Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Jan. 31, 2015 | Jun. 30, 2014 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | VONAGE HOLDINGS CORP | ||
Entity Central Index Key | 1272830 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | FALSE | ||
Entity Common Stock, Shares Outstanding | 211,217,679 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $658,638,331 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $40,797 | $84,663 |
Marketable securities | 7,162 | 0 |
Accounts receivable, net of allowance of $607 and $683, respectively | 17,990 | 19,649 |
Inventory, net of allowance of $181 and $229, respectively | 10,081 | 10,584 |
Deferred customer acquisition costs, current | 4,854 | 4,991 |
Deferred tax assets, current | 21,849 | 18,361 |
Prepaid expenses and other current assets | 12,665 | 16,892 |
Total current assets | 115,398 | 155,140 |
Property and equipment, net | 49,630 | 52,243 |
Goodwill | 191,262 | 83,627 |
Software, net | 18,624 | 20,557 |
Deferred customer acquisition costs, non-current | 87 | 193 |
Debt related costs, net | 2,151 | 1,313 |
Restricted cash | 3,405 | 4,405 |
Intangible assets, net | 59,907 | 76,850 |
Deferred tax assets, non-current | 227,090 | 246,539 |
Other assets | 7,748 | 1,882 |
Total assets | 675,302 | 642,749 |
Current liabilities: | ||
Accounts payable | 42,564 | 49,867 |
Accrued expenses | 84,196 | 81,127 |
Deferred revenue, current portion | 35,570 | 36,899 |
Current maturities of capital lease obligations | 3,365 | 2,889 |
Current portion of notes payable | 20,000 | 23,333 |
Total current liabilities | 185,695 | 194,115 |
Indebtedness under revolving credit facility | 67,000 | 75,000 |
Notes payable, net of current portion | 70,000 | 23,333 |
Deferred revenue, net of current portion | 855 | 436 |
Capital lease obligations, net of current maturities | 6,836 | 10,201 |
Other liabilities, net of current portion in accrued expenses | 1,419 | 1,628 |
Total liabilities | 331,805 | 304,713 |
Commitments and Contingencies | 0 | 0 |
Redeemable noncontrolling interest | 0 | -38 |
Stockholders’ Equity | ||
Common stock, par value $0.001 per share; 596,950 shares authorized at December 31, 2014 and December 31, 2013; 262,423 and 246,741 shares issued at December 31, 2014 and December 31, 2013, respectively; 211,994 and 212,339 shares outstanding at December 31, 2014 and December 31, 2013, respectively | 264 | 247 |
Additional paid-in capital | 1,184,662 | 1,136,289 |
Accumulated deficit | -677,675 | -697,941 |
Treasury stock, at cost, 50,429 shares at December 31, 2014 and 34,402 shares at December 31, 2013 | -159,775 | -101,040 |
Accumulated other comprehensive (loss) income | -3,131 | 519 |
Noncontrolling interest | -848 | 0 |
Total stockholders’ equity | 343,497 | 338,074 |
Total liabilities and stockholders’ equity | $675,302 | $642,749 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $607 | $683 |
Inventory, allowance | $181 | $229 |
Common stock, par value (USD per share) | $0.00 | $0.00 |
Common stock, shares authorized | 596,950,000 | 596,950,000 |
Common stock, shares issued | 262,423,000 | 246,741,000 |
Common stock, shares outstanding | 211,994,000 | 212,339,000 |
Treasury stock, shares | 50,429,000 | 34,402,000 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||
Revenues | $868,953 | $829,067 | $849,114 |
Operating Expenses: | |||
Cost of telephony services (excluding depreciation and amortization of $19,330, $14,892, and $15,115, respectively) | 232,053 | 237,294 | 259,224 |
Cost of goods sold | 36,815 | 37,586 | 39,133 |
Selling, general and administrative | 274,750 | 238,720 | 215,021 |
Marketing | 226,121 | 227,052 | 212,540 |
Depreciation and amortization | 51,407 | 36,066 | 33,324 |
Loss from abandonment of software assets | 0 | 0 | 25,262 |
Operating expenses | 821,146 | 776,718 | 784,504 |
Income from operations | 47,807 | 52,349 | 64,610 |
Other Income (Expense): | |||
Interest income | 212 | 307 | 109 |
Interest expense | -6,823 | -6,557 | -5,986 |
Other expense, net | 11 | -104 | -11 |
Total other income (expense) | -6,600 | -6,354 | -5,888 |
Income before income tax expense | 41,207 | 45,995 | 58,722 |
Income tax expense | -21,760 | -18,194 | -22,095 |
Net income | 19,447 | 27,801 | 36,627 |
Plus: Net loss attributable to noncontrolling interest | 819 | 488 | 0 |
Net income attributable to Vonage | $20,266 | $28,289 | $36,627 |
Net income attributable to Vonage per common share: | |||
Basic (USD per share) | $0.10 | $0.13 | $0.16 |
Diluted (USD per share) | $0.09 | $0.13 | $0.16 |
Weighted-average common shares outstanding: | |||
Basic (in shares) | 209,822 | 211,563 | 224,264 |
Diluted (in shares) | 219,419 | 220,520 | 232,633 |
Consolidated_Statements_of_Ope1
Consolidated Statements of Operations (Parenthetical) (Direct cost of telephony services, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Direct cost of telephony services | |||
Depreciation and Amortization | $19,330 | $14,892 | $15,115 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net income | $19,447 | $27,801 | $36,627 |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustment | -3,633 | -2,058 | 335 |
Unrealized loss on available-for-sale securities | -8 | 0 | 0 |
Total other comprehensive (loss) income | -3,641 | -2,058 | 335 |
Comprehensive income | 15,806 | 25,743 | 36,962 |
Comprehensive loss attributable to noncontrolling interest: | |||
Add: Net loss | -819 | -488 | 0 |
Foreign currency translation adjustment | 9 | -5 | 0 |
Total comprehensive loss attributable to noncontrolling interest | -810 | -493 | 0 |
Comprehensive income attributable to Vonage | $16,616 | $26,236 | $36,962 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income | $19,447 | $27,801 | $36,627 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization and impairment charges | 34,464 | 31,208 | 30,949 |
Amortization of intangibles | 16,943 | 4,858 | 2,375 |
Loss from abandonment of software assets | 0 | 0 | 25,262 |
Deferred tax expense (benefit) | 19,128 | 16,795 | 19,488 |
Allowance for doubtful accounts | -193 | -256 | 926 |
Allowance for obsolete inventory | 757 | 663 | 527 |
Amortization of debt related costs | 1,072 | 1,515 | 1,235 |
Share-based expense | 21,070 | 17,843 | 11,975 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | 4,887 | 1,236 | -3,461 |
Inventory | 36 | -5,835 | 748 |
Prepaid expenses and other current assets | 4,106 | -662 | 1,345 |
Deferred customer acquisition costs | 230 | 621 | -66 |
Other assets | -5,790 | 1,970 | -788 |
Accounts payable | -8,454 | -26,335 | 7,801 |
Accrued expenses | -13,042 | 17,869 | -10,719 |
Deferred revenue | -1,910 | -1,111 | -3,517 |
Other liabilities | -209 | 63 | -864 |
Net cash provided by operating activities | 92,542 | 88,243 | 119,843 |
Cash flows from investing activities: | |||
Capital expenditures | -12,436 | -9,889 | -13,763 |
Purchase of marketable securities | -7,170 | 0 | 0 |
Acquisition and development of software assets | -11,819 | -12,291 | -12,987 |
Acquisition of business, net of cash acquired | -88,098 | -100,057 | 0 |
Decrease in restricted cash | 995 | 1,252 | 1,278 |
Net cash used in investing activities | -118,528 | -120,985 | -25,472 |
Cash flows from financing activities: | |||
Principal payments on capital lease obligations and other liability | -2,889 | -3,471 | -2,104 |
Principal payments on notes and revolving credit facility | -41,666 | -23,334 | -28,333 |
Proceeds from issuance of notes payable and revolving credit facility | 77,000 | 102,500 | 0 |
Debt related costs | -1,910 | -2,056 | 0 |
Common stock repurchases | -49,338 | -56,294 | -27,545 |
Acquisition of redeemable noncontrolling interest | 0 | 455 | 0 |
Proceeds from exercise of stock options and stock warrant | 4,564 | 4,091 | 1,725 |
Net cash provided by (used in) financing activities | -14,239 | 21,891 | -56,257 |
Effect of exchange rate changes on cash | -3,641 | -1,596 | 133 |
Net change in cash and cash equivalents | -43,866 | -12,447 | 38,247 |
Cash and cash equivalents, beginning of period | 84,663 | 97,110 | 58,863 |
Cash and cash equivalents, end of period | 40,797 | 84,663 | 97,110 |
Supplemental disclosures of cash flow information: | |||
Interest | 5,252 | 4,722 | 4,653 |
Income taxes | 2,491 | 2,323 | 2,329 |
Non-cash financing transactions during the periods for: | |||
Common stock repurchases | 661 | 736 | 644 |
Issuance of Common Stock in connection with acquisition of business | $22,727 | $26,186 | $0 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (Deficit) and Redeemable Noncontrolling Interest (USD $) | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Accumulated Other Comprehensive Income | Non-controlling interest | Parent | Redeemable non-controlling interest |
In Thousands, unless otherwise specified | |||||||||
Beginning Balance at Dec. 31, 2011 | $299,567 | $228 | $1,074,488 | ($762,857) | ($14,529) | $2,237 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock option exercises | 1,725 | 2 | 1,723 | ||||||
Share-based expense | 11,975 | 11,975 | |||||||
Share-based award activity | -625 | -625 | |||||||
Warrant exercise | -28,189 | -28,189 | |||||||
Foreign currency translation adjustment | 335 | 335 | |||||||
Unrealized loss on available-for-sale securities | 0 | ||||||||
Net income (loss) | 36,627 | 36,627 | |||||||
Ending Balance at Dec. 31, 2012 | 321,415 | 230 | 1,088,186 | -726,230 | -43,343 | 2,572 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock option exercises | 9,554 | 9 | 9,545 | ||||||
Stock option cancellation | -5,463 | -5,463 | |||||||
Share-based expense | 17,843 | 17,843 | |||||||
Share-based award activity | -1,311 | -1,311 | |||||||
Common stock repurchases | -56,386 | -56,386 | |||||||
Acquisition of business | 26,186 | 8 | 26,178 | ||||||
Investment by redeemable noncontrolling interest | 455 | ||||||||
Foreign currency translation adjustment | -2,058 | -2,053 | -2,053 | -5 | |||||
Unrealized loss on available-for-sale securities | 0 | ||||||||
Net income (loss) | 27,801 | 28,289 | 28,289 | -488 | |||||
Ending Balance at Dec. 31, 2013 | 338,074 | 247 | 1,136,289 | -697,941 | -101,040 | 519 | -38 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock option exercises | 4,564 | 10 | 4,554 | ||||||
Share-based expense | 21,070 | 21,070 | |||||||
Share-based award activity | -9,004 | -9,004 | |||||||
Common stock repurchases | -49,263 | -49,263 | |||||||
Acquisition of business | 22,288 | 7 | 22,749 | -468 | |||||
Foreign currency translation adjustment | -3,633 | -3,642 | 9 | ||||||
Unrealized loss on available-for-sale securities | -8 | -8 | |||||||
Transfer of noncontrolling interest | -706 | -706 | 706 | ||||||
Net income (loss) | 19,447 | 20,266 | -151 | 20,115 | -668 | ||||
Ending Balance at Dec. 31, 2014 | $343,497 | $264 | $1,184,662 | ($677,675) | ($159,775) | ($3,131) | ($848) | $0 |
Basis_of_Presentation_and_Sign
Basis of Presentation and Significant Accounting Policies | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies | |||||||||||
NATURE OF OPERATIONS | ||||||||||||
Vonage Holdings Corp. (“Vonage”, “Company”, “we”, “our”, “us”) is incorporated as a Delaware corporation. We are a leading provider of communications services connecting people through cloud-connected devices worldwide. Customers in the United States represented 93% of our subscriber lines for our broadband telephone replacement services at December 31, 2014, with the balance primarily in Canada and the United Kingdom. | ||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Principles of Consolidation | ||||||||||||
The consolidated financial statements include the accounts of Vonage and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. We also consolidate a majority-owned entity in Brazil where we have the ability to exercise controlling influence. The ownership interest of the noncontrolling party is presented as noncontrolling interest. | ||||||||||||
Use of Estimates | ||||||||||||
Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States, which require management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the accompanying notes. Actual results could differ materially from these estimates. | ||||||||||||
On an ongoing basis, we evaluate our estimates, including the following: | ||||||||||||
> | the useful lives of property and equipment, software costs, and intangible assets; | |||||||||||
> | assumptions used for the purpose of determining share-based compensation using the Black-Scholes option pricing model and Monte Carlo simulation model (“Models”), and various other assumptions that we believe to be reasonable; the key inputs for these Models include our stock price at valuation date, exercise price, the dividend yield, risk-free interest rate, life in years, and historical volatility of our common stock; and | |||||||||||
> | assumptions used in determining the need for, and amount of, a valuation allowance on net deferred tax assets; | |||||||||||
We base our estimates on historical experience, available market information, appropriate valuation methodologies, and on various other assumptions that we believe to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. | ||||||||||||
Revenue Recognition | ||||||||||||
Operating revenues consist of telephony services revenues and customer equipment (which enables our telephony services) and shipping revenues. The point in time at which revenues are recognized is determined in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104, Revenue Recognition, and Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605, Revenue Recognition. | ||||||||||||
At the time a customer signs up for our telephony services, there are the following deliverables: | ||||||||||||
> | Providing equipment, if any, to the customer that enables our telephony services and | |||||||||||
> | Providing telephony services. | |||||||||||
The equipment is generally provided free of charge to our customers and in most instances there are no fees collected at sign-up. We record the fees collected for shipping the equipment to the customer, if any, as shipping and handling revenue at the time of shipment. | ||||||||||||
Telephony Services Revenue | ||||||||||||
Substantially all of our revenues are telephony services revenues, which are derived primarily from monthly subscription fees that customers are charged under our service plans. We also derive telephony services revenues from per minute fees for international calls if not covered under a plan, including calls made via applications for mobile devices and other stand-alone products, and for any calling minutes in excess of a customer’s monthly plan limits. Monthly subscription fees are automatically charged to customers’ credit cards, debit cards or electronic check payments ("ECP"), in advance and are recognized over the following month when services are provided. Revenues generated from international calls and from customers exceeding allocated call minutes under limited minute plans are recognized as services are provided, that is, as minutes are used, and are billed to a customer's credit cards, debit cards or ECP in arrears. As a result of multiple billing cycles each month, we estimate the amount of revenues earned from international calls and from customers exceeding allocated call minutes under limited minute plans but not billed from the end of each billing cycle to the end of each reporting period and record these amounts as accounts receivable. These estimates are based primarily upon historical minutes and have been consistent with our actual results. | ||||||||||||
We also provide rebates to customers who purchase their customer equipment from retailers and satisfy minimum service period requirements. These rebates in excess of activation fees are recorded as a reduction of revenues over the service period based upon the estimated number of customers that will ultimately earn and claim the rebates. | ||||||||||||
In the United States, we charge regulatory, compliance, E-911, and intellectual property-related fees on a monthly basis to defray costs, and to cover taxes that we are charged by the suppliers of telecommunications services. In addition, we charge customers Federal Universal Service Fund (“USF”) fees. We recognize revenue on a gross basis for USF and related fees. We record these fees as revenue when billed. All other taxes are recorded on a net basis. | ||||||||||||
In addition, historically, we charged a disconnect fee for customers who terminated their service plan within the first twelve months of service. Disconnect fees are recorded as revenue and are recognized at the time the customer terminates service. Beginning in September 2010, we eliminated the disconnect fee for new customers. In February of 2012 we re-introduced service agreements as an option for new customers. | ||||||||||||
Customer Equipment and Shipping Revenue | ||||||||||||
Customer equipment and shipping revenues consist of revenues from sales of customer equipment to wholesalers or directly to customers for replacement devices, or for upgrading their device at the time of customer sign-up for which we charge an additional fee. In addition, customer equipment and shipping revenues include revenues from the sale of VoIP telephones in order to access our small and medium business services. Customer equipment and shipping revenues also include the fees that customers are charged for shipping their customer equipment to them. Customer equipment and shipping revenues include sales to our retailers, who subsequently resell this customer equipment to customers. Revenues are reduced for payments to retailers and rebates to customers, who purchased their customer equipment through these retailers, to the extent of customer equipment and shipping revenues. In addition, historically, we charged an equipment recovery fee for customers who terminated their service plan within the first twelve months of service. Equipment recovery fees are recorded as revenue and are recognized at the time the customer terminates service. Beginning in September 2010, we eliminated the equipment recovery fees for new customers. | ||||||||||||
Cost of Telephony Services | ||||||||||||
Cost of telephony services consists primarily of costs that we pay to third parties in order to provide telephony services. These costs include access and interconnection charges that we pay to other telephone companies to terminate domestic and international phone calls on the public switched telephone network. In addition, these costs include the cost to lease phone numbers, to co-locate in other telephone companies’ facilities, to provide enhanced emergency dialing capabilities to transmit 911 calls, and to provide local number portability. These costs also include taxes that we pay on telecommunications services from our suppliers or are imposed by government agencies such as Federal USF and royalties for use of third parties’ intellectual property. In addition, the Company has reclassified certain personnel and related costs for network operations and customer care that are attributable to revenue generating activities from selling, general and administrative expense to cost of telephony services for all periods presented. | ||||||||||||
Cost of Goods Sold | ||||||||||||
Cost of goods sold consists primarily of costs that we incur when a customer signs up for our service. These costs include the cost of customer equipment for customers who subscribe through the direct sales channel in excess of activation fees. In addition, these costs include the amortization of deferred customer equipment, the cost of shipping and handling for customer equipment, the installation manual that accompanies the customer equipment, and the cost of certain promotions. | ||||||||||||
Research and Development Expenses | ||||||||||||
Costs for research, including predevelopment efforts prior to establishing technological feasibility of software expected to be marketed, are expensed as incurred. | ||||||||||||
Development costs are capitalized when technological feasibility has been established and anticipated future revenues support the recoverability of the capitalized amounts. Capitalization stops when the product is available for general release to customers. Due to the short time period between achieving technological feasibility and product release and the insignificant amount of costs incurred during such periods, we have not capitalized any software development, and have expensed these costs as incurred. | ||||||||||||
Research and development costs are not significant and are included in selling, general and administrative expense. | ||||||||||||
Cash, Cash Equivalents and Marketable Securities | ||||||||||||
We maintain cash with several investment grade financial institutions. Highly liquid investments, which are readily convertible into cash, with original maturities of three months or less, are recorded as cash equivalents. | ||||||||||||
Management determines the appropriate classification of our investments in debt and marketable equity securities at the time of purchase and reevaluates such designation at each balance sheet date. Our debt and marketable equity securities have been classified and accounted for as available for sale. We may or may not hold securities with stated maturities until maturity. In response to changes in the availability of and the yield on alternative investments as well as liquidity requirements, we may sell these securities prior to their stated maturities. These securities are carried at fair value, with the unrealized gains and losses reported as a component of other comprehensive income (loss). Any realized gains or losses on the sale of marketable securities are determined on a specific identification method, and such gains and losses are reflected as a component of other income or expense. | ||||||||||||
Certain Risks and Concentrations | ||||||||||||
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, marketable securities, and accounts receivable. They are subject to fluctuations in both market value and yield based upon changes in market conditions, including interest rates, liquidity, general economic conditions, and conditions specific to the issuers. Accounts receivable are typically unsecured and are derived from revenues earned from customers primarily located in the United States. A portion of our accounts receivable represents the timing difference between when a customer’s credit card is billed and the subsequent settlement of that transaction with our credit card processors. This timing difference is generally three days for substantially all of our credit card receivables. We have never experienced any accounts receivable write-offs due to this timing difference. In addition, we collect subscription fees in advance, minimizing our accounts receivable and bad debt exposure. If a customer’s credit card, debit card or ECP is declined, we generally suspend international calling capabilities as well as their ability to incur domestic usage charges in excess of their plan minutes. If the customer’s credit card, debit card or ECP could not be successfully processed during three billing cycles (i.e., the current and two subsequent monthly billing cycles), we terminate the account. In addition, we automatically charge any per minute fees to our customers’ credit card, debit card or ECP monthly in arrears. To further mitigate our bad debt exposure, a customer’s credit card, debit card or ECP will be charged in advance of their monthly billing if their international calling or overage charges exceed a certain dollar threshold. | ||||||||||||
Inventory | ||||||||||||
Inventory consists of the cost of customer equipment and is stated at the lower of cost or market, with cost determined using the average cost method. We provide an inventory allowance for customer equipment that has been returned by customers but may not be able to be reissued to new customers or returned to the manufacturer for credit. | ||||||||||||
Property and Equipment | ||||||||||||
Property and equipment includes acquired assets and those accounted for under capital leases and consist principally of network equipment and computer hardware, furniture, software, and leasehold improvements. Company-owned equipment in use at customer premises is also included in property and equipment. In addition, the lease of our corporate headquarters has been accounted for as a capital lease and is included in property and equipment. Network equipment and computer hardware and furniture are stated at cost with depreciation provided using the straight-line method over the estimated useful lives of the related assets, which range from three to five years. Leasehold improvements are amortized over their estimated useful life of the related assets or the life of the lease, whichever is shorter. The cost of renewals and substantial improvements is capitalized while the cost of maintenance and repairs is charged to operating expenses as incurred. Company-owned customer premises equipment is depreciated on a straight-line basis over three years. | ||||||||||||
