DTS 10-Q 8 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 01, 2016
Document and Entity Information
Entity Registrant Name	DTS, INC.
Entity Central Index Key	1,226,308
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		17,639,216
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 43,762	$ 52,208
Short-term investments	0	9,657
Accounts receivable, net of allowance for doubtful accounts of $303 and $541 at June 30, 2016 and December 31, 2015, respectively	20,447	12,454
Prepaid expenses and other current assets	6,342	5,855
Income taxes receivable	2,084	4,130
Total current assets	72,635	84,304
Property and equipment, net	27,971	29,022
Intangible assets, net	147,920	157,936
Goodwill	87,625	108,726
Deferred income taxes	40,843	24,018
Other long-term assets	7,288	3,934
Total assets	384,282	407,940
Current liabilities:
Accounts payable	4,420	5,979
Accrued expenses	12,503	22,960
Deferred revenue	3,204	5,711
Income taxes payable	104	123
Current portion of long-term debt, net	31,486	21,486
Total current liabilities	51,717	56,259
Long-term debt, net	105,923	136,666
Other long-term liabilities	9,990	9,983
Commitments and contingencies (Note 9)
Stockholders' equity:
Preferred stock—$0.0001 par value, 5,000 shares authorized at June 30, 2016 and December 31, 2015; no shares issued and outstanding	0	0
Common stock—$0.0001 par value, 70,000 shares authorized at June 30, 2016 and December 31, 2015; 22,305 and 21,988 shares issued at June 30, 2016 and December 31, 2015, respectively; 17,638 and 17,321 shares outstanding at June 30, 2016 and December 31, 2015, respectively	3	3
Additional paid-in capital	265,054	258,660
Treasury stock, at cost—4,667 at June 30, 2016 and December 31, 2015	(111,331)	(111,331)
Accumulated other comprehensive income	782	778
Retained earnings	62,144	56,922
Total stockholders' equity	216,652	205,032
Total liabilities and stockholders' equity	$ 384,282	$ 407,940

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 303	$ 541
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000	5,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	70,000	70,000
Common stock, shares issued	22,305	21,988
Common stock, shares outstanding	17,638	17,321
Treasury stock, shares	4,667	4,667

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Revenue	$ 48,655	$ 34,426	$ 93,850	$ 68,363
Cost of revenue	6,211	2,743	12,302	5,527
Gross profit	42,444	31,683	81,548	62,836
Operating expenses:
Selling, general and administrative	20,771	18,186	45,280	37,969
Research and development	12,612	9,611	25,299	19,239
Total operating expenses	33,383	27,797	70,579	57,208
Operating income	9,061	3,886	10,969	5,628
Interest and other expense, net	(1,240)	(458)	(2,399)	(619)
Income before income taxes	7,821	3,428	8,570	5,009
Provision for income taxes	3,136	1,141	3,348	1,668
Net income	$ 4,685	$ 2,287	$ 5,222	$ 3,341
Net income per common share:
Basic (in dollars per share)	$ 0.27	$ 0.13	$ 0.30	$ 0.19
Diluted (in dollars per share)	$ 0.26	$ 0.12	$ 0.29	$ 0.18
Weighted average shares outstanding:
Basic (in shares)	17,568	17,580	17,489	17,521
Weighted average diluted shares outstanding	17,965	18,415	17,867	18,326

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 4,685	$ 2,287	$ 5,222	$ 3,341
Other comprehensive income, net of tax:
Unrealized gains and losses on available-for-sale securities and other, net	0	99	4	2
Total comprehensive income	$ 4,685	$ 2,386	$ 5,226	$ 3,343

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 5,222	$ 3,341
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	13,396	7,181
Stock-based compensation charges	6,740	5,640
Deferred income taxes	(2,392)	(2,029)
Excess tax benefits from stock-based awards	(71)	(1,696)
Amortization of debt issuance costs	306	0
Other	(104)	310
Changes in operating assets and liabilities:
Accounts receivable	(7,816)	(4,419)
Prepaid expenses and other assets	126	2,339
Accounts payable, accrued expenses and other liabilities	(10,806)	(7,369)
Deferred revenue	(2,507)	(1,068)
Income taxes receivable/payable	4,226	1,948
Net cash provided by operating activities	6,320	4,178
Cash flows from investing activities:
Purchases of available-for-sale investments	(13,635)	(32,344)
Maturities of available-for-sale investments	11,125	0
Sales of available-for-sale investments	12,125	0
Purchases of property and equipment	(1,453)	(1,544)
Purchases of intangible assets	(1,378)	(1,660)
Other investing activities	0	(300)
Net cash provided by (used in) investing activities	6,784	(35,848)
Cash flows from financing activities:
Repayments of long-term borrowings	(20,938)	0
Payment of contingent consideration	(480)	0
Holdback and other payments related to acquisitions	(370)	0
Proceeds from the issuance of common stock under stock-based compensation plans	2,375	7,664
Cash paid for shares withheld for taxes	(2,208)	(2,774)
Excess tax benefits from stock-based awards	71	1,696
Purchases of treasury stock	0	(19,147)
Net cash used in financing activities	(21,550)	(12,561)
Net change in cash and cash equivalents	(8,446)	(44,231)
Cash and cash equivalents, beginning of period	52,208	99,435
Cash and cash equivalents, end of period	$ 43,762	$ 55,204

