Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Jul. 31, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'STAMPS.COM INC | ' |
Entity Central Index Key | '0001082923 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 15,875,163 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Jun-14 | ' |
CONSOLIDATED_BALANCE_SHEETS_un
CONSOLIDATED BALANCE SHEETS (unaudited) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $33,812 | $66,674 |
Short-term investments | 6,128 | 6,524 |
Accounts receivable, net | 9,191 | 17,504 |
Other current assets | 6,490 | 6,541 |
Total current assets | 55,621 | 97,243 |
Property and equipment, net | 29,526 | 29,763 |
Goodwill | 50,544 | 0 |
Intangible assets, net | 16,043 | 1,047 |
Long-term investments | 12,860 | 14,012 |
Deferred income taxes | 43,896 | 40,262 |
Other assets | 7,119 | 4,791 |
Total assets | 215,609 | 187,118 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 16,720 | 13,928 |
Deferred revenue | 1,565 | 1,425 |
Contingent consideration, current | 5,610 | 0 |
Total current liabilities | 23,895 | 15,353 |
Contingent consideration, long-term | 10,632 | 0 |
Commitments and contingencies | ' | ' |
Total liabilities | 34,527 | 15,353 |
Stockholders' equity: | ' | ' |
Common stock, $.001 par value Authorized shares: 47,500 in 2014 and 2013 Issued shares: 28,619 in 2014 and 28,518 in 2013 Outstanding shares: 15,853 in 2014 and 16,187 in 2013 | 51 | 51 |
Additional paid-in capital | 672,444 | 668,724 |
Accumulated deficit | -319,120 | -337,628 |
Treasury stock, at cost, 12,766 shares in 2014 and 12,331 in 2013 | -172,410 | -159,522 |
Accumulated other comprehensive income | 117 | 140 |
Total stockholders' equity | 181,082 | 171,765 |
Total liabilities and stockholders' equity | $215,609 | $187,118 |
CONSOLIDATED_BALANCE_SHEETS_un1
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Stockholders' equity | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in shares) | 47,500 | 47,500 |
Common stock, shares issued (in shares) | 28,619 | 28,518 |
Common stock, shares outstanding (in shares) | 15,853 | 16,187 |
Treasury stock shares (in shares) | 12,766 | 12,331 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenues: | ' | ' | ' | ' |
Service | $26,921 | $24,888 | $52,564 | $49,736 |
Product | 3,955 | 4,075 | 8,568 | 8,551 |
Insurance | 2,047 | 1,917 | 4,040 | 3,663 |
PhotoStamps | 1,359 | 1,229 | 2,408 | 2,259 |
Other | 2 | 0 | 2 | 1 |
Total revenues | 34,284 | 32,109 | 67,582 | 64,210 |
Cost of revenues: | ' | ' | ' | ' |
Service | 4,449 | 4,015 | 8,818 | 8,570 |
Product | 1,292 | 1,382 | 2,834 | 3,007 |
Insurance | 717 | 676 | 1,405 | 1,317 |
PhotoStamps | 1,158 | 1,015 | 2,004 | 1,846 |
Total cost of revenues | 7,616 | 7,088 | 15,061 | 14,740 |
Gross profit | 26,668 | 25,021 | 52,521 | 49,470 |
Operating expenses: | ' | ' | ' | ' |
Sales and marketing | 10,663 | 9,792 | 22,033 | 20,175 |
Research and development | 3,036 | 2,718 | 5,952 | 5,343 |
General and administrative | 5,350 | 3,966 | 9,547 | 7,592 |
Total operating expenses | 19,049 | 16,476 | 37,532 | 33,110 |
Income from operations | 7,619 | 8,545 | 14,989 | 16,360 |
Interest and other income, net | 89 | 95 | 225 | 249 |
Income before income taxes | 7,708 | 8,640 | 15,214 | 16,609 |
Income tax expense (benefit) | -3,466 | 27 | -3,294 | 90 |
Net income | $11,174 | $8,613 | $18,508 | $16,519 |
Net income per share | ' | ' | ' | ' |
Basic (in dollars per share) | $0.70 | $0.56 | $1.15 | $1.07 |
Diluted (in dollars per share) | $0.68 | $0.53 | $1.12 | $1.03 |
Weighted average shares outstanding | ' | ' | ' | ' |
Basic (in shares) | 15,993 | 15,486 | 16,107 | 15,407 |
Diluted (in shares) | 16,378 | 16,163 | 16,521 | 16,082 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) [Abstract] | ' | ' | ' | ' |
Net income | $11,174 | $8,613 | $18,508 | $16,519 |
Other comprehensive income: | ' | ' | ' | ' |
Unrealized loss on investments | -14 | -64 | -23 | -103 |
Comprehensive income | $11,160 | $8,549 | $18,485 | $16,416 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Operating activities: | ' | ' |
Net income | $18,508 | $16,519 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 1,735 | 1,140 |
Stock-based compensation expense | 1,942 | 2,223 |
Deferred income tax | -3,634 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 8,567 | 3,178 |
Other current assets | -250 | -1,138 |
Other assets | -2,328 | -720 |
Deferred revenue | -124 | -110 |
Accounts payable and accrued expenses | 2,513 | -564 |
Net cash provided by operating activities | 26,929 | 20,528 |
Investing activities: | ' | ' |
Sale of short-term investments | 4,271 | 4,138 |
Purchase of short-term investments | -3,902 | -4,159 |
Sale of long-term investments | 4,024 | 4,429 |
Purchase of long-term investments | -2,868 | -34 |
Purchase of property and equipment | -1,323 | -3,011 |
Acquisition of ShipStation (net of cash acquired) | -48,883 | 0 |
Net cash (used in) provided by investing activities | -48,681 | 1,363 |
Financing activities: | ' | ' |
Proceeds from exercise of stock options | 1,122 | 5,677 |
Issuance of common stock under ESPP | 656 | 517 |
Repurchase of common stock | -12,888 | -4,311 |
Net cash (used in) provided by financing activities | -11,110 | 1,883 |
Net (decrease) increase in cash and cash equivalents | -32,862 | 23,774 |
Cash and cash equivalents at beginning of period | 66,674 | 29,576 |
Cash and cash equivalents at end of period | 33,812 | 53,350 |
Supplemental Information: | ' | ' |
Capital expenditures accrued but not paid at period end | $15 | $206 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended | |
Jun. 30, 2014 | ||
Summary of Significant Accounting Policies [Abstract] | ' | |
Summary of Significant Accounting Policies | ' | |
1 | Summary of Significant Accounting Policies | |
Basis of Presentation | ||
We prepared the consolidated financial statements included herein without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. We believe that the disclosures are adequate to make the information presented not misleading. We recommend that these financial statements be read in conjunction with the audited financial statements and the notes thereto included in our latest annual report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on March 17, 2014. | ||
In our opinion, these unaudited financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly our financial position as of June 30, 2014, our results of operations for the three and six months ended June 30, 2014 and our cash flows for the six months ended June 30, 2014. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. | ||
Principles of Consolidation | ||
The consolidated financial statements include the accounts of Stamps.com Inc., ShipStation and PhotoStamps Inc. In June 2014, we completed our acquisition of ShipStation by purchasing 100% of the outstanding equity of Auctane LLC, the Texas limited liability company that operates ShipStation (“Auctane LLC”) in a cash and stock transaction. ShipStation, based in Austin, Texas, offers monthly subscription based e-commerce shipping software primarily under the brand ShipStation and Auctane (see Note 2 – “Acquisition”). Because 100% of the voting control of Auctane LLC is held by us, we have consolidated ShipStation, from the date we obtained control and PhotoStamps Inc. in the accompanying consolidated financial statements. All significant intercompany accounts and transactions have been eliminated. | ||
Use of Estimates and Risk Management | ||
The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates, and such differences may be material to the financial statements. Examples include estimates of loss contingencies, promotional coupon redemptions, the number of PhotoStamps retail boxes that will not be redeemed, deferred income taxes and estimates regarding the useful lives of our building, patents and other amortizable intangible assets. | ||
Contingencies and Litigation | ||
We are subject to various routine litigation matters as a claimant and a defendant. We record any amounts recovered in these matters when received. We record liabilities for claims against us when the loss is probable and estimable. Amounts recorded are based on reviews by outside counsel, in-house counsel and management. Actual results could differ from estimates. | ||
Fair Value of Financial Instruments | ||
Carrying amounts of certain of our financial instruments, including cash, cash equivalents, accounts receivable and accounts payable, approximate fair value due to their short maturities. The fair values of investments are determined using quoted market prices for those securities or similar financial instruments. | ||
The fair value of contingent consideration is determined using a series of options that replicate the pay-off structure of the earn-out, and the value of each of these options was determined using the Black-Scholes-Merton option pricing framework (see Note 2 - “Acquisition” for further description). | ||
Goodwill | ||
Goodwill represents the excess of the fair value of consideration given over the fair value of the tangible assets, identifiable intangible assets and liabilities assumed in a business combination. We are required to test goodwill for impairment annually and whenever events or circumstances indicate the fair value of a reporting unit may be below its carrying value. | ||
Trademarks, Patents and Intangible Assets | ||
Acquired trademarks, patents and other intangibles include both amortizable and non-amortizable assets and are included in intangible assets, net in the accompanying consolidated balance sheets. Intangible assets are carried at cost less accumulated amortization. Cost associated with internally developed intangible assets is typically expensed as incurred as research and development costs. Amortization of amortizable intangible assets is calculated on a straight-line basis over the estimated useful lives of the assets, ranging from approximately 4 to 17 years. | ||