Our network equipment and computer hardware, which consists of routers, gateways, and servers that enable our telephony services, is subject to technological risks and rapid market changes due to new products and services and changing customer demand. These changes may result in future adjustments to the estimated useful lives or the carrying value of these assets, or both. | ||||||||||||
Software Costs | ||||||||||||
We capitalize certain costs, such as purchased software and internally developed software that we use for customer acquisition and customer care automation tools, in accordance with FASB ASC 350-40, “Internal-Use Software”. Computer software is stated at cost less accumulated amortization and the estimated useful life is two to five years. | ||||||||||||
As previously disclosed, we experienced delays and incremental costs during the course of the development and implementation of a new billing and ordering system by Amdocs Software Systems Limited and Amdocs, Inc. (collectively, "Amdocs") and the transition of customers to the system. We conducted discussions with Amdocs to resolve the issues associated with the billing and ordering system. Based on these discussions, and after our consideration of the progress made improving our overall IT infrastructure, the incremental time and costs to develop and implement the Amdocs system, as well as the expected reduction in capital expenditures, in June 2012 we and Amdocs determined that terminating the program was in the best interest of both parties. On July 30, 2012, we entered into a Settlement Agreement with Amdocs terminating the related license agreement. As a result, we wrote off our investment in the system of $25,262, net of settlement amounts to us, in the second quarter of 2012. This charge is recorded as loss from abandonment of software assets in the statement of income. | ||||||||||||
Goodwill and Purchased-Intangible Assets | ||||||||||||
Goodwill acquired in acquisition of a business is accounted for based upon the excess fair value of consideration transferred over the fair value of net assets acquired in the business combination. Goodwill is tested for impairment on an annual basis on October 1st and, when specific circumstances dictate, between annual tests. When impaired, the carrying value of goodwill is written down to fair value. The goodwill impairment test involves evaluating qualitative information to determine if it is more than 50% likely that the fair value of a reporting unit is less than its carrying value in determining if the traditional two-step goodwill impairment test described below must be applied. The first step, identifying a potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying value of the reporting unit exceeds its fair value, the second step would need to be conducted; otherwise, no further steps are necessary as no potential impairment exists. The second step, measuring the impairment loss, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. Any excess of the reporting unit goodwill carrying value over the respective implied fair value is recognized as an impairment loss. There was no impairment of goodwill for the year ended December 31, 2014. | ||||||||||||
Purchased-intangible assets are accounted for based upon the fair value of assets received. Purchased-intangible assets are amortized on a straight-line or accelerated basis over the periods of benefit, ranging from two to ten years. We perform a review of purchased-intangible assets whenever events or changes in circumstances indicate that the useful life is shorter than we had originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, we assess the recoverability of purchased-intangible assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If the useful life of the asset is shorter than originally estimated, we accelerate the rate of amortization and amortize the remaining carrying value over the new shorter useful life. There was no impairment of purchased-intangible assets identified for the years ended December 31, 2014, 2013, or 2012. | ||||||||||||
Intangible Assets and Goodwill | ||||||||||||
Intangible assets acquired in the settlement of litigation or by direct purchase are accounted for based upon the fair value of assets received. Goodwill acquired in acquisition of a business is accounted for based upon the excess fair value of consideration transferred over the fair value of net assets acquired in the business combinations. | ||||||||||||
Patents and Patent Licenses | ||||||||||||
Patent rights acquired in the settlement of litigation or by direct purchase are accounted for based upon the fair value of assets received. | ||||||||||||
Long-Lived Assets | ||||||||||||
We evaluate impairment losses on long-lived assets used in operations when events and changes in circumstances indicate that the assets might be impaired. If our review indicates that the carrying value of an asset will not be recoverable, based on a comparison of the carrying value of the asset to the undiscounted future cash flows, the impairment will be measured by comparing the carrying value of the asset to its fair value. Fair value will be determined based on quoted market values, discounted cash flows or appraisals. Impairments of property and equipment are recorded in the statement of income as part of depreciation expense. | ||||||||||||
Debt Related Costs | ||||||||||||
Costs incurred in raising debt are deferred and amortized as interest expense using the effective interest method over the life of the debt. | ||||||||||||
Noncontrolling Interest and Redeemable Noncontrolling Interest | ||||||||||||
We consolidate a majority-owned entity where we have the ability to exercise controlling influence. The ownership interest of the noncontrolling party is presented as noncontrolling interest in the Consolidated Balance Sheet as Stockholders' Equity. If we are required to repurchase the noncontrolling interest at fair value, subject to adjustment, under a put option or other contractual redemption requirement, we will report the noncontrolling interest as redeemable in the Consolidated Balance Sheets between liabilities and equity. We adjust the redeemable noncontrolling interest to the redemption values on each balance sheet date with changes recognized as an adjustment to retained earnings, or in the absence of retained earnings, as an adjustment to additional paid-in capital when it becomes probable the noncontrolling interest will become redeemable. | ||||||||||||
Restricted Cash and Letters of Credit | ||||||||||||
We had a cash collateralized letter of credit for $3,311 and $4,306 as of December 31, 2014 and 2013, respectively, related to lease deposits for our Holmdel offices. In the aggregate, cash reserves and collateralized letters of credit of $3,405 and $4,405 were recorded as long-term restricted cash at December 31, 2014 and 2013, respectively. | ||||||||||||
Derivatives | ||||||||||||
We do not hold or issue derivative instruments for trading purposes. However, in accordance with FASB ASC 815, “Derivatives and Hedging” (“FASB ASC 815”), we review our contractual obligations to determine whether there are terms that possess the characteristics of derivative financial instruments that must be accounted for separately from the financial instrument in which they are embedded. We recognize these features as liabilities in our consolidated balance sheet at fair value each period and recognize any change in the fair value in our statement of operations in the period of change. We estimate the fair value of these liabilities using available market information and appropriate valuation methodologies. | ||||||||||||
Income Taxes | ||||||||||||
We recognize deferred tax assets and liabilities at enacted income tax rates for the temporary differences between the financial reporting bases and the tax bases of our assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. Our net deferred tax assets primarily consist of net operating loss carry forwards (“NOLs”). We are required to record a valuation allowance against our net deferred tax assets if we conclude that it is more likely than not that taxable income generated in the future will be insufficient to utilize the future income tax benefit from our net deferred tax assets (namely, the NOLs) prior to expiration. We periodically review this conclusion, which requires significant management judgment. If we are able to conclude in a future period that a future income tax benefit from our net deferred tax assets has a greater than 50 percent likelihood of being realized, we are required in that period to reduce the related valuation allowance with a corresponding decrease in income tax expense. This would result in a non-cash benefit to our net income in the period of the determination. In the fourth quarter of 2011, we released $325,601 of valuation allowance (see Note 5. Income Taxes). We periodically review this conclusion, which requires significant management judgment. In the future, if available evidence changes our conclusion that it is more likely than not that we will utilize our net deferred tax assets prior to their expiration, we will make an adjustment to the related valuation allowance and income tax expense at that time. In subsequent periods, we would expect to recognize income tax expense equal to our pre-tax income multiplied by our effective income tax rate, an expense that was not recognized prior to the reduction of the valuation allowance. Our effective rate may differ from the federal statutory rate due, in part, to our foreign operations and certain discrete period items, which in 2012 primarily consisted of adjustments related to stock compensation, including a non-cash deferred tax adjustment totaling $4,077 in 2012 for certain stock compensation previously considered nondeductible under Section 162(m) of the Internal Revenue Code. | ||||||||||||
We file income tax returns in the U.S. on a federal basis and in U.S. state and foreign jurisdictions. Our federal tax return remains subject to examination by the Internal Revenue Service from 2010 to present, our New Jersey tax returns remain open from 2008 to present, our Canada tax return remains open from 2009 to present, and other domestic and foreign tax returns remain open for all periods to which those filings relate. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate resolution. | ||||||||||||
We have not had any unrecognized tax benefits. We recognize interest and penalties accrued related to unrecognized tax benefits as components of our income tax provision. We have not had any interest and penalties accrued related to unrecognized tax benefits. | ||||||||||||
Business Combinations | ||||||||||||
We account for business combinations using the acquisition method of accounting. The acquisition method of accounting requires that the purchase price, including the fair value of contingent consideration, of the acquisition be allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, the Company’s estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill to the extent the Company identifies adjustments to the preliminary purchase price allocation. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. We include the results of all acquisitions in our Consolidated Financial Statements from the date of acquisition. | ||||||||||||
Acquisition related transaction costs, such as banking, legal, accounting and other costs incurred in connection with an acquisition are expensed as incurred in selling, general and administrative expense. | ||||||||||||
Acquisition related integration costs include costs associated with exit or disposal activities, which do not meet the criteria of discontinued operations, including costs for employee, lease, and contract terminations, facility closing or other exit activities. Additionally, these costs include expenses directly related to integrating and reorganizing acquired businesses and include items such as employee retention costs, recruiting costs, certain moving costs, certain duplicative costs during integration and asset impairments. These costs are expensed as incurred in selling, general and administrative expense. | ||||||||||||
Foreign Currency | ||||||||||||
Generally, the functional currency of our non-United States subsidiaries is the local currency. The financial statements of these subsidiaries are translated to United States dollars using month-end rates of exchange for assets and liabilities, and average rates of exchange for revenues, costs, and expenses. Translation gains and losses are deferred and recorded in accumulated other comprehensive income as a component of stockholders’ equity. | ||||||||||||
Share-Based Compensation | ||||||||||||
We account for share-based compensation in accordance with FASB ASC 718, “Compensation-Stock Compensation”. Under the fair value recognition provisions of this pronouncement, share-based compensation cost is measured at the grant date based on the fair value of the award, reduced as appropriate based on estimated forfeitures, and is recognized as expense over the applicable vesting period of the stock award using the accelerated method. The excess tax benefit associated with stock compensation deductions have not been recorded in additional paid-in capital. When evaluating whether an excess tax benefit has been realized, share based compensation deductions are not considered realized until NOLs are no longer sufficient to offset taxable income. Such excess tax benefits will be recorded when realized. | ||||||||||||
Earnings per Share | ||||||||||||
Net income per share has been computed according to FASB ASC 260, “Earnings per Share”, which requires a dual presentation of basic and diluted earnings per share (“EPS”). Basic EPS represents net income divided by the weighted average number of common shares outstanding during a reporting period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock, including stock options and restricted stock units under our 2001 Stock Incentive Plan and 2006 Incentive Plan were exercised or converted into common stock. The dilutive effect of outstanding, stock options and restricted stock units is reflected in diluted earnings per share by application of the treasury stock method. In applying the treasury stock method for stock-based compensation arrangements, the assumed proceeds are computed as the sum of the amount the employee must pay upon exercise and the amounts of average unrecognized compensation cost attributed to future services. | ||||||||||||
The following table sets forth the computation for basic and diluted net income per share: | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Numerator | ||||||||||||
Numerator for basic earnings per share-net income attributable to Vonage | $ | 20,266 | $ | 28,289 | $ | 36,627 | ||||||
Numerator for diluted earnings per share-net income attributable to Vonage | $ | 20,266 | $ | 28,289 | $ | 36,627 | ||||||
Denominator | ||||||||||||
Basic weighted average common shares outstanding | 209,822 | 211,563 | 224,264 | |||||||||
Dilutive effect of stock options and restricted stock units | 9,597 | 8,957 | 8,369 | |||||||||
Diluted weighted average common shares outstanding | 219,419 | 220,520 | 232,633 | |||||||||
Basic net income per share | ||||||||||||
Basic net income per share | $ | 0.1 | $ | 0.13 | $ | 0.16 | ||||||
Diluted net income per share | ||||||||||||
Diluted net income per share | $ | 0.09 | $ | 0.13 | $ | 0.16 | ||||||
The following shares were excluded from the calculation of diluted income per share because of their anti-dilutive effects: | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Restricted stock units | 5,454 | 3,625 | 2,468 | |||||||||
Employee stock options | 18,428 | 25,437 | 32,746 | |||||||||
23,882 | 29,062 | 35,214 | ||||||||||
Comprehensive Income | ||||||||||||
Comprehensive income consists of net income (loss) and other comprehensive items. Other comprehensive items include foreign currency translation adjustments and unrealized gains (losses) on available for sale securities. | ||||||||||||
Recent Accounting Pronouncements | ||||||||||||
In May 2014, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers". This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of good or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. This ASU is effective for annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. | ||||||||||||
Accordingly, we will adopt this ASU on January 1, 2017. Companies may use either a full retrospective or modified retrospective approach to adopt this ASU and our management is currently evaluating which transition approach to use. We are currently evaluating the impact of adopting ASU 2014-09 on our consolidated financial statements and related disclosures. | ||||||||||||
Reclassifications | ||||||||||||
The Company has reclassified certain personnel and related costs for network operations and customer care that are attributable to revenue generating activities from selling, general and administrative expense to cost of telephony services for all periods presented. The amounts reclassified were $23,582 and $27,347 for the years ended December 31, 2013 and 2012, respectively. The reclassifications had no impact on net earnings previously reported. |
Supplemental_Balance_Sheet_Acc
Supplemental Balance Sheet Account Information | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Supplemental Balance Sheet Account Information [Abstract] | ||||||||
Supplemental Balance Sheet Account Information | Supplemental Balance Sheet Account Information | |||||||
Prepaid expenses and other current assets | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Nontrade receivables | $ | 2,511 | $ | 7,402 | ||||
Services | 7,415 | 7,084 | ||||||
Telecommunications | 459 | 479 | ||||||
Insurance | 803 | 757 | ||||||
Marketing | 519 | 312 | ||||||
Other prepaids | 958 | 858 | ||||||
Prepaid expenses and other current assets | $ | 12,665 | $ | 16,892 | ||||
Property and equipment, net | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Building (under capital lease) | $ | 25,709 | $ | 25,709 | ||||
Network equipment and computer hardware | 73,599 | 78,312 | ||||||
Leasehold improvements | 48,574 | 44,141 | ||||||
Customer premise equipment | 3,220 | — | ||||||
Furniture | 1,914 | 812 | ||||||
Vehicles | 195 | 109 | ||||||
153,211 | 149,083 | |||||||
Less: accumulated depreciation and amortization | (103,581 | ) | (96,840 | ) | ||||
Property and equipment, net | $ | 49,630 | $ | 52,243 | ||||
Customer premise equipment, net | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Customer premise equipment | $ | 3,220 | $ | — | ||||
Less: accumulated depreciation | (74 | ) | — | |||||
Customer premise equipment, net | $ | 3,146 | $ | — | ||||
Software, net | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Purchased | $ | 55,636 | $ | 45,178 | ||||
Licensed | 909 | 909 | ||||||
Internally developed | 36,088 | 36,088 | ||||||
92,633 | 82,175 | |||||||
Less: accumulated amortization | (74,009 | ) | (61,618 | ) | ||||
Software, net | $ | 18,624 | $ | 20,557 | ||||
The total expected future annual amortization of software is as follows: | ||||||||
2015 | $ | 11,354 | ||||||
2016 | 5,258 | |||||||
2017 | 1,976 | |||||||
2018 | 36 | |||||||
Total | $ | 18,624 | ||||||
Debt related costs, net | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Senior secured term loan | $ | 6,617 | $ | 4,706 | ||||
Less: accumulated amortization | (4,466 | ) | (3,393 | ) | ||||
Debt related costs, net | $ | 2,151 | $ | 1,313 | ||||
Restricted cash | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Letter of credit-lease deposits | $ | 3,311 | $ | 4,306 | ||||
Cash reserves | 94 | 99 | ||||||
Restricted cash | $ | 3,405 | $ | 4,405 | ||||
Other assets | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Long term non-trade receivable | $ | 6,623 | $ | — | ||||
Others | 1,125 | 1,882 | ||||||
Other assets | $ | 7,748 | $ | 1,882 | ||||
Accrued expenses | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Compensation and related taxes and temporary labor | $ | 25,555 | $ | 20,276 | ||||
Marketing | 17,871 | 23,277 | ||||||
Taxes and fees | 17,300 | 18,207 | ||||||
Litigation and settlements | 23 | 89 | ||||||
Telecommunications | 8,134 | 7,942 | ||||||
Other accruals | 9,645 | 6,063 | ||||||
Customer credits | 1,883 | 1,719 | ||||||
Professional fees | 2,178 | 2,490 | ||||||
Accrued interest | 133 | 12 | ||||||
Inventory | 1,267 | 769 | ||||||
Credit card fees | 207 | 283 | ||||||
Accrued expenses | $ | 84,196 | $ | 81,127 | ||||
Accumulated other comprehensive (loss) income | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Foreign currency translation adjustment | $ | (3,123 | ) | $ | 519 | |||
Unrealized loss on available-for-sale securities | (8 | ) | — | |||||
Accumulated other comprehensive (loss) income | $ | (3,131 | ) | $ | 519 | |||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets | |||||||
Goodwill | ||||||||
The following table provides a summary of the changes in the carrying amounts of goodwill: | ||||||||
Balance at January 1, 2013 | $ | — | ||||||
Increase in goodwill related to acquisition of VBS | 83,627 | |||||||
Balance at December 31, 2013 | 83,627 | |||||||
Increase in goodwill related to acquisition of Telesphere | 111,028 | |||||||
Tax adjustment related to VBS | (3,393 | ) | ||||||
Balance at December 31, 2014 | $ | 191,262 | ||||||
Intangible assets, net | ||||||||
The carrying values of intangible assets were as follows: | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Customer relationships | $ | 39,100 | $ | 39,100 | ||||
Developed technology | 35,200 | 35,200 | ||||||
Patents and patent licenses | 12,764 | 18,264 | ||||||
Trademark | 560 | 560 | ||||||
Trade names | 500 | 500 | ||||||
Non-compete agreements | 200 | 200 | ||||||
Gross Carrying Amount | 88,324 | 93,824 | ||||||
Customer relationships | (10,185 | ) | (1,644 | ) | ||||
Developed technology | (7,108 | ) | (813 | ) | ||||
Patents and patent licenses | (10,426 | ) | (14,089 | ) | ||||
Trademark | (113 | ) | (13 | ) | ||||
Trade names | (472 | ) | (402 | ) | ||||
Non-compete agreements | (113 | ) | (13 | ) | ||||
Accumulated Amortization | (28,417 | ) | (16,974 | ) | ||||
Customer relationships | 28,915 | 37,456 | ||||||
Developed technology | 28,092 | 34,387 | ||||||
Patents and patent licenses | 2,338 | 4,175 | ||||||
Trademark | 447 | 547 | ||||||
Trade names | 28 | 98 | ||||||
Non-compete agreements | 87 | 187 | ||||||
Net Carrying Amount | $ | 59,907 | $ | 76,850 | ||||
Represents customer relationships, developed technology, trade names and non-compete agreements identified in the acquisition of a business. In addition, includes patents and trademarks we have purchased and licensed, including in connection with the settlement of litigation. | ||||||||
The intangible assets are being amortized over periods which reflect the pattern in which economic benefits of the assets are expected to be realized. The customer relationships and developed technology are being amortized on an accelerated basis over an estimated useful life of ten years; patents and patent licenses are being amortized over their weighted average remaining lives; trademark is being amortized on a straight-line basis over eight years; trade names are being amortized on a straight-line basis over five years; and the non-compete agreements are being amortized on a straight-line basis over two years. | ||||||||
The total expected future annual amortization is as follows: | ||||||||
2015 | $ | 14,184 | ||||||
2016 | 12,560 | |||||||
2017 | 9,480 | |||||||
2018 | 7,505 | |||||||
2019 | 5,796 | |||||||
Thereafter | 10,382 | |||||||
Total | $ | 59,907 | ||||||
Supplemental_Income_Statement_
Supplemental Income Statement Account Information | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Supplemental Income Statement Account Information [Abstract] | ||||||||||||
Supplemental Income Statement Account Information | Supplemental Income Statement Account Information | |||||||||||
Amounts included in revenues | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
USF fees | $ | 71,188 | $ | 70,009 | $ | 77,781 | ||||||
Disconnect fee | $ | 3,228 | $ | 4,152 | $ | 3,128 | ||||||
Initial activation fees | $ | 1,085 | $ | 1,278 | $ | 2,079 | ||||||
Customer equipment fees | $ | 715 | $ | 418 | $ | 614 | ||||||
Equipment recovery fees | $ | 80 | $ | 103 | $ | 102 | ||||||
Shipping and handling fees | $ | 2,374 | $ | 1,178 | $ | 1,385 | ||||||
Amounts included in cost of telephony services | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
USF costs | $ | 71,188 | $ | 70,009 | $ | 77,781 | ||||||