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements of DTS, Inc. (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments considered necessary for a fair statement of the Company's financial position at June 30, 2016 , and the results of operations and cash flows for the periods presented. All intercompany transactions have been eliminated in consolidation. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 , filed with the Securities and Exchange Commission on March 7, 2016 . The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	6 Months Ended
	Jun. 30, 2016
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, "Revenue from Contracts with Customers (Topic 606)." This ASU outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and superseded the then most current revenue recognition guidance, including industry-specific guidance. As updated in ASU 2015-14, for public entities, this ASU will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The FASB has further clarified Topic 606 by issuing ASU 2016-08 (principal versus agent considerations), ASU 2016-10 (identifying performance obligations and licensing), and ASU 2016-12 (narrow-scope improvements and practical expedients). Entities have the option of applying either a full retrospective approach or a modified approach to adopt the ASU. The Company is evaluating the impact of adoption of this ASU on its consolidated financial statements. In September 2015, the FASB issued ASU 2015-16, "Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments." The ASU requires that adjustments to provisional amounts identified during the measurement period be recognized in the reporting period in which the adjustment amounts are determined. For public entities, the ASU is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The ASU must be applied prospectively to adjustments to provisional amounts that occur after the effective date. The Company adopted this ASU in the first quarter of 2016 and applied it to measurement period adjustments relating to the acquisition of iBiquity Digital Corporation. For additional information on these adjustments, refer to Note 5 , " Business Combination ." In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." This ASU requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous US GAAP. For public entities, this ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, but entities may elect certain practical expedients when implementing the ASU. The Company is evaluating the impact of adoption of this ASU on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, "Compensation - Stock Based Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting." This ASU simplifies several aspects of accounting for stock-based compensation transactions, including income tax consequences and presentation on the statements of cash flows. For public business entities, this ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is evaluating the impact of adoption of this ASU on its consolidated financial statements.

Cash, Cash Equivalents and Inve

Cash, Cash Equivalents and Investments	6 Months Ended
	Jun. 30, 2016
Investments and Cash [Abstract]
Cash, Cash Equivalents and Investments	Cash, Cash Equivalents and Investments Cash, cash equivalents and investments, classified as available-for-sale, consisted of: As of As of Cash and cash equivalents: Cash $ 14,317 $ 16,257 Money market accounts 29,445 35,951 Total cash and cash equivalents $ 43,762 $ 52,208 Short-term investments: Corporate bonds $ — $ 9,657 Total short-term investments $ — $ 9,657 The Company had no material gross realized or unrealized holding gains or losses from its investments for the periods presented within this quarterly report.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements The Company's investments are required to be measured and recorded at fair value on a recurring basis. The Company obtains the fair value of its available-for-sale securities, which are not in active markets, from a third-party professional pricing service using quoted market prices for identical or comparable instruments, rather than direct observations of quoted prices in active markets. The Company's professional pricing service gathers observable inputs for all of its fixed income securities from a variety of industry data providers (e.g., large custodial institutions) and other third-party sources. Once the observable inputs are gathered, all data points are considered and the fair value is determined. The Company validates the quoted market prices provided by its primary pricing service by comparing their assessment of the fair values against the fair values provided by its investment managers. The Company's investment managers use similar techniques to its professional pricing service to derive pricing as described above. As all significant inputs were observable, derived from observable information in the marketplace or supported by observable levels at which transactions are executed in the marketplace, the Company classifies its available-for-sale securities within Level 2 of the fair value hierarchy. The Company's financial assets and liabilities, measured at fair value on a recurring basis, were: Fair Value Measurements Assets (Liabilities) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of June 30, 2016 $ — $ — $ — $ — As of December 31, 2015 Corporate bonds $ 9,657 $ — $ 9,657 $ — Contingent consideration(1) $ (480 ) $ — $ — $ (480 ) _______________________________________ (1) Represents the final payment under the contingent consideration related to the acquisition of assets from Phorus, Inc. and Phorus, LLC, which was classified in accrued expenses on the consolidated balance sheet as of December 31, 2015. In the first quarter of 2016, the Company paid this remaining liability in full.