Property and Equipment | ||
We account for property and equipment at cost less accumulated depreciation and amortization. We compute depreciation using the straight-line method over the estimated useful life of the asset, generally three to five years for furniture, fixtures and equipment and ten to forty years for building and building improvements. We have a policy of capitalizing expenditures that materially increase assets’ useful lives and charging ordinary maintenance and repairs to operations as incurred. When property or equipment is disposed of, the cost and related accumulated depreciation and amortization are removed, and any gain or loss is included in operations. | ||
Income Taxes | ||
We account for income taxes in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic No. 740, Income Taxes (“ASC 740”), which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the net deferred tax assets will not be realized. We record a valuation allowance to reduce our gross deferred tax assets, which are primarily comprised of U.S. Federal and State tax loss carry-forwards, to the amount that is more likely than not (a likelihood of more than 50 percent) to be realized. In order for us to realize our deferred tax assets, we must be able to generate sufficient taxable income. We evaluate the appropriateness of our deferred tax assets and related valuation allowance in accordance with ASC 740 based on all available positive and negative evidence. | ||
Revenue Recognition | ||
We recognize revenue from product sales or services rendered, as well as commissions from advertising or sale of products by third party vendors to our customer base when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable, and collectability is reasonably assured. | ||
Service revenue is primarily derived from monthly subscription and transaction fees and is recognized in the period that services are provided. Product sales, net of return allowances, are recorded when the products are shipped and title passes to customers. Sales of items, including PhotoStamps, sold to customers are made pursuant to a sales contract that provides for transfer of both title and risk of loss upon our delivery to the carrier. Return allowances for expected product returns, which reduce product revenue, are estimated using historical experience. Commissions from the advertising or sale of products by a third party vendor to our customer base are recognized when the revenue is earned and collection is deemed probable. | ||
Customers pay face value for postage purchased for use through our mailing and shipping software, and the funds are transferred directly from the customers to the United States Postal Service (“USPS”). We do not recognize revenue for this postage, as it is purchased by our customers directly from the USPS. | ||
PhotoStamps revenue, which includes the face value of postage, from the sale of PhotoStamps sheets and rolls is made pursuant to a sales contract that provides for transfer of both title and risk of loss upon our delivery to the carrier. | ||
Sale of PhotoStamps retail boxes are initially recorded as deferred revenue. PhotoStamps revenue related to the sale of these PhotoStamps retail boxes is subsequently recognized when either: 1) the PhotoStamps retail box is redeemed, or 2) the likelihood of the PhotoStamps retail box being redeemed is deemed remote (“breakage”) and there is no legal obligation to remit the value of the unredeemed PhotoStamps retail boxes. | ||
On a limited basis, we allow third parties to offer products and promotions to our customer base. These arrangements generally provide payment in the form of a flat fee or revenue sharing arrangements where we receive payment upon customers accessing third party products and services. Total revenue from such advertising arrangements was not significant during the three and six months ended June 30, 2014 and 2013. | ||
We provide our customers with the opportunity to purchase parcel insurance directly through our software. Insurance revenue represents the gross amount charged to the customer for purchasing insurance and the related cost represents the amount paid to the insurance broker, Parcel Insurance Plan. We recognize revenue on insurance purchases upon the ship date of the insured package. | ||
PhotoStamps Retail Boxes | ||
We sell PhotoStamps retail boxes that are redeemable for PhotoStamps on our website. The PhotoStamps retail boxes are sold through various third party retail partners. Our PhotoStamps retail boxes are not subject to administrative fees on unredeemed boxes and have no expiration date. PhotoStamps retail box sales are recorded as deferred revenue. We concluded that sufficient company-specific historical evidence existed to determine the period of time after which the likelihood of the PhotoStamps retail boxes being redeemed was remote. Based on our analysis of the redemption data, we estimate that period of time to be 60 months after the sale of our PhotoStamps retail boxes. | ||
We recognize breakage revenue related to our PhotoStamps retail boxes utilizing the redemption recognition method. Under the redemption recognition method, we recognize breakage revenue from unredeemed retail boxes in proportion to the revenue recognized from the retail boxes that have been redeemed. Revenue from our PhotoStamps retail boxes is included in PhotoStamps revenue. PhotoStamps retail box breakage revenue during the second quarter of 2014 and 2013 was not significant to our consolidated financial statements. | ||
Subsequent Events | ||
We are not aware of any material subsequent events or transactions that have occurred that would require recognition in the financial statements or disclosure in the notes to the consolidated financial statements. |
Acquisition
Acquisition | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Acquisition [Abstract] | ' | ||||||||||||||||
Acquisition | ' | ||||||||||||||||
2 | Acquisition | ||||||||||||||||
ShipStation Acquisition and Contingent Consideration | |||||||||||||||||
On June 10, 2014, we acquired 100% of the outstanding equity of Auctane LLC, which operates ShipStation, in a cash and contingent stock transaction. ShipStation, based in Austin, Texas, offers monthly subscription based e-commerce shipping software primarily under the brand ShipStation and Auctane. ShipStation is a leading web-based shipping software solution that allows online retailers and e-commerce merchants to organize, process, fulfill and ship their orders quickly and easily. ShipStation supports automatic order importing from over 40 shopping carts and marketplaces, including eBay, Amazon, Shopify, Bigcommerce, Volusion, Squarespace and others. ShipStation offers multi-carrier shipping options, and automation features like custom hierarchical rules and product profiles that allow customers to easily and automatically optimize their shipping. Using ShipStation, an online retailer or e-commerce merchant can ship their orders from wherever they sell and however they ship. | |||||||||||||||||
We have accounted for the acquisition under the acquisition method of accounting in accordance with the provisions of FASB ASC Topic No. 805 Business Combinations (ASC 805). The total purchase price for ShipStation was approximately $66.2 million and was comprised of the following (in thousands, except shares): | |||||||||||||||||
Fair Value | |||||||||||||||||
Cash Consideration | $ | 50,000 | |||||||||||||||
Fair value of performance linked earn-out of up to768,900 shares of Stamps.com common stock (contingent consideration) | 16,242 | ||||||||||||||||
Total purchase price | $ | 66,242 | |||||||||||||||
The performance linked earn-out payment of Stamps.com shares (or contingent consideration) to former equity members of Auctane LLC is based on the achievement of certain financial measures within a future time period. There are two future periods in which the earn-out payment will be calculated. The first earn-out period is based on the achievement of certain financial measures during the six months ended December 31, 2014. The second earn-out period is based on the achievement of certain financial measure during the twelve months ended December 31, 2015. The range of Stamps.com shares available for the performance linked earn-out for both periods is between 576,675 to 768,900 shares provided a minimum threshold for the financial measures is achieved. The current portion of the contingent consideration represents the estimated fair value of the first earn-out. The fair value of the contingent consideration was determined based on a probability weighted method, which incorporates management’s forecasts of financial measures and the likelihood of the financial measure targets being achieved using a series of options that replicate the pay-off structure of the earn-out, and the value of each of these options was determined using the Black-Scholes-Merton option pricing framework. | |||||||||||||||||
Under the acquisition method of accounting under ASC 805, the total estimated purchase price of the acquired company is allocated to the assets acquired and the liabilities assumed based on their fair values. We have made significant estimates and assumptions in determining the preliminary allocation of the purchase price. The preliminary allocation of purchase consideration is subject to change based on further review of the fair value of the assets acquired and liabilities assumed. The following table is the allocation of the purchase price (in thousands, except years): | |||||||||||||||||
Fair Value | Fair Value | Weighted Average Estimated Useful Life (In Years) | |||||||||||||||
Cash and cash equivalents | $ | 1,118 | |||||||||||||||
