Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 04, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MCHX | |
Entity Registrant Name | MARCHEX INC | |
Entity Central Index Key | 1,224,133 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 5,232,636 | |
Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 37,828,200 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 106,603 | $ 109,155 |
Accounts receivable, net | 26,497 | 24,621 |
Prepaid expenses and other current assets | 2,515 | 1,784 |
Refundable taxes | 117 | 127 |
Total current assets | 135,732 | 135,687 |
Property and equipment, net | 5,133 | 5,778 |
Intangible and other assets, net | 216 | 222 |
Goodwill | 63,305 | 63,305 |
Total assets | 204,386 | 204,992 |
Current liabilities: | ||
Accounts payable | 10,692 | 9,460 |
Accrued expenses and other current liabilities | 6,875 | 6,712 |
Deferred revenue | 319 | 692 |
Total current liabilities | 17,886 | 16,864 |
Other non-current liabilities | 543 | 662 |
Total liabilities | 18,429 | 17,526 |
Stockholders' equity: | ||
Treasury stock | 0 | (238) |
Additional paid-in capital | 352,729 | 350,799 |
Accumulated deficit | (167,195) | (163,518) |
Total stockholders' equity | 185,957 | 187,466 |
Total liabilities and stockholders' equity | 204,386 | 204,992 |
Class A | ||
Stockholders' equity: | ||
Common stock | 55 | 55 |
Class B | ||
Stockholders' equity: | ||
Common stock | $ 368 | $ 368 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue | $ 35,985 | $ 35,916 |
Expenses: | ||
Service costs | 21,982 | 19,366 |
Sales and marketing | 5,522 | 3,458 |
Product development | 7,472 | 7,693 |
General and administrative | 4,662 | 5,699 |
Disposition related costs | 4 | |
Total operating expenses | 39,642 | 36,216 |
Loss from operations | (3,657) | (300) |
Other expense: | ||
Interest and line of credit expense | (4) | (19) |
Other, net | (3) | (6) |
Total other expense | (7) | (25) |
Loss from continuing operations before provision for income taxes | (3,664) | (325) |
Income tax expense | 13 | 5 |
Net loss from continuing operations | (3,677) | (330) |
Discontinued operations | 4,913 | |
Net income (loss) | (3,677) | 4,583 |
Dividends paid to participating securities | (19) | |
Net income (loss) applicable to common stockholders | $ (3,677) | $ 4,564 |
Basic and diluted net income (loss) per Class A and Class B share applicable to common stockholders: | ||
Continuing operations | $ (0.09) | $ (0.01) |
Discontinued operations, net of tax | 0.12 | |
Basic and diluted net income (loss) per Class A and Class B share applicable to common stockholders | $ (0.09) | 0.11 |
Dividends paid per share | $ 0.02 | |
Class A | ||
Other expense: | ||
Net loss from continuing operations | $ (467) | $ (44) |
Net income (loss) applicable to common stockholders | $ (467) | $ 583 |
Shares used to calculate basic net income (loss) per share applicable to common stockholders: | ||
Shares used to calculate basic net income (loss) per share applicable to common stockholders | 5,233 | 5,233 |
Shares used to calculate diluted net income (loss) per share applicable to common stockholders: | ||
Shares used to calculate diluted net income (loss) per share applicable to common stockholders | 5,233 | 5,233 |
Class B | ||
Other expense: | ||
Net loss from continuing operations | $ (3,210) | $ (286) |
Dividends paid to participating securities | (19) | |
Net income (loss) applicable to common stockholders | $ (3,210) | $ 3,981 |
Shares used to calculate basic net income (loss) per share applicable to common stockholders: | ||
Shares used to calculate basic net income (loss) per share applicable to common stockholders | 35,977 | 35,766 |
Shares used to calculate diluted net income (loss) per share applicable to common stockholders: | ||
Shares used to calculate diluted net income (loss) per share applicable to common stockholders | 41,210 | 40,999 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (3,677) | $ 4,583 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Amortization and depreciation | 876 | 877 |
Allowance for doubtful accounts and advertiser credits | 261 | (40) |
Stock-based compensation | 1,966 | 2,794 |
Change in certain assets and liabilities: | ||
Accounts receivable, net | (2,137) | (1,962) |
Refundable taxes | 10 | (2) |
Prepaid expenses and other current assets | (718) | 58 |
Accounts payable | 1,257 | (125) |
Accrued expenses and other current liabilities | 387 | 782 |
Deferred revenue | (373) | (663) |
Other non-current liabilities | (119) | (102) |
Net cash provided by (used in) operating activities | (2,267) | 6,200 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (248) | (853) |
Cash paid for sale of Archeo assets | (224) | |
Purchases of intangibles and changes in other non-current assets | (3) | (24) |
Net cash used in investing activities | (475) | (877) |
Cash flows from financing activities: | ||
Tax withholding related to restricted stock awards | (50) | |
Common stock dividend payments | (839) | |
Repurchase of Class B common stock for treasury stock | (931) | |
Proceeds from exercises of stock options and issuance, issuance and vesting of restricted stock and employee stock purchase plan, net | 240 | 73 |
Net cash provided by (used in) financing activities | 190 | (1,697) |
Net increase (decrease) in cash and cash equivalents | (2,552) | 3,626 |
Cash and cash equivalents at beginning of period | 109,155 | 80,032 |
Cash and cash equivalents at end of period | $ 106,603 | $ 83,658 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Description of Business and Basis of Presentation | (1) Description of Business and Basis of Presentation Marchex, Inc. (the “Company”) was incorporated in the state of Delaware on January 17, 2003. The Company is a mobile advertising analytics company that helps connect online behavior to real-world, offline actions. The Company provides products and services for businesses of all sizes that depend on consumer phone calls to drive sales. The Company’s technology can facilitate call quality, analyze calls in real time and measure the outcomes of calls while its technology platform delivers performance-based, pay-for-call advertising across numerous mobile and online publishers to connect consumers with businesses over the phone. The accompanying unaudited condensed consolidated financial statements of Marchex, Inc. and its wholly-owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016, or for any other period. The balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. These condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to the condensed consolidated financial statements in the prior period to conform to the current period presentation. In April 2015, the Company sold certain assets related to Archeo’s domain operations, including the bulk of its domain name portfolio. As a result, the operating results related to these certain pay-per-click assets are shown as discontinued operations in the condensed consolidated statements of operations for all periods presented. In December 2015, the Company sold the remaining Archeo operations. The December 2015 disposition did not meet the criteria for discontinued operations, and as a result the operating results are reflected in continuing operations. See Note 12. Discontinued Operations and Disposition |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Significant Accounting Policies | (2) Significant Accounting Policies The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These judgments are difficult as matters that are inherently uncertain directly impact their valuation and accounting. Actual results may vary from management’s estimates and assumptions. Recent Accounting Pronouncement(s) Not Yet Effective In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09) Principal versus Agent Considerations—Reporting Revenue Gross versus Net (ASU 2016-08) Identifying Performance Obligations and Licensing (ASU 2016-10) In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes (ASU 2015-17) In February 2016, the FASB issued Accounting Standards Update No. 2016-02 Leases (Topic 842) In March 2016, the FASB amended the existing accounting standards for stock-based compensation, with Accounting Standards Update No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09) |