Business Combination

Business Combination	6 Months Ended
	Jun. 30, 2016
Business Combinations [Abstract]
Business Combination	Business Combination On October 1, 2015 , the Company completed the acquisition of iBiquity Digital Corporation (“iBiquity”), pursuant to the Agreement and Plan of Merger, dated August 31, 2015. The acquisition was accounted for under the acquisition method of accounting. During the six months ended June 30, 2016, the Company recognized a $ 21,101 net decrease in goodwill, primarily related to the recognition of additional acquired net operating loss carryforwards (NOLs) in connection with the intercompany transfer of intellectual property rights discussed in Note 10, “Income Taxes.” The increase in these NOLs is attributable to an update in the Company’s preliminary estimate of iBiquity federal and state NOLs that are more likely than not to be realized after considering the consequences of the limitations under Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”). Further analysis is currently being performed to finalize the estimated fair value of the acquired NOLs, and the Company is currently examining the overlap of prior year Section 382 ownership changes. The preliminary purchase price allocation remains provisional and is subject to certain working capital and other adjustments. Additionally, the Company has not yet obtained all available information necessary to finalize the measurement of certain assets and liabilities. The measurement of royalty recoveries remains provisional, because there may have been underreported royalty recoveries owed to iBiquity prior to the close of the acquisition, and the Company has not yet obtained the necessary information to determine such amounts. The Company is also waiting on information necessary to determine the fair value of certain rebate accruals and related indemnification assets. The measurement of legal contingencies has not yet been finalized because the Company has not yet received the information necessary to determine the fair value of any such contingencies. The measurement of acquired deferred income taxes has not been finalized as the Company is currently in the process of completing the analysis related to acquired NOLs, as discussed above. In addition, the Company is waiting on information related to certain pre-acquisition income tax filing positions of iBiquity that will assist the Company in finalizing the amounts to record for the acquired deferred income taxes. The Company is also waiting on information to assist the Company in finalizing the recording of any assumed uncertain income tax positions. The final allocation of the purchase price is expected to be completed as soon as practicable, but no later than October 1, 2016.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	6 Months Ended
	Jun. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Other Intangible Assets	Goodwill and Other Intangible Assets The changes in the Company's goodwill were: Goodwill Balance at December 31, 2015 $ 108,726 Purchase price allocation adjustments, net (21,101 ) Balance at June 30, 2016 $ 87,625 The Company's other intangible assets were: Weighted Average Life (Years) As of June 30, 2016 As of December 31, 2015 Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Customer Relationships 9 $ 116,026 $ (28,355 ) $ 87,671 $ 116,026 $ (22,039 ) $ 93,987 Acquired Technology 9 55,451 (16,910 ) 38,541 52,073 (14,071 ) 38,002 Tradenames 9 12,851 (3,273 ) 9,578 12,851 (2,452 ) 10,399 Contractual Rights 5 8,363 (3,345 ) 5,018 7,713 (2,527 ) 5,186 Patents 5 4,155 (1,724 ) 2,431 3,805 (1,538 ) 2,267 Trademarks 10 919 (452 ) 467 894 (417 ) 477 Non-Compete 2 492 (483 ) 9 492 (457 ) 35 Total amortizable intangible assets $ 198,257 $ (54,542 ) $ 143,715 $ 193,854 $ (43,501 ) $ 150,353 IPR&D 4,205 — 4,205 7,583 — 7,583 Total other intangible assets $ 202,462 $ (54,542 ) $ 147,920 $ 201,437 $ (43,501 ) $ 157,936 During the six months ended June 30, 2016 , the Company reclassified $ 3,378 of IPR&D assets not previously subject to amortization to amortizable intangible assets. Amortization of intangible assets included in the Company's condensed consolidated statements of operations was: For the Three Months For the Six Months 2016 2015 2016 2015 Cost of revenue $ 5,038 $ 2,386 $ 9,974 $ 4,754 Operating expenses 534 261 1,077 526 Total amortization of intangible assets $ 5,572 $ 2,647 $ 11,051 $ 5,280 The Company expects the future amortization of amortizable intangible assets held at June 30, 2016 to be as follows: Years Ending December 31, Estimated Amortization Expense 2016 (remaining 6 months) $ 11,328 2017 22,100 2018 20,152 2019 18,871 2020 15,432 2021 and thereafter 55,832 Total $ 143,715

Accrued Expenses

Accrued Expenses	6 Months Ended
	Jun. 30, 2016
Payables and Accruals [Abstract]
Accrued Expenses	Accrued Expenses Accrued expenses consisted of: As of As of Accrued payroll and related benefits $ 9,132 $ 17,998 Contingent consideration — 480 Other 3,371 4,482 Total accrued expenses $ 12,503 $ 22,960