Trade accounts receivable | 254 | ||||||||||||||||
Other assets | 39 | ||||||||||||||||
Property and equipment | 187 | ||||||||||||||||
Goodwill | 50,544 | ||||||||||||||||
Identifiable intangible assets: | |||||||||||||||||
Trademark | $ | 500 | |||||||||||||||
Developed technology | 5,300 | ||||||||||||||||
Non-compete agreement | 400 | ||||||||||||||||
Customer relationship | 9,000 | ||||||||||||||||
Total identifiable intangible assets | 15,200 | 8 | |||||||||||||||
Accrued expenses and other liabilities | (836 | ) | |||||||||||||||
Deferred revenue | (264 | ) | |||||||||||||||
Total purchase price | $ | 66,242 | |||||||||||||||
Goodwill represents the excess of the fair value of consideration given over the fair value of the tangible assets, identifiable intangible assets and liabilities assumed in a business combination and the potential synergy of combining the operations of Stamps.com and ShipStation. We expect the entire amount of goodwill recorded in this acquisition will be deducted for tax purposes ratably over a 15 year period. The identified intangible assets consist of trademarks, developed technology, non-compete agreements and customer relationships. The estimated fair values of the trademark and developed technology were determined using the “Relief from Royalty” method. The estimated fair value of the non-compete was determined using the “With and Without” method. The estimated fair value of customer relationship was determined using the “Excess Earnings” method. The rate utilized to discount net cash flows to their present values was approximately 15% and was determined after consideration of the overall enterprise rate of return and the relative risk and importance of the assets to the generation of future cash flows. Trademark, developed technology, non-compete and customer relationship will be amortized on a straight-line basis over their estimated useful lives. We expect the amortization of acquired intangibles will be approximately $500,000 per quarter for the remaining estimated useful lives. | |||||||||||||||||
For the three and six months ended June 30, 2014, the Company incurred approximately $420,000 in acquisition and integration related corporate development expenses. These costs are included in general and administrative expense on the Company’s Consolidated Statement of Income. For the period from June 10, 2014 to June 30, 2014, the acquired ShipStation operations were not material to the Company’s consolidated financial results. | |||||||||||||||||
Pro-Forma Financial Information | |||||||||||||||||
The pro-forma information presented is for illustrative purposes only and is not necessarily indicative of the results of operations that would have been realized if the acquisition had been completed on the date indicated, nor is it indicative of future operating results. The pro-forma financial information does not include any adjustments for operating efficiencies or cost savings. | |||||||||||||||||
The following table presents the pro-forma financial information (in thousands, except per share amounts) and assumes the acquisition of ShipStation occurred on January 1, 2013. | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Revenue | $ | 35,999 | $ | 33,239 | $ | 71,251 | $ | 66,172 | |||||||||
Income from operations | 7,597 | 8,300 | 14,831 | 15,768 | |||||||||||||
Net income | 7,492 | 11,984 | 14,668 | 19,528 | |||||||||||||
Basic earnings per share | $ | 0.47 | $ | 0.77 | $ | 0.91 | $ | 1.27 | |||||||||
Diluted earnings per share | $ | 0.46 | $ | 0.74 | $ | 0.89 | $ | 1.21 |
Legal_Proceedings
Legal Proceedings | 6 Months Ended | |
Jun. 30, 2014 | ||
Legal Proceedings [Abstract] | ' | |
Legal Proceedings | ' | |
3 | Legal Proceedings | |
We are subject to various routine legal proceedings and claims incidental to our business, and we do not believe that these proceedings and claims would reasonably be expected to have a material adverse effect on our financial position, results of operations or cash flows. |
Net_Income_per_Share
Net Income per Share | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Net Income per Share | ' | ||||||||||||||||
Net Income per Share | ' | ||||||||||||||||
4 | Net Income per Share | ||||||||||||||||
Net income per share represents net income attributable to common stockholders divided by the weighted average number of common shares outstanding during a reported period. The diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock, including stock options (commonly and hereafter referred to as “common stock equivalents”), were exercised or converted into common stock. Diluted net income per share is calculated by dividing net income during a reported period by the sum of the weighted average number of common shares outstanding plus common stock equivalents for the period. | |||||||||||||||||
The following table reconciles share amounts utilized to calculate basic and diluted net income per share (in thousands, except per share data): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net income | $ | 11,174 | $ | 8,613 | $ | 18,508 | $ | 16,519 | |||||||||
Basic - weighted average common shares | 15,993 | 15,486 | 16,107 | 15,407 | |||||||||||||
Diluted effect of common stock equivalents | 385 | 677 | 414 | 675 | |||||||||||||
Diluted - weighted average common shares | 16,378 | 16,163 | 16,521 | 16,082 | |||||||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 0.7 | $ | 0.56 | $ | 1.15 | $ | 1.07 | |||||||||
Diluted | $ | 0.68 | $ | 0.53 | $ | 1.12 | $ | 1.03 | |||||||||
The calculation of dilutive shares excludes the effect of the following options that are considered anti-dilutive (in thousands): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Anti-dilutive stock option shares | 171 | 40 | 140 | 99 |
StockBased_Employee_Compensati
Stock-Based Employee Compensation | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Stock-Based Employee Compensation [Abstract] | ' | ||||||||||||||||
Stock-Based Employee Compensation | ' | ||||||||||||||||
5 | Stock-Based Employee Compensation | ||||||||||||||||
We estimate the fair value of share-based payment awards on the date of grant using an option-pricing model and recognize stock-based compensation expense during each period based on the value of that portion of share-based payment awards that is ultimately expected to vest during the period, reduced for estimated forfeitures. We estimate forfeitures at the time of grant based on historical data and revise, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense recognized for all employee stock options granted is recognized using the straight-line method over their respective vesting periods of three to five years. | |||||||||||||||||
The following table sets forth the stock-based compensation expense that we recognized for the periods indicated (in thousands): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Stock-based compensation expense relating to: | |||||||||||||||||
Employee and director stock options | $ | 926 | $ | 1,081 | $ | 1,826 | $ | 1,924 | |||||||||
Employee stock purchases | — | — | 116 | 299 | |||||||||||||
Total stock-based compensation expense | $ | 926 | $ | 1,081 | $ | 1,942 | $ | 2,223 | |||||||||
Stock-based compensation expense relating to: | |||||||||||||||||
Cost of revenues | $ | 83 | $ | 79 | $ | 185 | $ | 187 | |||||||||
Sales and marketing | 141 | 180 | 334 | 418 | |||||||||||||
Research and development | 164 | 171 | 400 | 459 | |||||||||||||
General and administrative | 538 | 651 | 1,023 | 1,159 | |||||||||||||
Total stock-based compensation expense | $ | 926 | $ | 1,081 | $ | 1,942 | $ | 2,223 | |||||||||
We use the Black-Scholes option valuation model to estimate the fair value of share-based payment awards on the date of grant, which requires us to make a number of highly complex and subjective assumptions, including stock price volatility, expected term, risk-free interest rates and projected employee stock option exercise behaviors. In the case of options we grant, our assumption of expected volatility is based on the historical volatility of our stock price over the term equal to the expected life of the options. We base the risk-free interest rate on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life of the options assumed at the date of grant. The estimated expected life represents the weighted-average period the stock options are expected to remain outstanding, determined based on an analysis of historical exercise behavior. | |||||||||||||||||
The following are the weighted average assumptions used in the Black-Scholes valuation model for the periods indicated: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Expected dividend yield | — | — | — | — | |||||||||||||
Risk-free interest rate | 0.9 | % | 0.4 | % | 0.8 | % | 0.4 | % | |||||||||
Expected volatility | 50 | % | 48 | % | 50 | % | 47 | % | |||||||||
Expected life (in years) | 3.4 | 3.6 | 3.5 | 3.7 | |||||||||||||
Expected forfeiture rate | 6 | % | 6 | % | 6 | % | 6 | % |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Goodwill and Intangible Assets [Abstract] | ' | ||||||||||||
Goodwill and Intangible Assets | ' | ||||||||||||
6 | Goodwill and Intangible Assets | ||||||||||||
Goodwill represents the excess of the fair value of consideration given over the fair value of the tangible assets, identifiable intangible assets and liabilities assumed in a business combination. | |||||||||||||
The following table summarizes goodwill acquired in a business combination as of June 30, 2014 (in thousands): | |||||||||||||
2014 | |||||||||||||
Goodwill balance at December 31, 2013 | $ | — | |||||||||||
Acquisition (see Note 2 – “Acquisition”) | 50,544 | ||||||||||||
Goodwill balance at June 30, 2014 | $ | 50,544 | |||||||||||
