Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 01, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Geeknet, Inc | ' |
Entity Central Index Key | '0001096199 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 6,718,913 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $30,733 | $53,084 |
Accounts receivable, net of allowance of $0 and $6 as of September 30, 2014 and December 31, 2013, respectively | 6,430 | 9,719 |
Inventories, net | 32,487 | 20,186 |
Prepaid expenses and other current assets | 3,902 | 4,202 |
Total current assets | 73,552 | 87,191 |
Property and equipment, net | 1,800 | 2,465 |
Goodwill | 1,953 | 0 |
Other intangible assets, net | 1,257 | 0 |
Other long-term assets | 83 | 50 |
Total assets | 78,645 | 89,706 |
Current liabilities: | ' | ' |
Accounts payable | 9,301 | 10,250 |
Deferred revenue | 2,584 | 2,828 |
Accrued and other liabilities | 4,063 | 6,661 |
Total current liabilities | 15,948 | 19,739 |
Other long-term liabilities | 1,037 | 0 |
Total liabilities | 16,985 | 19,739 |
Commitments and contingencies (Note 8) | ' | ' |
Stockholders’ equity: | ' | ' |
Preferred stock, $0.001 par value; 1,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.001 par value; authorized — 25,000; issued — 7,003 and 6,901 shares, as of September 30, 2014 and December 31, 2013, respectively; outstanding — 6,719 and 6,639 shares as of September 30, 2014 and December 31, 2013, respectively | 7 | 7 |
Treasury stock | -3,827 | -3,479 |
Additional paid-in capital | 818,107 | 816,826 |
Accumulated other comprehensive income | 16 | 16 |
Accumulated deficit | -752,643 | -743,403 |
Total stockholders’ equity | 61,660 | 69,967 |
Total liabilities and stockholders’ equity | $78,645 | $89,706 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Accounts receivable, allowance | $0 | $6 |
Preferred stock, par value (in usd per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in usd per share) | $0.00 | $0.00 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 7,003,000 | 6,901,000 |
Common stock, shares outstanding | 6,719,000 | 6,639,000 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
Net revenue | $22,240 | $22,363 | $68,326 | $63,924 |
Cost of revenue | 17,949 | 18,113 | 56,750 | 51,645 |
Gross margin | 4,291 | 4,250 | 11,576 | 12,279 |
Operating expenses: | ' | ' | ' | ' |
Sales and marketing | 2,835 | 2,116 | 8,331 | 5,758 |
Technology and design | 2,422 | 1,457 | 6,362 | 4,355 |
General and administrative | 1,779 | 2,117 | 6,211 | 7,374 |
Total operating expenses | 7,036 | 5,690 | 20,904 | 17,487 |
Loss from operations | -2,745 | -1,440 | -9,328 | -5,208 |
Interest and other income (expense), net | -99 | 2 | 90 | -25 |
Loss from continuing operations before income taxes | -2,844 | -1,438 | -9,238 | -5,233 |
Income tax provision (benefit) | 2 | -3 | 2 | 0 |
Net loss from continuing operations | -2,846 | -1,435 | -9,240 | -5,233 |
Discontinued operations: | ' | ' | ' | ' |
Loss from discontinued operations, net of tax | 0 | -1 | 0 | -70 |
Net loss | ($2,846) | ($1,436) | ($9,240) | ($5,303) |
Loss per share from continuing operations: | ' | ' | ' | ' |
Basic and diluted | ($0.42) | ($0.22) | ($1.38) | ($0.79) |
Loss per share from discontinued operations: | ' | ' | ' | ' |
Basic and diluted | $0 | $0 | $0 | ($0.01) |
Net loss per share: | ' | ' | ' | ' |
Basic and diluted | ($0.42) | ($0.22) | ($1.38) | ($0.80) |
Shares used in per share calculations: | ' | ' | ' | ' |
Basic and diluted | 6,716 | 6,618 | 6,690 | 6,614 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash flows from operating activities from continuing operations: | ' | ' |
Net loss | ($9,240) | ($5,303) |
Loss from discontinued operations, net of tax | 0 | 70 |
Loss from continuing operations | -9,240 | -5,233 |
Adjustments to reconcile loss from continuing operations to net cash used in operating activities: | ' | ' |
Depreciation and amortization expense | 981 | 950 |
Stock-based compensation expense | 1,245 | 1,753 |
Provision for bad debts | -5 | 164 |
Provision for inventory write-downs | 76 | 712 |
Loss on disposal of assets, net | 4 | 4 |
Changes in assets and liabilities, net of effects of acquisition: | ' | ' |
Accounts receivable | 3,334 | -4,223 |
Inventories | -11,538 | -3,727 |
Prepaid expenses and other assets | 442 | -3,458 |
Accounts payable | -1,651 | -4,164 |
Deferred revenue | -541 | -331 |
Accrued and other liabilities | -3,287 | -1,001 |
Other long-term liabilities | 28 | -29 |
Net cash used in operating activities | -20,152 | -18,583 |
Cash flows from investing activities: | ' | ' |
Acquisition of a business | -1,421 | 0 |
Purchase of property and equipment | -209 | -8 |
Proceeds from sale of discontinued operations | 0 | 3,000 |
Net cash (used in) provided by investing activities | -1,630 | 2,992 |
Cash flows from financing activities: | ' | ' |
Payment of contingent consideration | -250 | 0 |
Proceeds from issuance of common stock | 29 | 292 |
Repurchase of stock | -348 | -1,286 |
Net cash used in financing activities | -569 | -994 |
Cash flows from discontinued operations: | ' | ' |
Net cash used in operating activities | 0 | -42 |
Net cash used in discontinued operations | 0 | -42 |
Net change in cash and cash equivalents | -22,351 | -16,627 |
Cash and cash equivalents, beginning of year | 53,084 | 57,294 |
Cash and cash equivalents, end of period | $30,733 | $40,667 |
Organization_and_Overview
Organization and Overview | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization and Overview | ' |
Organization and Overview | |
Geeknet, Inc. ("Geeknet") through its wholly-owned subsidiary, ThinkGeek, Inc. ("ThinkGeek"), sells collectibles, apparel, gadgets, electronics, toys and other retail products for technology enthusiasts and general consumers through its ThinkGeek.com website (the "website") and certain exclusive products to the Company's wholesale customers. Since 1999, ThinkGeek has been creating a world where everyone can embrace their inner geek, express their passions and connect with one another. In August 2014, Geeknet, through its newly formed wholly-owned subsidiary ThinkGeek Solutions, Inc. ("ThinkGeek Solutions" and together with Geeknet and ThinkGeek, the "Company"), completed the acquisition of substantially all of the assets and certain liabilities of Treehouse Brand Stores, LLC ("Treehouse"). Since 2009, Treehouse has partnered with major video game publishers to operate such publishers' web-stores and to engage fans with their unique and exclusive products. This acquisition aligns with the Company's strategic priorities and will allow it to expand its platform to increase its customer base. ThinkGeek Solutions is expected to remain managed by Treehouse's former leadership team and remain headquartered in Denver, Colorado. | |
ThinkGeek offers a broad range of unique products through its website that are often not available in traditional brick-and-mortar stores. The Company introduces a range of new products to ThinkGeek's audience on a regular basis. Some ThinkGeek products are custom made and developed by the Company's in-house product development team ("GeekLabs"). The Company has several wholesale arrangements with brick-and-mortar retailers located throughout the United States and internationally, allowing the Company to reach a broader consumer audience and expand its brand awareness. ThinkGeek Solutions distributes a wide variety of video game themed merchandise to its customer base through internet stores built for the gaming community. | |
The Company has two reportable segments: Website and Wholesale. The "Website" segment sells geek-themed retail products and video game themed merchandise through the website and internet stores. The "Wholesale" segment sells primarily exclusive GeekLabs products to brick-and-mortar retailers. |
Business_Combination
Business Combination | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Business Combinations [Abstract] | ' | |||||||||||||||
Business Combination | ' | |||||||||||||||
Business Combination | ||||||||||||||||
On August 1, 2014, the Company completed its acquisition of substantially all of the assets and certain liabilities of Treehouse. Treehouse was formed in 2009 and distributes a wide variety of video game themed merchandise to its customer base through internet stores built for the gaming community. The acquisition enables the Company to establish official web-stores under exclusive licenses to increase the Company's customer base. Under the terms of the asset purchase agreement, the Company agreed to pay $1.5 million in cash, less Treehouse's cash and deferred wages at the date of acquisition, with additional earn-out payments of up to $2.0 million based on the achievement of certain specified performance metrics through 2015. The Company determined the fair value of the liability for the contingent consideration based on a probability-weighted discounted cash flow analysis. The fair value measurement is based on significant inputs not observable in the market and represents a Level 3 measurement as defined in the fair value hierarchy. In each period, the Company will reassess its current estimates of performance relative to the targets and adjust the liability to fair value through earnings. | ||||||||||||||||