Long-term Debt

Long-term Debt	6 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
Long-term Debt	Long-term Debt On October 1, 2015, the Company entered into a credit agreement with Wells Fargo Bank, National Association and other lenders (the "Credit Agreement"), which provided the Company with a term loan and a revolver. On June 24, 2016, the Company entered into the First Amendment to Credit Agreement (the "Amendment") in connection with the intercompany transfer of intellectual property rights discussed in Note 10 , " Income Taxes ." The Amendment requires the Company to make prepayments of $20,000 of the term loan in 2016. During the three months ended June 30, 2016 , the Company made a prepayment of $10,000 , in addition to the scheduled quarterly principal payment of $5,469 . Under the Amendment, two additional prepayments of $5,000 each are due by September 30, 2016 and December 30, 2016. These prepayments will be applied to the scheduled principal installments under the Credit Agreement in inverse order of maturity, beginning with the final principal balance due on October 1, 2020. The original scheduled quarterly principal installment payments under the Credit Agreement are unchanged by the Amendment. The Company's outstanding balances under the Credit Agreement, presented net of certain debt issuance costs on the condensed consolidated balance sheets, were: As of As of Debt outstanding under term loan, current portion $ 31,875 $ 21,875 Debt issuance costs, current portion (389 ) (389 ) Current portion of long-term debt, net $ 31,486 $ 21,486 Debt outstanding under term loan, long-term $ 72,188 $ 103,125 Debt outstanding under revolver, long-term 35,000 35,000 Debt issuance costs, long-term (1,265 ) (1,459 ) Long-term debt, net $ 105,923 $ 136,666 Future long-term debt principal payments are as follows: Years Ending December 31, 2016 (remaining 6 months) $ 20,938 2017 21,876 2018 21,876 2019 21,876 2020 52,497 Total $ 139,063 Interest expense, including amortization of debt issuance costs, was: For the Three Months For the Six Months 2016 2015 2016 2015 $ 1,144 $ 78 $ 2,293 $ 148

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. Those indemnities include intellectual property indemnities to the Company's customers in connection with the sale of its products and the licensing of its technology, indemnities for liabilities associated with the infringement of other parties' technology based upon the Company's products and technology, and indemnities to the Company's directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. To date, the Company has not been required to make any payments and has not recorded any liability for these indemnities, commitments and guarantees in its consolidated balance sheets. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable. Under certain contractual rights arrangements, the Company may be obligated to pay up to approximately $7,200 over an estimated period of approximately four years if certain milestones are achieved. In connection with the acquisition of iBiquity, the Company evaluated the potential synergies and future operations of the combined entity and implemented a restructuring plan in the fourth quarter of 2015, impacting approximately 70 employees. As of December 31, 2015, the Company had accrued $ 5,517 of severance and related costs. For the six months ended June 30, 2016 , the Company recorded additional severance and related costs of $ 225 within operating expenses in the condensed consolidated statement of operations. During the six months ended June 30, 2016 , the Company paid $ 4,252 of severance and related costs, and as of June 30, 2016 , $ 1,490 remained accrued under certain separation agreements, which is expected to be paid over the next year.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Income taxes for quarterly periods are computed using the estimated annual effective tax rate for the year along with discrete items identified in the quarter. For the six months ended June 30, 2016 and 2015 , the Company's effective tax rate was approximately 39% and 33% , respectively. The effective tax rate for 2016 differed from the US statutory rate of 35% primarily due to the impact of a foreign loss in a jurisdiction that will not result in a tax benefit and non-creditable foreign withholding taxes, partially offset by certain foreign earnings subject to lower tax rates and research and development tax credits. The effective tax rate for 2015 differed from the US statutory rate primarily due to the impact of foreign operations, as the Company's tax rates in foreign countries are generally lower than the US statutory rate, which was partially offset by non-creditable foreign withholding taxes and non-deductible stock-based compensation. The Company has a strategy of commercializing certain non-US intellectual property rights from outside the US. In line with this strategy, in June 2016, the Company completed the implementation of an intercompany transfer of certain intellectual property licensing rights acquired from iBiquity to certain of the Company's foreign subsidiaries. The transaction was implemented to align with the Company's current operating processes, to optimize the global legal, operational and tax structure, and to maximize the use of available net operating loss carryforwards acquired from iBiquity. The transaction will not have a significant impact on the Company’s effective tax rate in 2016 but should benefit future periods as a result of the non-US income being subject to lower tax rates and the ability to amortize the intellectual property for tax purposes in the foreign jurisdictions. As of June 30, 2016 and December 31, 2015 , the Company's uncertain tax positions were $19,652 and $19,454 , respectively, of which $9,112 was recorded in other long-term liabilities for both periods. The remaining amounts were recorded as a reduction to non-current deferred tax assets. The slight increase was primarily due to uncertain tax positions relating to research and development tax credits. The Company believes that within the next twelve months it is reasonably possible that unrecognized tax benefits will decrease by approximately $ 300 due to the expiration of certain statutes of limitations. Any resolution of the Company's uncertain tax positions may impact the Company's effective tax rate. The Company believes its accruals for uncertain tax positions are adequate for all open years, based on the assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. Inherent uncertainties exist in estimating accruals for uncertain tax positions due to the progress of income tax audits and changes in tax law, both legislated and concluded through the various jurisdictions' tax court systems. The Company may, from time to time, be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to the Company's consolidated financial statements. Interest expense and penalties related to income taxes are included in income tax expense. The Company, or one of its subsidiaries, files income tax returns in the US and other foreign jurisdictions. With few exceptions, the Company is no longer subject to income tax examinations by the Internal Revenue Service (IRS) for years prior to 2012 and by the California Franchise Tax Board (FTB) for years prior to 2011. Significant judgment is required in determining the consolidated provision for income taxes as the Company considers each tax jurisdiction's taxable earnings and the impact of the tax audit process. The final outcome of tax audits by the IRS, the FTB or other state tax authorities, and various foreign tax authorities could differ materially from amounts reflected in the condensed consolidated financial statements. Licensing revenue is recognized gross of withholding taxes that are remitted by the Company's licensees directly to the local tax authorities. For the three months ended June 30, 2016 and 2015 , withholding taxes were $1,097 and $576 , respectively. For the six months ended June 30, 2016 and 2015 , withholding taxes were $1,811 and $982 , respectively. The increase in withholding taxes from 2015 to 2016 is primarily due to increases in revenue resulting from the iBiquity acquisition in October 2015.