Goodwill will be reviewed for impairment annually during the fourth quarter utilizing a qualitative assessment or a two-step process. We have an option to make a qualitative assessment of a reporting unit's goodwill for impairment. If we choose to perform a qualitative assessment and determine the fair value more likely than not exceeds the carrying value, no further evaluation is necessary. For reporting units where we perform the two-step process, the first step requires us to compare the fair value of each reporting unit, which we primarily determine using an income approach based on the present value of discounted cash flows, to the respective carrying value, which includes goodwill. If the fair value of the reporting unit exceeds its carrying value, the goodwill is not considered impaired. If the carrying value is higher than the fair value, there is an indication that impairment may exist and the second step is required. In step two, the implied fair value of goodwill is calculated as the excess of the fair value of a reporting unit over the fair values assigned to its assets and liabilities. If the implied fair value of goodwill is less than the carrying value of the reporting unit's goodwill, the difference is recognized as an impairment loss. | |||||||||||||
We have amortizable and non-amortizable intangible assets consisting of patents, trademarks, lease-in-place intangible assets, developed technology, non-compete agreements and customer relationships. | |||||||||||||
The following table summarizes our amortizable and non-amortizable intangible assets as of June 30, 2014 (in thousands): | |||||||||||||
Gross | Accumulated | Net | |||||||||||
Carrying | Amortization | Carrying | |||||||||||
Amount | Amount | ||||||||||||
Intangible assets | $ | 9,378 | $ | 8,426 | $ | 952 | |||||||
Intangible assets acquired in 2014 (see Note 2 – “Acquisition”) | 15,200 | 109 | 15,091 | ||||||||||
Total Intangible assets at June 30, 2014 | $ | 24,578 | $ | 8,535 | $ | 16,043 | |||||||
As of June 30, 2014, the remaining weighted average amortization period for our amortizable intangible assets is approximately 7.4 years. Our estimated amortization expense for the next five years is as follows (in thousands): | |||||||||||||
Year Ending June 30, | Estimated Amortization Expense | ||||||||||||
2015 | $ | 2,177 | |||||||||||
2016 | 2,125 | ||||||||||||
2017 | 2,108 | ||||||||||||
2018 | 2,045 | ||||||||||||
2019 | 1,835 |
Income_Taxes
Income Taxes | 6 Months Ended | |
Jun. 30, 2014 | ||
Income Taxes [Abstract] | ' | |
Income Taxes | ' | |
7 | Income Taxes | |
During the second quarter of 2014, our current income tax expense consisted of federal and state alternative minimum taxes. Our effective income tax rate differs from the statutory income tax rate primarily as a result of our use of net operating losses to offset current federal and state income taxes and the partial release of our valuation allowance. On June 10, 2014 we completed our acquisition of ShipStation (see Note 2 – “Acquisition”). Based on this discrete event, we re-evaluated our forecast of our projected taxable income. As a result, we released a portion of our valuation allowance totaling approximately $3.6 million during the second quarter of 2014. We evaluated the appropriateness of our deferred tax assets and related valuation allowance in accordance with ASC 740 based on all available positive and negative evidence. A valuation allowance is recorded against a portion of our gross deferred tax assets as we have determined the realization of these assets does not meet the more likely than not criteria. In making these determinations, we considered the available positive and negative evidence, including our recent earnings trend, expected future taxable income and the federal and state effective tax rates related to future taxable income. We recorded corporate alternative minimum U.S. federal and state taxes of approximately $167,000 and $339,000 during the three and six months ended June 30, 2014, respectively. Total net tax benefit for the three and six months ended June 30, 2014 was $3.5 million and $3.3 million, respectively. Total net income tax expense for corporate alternative minimum U.S. federal and state taxes was approximately $27,000 and $90,000 during the three and six months ended June 30, 2013, respectively. |
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Fair Value Measurements [Abstract] | ' | ||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
8 | Fair Value Measurements | ||||||||||||||||
Financial assets measured at fair value on a recurring basis are classified in one of the three following categories, which are described below: | |||||||||||||||||
Level 1 - Valuations based on unadjusted quoted prices for identical assets in an active market | |||||||||||||||||
Level 2 - Valuations based on quoted prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets | |||||||||||||||||
Level 3 - Valuations based on inputs that are unobservable and involve management judgment and our own assumptions about market participants and pricing | |||||||||||||||||
The following table summarizes our financial assets measured at fair value on a recurring basis (in thousands): | |||||||||||||||||
Fair Value Measurement at Reporting Date Using | |||||||||||||||||
Description | 30-Jun-14 | Quoted Prices | Significant | Significant | |||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||
Identical Assets | Inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Cash equivalents | $ | 33,812 | $ | 33,812 | $ | — | $ | — | |||||||||
Available-for-sale debt securities | 18,988 | — | 18,988 | — | |||||||||||||
Total | $ | 52,800 | $ | 33,812 | $ | 18,988 | $ | — | |||||||||
Fair Value Measurement at Reporting Date Using | |||||||||||||||||
Description | 31-Dec-13 | Quoted Prices | Significant | Significant | |||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||
Identical Assets | Inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Cash equivalents | $ | 66,674 | $ | 66,674 | $ | — | $ | — | |||||||||
Available-for-sale debt securities | 20,536 | — | 20,536 | — | |||||||||||||
Total | $ | 87,210 | $ | 66,674 | $ | 20,536 | $ | — | |||||||||
The fair value of our available-for-sale debt securities included in the Level 2 category is based on the market values obtained from an independent pricing service that were evaluated using pricing models that vary by asset class and may incorporate available trade, bid and other market information and price quotes from well established independent pricing vendors and broker-dealers. | |||||||||||||||||
As of June 30, 2014 we have $16.2 million of contingent consideration relating to our acquisition of ShipStation (see Note 2 – “Acquisition”) that required to be measured at fair value. | |||||||||||||||||
The following table summarizes our contingent consideration measured at fair value on a recurring basis (in thousands): | |||||||||||||||||
Fair Value Measurement at Reporting Date Using | |||||||||||||||||
Description | 30-Jun-14 | Quoted Prices | Significant | Significant | |||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||
Identical Assets | Inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Contingent consideration – current | $ | 5,610 | $ | — | $ | — | $ | 5,610 | |||||||||
Contingent consideration – long-term | 10,632 | — | — | 10,632 | |||||||||||||
Total | $ | 16,242 | $ | — | $ | — | $ | 16,242 |
Cash_Equivalents_and_Investmen
Cash Equivalents and Investments | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Cash Equivalents and Investments [Abstract] | ' | ||||||||||||||||
Cash Equivalents and Investments | ' | ||||||||||||||||
9 | Cash Equivalents and Investments | ||||||||||||||||
Our cash equivalents and investments consist of money market, asset-backed securities, US government obligation, and public corporate debt securities at June 30, 2014 and December 31, 2013. We consider all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. All of our investments are classified as available for sale and are recorded at market value using the specific identification method. Realized gains and losses are reflected in other income, net using the specific identification method. There was no material realized gain or loss with respect to our investments during the three and six months ended June 30, 2014. Unrealized gains and losses are included as a separate component of stockholders' equity. We do not intend to sell investments with an amortized cost basis exceeding fair value and it is not likely that we will be required to sell the investments before recovery of their amortized cost bases. We have 6 securities with a total fair value of $2.9 million that have unrealized losses of approximately $3,200 as of June 30, 2014. | |||||||||||||||||
On at least a quarterly basis, we evaluate our available for sale securities, and record an “other-than-temporary impairment” (“OTTI”) if we believe their fair value is less than historical cost and it is probable that we will not collect all contractual cash flows. We did not record any OTTI during the three and six months ended June 30, 2014, after evaluating a number of factors including, but not limited to: | |||||||||||||||||
· | How much fair value has declined below amortized cost | ||||||||||||||||
· | The financial condition of the issuers | ||||||||||||||||
· | Significant rating agency changes on the issuer | ||||||||||||||||
· | Our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value | ||||||||||||||||
The following tables summarize our cash, cash equivalents and investments as of June 30, 2014 and December 31, 2013 (in thousands): | |||||||||||||||||
30-Jun-14 | |||||||||||||||||
Cost or | Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | ||||||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Cash | $ | 33,077 | — | — | $ | 33,077 | |||||||||||