The acquisition was accounted for using the purchase method of accounting. Accordingly, the results of Treehouse have been included in the accompanying consolidated financial statements from the date of acquisition, and are included in the Website segment. Treehouse contributed net revenues of approximately $1.0 million and approximately $0.4 million net loss for the period from its acquisition date to September 30, 2014. In addition, approximately $0.1 million of acquisition-related costs incurred during the three months ended September 30, 2014 are included in general and administrative expenses. The purchase price has been allocated to the assets acquired and liabilities assumed based upon the respective preliminary estimates of fair value as of the date of the acquisition, which remain preliminary as of September 30, 2014 due to the recent timing of the acquisition, using assumptions that the Company's management believes are reasonable based on the information currently available. The excess of the purchase price over the estimated amounts of net assets was recorded as goodwill. Differences between the preliminary allocation and any changes thereto could be material. The preliminary allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date is as follows (in thousands): | ||||||||||||||||
Accounts receivable | $ | 40 | ||||||||||||||
Inventories | 839 | |||||||||||||||
Prepaid expenses and other current assets | 175 | |||||||||||||||
Property and equipment | 58 | |||||||||||||||
Goodwill | 1,953 | |||||||||||||||
Other intangible assets | 1,303 | |||||||||||||||
Total assets acquired | 4,368 | |||||||||||||||
Accounts payable | (702 | ) | ||||||||||||||
Deferred revenue | (297 | ) | ||||||||||||||
Accrued and other liabilities | (689 | ) | ||||||||||||||
Total liabilities assumed | (1,688 | ) | ||||||||||||||
Short-term contingent liabilities | (250 | ) | ||||||||||||||
Other long-term contingent liabilities | (1,009 | ) | ||||||||||||||
Cash paid at acquisition date | $ | 1,421 | ||||||||||||||
The following are the identifiable intangible assets acquired and their respective estimated lives, as determined based on preliminary valuations (in thousands): | ||||||||||||||||
Fair Value | Estimated Useful Life (Years) | |||||||||||||||
Acquired license agreements | $ | 1,040 | 5 | |||||||||||||
Developed technology | 138 | 5 | ||||||||||||||
Non-competition agreement | 82 | 3 | ||||||||||||||
Customer lists | 43 | 3 | ||||||||||||||
Total identifiable intangible assets | $ | 1,303 | ||||||||||||||
The following unaudited pro forma consolidated financial information reflects the results of operations of the Company as if the acquisition had been completed as of January 1, 2013, after giving effect to certain pro forma accounting adjustments. The pro forma adjustments were recorded principally for the purpose of eliminating intercompany transactions between the Company and Treehouse, adjusting for depreciation and amortization expense based on the fair values of the assets acquired, and adjusting for stock based compensation expense related to a senior management award. These pro forma results are not necessarily indicative of what the Company's operating results would have been had the acquisition actually taken place at the beginning of the period. | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
($ in thousands, except per share amounts) | ||||||||||||||||
Net revenue | $ | 22,833 | $ | 24,708 | $ | 73,145 | $ | 69,885 | ||||||||
Net loss | (3,000 | ) | (1,476 | ) | (10,141 | ) | (5,677 | ) | ||||||||
Basic and diluted earnings per share | $ | (0.45 | ) | $ | (0.22 | ) | $ | (1.52 | ) | $ | (0.86 | ) |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies | |
Except for the updates discussed below, there have been no significant changes to the Company’s critical accounting policies during the nine months ended September 30, 2014 as compared to what was previously disclosed in the Company's Annual Report on Form 10-K ("Form 10-K") for the year ended December 31, 2013. | |
Basis of Presentation | |
The Company has prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. These consolidated financial statements have been prepared on the same basis as the Company's annual financial statements and, in the opinion of management, include all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of the Company's financial position, results of operations, and cash flows for the periods presented. The Company's financial position, results of operations and cash flows for the periods presented are not necessarily indicative of the results that may be expected for 2014. This is due in part to the seasonal nature of the business with a disproportionate amount of sales occurring in the fourth quarter, which begins on October 1 and ends on December 31. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and notes thereto for the fiscal year ended December 31, 2013, included in the Company’s Form 10-K filed with the SEC. | |
For the three and nine months ended September 30, 2014 and September 30, 2013, there was no activity in other comprehensive loss, therefore, comprehensive loss equaled net loss. As a result, a separate Statement of Comprehensive Loss is not included in the accompanying consolidated financial statements. | |
The results of the Company's Media business, which was sold on September 17, 2012, are classified as discontinued operations for the three and nine months ended September 30, 2013 in the Company's Consolidated Statements of Operations. The expenses primarily relate to post-transaction transition services provided by the Company. | |
Certain prior period amounts have been reclassified to conform to the current period's presentation. In the Consolidated Statements of Cash Flows at September 30, 2013, there was $0.1 million of accrued royalties included in Accounts payable that have been reclassified to Accrued and other liabilities. | |
Use of Estimates in Preparation of Consolidated Financial Statements | |
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of such financial statements, as well as the reported amounts of revenue and expenses during the periods indicated. Estimates include, but are not limited to, orders in transit at the end of the reporting period, provision for returns, inventory valuation, Geek Points accruals, stock-based compensation, the fair values of certain assets acquired and liabilities assumed in a business combination, and income taxes. Actual results could differ from those estimates. | |
Net Revenue | |
The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sale price is fixed or determinable, and collectibility is reasonably assured. Net revenue for the Website segment is derived from the online sale of consumer goods. Website net revenue includes shipping revenue and is presented net of returns and allowances, discounts and sales taxes. Net revenue for the Wholesale segment is derived primarily from the sale of certain exclusive products through the wholesale channel. Wholesale net revenue is presented net of discounts, allowances and sales taxes. | |
Website revenue is deferred for orders shipped but not delivered before the end of the period. The amount recorded as deferred revenue is estimated because of the Company's high volume of transactions and the use of multiple shipping carriers. Estimates are used to determine which orders that shipped at the end of the reporting period were delivered and should be recognized as revenue. When calculating these estimates, the Company considers its historical experience of shipping transit times for domestic and international orders. On average, shipping transit times are approximately one to eight business days. As of September 30, 2014 and December 31, 2013, $0.9 million and $1.6 million, respectively, were recognized as deferred revenue for orders shipped at the end of the reporting period but not yet delivered to the customer. | |
The Company also engages in the sale of gift certificates. When a gift certificate is sold, Website revenue is deferred until the certificate is redeemed and the products are delivered. Deferred revenue at September 30, 2014 and December 31, 2013 relating to gift certificates was $1.2 million at each period. | |
The Company reserves an amount for estimated returns on website orders at the end of each reporting period. The Company provides website customers a 90-day right to return purchased products. These estimates are based on historical patterns and recent trends of customer returns. Reserves for returns at September 30, 2014 and December 31, 2013 were $0.1 million and $0.5 million, respectively. | |
Business Combinations | |
Business combinations are accounted for using the purchase method of accounting. The purchase price of an acquisition is allocated to the assets acquired, including intangible assets and liabilities assumed, based on their respective fair values at the acquisition date. Significant estimates and assumptions are required to value assets acquired and liabilities assumed at the acquisition date, including contingent consideration. Liabilities related to contingent consideration are remeasured at fair value in each subsequent reporting period. These estimates are inherently uncertain and subject to refinement and typically include the calculation of an appropriate discount rate and projection of cash flows associated with each acquired asset or assumed liability. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with corresponding adjustments to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Consolidated Statement of Operations. | |
Goodwill and Other Intangible Assets | |
Identifiable intangible assets were recorded based on their estimated fair values in connection with the acquisition. The identifiable intangible assets are amortized on a straight-line basis over their respective useful lives ranging from three to five years. For the three months ended September 30, 2014, the total amortization expense was insignificant. Identifiable intangible assets with finite lives are reviewed for impairment when events and circumstances indicate that the carrying value may not be recoverable. | |