Net Income (Loss) Per Common Sh

Net Income (Loss) Per Common Share	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
Net Income Per Common Share	Net Income Per Common Share Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share is calculated by dividing net income by the sum of the weighted average number of common shares outstanding plus the dilutive effect of any outstanding stock options, unvested restricted stock, any unvested PSUs for which the performance conditions have been satisfied at the reporting date, and the Company's employee stock purchase plan (ESPP) using the treasury stock method. The computation of basic and diluted net income per common share was: For the Three Months For the Six Months 2016 2015 2016 2015 Numerator: Net income $ 4,685 $ 2,287 $ 5,222 $ 3,341 Denominator: Weighted average shares outstanding 17,568 17,580 17,489 17,521 Effect of dilutive securities: Stock options 253 651 224 633 Restricted stock 138 169 149 161 ESPP 6 15 5 11 Weighted average diluted shares outstanding 17,965 18,415 17,867 18,326 Basic net income per common share $ 0.27 $ 0.13 $ 0.30 $ 0.19 Diluted net income per common share $ 0.26 $ 0.12 $ 0.29 $ 0.18 Anti-dilutive shares excluded from the determination of diluted net income per share 1,900 443 2,066 504

Subsequent Event (Notes)

Subsequent Event (Notes)	6 Months Ended
	Jun. 30, 2016
Subsequent Events [Abstract]
Subsequent Event	Subsequent Event On August 8, 2016, the Company announced that the Board of Directors approved a quarterly dividend program. The first dividend declared was $ 0.02 per common share, which is payable on August 31, 2016 to stockholders of record on August 22, 2016.

Cash, Cash Equivalents and In19

Cash, Cash Equivalents and Investments (Tables)	6 Months Ended
	Jun. 30, 2016
Investments and Cash [Abstract]
Schedule of cash, cash equivalents and investments	Cash, cash equivalents and investments, classified as available-for-sale, consisted of: As of As of Cash and cash equivalents: Cash $ 14,317 $ 16,257 Money market accounts 29,445 35,951 Total cash and cash equivalents $ 43,762 $ 52,208 Short-term investments: Corporate bonds $ — $ 9,657 Total short-term investments $ — $ 9,657

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
Schedule of financial assets and liabilities, measured at fair value on a recurring basis	The Company's financial assets and liabilities, measured at fair value on a recurring basis, were: Fair Value Measurements Assets (Liabilities) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) As of June 30, 2016 $ — $ — $ — $ — As of December 31, 2015 Corporate bonds $ 9,657 $ — $ 9,657 $ — Contingent consideration(1) $ (480 ) $ — $ — $ (480 ) _______________________________________ (1) Represents the final payment under the contingent consideration related to the acquisition of assets from Phorus, Inc. and Phorus, LLC, which was classified in accrued expenses on the consolidated balance sheet as of December 31, 2015. In the first quarter of 2016, the Company paid this remaining liability in full.