Stock-based Compensation Plans
Stock-based Compensation Plans | 3 Months Ended |
Mar. 31, 2016 | |
Stock-based Compensation Plans | (3) Stock-based Compensation Plans The Company grants stock-based awards, including stock options, restricted stock awards, and restricted stock units. The Company measures stock-based compensation cost at the grant date based on the fair value of the award and recognizes it as expense, net of estimated forfeitures, over the vesting or service period, as applicable, of the stock award, using the straight-line method under FASB ASC 718. Stock-based compensation expense was included in the following operating expense categories as follows (in thousands): Three months ended March 31, 2015 2016 Service costs $ 220 $ 198 Sales and marketing 245 439 Product development 579 532 General and administrative 1,747 797 Total stock-based compensation $ 2,791 $ 1,966 The Company uses the Black-Scholes option pricing model to estimate the per share fair value of stock option grants with time-based vesting. The Black-Scholes model relies on a number of key assumptions to calculate estimated fair values. For the quarters ended March 31, 2015 and 2016, the expected life of each award granted was determined based on historical experience with similar awards, giving consideration to contractual terms, anticipated exercise patterns, vesting schedules and forfeitures. Expected volatility is based on historical volatility levels of the Company’s Class B common stock and the expected volatility of companies in similar industries that have similar vesting and contractual terms. The risk-free interest rate is based on the implied yield currently available on U.S. Treasury issues with terms approximately equal to the expected life of the option. The Company used an expected annual dividend yield in consideration of the Company’s common stock dividend payments during the first half of 2015. The Company discontinued paying dividends on its common stock after the second quarter of 2015. The following weighted average assumptions were used in determining the fair value of time-vested stock option grants for the periods presented: Three months ended 2015 2016 Expected life (in years) 4.0-6.25 4.0 Risk-free interest rate 1.13%-1.54% 1.04% Expected volatility 62%-65% 58% Expected dividend yield 0.23%-0.36% 0% Stock option activity during the three months ended March 31, 2016 is summarized as follows: Shares Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value (in thousands) Balance at December 31, 2015 8,937,281 $ 6.97 6.33 $ 52 Options granted 208,500 3.89 Options forfeited (92,919 ) 5.26 Options expired (359,780 ) 15.69 Options exercised (51,891 ) 4.07 Balance at March 31, 2016 8,641,191 $ 6.57 6.40 $ 960 Restricted stock awards and restricted stock units are generally measured at fair value on the date of grant based on the number of awards granted and the quoted price of the Company’s common stock. Restricted stock units entitle the holder to receive one share of the Company’s Class B common stock upon satisfaction of certain service conditions. Restricted stock awards and restricted stock unit activity during the three months ended March 31, 2016 is summarized as follows: Shares/ Units Weighted average grant date fair value Unvested balance at December 31, 2015 2,222,080 $ 4.86 Granted 75,000 3.74 Vested (103,125 ) 4.47 Forfeited (31,905 ) 4.69 Unvested balance at March 31, 2016 2,162,050 $ 4.84 In the three months ended March 31, 2016, the Company repurchased approximately 11,000 shares from certain executives for minimum withholding taxes on approximately 38,000 restricted stock award vests. The number of shares repurchased was based on the value on the vesting date of the restricted stock awards equivalent to the value of the executives’ minimum withholding taxes of $50,000, which was remitted in cash to the appropriate taxing authorities. The payments are reflected as a financing activity within the consolidated statement of cash flows when paid. The payments had the effect of share repurchases by the Company as they reduced the number of shares that would have otherwise been issued on the vesting date and were recorded as a reduction of additional paid-in capital. In February 2015, vesting of approximately 139,000 stock options and 108,000 restricted stock awards were fully accelerated in connection with an executive’s employment agreement. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Net Income (Loss) Per Share | (4) Net Income (Loss) Per Share The Company computes net income (loss) per share of Class A and Class B common stock using the two class method. Under the provisions of the two class method, basic net income (loss) per share is computed by dividing net income (loss) applicable to common stockholders by the weighted average number of common shares outstanding during the year. Diluted net income (loss) per share is computed by dividing net income (loss) applicable to common stockholders by the weighted average number of common and dilutive common equivalent shares outstanding during the period. The computation of the diluted net income (loss) per share of Class B common stock assumes the conversion of Class A common stock to Class B common stock, while the diluted net income (loss) per share of Class A common stock does not assume the conversion of those shares. In accordance with the two class method, the undistributed earnings (losses) for each year are allocated based on the contractual participation rights of the Class A and Class B common shares and the restricted shares as if the earnings for the year had been distributed. Considering the terms of the Company’s charter which provides that, if and when dividends are declared on our common stock in accordance with Delaware General Corporation Law, equivalent dividends shall be paid with respect to the shares of Class A common stock and Class B common stock and that both classes of common stock have identical dividend rights and would share equally in the Company’s net assets in the event of liquidation, the Company has allocated undistributed earnings (losses) on a proportionate basis. Additionally, the Company has paid dividends equally to both classes of common stock and the unvested restricted shares for all cash dividends paid since November 2006. Instruments granted in unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities prior to vesting. As such, the Company’s restricted stock awards are considered participating securities for purposes of calculating earnings per share. Under the two class method, dividends paid on unvested restricted stock are allocated to these participating securities and therefore impact the calculation of amounts allocated to common stock. The following table calculates net income (loss) from continuing operations to net income (loss) applicable to common stockholders used to compute basic net income (loss) per share for the periods ended (in thousands, except per share amounts): Three months ended March 31, 2015 2016 Class A Class B Class A Class B Basic net income (loss) per share: Numerator: Net loss from continuing operations $ (44 ) $ (286 ) $ (467 ) $ (3,210 ) Dividends paid to participating securities — (19 ) — — Net loss from continuing operations applicable to common stockholders $ (44 ) $ (305 ) $ (467 ) $ (3,210 ) Discontinued operations, net of tax 627 4,286 — — Net income (loss) applicable to common stockholders $ 583 $ 3,981 $ (467 ) $ (3,210 ) Denominator: Weighted average number of shares outstanding used to calculate basic net income (loss) per share 5,233 35,766 5,233 35,977 Basic net income (loss) per share: Net loss from continuing operations applicable to common stockholders $ (0.01 ) $ (0.01 ) $ (0.09 ) $ (0.09 ) Discontinued operations, net of tax 0.12 0.12 — — Basic net income (loss) per share applicable to common stockholders $ 0.11 $ 0.11 $ (0.09 ) $ (0.09 ) The following table calculates net income (loss) from continuing operations to net income (loss) applicable to common stockholders used to compute diluted net income (loss) per share for the periods ended (in thousands, except per share amounts): Three months ended March 31, 2015 2016 Class A Class B Class A Class B Diluted net income (loss) per share: Numerator: Net loss from continuing operations $ (44 ) $ (286 ) $ (467 ) $ (3,210 ) Dividends paid to participating securities — (19 ) — — Reallocation of net loss for Class A shares as a result of conversion of Class A to Class B shares — (44 ) — (467 ) Net loss from continuing operations applicable to common stockholders $ (44 ) $ (349 ) $ (467 ) $ (3,677 ) Discontinued operations, net of tax 627 4,286 — — Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares — 627 — — Diluted discontinued operations, net of tax $ 627 $ 4,913 $ — $ — Net income (loss) applicable to common stockholders $ 583 $ 4,564 $ (467 ) $ (3,677 ) Denominator: Weighted average number of shares outstanding used to calculate basic net income (loss) per share 5,233 35,766 5,233 35,977 Conversion of Class A to Class B common shares outstanding — 5,233 — 5,233 Weighted average number of shares outstanding used to calculate diluted net income (loss) per share 5,233 40,999 5,233 41,210 Diluted net (loss) income per share: Net loss from continuing operations applicable to common stockholders $ (0.01 ) $ (0.01 ) $ (0.09 ) $ (0.09 ) Discontinued operations, net of tax 0.12 0.12 — — Diluted net income (loss) per share applicable to common stockholders $ 0.11 $ 0.11 $ (0.09 ) $ (0.09 ) The computation of diluted net income (loss) per share excludes the following because their effect would be anti-dilutive (in thousands): • For the three months ended March 31, 2015 and 2016, outstanding options to acquire 7,829 and 8,641 shares, respectively of Class B common stock. • For the three months ended March 31, 2015 and 2016, 235 and 708 shares of unvested Class B restricted common shares. • For the three months ended March 31, 2015 and 2016, 96 and 1,454 restricted stock units, respectively. |
Concentrations
Concentrations | 3 Months Ended |
Mar. 31, 2016 | |
Concentrations | (5) Concentrations The Company maintains substantially all of its cash and cash equivalents with one financial institution and are all considered at Level 1 fair value with observable inputs that reflect quoted prices for identical assets or liabilities in active markets. At various points during the three months ended March 31, 2016, the Company held cash equivalents in a commercial paper sweep account with the same financial institution. These Level 2 assets were fully liquidated prior to March 31, 2016. A significant majority of the Company’s revenue earned from advertisers is generated through arrangements with distribution partners. The Company may not be successful in renewing any of these agreements, or, if they are renewed, they may not be on terms as favorable as current arrangements. The Company may not be successful in entering into agreements with new distribution partners or advertisers on commercially acceptable terms. In addition, several of these distribution partners or advertisers may be considered potential competitors. There were no distribution partners paid more than 10% of consolidated revenue for the three months ended March 31, 2015 and 2016. The advertisers representing more than 10% of consolidated revenue are as follows (in percentages): Three months ended March 31, 2015 2016 Advertiser A 31 % 24 % Advertiser B 21 % 26 % Advertiser A is also a distribution partner. The outstanding receivable balance for each advertiser representing more than 10% of accounts receivable is as follows (in percentages): At December 31, 2015 At March 31, 2016 Advertiser A 14 % 22 % Advertiser B 28 % 28 % Advertiser C 19 % 11 % In certain cases, the Company may engage directly with one or more advertising agencies who act on an advertiser’s behalf. In addition, an advertising agency may represent more than one advertiser that utilizes the Company’s products and services. For the three months ended March 31, 2015 and 2016, one advertising agency represented 19% and 22% of consolidated revenue, respectively and as of December 31, 2015 and March 31, 2016, one advertising agency represented 22% of consolidated accounts receivable. |
Segment Reporting and Geographi
Segment Reporting and Geographic Information | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting and Geographic Information | (6) Segment Reporting and Geographic Information Operating segments are revenue-producing components of the enterprise for which separate financial information is produced internally for the Company’s management. Historically, the Company operated under two segments: Call-driven and Archeo. Subsequent to the sale of the Company’s remaining Archeo operations in December 2015, the Company operates under the Call-driven segment which is comprised of performance-based advertising business focused on driving phone calls. The Archeo segment historically comprised the Company’s click-based advertising businesses. In April 2015, the Company sold certain assets related to Archeo’s domain operations, including the bulk of its domain name portfolio. This disposition is shown as discontinued operations, net of tax in the condensed consolidated statements of operations for all periods presented and is excluded from segment reporting. On December 31, 2015 the Company sold the remaining Archeo operations, which did not meet the criteria for discontinued operations presentation. See Note 12. Discontinued Operations and Disposition Call-driven segment expenses include both direct costs incurred by the segment business as well as corporate overhead costs. Archeo segment expenses only include direct costs incurred by the segment. Segment expenses exclude the following: stock-based compensation, disposition related costs, and other expense. Selected segment information (in thousands): Three months ended March 31, 2015 Call-driven Archeo Total Revenue $ 35,029 $ 887 $ 35,916 Operating expenses 32,397 1,028 33,425 Segment profit (loss) $ 2,632 $ (141 ) $ 2,491 Less reconciling items: Stock based compensation 2,791 Other expense 25 Loss from continuing operations before provision for income taxes $ (325 ) For the three months ended March 31, 2016, the Company’s operating results are primarily all Call-driven. There were other operating activities related to transition activities of the Archeo operations, which were not significant. Revenues from advertisers by geographical areas are tracked on the basis of the location of the advertiser. The vast majority of the Company’s revenue and accounts receivable are derived from domestic sales to advertisers engaged in various mobile, online and other activities. Revenues by geographic region are as follows (in percentages): Three months ended March 31, 2015 2016 United States 97 % 97 % Canada 3 % 3 % Other countries * * 100 % 100 % * Less than 1% of revenue. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2016 | |