Goodwill was recorded as the excess of the purchase price over the net assets acquired. The Company evaluates goodwill for impairment annually as of December 31, and when an event occurs or circumstances change that indicates that the carrying value may not be recoverable. Impairment of goodwill is tested at the reporting unit level by comparing the carrying value of the reporting unit's net assets, including goodwill, to the fair value of the reporting unit. Due to the recent timing of the acquisition, the Company has not yet completed the analysis to determine the assignment of goodwill to the reporting units. If the carrying amount of the reporting unit exceeds its fair value, a second step is performed to measure the amount of the impairment loss, if any. The preparation of the goodwill impairment analysis requires the Company to make significant estimates and assumptions with respect to the determination of fair values of tangible and intangible assets. These estimates and assumptions, which include future values, are often subjective and may differ significantly from period to period based on changes in the overall economic environment, changes in its business and changes in its strategy or its internal forecasts. | |
Recently Adopted Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board issued authoritative guidance to amend previous guidance for income taxes and requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions. This standard is effective for fiscal years beginning on or after December 15, 2013 and subsequent interim periods. The standard shall be applied prospectively to all unrecognized tax benefits that exist at the effective date. The adoption of this standard, which became effective January 1, 2014, did not have an impact on the Company's results of operations or its financial position. | |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board issued authoritative guidance, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that the guidance will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. |
Balance_Sheet_Components
Balance Sheet Components | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Balance Sheet Components [Abstract] | ' | |||||||
Balance Sheet Components | ' | |||||||
Balance Sheet Components | ||||||||
Prepaid expenses and other current assets | ||||||||
Prepaid expenses and other current assets consist of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Prepaid expenses and deposits for inventory | $ | 3,525 | $ | 3,426 | ||||
Other current assets (1) | 377 | 776 | ||||||
Prepaid expenses and other current assets | $ | 3,902 | $ | 4,202 | ||||
(1) Other current assets at December 31, 2013, included a rebate receivable of approximately $0.5 million. | ||||||||
Property and equipment | ||||||||
Property and equipment consist of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Distribution equipment (useful lives of lesser of 7 years or contract term) | $ | 5,509 | $ | 5,475 | ||||
Computer and office equipment (useful lives of 3 to 5 years) | 409 | 377 | ||||||
Software, including internal-use software (useful lives of 3 years) | 329 | 237 | ||||||
Leasehold improvements (useful lives of lesser of estimated life or lease term) | 219 | 214 | ||||||
Furniture and fixtures (useful lives of 5 years) | 151 | 150 | ||||||
Total property and equipment | 6,617 | 6,453 | ||||||
Less: Accumulated depreciation and amortization | (4,817 | ) | (3,988 | ) | ||||
Property and equipment, net | $ | 1,800 | $ | 2,465 | ||||
Included in Software for the nine months ended September 30, 2014 is approximately $0.2 million of capitalized costs associated with internal-use software developed as part of implementing a new enterprise resource planning (ERP) system. Depreciation and amortization expense for property and equipment was $0.3 million for both the three months ended September 30, 2014 and September 30, 2013, and $0.9 million and $1.0 million for the nine months ended September 30, 2014 and September 30, 2013, respectively. | ||||||||
Accrued and other liabilities | ||||||||
Accrued and other liabilities consist of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Accrued royalties | $ | 1,892 | $ | 3,959 | ||||
Accrued employee compensation and benefits | 1,135 | 894 | ||||||
Accrued Geek Points(1) | 478 | 561 | ||||||
Other accrued liabilities | 558 | 1,247 | ||||||
Accrued and other liabilities | $ | 4,063 | $ | 6,661 | ||||
(1) Accrued Geek Points represents the cost of anticipated future redemptions for awards earned as of the end of the respective periods. | ||||||||
Other long-term liabilities | ||||||||
Other long-term liabilities consist of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Long-term contingent consideration(1) | $ | 1,009 | $ | — | ||||
Long-term deferred rent | 28 | — | ||||||
Other long-term liabilities | $ | 1,037 | $ | — | ||||
(1) Long-term contingent consideration represents the fair value of the potential earn-out payments related to the acquisition of Treehouse based on the terms of the asset purchase agreement. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Fair Value Disclosures [Abstract] | ' | |||||||
Fair Value Measurements | ' | |||||||
Fair Value Measurements | ||||||||
The Company records its financial assets and liabilities at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, an exit price, in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: | ||||||||
Level 1 - Quoted prices in active markets for identical assets or liabilities. | ||||||||
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||
The following table summarizes the Company's financial assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Cash and cash equivalents: | ||||||||
Level 1: | ||||||||
Money market fund deposits | $ | 12,278 | $ | 18,275 | ||||
Level 2: | ||||||||
Asset-backed securities | 5,400 | — | ||||||
Commercial paper | 600 | — | ||||||
Total cash and cash equivalents | $ | 18,278 | $ | 18,275 | ||||
Liabilities: | ||||||||
Level 3: | ||||||||
Acquisition related contingent consideration | 1,009 | — | ||||||
Total liabilities | $ | 1,009 | $ | — | ||||
On August 1, 2014, the Company completed the acquisition of Treehouse, which the Company accounted for under the purchase method of accounting. The terms of the asset purchase agreement relating to the acquisition provides for contingent consideration up to $2.0 million in cash earn-out payments based on the achievement of certain specified performance metrics through 2015. The estimated fair value of the performance-based contingent consideration was $1.0 million at September 30, 2014, and has been reflected as an other long-term liability. The Company determined the estimated fair value of the liability for the contingent consideration based on a probability-weighted discounted cash flow analysis. In each period, the Company will reassess its current estimates of performance relative to the stated targets and will adjust the liability to the estimated fair value through earnings. | ||||||||
The change in the contingent consideration liability is summarized as follows during the three months ended September 30, 2014 (in thousands): | ||||||||
Three Months Ended | ||||||||
September 30, 2014 | ||||||||
Balance, at acquisition | $ | 1,259 | ||||||
Less: payment of contingent consideration during the period | (250 | ) | ||||||
Balance, end of period | $ | 1,009 | ||||||
Computation_of_Per_Share_Amoun
Computation of Per Share Amounts | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Computation of Per Share Amounts | ' | |||||||||||||||
Computation of Per Share Amounts | ||||||||||||||||
Basic earnings per common share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is computed using the weighted-average number of common and dilutive common equivalent shares outstanding during the period. Common equivalent shares are anti-dilutive when their conversion would reduce the loss per share. For the three and nine months ended September 30, 2014 and September 30, 2013, the Company excluded all stock options and restricted stock units from the calculation of diluted net loss per common share because all such securities were anti-dilutive. | ||||||||||||||||
Employee stock options and unvested restricted stock units granted by the Company are treated as potential common shares outstanding in computing diluted earnings per share. Diluted shares outstanding include the dilutive effect of in-the-money options, calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares. | ||||||||||||||||
The following table presents the calculation of basic and diluted earnings per share (in thousands, except per share data): | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net loss from continuing operations | $ | (2,846 | ) | $ | (1,435 | ) | $ | (9,240 | ) | $ | (5,233 | ) | ||||
Loss from discontinued operations, net of tax | — | (1 | ) | — | (70 | ) | ||||||||||
Net loss | $ | (2,846 | ) | $ | (1,436 | ) | $ | (9,240 | ) | $ | (5,303 | ) | ||||
Weighted average shares - basic and diluted | 6,716 | 6,618 | 6,690 | 6,614 | ||||||||||||
Loss per share from continuing operations: | ||||||||||||||||
Basic and diluted | $ | (0.42 | ) | $ | (0.22 | ) | $ | (1.38 | ) | $ | (0.79 | ) | ||||
Loss per share from discontinued operations: | ||||||||||||||||
Basic and diluted | $ | — | $ | — | $ | — | $ | (0.01 | ) | |||||||
Net loss per share: | ||||||||||||||||
Basic and diluted | $ | (0.42 | ) | $ | (0.22 | ) | $ | (1.38 | ) | $ | (0.80 | ) | ||||