Amounts included in cost of goods sold | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Shipping and handling cost | $ | 6,028 | $ | 5,188 | $ | 7,064 | ||||||
Amounts included in selling, general and administrative expense | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Advertising costs | $ | 328 | $ | 1,012 | $ | 2,053 | ||||||
Acquisition related transaction costs | $ | 2,466 | $ | 2,681 | $ | — | ||||||
Acquisition related integration costs | $ | 100 | $ | 87 | $ | — | ||||||
Amounts included in marketing | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Advertising costs | $ | 140,810 | $ | 142,094 | $ | 129,665 | ||||||
Depreciation and amortization expense | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Network equipment and computer hardware | $ | 13,449 | $ | 13,475 | $ | 14,943 | ||||||
Software | 12,009 | 10,843 | 9,621 | |||||||||
Capital leases | 2,200 | 2,200 | 2,199 | |||||||||
Other leasehold improvements | 4,434 | 4,167 | 3,986 | |||||||||
Customer premise equipment | 75 | — | — | |||||||||
Furniture | 194 | 120 | 130 | |||||||||
Vehicles | 31 | 10 | 16 | |||||||||
Patents | 1,833 | 2,304 | 2,306 | |||||||||
Trademarks | 72 | 70 | 70 | |||||||||
Customer relationships | 8,539 | 1,644 | — | |||||||||
Acquired technology | 6,296 | 813 | — | |||||||||
Trade names | 100 | 13 | — | |||||||||
Non-compete agreements | 101 | 13 | — | |||||||||
49,333 | 35,672 | 33,271 | ||||||||||
Property and equipment impairments | 1,959 | 9 | (2 | ) | ||||||||
Software impairments | 115 | 385 | 55 | |||||||||
Depreciation and amortization expense | $ | 51,407 | $ | 36,066 | $ | 33,324 | ||||||
Amounts included in interest expense | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Debt related costs amortization | $ | 1,072 | $ | 1,515 | $ | 1,235 | ||||||
Amounts included in other expense, net | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Net gains (losses) resulting from foreign exchange transactions | $ | 10 | $ | (109 | ) | $ | (11 | ) | ||||
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Income Taxes | Income Taxes | |||||||||||
The components of income (loss) before income tax expense are as follows: | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
United States | $ | 44,044 | $ | 39,650 | $ | 46,904 | ||||||
Foreign | (2,837 | ) | 6,345 | 11,818 | ||||||||
$ | 41,207 | $ | 45,995 | $ | 58,722 | |||||||
The components of the income tax (expense) benefit are as follows: | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current: | ||||||||||||
Federal | $ | (1,452 | ) | $ | (907 | ) | $ | (979 | ) | |||
Foreign | (377 | ) | (155 | ) | (142 | ) | ||||||
State and local taxes | (803 | ) | (337 | ) | (1,486 | ) | ||||||
$ | (2,632 | ) | $ | (1,399 | ) | $ | (2,607 | ) | ||||
Deferred: | ||||||||||||
Federal | $ | (15,239 | ) | $ | (14,954 | ) | $ | (12,642 | ) | |||
Foreign | (2,985 | ) | (1,603 | ) | (3,479 | ) | ||||||
State and local taxes | (904 | ) | (238 | ) | (3,367 | ) | ||||||
$ | (19,128 | ) | $ | (16,795 | ) | $ | (19,488 | ) | ||||
$ | (21,760 | ) | $ | (18,194 | ) | $ | (22,095 | ) | ||||
The following table summarizes deferred taxes resulting from differences between financial accounting basis and tax basis of assets and liabilities. | ||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||
Current assets and liabilities: | ||||||||||||
Deferred revenue | $ | 13,265 | $ | 14,846 | ||||||||
Accounts receivable and inventory allowances | 289 | 335 | ||||||||||
Accrued expenses | 8,295 | 3,180 | ||||||||||
Deferred tax assets, net, current | $ | 21,849 | $ | 18,361 | ||||||||
Non-current assets and liabilities: | ||||||||||||
Acquired intangible assets and property and equipment | $ | (11,876 | ) | $ | (23,762 | ) | ||||||
Accrued expenses | (1,937 | ) | — | |||||||||
Research and development and alternative minimum tax credit | 4,952 | 3,613 | ||||||||||
Stock option compensation | 17,802 | 17,317 | ||||||||||
Capital leases | (5,401 | ) | (4,486 | ) | ||||||||
Deferred revenue | (524 | ) | (627 | ) | ||||||||
Net operating loss carryforwards | 241,525 | 271,406 | ||||||||||
244,541 | 263,461 | |||||||||||
Valuation allowance | (17,451 | ) | (16,922 | ) | ||||||||
Deferred tax assets, net, non-current | $ | 227,090 | $ | 246,539 | ||||||||
We recognize deferred tax assets and liabilities at enacted income tax rates for the temporary differences between the financial reporting bases and the tax bases of our assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. Our net deferred tax assets primarily consist of net operating loss carry forwards (“NOLs”). We are required to record a valuation allowance against our net deferred tax assets if we conclude that it is more likely than not that taxable income generated in the future will be insufficient to utilize the future income tax benefit from our net deferred tax assets (namely, the NOLs), prior to expiration. We periodically review this conclusion, which requires significant management judgment. Until the fourth quarter of 2011, we recorded a valuation allowance fully against our net deferred tax assets. In 2011, we completed our first full year of taxable income and completed our budgetary process for periods subsequent to 2011, which anticipates continued taxable income in the future. Based upon these factors and our sustained profitable operating performance over the past three years excluding certain losses associated with our prior convertible notes and our December 2010 debt refinancing, our evaluation determined that the benefit resulting from our net deferred tax assets (namely, the NOLs), are likely to be realized prior to their expiration. Accordingly, we released the related valuation allowance against our United States federal and Canada net deferred tax assets, and a portion of the allowance against our state net deferred tax assets as certain NOLs may expire prior to utilization due to shorter utilization periods in certain states, resulting in a one-time non-cash income tax benefit of $325,601 and a corresponding net deferred tax asset of $325,601 in the fourth quarter of 2011. We still maintain a full valuation allowance against our United Kingdom net deferred tax assets as we are unable to conclude that it is more likely than not that some or all of the related United Kingdom net deferred tax assets will be realized. | ||||||||||||
In connection with the acquisition of Vocalocity, we recorded a net deferred tax liability of $24,000 related to the $75,000 of identified intangible assets that will be amortized for financial reporting purposes but not for tax purposes and a deferred tax asset of $10,336 primarily consisting of NOLs. We had recorded a valuation allowance of $4,336 against Vocalocity's deferred tax assets based upon our preliminary assessment of the utilization of the NOLs as the NOLs are subject to Section 382 limitations. Subsequent to the acquisition date, we increased the deferred tax assets by $3,393 based upon updated information with respect to NOL utilization. | ||||||||||||
In the future, if available evidence changes our conclusion that it is more likely than not that we will utilize our net deferred tax assets prior to their expiration, we will make an adjustment to the related valuation allowance and income tax expense at that time. In subsequent periods, we would expect to recognize income tax expense equal to our pre-tax income multiplied by our effective income tax rate, an expense that was not recognized prior to the reduction of the valuation allowance. | ||||||||||||
The reconciliation between the United States statutory federal income tax rate and the effective rate is as follows: | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
U.S. Federal statutory tax rate | 35 | % | 35 | % | 35 | % | ||||||
Permanent items | 3 | % | 4 | % | 1 | % | ||||||
State and local taxes, net of federal benefit | 3 | % | — | % | 5 | % | ||||||
International tax (reflects effect of losses for which tax benefit not realized) | 11 | % | (1 | )% | (1 | )% | ||||||
Valuation reserve for income taxes and other | 1 | % | 1 | % | (2 | )% | ||||||
Effective tax rate | 53 | % | 39 | % | 38 | % | ||||||
As of December 31, 2014, we had NOLs for United States federal and state tax purposes of $639,981 and $214,238, respectively, expiring at various times from years ending 2015 through 2033 as follows: | ||||||||||||
Federal | State | |||||||||||
2015 | $ | — | $ | 21,668 | ||||||||
2016 | — | 6,015 | ||||||||||
2017 | — | 2,433 | ||||||||||
2018 | — | 2,866 | ||||||||||
2019 | — | 14 | ||||||||||
2020 | — | 356 | ||||||||||
2021 | — | 4,388 | ||||||||||
2022 | — | 18,408 | ||||||||||
2023 | — | 12,448 | ||||||||||
2024 | — | 1,374 | ||||||||||
2025 | 84,670 | 7,087 | ||||||||||
2026 | 190,275 | 12,914 | ||||||||||
2027 | 232,525 | 37,213 | ||||||||||
2028 | 29,166 | 13,253 | ||||||||||
2029 | 4,664 | 4,516 | ||||||||||
2030 | 96,056 | 45,830 | ||||||||||
2031 | 1,908 | 5,371 | ||||||||||
2032 | — | 7,769 | ||||||||||
2033 | 717 | 10,315 | ||||||||||
Total | $ | 639,981 | $ | 214,238 | ||||||||
United States federal and state NOLs of $15,482 represent excess tax benefits from the exercise of share based awards which will be recorded in additional paid-in capital when realized. In addition, we had NOLs for Canadian tax purposes of $4,458 expiring in 2027. We also had NOLs for United Kingdom tax purposes of $44,853 with no expiration date. | ||||||||||||
Under Section 382 of the Internal Revenue Code, if we undergo an “ownership change” (generally defined as a greater than 50% change (by value) in our equity ownership over a three-year period), our ability to use our pre-change of control NOLs and other pre-change tax attributes against our post-change income may be limited. The Section 382 limitation is applied annually so as to limit the use of our pre-change NOLs to an amount that generally equals the value of our stock immediately before the ownership change multiplied by a designated federal long-term tax-exempt rate. At December 31, 2014, there were no limitations on the use of our NOLs except for certain of the NOLs of Vocalocity as of the date of acquisition. |
LongTerm_Debt_and_Revolving_Cr
Long-Term Debt and Revolving Credit Facility | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Long-Term Debt And Revolving Credit Facility | Long-Term Debt and Revolving Credit Facility | |||||||
A schedule of long-term debt at December 31, 2014 and 2013 is as follows: | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
2.875-3.375% 2014 Credit Facility - due 2018 | $ | 70,000 | $ | — | ||||
2.875-3.375% Revolving Credit Facility - due 2018 | $ | 67,000 | $ | — | ||||
3.125-3.625% 2013 Credit Facility - due 2016 | $ | — | $ | 23,333 | ||||
3.125-3.625% 2013 Revolving Credit Facility - due 2016 | $ | — | $ | 75,000 | ||||
Total Long-Term Debt and Revolving Credit Facility | $ | 137,000 | $ | 98,333 | ||||
At December 31, 2014, future payments under long-term debt obligations over each of the next five years and thereafter are as follows: | ||||||||
2014 Credit Facility | ||||||||
2015 | 20,000 | |||||||
2016 | 20,000 | |||||||
2017 | 20,000 | |||||||
2018 | 30,000 | |||||||
Minimum future payments of principal | 90,000 | |||||||
Current portion | 20,000 | |||||||
Long-term portion | $ | 70,000 | ||||||
Acquisition of Telesphere | ||||||||
In connection with our acquisition of Telesphere, we financed the transaction with $67,000 from our revolving credit facility. | ||||||||
August 2014 Financing | ||||||||
On August 13, 2014, we entered into a credit agreement (the “2014 Credit Facility”) consisting of a $100,000 senior secured term loan and a $125,000 revolving credit facility. The co-borrowers under the 2014 Credit Facility are us and Vonage America Inc., our wholly owned subsidiary. Obligations under the 2014 Credit Facility are guaranteed, fully and unconditionally, by our other material United States subsidiaries and are secured by substantially all of the assets of each borrower and each guarantor. The lenders under the 2014 Credit Facility are JPMorgan Chase Bank, N.A., Citizens Bank, N.A., Silicon Valley Bank, SunTrust Bank, Fifth Third Bank, Keybank National Association, and MUFG Union Bank, N.A. JPMorgan Chase Bank, N.A. is a party to the agreement as administrative agent, Citizens Bank, N.A. as syndication agent, and Silicon Valley Bank and SunTrust Bank as documentation agents. J.P. Morgan Securities LLC and Citizens Bank, N.A. acted as joint lead bookrunners, and J.P. Morgan Securities LLC, Citizens Bank, N.A., Silicon Valley Bank, and SunTrust Robinson Humphrey Inc. acted as joint lead arrangers. | ||||||||
Use of Proceeds | ||||||||
We used $90,000 of the net available proceeds of the 2014 Credit Facility to retire all of the debt under our 2013 Credit Facility. Remaining proceeds from the senior secured term loan and the undrawn revolving credit facility under the 2014 Credit Facility will be used for general corporate purposes. We also incurred $1,910 of fees in connection with the 2014 Credit Facility, which is amortized, along with the unamortized fees of $668 in connection with the 2013 Credit Facility, to interest expense over the life of the debt using the effective interest method. | ||||||||
2014 Credit Facility Terms | ||||||||
The following description summarizes the material terms of the 2014 Credit Facility: | ||||||||
The loans under the 2014 Credit Facility mature in August 2018. Principal amounts under the 2014 Credit Facility are repayable in quarterly installments of $5,000 per quarter for the senior secured term loan. The unused portion of our revolving credit facility incurs a 0.40% commitment fee. | ||||||||
Outstanding amounts under the 2014 Credit Facility, at our option, will bear interest at: | ||||||||
> | LIBOR (applicable to one-, two-, three-, six-, or twelve-month periods) plus an applicable margin equal to 2.875% if our consolidated leverage ratio is less than 0.75 to 1.00, 3.125% if our consolidated leverage ratio is greater than or equal to 0.75 to 1.00 and less than 1.50 to 1.00, and 3.375% if our consolidated leverage ratio is greater than or equal to 1.50 to 1.00, payable on the last day of each relevant interest period or, if the interest period is longer than three months, each day that is three months after the first day of the interest period, or | |||||||
> | the base rate determined by reference to the highest of (a) the federal funds effective rate from time to time plus 0.50%, (b) the prime rate of JPMorgan Chase Bank, N.A., and (c) the adjusted LIBO rate applicable to one month interest periods plus 1.00%, plus an applicable margin equal to 1.875% if our consolidated leverage ratio is less than 0.75 to 1.00, 2.125% if our consolidated leverage ratio is greater than or equal to 0.75 to 1.00 and less than 1.50 to 1.00, and 2.375% if our consolidated leverage ratio is greater than or equal to 1.50 to 1.00, payable on the last business day of each March, June, September, and December and the maturity date of the 2014 Credit Facility. | |||||||
The 2014 Credit Facility provides greater flexibility to us in funding acquisitions and restricted payments, such as stock buybacks, than the 2013 Credit Facility. | ||||||||
We may prepay the 2014 Credit Facility at our option at any time without premium or penalty. The 2014 Credit Facility is subject to mandatory prepayments in amounts equal to: | ||||||||
> | 100% of the net cash proceeds from any non-ordinary course sale or other disposition of our property and assets for consideration in excess of a certain amount subject to customary reinvestment provisions and certain other exceptions, and | |||||||
> | 100% of the net cash proceeds received in connection with other non-ordinary course transactions, including insurance proceeds not otherwise applied to the relevant insurance loss. | |||||||
Subject to certain restrictions and exceptions, the 2014 Credit Facility permits us to obtain one or more incremental term loans and/or revolving credit facilities in an aggregate principal amount of up to $60,000 plus an amount equal to repayments of the senior secured term loan upon providing documentation reasonably satisfactory to the administrative agent. The 2014 Credit Facility includes customary representations and warranties and affirmative covenants of the borrowers. In addition, the 2014 Credit Facility contains customary negative covenants, including, among other things, restrictions on the ability of us and our subsidiaries to consolidate or merge, create liens, incur additional indebtedness, dispose of assets, consummate acquisitions, make investments, and pay dividends and other distributions. We must also comply with the following financial covenants: | ||||||||
> | a consolidated leverage ratio of no greater than 2.25 to 1.00; | |||||||
> | a consolidated fixed coverage charge ratio of no less than 1.75 to 1.00 subject to adjustment to exclude up to $80,000 in specified restricted payments; | |||||||
> | minimum cash of $25,000 including the unused portion of the revolving credit facility; and | |||||||
> | maximum capital expenditures not to exceed $55,000 during any fiscal year, provided that the unused amount of any permitted capital expenditures in any fiscal year may be carried forward to the next following fiscal year. | |||||||
In addition, annual excess cash flow up to $8,000 increases permitted capital expenditures. | ||||||||
As of December 31, 2014, we were in compliance with all covenants, including financial covenants, for the 2014 Credit Facility. | ||||||||
The 2014 Credit Facility contains customary events of default that may permit acceleration of the debt. During the continuance of a payment default, interest will accrue at a default interest rate of 2% above the interest rate which would otherwise be applicable, in the case of loans, and at a rate equal to the rate applicable to base rate loans plus 2%, in the case of all other amounts. | ||||||||
Acquisition of Vocalocity | ||||||||
In connection with our acquisition of Vocalocity, we financed the transaction with $75,000 from our revolving credit facility. | ||||||||
February 2013 Financing | ||||||||
On February 11, 2013 we entered into Amendment No. 1 to the 2011 Credit Agreement (as further amended by Amendment No. 2 to our 2011 Credit Facility, the "2013 Credit Facility"). The 2013 Credit Facility consists of a $70,000 senior secured term loan and a $75,000 revolving credit facility. The co-borrowers under the 2013 Credit Facility are us and Vonage America Inc., our wholly owned subsidiary. Obligations under the 2013 Credit Facility are guaranteed, fully and unconditionally, by our other United States subsidiaries and are secured by substantially all of the assets of each borrower and each of the guarantors. On July 26, 2013 we entered into Amendment No. 2 to our 2011 Credit Agreement, which amends our financial covenant related to our consolidated fixed charge coverage ratio by increasing the amount of restricted payments excluded from such calculation from $50,000 to $80,000. | ||||||||
Use of Proceeds | ||||||||
We used $42,500 of the net available proceeds of the 2013 Credit Facility to retire all of the debt under our 2011 Credit Facility. Remaining net proceeds of $27,500 from the senior secured term loan and the undrawn revolving credit facility under the 2013 Credit Facility will be used for general corporate purposes. We also incurred $2,009 of fees in connection with the 2013 Credit Facility, which is amortized, along with the pre-existing unamortized fees of $670 in connection with the 2011 Credit Facility, to interest expense over the life of the debt using the effective interest method. We used $75,000 from the 2013 revolving credit facility in connection with the acquisition of Vocalocity on November 15, 2013. | ||||||||
2013 Credit Facility Terms | ||||||||
The following description summarizes the material terms of the 2013 Credit Facility: | ||||||||
The loans under the 2013 Credit Facility mature in February 2016. Principal amounts under the 2013 Credit Facility are repayable in quarterly installments of $5,833 per quarter for the senior secured term loan. The unused portion of our revolving credit facility incurs a 0.45% commitment fee. | ||||||||
Outstanding amounts under the 2013 Credit Facility, at our option, will bear interest at: | ||||||||
> | LIBOR (applicable to one-, two-, three- or six-month periods) plus an applicable margin equal to 3.125% if our consolidated leverage ratio is less than 0.75 to 1.00, 3.375% if our consolidated leverage ratio is greater than or equal to 0.75 to 1.00 and less than 1.50 to 1.00, and 3.625% if our consolidated leverage ratio is greater than or equal to 1.50 to 1.00, payable on the last day of each relevant interest period or, if the interest period is longer than three months, each day that is three months after the first day of the interest period, or | |||||||
> | the base rate determined by reference to the highest of (a) the federal funds effective rate from time to time plus 0.50%, (b) the prime rate of JPMorgan Chase Bank, N.A., and (c) the LIBOR rate applicable to one month interest periods plus 1.00%, plus an applicable margin equal to 2.125% if our consolidated leverage ratio is less than 0.75 to 1.00, 2.275% if our consolidated leverage ratio is greater than or equal to 0.75 to 1.00 and less than 1.50 to 1.00, and 2.625% if our consolidated leverage ratio is greater than or equal to 1.50 to 1.00, payable on the last business day of each March, June, September, and December and the maturity date of the 2013 Credit Facility. | |||||||
July 2011 Financing | ||||||||
On July 29, 2011, we entered into a credit agreement (the "2011 Credit Facility") consisting of an $85,000 senior secured term loan and a $35,000 revolving credit facility. The co-borrowers under the 2011 Credit Facility were us and Vonage America Inc., our wholly owned subsidiary. Obligations under the 2011 Credit Facility were guaranteed, fully and unconditionally, by our other United States subsidiaries and are secured by substantially all of the assets of each borrower and each of the guarantors. | ||||||||
Use of Proceeds | ||||||||
We used $100,000 of the net available proceeds of the 2011 Credit Facility, plus $31,000 of cash on hand, to retire all of the debt under the credit facility that we entered into in December 2010 (the "2010 Credit Facility"), including a $1,000 prepayment fee to holders of the 2010 Credit Facility. We also incurred $2,697 of fees in connection with the 2011 Credit Facility, which is amortized to interest expense over the life of the debt using the effective interest method. | ||||||||
2011 Credit Facility Terms | ||||||||
The following description summarizes the material terms of the 2011 Credit Facility: | ||||||||
The loans under the 2011 Credit Facility mature in July 2014. Principal amounts under the 2011 Credit Facility are repayable in installments of $7,083 per quarter for the senior secured term loan. The unused portion of our revolving credit facility incurs a 0.50% commitment fee. | ||||||||
Outstanding amounts under each of the senior secured term loan and the revolving credit facility, at our option, will bear interest at: | ||||||||
> | LIBOR (applicable to one-, two-, three- or six-month periods) plus an applicable margin equal to 3.25% if our consolidated leverage ratio is less than 0.75 to 1.00, 3.5% if our consolidated leverage ratio is greater than or equal to 0.75 to 1.00 and less than 1.50 to 1.00, and 3.75% if our consolidated leverage ratio is greater than or equal to 1.50 to 1.00, payable on the last day of each relevant interest period or, if the interest period is longer than three months, each day that is three months after the first day of the interest period, or | |||||||
> | the base rate determined by reference to the highest of (a) the federal funds effective rate from time to time plus 0.50%, (b) the prime rate of JPMorgan Chase Bank, N.A., and (c) the LIBOR rate applicable to one month interest periods plus 1.00%, plus an applicable margin equal to 2.25% if our consolidated leverage ratio is less than 0.75 to 1.00, 2.5% if our consolidated leverage ratio is greater than or equal to 0.75 to 1.00 and less than 1.50 to 1.00, and 2.75% if our consolidated leverage ratio is greater than or equal to 1.50 to 1.00, payable on the last business day of each March, June, September, and December and the maturity date of the 2011 Credit Facility. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Fair Value Disclosures [Abstract] | ||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | |||||||
Effective January 1, 2008, we adopted FASB ASC 820-10-25, “Fair Value Measurements and Disclosures”. This standard establishes a framework for measuring fair value and expands disclosure about fair value measurements. We did not elect fair value accounting for any assets and liabilities allowed by FASB ASC 825, “Financial Instruments”. | ||||||||