Goodwill and Other Intangible21

Goodwill and Other Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Goodwill	The changes in the Company's goodwill were: Goodwill Balance at December 31, 2015 $ 108,726 Purchase price allocation adjustments, net (21,101 ) Balance at June 30, 2016 $ 87,625
Summary of the Company's finite lived intangible assets	The Company's other intangible assets were: Weighted Average Life (Years) As of June 30, 2016 As of December 31, 2015 Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Customer Relationships 9 $ 116,026 $ (28,355 ) $ 87,671 $ 116,026 $ (22,039 ) $ 93,987 Acquired Technology 9 55,451 (16,910 ) 38,541 52,073 (14,071 ) 38,002 Tradenames 9 12,851 (3,273 ) 9,578 12,851 (2,452 ) 10,399 Contractual Rights 5 8,363 (3,345 ) 5,018 7,713 (2,527 ) 5,186 Patents 5 4,155 (1,724 ) 2,431 3,805 (1,538 ) 2,267 Trademarks 10 919 (452 ) 467 894 (417 ) 477 Non-Compete 2 492 (483 ) 9 492 (457 ) 35 Total amortizable intangible assets $ 198,257 $ (54,542 ) $ 143,715 $ 193,854 $ (43,501 ) $ 150,353 IPR&D 4,205 — 4,205 7,583 — 7,583 Total other intangible assets $ 202,462 $ (54,542 ) $ 147,920 $ 201,437 $ (43,501 ) $ 157,936
Summary of the Company's indefinite lived intangible assets	The Company's other intangible assets were: Weighted Average Life (Years) As of June 30, 2016 As of December 31, 2015 Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Customer Relationships 9 $ 116,026 $ (28,355 ) $ 87,671 $ 116,026 $ (22,039 ) $ 93,987 Acquired Technology 9 55,451 (16,910 ) 38,541 52,073 (14,071 ) 38,002 Tradenames 9 12,851 (3,273 ) 9,578 12,851 (2,452 ) 10,399 Contractual Rights 5 8,363 (3,345 ) 5,018 7,713 (2,527 ) 5,186 Patents 5 4,155 (1,724 ) 2,431 3,805 (1,538 ) 2,267 Trademarks 10 919 (452 ) 467 894 (417 ) 477 Non-Compete 2 492 (483 ) 9 492 (457 ) 35 Total amortizable intangible assets $ 198,257 $ (54,542 ) $ 143,715 $ 193,854 $ (43,501 ) $ 150,353 IPR&D 4,205 — 4,205 7,583 — 7,583 Total other intangible assets $ 202,462 $ (54,542 ) $ 147,920 $ 201,437 $ (43,501 ) $ 157,936
Summary of amortization of intangible assets	Amortization of intangible assets included in the Company's condensed consolidated statements of operations was: For the Three Months For the Six Months 2016 2015 2016 2015 Cost of revenue $ 5,038 $ 2,386 $ 9,974 $ 4,754 Operating expenses 534 261 1,077 526 Total amortization of intangible assets $ 5,572 $ 2,647 $ 11,051 $ 5,280
Schedule of expected future amortization of intangible assets	The Company expects the future amortization of amortizable intangible assets held at June 30, 2016 to be as follows: Years Ending December 31, Estimated Amortization Expense 2016 (remaining 6 months) $ 11,328 2017 22,100 2018 20,152 2019 18,871 2020 15,432 2021 and thereafter 55,832 Total $ 143,715

Accrued Expenses (Tables)

Accrued Expenses (Tables)	6 Months Ended
	Jun. 30, 2016
Payables and Accruals [Abstract]
Schedule of accrued expenses	Accrued expenses consisted of: As of As of Accrued payroll and related benefits $ 9,132 $ 17,998 Contingent consideration — 480 Other 3,371 4,482 Total accrued expenses $ 12,503 $ 22,960

Long-term Debt (Tables)

Long-term Debt (Tables)	6 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
Schedule of Debt	The Company's outstanding balances under the Credit Agreement, presented net of certain debt issuance costs on the condensed consolidated balance sheets, were: As of As of Debt outstanding under term loan, current portion $ 31,875 $ 21,875 Debt issuance costs, current portion (389 ) (389 ) Current portion of long-term debt, net $ 31,486 $ 21,486 Debt outstanding under term loan, long-term $ 72,188 $ 103,125 Debt outstanding under revolver, long-term 35,000 35,000 Debt issuance costs, long-term (1,265 ) (1,459 ) Long-term debt, net $ 105,923 $ 136,666
Schedule of Maturities of Long-term Debt	Future long-term debt principal payments are as follows: Years Ending December 31, 2016 (remaining 6 months) $ 20,938 2017 21,876 2018 21,876 2019 21,876 2020 52,497 Total $ 139,063
Schedule of Debt Interest Payments [Table Text Block]	Interest expense, including amortization of debt issuance costs, was: For the Three Months For the Six Months 2016 2015 2016 2015 $ 1,144 $ 78 $ 2,293 $ 148

Net Income (Loss) Per Common 24

Net Income (Loss) Per Common Share (Tables)	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
Computation of basic and diluted net income per common share	The computation of basic and diluted net income per common share was: For the Three Months For the Six Months 2016 2015 2016 2015 Numerator: Net income $ 4,685 $ 2,287 $ 5,222 $ 3,341 Denominator: Weighted average shares outstanding 17,568 17,580 17,489 17,521 Effect of dilutive securities: Stock options 253 651 224 633 Restricted stock 138 169 149 161 ESPP 6 15 5 11 Weighted average diluted shares outstanding 17,965 18,415 17,867 18,326 Basic net income per common share $ 0.27 $ 0.13 $ 0.30 $ 0.19 Diluted net income per common share $ 0.26 $ 0.12 $ 0.29 $ 0.18 Anti-dilutive shares excluded from the determination of diluted net income per share 1,900 443 2,066 504

Cash, Cash Equivalents and In25

Cash, Cash Equivalents and Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Cash, cash equivalents and investments
Total cash and cash equivalents	$ 43,762	$ 52,208	$ 55,204	$ 99,435
Total short-term investments	0	9,657
Corporate Bond
Cash, cash equivalents and investments
Short-term investments	0	9,657
Cash
Cash, cash equivalents and investments
Cash	14,317	16,257
Money market accounts
Cash, cash equivalents and investments
Cash equivalents	$ 29,445	$ 35,951