Property and Equipment | (7) Property and Equipment Property and equipment consisted of the following (in thousands): At December 31, 2015 At March 31, 2016 Computer and other related equipment $ 21,551 $ 21,534 Purchased and internally developed software 7,893 7,893 Furniture and fixtures 1,778 1,821 Leasehold improvements 2,123 2,153 $ 33,345 $ 33,401 Less: accumulated depreciation and amortization (27,567 ) (28,268 ) Property and equipment, net $ 5,778 $ 5,133 Depreciation and amortization expense, related to property and equipment was approximately $839,000 and $866,000 for the three months ended March 31, 2015 and 2016, respectively. |
Commitments, Contingencies and
Commitments, Contingencies and Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Commitments, Contingencies and Taxes | (8) Commitments, Contingencies and Taxes (a) Commitments The Company has commitments for future payments related to office facilities leases and other contractual obligations. The Company leases its office facilities under operating lease agreements expiring through 2018. The Company recognizes rent expense under such agreements on a straight-line basis over the lease term with any lease incentive amortized as a reduction of rent expense over the lease term. The Company also has other contractual obligations expiring over varying time periods through 2018. Other contractual obligations primarily relate to minimum contractual payments due to distribution partners and other outside service providers. Future minimum payments are approximately as follows (in thousands): Facilities operating leases Other contractual obligations Total 2016 $ 1,753 $ 2,706 $ 4,459 2017 2,373 1,564 3,937 2018 577 412 989 2019 and after — — — Total minimum payments $ 4,703 $ 4,682 $ 9,385 Rent expense incurred by the Company was approximately $484,000 and $492,000 for the three months ended March 31, 2015 and 2016, respectively. (b) Contingencies On November 17, 2015, Steven Porter, a purported shareholder of the Company, filed a securities class action against the Company and certain officers of the Company, alleging violations of the federal securities laws (the “Complaint”). Mr. Porter sought to represent all people who purchased or otherwise acquired the Company’s Class B common stock during the period from March 19, 2014 to September 18, 2014, and sought unspecified damages. The Complaint alleged that the Defendants made false and/or misleading statements and/or failed to disclose material adverse facts about the Company’s business, operations, and prospects. On April 1, 2016, Mr. Porter was appointed “Lead Plaintiff” in the action. On April 22, 2016, the case was dismissed without prejudice after the Lead Plaintiff filed a notice of voluntary dismissal of the case. In addition, the Company from time to time is a party to disputes and legal and administrative proceedings arising from the ordinary course of business. In some agreements to which the Company is a party to, the Company has agreed to indemnification provisions of varying scope and terms with advertisers, vendors and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of agreements or representations and warranties made by the Company, services to be provided by the Company and intellectual property infringement claims made by third parties. As a result of these provisions, the Company may from time to time provide certain levels of financial support to our contract parties to seek to minimize the impact of any associated litigation in which they may be involved. To date, there have been no known events or circumstances that have resulted in any material costs related to these indemnification provisions and no liabilities therefore have been recorded in the accompanying consolidated financial statements. However, the maximum potential amount of the future payments we could be required to make under these indemnification provisions could be material. While any litigation contains an element of uncertainty, the Company is not aware of any legal proceedings or claims which are pending that the Company believes, based on current knowledge, will have, individually or taken together, a material adverse effect on the Company’s financial condition, results of operations or liquidity. (c) Taxes The Company determined that it is not more likely than not that its deferred tax assets will be realized and accordingly recorded 100% valuation allowance against these deferred tax assets as of December 31, 2015 and March 31, 2016. In assessing whether it is more likely than not that the Company’s deferred tax assets will be realized, factors considered included: historical taxable income, historical trends related to advertiser usage rates, projected revenues and expenses, macroeconomic conditions, issues facing the industry, existing contracts, the Company’s ability to project future results and any appreciation of its other assets. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. The Company considered the future reversal of deferred tax liabilities, carryback potential, projected taxable income, and tax planning strategies as well as its history of taxable income or losses in the relevant jurisdictions in making this assessment. Based on the level of historical taxable losses and the uncertainty of projections for future taxable income over the periods for which the deferred tax assets are deductible, the Company concluded that it is not more likely than not that the gross deferred tax assets will be realized. From time to time, various state, federal and other jurisdictional tax authorities undertake audits of the Company and its filings. In evaluating the exposure associated with various tax filing positions, the Company on occasion accrues charges for uncertain positions. Resolution of uncertain tax positions will impact our effective tax rate when settled. The Company does not have any significant interest or penalty accruals. The provision for income taxes includes the impact of contingency provisions and changes to contingencies that are considered appropriate. The Company files U.S. federal, certain U.S. states, and certain foreign tax returns. Generally, U.S. federal, U.S. state, and foreign tax returns filed for years after 2011 are within the statute of limitations and are under examination or may be subject to examination. |
Credit Agreement
Credit Agreement | 3 Months Ended |
Mar. 31, 2016 | |