FASB ASC 820-10 defines fair value as the amount that would be received for an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. FASB ASC 820-10 describes the following three levels of inputs that may be used: | ||||||||
> | Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets and liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |||||||
> | Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data. | |||||||
> | Level 3: Unobservable inputs when there is little or no market data available, thereby requiring an entity to develop its own assumptions. The fair value hierarchy gives the lowest priority to Level 3 inputs. | |||||||
Although management believed its valuation methods were appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could have resulted in a different fair value measurement at the reporting date. | ||||||||
The following table presents the assets that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of December 31, 2014 and December 31, 2013: | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Level 1 Assets | ||||||||
Money market fund (1) | $ | 2,786 | $ | — | ||||
Level 2 Assets | ||||||||
Available-for-sale securities (2) | $ | 7,162 | $ | — | ||||
(1) Included in cash and cash equivalents on our consolidated balance sheet. | ||||||||
(2) Included in marketable securities on our consolidated balance sheet. | ||||||||
Fair Value of Other Financial Instruments | ||||||||
The carrying amounts of our financial instruments, including cash and cash equivalents, accounts receivable, and accounts payable, approximate fair value because of their short maturities. The carrying amounts of our capital leases approximate fair value of these obligations based upon management’s best estimates of interest rates that would | ||||||||
be available for similar debt obligations at December 31, 2014 and 2013. We believe the fair value of our debt at December 31, 2014 was approximately the same as its carrying amount as market conditions, including available interest rates, credit spread relative to our credit rating, and illiquidity, remain relatively unchanged from the issuance date of our debt on August 13, 2014 for a similar debt instrument. |
Common_Stock
Common Stock | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Equity [Abstract] | ||||||||
Common Stock | Common Stock | |||||||
Net Operating Loss Rights Agreement | ||||||||
On June 7, 2012, we entered into a Tax Benefits Preservation Plan ("Preservation Plan") designed to preserve stockholder value and tax assets. Our ability to use our tax attributes to offset tax on U.S. taxable income would be substantially limited if there were an "ownership change" as defined under Section 382 of the U.S. Internal Revenue Code. In general, an ownership change would occur if one or more "5-percent shareholders," as defined under Section 382, collectively increase their ownership in us by more than 50 percent over a rolling three-year period. | ||||||||
In connection with the adoption of the Preservation Plan, our board of directors declared a dividend of one preferred share purchase right for each outstanding share of the Company’s common stock. The preferred share purchase rights were distributed to stockholders of record as of June 18, 2012, as well as to holders of the Company's common stock issued after that date, but will only be activated if certain triggering events under the Preservation Plan occur. | ||||||||
Under the Preservation Plan, preferred share purchase rights will work to impose significant dilution upon any person or group which acquires beneficial ownership of 4.9% or more of the outstanding common stock, without the approval of our board of directors, from and after June 7, 2012. Stockholders that own 4.9% or more of the outstanding common stock as of the opening of business on June 7, 2012, will not trigger the preferred share purchase rights so long as they do not (i) acquire additional shares of common stock or (ii) fall under 4.9% ownership of common stock and then re-acquire shares that in the aggregate equal 4.9% or more of the common stock. | ||||||||
The Preservation Plan was scheduled to expire no later than the close of business June 7, 2013, unless extended by our board of directors. On April 4, 2013, our board of directors determined to extend the Preservation Plan through June 7, 2015, subject to ratification of the extension by stockholders at the Vonage 2013 annual meeting of stockholders. On June 6, 2013, at the Vonage 2013 annual meeting of stockholders, stockholders ratified the extension of the Preservation Plan through June 7, 2015. | ||||||||
Common Stock Repurchases | ||||||||
On July 25, 2012, our board of directors authorized a program to repurchase up to $50,000 of Vonage common stock through December 31, 2013. The specific timing and amount of repurchases would vary based on available capital resources and other financial and operational performance, market conditions, securities law limitations, and other factors. The repurchases would be made using our cash resources. | ||||||||
We repurchased the following shares of common stock with cash resources under the $50,000 repurchase program as of December 31, 2013: | ||||||||
31-Dec-13 | ||||||||
Shares of common stock repurchased | 2,189 | |||||||
Value of common stock repurchased | $ | 5,374 | ||||||
On February 7, 2013, our board of directors discontinued the remainder of our existing $50,000 repurchase program effective at the close of business on February 12, 2013 with $16,682 of availability remaining, and authorized a new program to repurchase up to $100,000 of Vonage common stock by December 31, 2014. The specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance, market conditions, securities law limitations, and other factors. The repurchases will be made using our cash resources. The $100,000 repurchase program may be suspended or discontinued at any time without prior notice. | ||||||||
We repurchased the following shares of common stock with cash resources under the $100,000 repurchase program as of December 31, 2014 and December 31, 2013: | ||||||||
December 31, 2014 (1) | December 31, 2013 (2) | |||||||
Shares of common stock repurchased | 13,475 | 16,954 | ||||||
Value of common stock repurchased | $ | 49,128 | $ | 50,653 | ||||
(1) including 171 shares, or $660, of common stock repurchases settled in January 2015; excluding commission of $2. | ||||||||
(2) including 220 shares, or $734, of common stock repurchases settled in January 2014; excluding commission of $2. | ||||||||
As of December 31, 2014, approximately $219 remained of our $100,000 repurchase program. The repurchase program expired on December 31, 2014. | ||||||||
On December 9, 2014, Vonage's Board of Directors authorized a new program for the Company to repurchase up to $100,000 of its outstanding common stock. Repurchases under the new program are expected to be made over a four-year period beginning in 2015. | ||||||||
Under the new program, the timing and amount of repurchases will be determined by management based on its evaluation of market conditions, the trading price of the stock and will vary based on available capital resources and other financial and operational performance, market conditions, securities law limitations, and other factors. Repurchases may be made in the open market or through private transactions from time to time. The repurchases will be made using available cash balances. In any period, under each repurchase program, cash used in financing activities related to common stock repurchases may differ from the comparable change in stockholders' equity, reflecting timing differences between the recognition of share repurchase transactions and their settlement for cash. | ||||||||
Stock Option Cancellation | ||||||||
As part of our strategy to build shareholder value and to facilitate our goal of reducing the number of shares of common stock outstanding, on February 19, 2013, we entered into an agreement with our Chief Executive Officer to cancel a total of 4,500 of his vested stock options for $5,463. The payment reflects a discount, in favor of the Company, from the closing price of the common stock on the New York Stock Exchange on February 19, 2013. |
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans | |||||||||||||||||||||||
Share-Based Compensation | ||||||||||||||||||||||||
Our stock option program is a long-term retention program that is intended to attract, retain and provide incentives for talented employees, officers and directors, and to align stockholder and employee interests. Currently, we grant options from our 2006 Incentive Plan. Our 2001 Stock Incentive Plan was terminated by our board of directors in 2008. As such, share-based awards are no longer granted under the 2001 Stock Incentive Plan. Under the 2006 Incentive Plan, share-based awards can be granted to all employees, including executive officers, outside consultants, and non-employee directors. Vesting periods for share-based awards are generally three or four years for both plans. Awards granted under each plan expire in five or ten years from the effective date of grant. As of April 2010, the Company began routinely granting awards with a ten year expiration period. | ||||||||||||||||||||||||
The fair value for these options was estimated at the date of grant using a Black-Scholes option-pricing model. The assumptions used to value options are as follows: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Risk-free interest rate | 1.78-2.19% | 1.13-2.02% | 0.94-1.36% | |||||||||||||||||||||
Expected stock price volatility | 85.28-86.93% | 86.94-90.39% | 90.37-93.57% | |||||||||||||||||||||
Dividend yield | 0 | % | 0 | % | 0 | % | ||||||||||||||||||
Expected life (in years) | 6.25 | 6.25 | 6.25 | |||||||||||||||||||||
Beginning January 1, 2006, we estimated the volatility of our stock using historical volatility of comparable public companies in accordance with guidance in FASB ASC 718, “Compensation-Stock Compensation”. Beginning in the first quarter of 2008, we used the historical volatility of our common stock to measure expected volatility for future option grants. | ||||||||||||||||||||||||
The risk-free interest rate assumption is based upon observed interest rates appropriate for the term of our employee stock options. The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding, which we derive based on our historical settlement experience. | ||||||||||||||||||||||||
Beginning in 2014, we issued restricted performance stock units with vesting that is contingent on both total shareholder return ("TSR") compared to members of our peer group and continued service. For the market-based restricted performance stock units issued during the year ended December 31, 2014, the payouts at vesting which are linearly interpolated between the percentiles specified below are as follows: | ||||||||||||||||||||||||
Payout Schedule | ||||||||||||||||||||||||
Percentile Ranking | % of Target Earned | |||||||||||||||||||||||
80% | 200% | |||||||||||||||||||||||
50% | 100% | |||||||||||||||||||||||
30% | 50% | |||||||||||||||||||||||
<30% | —% | |||||||||||||||||||||||
Notwithstanding the foregoing, if our TSR is negative for the performance period, then the vesting percentage shall not exceed 100%. In addition, we reduce the shares available for grant to cover the potential payout of 200%. | ||||||||||||||||||||||||
To value these market-based restricted performance stock units, we used a Monte Carlo simulation model on the date of grant. Fair value of $6.56 was determined using the Monte Carlo simulation model based on the assumptions used for the expected stock price volatility, the correlation coefficient between us and our peer group, risk free interest rates, and future dividend payments. We used the historical volatility of 48.91% and correlation of our stock based on the period equal to the remaining performance period as of the grant date. The risk-free interest rate was 0.69% based on upon interpolation between the yields of a 2.00-year and 3.00-year maturity U.S. Treasury Bonds as of the grant date. The dividend yield was 0.00% based on our history and expectation of future dividend payout. The expected life was 2.79 years. Compensation expense for restricted stock units with performance and market conditions is recognized over the requisite service period using the straight-line method and includes the impact of estimated forfeitures. | ||||||||||||||||||||||||
Our stock incentive plans as of December 31, 2014 are summarized as follows (in thousands): | ||||||||||||||||||||||||
Shares | Shares | Stock | Restricted | |||||||||||||||||||||
Authorized | Available | Options | Stock and | |||||||||||||||||||||
for Grant | Outstanding | Restricted | ||||||||||||||||||||||
Stock | ||||||||||||||||||||||||
Units | ||||||||||||||||||||||||
2001 Incentive Plan | — | — | 1,058 | — | ||||||||||||||||||||
2006 Incentive Plan | 77,400 | 10,235 | 24,593 | 7,828 | ||||||||||||||||||||
Total as of December 31, 2014 | 77,400 | 10,235 | 25,651 | 7,828 | ||||||||||||||||||||
2001 Stock Incentive Plan | ||||||||||||||||||||||||
In February 2001, we adopted the 2001 Stock Incentive Plan, which is an amendment and restatement of the 2000 Stock Incentive Plan of MIN-X.COM, INC. There have not been any options available for future grant under the 2001 Stock Incentive Plan since our board of directors terminated the plan in 2008. | ||||||||||||||||||||||||
2006 Incentive Plan | ||||||||||||||||||||||||
In May 2006 we adopted the 2006 Incentive Plan. The 2006 Incentive Plan permits the grant of stock options, restricted stock, restricted stock units, stock appreciation rights, performance stock, performance units, annual awards, and other awards based on, or related to, shares of our common stock. Options awarded under our 2006 Incentive Plan may be non-statutory stock options or may qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended. Our 2006 Incentive Plan contains various limits with respect to the types of awards, as follows: | ||||||||||||||||||||||||
• | a maximum of 20,000 shares may be issued under the plan pursuant to incentive stock options; | |||||||||||||||||||||||
• | a maximum of 10,000 shares may be issued pursuant to options and stock appreciation rights granted to any participant in a calendar year; | |||||||||||||||||||||||
• | a maximum of $5,000 may be paid pursuant to annual awards granted to any participant in a calendar year; and | |||||||||||||||||||||||
• | a maximum of $10,000 may be paid (in the case of awards denominated in cash) and a maximum of 10,000 shares may be issued (in the case of awards denominated in shares) pursuant to awards, other than options, stock appreciation rights or annual awards, granted to any participant in a calendar year. | |||||||||||||||||||||||
Based upon June 2010 and June 2013 amendments to the plan, the maximum number of shares of our common stock that are authorized for issuance under our 2006 Incentive Plan is 77,400 shares. Shares issued under the plan may be authorized and unissued shares or may be issued shares that we have reacquired. Shares covered by awards that are forfeited, canceled or otherwise expire without having been exercised or settled, or that are settled by cash or other non-share consideration, will become available for issuance pursuant to a new award. Shares that are tendered or withheld to pay the exercise price of an award or to satisfy tax withholding obligations will not be available for issuance pursuant to new awards. At December 31, 2014, 10,235 shares were available for future grant under the 2006 Stock Incentive Plan. | ||||||||||||||||||||||||
The following table summarizes the activity for all awards under both of our stock incentive plans: | ||||||||||||||||||||||||
Stock Options Outstanding | Restricted Stock and | |||||||||||||||||||||||
Restricted Stock Units | ||||||||||||||||||||||||
Outstanding | ||||||||||||||||||||||||
Number of | Weighted | Number of | Weighted | |||||||||||||||||||||
Shares | Average | Shares | Average | |||||||||||||||||||||
Exercise | Grant | |||||||||||||||||||||||
Price Per | Date Fair | |||||||||||||||||||||||
Share | Market | |||||||||||||||||||||||
Value | ||||||||||||||||||||||||
Per | ||||||||||||||||||||||||
Share | ||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||
Balance at December 31, 2011 | 37,282 | $ | 2.51 | 2,275 | $ | 2.79 | ||||||||||||||||||
Stock options granted | 8,701 | 2.22 | ||||||||||||||||||||||
Stock options exercised | (1,237 | ) | 1.39 | |||||||||||||||||||||
Stock options canceled | (4,506 | ) | 3.99 | |||||||||||||||||||||
Restricted stocks and restricted stock units granted | 2,400 | 2.29 | ||||||||||||||||||||||
Restricted stocks and restricted stock units exercised | (1,022 | ) | 2.31 | |||||||||||||||||||||
Restricted stocks and restricted stock units canceled | (310 | ) | 2.58 | |||||||||||||||||||||
Balance at December 31, 2012 | 40,240 | 2.32 | 3,343 | 2.59 | ||||||||||||||||||||
Stock options granted | 9,315 | 2.89 | ||||||||||||||||||||||
Stock options exercised | (7,842 | ) | 1.47 | |||||||||||||||||||||
Stock options canceled | (8,876 | ) | 2.14 | |||||||||||||||||||||
Restricted stocks and restricted stock units granted | 3,896 | 3.01 | ||||||||||||||||||||||
Restricted stocks and restricted stock units exercised | (1,549 | ) | 2.48 | |||||||||||||||||||||
Restricted stocks and restricted stock units canceled | (508 | ) | 2.84 | |||||||||||||||||||||
Balance at December 31, 2013 | 32,837 | 2.73 | 5,182 | 2.92 | ||||||||||||||||||||
Stock options granted | 6,865 | 3.47 | ||||||||||||||||||||||
Stock options exercised | (10,504 | ) | 1.65 | |||||||||||||||||||||
Stock options canceled | (3,547 | ) | 3.19 | |||||||||||||||||||||
Restricted stocks and restricted stock units granted | 5,240 | 4.71 | ||||||||||||||||||||||
Restricted stocks and restricted stock units exercised | (1,734 | ) | 2.83 | |||||||||||||||||||||
Restricted stocks and restricted stock units canceled | (860 | ) | 3.32 | |||||||||||||||||||||
Balance at December 31, 2014-stock options | 25,651 | $ | 3.31 | |||||||||||||||||||||
Balance at December 31, 2014-Restricted stock and restricted stock units | 7,828 | $ | 4.09 | |||||||||||||||||||||
Exercisable at December 31, 2014 | 10,708 | $ | 3.6 | |||||||||||||||||||||
Unvested shares at December 31, 2013 | 17,048 | $ | 2.71 | |||||||||||||||||||||
Unvested shares at December 31, 2014 | 14,943 | $ | 3.1 | |||||||||||||||||||||
The weighted average exercise price of options granted was $3.47, $2.89, and $2.22 for the years ended December 31, 2014, 2013, and 2012, respectively. The weighted average grant date fair market value of restricted stock and restricted stock units granted was $4.71, $3.01, and $2.29 during the year ended December 31, 2014, 2013, and 2012, respectively. | ||||||||||||||||||||||||
The aggregate intrinsic value of exercised stock options for the years ended December 31, 2014, 2013, and 2012 was $22,962, $9,891, and $1,042, respectively. The aggregate intrinsic value of exercised restricted stock and restricted stock units for the years ended December 31, 2014, 2013, and 2012 was $4,909, $3,788, and $2,250, respectively. | ||||||||||||||||||||||||
The weighted average grant date fair market value of stock options granted was $2.55, $2.16, and $1.58 for the years ended December 31, 2014, 2013, and 2012. | ||||||||||||||||||||||||
Total share-based compensation expense recognized for the years ended December 31, 2014, 2013, and 2012 was $21,070, $17,843, and $11,975, respectively, which were recorded to selling, general and administrative expense in the consolidated statement of income. As of December 31, 2014, total unamortized share-based compensation was $27,130, net of estimated forfeitures, which is expected to be amortized over the remaining vesting period of each grant, up to the next 48 months. Compensation costs for all share-based awards are recognized using the ratable single-option approach on an accrual basis and are amortized using an accelerated amortization schedule. Our current policy is to issue new shares to settle the exercise of stock options and prospectively, the vesting of restricted stock units. | ||||||||||||||||||||||||
Information regarding the options outstanding as of December 31, 2014 is summarized below: | ||||||||||||||||||||||||
Stock Options Outstanding | Stock Options Exercisable | |||||||||||||||||||||||
Range of | Stock | Weighted | Weighted | Aggregate | Stock | Weighted | Weighted | Aggregate | ||||||||||||||||
Exercise Prices | Options | Average | Average | Intrinsic | Options | Average | Average | Intrinsic | ||||||||||||||||
Outstanding | Remaining | Exercise | Value | Vested and | Remaining | Exercise | Value | |||||||||||||||||
Contractual | Price | Exercisable | Contractual | Price | ||||||||||||||||||||
Life | Life | |||||||||||||||||||||||
(in thousands) | (in years) | (in thousands) | (in thousands) | (in years) | (in thousands) | |||||||||||||||||||
$0.33 to $1.43 | 3,092 | 1.37 | 3,092 | 1.37 | ||||||||||||||||||||
$1.44 to $1.99 | 164 | 1.69 | 102 | 1.68 | ||||||||||||||||||||
$2.00 to $4.00 | 18,434 | 2.92 | 4,238 | 2.56 | ||||||||||||||||||||
$4.01 to $7.34 | 2,826 | 4.73 | 2,141 | 4.77 | ||||||||||||||||||||
$7.35 to $35.00 | 1,135 | 11.47 | 1,135 | 11.47 | ||||||||||||||||||||
25,651 | 7.2 | 3.31 | $ | 24,203 | 10,708 | 5.3 | 3.6 | $ | 13,033 | |||||||||||||||
The aggregate intrinsic value of restricted stock units outstanding was $29,825 as of December 31, 2014. | ||||||||||||||||||||||||
Retirement Plan | ||||||||||||||||||||||||
In March 2001, we established a 401(k) Retirement Plan (the “Retirement Plan”) available to employees who meet the plan’s eligibility requirements. Participants may elect to contribute a percentage of their | ||||||||||||||||||||||||
compensation to the Retirement Plan up to a statutory limit. We may make a contribution to the Retirement Plan in the form of a matching contribution. The employer matching contribution is 50% of each employee’s contributions not to exceed $6 in 2012, 2013, and 2014. Our expense related to the Retirement Plan was $2,959, $2,554, and $2,160 in 2014, 2013, and 2012, respectively. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||
Commitments and Contingencies | Commitments and Contingencies | |||||||
Capital Leases | ||||||||
Assets financed under capital lease agreements are included in property and equipment in the consolidated balance sheet and related depreciation and amortization expense is included in the consolidated statements of operations. | ||||||||
On March 24, 2005, we entered into a lease for our headquarters in Holmdel, New Jersey. We took possession of a portion of the office space at the inception of the lease, another portion on August 1, 2005 and took over the remainder of the office space in early 2006. The overall lease term is twelve years and five months. In connection with the lease, we issued a letter of credit which requires $7,350 of cash as collateral, which is classified as restricted cash. Part | ||||||||
of the cash was released, leaving a balance of $3,311 at December 31, 2014. The gross amount of the building recorded under capital leases totaled $25,709 as of December 31, 2014 and accumulated depreciation was approximately $19,846 as of December 31, 2014. | ||||||||
Operating Leases | ||||||||
We have entered into various non-cancelable operating lease agreements for certain of our existing office and telecommunications co-location space in the United States and for international subsidiaries with original lease periods expiring between 2014 and 2015. We are committed to pay a portion of the buildings’ operating expenses as determined under the agreements. | ||||||||
At December 31, 2014, future payments under capital leases and minimum payments under non-cancelable operating leases are as follows over each of the next five years and thereafter: | ||||||||
December 31, 2014 | ||||||||
Capital | Operating | |||||||
Leases | Leases | |||||||
2015 | $ | 4,457 | $ | 4,487 | ||||
2016 | 4,545 | 2,336 | ||||||
2017 | 3,071 | 2,222 | ||||||
2018 | — | 2,144 | ||||||
2019 | — | 2,136 | ||||||
Thereafter | — | 1,842 | ||||||
Total minimum payments required | 12,073 | $ | 15,167 | |||||
Less amounts representing interest | (1,872 | ) | ||||||
Minimum future payments of principal | 10,201 | |||||||
Current portion | 3,365 | |||||||
Long-term portion | $ | 6,836 | ||||||
Rent expense was $7,007 for 2014, $6,071 for 2013, and $4,995 for 2012. | ||||||||
Stand-by Letters of Credit | ||||||||
We have stand-by letters of credit totaling $3,311 and $4,306, as of December 31, 2014 and 2013, respectively. | ||||||||
End-User Commitments | ||||||||