Money market | 735 | — | — | 735 | |||||||||||||
Cash and cash equivalents | 33,812 | — | — | 33,812 | |||||||||||||
Short-term investments: | |||||||||||||||||
Corporate notes and bonds | 6,110 | 18 | — | 6,128 | |||||||||||||
Short-term investments | 6,110 | 18 | — | 6,128 | |||||||||||||
Long-term investments: | |||||||||||||||||
Corporate bonds and asset backed securities | 11,263 | 100 | (3 | ) | 11,360 | ||||||||||||
U.S. government and agency securities | 1,498 | 2 | — | 1,500 | |||||||||||||
Long-term investments | 12,761 | 102 | (3 | ) | 12,860 | ||||||||||||
Cash, cash equivalents and investments | $ | 52,683 | 120 | (3 | ) | $ | 52,800 | ||||||||||
31-Dec-13 | |||||||||||||||||
Cost or | Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | ||||||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Cash | $ | 46,792 | — | — | $ | 46,792 | |||||||||||
Money market | 19,882 | — | — | 19,882 | |||||||||||||
Cash and cash equivalents | 66,674 | — | — | 66,674 | |||||||||||||
Short-term investments: | |||||||||||||||||
Corporate notes and bonds | 6,479 | 45 | — | 6,524 | |||||||||||||
Short-term investments | 6,479 | 45 | — | 6,524 | |||||||||||||
Long-term investments: | |||||||||||||||||
Corporate bonds and asset backed securities | 13,917 | 106 | (11 | ) | 14,012 | ||||||||||||
Long-term investments | 13,917 | 106 | (11 | ) | 14,012 | ||||||||||||
Cash, cash equivalents and investments | $ | 87,070 | 151 | (11 | ) | $ | 87,210 | ||||||||||
The following table summarizes contractual maturities of our marketable fixed-income securities as of June 30, 2014 (in thousands): | |||||||||||||||||
Amortized | Estimated | ||||||||||||||||
Cost | Fair Value | ||||||||||||||||
Due within one year | $ | 6,110 | $ | 6,128 | |||||||||||||
Due after one year through five years | 12,761 | 12,860 | |||||||||||||||
Due after five years through ten years | — | — | |||||||||||||||
Total | $ | 18,871 | $ | 18,988 |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Summary of Significant Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
We prepared the consolidated financial statements included herein without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. We believe that the disclosures are adequate to make the information presented not misleading. We recommend that these financial statements be read in conjunction with the audited financial statements and the notes thereto included in our latest annual report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on March 17, 2014. | |
In our opinion, these unaudited financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly our financial position as of June 30, 2014, our results of operations for the three and six months ended June 30, 2014 and our cash flows for the six months ended June 30, 2014. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. | |
Principles of Consolidation | ' |
Principles of Consolidation | |
The consolidated financial statements include the accounts of Stamps.com Inc., ShipStation and PhotoStamps Inc. In June 2014, we completed our acquisition of ShipStation by purchasing 100% of the outstanding equity of Auctane LLC, the Texas limited liability company that operates ShipStation (“Auctane LLC”) in a cash and stock transaction. ShipStation, based in Austin, Texas, offers monthly subscription based e-commerce shipping software primarily under the brand ShipStation and Auctane (see Note 2 – “Acquisition”). Because 100% of the voting control of Auctane LLC is held by us, we have consolidated ShipStation, from the date we obtained control and PhotoStamps Inc. in the accompanying consolidated financial statements. All significant intercompany accounts and transactions have been eliminated. | |
Use of Estimates and Risk Management | ' |
Use of Estimates and Risk Management | |
The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates, and such differences may be material to the financial statements. Examples include estimates of loss contingencies, promotional coupon redemptions, the number of PhotoStamps retail boxes that will not be redeemed, deferred income taxes and estimates regarding the useful lives of our building, patents and other amortizable intangible assets. | |
Contingencies and Litigation | ' |
Contingencies and Litigation | |
We are subject to various routine litigation matters as a claimant and a defendant. We record any amounts recovered in these matters when received. We record liabilities for claims against us when the loss is probable and estimable. Amounts recorded are based on reviews by outside counsel, in-house counsel and management. Actual results could differ from estimates. | |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | |
Carrying amounts of certain of our financial instruments, including cash, cash equivalents, accounts receivable and accounts payable, approximate fair value due to their short maturities. The fair values of investments are determined using quoted market prices for those securities or similar financial instruments. | |
The fair value of contingent consideration is determined using a series of options that replicate the pay-off structure of the earn-out, and the value of each of these options was determined using the Black-Scholes-Merton option pricing framework (see Note 2 - “Acquisition” for further description). | |
Goodwill | ' |
Goodwill | |
Goodwill represents the excess of the fair value of consideration given over the fair value of the tangible assets, identifiable intangible assets and liabilities assumed in a business combination. We are required to test goodwill for impairment annually and whenever events or circumstances indicate the fair value of a reporting unit may be below its carrying value. | |
Trademarks, Patents and Intangible Assets | ' |
Trademarks, Patents and Intangible Assets | |
Acquired trademarks, patents and other intangibles include both amortizable and non-amortizable assets and are included in intangible assets, net in the accompanying consolidated balance sheets. Intangible assets are carried at cost less accumulated amortization. Cost associated with internally developed intangible assets is typically expensed as incurred as research and development costs. Amortization of amortizable intangible assets is calculated on a straight-line basis over the estimated useful lives of the assets, ranging from approximately 4 to 17 years. | |
Property and Equipment | ' |
Property and Equipment | |
We account for property and equipment at cost less accumulated depreciation and amortization. We compute depreciation using the straight-line method over the estimated useful life of the asset, generally three to five years for furniture, fixtures and equipment and ten to forty years for building and building improvements. We have a policy of capitalizing expenditures that materially increase assets’ useful lives and charging ordinary maintenance and repairs to operations as incurred. When property or equipment is disposed of, the cost and related accumulated depreciation and amortization are removed, and any gain or loss is included in operations. | |
Income Taxes | ' |
Income Taxes | |
We account for income taxes in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic No. 740, Income Taxes (“ASC 740”), which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the net deferred tax assets will not be realized. We record a valuation allowance to reduce our gross deferred tax assets, which are primarily comprised of U.S. Federal and State tax loss carry-forwards, to the amount that is more likely than not (a likelihood of more than 50 percent) to be realized. In order for us to realize our deferred tax assets, we must be able to generate sufficient taxable income. We evaluate the appropriateness of our deferred tax assets and related valuation allowance in accordance with ASC 740 based on all available positive and negative evidence. | |
Revenue Recognition | ' |
Revenue Recognition | |
We recognize revenue from product sales or services rendered, as well as commissions from advertising or sale of products by third party vendors to our customer base when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable, and collectability is reasonably assured. | |
Service revenue is primarily derived from monthly subscription and transaction fees and is recognized in the period that services are provided. Product sales, net of return allowances, are recorded when the products are shipped and title passes to customers. Sales of items, including PhotoStamps, sold to customers are made pursuant to a sales contract that provides for transfer of both title and risk of loss upon our delivery to the carrier. Return allowances for expected product returns, which reduce product revenue, are estimated using historical experience. Commissions from the advertising or sale of products by a third party vendor to our customer base are recognized when the revenue is earned and collection is deemed probable. | |
Customers pay face value for postage purchased for use through our mailing and shipping software, and the funds are transferred directly from the customers to the United States Postal Service (“USPS”). We do not recognize revenue for this postage, as it is purchased by our customers directly from the USPS. | |
PhotoStamps revenue, which includes the face value of postage, from the sale of PhotoStamps sheets and rolls is made pursuant to a sales contract that provides for transfer of both title and risk of loss upon our delivery to the carrier. | |
Sale of PhotoStamps retail boxes are initially recorded as deferred revenue. PhotoStamps revenue related to the sale of these PhotoStamps retail boxes is subsequently recognized when either: 1) the PhotoStamps retail box is redeemed, or 2) the likelihood of the PhotoStamps retail box being redeemed is deemed remote (“breakage”) and there is no legal obligation to remit the value of the unredeemed PhotoStamps retail boxes. | |