The following potential common shares have been excluded from the calculation of diluted earnings per share for all periods presented because they are anti-dilutive (in thousands): | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Anti-dilutive securities: | ||||||||||||||||
Employee stock options | 175 | 86 | 127 | 100 | ||||||||||||
Unvested restricted stock units | 82 | 29 | 25 | 50 | ||||||||||||
Total | 257 | 115 | 152 | 150 | ||||||||||||
Stock_Compensation
Stock Compensation | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Stock Compensation | ' | |||||||||||||||
Stock Compensation | ||||||||||||||||
In December 2007, the Company's stockholders approved the 2007 Equity Incentive Plan (“2007 Plan”). The 2007 Plan replaced the Company's 1998 Stock Plan (the “1998 Plan”) and the 1999 Director Option Plan (the “Directors' Plan”), collectively referred to as the “Equity Plans.” The Equity Plans will continue to govern awards previously granted under each respective plan. At September 30, 2014, 125,209 shares of common stock were available for issuance under the 2007 Plan. | ||||||||||||||||
Options granted under the 2007 Plan must be issued at a price equal to at least the fair market value of the Company’s common stock on the date of grant. All vested stock options under the 2007 Plan may be exercised at the earlier of within 10 years of the date of grant or within 90 days of termination of employment, or such other time as may be provided in the stock option agreement, and vest as determined by the Board of Directors. The Company’s policy is to issue new shares upon exercise of options or vesting of Restricted Stock Units ("RSUs") under the 2007 Plan. | ||||||||||||||||
Stock Options | ||||||||||||||||
The following table summarizes option activities from December 31, 2013 through September 30, 2014: | ||||||||||||||||
Number of Shares | Weighted-Average Exercise Price per Share | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||
Outstanding as of December 31, 2013 | 133,578 | $17.57 | ||||||||||||||
Granted | 82,072 | $11.54 | ||||||||||||||
Exercised | (725 | ) | $11.00 | |||||||||||||
Canceled | (8,250 | ) | $16.22 | |||||||||||||
Outstanding as of September 30, 2014 | 206,675 | $15.26 | 7.9 | $1 | ||||||||||||
Vested or expected to vest at September 30, 2014 | 177,684 | $15.73 | 7.7 | $1 | ||||||||||||
Exercisable at September 30, 2014 | 94,960 | $17.84 | 6.2 | $1 | ||||||||||||
The total intrinsic value of options exercised for the three and nine months ended September 30, 2014 and September 30, 2013 was insignificant for all periods. The weighted average grant date fair value for the three and nine months ended September 30, 2014 was $4.05 and $4.07 respectively. The weighted average grant date fair value for the three and nine months ended September 30, 2013 was $6.50 and $6.06, respectively. The total cash received from stock options exercised was insignificant for the three and nine months ended September 30, 2014. The total cash received from stock options exercised was insignificant and $0.3 million for the three and nine months ended September 30, 2013. For the three and nine months ended September 30, 2014 and September 30, 2013, no tax benefit was realized from exercised options. | ||||||||||||||||
The fair value of the option grants has been calculated on the date of grant using the Black-Scholes option pricing model. The expected life was based on historical settlement patterns. Expected volatility was based on historical implied volatility in the Company’s stock. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. The following table summarizes the weighted-average assumptions for stock options granted: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Expected life (years) | 3.31 | 3 | 3.3 | 3 | ||||||||||||
Risk-free interest rate | 1.00% | 0.80% | 1.00% | 0.50% | ||||||||||||
Volatility | 49% | 58% | 49% | 59% | ||||||||||||
Dividend yield | — | — | — | — | ||||||||||||
Restricted Stock | ||||||||||||||||
RSUs granted to employees typically vest over a three year period. RSUs granted to non-employee directors typically vest on the same day of the grant and represent compensation for serving on the Company's Board of Directors. The following table summarizes restricted stock activities from December 31, 2013 through September 30, 2014: | ||||||||||||||||
Number of Shares | Weighted-Average Grant-Date Fair Value | |||||||||||||||
Outstanding as of December 31, 2013 | 94,771 | $17.91 | ||||||||||||||
Granted | 120,978 | $13.22 | ||||||||||||||
Restricted Stock Release | (98,755 | ) | $17.24 | |||||||||||||
Canceled | (6,432 | ) | $15.61 | |||||||||||||
Outstanding as of September 30, 2014 | 110,562 | $13.51 | ||||||||||||||
Stock-Based Compensation Expense | ||||||||||||||||
The following table summarizes stock-based compensation expense as recorded in the Consolidated Statements of Operations (in thousands): | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Cost of revenue | $ | 45 | $ | 19 | $ | 85 | $ | (101 | ) | |||||||
Sales and marketing | 24 | 19 | 67 | (49 | ) | |||||||||||
Technology and design | 56 | 42 | 166 | 135 | ||||||||||||
General and administrative | 65 | 209 | 927 | 1,768 | ||||||||||||
Included in operating expenses | 145 | 270 | 1,160 | 1,854 | ||||||||||||
Total stock-based compensation expense | $ | 190 | $ | 289 | $ | 1,245 | $ | 1,753 | ||||||||
The stock-based compensation expense is net of insignificant amounts capitalized to internal-use software for the three and nine months ended September 30, 2014. | ||||||||||||||||
As of September 30, 2014, total compensation cost not yet recognized and the weighted-average remaining term is as follows ($ in thousands): | ||||||||||||||||
Expense not yet | Weighted-Average Remaining Term (in years) | |||||||||||||||
recognized | ||||||||||||||||
Stock Options | $ | 387 | 2.5 | |||||||||||||
Restricted Stock Units | $ | 985 | 2.4 | |||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Commitments and Contingencies | |
Legal Proceedings | |
The Company is involved from time to time in claims, proceedings and litigation arising in the normal course of business. The Company reviews all claims and accrues a liability for those matters where it believes that the likelihood that a loss will occur is probable and the amount of loss is reasonably estimable. | |
On June 10, 2013, the Company was served with a complaint filed by UbiComm LLC in U.S. District Court, for the District of Delaware, alleging infringement of U.S. Patent Number 5,603,054 ("Patent '054"). On September 3, 2013, the Company filed a Motion to Dismiss the Complaint, which was granted on November 15, 2013. On the same day, Ubicomm appealed the dismissal to the U.S. Court of Appeals for the Federal Circuit (the "Appeals Court"). Subsequently, the parties agreed to stay the matter pending the U.S. Supreme Court decision in Alice Corp v. CLS Bank which related to Patent '054. Following the Supreme Court’s CLS Bank decision on June 19, 2014, UbiComm decided to withdraw the appeal. The parties entered into a Joint Motion to Dismiss the appeal on July 23, 2014, and the Appeals Court granted the motion to dismiss on July 31, 2014. |
Segments
Segments | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Segment and Geographic Information | ' | ||||||||||||
Segment and Geographic Information | |||||||||||||
The Company has three operating segments: Website, Wholesale, and ThinkGeek Solutions. The ThinkGeek Solutions operating segment has been aggregated into the existing Website reportable segment. The Website segment sells geek-themed retail products and video game themed merchandise to technology enthusiasts and general consumers through the website and through internet stores. The Wholesale segment has higher gross margins, as it primarily sells exclusive higher margin GeekLabs products to brick-and-mortar retailers. | |||||||||||||
The accounting policies of the reportable segments are consistent with those described in the summary of significant accounting policies included in the Company’s 2013 Form 10-K. The majority of costs are specifically identifiable to each segment. However, where costs are not specifically identifiable, they are allocated based on the ratio of segment product costs to total product costs. The Company's chief decision-making group is the Chief Executive Officer and the Chief Financial Officer. The Company's accounts receivables are primarily related to the Wholesale segment. Other than inventory, the Company's assets and liabilities are not allocated or reviewed by the chief decision-making group on a segment basis. Beginning in the first quarter of 2014, the Company began identifying inventory that was dedicated exclusively to the Wholesale segment which was approximately $2.9 million as of September 30, 2014. | |||||||||||||
(in thousands) | Website | Wholesale | Total | ||||||||||
Three Months Ended September 30, 2014 | |||||||||||||
Net revenue | $ | 15,330 | $ | 6,910 | $ | 22,240 | |||||||
Cost of revenue | 13,481 | 4,468 | 17,949 | ||||||||||
Gross margin | $ | 1,849 | $ | 2,442 | $ | 4,291 | |||||||
Gross margin % | 12.1 | % | 35.3 | % | 19.3 | % | |||||||
Three Months Ended September 30, 2013 | |||||||||||||
Net revenue | $ | 16,990 | $ | 5,373 | $ | 22,363 | |||||||
Cost of revenue | 14,377 | 3,736 | 18,113 | ||||||||||
Gross margin | $ | 2,613 | $ | 1,637 | $ | 4,250 | |||||||
Gross margin % | 15.4 | % | 30.5 | % | 19 | % | |||||||
Nine Months Ended September 30, 2014 | |||||||||||||
Net revenue | $ | 51,042 | $ | 17,284 | $ | 68,326 | |||||||
Cost of revenue | 45,219 | 11,531 | 56,750 | ||||||||||
Gross margin | $ | 5,823 | $ | 5,753 | $ | 11,576 | |||||||
Gross margin % | 11.4 | % | 33.3 | % | 16.9 | % | |||||||