We are obligated to provide telephone services to our registered end-users. The costs related to the potential utilization of minutes sold are expensed as incurred. Our obligation to provide this service is dependent on the proper functioning of systems controlled by third-party service providers. We do not have a contractual service relationship with some of these providers. | ||||||||
Vendor Commitments | ||||||||
We have several commitments primarily commitments to vendors who will provide local inbound, customer care, carrier operation, networks and telephone related services, process our credit card billings, license patents to us, sell us communication devices, supply us energy, provide marketing infrastructure and services, and partner with us in international operations. In certain cases, we may terminate these arrangements early upon payment of specified fees. These commitments total $234,390. Of this total amount, we expect to purchase $128,809 in 2015, $67,891 in 2016, $17,686 in 2017, and $14,158 in 2018, and 5,846 in 2019 respectively. These amounts do not represent our entire anticipated purchases in the future, but represent only those items for which we are contractually committed. We also purchase products and services as needed with no firm commitment. For this reason, the amounts presented do not provide a reliable indicator of our expected future cash outflows or changes in our expected cash position. | ||||||||
Litigation | ||||||||
From time to time, in addition to those identified below, we are subject to legal proceedings, claims, investigations, and proceedings in the ordinary course of business, including claims of alleged infringement of third-party patents and other intellectual property rights, commercial, employment, and other matters. From time to time, we also receive letters or other communications from third parties inviting us to obtain patent licenses that might be relevant to our business or alleging that our services infringe upon third party patents or other intellectual property. In accordance with generally accepted accounting principles, we make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss or range of loss can be reasonably estimated. These provisions, if any, are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. Litigation is inherently unpredictable. We believe that we have valid defenses with respect to the legal matters pending against us and are vigorously defending these matters. Given the uncertainty surrounding litigation and our inability to assess the likelihood of a favorable or unfavorable outcome in the above noted matters and our inability to reasonably estimate the amount of loss or range of loss, it is possible that the resolution of one or more of these matters could have a material adverse effect on our consolidated financial position, cash flows or results of operations. | ||||||||
IP Matters | ||||||||
Bear Creek Technologies, Inc. On February 22, 2011, Bear Creek Technologies, Inc. (“Bear Creek”) filed a lawsuit against Vonage Holdings Corp., Vonage America, Inc., Vonage Marketing LLC, and Aptela Inc. (a subsidiary of Vocalocity, Inc., a wholly-owned subsidiary of the Company which was acquired on November 15, 2013 pursuant to an Agreement and Plan of Merger dated October 9, 2013) in the United States District Court for the Eastern District of Virginia (Norfolk Division) alleging that Vonage’s and Aptela’s products and services are covered by United States Patent No. 7,889,722, entitled “System for Interconnecting Standard Telephony Communications Equipment to Internet Protocol Networks” (the “''722 Patent”). The suit also named numerous other defendants, including Verizon Communications, Inc., Comcast Corporation, Time-Warner Cable, Inc., AT&T, Inc., and T-Mobile USA Inc. On August 17, 2011, the Court dismissed Bear Creek’s case against the Vonage entities and Aptela, as well as all the other defendants, except for one defendant. Later, on August 17, 2011, Bear Creek re-filed its complaint concerning the ‘722 Patent in the United States District Court for the District of Delaware against the same Vonage entities; and also re-filed a separate complaint concerning the ‘722 Patent in the United States District Court for the Eastern District of Virginia against Aptela. In each complaint, Bear Creek alleges that Vonage and Aptela, respectively, are infringing one or more claims of the ‘722 Patent. In addition, Bear Creek alleges that each party is contributing to and inducing infringement of one or more claims of the ‘722 Patent. On January 25, 2012, Bear Creek filed a motion with the United States Judicial Panel on Multidistrict Litigation seeking to transfer and consolidate its litigations against Vonage and Aptela with twelve other separate actions Bear Creek filed in the U.S. District Courts for Delaware and the Eastern District of Virginia. On May 2, 2012, the Multidistrict Litigation Panel granted Bear Creek’s motion and ordered the coordination or consolidation for pretrial proceedings of all fourteen actions in the U.S. District Court for the District of Delaware. On October 11, 2012, Vonage filed an answer to Bear Creek’s complaint, including counterclaims of non-infringement and invalidity of the ‘722 patent. Aptela, which filed a motion to dismiss Bear Creek’s complaint on September 27, 2011, has not yet answered, as its motion remains pending and awaiting disposition by the court. On November 5, 2012, Bear Creek filed an answer to Vonage’s counterclaims. On March 1, 2013, several defendants including Vonage moved the Court to stay the case pending resolution of the reexamination of the ‘722 patent requested by Cisco Systems, Inc. (“Cisco”) as described below; the motion was granted on July 17, 2013, and the case is now stayed pending the resolution of the reexamination. On November 8, 2013, the Court granted Bear Creek’s request to terminate and substitute counsel representing it in the litigation. | ||||||||
A request for reexamination of the ‘722 Patent was filed on September 12, 2012 by Cisco, challenging the validity of the ‘722 Patent. Cisco’s request was granted by the USPTO on November 28, 2012. On March 24, 2014, the Patent Office issued an Action Closing Prosecution, confirming its rejection of all claims of the ‘722 patent on multiple independent grounds. Bear Creek filed comments to the Action Closing Prosecution on April 24, 2014. Cisco filed responsive comments on May 22, 2014. On September 15, 2014, Bear Creek filed a Notice of Appeal to the Patent Office’s rejection of its patent. On November 14, 2014, Bear Creek submitted its Appeal to the Patent Trial and Appeal Board. Cisco filed its responsive brief on December 12, 2014; the brief was defective and, at the direction of the Patent Office, Cisco re-filed an amended brief on December 31, 2014. | ||||||||
RPost Holdings, Inc. On August 24, 2012, RPost Holdings, Inc., RPost Communications Limited, and RMail Limited (collectively, “RPost”) filed a lawsuit against StrongMail Systems, Inc. (“StrongMail”) in the United States District Court for the Eastern District of Texas (Marshall Division) alleging that StrongMail’s products and services, including its electronic mail marketing services, are covered by United States Patent Nos. 8,224,913, 8,209,389, 8,161,104, 7,966,372, and 6,182,219. On January 16, 2013, StrongMail moved the Court to transfer the venue of the lawsuit to the Northern District of California. That motion was denied by the Court on August 19, 2013. On February 11, 2013, RPost filed an amended complaint, adding 27 new defendants, including Vonage America Inc. RPost’s amended complaint alleges willful infringement of the RPost patents by Vonage and each of the other new defendants because they are customers of StrongMail. StrongMail has agreed to fully defend and indemnify Vonage in this lawsuit. Vonage answered the complaint on May 7, 2013. On January 30, 2014, RPost informed the Court that it is ready for a scheduling conference; the Court has not yet scheduled a conference. | ||||||||
AIP Acquisition LLC. On January 3, 2014, AIP Acquisition LLC (“AIP”), filed a lawsuit against Vonage Holdings Corp., Vonage America, Inc., and Vonage Marketing LLC in the U.S. District Court for the District of Delaware (Norfolk Division) alleging that Vonage’s products and services are covered by United States Patent No. 7,269,247. Vonage filed an answer and counterclaims on February 25, 2014. AIP filed an amended complaint on March 18, 2014, which Vonage answered on April 4, 2014. On April 8, 2014, the Court ordered a stay of the case pending final resolution of non-party Level 3’s inter partes review request of United States Patent No. 7,724,879, which is a continuation of the ‘247 patent. On October 8, 2014, the Patent Office issued a Final Written Decision, finding all challenged claims of the ‘879 patent to be invalid. On December 9, 2014, AIP filed a Notice of Appeal to the Patent Office’s rejection of its patent. On December 15, 2014, AIP moved to replace its attorneys and the Patent Office granted the request on December 23, 2014. | ||||||||
A second request for inter partes review of the ‘879 patent was made by Cisco on December 12, 2013 and granted by the Patent Office on May 27, 2014. AIP filed its response on August 18, 2014, and Cisco filed its reply on November 14, 2014. An oral hearing was held on January 7, 2015. The proceeding remains pending before the Patent Office. | ||||||||
Cisco petitioned for inter partes review of the ‘247 patent on November 25, 2014. The Patent Office has not yet determined whether to grant this petition. | ||||||||
Spansion. On April 28, 2014, Spansion LLC (“Spansion”), filed a lawsuit against Vonage Holdings Corp., Vonage America, Inc., Vonage Marketing LLC, and 20 other defendants in the U.S. District Court for the Northern District of California alleging that Macronix’s flash memory chips and products containing those chips, including Vonage analog telephone adapter products, each are covered by one or more Spansion patents. On April 29, 2014, Spansion filed a complaint at the International Trade Commission containing substantially similar allegations, requesting that the ITC institute an investigation pursuant to Section 337 of the Tariff Act of 1930 against the respondents, including Vonage. Spansion’s complaints allege that Vonage’s telephone adapters are covered by United States Patent No. 6,246,611. Macronix agreed to fully defend and indemnify Vonage in the district court and ITC proceedings. On January 27, 2015, Macronix and Spansion announced a global settlement of all outstanding patent disputes, including the California action and the ITC complaint. The parties have agreed to dismiss all patent cases between themselves and their downstream customers (including Vonage) worldwide, granting to each other licenses under their respective patents. | ||||||||
Commercial Litigation | ||||||||
Merkin & Smith, et als. On September 27, 2013, Arthur Merkin and James Smith filed a putative class action lawsuit against Vonage America, Inc. in the Superior Court of the State of California, County of Los Angeles, alleging that Vonage violated California’s Unfair Competition Law by charging its customers fictitious 911 taxes and fees. On October 30, 2013, Vonage filed a notice removing the case to the United States District Court for the Central District of California. On October 30, 2013 the case was assigned to a United States District Judge and a Magistrate Judge. On November 26, 2013, Vonage filed its Answer to the Complaint. On December 4, 2013, Vonage filed a Motion to Compel Arbitration. On February 4, 2014, the Court denied Vonage’s Motion to Compel Arbitration. On March 5, 2014, Vonage filed an appeal with the United States Court of Appeals for the Ninth Circuit of the decision denying Vonage’s Motion to Compel Arbitration. On March 6, 2014, Vonage moved to stay the district court proceedings pending its appeal; the Court granted Vonage’s stay motion on March 26, 2014. Briefing on the appeal is now complete, though oral argument has not yet been scheduled. | ||||||||
Regulation | ||||||||
Telephony services are subject to a broad spectrum of state and federal regulations. Because of the uncertainty over whether Voice over Internet Protocol (“VoIP”) should be treated as a telecommunications or information service, we have been involved in a substantial amount of state and federal regulatory activity. Implementation and interpretation of the existing laws and regulations is ongoing and is subject to litigation by various federal and state agencies and courts. Due to the uncertainty over the regulatory classification of VoIP service, there can be no assurance that we will not be subject to new regulations or existing regulations under new interpretations, and that such change would not introduce material additional costs to our business. | ||||||||
Federal - Net Neutrality | ||||||||
Clear and enforceable net neutrality rules would make it more difficult for broadband Internet service providers to block or discriminate against Vonage service. Also explicitly applying net neutrality rules to wireless broadband Internet service could create greater opportunities for VoIP applications that run on wireless broadband Internet service. In October 2009, the FCC proposed the adoption of enforceable net neutrality rules for both wired and wireless broadband Internet service providers. The proposed rules would prohibit wired and wireless broadband Internet service providers from blocking or hindering lawful content, applications, or services and from unreasonably discriminating when transmitting lawful network traffic. In addition, broadband Internet service providers would have to publicly disclose certain information about their network management practices. In December 2010, the FCC adopted enforceable net neutrality rules based on its October 2009 proposal. All of the proposed rules in the October 2009 proposal applied to wired broadband Internet providers. The FCC applied some but not all of the proposed rules to wireless broadband service. Wireless broadband Internet services providers are prohibited from blocking or hindering voice or video applications that compete with the broadband Internet service provider's voice or video services. Wireless providers are also subject to transparency requirements, but they are not subject to the prohibition on unreasonable discrimination that applies to wired broadband Internet services providers. Final rules were filed in the Federal Register in September 2011. Shortly thereafter, a number of parties filed appeals of the rules in various federal circuit courts; some alleging that the FCC lacks authority to apply net neutrality rules to broadband service providers and some alleging that the rules did not go far enough. The D.C. Circuit Court of Appeals was selected by lottery to decide the appeals and the appeals alleging that the rules did not go far enough were dropped. The D.C. Circuit Court of Appeals heard oral arguments on the appeal on September 9, 2013. On January 14, 2014, the D.C. Circuit vacated the anti-blocking and the unreasonable discrimination provisions of the rules. A vote on the new net neutrality rules currently is expected at the February 26, 2015 FCC meeting. | ||||||||
Federal - Intercarrier Compensation | ||||||||
On February 9, 2011, the FCC released a Notice of Proposed Rulemaking on reforming universal service and the intercarrier compensation (“ICC”) system that governs payments between telecommunications carriers primarily for terminating traffic. In particular, the FCC indicated that it has never determined the ICC obligations for VoIP service and sought comment on a number of proposals for how VoIP should be treated in the ICC system. The FCC's adoption of an ICC proposal will impact Vonage's costs for telecommunications services. On October 27, 2011, the FCC adopted an order reforming universal service and ICC. The FCC order provides that VoIP originated calls will be subject to interstate access charges for long distance calls and reciprocal compensation for local calls that terminate to the public switched telephone network (“PSTN”). It also subjected PSTN originated traffic directed to VoIP subscribers to similar ICC obligations. The termination charges for all traffic, including VoIP originated traffic, will transition over several years to a bill and keep arrangement (i.e., no termination charges). Numerous parties filed appeals of the FCC order in multiple federal circuit courts of appeal. The 10th Circuit Court of Appeals was selected by lottery to decide the appeals. The appeals are pending. | ||||||||
Federal - Universal Service Contribution Reform | ||||||||
On April 30, 2012, the FCC released a Further Notice of Proposed Rulemaking on reforming federal universal service fund (“USF”) contributions. Currently USF contributions are assessed on the interstate and international revenue of traditional telephone carriers and interconnected VoIP providers like Vonage. The level of USF assessments on these providers has been going up over time because of decreases in the revenue subject to assessment due to substitution of non-assessable services such as non-interconnected VoIP services. If the FCC does reform USF contributions, it is likely that Vonage's contribution burden will decline. | ||||||||
Federal - E-Rate Reform | ||||||||
On December 19, 2013, the FCC released a Second Report and Order and Order on Reconsideration modernizing the E-Rate program. The E-Rate program subsidizes voice and data services for schools and libraries and is one component of the federal universal service fund. The December 19 order increased the size of the E-Rate fund to $3.9B in available annual funding. This represents an approximately $1.5B annual (17%) increase in the overall size of the universal service fund. This increase in the size of the fund will likely lead to increased USF contribution levels for Vonage services subject to assessment for federal USF. | ||||||||
Federal - Rural Call Completion Issues | ||||||||
On February 7, 2013, the FCC released a Notice of Proposed Rulemaking on rural call completion issues. The Notice of Proposed Rulemaking (NPRM) proposed new detailed reporting requirements to gauge rural call completion performance. Rural carriers have argued that VoIP provider call completion performance to rural areas is generally poor. On October 28, 2013, the FCC adopted an order on rural call completion that imposes new reporting obligations and restricts certain call signaling practices. The call signaling rules went into effect on January 31, 2014. We filed for extensions that the FCC granted on January 30, 2014 and February 28, 2014 and as of April 17, 2014, we were compliant with the call signaling rules. The effective date for the reporting requirements has not yet been established. We could be subject to an FCC enforcement action in the future in the event the FCC took the position that our rural call completion performance is inadequate or we were not compliant with the FCC’s order. | ||||||||
Federal - Numbering Rights | ||||||||
On April 18, 2013, the FCC issued a Notice of Proposed Rulemaking (NPRM) that proposed to modify FCC rules to allow VoIP providers to directly access telephone numbers. In addition, the FCC granted a waiver from its existing rules to allow Vonage to conduct a trial of direct access to telephone numbers. The trial would allow the FCC to obtain real-world data on direct access to telephone numbers by VoIP providers to inform consideration of the NPRM. Direct access to telephone numbers would facilitate IP to IP interconnection, which may allow VoIP providers to provide higher quality, lower cost services, promote the deployment of innovative new voice services, and experience reductions in the cost of telephony services. Vonage successfully completed the trial in certain markets and filed the required reports on the trial with the FCC. On January 31, 2014, the FCC Wireline Competition Bureau issued a positive report on the trial, concluding that Vonage's successful trial confirmed the technical feasibility of interconnected VoIP providers obtaining telephone numbers directly from the numbering administrators. Given the positive report, the FCC may adopt its proposed rule to allow VoIP providers to directly access telephone numbers. | ||||||||
State Telecommunications Regulation | ||||||||
In general, the focus of interconnected VoIP telecommunications regulation is at the federal level. On November 12, 2004, the FCC issued a declaratory ruling providing that our service is subject to federal regulation and preempted the Minnesota Public Utilities Commission from imposing certain of its regulations on us. The FCC's decision was based on its conclusion that our service is interstate in nature and cannot be separated into interstate and intrastate components. On March 21, 2007, the United States Court of Appeals for the 8th Circuit affirmed the FCC's declaratory ruling preempting state regulation of our service. The 8th Circuit found that it is impossible for us to separate our interstate traffic from our intrastate traffic because of the nomadic nature of the service. As a result, the 8th Circuit held that it was reasonable for the FCC to preempt state regulation of our service. The 8th Circuit was clear, however, that the preemptive effect of the FCC's declaratory ruling may be reexamined if technological advances allow for the separation of interstate and intrastate components of the nomadic VoIP service. Therefore, the preemption of state authority over our service under this ruling generally hinges on the inability to separate the interstate and intrastate components of the service. | ||||||||
While this ruling does not exempt us from all state oversight of our service, it effectively prevents state telecommunications regulators from imposing certain burdensome and inconsistent market entry requirements and certain other state utility rules and regulations on our service. State regulators continue to probe the limits of federal preemption in their attempts to apply state telecommunications regulation to interconnected VoIP service. On July 16, 2009, the Nebraska Public Service Commission and the Kansas Corporation Commission filed a petition with the FCC seeking a declaratory ruling or, alternatively, adoption of a rule declaring that state authorities may apply universal service funding requirements to nomadic VoIP providers. We participated in the FCC proceedings on the petition. On November 5, 2010, the FCC issued a declaratory ruling that allowed states to assess state USF on nomadic VoIP providers on a going forward basis provided that the states comply with certain conditions to ensure that imposing state USF does not conflict with federal law or policy. We expect that state public utility commissions and state legislators will continue their attempts to apply state telecommunications regulations to nomadic VoIP service. | ||||||||
State and Municipal Taxes | ||||||||
In accordance with generally accepted accounting principles, we make a provision for a liability for taxes when it is both probable that a liability has been incurred and the amount of the liability or range of liability can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. For a period of time, we did not collect or remit state or municipal taxes (such as sales, excise, utility, use, and ad valorem taxes), fees or surcharges (“Taxes”) on the charges to our customers for our services, except that we historically complied with the New Jersey sales tax. We have received inquiries or demands from a number of state and municipal taxing and 911 agencies seeking payment of Taxes that are applied to or collected from customers of providers of traditional public switched telephone network services. Although we have consistently maintained that these Taxes do not apply to our service for a variety of reasons depending on the statute or rule that establishes such obligations, we are now collecting and remitting sales taxes in certain of those states including a number of states that have changed their statutes to expressly include VoIP. In addition, many states address how VoIP providers should contribute to support public safety agencies, and in those states we remit fees to the appropriate state agencies. We could also be contacted by state or municipal taxing and 911 agencies regarding Taxes that do explicitly apply to VoIP and these agencies could seek retroactive payment of Taxes. As such, we have a reserve of $3,125 as of December 31, 2014 as our best estimate of the potential tax exposure for any retroactive assessment. We believe the maximum estimated exposure for retroactive assessments is approximately $5,000 as of December 31, 2014. | ||||||||
Employment Agreements | ||||||||