Credit Agreement | (9) Credit Agreement In April 2008, the Company entered into a credit agreement providing for a senior secured $30 million revolving credit facility (“Credit Agreement”). In April 2015, the Company signed an amendment to the Credit Agreement, which extended the maturity to April 1, 2017, clarified the LIBOR rate as determined under the Credit Agreement cannot be below zero percent (0%) and added a financial covenant limiting outstanding balances under the Credit Agreement not to exceed a collateral value as defined in the Credit Agreement. Interest on outstanding balances under the Credit Agreement will accrue at LIBOR plus an applicable margin rate, as determined under the agreement and has an unused commitment fee. The Credit Agreement contains certain customary representations and warranties, financial covenants, events of default and is secured by substantially all of the assets of the Company. During the three months ended March 31, 2015 and 2016, the Company had no borrowings under the Credit Agreement. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill | (10) Goodwill There was no change in goodwill during the three months ended March 31, 2016. The Company reviews goodwill for impairment annually on November 30 and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. When evaluating goodwill for impairment, the Company may first perform a qualitative assessment and determine if the fair value of the reporting unit is more likely than not greater than its carrying amount. The testing of goodwill for impairment requires the Company to make significant estimates about its future performance and cash flows, as well as other assumptions. Events and circumstances considered in determining whether the carrying value of goodwill may not be recoverable include, but are not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; and significant changes in competition and market dynamics. These estimates are inherently uncertain and can be affected by numerous factors, including changes in economic, industry or market conditions, changes in business operations, a loss of a significant customer, changes in competition or changes in the share price of the Company’s common stock and market capitalization. Significant and sustained declines in the Company’s stock price and market capitalization, a significant decline in its expected future cash flows or a significant adverse change in the Company’s business climate, among other factors, could result in the need to perform an impairment analysis in future periods. The Company cannot accurately predict the amount and timing of any future impairment of goodwill. Should the value of goodwill become impaired, the Company would record an impairment charge, which could have an adverse effect on its financial condition and results of operations. The current business environment is subject to evolving market conditions and requires significant management judgment to interpret the potential impact to our assumptions. For the period April 1, 2016 to May 6, 2016, the Company’s stock price has been impacted by volatility in the U.S. financial markets and at various points in time, the Company’s stock price approached or dropped below the then book value. To the extent that changes in the current business environment impact the Company’s ability to achieve levels of forecasted operating results and cash flows, if the Company’s stock price were to trade below book value per share for an extended period of time and/or should other events occur indicating the remaining carrying value of our assets might be impaired, the Company would test its goodwill for impairment and may recognize an impairment loss to the extent that the carrying amount exceeds such asset’s fair value. The Company will continue to monitor its financial performance, stock price and other factors in order to determine if there are any indicators of impairment prior to its annual impairment evaluation in November 2016. |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2016 | |
Common Stock | (11) Common Stock In November 2014, the Company’s board of directors authorized a new share repurchase program (the “2014 Repurchase Program”), which supersedes and replaces any prior repurchase programs. Under the 2014 Repurchase Program, the Company is authorized to repurchase up to 3 million shares of the Company’s Class B common stock in the aggregate through open market and privately negotiated transactions, at such times and in such amounts as the Company deems appropriate. Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, capital availability, and other market conditions. The 2014 Repurchase Program does not have an expiration date and may be expanded, limited or terminated at any time without prior notice. During the three months ended March 31, 2015, the Company repurchased 238,000 shares of Class B common stock for $931,000. During the three months ended March 31, 2015 and 2016, the Company’s board of directors approved and the Company retired 469,961 and 125,237 shares, respectively, of treasury stock. |
Discontinued Operations and Dis
Discontinued Operations and Dispositions | 3 Months Ended |
Mar. 31, 2016 | |
Discontinued Operations and Dispositions | (12) Discontinued Operations and Dispositions In April 2015, the Company sold certain assets related to Archeo’s domain operations, including the bulk of its domain name portfolio. This disposal met the requirements of Accounting Standards Codification 205-20, Discontinued Operations Three Months Ended March 31, 2015 Revenue $ 6,659 Expenses: Service costs 1,322 Sales and marketing 199 Income from discontinued operations, net of tax 5,138 Gain on sale of discontinued operations, net of tax (225 ) Discontinued operations, net of tax $ 4,913 The discontinued operation incurred amortization of $14,000 for the three months ended March 31, 2015. The net cash proceeds related to Archeo’s domain operations sold in April 2015 were approximately $28.1 million. The sale includes a contingent earn-out consideration payment that depends upon the achievement of certain thresholds and will be recognized as income when received. On December 31, 2015, the Company sold the remaining Archeo operations for cash proceeds of $750,000. The transaction costs were approximately $244,000 and the net carrying value of the liabilities assumed were approximately $990,000, resulting in a net gain of $1.5 million from the sale. The Company evaluated this disposition and determined that it did not meet the criteria for classification as a discontinued operation. As a result, operating results of these Archeo operations are reflected in the Company’s continuing operations in the condensed consolidated statements of operations. For the three months ended March 31, 2015, income (loss) before provision for income taxes for these Archeo operations included in the Company’s continuing operations, were ($141,000). |
Description of Business and B17
Description of Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accompanying Unaudited Condensed Consolidated Financial Statements | The accompanying unaudited condensed consolidated financial statements of Marchex, Inc. and its wholly-owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016, or for any other period. The balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. These condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to the condensed consolidated financial statements in the prior period to conform to the current period presentation. In April 2015, the Company sold certain assets related to Archeo’s domain operations, including the bulk of its domain name portfolio. As a result, the operating results related to these certain pay-per-click assets are shown as discontinued operations in the condensed consolidated statements of operations for all periods presented. In December 2015, the Company sold the remaining Archeo operations. The December 2015 disposition did not meet the criteria for discontinued operations, and as a result the operating results are reflected in continuing operations. See Note 12. Discontinued Operations and Disposition |
Recent Accounting Pronouncement(s) Not Yet Effective | Recent Accounting Pronouncement(s) Not Yet Effective In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09) Principal versus Agent Considerations—Reporting Revenue Gross versus Net (ASU 2016-08) Identifying Performance Obligations and Licensing (ASU 2016-10) In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes (ASU 2015-17) In February 2016, the FASB issued Accounting Standards Update No. 2016-02 Leases (Topic 842) In March 2016, the FASB amended the existing accounting standards for stock-based compensation, with Accounting Standards Update No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09) |
