East West Bank [Member] | Prime Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 4.75% | 4.50% | ||||||
Term Loan And Loan Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Loan amount | $ 8,200,000 | |||||||
Payments for debt issuance costs | $ 2,000 | |||||||
Term Loan And Loan Facility [Member] | East West Bank [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving Facilities Loan and Security Agreement amount to pay off and terminate | $ 10,000,000 | |||||||
Minimum [Member] | Loan Facility [Member] | East West Bank [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Prepayment amount | $ 250,000 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018USD ($)item | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2015entity | |
Income Taxes [Line Items] | ||||
Net income tax expense | $ 95 | $ 350 | ||
Deferred tax expense (benefit) | $ 100 | $ (100) | ||
Effective tax rate | 16.00% | 27.00% | 35.00% | |
Deferred tax assets | $ 396 | $ 274 | ||
Research and experimentation credit carryforwards | 303 | 303 | ||
Alternative minimum tax credits | 770 | 770 | ||
Foreign tax credits carryforwards | 4,731 | 4,731 | ||
Unrecognized tax benefits | $ 0 | $ 0 | ||
Number of Indian subsidiaries acquired pursuant to the merger terms | entity | 2 | |||
Number of income tax returns under examination | item | 0 | |||
Indian Operations [Member] | ||||
Income Taxes [Line Items] | ||||
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 | |||
U.K. and India Operations [Member] | ||||
Income Taxes [Line Items] | ||||
Current income tax expense | $ 400 | |||
U.S., U.K. and India Operations [Member] | ||||
Income Taxes [Line Items] | ||||
Current income tax expense | $ 200 | |||
Scenario, Plan [Member] | ||||
Income Taxes [Line Items] | ||||
Effective tax rate | 21.00% |
Income Taxes (Components Of Def
Income Taxes (Components Of Deferred Tax Assets And Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Foreign tax credits carryforwards | $ 4,731 | $ 4,731 |
Net operating loss carryforwards | 3,811 | 3,294 |
Research & development credits | 303 | 303 |
AMT credits | 770 | 770 |
Stock compensation | 652 | 570 |
Depreciable assets | 46 | 33 |
Accrued liabilities and reserves | 182 | 66 |
Total deferred tax assets | 10,495 | 9,767 |
Deferred tax liabilities: | ||
Intangibles | (1,066) | (1,045) |
Accrued liabilities and reserves | (196) | (120) |
Total deferred tax liability | (1,262) | (1,165) |
Net deferred tax assets, before valuation allowance | 9,233 | 8,602 |
Valuation allowance | (8,837) | (8,328) |
Net deferred tax asset | $ 396 | $ 274 |
Geographical Information (Long-
Geographical Information (Long-Lived Assets, Net By Geographic Region) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Long-lived assets, net | $ 31,564 | $ 31,087 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets, net | 11,098 | 11,276 |
United Kingdom [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets, net | 18,599 | 17,968 |
Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets, net | $ 1,867 | $ 1,843 |
Commitments And Contingencies (
Commitments And Contingencies (Narrative) (Details) - USD ($) $ in Thousands | Jul. 03, 2017 | Sep. 30, 2015 | Oct. 24, 2013 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Indemnification Agreement [Member] | Insurance Policy Coverage [Member] | ||||||
Other Commitments [Line Items] | ||||||
Liabilities | $ 0 | $ 0 | ||||
Indemnification Agreement [Member] | Customers And Suppliers [Member] | ||||||
Other Commitments [Line Items] | ||||||
Liabilities | 0 | 0 | ||||
Indemnification Agreement [Member] | Product Warranty [Member] | ||||||
Other Commitments [Line Items] | ||||||
Liabilities | $ 0 | 0 | ||||
Telespree [Member] | ||||||
Other Commitments [Line Items] | ||||||
Acquisition date | Oct. 24, 2013 | |||||
Initial payment | $ 500 | |||||
SSM [Member] | ||||||
Other Commitments [Line Items] | ||||||
Acquisition date | Sep. 30, 2015 | |||||
Initial payment | $ 300 | |||||
EVOL BLS [Member] | ||||||
Other Commitments [Line Items] | ||||||
Acquisition date | Jul. 3, 2017 | |||||
Percentage of revenue over defined threshold levels | 50.00% | |||||
Amount of revenue over defined threshold levels percentage | $ 800 | |||||
Revenue over defined threshold levels period | 3 years | |||||
EVOL BLS [Member] | Estimated [Member] | ||||||
Other Commitments [Line Items] | ||||||
Earnout | $ 400 | $ 400 | ||||
EVOL BLS [Member] | Minimum [Member] | ||||||
Other Commitments [Line Items] | ||||||
Amount of revenue over defined threshold levels percentage | $ 4,800 |