Xo 10-Q 8 May 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2015	1-May-15
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	FALSE
Document Period End Date	31-Mar-15
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Trading Symbol	XOXO
Entity Registrant Name	XO GROUP INC.
Entity Central Index Key	1062292
Current Fiscal Year End Date	-19
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		26,452,473

CONDENSED_CONSOLIDATED_BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2015	Dec. 31, 2014
In Thousands, unless otherwise specified
Current assets:
Cash and cash equivalents	$82,672	$89,955
Accounts receivable, net of allowances of $3,019 and $2,756 at March 31, 2015 and December 31, 2014, respectively	16,182	15,785
Deferred tax assets, net	3,052	3,052
Prepaid expenses and other current assets	4,604	4,696
Total current assets	106,510	113,488
Long-term restricted cash	2,600	2,600
Property and equipment, net	14,985	15,125
Goodwill and intangibles, net	43,532	43,558
Deferred tax assets, net	12,781	13,110
Investments	5,495	5,501
Other assets	152	200
Total assets	186,055	193,582
Current liabilities:
Accounts payable and accrued expenses	8,617	12,463
Deferred revenue	16,947	16,236
Total current liabilities	25,564	28,699
Deferred rent	4,996	5,167
Other liabilities	1,229	1,790
Total liabilities	31,789	35,656
Commitments and contingencies (Note 5)
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized and 0 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively	0	0
Common stock, $0.01 par value; 100,000,000 shares authorized and 26,468,413 and 26,630,507 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively	266	267
Additional paid-in-capital	170,672	171,951
Accumulated other comprehensive income	0	35
Accumulated deficit	-16,672	-14,327
Total stockholders’ equity	154,266	157,926
Total liabilities and stockholders’ equity	$186,055	$193,582

CONDENSED_CONSOLIDATED_BALANCE1

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
In Thousands, except Share data, unless otherwise specified
Statement of Financial Position [Abstract]
Accounts Receivable, allowances	$3,019	$2,756
Preferred stock, par value	$0.00	$0.00
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$0.01	$0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	26,468,413	26,630,507
Common stock, shares outstanding	26,468,413	26,630,507

CONDENSED_CONSOLIDATED_STATEME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Net revenue:
Online advertising	$23,916	$21,349
Registry and commerce	2,294	1,886
Merchandise	878	3,653
Publishing and other	5,514	5,532
Total net revenue	32,602	32,420
Cost of revenue:
Online advertising	354	463
Merchandise	881	2,366
Publishing and other	1,420	1,631
Total cost of revenue	2,655	4,460
Gross profit	29,947	27,960
Operating expenses:
Product and content development	9,554	8,873
Sales and marketing	10,622	11,113
General and administrative	6,090	7,065
Depreciation and amortization	1,245	1,677
Total operating expenses	27,511	28,728
Income (loss) from operations	2,436	-768
Loss in equity interests	-6	-60
Interest and other income (expense), net	-23	-25
Income (loss) before income taxes	2,407	-853
Income tax expense (benefit)	962	-177
Net income (loss)	$1,445	($676)
Net income (loss) per share:
Basic (usd per share)	$0.06	($0.03)
Diluted (usd per share)	$0.06	($0.03)
Weighted average number of shares used in calculating net earnings per share:
Basic (shares)	25,174	24,908
Diluted (shares)	25,624	24,908
Restricted stock
Weighted average number of shares used in calculating net earnings per share:
Dilutive securities included in dilutive shares (shares)	425	0
Options
Weighted average number of shares used in calculating net earnings per share:
Dilutive securities included in dilutive shares (shares)	25	0

CONDENSED_CONSOLIDATED_STATEME1

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Statement of Comprehensive Income [Abstract]
Net income (loss)	$1,445	($676)
Other comprehensive income:
Foreign currency translation adjustments	0	44
Total comprehensive income (loss)	$1,445	($632)