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value Measurements
Contingent consideration	$ 0	$ (480)
Recurring basis | Total
Fair Value Measurements
Fair value of assets (liabilities)	0
Contingent consideration		(480)
Recurring basis | Total | Corporate Bond
Fair Value Measurements
Available-for-sale securities		9,657
Recurring basis | Fair Value Measurements | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Measurements
Fair value of assets (liabilities)	0
Contingent consideration		0
Recurring basis | Fair Value Measurements | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate Bond
Fair Value Measurements
Available-for-sale securities		0
Recurring basis | Fair Value Measurements | Significant Other Observable Inputs (Level 2)
Fair Value Measurements
Fair value of assets (liabilities)	0
Contingent consideration		0
Recurring basis | Fair Value Measurements | Significant Other Observable Inputs (Level 2) | Corporate Bond
Fair Value Measurements
Available-for-sale securities		9,657
Recurring basis | Fair Value Measurements | Significant Unobservable Inputs (Level 3)
Fair Value Measurements
Fair value of assets (liabilities)	$ 0
Contingent consideration		(480)
Recurring basis | Fair Value Measurements | Significant Unobservable Inputs (Level 3) | Corporate Bond
Fair Value Measurements
Available-for-sale securities		$ 0

Business Combination (Details)

Business Combination (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016USD ($)
Business Acquisition [Line Items]
Decrease in goodwill due to purchase price adjustment	$ 21,101
iBiquity
Business Acquisition [Line Items]
Decrease in goodwill due to purchase price adjustment	$ 21,101

Goodwill and Other Intangible28

Goodwill and Other Intangible Assets - Goodwill (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016USD ($)
Goodwill [Roll Forward]
Balance at December 31, 2015	$ 108,726
Purchase price allocation adjustments, net	(21,101)
Balance at June 30, 2016	$ 87,625

Goodwill and Other Intangible29

Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Summary of acquired intangible assets by category
Gross amount of amortizable assets	$ 198,257		$ 198,257		$ 193,854
Accumulated Amortization	(54,542)		(54,542)		(43,501)
Net Carrying Amount of amortizable assets	143,715		143,715		150,353
Total amortization of intangible assets	5,572	$ 2,647	11,051	$ 5,280
Total intangible assets, gross	202,462		202,462		201,437
Accumulated Amortization	(54,542)		(54,542)		(43,501)
Intangible assets, net	147,920		147,920		157,936
IPR&D
Summary of acquired intangible assets by category
Indefinite-lived intangible assets	4,205		$ 4,205		7,583
Customer Relationships
Summary of acquired intangible assets by category
Weighted Average Life (Years)			9 years
Gross amount of amortizable assets	116,026		$ 116,026		116,026
Accumulated Amortization	(28,355)		(28,355)		(22,039)
Net Carrying Amount of amortizable assets	87,671		87,671		93,987
Accumulated Amortization	(28,355)		$ (28,355)		(22,039)
Acquired Technology
Summary of acquired intangible assets by category
Weighted Average Life (Years)			9 years
Gross amount of amortizable assets	55,451		$ 55,451		52,073
Accumulated Amortization	(16,910)		(16,910)		(14,071)
Net Carrying Amount of amortizable assets	38,541		38,541		38,002
Accumulated Amortization	(16,910)		$ (16,910)		(14,071)
Tradenames
Summary of acquired intangible assets by category
Weighted Average Life (Years)			9 years
Gross amount of amortizable assets	12,851		$ 12,851		12,851
Accumulated Amortization	(3,273)		(3,273)		(2,452)
Net Carrying Amount of amortizable assets	9,578		9,578		10,399
Accumulated Amortization	(3,273)		$ (3,273)		(2,452)
Contractual Rights
Summary of acquired intangible assets by category
Weighted Average Life (Years)			5 years
Gross amount of amortizable assets	8,363		$ 8,363		7,713
Accumulated Amortization	(3,345)		(3,345)		(2,527)
Net Carrying Amount of amortizable assets	5,018		5,018		5,186
Accumulated Amortization	(3,345)		$ (3,345)		(2,527)
Patents
Summary of acquired intangible assets by category
Weighted Average Life (Years)			5 years
Gross amount of amortizable assets	4,155		$ 4,155		3,805
Accumulated Amortization	(1,724)		(1,724)		(1,538)
Net Carrying Amount of amortizable assets	2,431		2,431		2,267
Accumulated Amortization	(1,724)		$ (1,724)		(1,538)
Trademarks
Summary of acquired intangible assets by category
Weighted Average Life (Years)			10 years
Gross amount of amortizable assets	919		$ 919		894
Accumulated Amortization	(452)		(452)		(417)
Net Carrying Amount of amortizable assets	467		467		477
Accumulated Amortization	(452)		$ (452)		(417)
Non-Compete
Summary of acquired intangible assets by category
Weighted Average Life (Years)			2 years
Gross amount of amortizable assets	492		$ 492		492
Accumulated Amortization	(483)		(483)		(457)
Net Carrying Amount of amortizable assets	9		9		35
Accumulated Amortization	(483)		(483)		$ (457)
IPR&D
Summary of acquired intangible assets by category
Indefinite lived intangible assets transferred to finite lived intangible assets			3,378
Cost of revenue
Summary of acquired intangible assets by category
Total amortization of intangible assets	5,038	2,386	9,974	4,754
Operating expenses
Summary of acquired intangible assets by category
Total amortization of intangible assets	$ 534	$ 261	$ 1,077	$ 526