On a limited basis, we allow third parties to offer products and promotions to our customer base. These arrangements generally provide payment in the form of a flat fee or revenue sharing arrangements where we receive payment upon customers accessing third party products and services. Total revenue from such advertising arrangements was not significant during the three and six months ended June 30, 2014 and 2013. | |
We provide our customers with the opportunity to purchase parcel insurance directly through our software. Insurance revenue represents the gross amount charged to the customer for purchasing insurance and the related cost represents the amount paid to the insurance broker, Parcel Insurance Plan. We recognize revenue on insurance purchases upon the ship date of the insured package. | |
PhotoStamps Retail Boxes | ' |
PhotoStamps Retail Boxes | |
We sell PhotoStamps retail boxes that are redeemable for PhotoStamps on our website. The PhotoStamps retail boxes are sold through various third party retail partners. Our PhotoStamps retail boxes are not subject to administrative fees on unredeemed boxes and have no expiration date. PhotoStamps retail box sales are recorded as deferred revenue. We concluded that sufficient company-specific historical evidence existed to determine the period of time after which the likelihood of the PhotoStamps retail boxes being redeemed was remote. Based on our analysis of the redemption data, we estimate that period of time to be 60 months after the sale of our PhotoStamps retail boxes. | |
We recognize breakage revenue related to our PhotoStamps retail boxes utilizing the redemption recognition method. Under the redemption recognition method, we recognize breakage revenue from unredeemed retail boxes in proportion to the revenue recognized from the retail boxes that have been redeemed. Revenue from our PhotoStamps retail boxes is included in PhotoStamps revenue. PhotoStamps retail box breakage revenue during the second quarter of 2014 and 2013 was not significant to our consolidated financial statements. | |
Subsequent Events | ' |
Subsequent Events | |
We are not aware of any material subsequent events or transactions that have occurred that would require recognition in the financial statements or disclosure in the notes to the consolidated financial statements. |
Acquisition_Tables
Acquisition (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Acquisition [Abstract] | ' | ||||||||||||||||
Schedule of purchase price | ' | ||||||||||||||||
We have accounted for the acquisition under the acquisition method of accounting in accordance with the provisions of FASB ASC Topic No. 805 Business Combinations (ASC 805). The total purchase price for ShipStation was approximately $66.2 million and was comprised of the following (in thousands, except shares): | |||||||||||||||||
Fair Value | |||||||||||||||||
Cash Consideration | $ | 50,000 | |||||||||||||||
Fair value of performance linked earn-out of up to768,900 shares of Stamps.com common stock (contingent consideration) | 16,242 | ||||||||||||||||
Total purchase price | $ | 66,242 | |||||||||||||||
Allocation of the purchase price | ' | ||||||||||||||||
The following table is the allocation of the purchase price (in thousands, except years): | |||||||||||||||||
Fair Value | Fair Value | Weighted Average Estimated Useful Life (In Years) | |||||||||||||||
Cash and cash equivalents | $ | 1,118 | |||||||||||||||
Trade accounts receivable | 254 | ||||||||||||||||
Other assets | 39 | ||||||||||||||||
Property and equipment | 187 | ||||||||||||||||
Goodwill | 50,544 | ||||||||||||||||
Identifiable intangible assets: | |||||||||||||||||
Trademark | $ | 500 | |||||||||||||||
Developed technology | 5,300 | ||||||||||||||||
Non-compete agreement | 400 | ||||||||||||||||
Customer relationship | 9,000 | ||||||||||||||||
Total identifiable intangible assets | 15,200 | 8 | |||||||||||||||
Accrued expenses and other liabilities | (836 | ) | |||||||||||||||
Deferred revenue | (264 | ) | |||||||||||||||
Total purchase price | $ | 66,242 | |||||||||||||||
Pro forma financial information | ' | ||||||||||||||||
The following table presents the pro-forma financial information (in thousands, except per share amounts) and assumes the acquisition of ShipStation occurred on January 1, 2013. | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Revenue | $ | 35,999 | $ | 33,239 | $ | 71,251 | $ | 66,172 | |||||||||
Income from operations | 7,597 | 8,300 | 14,831 | 15,768 | |||||||||||||
Net income | 7,492 | 11,984 | 14,668 | 19,528 | |||||||||||||
Basic earnings per share | $ | 0.47 | $ | 0.77 | $ | 0.91 | $ | 1.27 | |||||||||
Diluted earnings per share | $ | 0.46 | $ | 0.74 | $ | 0.89 | $ | 1.21 |
Net_Income_per_Share_Tables
Net Income per Share (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Net Income per Share | ' | ||||||||||||||||
Calculation of basic and diluted net income per share | ' | ||||||||||||||||
The following table reconciles share amounts utilized to calculate basic and diluted net income per share (in thousands, except per share data): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net income | $ | 11,174 | $ | 8,613 | $ | 18,508 | $ | 16,519 | |||||||||
Basic - weighted average common shares | 15,993 | 15,486 | 16,107 | 15,407 | |||||||||||||
Diluted effect of common stock equivalents | 385 | 677 | 414 | 675 | |||||||||||||
Diluted - weighted average common shares | 16,378 | 16,163 | 16,521 | 16,082 | |||||||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 0.7 | $ | 0.56 | $ | 1.15 | $ | 1.07 | |||||||||
Diluted | $ | 0.68 | $ | 0.53 | $ | 1.12 | $ | 1.03 | |||||||||
Anti-dilutive securities excluded from computation of earnings per share | ' | ||||||||||||||||
The calculation of dilutive shares excludes the effect of the following options that are considered anti-dilutive (in thousands): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Anti-dilutive stock option shares | 171 | 40 | 140 | 99 |
StockBased_Employee_Compensati1
Stock-Based Employee Compensation (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Stock-Based Employee Compensation [Abstract] | ' | ||||||||||||||||
Stock-based compensation expense | ' | ||||||||||||||||
The following table sets forth the stock-based compensation expense that we recognized for the periods indicated (in thousands): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Stock-based compensation expense relating to: | |||||||||||||||||
Employee and director stock options | $ | 926 | $ | 1,081 | $ | 1,826 | $ | 1,924 | |||||||||
Employee stock purchases | — | — | 116 | 299 | |||||||||||||
Total stock-based compensation expense | $ | 926 | $ | 1,081 | $ | 1,942 | $ | 2,223 | |||||||||
Stock-based compensation expense relating to: | |||||||||||||||||
Cost of revenues | $ | 83 | $ | 79 | $ | 185 | $ | 187 | |||||||||
Sales and marketing | 141 | 180 | 334 | 418 | |||||||||||||
Research and development | 164 | 171 | 400 | 459 | |||||||||||||
General and administrative | 538 | 651 | 1,023 | 1,159 | |||||||||||||
Total stock-based compensation expense | $ | 926 | $ | 1,081 | $ | 1,942 | $ | 2,223 | |||||||||
Weighted average assumptions used in Black-Scholes valuation model | ' | ||||||||||||||||
The following are the weighted average assumptions used in the Black-Scholes valuation model for the periods indicated: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Expected dividend yield | — | — | — | — | |||||||||||||
Risk-free interest rate | 0.9 | % | 0.4 | % | 0.8 | % | 0.4 | % | |||||||||
Expected volatility | 50 | % | 48 | % | 50 | % | 47 | % | |||||||||
Expected life (in years) | 3.4 | 3.6 | 3.5 | 3.7 | |||||||||||||
Expected forfeiture rate | 6 | % | 6 | % | 6 | % | 6 | % |
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Goodwill and Intangible Assets [Abstract] | ' | ||||||||||||
Schedule of Goodwill | ' | ||||||||||||
The following table summarizes goodwill acquired in a business combination as of June 30, 2014 (in thousands): | |||||||||||||
2014 | |||||||||||||
Goodwill balance at December 31, 2013 | $ | — | |||||||||||
Acquisition (see Note 2 – “Acquisition”) | 50,544 | ||||||||||||
Goodwill balance at June 30, 2014 | $ | 50,544 | |||||||||||
Schedule of acquired intangible assets | ' | ||||||||||||
The following table summarizes our amortizable and non-amortizable intangible assets as of June 30, 2014 (in thousands): | |||||||||||||
Gross | Accumulated | Net | |||||||||||
Carrying | Amortization | Carrying | |||||||||||
Amount | Amount | ||||||||||||
Intangible assets | $ | 9,378 | $ | 8,426 | $ | 952 | |||||||
Intangible assets acquired in 2014 (see Note 2 – “Acquisition”) | 15,200 | 109 | 15,091 | ||||||||||
Total Intangible assets at June 30, 2014 | $ | 24,578 | $ | 8,535 | $ | 16,043 | |||||||
Schedule of future amortization expense | ' | ||||||||||||
As of June 30, 2014, the remaining weighted average amortization period for our amortizable intangible assets is approximately 7.4 years. Our estimated amortization expense for the next five years is as follows (in thousands): | |||||||||||||
Year Ending June 30, | Estimated Amortization Expense | ||||||||||||
2015 | $ | 2,177 | |||||||||||
2016 | 2,125 | ||||||||||||
2017 | 2,108 | ||||||||||||
2018 | 2,045 | ||||||||||||
2019 | 1,835 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Fair Value Measurements [Abstract] | ' | ||||||||||||||||
Financial assets measured at fair value on a recurring basis | ' | ||||||||||||||||
The following table summarizes our financial assets measured at fair value on a recurring basis (in thousands): | |||||||||||||||||
Fair Value Measurement at Reporting Date Using | |||||||||||||||||