Nine Months Ended September 30, 2013 | |||||||||||||
Net revenue | $ | 53,225 | $ | 10,699 | $ | 63,924 | |||||||
Cost of revenue | 44,371 | 7,274 | 51,645 | ||||||||||
Gross margin | $ | 8,854 | $ | 3,425 | $ | 12,279 | |||||||
Gross margin % | 16.6 | % | 32 | % | 19.2 | % | |||||||
Net revenue derived from international orders was $5.2 million and $4.9 million, and $15.5 million and $13.8 million, for the three and nine months ended September 30, 2014 and September 30, 2013, respectively. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The Company has prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. These consolidated financial statements have been prepared on the same basis as the Company's annual financial statements and, in the opinion of management, include all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of the Company's financial position, results of operations, and cash flows for the periods presented. The Company's financial position, results of operations and cash flows for the periods presented are not necessarily indicative of the results that may be expected for 2014. This is due in part to the seasonal nature of the business with a disproportionate amount of sales occurring in the fourth quarter, which begins on October 1 and ends on December 31. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and notes thereto for the fiscal year ended December 31, 2013, included in the Company’s Form 10-K filed with the SEC. | |
Use of Estimates in Preparation of Consolidated Financial Statements | ' |
Use of Estimates in Preparation of Consolidated Financial Statements | |
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of such financial statements, as well as the reported amounts of revenue and expenses during the periods indicated. Estimates include, but are not limited to, orders in transit at the end of the reporting period, provision for returns, inventory valuation, Geek Points accruals, stock-based compensation, the fair values of certain assets acquired and liabilities assumed in a business combination, and income taxes. Actual results could differ from those estimates. | |
Net Revenue | ' |
Net Revenue | |
The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sale price is fixed or determinable, and collectibility is reasonably assured. Net revenue for the Website segment is derived from the online sale of consumer goods. Website net revenue includes shipping revenue and is presented net of returns and allowances, discounts and sales taxes. Net revenue for the Wholesale segment is derived primarily from the sale of certain exclusive products through the wholesale channel. Wholesale net revenue is presented net of discounts, allowances and sales taxes. | |
Website revenue is deferred for orders shipped but not delivered before the end of the period. The amount recorded as deferred revenue is estimated because of the Company's high volume of transactions and the use of multiple shipping carriers. Estimates are used to determine which orders that shipped at the end of the reporting period were delivered and should be recognized as revenue. When calculating these estimates, the Company considers its historical experience of shipping transit times for domestic and international orders. On average, shipping transit times are approximately one to eight business days. As of September 30, 2014 and December 31, 2013, $0.9 million and $1.6 million, respectively, were recognized as deferred revenue for orders shipped at the end of the reporting period but not yet delivered to the customer. | |
The Company also engages in the sale of gift certificates. When a gift certificate is sold, Website revenue is deferred until the certificate is redeemed and the products are delivered. Deferred revenue at September 30, 2014 and December 31, 2013 relating to gift certificates was $1.2 million at each period. | |
The Company reserves an amount for estimated returns on website orders at the end of each reporting period. The Company provides website customers a 90-day right to return purchased products. These estimates are based on historical patterns and recent trends of customer returns. | |
Business Combinations | ' |
Business Combinations | |
Business combinations are accounted for using the purchase method of accounting. The purchase price of an acquisition is allocated to the assets acquired, including intangible assets and liabilities assumed, based on their respective fair values at the acquisition date. Significant estimates and assumptions are required to value assets acquired and liabilities assumed at the acquisition date, including contingent consideration. Liabilities related to contingent consideration are remeasured at fair value in each subsequent reporting period. These estimates are inherently uncertain and subject to refinement and typically include the calculation of an appropriate discount rate and projection of cash flows associated with each acquired asset or assumed liability. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with corresponding adjustments to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Consolidated Statement of Operations. | |
Goodwill and Other Intangible Assets | ' |
Goodwill and Other Intangible Assets | |
Identifiable intangible assets were recorded based on their estimated fair values in connection with the acquisition. The identifiable intangible assets are amortized on a straight-line basis over their respective useful lives ranging from three to five years. For the three months ended September 30, 2014, the total amortization expense was insignificant. Identifiable intangible assets with finite lives are reviewed for impairment when events and circumstances indicate that the carrying value may not be recoverable. | |
Goodwill was recorded as the excess of the purchase price over the net assets acquired. The Company evaluates goodwill for impairment annually as of December 31, and when an event occurs or circumstances change that indicates that the carrying value may not be recoverable. Impairment of goodwill is tested at the reporting unit level by comparing the carrying value of the reporting unit's net assets, including goodwill, to the fair value of the reporting unit. Due to the recent timing of the acquisition, the Company has not yet completed the analysis to determine the assignment of goodwill to the reporting units. If the carrying amount of the reporting unit exceeds its fair value, a second step is performed to measure the amount of the impairment loss, if any. The preparation of the goodwill impairment analysis requires the Company to make significant estimates and assumptions with respect to the determination of fair values of tangible and intangible assets. These estimates and assumptions, which include future values, are often subjective and may differ significantly from period to period based on changes in the overall economic environment, changes in its business and changes in its strategy or its internal forecasts. | |
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements | ' |
Recently Adopted Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board issued authoritative guidance to amend previous guidance for income taxes and requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, with certain exceptions. This standard is effective for fiscal years beginning on or after December 15, 2013 and subsequent interim periods. The standard shall be applied prospectively to all unrecognized tax benefits that exist at the effective date. The adoption of this standard, which became effective January 1, 2014, did not have an impact on the Company's results of operations or its financial position. | |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board issued authoritative guidance, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that the guidance will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. |
Business_Combination_Tables
Business Combination (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Business Combinations [Abstract] | ' | |||||||||||||||
Schedule of Recognized Identifiable Assets Acquired and Liabilities Assumed | ' | |||||||||||||||
The preliminary allocation of the purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date is as follows (in thousands): | ||||||||||||||||
Accounts receivable | $ | 40 | ||||||||||||||
Inventories | 839 | |||||||||||||||
Prepaid expenses and other current assets | 175 | |||||||||||||||
Property and equipment | 58 | |||||||||||||||
Goodwill | 1,953 | |||||||||||||||
Other intangible assets | 1,303 | |||||||||||||||
Total assets acquired | 4,368 | |||||||||||||||
Accounts payable | (702 | ) | ||||||||||||||
Deferred revenue | (297 | ) | ||||||||||||||
Accrued and other liabilities | (689 | ) | ||||||||||||||
Total liabilities assumed | (1,688 | ) | ||||||||||||||
Short-term contingent liabilities | (250 | ) | ||||||||||||||
Other long-term contingent liabilities | (1,009 | ) | ||||||||||||||
Cash paid at acquisition date | $ | 1,421 | ||||||||||||||
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | ' | |||||||||||||||
The following are the identifiable intangible assets acquired and their respective estimated lives, as determined based on preliminary valuations (in thousands): | ||||||||||||||||
Fair Value | Estimated Useful Life (Years) | |||||||||||||||
Acquired license agreements | $ | 1,040 | 5 | |||||||||||||
Developed technology | 138 | 5 | ||||||||||||||
Non-competition agreement | 82 | 3 | ||||||||||||||
Customer lists | 43 | 3 | ||||||||||||||
Total identifiable intangible assets | $ | 1,303 | ||||||||||||||
Business Acquisition, Pro Forma Information | ' | |||||||||||||||