Our Chief Executive Officer is subject to an employment contract with a minimum salary commitment that is subject to annual review. He is also eligible for an annual performance bonus with a target based upon his then annual salary. The term of the employment contract with our Chief Executive Officer expires in 2017. In the event of the termination of our Chief Executive Officer’s employment, depending upon the circumstances, he will be entitled to severance benefits equal to (i) twelve months base salary plus his target bonus amount for the year in which his employment terminates, payable over the twelve months period following termination of employment, (ii) a pro rata share (based on the portion of the year elapsed) of his bonus for the year in which his employment terminates, payable when, as and if under the Company’s bonus program such bonus would otherwise be paid, but in no event later than March 15th of the year following the year to which such bonus relates, (iii) any prior year bonus amounts earned but unpaid as of the termination date, (iv) other accrued but unpaid compensation and benefits under the Company’s benefits plans, (v) amounts to cover specified health care coverage premiums and (vi) vesting of certain equity awards pursuant to the terms of such awards. |
Acquisition_of_Business
Acquisition of Business | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Business Combinations [Abstract] | ||||||||
Acquisition of Business | Acquisition of Business | |||||||
Acquisition of Telesphere | ||||||||
Telesphere offers a comprehensive range of cloud voice and UCaaS services, including advanced call center solutions, collaboration, mobile office, and HD multi-point video conferencing. Facilitating its cloud services delivery, Telesphere also provides integrated MPLS services over its nationwide network enabling quality of service (QoS) management and security increasingly required by businesses utilizing extensive UCaaS features. | ||||||||
Telesphere is highly complementary to Vonage Business Solutions (“VBS). The addition of Telesphere more than doubles our addressable cloud market opportunity, immediately moving us into a considerably larger SMB and enterprise market, which exceeds $15 billion in North America. These companies generally require quality of service management, service level agreements, and carrier-grade feature sets matching those provided by on-premises PBX vendors. | ||||||||
Pursuant to the Agreement and Plan of Merger (the “Telesphere Merger Agreement ”), dated November 4, 2014, by and among Vonage, Thunder Acquisition Corp., a Washington corporation and newly formed wholly owned subsidiary of Vonage (“Merger Sub”), Telesphere Networks Ltd. ("Telesphere"), and each of John Chapple and Gary O’Malley, as representative of the securityholders of Telesphere (collectively, the “Representative”). Pursuant to the Merger Agreement, on December 15, 2014, Merger Sub merged with and into Telesphere, and Telesphere became a wholly owned subsidiary of Vonage (the “Merger”). | ||||||||
We acquired Telesphere for $114,435, including 6,825 shares of Vonage common stock (which shares had an aggregate value of approximately $22,727 based upon the closing stock price on December 15, 2014) and cash consideration of $91,708 (of which $3,610 was paid in January 2015) including payment of $676 for excess cash as of closing date, subject to adjustments for closing cash and working capital of Telesphere, reductions for indebtedness and transaction expenses of Telesphere that remained unpaid as of closing, and deposits into the escrow funds, pursuant to the Merger Agreement. We financed the transaction with $24,708 of cash and $67,000 from our revolving credit facility. The aggregate consideration will be allocated among holders of: (i) Telesphere preferred stock, (ii) Telesphere common stock, (iii) vested options to purchase Telesphere common stock, and (iv) warrants to purchase Telesphere preferred stock. | ||||||||
Pursuant to the Acquisition Agreement, $10,725 of the cash consideration and $2,875 of the stock consideration was placed in escrow (the "Holdback") for unknown liabilities that may have existed as of the acquisition date. $11,600 of the Holdback, which was included as part of the acquisition consideration, will be paid for such unknown liabilities or to the former Telesphere shareholders within 18 months from the closing date of the Acquisition. $2,000 of the Holdback, which was included as part of the acquisition consideration, will be paid for such unknown tax specific liabilities or to the former Telesphere shareholders within 36 months from the closing date of the Acquisition. | ||||||||
During 2014, we incurred $2,446 in acquisition related transaction costs, which were recorded in selling, general and administrative expense in the accompanying Consolidated Statements of Operations. | ||||||||
The results of operations of the Telesphere business and the estimated fair values of the assets acquired and liabilities assumed have been included in our consolidated financial statements since the date of the Acquisition. The Company recorded revenue of $1,751 and a loss of $258 in the year ended December 31, 2014. | ||||||||
The Acquisition was accounted for using the acquisition method of accounting under which assets and liabilities of Telesphere were recorded at their respective fair values including an amount for goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets. We do not expect any portion of this goodwill to be deductible for tax purposes. The goodwill attributable to the Acquisition has been recorded as a non-current asset and is not amortized, but is subject to an annual review for impairment. | ||||||||
The Company is still in the process of allocating the acquisition price to identified intangible assets acquired as of the closing date of the Acquisition and has currently reflected the entire excess of the acquisition consideration over identifiable net assets as goodwill. The fair values assigned to identifiable intangible assets assumed will be based on management’s estimates and assumptions. The estimated fair values of the identified current assets, property and equipment, software and other assets acquired and current liabilities assumed are considered preliminary and are based on the most recent information available. We believe that the information provides a reasonable basis for assigning fair value, but we are waiting for additional information, primarily related to income, sales, excise, and ad valorem taxes which are subject to change. Thus the provisional measurements of fair value set forth below are subject to change. We expect to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. | ||||||||
The table below summarizes the assets acquired and liabilities assumed as of December 15, 2014 as follows: | ||||||||
Estimated Fair Value | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 70 | ||||||
Accounts receivable | 3,083 | |||||||
Inventory | 386 | |||||||
Prepaid expenses and other current assets | 398 | |||||||
Total current assets | 3,937 | |||||||
Property and equipment | 5,731 | |||||||
Software | 3 | |||||||
Other assets | 76 | |||||||
Total assets acquired | 9,747 | |||||||
Liabilities | ||||||||
Current liabilities: | ||||||||
Accounts payable | 1,202 | |||||||
Accrued expenses | 3,982 | |||||||
Deferred revenue, current portion | 1,156 | |||||||
Total current liabilities | 6,340 | |||||||
Total liabilities assumed | 6,340 | |||||||
Net identifiable assets acquired | 3,407 | |||||||
Goodwill | 111,028 | |||||||
Total purchase price | $ | 114,435 | ||||||
Pro forma financial information (unaudited) | ||||||||
The following unaudited supplemental pro forma information presents the combined historical results of operations of Vonage and Telesphere for the years 2014 and 2013, as if the Acquisition had been completed at the beginning of 2013. | ||||||||
For the years ended December 31, | ||||||||
2014 | 2013 | |||||||
Revenue | $ | 906,827 | $ | 860,798 | ||||
Net income attributable to Vonage | 16,977 | 24,168 | ||||||
Net income attributable to Vonage per share - basic | 0.08 | 0.11 | ||||||
Net income attributable to Vonage per share - diluted | 0.08 | 0.11 | ||||||
The pro forma financial information includes adjustments to reflect one time charges in the appropriate pro forma periods as though the companies were combined as of the beginning of 2013. Since, the Company is also still in the process of allocating the acquisition price to identified intangible assets acquired as of the closing date of the Acquisition, no amounts are included for amortization of identified intangible assets which may be material. These adjustments include: | ||||||||
> | a decrease in depreciation expense of $842 for the year ended 2014, related to the buyout of capital leases; | |||||||
> | a decrease in income tax expense of $1,447 for the year ended 2014 and an increase in income tax expense of $861 for the year ended 2013, respectively, related to pro forma adjustments and Telesphere's results prior to acquisition; | |||||||
> | the exclusion of Telesphere and our transaction-related expenses of $4,927 for the year ended 2014; | |||||||
> | an increase in interest expense of $2,152 for the years ended 2014 and 2013, respectively associated with revolving line of credit. | |||||||
Acquisition of Vocalocity | ||||||||
Vocalocity is an industry-leading provider of cloud-based communication services to small and medium businesses (SMB). The acquisition of Vocalocity immediately positions Vonage as a leader in the SMB hosted VoIP market. SMB and small office, home office (SOHO) services previously offered by Vonage will now be offered under the Vonage Business Solutions brand on the Vocalocity platform. | ||||||||
Pursuant to the Merger Agreement dated October 9, 2013, by and among Vocalocity and the Merger Sub, Vonage, and the Shareholder Representative, on November 15, 2013, Merger Sub merged with and into Vocalocity, and Vocalocity became a wholly-owned subsidiary of Vonage. In addition, at the effective time of the Merger all previously unexercised vested Vocalocity stock options that were not out-of-the-money were cashed out at the spread between the applicable exercise price and the applicable merger consideration, subject to reductions for escrow deposits. Unvested and/or out-of the-money Vocalocity stock options were cancelled and terminated with no right to receive payment. Immediately prior to the consummation of the Merger, options to purchase common stock held by certain persons were accelerated, such that they are fully vested and exercisable as of the Effective Time. | ||||||||
We acquired Vocalocity for $134,167, including 7,983 shares of Vonage common stock (which shares had an aggregate value of approximately $26,186 based upon the closing stock price on November 15, 2013) and cash consideration of $107,981 including payment of $2,869 for excess cash as of closing date, subject to adjustments for closing cash and working capital of Vocalocity, reductions for indebtedness and transaction expenses of Vocalocity that remained unpaid as of closing, and deposits into the escrow funds, pursuant to the Merger Agreement. We financed the transaction with $32,981 of cash and $75,000 from our revolving credit facility. The aggregate consideration will be allocated among holders of: (i) Vocalocity preferred stock, (ii) Vocalocity common stock, (iii) vested options to purchase Vocalocity common stock, and (iv) warrants to purchase Vocalocity preferred stock. | ||||||||
During 2013, we incurred $2,768 in acquisition related transaction and integration costs, which were recorded in selling, general and administrative expense in the accompanying Consolidated Statements of Operations. | ||||||||
The Acquisition was accounted for using the acquisition method of accounting under which assets and liabilities of Vocalocity were recorded at their respective fair values including an amount for goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets. | ||||||||
The acquisition price was allocated to the tangible and identified intangible assets acquired and liabilities assumed as of the closing date of the Acquisition. Subsequent to the acquisition date, we decreased the deferred tax liabilities, net, non-current by $3,393 based upon updated information with respect to NOL utilization. | ||||||||
The table below summarizes the assets acquired and liabilities assumed as of November 15, 2013 as follows: | ||||||||
Estimated Fair Value | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 7,924 | ||||||
Accounts receivable | 275 | |||||||
Prepaid expenses and other current assets | 787 | |||||||
Total current assets | 8,986 | |||||||
Property and equipment | 1,777 | |||||||
Intangible assets | 75,000 | |||||||
Other assets | 53 | |||||||
Total assets acquired | 85,816 | |||||||
Liabilities | ||||||||
Current liabilities: | ||||||||
Accounts payable | 2,226 | |||||||
Accrued expenses | 7,064 | |||||||
Deferred revenue, current portion | 1,986 | |||||||
Total current liabilities | 11,276 | |||||||
Deferred tax liabilities, net, non-current | 24,000 | |||||||
Total liabilities assumed | 35,276 | |||||||
Net identifiable assets acquired | 50,540 | |||||||
Goodwill | 83,627 | |||||||
Total purchase price | $ | 134,167 | ||||||
The intangible assets as of the closing date of the Acquisition included: | ||||||||
Amount | ||||||||
Customer relationships | $ | 39,100 | ||||||
Developed technologies | 35,200 | |||||||
Trade names | 500 | |||||||
Non-compete agreements | 200 | |||||||
$ | 75,000 | |||||||
Indications of fair value of the intangible assets acquired in connection with the Acquisition were determined using either the income, market or replacement cost methodologies. The intangible assets are being amortized over periods which reflect the pattern in which economic benefits of the assets are expected to be realized. The customer relationships and developed technology are being amortized on an accelerated basis over an estimated useful life of ten years; trade names are being amortized on a straight-line basis over five years; and the non-compete agreements are being amortized on a straight-line basis over two years. | ||||||||
The excess of purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed represents the amount of goodwill resulting from the Acquisition. We do not expect any portion of this goodwill to be deductible for tax purposes. The goodwill attributable to the Acquisition has been recorded as a non-current asset and is not amortized, but is subject to an annual review for impairment. We believe the factors that contributed to goodwill include synergies that are specific to our consolidated business, the acquisition of a talented workforce that provides us expertise in small and medium business market as well as other intangible assets that do not qualify for separate recognition. | ||||||||
The results of operations of the Vocalocity business and the estimated fair values of the assets acquired and liabilities assumed have been included in our consolidated financial statements since the date of the Acquisition. |
Noncontrolling_Interest_and_Re
Noncontrolling Interest and Redeemable Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2014 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest and Redeemable Noncontrolling Interest | Noncontrolling Interest and Redeemable Noncontrolling Interest |
In the third quarter of 2013, we formed a consolidated foreign subsidiary in Brazil in connection with our previously announced joint venture in Brazil, creating a redeemable noncontrolling interest. The redeemable noncontrolling interest consists of the 30.0% interest in this subsidiary held by our joint venture partner. | |
In 2014, our joint venture partner did not make required capital calls and correspondingly its interest was diluted to 4% and is no longer contingently redeemable. As such, we have reclassified the redeemable noncontrolling interest previously included in the mezzanine section of our Consolidated Balance Sheets to noncontrolling interest in the Stockholders' Equity section of our Consolidated Balance Sheets. | |
In December 2014 we announced plans to exit the Brazilian market for consumer telephony services and wind down of our joint venture operations in the country. The Company expects to complete the process by the end of the first quarter of 2015. | |
We expect to avoid material operating losses in Brazil in 2015 and 2016 due to the significant planned incremental investment that would have been required to scale the business. In connection with the wind down, we incurred approximately $111 and $1,972 in cash and non-cash charges, respectively, in the fourth quarter of 2014 related to severance-related expenses and asset write downs. We estimate that we will incur approximately $500 in cash charges in the first quarter of 2015 related to contract terminations and severance-related expenses. |
Geographic_Information
Geographic Information | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Geographic Information | Geographic Information | |||||||||||
ASC 280 "Segment Reporting" establishes reporting standards for an enterprise's business segments and related disclosures about its products, services, geographic areas and major customers. Under ASC 280, the method for determining what information to report is based upon the way management organizes the operating segments within the Company for making operating decisions and assessing financial performance. Our chief operating decision-makers review financial information presented on a consolidated basis, accompanied by disaggregated information about revenues, marketing expenses and operating income (loss) excluding depreciation for our consumer customers and our small and medium business customers for purposes of allocating resources and evaluating financial performance. Based upon the information reviewed by our chief operating decision makers, we have determined that we have two operating segments; however, we have one reportable segment as our two operating segments meet the criteria for aggregation since the segments have similar operating and economic characteristics. | ||||||||||||
Information about our operations by geographic location is as follows: | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenue: | ||||||||||||
United States | $ | 823,858 | $ | 784,665 | $ | 804,870 | ||||||
Brazil | 98 | — | — | |||||||||
Canada | 30,294 | 32,348 | 32,570 | |||||||||
United Kingdom | 14,703 | 12,054 | 11,674 | |||||||||
$ | 868,953 | $ | 829,067 | $ | 849,114 | |||||||
December 31, 2014 | December 31, 2013 | |||||||||||
Long-lived assets: | ||||||||||||
United States | $ | 318,604 | $ | 231,335 | ||||||||
Brazil | 145 | 845 | ||||||||||
United Kingdom | 545 | 821 | ||||||||||
Israel | 129 | 276 | ||||||||||
$ | 319,423 | $ | 233,277 | |||||||||
Quarterly_Financial_Informatio
Quarterly Financial Information (Unaudited) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||
Quarterly Financial Information (Unaudited) | Quarterly Financial Information (Unaudited) | |||||||||||||||||||
The following table sets forth the reviewed consolidated quarterly financial information for 2014 and 2013: | ||||||||||||||||||||
For the Quarter Ended | ||||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | Total | ||||||||||||||||
Year Ended 2014 | ||||||||||||||||||||
Revenue | $ | 220,733 | $ | 218,882 | $ | 214,737 | $ | 214,601 | $ | 868,953 | ||||||||||
Net income attributable to Vonage | 4,588 | 5,518 | 4,556 | 5,604 | 20,266 | |||||||||||||||
Net income attributable to Vonage per common share: | ||||||||||||||||||||
Basic | 0.02 | 0.03 | 0.02 | 0.03 | ||||||||||||||||
Diluted | 0.02 | 0.02 | 0.02 | 0.03 | ||||||||||||||||
Year Ended 2013 | ||||||||||||||||||||
Revenue | $ | 209,087 | $ | 204,776 | $ | 203,984 | $ | 211,220 | $ | 829,067 | ||||||||||
Net income (loss) | 13,047 | 7,447 | 4,207 | 3,588 | 28,289 | |||||||||||||||
Net income (loss) per common share: | ||||||||||||||||||||
Basic | 0.06 | 0.04 | 0.02 | 0.02 | ||||||||||||||||
Diluted | 0.06 | 0.03 | 0.02 | 0.02 | ||||||||||||||||
Basis_of_Presentation_and_Sign1
Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Principles of Consolidation | Principles of Consolidation | |
The consolidated financial statements include the accounts of Vonage and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. We also consolidate a majority-owned entity in Brazil where we have the ability to exercise controlling influence. The ownership interest of the noncontrolling party is presented as noncontrolling interest. | ||
Use of Estimates | Use of Estimates | |
Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States, which require management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the accompanying notes. Actual results could differ materially from these estimates. | ||
On an ongoing basis, we evaluate our estimates, including the following: | ||
> | the useful lives of property and equipment, software costs, and intangible assets; | |
> | assumptions used for the purpose of determining share-based compensation using the Black-Scholes option pricing model and Monte Carlo simulation model (“Models”), and various other assumptions that we believe to be reasonable; the key inputs for these Models include our stock price at valuation date, exercise price, the dividend yield, risk-free interest rate, life in years, and historical volatility of our common stock; and | |
> | assumptions used in determining the need for, and amount of, a valuation allowance on net deferred tax assets; | |
We base our estimates on historical experience, available market information, appropriate valuation methodologies, and on various other assumptions that we believe to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. | ||
Revenue Recognition | Revenue Recognition | |
Operating revenues consist of telephony services revenues and customer equipment (which enables our telephony services) and shipping revenues. The point in time at which revenues are recognized is determined in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104, Revenue Recognition, and Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605, Revenue Recognition. | ||
At the time a customer signs up for our telephony services, there are the following deliverables: | ||
> | Providing equipment, if any, to the customer that enables our telephony services and | |
> | Providing telephony services. | |
The equipment is generally provided free of charge to our customers and in most instances there are no fees collected at sign-up. We record the fees collected for shipping the equipment to the customer, if any, as shipping and handling revenue at the time of shipment. | ||
Telephony Services Revenue | ||
Substantially all of our revenues are telephony services revenues, which are derived primarily from monthly subscription fees that customers are charged under our service plans. We also derive telephony services revenues from per minute fees for international calls if not covered under a plan, including calls made via applications for mobile devices and other stand-alone products, and for any calling minutes in excess of a customer’s monthly plan limits. Monthly subscription fees are automatically charged to customers’ credit cards, debit cards or electronic check payments ("ECP"), in advance and are recognized over the following month when services are provided. Revenues generated from international calls and from customers exceeding allocated call minutes under limited minute plans are recognized as services are provided, that is, as minutes are used, and are billed to a customer's credit cards, debit cards or ECP in arrears. As a result of multiple billing cycles each month, we estimate the amount of revenues earned from international calls and from customers exceeding allocated call minutes under limited minute plans but not billed from the end of each billing cycle to the end of each reporting period and record these amounts as accounts receivable. These estimates are based primarily upon historical minutes and have been consistent with our actual results. | ||
We also provide rebates to customers who purchase their customer equipment from retailers and satisfy minimum service period requirements. These rebates in excess of activation fees are recorded as a reduction of revenues over the service period based upon the estimated number of customers that will ultimately earn and claim the rebates. | ||
In the United States, we charge regulatory, compliance, E-911, and intellectual property-related fees on a monthly basis to defray costs, and to cover taxes that we are charged by the suppliers of telecommunications services. In addition, we charge customers Federal Universal Service Fund (“USF”) fees. We recognize revenue on a gross basis for USF and related fees. We record these fees as revenue when billed. All other taxes are recorded on a net basis. | ||