CONDENSED_CONSOLIDATED_STATEME2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$1,445	($676)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	1,245	1,677
Stock-based compensation expense	1,480	1,188
Deferred income taxes	329	-46
Excess tax benefits from stock-based awards	-747	-930
Allowance for doubtful accounts	544	252
Other non-cash charges	-84	181
Changes in operating assets and liabilities:
Increase in accounts receivable	-641	-2,109
Decrease (increase) in other assets	633	-1,168
Decrease in accounts payable and accrued expenses	-3,836	-948
Increase in deferred revenue	711	1,789
Decrease in deferred rent	-171	-183
(Decrease) increase in other liabilities, net	-24	16
Net cash provided by (used in) operating activities	884	-957
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	-220	-281
Additions to capitalized software	-1,015	-725
Proceeds from the sale of property and equipment	185	0
Payment to acquire investment	0	-4,000
Other investing activities	-31	-5
Acquisitions, net of cash acquired	0	-5,724
Net cash used in investing activities	-1,081	-10,735
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of common stock	-5,993	-615
Proceeds pursuant to employee stock-based compensation plans	186	187
Excess tax benefits from stock-based awards	747	930
Surrender of restricted common stock for income tax purposes	-2,026	-4,025
Net cash used in financing activities	-7,086	-3,523
Decrease in cash and cash equivalents	-7,283	-15,215
Cash and cash equivalents at beginning of period	89,955	90,697
Cash and cash equivalents at end of period	$82,672	$75,482

Organization_and_Basis_of_Pres

Organization and Basis of Presentation	3 Months Ended
	Mar. 31, 2015
Accounting Policies [Abstract]
Organization and Basis of Presentation	Organization and Basis of Presentation
	The accompanying unaudited condensed consolidated financial statements include the accounts of XO Group Inc. (“XO Group” or the “Company”) and its wholly-owned subsidiaries. The condensed consolidated financial statements included in this report have been prepared by the Company pursuant to the rules and regulations of the SEC. Certain information and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. Certain prior year financial statement line items have been reclassified to conform to the current year’s presentation. The Company believes that the disclosures are adequate to make the information presented not misleading. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2014.
	In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial condition, results of operations and changes in cash flows of the Company for the interim periods presented. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of results to be expected for the entire calendar year.
	Earnings per Share
	The calculation of diluted earnings per share for the three months ended March 31, 2015 excludes a weighted average number of stock options, restricted stock and ESPP shares of 150,000, 57,389 and 1,049, respectively, because to include them would be antidilutive. The calculation of diluted earnings per share for the three months ended March 31, 2014 excludes a weighted average number of stock options and restricted stock of 150,000 and 107,793, respectively, because to include them would be antidilutive.
	Recently Issued Accounting Pronouncements
	In May 2014, the accounting standard relating to revenue from contracts with customers was updated to clarify the principles for recognizing revenue and develop a common standard for all industries. The new guidance is effective for reporting periods beginning after December 15, 2016. An update to the May 2014 guidance has been proposed to revise the effective date to reporting periods beginning after December 15, 2017. Entities have the option of using either a full retrospective or cumulative effect approach to adopt the new standard. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements or the method of adoption.

Fair_Value_Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2015
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements
	Cash and cash equivalents and investments consist of the following:
		March 31,		December 31,
		2015		2014
		(In Thousands)
	Cash and cash equivalents
	Cash	$	19,901	$	27,186
	Restricted cash	525		525
	Money market funds	62,246		62,244
	Total cash and cash equivalents	82,672		89,955
	Long-term investments
	Long-term restricted cash	2,600		2,600
	Total cash and cash equivalents and investments	$	85,272	$	92,555
	The inputs to the valuation techniques used to measure fair value are classified into the following categories:
	Level 1 — Quoted prices in active markets for identical assets or liabilities
	Level 2 — Quoted prices for similar assets and liabilities in active markets or inputs that are observable
	Level 3 — Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)
	As of March 31, 2015, the Company’s investment in cash and cash equivalents of $82.7 million, and long-term restricted cash on the condensed consolidated balance sheets of $2.6 million, were measured at fair value using Level 1 inputs. During the three months ended March 31, 2015, there were no transfers in or out of the Company’s Level 1 assets.