The following unaudited pro forma consolidated financial information reflects the results of operations of the Company as if the acquisition had been completed as of January 1, 2013, after giving effect to certain pro forma accounting adjustments. The pro forma adjustments were recorded principally for the purpose of eliminating intercompany transactions between the Company and Treehouse, adjusting for depreciation and amortization expense based on the fair values of the assets acquired, and adjusting for stock based compensation expense related to a senior management award. These pro forma results are not necessarily indicative of what the Company's operating results would have been had the acquisition actually taken place at the beginning of the period. | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
($ in thousands, except per share amounts) | ||||||||||||||||
Net revenue | $ | 22,833 | $ | 24,708 | $ | 73,145 | $ | 69,885 | ||||||||
Net loss | (3,000 | ) | (1,476 | ) | (10,141 | ) | (5,677 | ) | ||||||||
Basic and diluted earnings per share | $ | (0.45 | ) | $ | (0.22 | ) | $ | (1.52 | ) | $ | (0.86 | ) |
Balance_Sheet_Components_Table
Balance Sheet Components (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Balance Sheet Components [Abstract] | ' | |||||||
Prepaid Expenses and Other Current Assets | ' | |||||||
Prepaid expenses and other current assets consist of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Prepaid expenses and deposits for inventory | $ | 3,525 | $ | 3,426 | ||||
Other current assets (1) | 377 | 776 | ||||||
Prepaid expenses and other current assets | $ | 3,902 | $ | 4,202 | ||||
(1) Other current assets at December 31, 2013, included a rebate receivable of approximately $0.5 million. | ||||||||
Property, Plant and Equipment | ' | |||||||
Property and equipment consist of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Distribution equipment (useful lives of lesser of 7 years or contract term) | $ | 5,509 | $ | 5,475 | ||||
Computer and office equipment (useful lives of 3 to 5 years) | 409 | 377 | ||||||
Software, including internal-use software (useful lives of 3 years) | 329 | 237 | ||||||
Leasehold improvements (useful lives of lesser of estimated life or lease term) | 219 | 214 | ||||||
Furniture and fixtures (useful lives of 5 years) | 151 | 150 | ||||||
Total property and equipment | 6,617 | 6,453 | ||||||
Less: Accumulated depreciation and amortization | (4,817 | ) | (3,988 | ) | ||||
Property and equipment, net | $ | 1,800 | $ | 2,465 | ||||
Schedule of Accrued Liabilities | ' | |||||||
Accrued and other liabilities consist of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Accrued royalties | $ | 1,892 | $ | 3,959 | ||||
Accrued employee compensation and benefits | 1,135 | 894 | ||||||
Accrued Geek Points(1) | 478 | 561 | ||||||
Other accrued liabilities | 558 | 1,247 | ||||||
Accrued and other liabilities | $ | 4,063 | $ | 6,661 | ||||
(1) Accrued Geek Points represents the cost of anticipated future redemptions for awards earned as of the end of the respective periods. | ||||||||
Schedule of Other Long Term Liabilities | ' | |||||||
Other long-term liabilities consist of the following (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Long-term contingent consideration(1) | $ | 1,009 | $ | — | ||||
Long-term deferred rent | 28 | — | ||||||
Other long-term liabilities | $ | 1,037 | $ | — | ||||
(1) Long-term contingent consideration represents the fair value of the potential earn-out payments related to the acquisition of Treehouse based on the terms of the asset purchase agreement. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Fair Value Disclosures [Abstract] | ' | |||||||
Fair Value, Assets Measured on Recurring Basis | ' | |||||||
The following table summarizes the Company's financial assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands): | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
Cash and cash equivalents: | ||||||||
Level 1: | ||||||||
Money market fund deposits | $ | 12,278 | $ | 18,275 | ||||
Level 2: | ||||||||
Asset-backed securities | 5,400 | — | ||||||
Commercial paper | 600 | — | ||||||
Total cash and cash equivalents | $ | 18,278 | $ | 18,275 | ||||
Liabilities: | ||||||||
Level 3: | ||||||||
Acquisition related contingent consideration | 1,009 | — | ||||||
Total liabilities | $ | 1,009 | $ | — | ||||
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | ' | |||||||
The change in the contingent consideration liability is summarized as follows during the three months ended September 30, 2014 (in thousands): | ||||||||
Three Months Ended | ||||||||
September 30, 2014 | ||||||||
Balance, at acquisition | $ | 1,259 | ||||||
Less: payment of contingent consideration during the period | (250 | ) | ||||||
Balance, end of period | $ | 1,009 | ||||||
Computation_of_Per_Share_Amoun1
Computation of Per Share Amounts (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | ' | |||||||||||||||
The following table presents the calculation of basic and diluted earnings per share (in thousands, except per share data): | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net loss from continuing operations | $ | (2,846 | ) | $ | (1,435 | ) | $ | (9,240 | ) | $ | (5,233 | ) | ||||
Loss from discontinued operations, net of tax | — | (1 | ) | — | (70 | ) | ||||||||||
Net loss | $ | (2,846 | ) | $ | (1,436 | ) | $ | (9,240 | ) | $ | (5,303 | ) | ||||
Weighted average shares - basic and diluted | 6,716 | 6,618 | 6,690 | 6,614 | ||||||||||||
Loss per share from continuing operations: | ||||||||||||||||
Basic and diluted | $ | (0.42 | ) | $ | (0.22 | ) | $ | (1.38 | ) | $ | (0.79 | ) | ||||
Loss per share from discontinued operations: | ||||||||||||||||
Basic and diluted | $ | — | $ | — | $ | — | $ | (0.01 | ) | |||||||
Net loss per share: | ||||||||||||||||
Basic and diluted | $ | (0.42 | ) | $ | (0.22 | ) | $ | (1.38 | ) | $ | (0.80 | ) | ||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | ' | |||||||||||||||
The following potential common shares have been excluded from the calculation of diluted earnings per share for all periods presented because they are anti-dilutive (in thousands): | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Anti-dilutive securities: | ||||||||||||||||
Employee stock options | 175 | 86 | 127 | 100 | ||||||||||||
Unvested restricted stock units | 82 | 29 | 25 | 50 | ||||||||||||
Total | 257 | 115 | 152 | 150 | ||||||||||||
Stock_Compensation_Tables
Stock Compensation (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity | ' | |||||||||||||||
The following table summarizes option activities from December 31, 2013 through September 30, 2014: | ||||||||||||||||
Number of Shares | Weighted-Average Exercise Price per Share | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||
Outstanding as of December 31, 2013 | 133,578 | $17.57 | ||||||||||||||
Granted | 82,072 | $11.54 | ||||||||||||||
Exercised | (725 | ) | $11.00 | |||||||||||||
Canceled | (8,250 | ) | $16.22 | |||||||||||||
Outstanding as of September 30, 2014 | 206,675 | $15.26 | 7.9 | $1 | ||||||||||||
Vested or expected to vest at September 30, 2014 | 177,684 | $15.73 | 7.7 | $1 | ||||||||||||
Exercisable at September 30, 2014 | 94,960 | $17.84 | 6.2 | $1 | ||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | ' | |||||||||||||||
The following table summarizes the weighted-average assumptions for stock options granted: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Expected life (years) | 3.31 | 3 | 3.3 | 3 | ||||||||||||
Risk-free interest rate | 1.00% | 0.80% | 1.00% | 0.50% | ||||||||||||
Volatility | 49% | 58% | 49% | 59% | ||||||||||||
Dividend yield | — | — | — | — | ||||||||||||
Schedule of Share-based Compensation, Restricted Stock Units Activity | ' | |||||||||||||||
The following table summarizes restricted stock activities from December 31, 2013 through September 30, 2014: | ||||||||||||||||
Number of Shares | Weighted-Average Grant-Date Fair Value | |||||||||||||||
Outstanding as of December 31, 2013 | 94,771 | $17.91 | ||||||||||||||
Granted | 120,978 | $13.22 | ||||||||||||||
Restricted Stock Release | (98,755 | ) | $17.24 | |||||||||||||
Canceled | (6,432 | ) | $15.61 | |||||||||||||
Outstanding as of September 30, 2014 | 110,562 | $13.51 | ||||||||||||||
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ' | |||||||||||||||
The following table summarizes stock-based compensation expense as recorded in the Consolidated Statements of Operations (in thousands): | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Cost of revenue | $ | 45 | $ | 19 | $ | 85 | $ | (101 | ) | |||||||
Sales and marketing | 24 | 19 | 67 | (49 | ) | |||||||||||
Technology and design | 56 | 42 | 166 | 135 | ||||||||||||
General and administrative | 65 | 209 | 927 | 1,768 | ||||||||||||
Included in operating expenses | 145 | 270 | 1,160 | 1,854 | ||||||||||||
Total stock-based compensation expense | $ | 190 | $ | 289 | $ | 1,245 | $ | 1,753 | ||||||||
Schedule of Unrecognized Compensation Cost, Nonvested Awards | ' | |||||||||||||||
As of September 30, 2014, total compensation cost not yet recognized and the weighted-average remaining term is as follows ($ in thousands): | ||||||||||||||||
Expense not yet | Weighted-Average Remaining Term (in years) | |||||||||||||||
recognized | ||||||||||||||||
Stock Options | $ | 387 | 2.5 | |||||||||||||
Restricted Stock Units | $ | 985 | 2.4 | |||||||||||||
Segments_Tables
Segments (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Schedule of Segment Reporting Information, by Segment | ' | ||||||||||||
(in thousands) | Website | Wholesale | Total | ||||||||||