Stock-based Compensation Plans
Stock-based Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stock Based Compensation Expense Included in Operating Expense | Stock-based compensation expense was included in the following operating expense categories as follows (in thousands): Three months ended March 31, 2015 2016 Service costs $ 220 $ 198 Sales and marketing 245 439 Product development 579 532 General and administrative 1,747 797 Total stock-based compensation $ 2,791 $ 1,966 |
Assumptions to Estimate Fair Value for Stock Options at Grant Date | The following weighted average assumptions were used in determining the fair value of time-vested stock option grants for the periods presented: Three months ended 2015 2016 Expected life (in years) 4.0-6.25 4.0 Risk-free interest rate 1.13%-1.54% 1.04% Expected volatility 62%-65% 58% Expected dividend yield 0.23%-0.36% 0% |
Summary of Stock Option Activity | Stock option activity during the three months ended March 31, 2016 is summarized as follows: Shares Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value (in thousands) Balance at December 31, 2015 8,937,281 $ 6.97 6.33 $ 52 Options granted 208,500 3.89 Options forfeited (92,919 ) 5.26 Options expired (359,780 ) 15.69 Options exercised (51,891 ) 4.07 Balance at March 31, 2016 8,641,191 $ 6.57 6.40 $ 960 |
Summary of Restricted Stock Awards and Restricted Stock Units | Restricted stock awards and restricted stock unit activity during the three months ended March 31, 2016 is summarized as follows: Shares/ Units Weighted average grant date fair value Unvested balance at December 31, 2015 2,222,080 $ 4.86 Granted 75,000 3.74 Vested (103,125 ) 4.47 Forfeited (31,905 ) 4.69 Unvested balance at March 31, 2016 2,162,050 $ 4.84 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Computation of Net Income (Loss) per Share Basic and Diluted | The following table calculates net income (loss) from continuing operations to net income (loss) applicable to common stockholders used to compute basic net income (loss) per share for the periods ended (in thousands, except per share amounts): Three months ended March 31, 2015 2016 Class A Class B Class A Class B Basic net income (loss) per share: Numerator: Net loss from continuing operations $ (44 ) $ (286 ) $ (467 ) $ (3,210 ) Dividends paid to participating securities — (19 ) — — Net loss from continuing operations applicable to common stockholders $ (44 ) $ (305 ) $ (467 ) $ (3,210 ) Discontinued operations, net of tax 627 4,286 — — Net income (loss) applicable to common stockholders $ 583 $ 3,981 $ (467 ) $ (3,210 ) Denominator: Weighted average number of shares outstanding used to calculate basic net income (loss) per share 5,233 35,766 5,233 35,977 Basic net income (loss) per share: Net loss from continuing operations applicable to common stockholders $ (0.01 ) $ (0.01 ) $ (0.09 ) $ (0.09 ) Discontinued operations, net of tax 0.12 0.12 — — Basic net income (loss) per share applicable to common stockholders $ 0.11 $ 0.11 $ (0.09 ) $ (0.09 ) The following table calculates net income (loss) from continuing operations to net income (loss) applicable to common stockholders used to compute diluted net income (loss) per share for the periods ended (in thousands, except per share amounts): Three months ended March 31, 2015 2016 Class A Class B Class A Class B Diluted net income (loss) per share: Numerator: Net loss from continuing operations $ (44 ) $ (286 ) $ (467 ) $ (3,210 ) Dividends paid to participating securities — (19 ) — — Reallocation of net loss for Class A shares as a result of conversion of Class A to Class B shares — (44 ) — (467 ) Net loss from continuing operations applicable to common stockholders $ (44 ) $ (349 ) $ (467 ) $ (3,677 ) Discontinued operations, net of tax 627 4,286 — — Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares — 627 — — Diluted discontinued operations, net of tax $ 627 $ 4,913 $ — $ — Net income (loss) applicable to common stockholders $ 583 $ 4,564 $ (467 ) $ (3,677 ) Denominator: Weighted average number of shares outstanding used to calculate basic net income (loss) per share 5,233 35,766 5,233 35,977 Conversion of Class A to Class B common shares outstanding — 5,233 — 5,233 Weighted average number of shares outstanding used to calculate diluted net income (loss) per share 5,233 40,999 5,233 41,210 Diluted net (loss) income per share: Net loss from continuing operations applicable to common stockholders $ (0.01 ) $ (0.01 ) $ (0.09 ) $ (0.09 ) Discontinued operations, net of tax 0.12 0.12 — — Diluted net income (loss) per share applicable to common stockholders $ 0.11 $ 0.11 $ (0.09 ) $ (0.09 ) |
Concentrations (Tables)
Concentrations (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Consolidated Revenue | |
Schedules of Concentration of Risk, by Risk Factor | The advertisers representing more than 10% of consolidated revenue are as follows (in percentages): Three months ended March 31, 2015 2016 Advertiser A 31 % 24 % Advertiser B 21 % 26 % |
Consolidated Accounts Receivable | |
Schedules of Concentration of Risk, by Risk Factor | The outstanding receivable balance for each advertiser representing more than 10% of accounts receivable is as follows (in percentages): At December 31, 2015 At March 31, 2016 Advertiser A 14 % 22 % Advertiser B 28 % 28 % Advertiser C 19 % 11 % |
Segment Reporting and Geograp21
Segment Reporting and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Information | Selected segment information (in thousands): Three months ended March 31, 2015 Call-driven Archeo Total Revenue $ 35,029 $ 887 $ 35,916 Operating expenses 32,397 1,028 33,425 Segment profit (loss) $ 2,632 $ (141 ) $ 2,491 Less reconciling items: Stock based compensation 2,791 Other expense 25 Loss from continuing operations before provision for income taxes $ (325 ) |
Revenues by Geographic Region | Revenues by geographic region are as follows (in percentages): Three months ended March 31, 2015 2016 United States 97 % 97 % Canada 3 % 3 % Other countries * * 100 % 100 % * Less than 1% of revenue. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property and Equipment | Property and equipment consisted of the following (in thousands): At December 31, 2015 At March 31, 2016 Computer and other related equipment $ 21,551 $ 21,534 Purchased and internally developed software 7,893 7,893 Furniture and fixtures 1,778 1,821 Leasehold improvements 2,123 2,153 $ 33,345 $ 33,401 Less: accumulated depreciation and amortization (27,567 ) (28,268 ) Property and equipment, net $ 5,778 $ 5,133 |
Commitments, Contingencies an23
Commitments, Contingencies and Taxes (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Future Minimum Payments | Future minimum payments are approximately as follows (in thousands): Facilities operating leases Other contractual obligations Total 2016 $ 1,753 $ 2,706 $ 4,459 2017 2,373 1,564 3,937 2018 577 412 989 2019 and after — — — Total minimum payments $ 4,703 $ 4,682 $ 9,385 |
Discontinued Operations and D24
Discontinued Operations and Dispositions (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Operating Results for Discontinued Operations | The operating results for the discontinued operations were as follows (in thousands): Three Months Ended March 31, 2015 Revenue $ 6,659 Expenses: Service costs 1,322 Sales and marketing 199 Income from discontinued operations, net of tax 5,138 Gain on sale of discontinued operations, net of tax (225 ) Discontinued operations, net of tax $ 4,913 |
Stock-Based Compensation Expens