Stockholders_Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	Stockholders’ Equity
	The Company maintains several stock-based compensation plans, which are more fully described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.
	During the three months ended March 31, 2015, common stock outstanding decreased by 162,094 shares as a result of (i) the issuance of 290,473 shares of restricted common stock, net of cancellations, and (ii) the issuance of 19,590 shares of common stock pursuant to the employee stock purchase plan, offset by (iii) 342,508 shares of common stock repurchased and retired and (iv) 129,649 shares of restricted common stock surrendered for income tax purposes. During the three months ended March 31, 2015, 215,851 shares of restricted common stock vested.
	Stock-Based Compensation
	The Company included total stock-based compensation expense related to all its stock awards in various operating expense categories for the three months ended March 31, 2015 and 2014, as follows:
		Three Months Ended March 31,
		2015		2014
		(In Thousands)
	Product and content development	$	584	$	443
	Sales and marketing	370		239
	General and administrative	526		506
	Total stock-based compensation	$	1,480	$	1,188

Supplemental_Balance_Sheet_and

Supplemental Balance Sheet and Cash Flow Information	3 Months Ended
	Mar. 31, 2015
Supplemental Balance Sheet and Cash Flow Information [Abstract]
Supplemental Balance Sheet and Cash Flow Information	Supplemental Balance Sheet and Cash Flow Information
	The components of certain balance sheet accounts and supplemental cash flow information are as follows:
		March 31,		December 31,
		2015		2014
		(In Thousands)
	Prepaid expenses and other current assets
	Taxes	$	1,789	$	786
	Software licenses and maintenance	1,297		1,538
	Compensation and employee benefits	525		496
	Deferred production and marketing costs	117		147
	Inventory - raw materials	—		371
	Inventory - finished goods	—		269
	Other	876		1,089
	Total prepaid expenses and other current assets	$	4,604	$	4,696
	Accounts payable and accrued expenses
	Compensation and employee benefits	$	2,722	$	6,339
	Accounts payable	2,129		2,540
	Foreign taxes	321		528
	Other accrued expenses	3,445		3,056
	Total accounts payable and accrued expenses	$	8,617	$	12,463
		Three Months Ended March 31,
		2015		2014
	Cash paid for income taxes	$	1,008	$	232
	During the first quarter of 2015, all of the Company’s inventory was sold in conjunction with the closure of their merchandise operations in Redding, CA. Inventory reserves were $0.9 million as of December 31, 2014.
	The Company made payments of $0.3 million during the first quarter of 2015 related to separation charges incurred in conjunction with the closure of their merchandise operations, thus eliminating their restructuring liability that was recorded within accounts payable and accrued expenses on the consolidated balance sheet as of December 31, 2014. During the first quarter of 2015, the Company incurred additional charges related to the closure of their merchandise operations of $0.4 million.
	Amortization of capitalized software was $0.7 million for the three months ended March 31, 2015, compared to $0.5 million for the three months ended March 31, 2014.

Commitments_and_Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies
	The Company has guaranteed certain obligations relating principally to operating leases and a letter of credit. As of March 31, 2015, the Company also has guarantees related to purchase orders.
	As of March 31, 2015, the Company was engaged in certain legal actions arising in the ordinary course of business and believes that the ultimate outcome of these actions will not have a material effect on its results of operations, financial position or cash flows.
	In connection with the sale of our Ijie operations, the Company has agreed to indemnify the buyers for certain liabilities that may arise related to events prior to the sale transaction or breach of our covenants under the sale agreement.

Organization_and_Basis_of_Pres1

Organization and Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2015
Accounting Policies [Abstract]
Earnings per Share	Earnings per Share
	The calculation of diluted earnings per share for the three months ended March 31, 2015 excludes a weighted average number of stock options, restricted stock and ESPP shares of 150,000, 57,389 and 1,049, respectively, because to include them would be antidilutive. The calculation of diluted earnings per share for the three months ended March 31, 2014 excludes a weighted average number of stock options and restricted stock of 150,000 and 107,793, respectively, because to include them would be antidilutive.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements
	In May 2014, the accounting standard relating to revenue from contracts with customers was updated to clarify the principles for recognizing revenue and develop a common standard for all industries. The new guidance is effective for reporting periods beginning after December 15, 2016. An update to the May 2014 guidance has been proposed to revise the effective date to reporting periods beginning after December 15, 2017. Entities have the option of using either a full retrospective or cumulative effect approach to adopt the new standard. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its consolidated financial statements or the method of adoption.