In addition, historically, we charged a disconnect fee for customers who terminated their service plan within the first twelve months of service. Disconnect fees are recorded as revenue and are recognized at the time the customer terminates service. Beginning in September 2010, we eliminated the disconnect fee for new customers. In February of 2012 we re-introduced service agreements as an option for new customers. | ||
Customer Equipment and Shipping Revenue | ||
Customer equipment and shipping revenues consist of revenues from sales of customer equipment to wholesalers or directly to customers for replacement devices, or for upgrading their device at the time of customer sign-up for which we charge an additional fee. In addition, customer equipment and shipping revenues include revenues from the sale of VoIP telephones in order to access our small and medium business services. Customer equipment and shipping revenues also include the fees that customers are charged for shipping their customer equipment to them. Customer equipment and shipping revenues include sales to our retailers, who subsequently resell this customer equipment to customers. Revenues are reduced for payments to retailers and rebates to customers, who purchased their customer equipment through these retailers, to the extent of customer equipment and shipping revenues. In addition, historically, we charged an equipment recovery fee for customers who terminated their service plan within the first twelve months of service. Equipment recovery fees are recorded as revenue and are recognized at the time the customer terminates service. Beginning in September 2010, we eliminated the equipment recovery fees for new customers. | ||
Cost of Telephony Services | Cost of Telephony Services | |
Cost of telephony services consists primarily of costs that we pay to third parties in order to provide telephony services. These costs include access and interconnection charges that we pay to other telephone companies to terminate domestic and international phone calls on the public switched telephone network. In addition, these costs include the cost to lease phone numbers, to co-locate in other telephone companies’ facilities, to provide enhanced emergency dialing capabilities to transmit 911 calls, and to provide local number portability. These costs also include taxes that we pay on telecommunications services from our suppliers or are imposed by government agencies such as Federal USF and royalties for use of third parties’ intellectual property. In addition, | ||
Cost of Goods Sold | Cost of Goods Sold | |
Cost of goods sold consists primarily of costs that we incur when a customer signs up for our service. These costs include the cost of customer equipment for customers who subscribe through the direct sales channel in excess of activation fees. In addition, these costs include the amortization of deferred customer equipment, the cost of shipping and handling for customer equipment, the installation manual that accompanies the customer equipment, and the cost of certain promotions. | ||
Research and Development Expenses | Research and Development Expenses | |
Costs for research, including predevelopment efforts prior to establishing technological feasibility of software expected to be marketed, are expensed as incurred. | ||
Development costs are capitalized when technological feasibility has been established and anticipated future revenues support the recoverability of the capitalized amounts. Capitalization stops when the product is available for general release to customers. Due to the short time period between achieving technological feasibility and product release and the insignificant amount of costs incurred during such periods, we have not capitalized any software development, and have expensed these costs as incurred. | ||
Research and development costs are not significant and are included in selling, general and administrative expense. | ||
Cash, Cash Equivalents and Marketable Securities | Cash, Cash Equivalents and Marketable Securities | |
We maintain cash with several investment grade financial institutions. Highly liquid investments, which are readily convertible into cash, with original maturities of three months or less, are recorded as cash equivalents. | ||
Certain Risks and Concentrations | Certain Risks and Concentrations | |
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, marketable securities, and accounts receivable. They are subject to fluctuations in both market value and yield based upon changes in market conditions, including interest rates, liquidity, general economic conditions, and conditions specific to the issuers. Accounts receivable are typically unsecured and are derived from revenues earned from customers primarily located in the United States. A portion of our accounts receivable represents the timing difference between when a customer’s credit card is billed and the subsequent settlement of that transaction with our credit card processors. This timing difference is generally three days for substantially all of our credit card receivables. We have never experienced any accounts receivable write-offs due to this timing difference. In addition, we collect subscription fees in advance, minimizing our accounts receivable and bad debt exposure. If a customer’s credit card, debit card or ECP is declined, we generally suspend international calling capabilities as well as their ability to incur domestic usage charges in excess of their plan minutes. If the customer’s credit card, debit card or ECP could not be successfully processed during three billing cycles (i.e., the current and two subsequent monthly billing cycles), we terminate the account. In addition, we automatically charge any per minute fees to our customers’ credit card, debit card or ECP monthly in arrears. To further mitigate our bad debt exposure, a customer’s credit card, debit card or ECP will be charged in advance of their monthly billing if their international calling or overage charges exceed a certain dollar threshold. | ||
Inventory | Inventory | |
Inventory consists of the cost of customer equipment and is stated at the lower of cost or market, with cost determined using the average cost method. We provide an inventory allowance for customer equipment that has been returned by customers but may not be able to be reissued to new customers or returned to the manufacturer for credit. | ||
Property and Equipment | Property and Equipment | |
Property and equipment includes acquired assets and those accounted for under capital leases and consist principally of network equipment and computer hardware, furniture, software, and leasehold improvements. Company-owned equipment in use at customer premises is also included in property and equipment. In addition, the lease of our corporate headquarters has been accounted for as a capital lease and is included in property and equipment. Network equipment and computer hardware and furniture are stated at cost with depreciation provided using the straight-line method over the estimated useful lives of the related assets, which range from three to five years. Leasehold improvements are amortized over their estimated useful life of the related assets or the life of the lease, whichever is shorter. The cost of renewals and substantial improvements is capitalized while the cost of maintenance and repairs is charged to operating expenses as incurred. Company-owned customer premises equipment is depreciated on a straight-line basis over three years. | ||
Our network equipment and computer hardware, which consists of routers, gateways, and servers that enable our telephony services, is subject to technological risks and rapid market changes due to new products and services and changing customer demand. These changes may result in future adjustments to the estimated useful lives or the carrying value of these assets, or both. | ||
Software Costs | Software Costs | |
We capitalize certain costs, such as purchased software and internally developed software that we use for customer acquisition and customer care automation tools, in accordance with FASB ASC 350-40, “Internal-Use Software”. Computer software is stated at cost less accumulated amortization and the estimated useful life is two to five years. | ||
Goodwill and Purchased-Intangible Assets | Goodwill and Purchased-Intangible Assets | |
Goodwill acquired in acquisition of a business is accounted for based upon the excess fair value of consideration transferred over the fair value of net assets acquired in the business combination. Goodwill is tested for impairment on an annual basis on October 1st and, when specific circumstances dictate, between annual tests. When impaired, the carrying value of goodwill is written down to fair value. The goodwill impairment test involves evaluating qualitative information to determine if it is more than 50% likely that the fair value of a reporting unit is less than its carrying value in determining if the traditional two-step goodwill impairment test described below must be applied. The first step, identifying a potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying value of the reporting unit exceeds its fair value, the second step would need to be conducted; otherwise, no further steps are necessary as no potential impairment exists. The second step, measuring the impairment loss, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. Any excess of the reporting unit goodwill carrying value over the respective implied fair value is recognized as an impairment loss. There was no impairment of goodwill for the year ended December 31, 2014. | ||
Purchased-intangible assets are accounted for based upon the fair value of assets received. Purchased-intangible assets are amortized on a straight-line or accelerated basis over the periods of benefit, ranging from two to ten years. We perform a review of purchased-intangible assets whenever events or changes in circumstances indicate that the useful life is shorter than we had originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, we assess the recoverability of purchased-intangible assets by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If the useful life of the asset is shorter than originally estimated, we accelerate the rate of amortization and amortize the remaining carrying value over the new shorter useful life. There was no impairment of purchased-intangible assets identified for the years ended December 31, 2014, 2013, or 2012. | ||
Intangible Assets and Goodwill | ||
Intangible assets acquired in the settlement of litigation or by direct purchase are accounted for based upon the fair value of assets received. Goodwill acquired in acquisition of a business is accounted for based upon the excess fair value of consideration transferred over the fair value of net assets acquired in the business combinations. | ||
Patents and Patent Licenses | ||
Patent rights acquired in the settlement of litigation or by direct purchase are accounted for based upon the fair value of assets received. | ||
Long-Lived Assets | Long-Lived Assets | |
We evaluate impairment losses on long-lived assets used in operations when events and changes in circumstances indicate that the assets might be impaired. If our review indicates that the carrying value of an asset will not be recoverable, based on a comparison of the carrying value of the asset to the undiscounted future cash flows, the impairment will be measured by comparing the carrying value of the asset to its fair value. Fair value will be determined based on quoted market values, discounted cash flows or appraisals. Impairments of property and equipment are recorded in the statement of income as part of depreciation expense. | ||
Debt Related Costs | Debt Related Costs | |
Costs incurred in raising debt are deferred and amortized as interest expense using the effective interest method over the life of the debt. | ||
Noncontrolling Interest and Redeemable Noncontrolling Interest | Noncontrolling Interest and Redeemable Noncontrolling Interest | |
We consolidate a majority-owned entity where we have the ability to exercise controlling influence. The ownership interest of the noncontrolling party is presented as noncontrolling interest in the Consolidated Balance Sheet as Stockholders' Equity. If we are required to repurchase the noncontrolling interest at fair value, subject to adjustment, under a put option or other contractual redemption requirement, we will report the noncontrolling interest as redeemable in the Consolidated Balance Sheets between liabilities and equity. We adjust the redeemable noncontrolling interest to the redemption values on each balance sheet date with changes recognized as an adjustment to retained earnings, or in the absence of retained earnings, as an adjustment to additional paid-in capital when it becomes probable the noncontrolling interest will become redeemable. | ||
Derivatives | Derivatives | |
We do not hold or issue derivative instruments for trading purposes. However, in accordance with FASB ASC 815, “Derivatives and Hedging” (“FASB ASC 815”), we review our contractual obligations to determine whether there are terms that possess the characteristics of derivative financial instruments that must be accounted for separately from the financial instrument in which they are embedded. We recognize these features as liabilities in our consolidated balance sheet at fair value each period and recognize any change in the fair value in our statement of operations in the period of change. We estimate the fair value of these liabilities using available market information and appropriate valuation methodologies. | ||
Income Taxes | Income Taxes | |
We recognize deferred tax assets and liabilities at enacted income tax rates for the temporary differences between the financial reporting bases and the tax bases of our assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. Our net deferred tax assets primarily consist of net operating loss carry forwards (“NOLs”). We are required to record a valuation allowance against our net deferred tax assets if we conclude that it is more likely than not that taxable income generated in the future will be insufficient to utilize the future income tax benefit from our net deferred tax assets (namely, the NOLs) prior to expiration. We periodically review this conclusion, which requires significant management judgment. If we are able to conclude in a future period that a future income tax benefit from our net deferred tax assets has a greater than 50 percent likelihood of being realized, we are required in that period to reduce the related valuation allowance with a corresponding decrease in income tax expense. This would result in a non-cash benefit to our net income in the period of the determination. In the fourth quarter of 2011, we released $325,601 of valuation allowance (see Note 5. Income Taxes). We periodically review this conclusion, which requires significant management judgment. In the future, if available evidence changes our conclusion that it is more likely than not that we will utilize our net deferred tax assets prior to their expiration, we will make an adjustment to the related valuation allowance and income tax expense at that time. In subsequent periods, we would expect to recognize income tax expense equal to our pre-tax income multiplied by our effective income tax rate, an expense that was not recognized prior to the reduction of the valuation allowance. Our effective rate may differ from the federal statutory rate due, in part, to our foreign operations and certain discrete period items, which in 2012 primarily consisted of adjustments related to stock compensation, including a non-cash deferred tax adjustment totaling $4,077 in 2012 for certain stock compensation previously considered nondeductible under Section 162(m) of the Internal Revenue Code. | ||
We file income tax returns in the U.S. on a federal basis and in U.S. state and foreign jurisdictions. Our federal tax return remains subject to examination by the Internal Revenue Service from 2010 to present, our New Jersey tax returns remain open from 2008 to present, our Canada tax return remains open from 2009 to present, and other domestic and foreign tax returns remain open for all periods to which those filings relate. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate resolution. | ||
We have not had any unrecognized tax benefits. We recognize interest and penalties accrued related to unrecognized tax benefits as components of our income tax provision. We have not had any interest and penalties accrued related to unrecognized tax benefits. | ||
Business Combinations | Business Combinations | |
We account for business combinations using the acquisition method of accounting. The acquisition method of accounting requires that the purchase price, including the fair value of contingent consideration, of the acquisition be allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, the Company’s estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill to the extent the Company identifies adjustments to the preliminary purchase price allocation. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. We include the results of all acquisitions in our Consolidated Financial Statements from the date of acquisition. | ||
Acquisition related transaction costs, such as banking, legal, accounting and other costs incurred in connection with an acquisition are expensed as incurred in selling, general and administrative expense. | ||
Acquisition related integration costs include costs associated with exit or disposal activities, which do not meet the criteria of discontinued operations, including costs for employee, lease, and contract terminations, facility closing or other exit activities. Additionally, these costs include expenses directly related to integrating and reorganizing acquired businesses and include items such as employee retention costs, recruiting costs, certain moving costs, certain duplicative costs during integration and asset impairments. These costs are expensed as incurred in selling, general and administrative expense. | ||
Foreign Currency | Foreign Currency | |
Generally, the functional currency of our non-United States subsidiaries is the local currency. The financial statements of these subsidiaries are translated to United States dollars using month-end rates of exchange for assets and liabilities, and average rates of exchange for revenues, costs, and expenses. Translation gains and losses are deferred and recorded in accumulated other comprehensive income as a component of stockholders’ equity. | ||
Share-Based Compensation | Share-Based Compensation | |
We account for share-based compensation in accordance with FASB ASC 718, “Compensation-Stock Compensation”. Under the fair value recognition provisions of this pronouncement, share-based compensation cost is measured at the grant date based on the fair value of the award, reduced as appropriate based on estimated forfeitures, and is recognized as expense over the applicable vesting period of the stock award using the accelerated method. The excess tax benefit associated with stock compensation deductions have not been recorded in additional paid-in capital. When evaluating whether an excess tax benefit has been realized, share based compensation deductions are not considered realized until NOLs are no longer sufficient to offset taxable income. Such excess tax benefits will be recorded when realized. | ||
Earnings per Share | We account for share-based compensation in accordance with FASB ASC 718, “Compensation-Stock Compensation”. Under the fair value recognition provisions of this pronouncement, share-based compensation cost is measured at the grant date based on the fair value of the award, reduced as appropriate based on estimated forfeitures, and is recognized as expense over the applicable vesting period of the stock award using the accelerated method. The excess tax benefit associated with stock compensation deductions have not been recorded in additional paid-in capital. When evaluating whether an excess tax benefit has been realized, share based compensation deductions are not considered realized until NOLs are no longer sufficient to offset taxable income. Such excess tax benefits will be recorded when realized. | |
Earnings per Share | ||
Net income per share has been computed according to FASB ASC 260, “Earnings per Share”, which requires a dual presentation of basic and diluted earnings per share (“EPS”). Basic EPS represent | ||
Comprehensive Income | Comprehensive Income | |
Comprehensive income consists of net income (loss) and other comprehensive items. Other comprehensive items include foreign currency translation adjustments and unrealized gains (losses) on available for sale securities. | ||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |
In May 2014, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers". This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of good or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. This ASU is effective for annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. | ||
Accordingly, we will adopt this ASU on January 1, 2017. Companies may use either a full retrospective or modified retrospective approach to adopt this ASU and our management is currently evaluating which transition approach to use. We are currently evaluating the impact of adopting ASU 2014-09 on our consolidated financial statements and related disclosures. | ||
Reclassifications | Reclassifications | |
The Company has reclassified certain personnel and related costs for network operations and customer care that are attributable to revenue generating activities from selling, general and administrative expense to cost of telephony services for all periods presented. The amounts reclassified were $23,582 and $27,347 for the years ended December 31, 2013 and 2012, respectively. The reclassifications had no impact on net earnings previously reported. | ||
Capital Leases | Capital Leases | |
Assets financed under capital lease agreements are included in property and equipment in the consolidated balance sheet and related depreciation and amortization expense is included in the consolidated statements of operations. |
Basis_of_Presentation_and_Sign2
Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||
Computation for basic and diluted net (loss) income per share | The following table sets forth the computation for basic and diluted net income per share: | |||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Numerator | ||||||||||||
Numerator for basic earnings per share-net income attributable to Vonage | $ | 20,266 | $ | 28,289 | $ | 36,627 | ||||||
Numerator for diluted earnings per share-net income attributable to Vonage | $ | 20,266 | $ | 28,289 | $ | 36,627 | ||||||
Denominator | ||||||||||||
Basic weighted average common shares outstanding | 209,822 | 211,563 | 224,264 | |||||||||
Dilutive effect of stock options and restricted stock units | 9,597 | 8,957 | 8,369 | |||||||||
Diluted weighted average common shares outstanding | 219,419 | 220,520 | 232,633 | |||||||||
Basic net income per share | ||||||||||||
Basic net income per share | $ | 0.1 | $ | 0.13 | $ | 0.16 | ||||||
Diluted net income per share | ||||||||||||
Diluted net income per share | $ | 0.09 | $ | 0.13 | $ | 0.16 | ||||||
Securities excluded from calculation of diluted earnings per common share because of anti-dilutive effects | The following shares were excluded from the calculation of diluted income per share because of their anti-dilutive effects: | |||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Restricted stock units | 5,454 | 3,625 | 2,468 | |||||||||
Employee stock options | 18,428 | 25,437 | 32,746 | |||||||||
23,882 | 29,062 | 35,214 | ||||||||||
Supplemental_Balance_Sheet_Acc1
Supplemental Balance Sheet Account Information (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Supplemental Balance Sheet Account Information [Abstract] | ||||||||
Supplemental balance sheet account information | Prepaid expenses and other current assets | |||||||
December 31, 2014 | December 31, 2013 | |||||||
Nontrade receivables | $ | 2,511 | $ | 7,402 | ||||
Services | 7,415 | 7,084 | ||||||
Telecommunications | 459 | 479 | ||||||
Insurance | 803 | 757 | ||||||
Marketing | 519 | 312 | ||||||
Other prepaids | 958 | 858 | ||||||
Prepaid expenses and other current assets | $ | 12,665 | $ | 16,892 | ||||
Property and equipment, net | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Building (under capital lease) | $ | 25,709 | $ | 25,709 | ||||
Network equipment and computer hardware | 73,599 | 78,312 | ||||||
Leasehold improvements | 48,574 | 44,141 | ||||||
Customer premise equipment | 3,220 | — | ||||||
Furniture | 1,914 | 812 | ||||||
Vehicles | 195 | 109 | ||||||
153,211 | 149,083 | |||||||