Description | 30-Jun-14 | Quoted Prices | Significant | Significant | |||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||
Identical Assets | Inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Cash equivalents | $ | 33,812 | $ | 33,812 | $ | — | $ | — | |||||||||
Available-for-sale debt securities | 18,988 | — | 18,988 | — | |||||||||||||
Total | $ | 52,800 | $ | 33,812 | $ | 18,988 | $ | — | |||||||||
Fair Value Measurement at Reporting Date Using | |||||||||||||||||
Description | 31-Dec-13 | Quoted Prices | Significant | Significant | |||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||
Identical Assets | Inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Cash equivalents | $ | 66,674 | $ | 66,674 | $ | — | $ | — | |||||||||
Available-for-sale debt securities | 20,536 | — | 20,536 | — | |||||||||||||
Total | $ | 87,210 | $ | 66,674 | $ | 20,536 | $ | — | |||||||||
Contingent consideration measured at fair value on a recurring basis | ' | ||||||||||||||||
The following table summarizes our contingent consideration measured at fair value on a recurring basis (in thousands): | |||||||||||||||||
Fair Value Measurement at Reporting Date Using | |||||||||||||||||
Description | 30-Jun-14 | Quoted Prices | Significant | Significant | |||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||
Identical Assets | Inputs | (Level 3) | |||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||
Contingent consideration – current | $ | 5,610 | $ | — | $ | — | $ | 5,610 | |||||||||
Contingent consideration – long-term | 10,632 | — | — | 10,632 | |||||||||||||
Total | $ | 16,242 | $ | — | $ | — | $ | 16,242 |
Cash_Equivalents_and_Investmen1
Cash Equivalents and Investments (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Cash Equivalents and Investments [Abstract] | ' | ||||||||||||||||
Cash, cash equivalents, restricted cash and investments | ' | ||||||||||||||||
The following tables summarize our cash, cash equivalents and investments as of June 30, 2014 and December 31, 2013 (in thousands): | |||||||||||||||||
30-Jun-14 | |||||||||||||||||
Cost or | Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | ||||||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Cash | $ | 33,077 | — | — | $ | 33,077 | |||||||||||
Money market | 735 | — | — | 735 | |||||||||||||
Cash and cash equivalents | 33,812 | — | — | 33,812 | |||||||||||||
Short-term investments: | |||||||||||||||||
Corporate notes and bonds | 6,110 | 18 | — | 6,128 | |||||||||||||
Short-term investments | 6,110 | 18 | — | 6,128 | |||||||||||||
Long-term investments: | |||||||||||||||||
Corporate bonds and asset backed securities | 11,263 | 100 | (3 | ) | 11,360 | ||||||||||||
U.S. government and agency securities | 1,498 | 2 | — | 1,500 | |||||||||||||
Long-term investments | 12,761 | 102 | (3 | ) | 12,860 | ||||||||||||
Cash, cash equivalents and investments | $ | 52,683 | 120 | (3 | ) | $ | 52,800 | ||||||||||
31-Dec-13 | |||||||||||||||||
Cost or | Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Estimated | ||||||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Cash | $ | 46,792 | — | — | $ | 46,792 | |||||||||||
Money market | 19,882 | — | — | 19,882 | |||||||||||||
Cash and cash equivalents | 66,674 | — | — | 66,674 | |||||||||||||
Short-term investments: | |||||||||||||||||
Corporate notes and bonds | 6,479 | 45 | — | 6,524 | |||||||||||||
Short-term investments | 6,479 | 45 | — | 6,524 | |||||||||||||
Long-term investments: | |||||||||||||||||
Corporate bonds and asset backed securities | 13,917 | 106 | (11 | ) | 14,012 | ||||||||||||
Long-term investments | 13,917 | 106 | (11 | ) | 14,012 | ||||||||||||
Cash, cash equivalents and investments | $ | 87,070 | 151 | (11 | ) | $ | 87,210 | ||||||||||
Contractual maturities of marketable fixed-income securities | ' | ||||||||||||||||
The following table summarizes contractual maturities of our marketable fixed-income securities as of June 30, 2014 (in thousands): | |||||||||||||||||
Amortized | Estimated | ||||||||||||||||
Cost | Fair Value | ||||||||||||||||
Due within one year | $ | 6,110 | $ | 6,128 | |||||||||||||
Due after one year through five years | 12,761 | 12,860 | |||||||||||||||
Due after five years through ten years | — | — | |||||||||||||||
Total | $ | 18,871 | $ | 18,988 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) | 6 Months Ended |
Jun. 30, 2014 | |
Principles of Consolidation [Abstract] | ' |
Percentage of outstanding equity in Auctane LLC purchased (in hundredths) | 100.00% |
Percentage of voting control in Auctane LLC (in hundredths) | 100.00% |
Minimum [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Estimated useful life | '4 years |
Minimum [Member] | Furniture, Fixtures and Equipment [Member] | ' |
Property and Equipment [Abstract] | ' |
Estimated useful life | '3 years |
Minimum [Member] | Building and Building Improvements [Member] | ' |
Property and Equipment [Abstract] | ' |
Estimated useful life | '10 years |
Maximum [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Estimated useful life | '17 years |
Maximum [Member] | Furniture, Fixtures and Equipment [Member] | ' |
Property and Equipment [Abstract] | ' |
Estimated useful life | '5 years |
Maximum [Member] | Building and Building Improvements [Member] | ' |
Property and Equipment [Abstract] | ' |
Estimated useful life | '40 years |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies, Part II (Details) | 6 Months Ended |
Jun. 30, 2014 | |
Criteria | |
Income Taxes [Abstract] | ' |
Percentage of realization of deferred tax assets, minimum (in hundredths) | 50.00% |
Revenue Recognition [Abstract] | ' |
Number of criteria to be met for recognition of revenue | 4 |
PhotoStamps Retail Boxes [Abstract] | ' |
Period of redemption of PhotoStamps retail boxes | '60 months |
Acquisition_Details
Acquisition (Details) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | |||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 10, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
Trademarks [Member] | Developed Technology [Member] | Non-compete Agreement [Member] | Customer Relationship [Member] | ShipStation [Member] | ShipStation [Member] | ShipStation [Member] | ShipStation [Member] | ShipStation [Member] | ||||||
ShoppingCarts | Minimum [Member] | Maximum [Member] | ||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of voting interests acquired (in hundredths) | 100.00% | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' |
Number of automatic order importing carts and marketplaces | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40 | ' | ' |
Business Combination, Consideration Transferred, Including Equity Interest in Acquiree Held Prior to Combination [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash Consideration | ' | ' | $50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of performance linked earn-out of up to768,900 shares of Stamps.com common stock (contingent consideration) | ' | ' | 16,242 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total purchase price | ' | ' | 66,242 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Range of acquiree shares available for the performance linked earn-out (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 576,675 | 768,900 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | 1,118,000 | ' | 1,118,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Trade accounts receivable | 254,000 | ' | 254,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other assets | 39,000 | ' | 39,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment | 187,000 | ' | 187,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | 50,544,000 | ' | 50,544,000 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Identifiable intangible assets | 15,200,000 | ' | 15,200,000 | ' | ' | 500,000 | 5,300,000 | 400,000 | 9,000,000 | ' | ' | ' | ' | ' |
Accrued expenses and other liabilities | -836,000 | ' | -836,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue | -264,000 | ' | -264,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total purchase price | 66,242,000 | ' | 66,242,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquired Finite Lived Intangible Assets, Weighted Average Useful Life [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Identifiable intangible assets, weighted average useful life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '8 years | ' | ' | ' |
Business acquisition purchase price allocation goodwill tax deductible period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '15 years | ' | ' | ' |
Discount rate of net cash flows to their present values (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15.00% | 15.00% | ' | ' | ' |
Amortization of intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' |
Acquisition and integration related corporate development expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | 420,000 | 420,000 | ' | ' | ' |
Business Acquisition, Pro Forma Information [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | 35,999 | 33,239 | 71,251 | 66,172 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income from operations | 7,597 | 8,300 | 14,831 | 15,768 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $7,492 | $11,984 | $14,668 | $19,528 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic earnings per share (in dollars per share) | $0.47 | $0.77 | $0.91 | $1.27 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Diluted earnings per share (in dollars per share) | $0.46 | $0.74 | $0.89 | $1.21 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net_Income_per_Share_Details
Net Income per Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Computation of basic and diluted net income per share [Abstract] | ' | ' | ' | ' |
Net income | $11,174 | $8,613 | $18,508 | $16,519 |
Basic - weighted average common shares (in shares) | 15,993 | 15,486 | 16,107 | 15,407 |