Fair_Value_Measurements_Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2015
Fair Value Disclosures [Abstract]
Cash and Cash Equivalents, Restricted Cash and Investments	Cash and cash equivalents and investments consist of the following:
		March 31,		December 31,
		2015		2014
		(In Thousands)
	Cash and cash equivalents
	Cash	$	19,901	$	27,186
	Restricted cash	525		525
	Money market funds	62,246		62,244
	Total cash and cash equivalents	82,672		89,955
	Long-term investments
	Long-term restricted cash	2,600		2,600
	Total cash and cash equivalents and investments	$	85,272	$	92,555

Stockholders_Equity_Tables

Stockholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs	The Company included total stock-based compensation expense related to all its stock awards in various operating expense categories for the three months ended March 31, 2015 and 2014, as follows:
		Three Months Ended March 31,
		2015		2014
		(In Thousands)
	Product and content development	$	584	$	443
	Sales and marketing	370		239
	General and administrative	526		506
	Total stock-based compensation	$	1,480	$	1,188

Supplemental_Balance_Sheet_and1

Supplemental Balance Sheet and Cash Flow Information (Tables)	3 Months Ended
	Mar. 31, 2015
Supplemental Balance Sheet and Cash Flow Information [Abstract]
Supplemental balance sheet information	The components of certain balance sheet accounts and supplemental cash flow information are as follows:
		March 31,		December 31,
		2015		2014
		(In Thousands)
	Prepaid expenses and other current assets
	Taxes	$	1,789	$	786
	Software licenses and maintenance	1,297		1,538
	Compensation and employee benefits	525		496
	Deferred production and marketing costs	117		147
	Inventory - raw materials	—		371
	Inventory - finished goods	—		269
	Other	876		1,089
	Total prepaid expenses and other current assets	$	4,604	$	4,696
	Accounts payable and accrued expenses
	Compensation and employee benefits	$	2,722	$	6,339
	Accounts payable	2,129		2,540
	Foreign taxes	321		528
	Other accrued expenses	3,445		3,056
	Total accounts payable and accrued expenses	$	8,617	$	12,463
		Three Months Ended March 31,
		2015		2014
	Cash paid for income taxes	$	1,008	$	232

Organization_and_Basis_of_Pres2

Organization and Basis of Presentation (Details)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	150,000	150,000
Restricted stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	57,389	107,793
Employee Stock Purchase Plan
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,049

Fair_Value_Measurements_Additi

Fair Value Measurements - Additional Information (Detail) (USD $)	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Cash and cash equivalents
Cash	$19,901	$27,186
Restricted cash	525	525
Money market funds	62,246	62,244
Total cash and cash equivalents	82,672	89,955	75,482	90,697
Long-term investments
Long-term restricted cash	2,600	2,600
Total cash and cash equivalents and investments	85,272	92,555
Fair Value, Inputs, Level 1
Long-term investments
Cash and Cash Equivalents, Fair Value Disclosure	82,700
Restricted Cash And Cash Equivalents Noncurrent Fair Value Disclosure	$2,600

Stockholders_Equity_Details

Stockholders' Equity (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Decrease in common stock	162,094
Common stock, shares outstanding	26,468,413		26,630,507
Restricted Stock, Value, Shares Issued Net of Tax Withholdings	290,473
Stock Issued During Period, Shares, Employee Stock Purchase Plans	19,590
Stock Repurchased and Retired During Period, Shares	342,508
Shares Surrendered By Employees To Pay Taxes	$129,649
Stock-based compensation expense	1,480,000	1,188,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	215,851
Product and content development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	584,000	443,000
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	370,000	239,000
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$526,000	$506,000

Supplemental_Balance_Sheet_and2

Supplemental Balance Sheet and Cash Flow Information (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Accounts Payable and Accrued Liabilities [Abstract]
Employee-related Liabilities, Current	$2,722,000		$6,339,000
Accounts Payable, Current	2,129,000		2,540,000
Taxes Payable, Current	321,000		528,000
Other Accrued Liabilities, Current	3,445,000		3,056,000
Accounts Payable and Accrued Liabilities, Current	8,617,000		12,463,000
Prepaid Expense and Other Assets, Current [Abstract]
Deferred production and marketing costs	1,789,000		786,000
Inventory - raw materials	1,297,000		1,538,000
Inventory - finished goods	525,000		496,000
Deferred Costs	117,000		147,000
Taxes	0		371,000
Software licenses and maintenance	0		269,000
Other	876,000		1,089,000
Total prepaid expenses and other current assets	4,604,000		4,696,000
Supplemental Balance Sheet and Cash Flow Information [Abstract]
Inventory Valuation Reserves			900,000
Severance Costs	300,000
Business Exit Costs	400,000
Finite-Lived Intangible Assets [Line Items]
Income Taxes Paid, Net	1,008	232
Software and Software Development Costs [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization	$700,000	$500,000