Three Months Ended September 30, 2014 | |||||||||||||
Net revenue | $ | 15,330 | $ | 6,910 | $ | 22,240 | |||||||
Cost of revenue | 13,481 | 4,468 | 17,949 | ||||||||||
Gross margin | $ | 1,849 | $ | 2,442 | $ | 4,291 | |||||||
Gross margin % | 12.1 | % | 35.3 | % | 19.3 | % | |||||||
Three Months Ended September 30, 2013 | |||||||||||||
Net revenue | $ | 16,990 | $ | 5,373 | $ | 22,363 | |||||||
Cost of revenue | 14,377 | 3,736 | 18,113 | ||||||||||
Gross margin | $ | 2,613 | $ | 1,637 | $ | 4,250 | |||||||
Gross margin % | 15.4 | % | 30.5 | % | 19 | % | |||||||
Nine Months Ended September 30, 2014 | |||||||||||||
Net revenue | $ | 51,042 | $ | 17,284 | $ | 68,326 | |||||||
Cost of revenue | 45,219 | 11,531 | 56,750 | ||||||||||
Gross margin | $ | 5,823 | $ | 5,753 | $ | 11,576 | |||||||
Gross margin % | 11.4 | % | 33.3 | % | 16.9 | % | |||||||
Nine Months Ended September 30, 2013 | |||||||||||||
Net revenue | $ | 53,225 | $ | 10,699 | $ | 63,924 | |||||||
Cost of revenue | 44,371 | 7,274 | 51,645 | ||||||||||
Gross margin | $ | 8,854 | $ | 3,425 | $ | 12,279 | |||||||
Gross margin % | 16.6 | % | 32 | % | 19.2 | % | |||||||
Organization_and_Overview_Deta
Organization and Overview (Details) | 9 Months Ended |
Sep. 30, 2014 | |
Segment | |
Basis of Presentation [Abstract] | ' |
Reportable segments (number) | 2 |
Business_Combination_Narrative
Business Combination (Narrative) (Details) (Treehouse, USD $) | 0 Months Ended | 2 Months Ended | |
Aug. 01, 2014 | Sep. 30, 2014 | Aug. 01, 2014 | |
Treehouse | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' |
Total initial consideration in cash | $1,500,000 | ' | ' |
Contingent consideration (up to 2 million) | ' | ' | 2,000,000 |
Revenues contributed since acquisition date | ' | 1,000,000 | ' |
Net loss for the period from acquisition date | ' | 400,000 | ' |
Acquisition related costs | ' | $100,000 | ' |
Business_Combination_Schedule_
Business Combination (Schedule of Preliminary Allocation of Purchase Price) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Aug. 01, 2014 |
In Thousands, unless otherwise specified | Treehouse | ||
Business Acquisition [Line Items] | ' | ' | ' |
Accounts receivable | ' | ' | $40 |
Inventories | ' | ' | 839 |
Prepaid expenses and other current assets | ' | ' | 175 |
Property and equipment | ' | ' | 58 |
Goodwill | 1,953 | 0 | 1,953 |
Other intangible assets | ' | ' | 1,303 |
Total assets acquired | ' | ' | 4,368 |
Accounts payable | ' | ' | -702 |
Deferred revenue | ' | ' | -297 |
Accrued and other liabilities | ' | ' | -689 |
Total liabilities assumed | ' | ' | -1,688 |
Short-term contingent liabilities | ' | ' | -250 |
Other long-term contingent liabilities | ' | ' | -1,009 |
Cash paid at acquisition date | ' | ' | $1,421 |
Business_Combination_Schedule_1
Business Combination (Schedule of Identifiable Assets Acquired) (Details) (Treehouse, USD $) | 0 Months Ended |
In Thousands, unless otherwise specified | Aug. 01, 2014 |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Identifiable intangible assets acquired | $1,303 |
Acquired license agreements | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Identifiable intangible assets acquired | 1,040 |
Estimated Useful Life (Years) | '5 years |
Developed technology | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Identifiable intangible assets acquired | 138 |
Estimated Useful Life (Years) | '5 years |
Non-competition agreement | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Identifiable intangible assets acquired | 82 |
Estimated Useful Life (Years) | '3 years |
Customer lists | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' |
Identifiable intangible assets acquired | $43 |
Estimated Useful Life (Years) | '3 years |
Business_Combination_Schedule_2
Business Combination (Schedule of Pro Forma Information) (Details) (Treehouse, USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Treehouse | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Net revenue | $22,833 | $24,708 | $73,145 | $69,885 |
Net loss | ($3,000) | ($1,476) | ($10,141) | ($5,677) |
Basic and diluted earnings per share | ($0.45) | ($0.22) | ($1.52) | ($0.86) |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 9 Months Ended | 9 Months Ended | |||||
Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | |
Minimum | Maximum | e-Commerce | e-Commerce | Accrued Liabilities and Other | |||
Reclassification of Accounts Payable to Accrued Liabilities and Other | |||||||
Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Accrued royalties included in Accounts Payable | ' | ' | ' | ' | ' | ' | $100,000 |
Approximate average shipping time, minimum | '1 day | ' | ' | ' | ' | ' | ' |
Approximate average shipping time, maximum | '8 days | ' | ' | ' | ' | ' | ' |
Deferred revenue | 2,584,000 | 2,828,000 | ' | ' | 900,000 | 1,600,000 | ' |
Deferred revenue related to gift certificates | 1,200,000 | 1,200,000 | ' | ' | ' | ' | ' |
Right to return products (days) | '90 days | ' | ' | ' | ' | ' | ' |
Reserves for returns | $100,000 | $500,000 | ' | ' | ' | ' | ' |
Identifiable intangible assets useful lives | ' | ' | '3 years | '5 years | ' | ' | ' |
Balance_Sheet_Components_Prepa
Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
Balance Sheet Components [Abstract] | ' | ' | ||
Prepaid expenses and deposits for inventory | $3,525,000 | $3,426,000 | ||
Other current assets | 377,000 | [1] | 776,000 | [1] |
Prepaid expenses and other current assets | 3,902,000 | 4,202,000 | ||
Rebate receivable | ' | $500,000 | ||
[1] | Other current assets at December 31, 2013, included a rebate receivable of approximately $0.5 million. |
Balance_Sheet_Components_Prope
Balance Sheet Components - Property, Plant and Equipment (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Total property and equipment | $6,617,000 | ' | $6,617,000 | ' | $6,453,000 |
Less: Accumulated depreciation and amortization | -4,817,000 | ' | -4,817,000 | ' | -3,988,000 |
Property and equipment, net | 1,800,000 | ' | 1,800,000 | ' | 2,465,000 |
Depreciation expense | 300,000 | 300,000 | 900,000 | 1,000,000 | ' |
Distribution equipment (useful lives of lesser of 7 years or contract term) | ' | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Property and equipment, useful life | ' | ' | '7 years | ' | ' |
Total property and equipment | 5,509,000 | ' | 5,509,000 | ' | 5,475,000 |
Computer and office equipment (useful lives of 3 to 5 years) | ' | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Total property and equipment | 409,000 | ' | 409,000 | ' | 377,000 |
Computer and office equipment (useful lives of 3 to 5 years) | Minimum | ' | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Property and equipment, useful life | ' | ' | '3 years | ' | ' |
Computer and office equipment (useful lives of 3 to 5 years) | Maximum | ' | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Property and equipment, useful life | ' | ' | '5 years | ' | ' |
Software, including internal-use software (useful lives of 3 years) | ' | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Total property and equipment | 329,000 | ' | 329,000 | ' | 237,000 |
Capitalized costs associated with internal-use software | ' | ' | 200,000 | ' | ' |
Software, including internal-use software (useful lives of 3 years) | Minimum | ' | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Property and equipment, useful life | ' | ' | '3 years | ' | ' |
Leasehold improvements (useful lives of lesser of estimated life or lease term) | ' | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Total property and equipment | 219,000 | ' | 219,000 | ' | 214,000 |
Furniture and fixtures (useful lives of 5 years) | ' | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Property and equipment, useful life | ' | ' | '5 years | ' | ' |
Total property and equipment | $151,000 | ' | $151,000 | ' | $150,000 |
Balance_Sheet_Components_Accru
Balance Sheet Components - Accrued and Other Liabilities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Balance Sheet Components [Abstract] | ' | ' | ||
Accrued royalties | $1,892 | $3,959 | ||
Accrued employee compensation and benefits | 1,135 | 894 | ||
Accrued Geek Points | 478 | [1] | 561 | [1] |
Other accrued liabilities | 558 | 1,247 | ||
Accrued and other liabilities | $4,063 | $6,661 | ||
[1] | Accrued Geek Points represents the cost of anticipated future redemptions for awards earned as of the end of the respective periods. |
Balance_Sheet_Components_Other
Balance Sheet Components Other Long Term Liabilities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Balance Sheet Components [Abstract] | ' | ' | ||
Long-term contingent consideration | $1,009 | [1] | $0 | [1] |
Long-term deferred rent | 28 | 0 | ||
Other long-term liabilities | $1,037 | $0 | ||
[1] | Long-term contingent consideration represents the fair value of the potential earn-out payments related to the acquisition of Treehouse based on the terms of the asset purchase agreement. |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Fair Value, Measurements, Recurring, USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total cash and cash equivalents | $18,278 | $18,275 |
Total liabilities | 1,009 | 0 |
Level 1: | Money market fund deposits | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total cash and cash equivalents | 12,278 | 18,275 |
Level 2: | Asset-backed securities | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total cash and cash equivalents | 5,400 | 0 |
Level 2: | Commercial paper | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total cash and cash equivalents | 600 | 0 |
Level 3: | Acquisition related contingent consideration | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Total liabilities | $1,009 | $0 |