Goodwill and Other Intangible30

Goodwill and Other Intangible Assets - Future Amortization (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Future amortization of intangible assets
2016 (remaining 6 months)	$ 11,328
2,017	22,100
2,018	20,152
2,019	18,871
2,020	15,432
2021 and thereafter	55,832
Net Carrying Amount of amortizable assets	$ 143,715	$ 150,353

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Payables and Accruals [Abstract]
Accrued payroll and related benefits	$ 9,132	$ 17,998
Contingent consideration	0	480
Other	3,371	4,482
Total accrued expenses	$ 12,503	$ 22,960

Long-term Debt (Details)

Long-term Debt (Details)	3 Months Ended
	Jun. 30, 2016USD ($)prepayment	Dec. 31, 2015USD ($)
Long-term debt
Number of prepayments required under amendment | prepayment	2
Current portion of long-term debt, net	$ 31,486,000	$ 21,486,000
Debt issuance costs, long-term	(1,265,000)	(1,459,000)
Long-term debt, net	105,923,000	136,666,000
Term Loan
Long-term debt
Debt outstanding, current portion	31,875,000	21,875,000
Debt issuance costs, current portion	(389,000)	(389,000)
Current portion of long-term debt, net	31,486,000	21,486,000
Debt outstanding, long-term	72,188,000	103,125,000
Revolver
Long-term debt
Debt outstanding, long-term	35,000,000	$ 35,000,000
Amended Credit Agreement
Long-term debt
Prepayments required in current year	20,000,000
Prepayments made	10,000,000
Scheduled quarterly principal payment made	5,469,000
Prepayment amounts due	$ 5,000,000

Long-term Debt - Future Debt Pa

Long-term Debt - Future Debt Payments (Details) $ in Thousands	Jun. 30, 2016USD ($)
Debt Disclosure [Abstract]
2016 (remaining 6 months)	$ 20,938
2,017	21,876
2,018	21,876
2,019	21,876
2,020	52,497
Total	$ 139,063

Long-term Debt - Interest Expen

Long-term Debt - Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Debt Disclosure [Abstract]
Interest expense and amortization of debt issuance costs	$ 1,144	$ 78	$ 2,293	$ 148

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016USD ($)	Dec. 31, 2015USD ($)
Commitments and Contingencies
Period for the payment of additional consideration subject to the achievement of certain milestones	4 years
Number of employee positions eliminated		70
Employee Severance and Related Cost
Commitments and Contingencies
Restructuring charges accrued	$ 1,490	$ 5,517
Payments for Restructuring	4,252
Employee Severance and Related Cost | Operating expenses
Commitments and Contingencies
Restructuring charges	225
Maximum
Commitments and Contingencies
Potential milestone payments under certain contractual rights arrangements	$ 7,200

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Effective tax rate (as a percent)			39.00%	33.00%
Statutory federal rate (as a percent)			35.00%
Uncertain tax positions	$ 19,652		$ 19,652		$ 19,454
Withholding taxes	1,097	$ 576	1,811	$ 982
Other long-term liabilities
Uncertain tax positions	9,112		9,112		$ 9,112
Lapse of Applicable Statute of Limitations
Reasonably possible decrease in unrecognized tax benefits in the next twelve months	$ 300		$ 300

Net Income (Loss) Per Common 37

Net Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Numerator:
Net income	$ 4,685	$ 2,287	$ 5,222	$ 3,341
Denominator:
Weighted average shares outstanding	17,568	17,580	17,489	17,521
Weighted average diluted shares outstanding	17,965	18,415	17,867	18,326
Basic net income (loss) per common share (in dollars per share)	$ 0.27	$ 0.13	$ 0.30	$ 0.19
Diluted net income (loss) per common share (in dollars per share)	$ 0.26	$ 0.12	$ 0.29	$ 0.18
Anti-dilutive shares excluded from the determination of diluted net income per share	1,900	443	2,066	504
Stock Options
Denominator:
Effect of dilutive securities	253	651	224	633
RSUs
Denominator:
Effect of dilutive securities	138	169	149	161
ESPP
Denominator:
Effect of dilutive securities	6	15	5	11

Subsequent Event (Details)

Subsequent Event (Details)	Aug. 08, 2016$ / shares
Subsequent Event
Subsequent Event [Line Items]
Dividends declared (in dollars per share)	$ 0.02