Diluted effect of common stock equivalents (in shares) | 385 | 677 | 414 | 675 |
Diluted - weighted average common shares (in shares) | 16,378 | 16,163 | 16,521 | 16,082 |
Earnings per share [Abstract] | ' | ' | ' | ' |
Basic (in dollars per share) | $0.70 | $0.56 | $1.15 | $1.07 |
Diluted (in dollars per share) | $0.68 | $0.53 | $1.12 | $1.03 |
Stock Options [Member] | ' | ' | ' | ' |
Anti-dilutive shares excluded from computation of diluted shares [Abstract] | ' | ' | ' | ' |
Anti-dilutive stock option shares (in shares) | 171 | 40 | 140 | 99 |
StockBased_Employee_Compensati2
Stock-Based Employee Compensation (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | $926 | $1,081 | $1,942 | $2,223 |
Weighted average assumptions used in Black-Scholes valuation model [Abstract] | ' | ' | ' | ' |
Expected dividend yield (in hundredths) | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate (in hundredths) | 0.90% | 0.40% | 0.80% | 0.40% |
Expected volatility (in hundredths) | 50.00% | 48.00% | 50.00% | 47.00% |
Expected life | '3 years 4 months 24 days | '3 years 7 months 6 days | '3 years 6 months | '3 years 8 months 12 days |
Expected forfeiture rate (in hundredths) | 6.00% | 6.00% | 6.00% | 6.00% |
Employee and director stock options [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | 926 | 1,081 | 1,826 | 1,924 |
Employee stock purchases [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | 0 | 0 | 116 | 299 |
Cost of revenues [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | 83 | 79 | 185 | 187 |
Sales and marketing [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | 141 | 180 | 334 | 418 |
Research and development [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | 164 | 171 | 400 | 459 |
General and administrative [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | $538 | $651 | $1,023 | $1,159 |
Minimum [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Vesting period | ' | ' | '3 years | ' |
Maximum [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Vesting period | ' | ' | '5 years | ' |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 |
Goodwill [Roll Forward] | ' | ' |
Goodwill, beginning balance | $0 | ' |
Acquisition (see Note 2 - "Acquisition") | 50,544 | ' |
Goodwill, ending balance | 50,544 | ' |
Intangible Assets [Abstract] | ' | ' |
Gross carrying value | 24,578 | 9,378 |
Accumulated amortization | 8,535 | 8,426 |
Nat carrying value | 16,043 | 952 |
Intangible assets acquired in 2014 (see Note 2 - "Acquisition") [Abstract] | ' | ' |
Gross carrying value, acquired | 15,200 | ' |
Accumulated amortization, acquired | 109 | ' |
Net carrying value, acquired | 15,091 | ' |
Identifiable intangible assets, weighted average remaining useful life | '7 years 4 months 24 days | ' |
Amortization Expense, Fiscal Year Maturity [Abstract] | ' | ' |
2015 | 2,177 | ' |
2016 | 2,125 | ' |
2017 | 2,108 | ' |
2018 | 2,045 | ' |
2019 | $1,835 | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Income Taxes [Abstract] | ' | ' | ' | ' |
Valuation allowance | $3,600,000 | ' | $3,600,000 | ' |
Total net income tax expense for corporate alternative minimum federal and state taxes | 167,000 | 27,000 | 339,000 | 90,000 |
Total net tax benefit | $3,466,000 | ($27,000) | $3,294,000 | ($90,000) |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Financial assets measured at fair value on a recurring basis [Abstract] | ' | ' |
Available-for-sale debt securities | $18,988 | ' |
Contingent consideration measured at fair value on a recurring basis [Abstract] | ' | ' |
Total | 10,632 | 0 |
Recurring [Member] | ' | ' |
Financial assets measured at fair value on a recurring basis [Abstract] | ' | ' |
Cash and cash equivalents | 33,812 | 66,674 |
Available-for-sale debt securities | 18,988 | 20,536 |
Total | 52,800 | 87,210 |
Contingent consideration measured at fair value on a recurring basis [Abstract] | ' | ' |
Contingent consideration - current | 5,610 | ' |
Contingent consideration - long-term | 10,632 | ' |
Total | 16,242 | ' |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ' | ' |
Financial assets measured at fair value on a recurring basis [Abstract] | ' | ' |
Cash and cash equivalents | 33,812 | 66,674 |
Available-for-sale debt securities | 0 | 0 |
Total | 33,812 | 66,674 |
Contingent consideration measured at fair value on a recurring basis [Abstract] | ' | ' |
Contingent consideration - current | 0 | ' |
Contingent consideration - long-term | 0 | ' |
Total | 0 | ' |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ' | ' |
Financial assets measured at fair value on a recurring basis [Abstract] | ' | ' |
Cash and cash equivalents | 0 | 0 |
Available-for-sale debt securities | 18,988 | 20,536 |
Total | 18,988 | 20,536 |
Contingent consideration measured at fair value on a recurring basis [Abstract] | ' | ' |
Contingent consideration - current | 0 | ' |
Contingent consideration - long-term | 0 | ' |
Total | 0 | ' |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ' | ' |
Financial assets measured at fair value on a recurring basis [Abstract] | ' | ' |
Cash and cash equivalents | 0 | 0 |
Available-for-sale debt securities | 0 | 0 |
Total | 0 | 0 |
Contingent consideration measured at fair value on a recurring basis [Abstract] | ' | ' |
Contingent consideration - current | 5,610 | ' |
Contingent consideration - long-term | 10,632 | ' |
Total | $16,242 | ' |
Cash_Equivalents_and_Investmen2
Cash Equivalents and Investments (Details) (USD $) | 6 Months Ended | |||
Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | |
Security | ||||
Cash Equivalents and Investments [Abstract] | ' | ' | ' | ' |
Number of securities held | 6 | ' | ' | ' |
Fair value of securities | $2,900,000 | ' | ' | ' |
Unrealized losses on security held | 3,200 | ' | ' | ' |
Cash and cash equivalents [Abstract] | ' | ' | ' | ' |
Cost or amortized cost | 33,812,000 | 66,674,000 | 53,350,000 | 29,576,000 |
Contractual maturities of marketable fixed-income securities [Abstract] | ' | ' | ' | ' |
Due within one year, amortized cost | 6,110,000 | ' | ' | ' |
Due after one year through five years, amortized cost | 12,761,000 | ' | ' | ' |
Due after five year through ten years, amortized cost | 0 | ' | ' | ' |
Total, Amortized Cost | 18,871,000 | ' | ' | ' |
Due within one year, estimated fair value | 6,128,000 | ' | ' | ' |
Due after one year through five years, estimated fair value | 12,860,000 | ' | ' | ' |
Due after five year through ten years, estimated fair value | 0 | ' | ' | ' |
Total, Estimated Fair Value | 18,988,000 | ' | ' | ' |
Cash and cash equivalents [Member] | ' | ' | ' | ' |
Cash and cash equivalents [Abstract] | ' | ' | ' | ' |
Cost or amortized cost | 33,812,000 | 66,674,000 | ' | ' |
Gross unrealized gains | 0 | 0 | ' | ' |
Gross unrealized Losses | 0 | 0 | ' | ' |
Estimated fair value | 33,812,000 | 66,674,000 | ' | ' |
Short-term investments [Member] | ' | ' | ' | ' |
Cash and cash equivalents [Abstract] | ' | ' | ' | ' |
Cost or amortized cost | 6,110,000 | 6,479,000 | ' | ' |
Gross unrealized gains | 18,000 | 45,000 | ' | ' |
Gross unrealized Losses | 0 | 0 | ' | ' |
Estimated fair value | 6,128,000 | 6,524,000 | ' | ' |
Long-term investments [Member] | ' | ' | ' | ' |
Cash and cash equivalents [Abstract] | ' | ' | ' | ' |
Cost or amortized cost | 12,761,000 | 13,917,000 | ' | ' |
Gross unrealized gains | 102,000 | 106,000 | ' | ' |
Gross unrealized Losses | -3,000 | -11,000 | ' | ' |
Estimated fair value | 12,860,000 | 14,012,000 | ' | ' |
Cash, cash equivalents and investments [Member] | ' | ' | ' | ' |
Cash and cash equivalents [Abstract] | ' | ' | ' | ' |
Cost or amortized cost | 52,683,000 | 87,070,000 | ' | ' |
Gross unrealized gains | 120,000 | 151,000 | ' | ' |
Gross unrealized Losses | -3,000 | -11,000 | ' | ' |
Estimated fair value | 52,800,000 | 87,210,000 | ' | ' |
Cash [Member] | Cash and cash equivalents [Member] | ' | ' | ' | ' |
Cash and cash equivalents [Abstract] | ' | ' | ' | ' |
Cost or amortized cost | 33,077,000 | 46,792,000 | ' | ' |
Gross unrealized gains | 0 | 0 | ' | ' |
Gross unrealized Losses | 0 | 0 | ' | ' |
Estimated fair value | 33,077,000 | 46,792,000 | ' | ' |
Money market [Member] | Cash and cash equivalents [Member] | ' | ' | ' | ' |
Cash and cash equivalents [Abstract] | ' | ' | ' | ' |
Cost or amortized cost | 735,000 | 19,882,000 | ' | ' |
Gross unrealized gains | 0 | 0 | ' | ' |
Gross unrealized Losses | 0 | 0 | ' | ' |
Estimated fair value | 735,000 | 19,882,000 | ' | ' |
Corporate notes and bonds [Member] | Short-term investments [Member] | ' | ' | ' | ' |
Cash and cash equivalents [Abstract] | ' | ' | ' | ' |
Cost or amortized cost | 6,110,000 | ' | ' | ' |
Gross unrealized gains | 18,000 | ' | ' | ' |
Gross unrealized Losses | 0 | ' | ' | ' |
Estimated fair value | 6,128,000 | ' | ' | ' |
Corporate bonds and asset backed securities [Member] | Short-term investments [Member] | ' | ' | ' | ' |
Cash and cash equivalents [Abstract] | ' | ' | ' | ' |
Cost or amortized cost | ' | 6,479,000 | ' | ' |
Gross unrealized gains | ' | 45,000 | ' | ' |
Gross unrealized Losses | ' | 0 | ' | ' |
Estimated fair value | ' | 6,524,000 | ' | ' |
Corporate bonds and asset backed securities [Member] | Long-term investments [Member] | ' | ' | ' | ' |
Cash and cash equivalents [Abstract] | ' | ' | ' | ' |
Cost or amortized cost | 11,263,000 | 13,917,000 | ' | ' |
Gross unrealized gains | 100,000 | 106,000 | ' | ' |
Gross unrealized Losses | -3,000 | -11,000 | ' | ' |
Estimated fair value | 11,360,000 | 14,012,000 | ' | ' |
U.S. government and agency securities [Member] | Long-term investments [Member] | ' | ' | ' | ' |
Cash and cash equivalents [Abstract] | ' | ' | ' | ' |
Cost or amortized cost | 1,498,000 | ' | ' | ' |
Gross unrealized gains | 2,000 | ' | ' | ' |
Gross unrealized Losses | 0 | ' | ' | ' |
Estimated fair value | $1,500,000 | ' | ' | ' |