Fair_Value_Measurements_Narrat
Fair Value Measurements (Narrative) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Aug. 01, 2014 | Sep. 30, 2014 | ||
Treehouse | Treehouse | Treehouse | |||||
Other long-term liability | |||||||
Fair Value, Measurements, Recurring | |||||||
Level 3: | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' | ' | ||
Contingent consideration (up to 2 million) | ' | ' | ' | $2,000,000 | ' | ||
Long-term contingent consideration | $1,009,000 | [1] | $0 | [1] | $1,009,000 | $1,259,000 | $1,000,000 |
[1] | Long-term contingent consideration represents the fair value of the potential earn-out payments related to the acquisition of Treehouse based on the terms of the asset purchase agreement. |
Fair_Value_Measurements_Schedu
Fair Value Measurements (Schedule of Change in Contingent Consideration) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | ||
In Thousands, unless otherwise specified | Treehouse | ||||
Contingent Consideration [Roll Forward] | ' | ' | ' | ||
Balance, at acquisition | $1,009 | [1] | $0 | [1] | $1,259 |
Less: payment of contingent consideration during the period | ' | ' | -250 | ||
Balance, end of period | $1,009 | [1] | $0 | [1] | $1,009 |
[1] | Long-term contingent consideration represents the fair value of the potential earn-out payments related to the acquisition of Treehouse based on the terms of the asset purchase agreement. |
Computation_of_Per_Share_Amoun2
Computation of Per Share Amounts - Net Loss Per Share Disclosure (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Net loss from continuing operations | ($2,846) | ($1,435) | ($9,240) | ($5,233) |
Loss from discontinued operations, net of tax | 0 | -1 | 0 | -70 |
Net loss | ($2,846) | ($1,436) | ($9,240) | ($5,303) |
Shares used in per share calculations: | ' | ' | ' | ' |
Basic and diluted | 6,716 | 6,618 | 6,690 | 6,614 |
Loss per share from continuing operations: | ' | ' | ' | ' |
Basic and diluted | ($0.42) | ($0.22) | ($1.38) | ($0.79) |
Loss per share from discontinued operations: | ' | ' | ' | ' |
Basic and diluted | $0 | $0 | $0 | ($0.01) |
Net loss per share: | ' | ' | ' | ' |
Basic and diluted | ($0.42) | ($0.22) | ($1.38) | ($0.80) |
Computation_of_Per_Share_Amoun3
Computation of Per Share Amounts - Anti-Dilutive Shares Disclosure (Details) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Antidilutive securities | 257 | 115 | 152 | 150 |
Employee stock options | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Antidilutive securities | 175 | 86 | 127 | 100 |
Unvested restricted stock units | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Antidilutive securities | 82 | 29 | 25 | 50 |
Stock_Compensation_Details
Stock Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Granted, weighted average grant date fair value | $4.05 | $6.50 | $4.07 | $6.06 |
Total cash received from stock options exercised | ' | ' | ' | $300,000 |
Tax benefit realized from exercised options | $0 | $0 | $0 | $0 |
2007 Plan | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Shares available for grant | 125,209 | ' | 125,209 | ' |
Employee stock options | 2007 Plan | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Term of award | ' | ' | '10 years | ' |
Period from termination of employment to exercise awards | ' | ' | '90 days | ' |
Restricted Stock Units | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Award vesting period | ' | ' | '3 years | ' |
Stock_Compensation_Stock_Optio
Stock Compensation - Stock Option Activity (Details) (USD $) | 9 Months Ended |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 |
Stock Options, Outstanding [Roll Forward] | ' |
Outstanding as of December 31, 2013 (shares) | 133,578 |
Granted (shares) | 82,072 |
Exercised (shares) | -725 |
Canceled (shares) | -8,250 |
Outstanding as of September 30, 2014 (shares) | 206,675 |
Vested or expected to vest at September 30, 2014 (shares) | 177,684 |
Exercisable at September 30, 2014 (shares) | 94,960 |
Stock Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ' |
Outstanding as of December 31, 2013, Weighted Average Exercise Price (dollars per share) | $17.57 |
Granted, Weighted Average Exercise Price (dollars per share) | $11.54 |
Exercised, Weighted Average Exercise Price (dollars per share) | $11 |
Canceled, Weighted Average Exercise Price (dollars per share) | $16.22 |
Outstanding as of September 30, 2014, Weighted Average Exercise Price (dollars per share) | $15.26 |
Vested and expected to vest at September 30, 2014, Weighted Average Exercise Price (dollars per share) | $15.73 |
Exercisable at September 30, 2014, Weighted Average Exercise Price (dollars per share) | $17.84 |
Stock Options, Additional Disclosures [Abstract] | ' |
Outstanding as of September 30, 2014, Weighted-Average Remaining Contractual Term (in years) | '7 years 10 months 24 days |
Vested and expected to vest at September 30, 2014, Weighted-Average Remaining Contractual Term (in years) | '7 years 8 months 12 days |
Exercisable at September 30, 2014, Weighted-Average Remaining Contractual Term (in years) | '6 years 2 months 12 days |
Outstanding as of September 30, 2014, Aggregate Intrinsic Value | $1 |
Vested and expected to vest at September 30, 2014, Aggregate Intrinsic Value | 1 |
Exercisable at September 30, 2014, Aggregate Intrinsic Value | $1 |
Stock_Compensation_Weighted_Av
Stock Compensation - Weighted Average Assumptions (Details) (Employee stock options) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Employee stock options | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ' | ' | ' | ' |
Expected life (years) | '3 years 3 months 22 days | '3 years 3 months 18 days | '3 years | '3 years |
Risk-free interest rate | 1.00% | 0.80% | 1.00% | 0.50% |
Volatility | 49.00% | 58.00% | 49.00% | 59.00% |
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Stock_Compensation_Restricted_
Stock Compensation - Restricted Stock Unit Activity (Details) (Restricted Stock Units, USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Restricted Stock Units | ' |
Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ' |
Outstanding as of December 31, 2013 (shares) | 94,771 |
Granted (shares) | 120,978 |
Restricted Stock Release (shares) | -98,755 |
Canceled (shares) | -6,432 |
Outstanding as of September 30, 2014 (shares) | 110,562 |
Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ' |
Outstanding as of December 31, 2013, Weighted Average Grant Date Fair Value (dollars per share) | $17.91 |
Granted, Weighted Average Grant Date Fair Value (dollars per share) | $13.22 |
Restricted Stock Release, Weighted Average Grant Date Fair Value (dollars per share) | $17.24 |
Canceled, Weighted Average Grant Date Fair Value (dollars per share) | $15.61 |
Outstanding as of September 30, 2014, Weighted Average Grant Date Fair Value (dollars per share) | $13.51 |
Stock_Compensation_Stock_Based
Stock Compensation - Stock Based Compensation Expense (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock-based compensation expense | $190 | $289 | $1,245 | $1,753 |
Cost of revenue | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock-based compensation expense | 45 | 19 | 85 | -101 |
Included in operating expenses | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock-based compensation expense | 145 | 270 | 1,160 | 1,854 |
Sales and marketing | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock-based compensation expense | 24 | 19 | 67 | -49 |
Technology and design | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock-based compensation expense | 56 | 42 | 166 | 135 |
General and administrative | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Stock-based compensation expense | $65 | $209 | $927 | $1,768 |
Stock_Compensation_Compensatio
Stock Compensation - Compensation Costs Not Yet Recognized (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 |
Stock Options | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Expense not yet recognized | $387 |
Weighted-Average Remaining Term (in years) | '2 years 6 months |
Restricted Stock Units | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Expense not yet recognized | $985 |
Weighted-Average Remaining Term (in years) | '2 years 4 months 24 days |
Segments_Narrative_Details
Segments (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Segment | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Operating segments (number) | ' | ' | 3 | ' | ' |
Inventories, net | $32,487 | ' | $32,487 | ' | $20,186 |
Net revenue | 22,240 | 22,363 | 68,326 | 63,924 | ' |
International | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net revenue | 5,200 | 15,500 | 4,900 | 13,800 | ' |
Wholesale | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Inventories, net | 2,900 | ' | 2,900 | ' | ' |
Net revenue | $6,910 | $5,373 | $17,284 | $10,699 | ' |
Segments_Schedule_of_Segment_I
Segments (Schedule of Segment Information) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net revenue | $22,240 | $22,363 | $68,326 | $63,924 |
Cost of revenue | 17,949 | 18,113 | 56,750 | 51,645 |
Gross margin | 4,291 | 4,250 | 11,576 | 12,279 |
Gross margin % | 19.30% | 19.00% | 16.90% | 19.20% |
Website | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net revenue | 15,330 | 16,990 | 51,042 | 53,225 |
Cost of revenue | 13,481 | 14,377 | 45,219 | 44,371 |
Gross margin | 1,849 | 2,613 | 5,823 | 8,854 |
Gross margin % | 12.10% | 15.40% | 11.40% | 16.60% |
Wholesale | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net revenue | 6,910 | 5,373 | 17,284 | 10,699 |
Cost of revenue | 4,468 | 3,736 | 11,531 | 7,274 |
Gross margin | $2,442 | $1,637 | $5,753 | $3,425 |
Gross margin % | 35.30% | 30.50% | 33.30% | 32.00% |