Stock-Based Compensation Expense by Operating Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | $ 1,966 | $ 2,791 |
Service Costs | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | 198 | 220 |
Sales and Marketing | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | 439 | 245 |
Product Development | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | 532 | 579 |
General and Administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation | $ 797 | $ 1,747 |
Assumptions to Estimate Fair Va
Assumptions to Estimate Fair Value for Stock Options at Grant Date (Detail) - Time Vested Stock Options | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 1.04% | 1.13% |
Risk-free interest rate, maximum | 1.54% | |
Expected volatility, minimum | 58.00% | 62.00% |
Expected volatility, maximum | 65.00% | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (in years) | 4 years | 4 years |
Expected dividend yield | 0.00% | 0.23% |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (in years) | 6 years 3 months | |
Expected dividend yield | 0.36% |
Summary of Stock Option and Res
Summary of Stock Option and Restricted Stock Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares, Beginning Balance | 8,937,281 | |
Options granted, Shares | 208,500 | |
Options forfeited, Shares | (92,919) | |
Options expired, Shares | (359,780) | |
Options exercised, Shares | (51,891) | |
Number of shares, Ending Balance | 8,641,191 | 8,937,281 |
Weighted average exercise price, Beginning Balance | $ 6.97 | |
Options granted, Weighted average exercise price | 3.89 | |
Options forfeited, Weighted average exercise price | 5.26 | |
Options expired, Weighted average exercise price | 15.69 | |
Options exercised, Weighted average exercise price | 4.07 | |
Weighted average exercise price, Ending Balance | $ 6.57 | $ 6.97 |
Weighted average remaining contractual term, End of the period | 6 years 4 months 24 days | 6 years 3 months 29 days |
Aggregate intrinsic value, Outstanding Ending Balance | $ 960 | $ 52 |
Summary Restricted Stock Awards
Summary Restricted Stock Awards and Restricted Stock Units Activity (Detail) - $ / shares | Feb. 28, 2015 | Mar. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vested, Shares | (108,000) | (38,000) |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unvested Shares, Beginning Balance | 2,222,080 | |
Granted, Shares | 75,000 | |
Vested, Shares | (103,125) | |
Forfeited, Shares | (31,905) | |
Unvested Shares, Ending Balance | 2,162,050 | |
Weighted average grant date fair value, Beginning Balance | $ 4.86 | |
Granted, Weighted average grant date fair value | 3.74 | |
Vested, Weighted average grant date fair value | 4.47 | |
Forfeited, Weighted average grant date fair value | 4.69 | |
Weighted average grant date fair value, Ending Balance | $ 4.84 |
Stock-based Compensation Plan29
Stock-based Compensation Plans - Additional Information (Detail) - USD ($) $ in Thousands | Feb. 28, 2015 | Mar. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Repurchase of stock for tax withholding | 11,000 | |
Vested, Shares | 108,000 | 38,000 |
Minimum withholding tax | $ 50 | |
Options vested | 139,000 |
Computation of Net Income (Loss
Computation of Net Income (Loss) Per Share Basic and Diluted (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Numerator: | ||
Net loss from continuing operations | $ (3,677) | $ (330) |
Dividends paid to participating securities | (19) | |
Net income (loss) applicable to common stockholders | (3,677) | 4,564 |
Numerator: | ||
Net loss from continuing operations | (3,677) | (330) |
Dividends paid to participating securities | (19) | |
Class A | ||
Numerator: | ||
Net loss from continuing operations | (467) | (44) |
Net loss from continuing operations applicable to common stockholders | (467) | (44) |
Discontinued operations, net of tax | 627 | |
Net income (loss) applicable to common stockholders | $ (467) | $ 583 |
Denominator: | ||
Weighted average number of shares outstanding used to calculate basic net income (loss) per share | 5,233 | 5,233 |
Basic net income (loss) per share: | ||
Net loss from continuing operations applicable to common stockholders | $ (0.09) | $ (0.01) |
Discontinued operations, net of tax | 0.12 | |
Basic net income (loss) per share applicable to common stockholders | $ (0.09) | $ 0.11 |
Numerator: | ||
Net loss from continuing operations | $ (467) | $ (44) |
Net loss from continuing operations applicable to common stockholders | (467) | (44) |
Discontinued operations, net of tax | 627 | |
Diluted discontinued operations, net of tax | 627 | |
Net income (loss) applicable to common stockholders | $ (467) | $ 583 |
Denominator: | ||
Weighted average number of shares outstanding used to calculate basic net income (loss) per share | 5,233 | 5,233 |
Weighted average number of shares outstanding used to calculate diluted net income (loss) per share | 5,233 | 5,233 |
Diluted net (loss) income per share: | ||
Net loss from continuing operations applicable to common stockholders | $ (0.09) | $ (0.01) |
Discontinued operations, net of tax | 0.12 | |
Diluted net income (loss) per share applicable to common stockholders | $ (0.09) | $ 0.11 |
Class B | ||
Numerator: | ||
Net loss from continuing operations | $ (3,210) | $ (286) |
Dividends paid to participating securities | (19) | |
Net loss from continuing operations applicable to common stockholders | (3,210) | (305) |
Discontinued operations, net of tax | 4,286 | |
Net income (loss) applicable to common stockholders | $ (3,210) | $ 3,981 |
Denominator: | ||
Weighted average number of shares outstanding used to calculate basic net income (loss) per share | 35,977 | 35,766 |
Basic net income (loss) per share: | ||
Net loss from continuing operations applicable to common stockholders | $ (0.09) | $ (0.01) |
Discontinued operations, net of tax | 0.12 | |
Basic net income (loss) per share applicable to common stockholders | $ (0.09) | $ 0.11 |
Numerator: | ||
Net loss from continuing operations | $ (3,210) | $ (286) |
Dividends paid to participating securities | (19) | |
Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares | (467) | (44) |
Net loss from continuing operations applicable to common stockholders | (3,677) | (349) |
Discontinued operations, net of tax | 4,286 | |
Diluted discontinued operations, net of tax | 4,913 | |
Net income (loss) applicable to common stockholders | $ (3,677) | $ 4,564 |
Denominator: | ||
Weighted average number of shares outstanding used to calculate basic net income (loss) per share | 35,977 | 35,766 |
Conversion of Class A to Class B common shares outstanding | 5,233 | 5,233 |
Weighted average number of shares outstanding used to calculate diluted net income (loss) per share | 41,210 | 40,999 |
Diluted net (loss) income per share: | ||
Net loss from continuing operations applicable to common stockholders | $ (0.09) | $ (0.01) |
Discontinued operations, net of tax | 0.12 | |
Diluted net income (loss) per share applicable to common stockholders | $ (0.09) | $ 0.11 |
Class B | Discontinued Operations | ||
Numerator: | ||
Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares | $ 627 |
Net Income (Loss) Per Share - A
Net Income (Loss) Per Share - Additional Information (Detail) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Restricted Stock | Class B | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 708 | 235 |
Equity Option | Class B | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 8,641 | 7,829 |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 1,454 | 96 |
Concentrations - Additional Inf
Concentrations - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016EntityAgencyDistributor | Mar. 31, 2015AgencyDistributor | Dec. 31, 2015Agency | |
Concentration Risk [Line Items] | |||
Number of financial institution | Entity | 1 | ||
Percentage of revenue as criteria for major distribution partners | 10.00% | 10.00% | |
Number of distribution partners that were paid consolidated revenue | Distributor | 0 | 0 | |
Consolidated Revenue | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Number of advertising agencies | 1 | 1 | |
Concentration risk, percentage | 22.00% | 19.00% | |
Consolidated Accounts Receivable | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Number of advertising agencies | 1 | 1 | |
Concentration risk, percentage | 22.00% | 22.00% |
Schedules of Concentration of R
Schedules of Concentration of Risk Based on Consolidated Revenue (Detail) - Customer Concentration Risk - Consolidated Revenue | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 22.00% | 19.00% |
Advertiser A | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 24.00% | 31.00% |
Advertiser B | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 26.00% | 21.00% |
Schedules of Concentration of34
Schedules of Concentration of Risk Based on Accounts Receivable (Detail) - Customer Concentration Risk - Consolidated Accounts Receivable | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 22.00% | 22.00% |
Advertiser A | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 22.00% | 14.00% |
Advertiser D | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 28.00% | 28.00% |
Advertiser E | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.00% | 19.00% |
Segment Reporting and Geograp35
Segment Reporting and Geographic Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2015Segment | |
Segment Reporting Information | |
Number of operating segments | 2 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information | ||
Revenue | $ 35,985 | $ 35,916 |
Operating expenses | 39,642 | 36,216 |
Segment profit (loss) | (3,657) | (300) |
Less reconciling items: | ||
Stock based compensation | 1,966 | 2,791 |
Loss from continuing operations before provision for income taxes | $ (3,664) | (325) |
Operating Segments | ||
Segment Reporting Information | ||
Revenue | 35,916 | |
Operating expenses | 33,425 | |
Segment profit (loss) | 2,491 | |
Less reconciling items: | ||
Stock based compensation | 2,791 | |
Other expense | 25 | |
Loss from continuing operations before provision for income taxes | (325) | |
Operating Segments | Call driven | ||
Segment Reporting Information | ||
Revenue | 35,029 | |
Operating expenses | 32,397 | |
Segment profit (loss) | 2,632 | |
Operating Segments | Archeo | ||
Segment Reporting Information | ||
Revenue | 887 | |
Operating expenses | 1,028 | |
Segment profit (loss) | $ (141) |
Revenues by Geographic Region (
Revenues by Geographic Region (Detail) - Geographic Concentration Risk - Consolidated Revenue | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Segment Reporting Information | |||
Revenue by geographic region | 100.00% | 100.00% | |
United States | |||
Segment Reporting Information | |||
Revenue by geographic region | 97.00% | 97.00% | |
Canada | |||
Segment Reporting Information | |||
Revenue by geographic region | 3.00% | 3.00% | |
Other Countries | |||
Segment Reporting Information | |||
Revenue by geographic region | [1] | 0.00% | 0.00% |
[1] | Less than 1% of revenue. |
Property and Equipment (Detail)
Property and Equipment (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 33,401 | $ 33,345 |
Less: accumulated depreciation and amortization | (28,268) | (27,567) |
Property and equipment, net | 5,133 | 5,778 |
Computer and Other Related Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 21,534 | 21,551 |
Purchased and Internally Developed Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 7,893 | 7,893 |
Furniture and Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,821 | 1,778 |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,153 | $ 2,123 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation and amortization expense | $ 866,000 | $ 839,000 |
Commitments, Contingencies an40
Commitments, Contingencies and Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Commitments, Contingencies and Taxes [Line Items] | |||
Expiration of operating lease agreements | 2,018 | ||
Expiration of other contractual obligations | 2,018 | ||
Rent expense | $ 492,000 | $ 484,000 | |
Percentage of valuation allowance | 100.00% | 100.00% |
Future Minimum Payments (Detail
Future Minimum Payments (Detail) $ in Thousands | Mar. 31, 2016USD ($) |
Schedule Of Contractual Commitments [Line Items] | |
Facilities operating leases 2016 | $ 1,753 |
Facilities operating leases 2017 | 2,373 |
Facilities operating leases 2018 | 577 |
Facilities operating leases 2019 and after | 0 |
Facilities operating leases Total minimum payments | 4,703 |
Other contractual obligations 2016 | 2,706 |
Other contractual obligations 2017 | 1,564 |
Other contractual obligations 2018 | 412 |
Other contractual obligations 2019 and after | 0 |
Other contractual obligations, Total minimum payments | 4,682 |
Total 2,016 | 4,459 |
Total 2,017 | 3,937 |
Total 2,018 | 989 |
Total 2019 and after | 0 |
Total minimum payments | $ 9,385 |
Credit Agreement - Additional I
Credit Agreement - Additional Information (Detail) - USD ($) | 1 Months Ended | |||
Apr. 30, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Apr. 30, 2008 | |
Line of Credit Facility [Line Items] | ||||
Secured revolving credit facility | $ 30,000,000 | |||
Borrowings under the credit agreement | $ 0 | $ 0 | ||
Amended Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Maturity period | Apr. 1, 2017 | |||
Amended Credit Agreement | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
LIBOR rate | 0.00% |
Goodwill - Additional Informati
Goodwill - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Goodwill [Line Items] | |
Change in goodwill | $ 0 |
Common Stock - Additional Infor
Common Stock - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Nov. 30, 2014 | |
Equity, Class of Treasury Stock [Line Items] | |||
Treasury stock, shares retired | 125,237 | 469,961 | |
Class B | |||
Equity, Class of Treasury Stock [Line Items] | |||
Number of shares authorized to be repurchased | 3,000,000 | ||
Treasury stock acquired, shares | 238,000 | ||
Treasury stock acquired, value | $ 931,000 |
Operating Results for Discontin
Operating Results for Discontinued Operations (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2015USD ($) | |
Expenses: | |
Discontinued operations, net of tax | $ 4,913 |
Archeo's Pay-Per-Click Advertising Services and Archeo's Domain Operations | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Revenue | 6,659 |
Expenses: | |
Service costs | 1,322 |
Sales and marketing | 199 |
Income from discontinued operations, net of tax | 5,138 |
Gain on sale of discontinued operations, net of tax | (225) |
Discontinued operations, net of tax | $ 4,913 |
Discontinued Operations and D46
Discontinued Operations and Dispositions - Additional Information (Detail) - USD ($) | Dec. 31, 2015 | Apr. 30, 2015 | Mar. 31, 2016 | Mar. 31, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Discontinued operation, amortization expenses | $ 14,000 | |||
Cash proceeds from sale of discontinued operations | $ 28,100,000 | |||
Income (loss) from continuing operations before provision for income taxes | $ (3,664,000) | (325,000) | ||
Archeo | Disposal Group, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of Archeo assets, net | $ 750,000 | |||
Archeo business, estimated transaction cost | 244,000 | |||
Archeo business, relief of liabilities | 990,000 | |||
Gain on sale of Archeo assets | $ 1,500,000 | |||
Income (loss) from continuing operations before provision for income taxes | $ (141,000) |