Less: accumulated depreciation and amortization | (103,581 | ) | (96,840 | ) | ||||
Property and equipment, net | $ | 49,630 | $ | 52,243 | ||||
Customer premise equipment, net | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Customer premise equipment | $ | 3,220 | $ | — | ||||
Less: accumulated depreciation | (74 | ) | — | |||||
Customer premise equipment, net | $ | 3,146 | $ | — | ||||
Software, net | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Purchased | $ | 55,636 | $ | 45,178 | ||||
Licensed | 909 | 909 | ||||||
Internally developed | 36,088 | 36,088 | ||||||
92,633 | 82,175 | |||||||
Less: accumulated amortization | (74,009 | ) | (61,618 | ) | ||||
Software, net | $ | 18,624 | $ | 20,557 | ||||
The total expected future annual amortization of software is as follows: | ||||||||
2015 | $ | 11,354 | ||||||
2016 | 5,258 | |||||||
2017 | 1,976 | |||||||
2018 | 36 | |||||||
Total | $ | 18,624 | ||||||
Debt related costs, net | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Senior secured term loan | $ | 6,617 | $ | 4,706 | ||||
Less: accumulated amortization | (4,466 | ) | (3,393 | ) | ||||
Debt related costs, net | $ | 2,151 | $ | 1,313 | ||||
Restricted cash | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Letter of credit-lease deposits | $ | 3,311 | $ | 4,306 | ||||
Cash reserves | 94 | 99 | ||||||
Restricted cash | $ | 3,405 | $ | 4,405 | ||||
Other assets | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Long term non-trade receivable | $ | 6,623 | $ | — | ||||
Others | 1,125 | 1,882 | ||||||
Other assets | $ | 7,748 | $ | 1,882 | ||||
Accrued expenses | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Compensation and related taxes and temporary labor | $ | 25,555 | $ | 20,276 | ||||
Marketing | 17,871 | 23,277 | ||||||
Taxes and fees | 17,300 | 18,207 | ||||||
Litigation and settlements | 23 | 89 | ||||||
Telecommunications | 8,134 | 7,942 | ||||||
Other accruals | 9,645 | 6,063 | ||||||
Customer credits | 1,883 | 1,719 | ||||||
Professional fees | 2,178 | 2,490 | ||||||
Accrued interest | 133 | 12 | ||||||
Inventory | 1,267 | 769 | ||||||
Credit card fees | 207 | 283 | ||||||
Accrued expenses | $ | 84,196 | $ | 81,127 | ||||
Accumulated other comprehensive (loss) income | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Foreign currency translation adjustment | $ | (3,123 | ) | $ | 519 | |||
Unrealized loss on available-for-sale securities | (8 | ) | — | |||||
Accumulated other comprehensive (loss) income | $ | (3,131 | ) | $ | 519 | |||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||
Schedule of Goodwill | Goodwill | |||||||
The following table provides a summary of the changes in the carrying amounts of goodwill: | ||||||||
Balance at January 1, 2013 | $ | — | ||||||
Increase in goodwill related to acquisition of VBS | 83,627 | |||||||
Balance at December 31, 2013 | 83,627 | |||||||
Increase in goodwill related to acquisition of Telesphere | 111,028 | |||||||
Tax adjustment related to VBS | (3,393 | ) | ||||||
Balance at December 31, 2014 | $ | 191,262 | ||||||
Intangible assets, net | ||||||||
Intangible assets, net | ||||||||
The carrying values of intangible assets were as follows: | ||||||||
December 31, 2014 | December 31, 2013 | |||||||
Customer relationships | $ | 39,100 | $ | 39,100 | ||||
Developed technology | 35,200 | 35,200 | ||||||
Patents and patent licenses | 12,764 | 18,264 | ||||||
Trademark | 560 | 560 | ||||||
Trade names | 500 | 500 | ||||||
Non-compete agreements | 200 | 200 | ||||||
Gross Carrying Amount | 88,324 | 93,824 | ||||||
Customer relationships | (10,185 | ) | (1,644 | ) | ||||
Developed technology | (7,108 | ) | (813 | ) | ||||
Patents and patent licenses | (10,426 | ) | (14,089 | ) | ||||
Trademark | (113 | ) | (13 | ) | ||||
Trade names | (472 | ) | (402 | ) | ||||
Non-compete agreements | (113 | ) | (13 | ) | ||||
Accumulated Amortization | (28,417 | ) | (16,974 | ) | ||||
Customer relationships | 28,915 | 37,456 | ||||||
Developed technology | 28,092 | 34,387 | ||||||
Patents and patent licenses | 2,338 | 4,175 | ||||||
Trademark | 447 | 547 | ||||||
Trade names | 28 | 98 | ||||||
Non-compete agreements | 87 | 187 | ||||||
Net Carrying Amount | $ | 59,907 | $ | 76,850 | ||||
Total expected future annual amortization | The total expected future annual amortization is as follows: | |||||||
2015 | $ | 14,184 | ||||||
2016 | 12,560 | |||||||
2017 | 9,480 | |||||||
2018 | 7,505 | |||||||
2019 | 5,796 | |||||||
Thereafter | 10,382 | |||||||
Total | $ | 59,907 | ||||||
Supplemental_Income_Statement_1
Supplemental Income Statement Account Information (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Supplemental Income Statement Account Information [Abstract] | ||||||||||||
Supplemental income statement information | Amounts included in revenues | |||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
USF fees | $ | 71,188 | $ | 70,009 | $ | 77,781 | ||||||
Disconnect fee | $ | 3,228 | $ | 4,152 | $ | 3,128 | ||||||
Initial activation fees | $ | 1,085 | $ | 1,278 | $ | 2,079 | ||||||
Customer equipment fees | $ | 715 | $ | 418 | $ | 614 | ||||||
Equipment recovery fees | $ | 80 | $ | 103 | $ | 102 | ||||||
Shipping and handling fees | $ | 2,374 | $ | 1,178 | $ | 1,385 | ||||||
Amounts included in cost of telephony services | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
USF costs | $ | 71,188 | $ | 70,009 | $ | 77,781 | ||||||
Amounts included in cost of goods sold | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Shipping and handling cost | $ | 6,028 | $ | 5,188 | $ | 7,064 | ||||||
Amounts included in selling, general and administrative expense | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Advertising costs | $ | 328 | $ | 1,012 | $ | 2,053 | ||||||
Acquisition related transaction costs | $ | 2,466 | $ | 2,681 | $ | — | ||||||
Acquisition related integration costs | $ | 100 | $ | 87 | $ | — | ||||||
Amounts included in marketing | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Advertising costs | $ | 140,810 | $ | 142,094 | $ | 129,665 | ||||||
Depreciation and amortization expense | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Network equipment and computer hardware | $ | 13,449 | $ | 13,475 | $ | 14,943 | ||||||
Software | 12,009 | 10,843 | 9,621 | |||||||||
Capital leases | 2,200 | 2,200 | 2,199 | |||||||||
Other leasehold improvements | 4,434 | 4,167 | 3,986 | |||||||||
Customer premise equipment | 75 | — | — | |||||||||
Furniture | 194 | 120 | 130 | |||||||||
Vehicles | 31 | 10 | 16 | |||||||||
Patents | 1,833 | 2,304 | 2,306 | |||||||||
Trademarks | 72 | 70 | 70 | |||||||||
Customer relationships | 8,539 | 1,644 | — | |||||||||
Acquired technology | 6,296 | 813 | — | |||||||||
Trade names | 100 | 13 | — | |||||||||
Non-compete agreements | 101 | 13 | — | |||||||||
49,333 | 35,672 | 33,271 | ||||||||||
Property and equipment impairments | 1,959 | 9 | (2 | ) | ||||||||
Software impairments | 115 | 385 | 55 | |||||||||
Depreciation and amortization expense | $ | 51,407 | $ | 36,066 | $ | 33,324 | ||||||
Amounts included in interest expense | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Debt related costs amortization | $ | 1,072 | $ | 1,515 | $ | 1,235 | ||||||
Amounts included in other expense, net | ||||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Net gains (losses) resulting from foreign exchange transactions | $ | 10 | $ | (109 | ) | $ | (11 | ) | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Components of income (loss) before income tax expense | The components of income (loss) before income tax expense are as follows: | |||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
United States | $ | 44,044 | $ | 39,650 | $ | 46,904 | ||||||
Foreign | (2,837 | ) | 6,345 | 11,818 | ||||||||
$ | 41,207 | $ | 45,995 | $ | 58,722 | |||||||
Components of income tax (expense) benefit | The components of the income tax (expense) benefit are as follows: | |||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current: | ||||||||||||
Federal | $ | (1,452 | ) | $ | (907 | ) | $ | (979 | ) | |||
Foreign | (377 | ) | (155 | ) | (142 | ) | ||||||
State and local taxes | (803 | ) | (337 | ) | (1,486 | ) | ||||||
$ | (2,632 | ) | $ | (1,399 | ) | $ | (2,607 | ) | ||||
Deferred: | ||||||||||||
Federal | $ | (15,239 | ) | $ | (14,954 | ) | $ | (12,642 | ) | |||
Foreign | (2,985 | ) | (1,603 | ) | (3,479 | ) | ||||||
State and local taxes | (904 | ) | (238 | ) | (3,367 | ) | ||||||
$ | (19,128 | ) | $ | (16,795 | ) | $ | (19,488 | ) | ||||
$ | (21,760 | ) | $ | (18,194 | ) | $ | (22,095 | ) | ||||
Components of deferred tax assets and liabilities | The following table summarizes deferred taxes resulting from differences between financial accounting basis and tax basis of assets and liabilities. | |||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||
Current assets and liabilities: | ||||||||||||
Deferred revenue | $ | 13,265 | $ | 14,846 | ||||||||
Accounts receivable and inventory allowances | 289 | 335 | ||||||||||
Accrued expenses | 8,295 | 3,180 | ||||||||||
Deferred tax assets, net, current | $ | 21,849 | $ | 18,361 | ||||||||
Non-current assets and liabilities: | ||||||||||||
Acquired intangible assets and property and equipment | $ | (11,876 | ) | $ | (23,762 | ) | ||||||
Accrued expenses | (1,937 | ) | — | |||||||||
Research and development and alternative minimum tax credit | 4,952 | 3,613 | ||||||||||
Stock option compensation | 17,802 | 17,317 | ||||||||||
Capital leases | (5,401 | ) | (4,486 | ) | ||||||||
Deferred revenue | (524 | ) | (627 | ) | ||||||||
Net operating loss carryforwards | 241,525 | 271,406 | ||||||||||
244,541 | 263,461 | |||||||||||
Valuation allowance | (17,451 | ) | (16,922 | ) | ||||||||
Deferred tax assets, net, non-current | $ | 227,090 | $ | 246,539 | ||||||||
Reconciliation of income tax rate | The reconciliation between the United States statutory federal income tax rate and the effective rate is as follows: | |||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
U.S. Federal statutory tax rate | 35 | % | 35 | % | 35 | % | ||||||
Permanent items | 3 | % | 4 | % | 1 | % | ||||||
State and local taxes, net of federal benefit | 3 | % | — | % | 5 | % | ||||||
International tax (reflects effect of losses for which tax benefit not realized) | 11 | % | (1 | )% | (1 | )% | ||||||
Valuation reserve for income taxes and other | 1 | % | 1 | % | (2 | )% | ||||||
Effective tax rate | 53 | % | 39 | % | 38 | % | ||||||
Summary of net operating loss carryforwards | As of December 31, 2014, we had NOLs for United States federal and state tax purposes of $639,981 and $214,238, respectively, expiring at various times from years ending 2015 through 2033 as follows: | |||||||||||
Federal | State | |||||||||||
2015 | $ | — | $ | 21,668 | ||||||||
2016 | — | 6,015 | ||||||||||
2017 | — | 2,433 | ||||||||||
2018 | — | 2,866 | ||||||||||
2019 | — | 14 | ||||||||||
2020 | — | 356 | ||||||||||
2021 | — | 4,388 | ||||||||||
2022 | — | 18,408 | ||||||||||
2023 | — | 12,448 | ||||||||||
2024 | — | 1,374 | ||||||||||
2025 | 84,670 | 7,087 | ||||||||||
2026 | 190,275 | 12,914 | ||||||||||
2027 | 232,525 | 37,213 | ||||||||||
2028 | 29,166 | 13,253 | ||||||||||
2029 | 4,664 | 4,516 | ||||||||||
2030 | 96,056 | 45,830 | ||||||||||
2031 | 1,908 | 5,371 | ||||||||||
2032 | — | 7,769 | ||||||||||
2033 | 717 | 10,315 | ||||||||||
Total | $ | 639,981 | $ | 214,238 | ||||||||
LongTerm_Debt_and_Revolving_Cr1
Long-Term Debt and Revolving Credit Facility (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Schedule of long-term debt | A schedule of long-term debt at December 31, 2014 and 2013 is as follows: | |||||||
December 31, 2014 | December 31, 2013 | |||||||
2.875-3.375% 2014 Credit Facility - due 2018 | $ | 70,000 | $ | — | ||||
2.875-3.375% Revolving Credit Facility - due 2018 | $ | 67,000 | $ | — | ||||
3.125-3.625% 2013 Credit Facility - due 2016 | $ | — | $ | 23,333 | ||||
3.125-3.625% 2013 Revolving Credit Facility - due 2016 | $ | — | $ | 75,000 | ||||
Total Long-Term Debt and Revolving Credit Facility | $ | 137,000 | $ | 98,333 | ||||
Future payments under long-term debt obligations | At December 31, 2014, future payments under long-term debt obligations over each of the next five years and thereafter are as follows: | |||||||
2014 Credit Facility | ||||||||
2015 | 20,000 | |||||||
2016 | 20,000 | |||||||
2017 | 20,000 | |||||||
2018 | 30,000 | |||||||
Minimum future payments of principal | 90,000 | |||||||
Current portion | 20,000 | |||||||
Long-term portion | $ | 70,000 | ||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments Fair Value Asset Measured on Recurring basis (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Fair Value Disclosures [Abstract] | ||||||||
Fair Value, Assets Measured on Recurring Basis | The following table presents the assets that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of December 31, 2014 and December 31, 2013: | |||||||
December 31, 2014 | December 31, 2013 | |||||||
Level 1 Assets | ||||||||
Money market fund (1) | $ | 2,786 | $ | — | ||||
Level 2 Assets | ||||||||
Available-for-sale securities (2) | $ | 7,162 | $ | — | ||||
(1) Included in cash and cash equivalents on our consolidated balance sheet. | ||||||||
(2) Included in marketable securities on our consolidated balance sheet. |
Common_Stock_Tables
Common Stock (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
$50,000 repurchase program | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Common stock repurchases | We repurchased the following shares of common stock with cash resources under the $50,000 repurchase program as of December 31, 2013: | |||||||
31-Dec-13 | ||||||||
Shares of common stock repurchased | 2,189 | |||||||
Value of common stock repurchased | $ | 5,374 | ||||||
$100,000 repurchase program | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Common stock repurchases | We repurchased the following shares of common stock with cash resources under the $100,000 repurchase program as of December 31, 2014 and December 31, 2013: | |||||||
December 31, 2014 (1) | December 31, 2013 (2) | |||||||
Shares of common stock repurchased | 13,475 | 16,954 | ||||||
Value of common stock repurchased | $ | 49,128 | $ | 50,653 | ||||
(1) including 171 shares, or $660, of common stock repurchases settled in January 2015; excluding commission of $2. | ||||||||
(2) including 220 shares, or $734, of common stock repurchases settled in January 2014; excluding commission of $2. |
Employee_Benefit_Plans_Tables
Employee Benefit Plans (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||
Assumptions used to value options | The fair value for these options was estimated at the date of grant using a Black-Scholes option-pricing model. The assumptions used to value options are as follows: | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Risk-free interest rate | 1.78-2.19% | 1.13-2.02% | 0.94-1.36% | |||||||||||||||||||||
Expected stock price volatility | 85.28-86.93% | 86.94-90.39% | 90.37-93.57% | |||||||||||||||||||||
Dividend yield | 0 | % | 0 | % | 0 | % | ||||||||||||||||||
Expected life (in years) | 6.25 | 6.25 | 6.25 | |||||||||||||||||||||
Summary of stock incentive plans | Our stock incentive plans as of December 31, 2014 are summarized as follows (in thousands): | |||||||||||||||||||||||
Shares | Shares | Stock | Restricted | |||||||||||||||||||||
Authorized | Available | Options | Stock and | |||||||||||||||||||||
for Grant | Outstanding | Restricted | ||||||||||||||||||||||
Stock | ||||||||||||||||||||||||
Units | ||||||||||||||||||||||||
2001 Incentive Plan | — | — | 1,058 | — | ||||||||||||||||||||
2006 Incentive Plan | 77,400 | 10,235 | 24,593 | 7,828 | ||||||||||||||||||||
Total as of December 31, 2014 | 77,400 | 10,235 | 25,651 | 7,828 | ||||||||||||||||||||
Summary of award activity | . | |||||||||||||||||||||||
The following table summarizes the activity for all awards under both of our stock incentive plans: | ||||||||||||||||||||||||
Stock Options Outstanding | Restricted Stock and | |||||||||||||||||||||||
Restricted Stock Units | ||||||||||||||||||||||||
Outstanding | ||||||||||||||||||||||||
Number of | Weighted | Number of | Weighted | |||||||||||||||||||||
Shares | Average | Shares | Average | |||||||||||||||||||||
Exercise | Grant | |||||||||||||||||||||||
Price Per | Date Fair | |||||||||||||||||||||||
Share | Market | |||||||||||||||||||||||
Value | ||||||||||||||||||||||||
Per | ||||||||||||||||||||||||
Share | ||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||
Balance at December 31, 2011 | 37,282 | $ | 2.51 | 2,275 | $ | 2.79 | ||||||||||||||||||
Stock options granted | 8,701 | 2.22 | ||||||||||||||||||||||
Stock options exercised | (1,237 | ) | 1.39 | |||||||||||||||||||||
Stock options canceled | (4,506 | ) | 3.99 | |||||||||||||||||||||
Restricted stocks and restricted stock units granted | 2,400 | 2.29 | ||||||||||||||||||||||
Restricted stocks and restricted stock units exercised | (1,022 | ) | 2.31 | |||||||||||||||||||||
Restricted stocks and restricted stock units canceled | (310 | ) | 2.58 | |||||||||||||||||||||
Balance at December 31, 2012 | 40,240 | 2.32 | 3,343 | 2.59 | ||||||||||||||||||||
Stock options granted | 9,315 | 2.89 | ||||||||||||||||||||||
Stock options exercised | (7,842 | ) | 1.47 | |||||||||||||||||||||
Stock options canceled | (8,876 | ) | 2.14 | |||||||||||||||||||||
Restricted stocks and restricted stock units granted | 3,896 | 3.01 | ||||||||||||||||||||||
Restricted stocks and restricted stock units exercised | (1,549 | ) | 2.48 | |||||||||||||||||||||
Restricted stocks and restricted stock units canceled | (508 | ) | 2.84 | |||||||||||||||||||||
Balance at December 31, 2013 | 32,837 | 2.73 | 5,182 | 2.92 | ||||||||||||||||||||
Stock options granted | 6,865 | 3.47 | ||||||||||||||||||||||
Stock options exercised | (10,504 | ) | 1.65 | |||||||||||||||||||||
Stock options canceled | (3,547 | ) | 3.19 | |||||||||||||||||||||
Restricted stocks and restricted stock units granted | 5,240 | 4.71 | ||||||||||||||||||||||
Restricted stocks and restricted stock units exercised | (1,734 | ) | 2.83 | |||||||||||||||||||||
Restricted stocks and restricted stock units canceled | (860 | ) | 3.32 | |||||||||||||||||||||
Balance at December 31, 2014-stock options | 25,651 | $ | 3.31 | |||||||||||||||||||||
Balance at December 31, 2014-Restricted stock and restricted stock units | 7,828 | $ | 4.09 | |||||||||||||||||||||
Exercisable at December 31, 2014 | 10,708 | $ | 3.6 | |||||||||||||||||||||
Unvested shares at December 31, 2013 | 17,048 | $ | 2.71 | |||||||||||||||||||||
Unvested shares at December 31, 2014 | 14,943 | $ | 3.1 | |||||||||||||||||||||
Information regarding options outstanding by exercise price range | Information regarding the options outstanding as of December 31, 2014 is summarized below: | |||||||||||||||||||||||
Stock Options Outstanding | Stock Options Exercisable | |||||||||||||||||||||||
Range of | Stock | Weighted | Weighted | Aggregate | Stock | Weighted | Weighted | Aggregate | ||||||||||||||||
Exercise Prices | Options | Average | Average | Intrinsic | Options | Average | Average | Intrinsic | ||||||||||||||||
Outstanding | Remaining | Exercise | Value | Vested and | Remaining | Exercise | Value | |||||||||||||||||
Contractual | Price | Exercisable | Contractual | Price | ||||||||||||||||||||
Life | Life | |||||||||||||||||||||||
(in thousands) | (in years) | (in thousands) | (in thousands) | (in years) | (in thousands) | |||||||||||||||||||
$0.33 to $1.43 | 3,092 | 1.37 | 3,092 | 1.37 | ||||||||||||||||||||
$1.44 to $1.99 | 164 | 1.69 | 102 | 1.68 | ||||||||||||||||||||
$2.00 to $4.00 | 18,434 | 2.92 | 4,238 | 2.56 | ||||||||||||||||||||
$4.01 to $7.34 | 2,826 | 4.73 | 2,141 | 4.77 | ||||||||||||||||||||
$7.35 to $35.00 | 1,135 | 11.47 | 1,135 | 11.47 | ||||||||||||||||||||
25,651 | 7.2 | 3.31 | $ | 24,203 | 10,708 | 5.3 | 3.6 | $ | 13,033 | |||||||||||||||
Payout vesting schedule | For the market-based restricted performance stock units issued during the year ended December 31, 2014, the payouts at vesting which are linearly interpolated between the percentiles specified below are as follows: | |||||||||||||||||||||||
Payout Schedule | ||||||||||||||||||||||||
Percentile Ranking | % of Target Earned | |||||||||||||||||||||||
80% | 200% | |||||||||||||||||||||||
50% | 100% | |||||||||||||||||||||||
30% | 50% | |||||||||||||||||||||||
<30% | —% |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||
Future payments under capital leases and minimum payments under non-cancelable operating leases | At December 31, 2014, future payments under capital leases and minimum payments under non-cancelable operating leases are as follows over each of the next five years and thereafter: | |||||||
December 31, 2014 | ||||||||
Capital | Operating | |||||||
Leases | Leases | |||||||
2015 | $ | 4,457 | $ | 4,487 | ||||
2016 | 4,545 | 2,336 | ||||||
2017 | 3,071 | 2,222 | ||||||
2018 | — | 2,144 | ||||||
2019 | — | 2,136 | ||||||
Thereafter | — | 1,842 | ||||||
Total minimum payments required | 12,073 | $ | 15,167 | |||||
Less amounts representing interest | (1,872 | ) | ||||||
Minimum future payments of principal | 10,201 | |||||||
Current portion | 3,365 | |||||||
Long-term portion | $ | 6,836 | ||||||
Acquisition_of_Business_Tables
Acquisition of Business (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Business Combinations [Abstract] | ||||||||
Estimated fair values of assets acquired and liabilities assumed | The table below summarizes the assets acquired and liabilities assumed as of December 15, 2014 as follows: | |||||||
Estimated Fair Value | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 70 | ||||||
Accounts receivable | 3,083 | |||||||
Inventory | 386 | |||||||
Prepaid expenses and other current assets | 398 | |||||||
Total current assets | 3,937 | |||||||
Property and equipment | 5,731 | |||||||
Software | 3 | |||||||
Other assets | 76 | |||||||
Total assets acquired | 9,747 | |||||||
Liabilities | ||||||||
Current liabilities: | ||||||||
Accounts payable | 1,202 | |||||||
Accrued expenses | 3,982 | |||||||
Deferred revenue, current portion | 1,156 | |||||||
Total current liabilities | 6,340 | |||||||
Total liabilities assumed | 6,340 | |||||||
Net identifiable assets acquired | 3,407 | |||||||
Goodwill | 111,028 | |||||||
Total purchase price | $ | 114,435 | ||||||
The table below summarizes the assets acquired and liabilities assumed as of November 15, 2013 as follows: | ||||||||
Estimated Fair Value | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 7,924 | ||||||
Accounts receivable | 275 | |||||||
Prepaid expenses and other current assets | 787 | |||||||
Total current assets | 8,986 | |||||||
Property and equipment | 1,777 | |||||||
Intangible assets | 75,000 | |||||||
Other assets | 53 | |||||||
Total assets acquired | 85,816 | |||||||
Liabilities | ||||||||
Current liabilities: | ||||||||
Accounts payable | 2,226 | |||||||
Accrued expenses | 7,064 | |||||||
Deferred revenue, current portion | 1,986 | |||||||
Total current liabilities | 11,276 | |||||||
Deferred tax liabilities, net, non-current | 24,000 | |||||||
Total liabilities assumed | 35,276 | |||||||
Net identifiable assets acquired | 50,540 | |||||||
Goodwill | 83,627 | |||||||
Total purchase price | $ | 134,167 | ||||||
Pro forma financial information | The following unaudited supplemental pro forma information presents the combined historical results of operations of Vonage and Telesphere for the years 2014 and 2013, as if the Acquisition had been completed at the beginning of 2013. | |||||||
For the years ended December 31, | ||||||||
2014 | 2013 | |||||||
Revenue | $ | 906,827 | $ | 860,798 | ||||
Net income attributable to Vonage | 16,977 | 24,168 | ||||||
Net income attributable to Vonage per share - basic | 0.08 | 0.11 | ||||||
Net income attributable to Vonage per share - diluted | 0.08 | 0.11 | ||||||
Intangible Assets Acquired | The intangible assets as of the closing date of the Acquisition included: | |||||||
Amount | ||||||||
Customer relationships | $ | 39,100 | ||||||
Developed technologies | 35,200 | |||||||
Trade names | 500 | |||||||
Non-compete agreements | 200 | |||||||
$ | 75,000 | |||||||
Geographic_Information_Tables
Geographic Information (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Operations information by geographic location | Information about our operations by geographic location is as follows: | |||||||||||
For the years ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenue: | ||||||||||||
United States | $ | 823,858 | $ | 784,665 | $ | 804,870 | ||||||
Brazil | 98 | — | — | |||||||||
Canada | 30,294 | 32,348 | 32,570 | |||||||||
United Kingdom | 14,703 | 12,054 | 11,674 | |||||||||
$ | 868,953 | $ | 829,067 | $ | 849,114 | |||||||
December 31, 2014 | December 31, 2013 | |||||||||||
Long-lived assets: | ||||||||||||
United States | $ | 318,604 | $ | 231,335 | ||||||||
Brazil | 145 | 845 | ||||||||||
United Kingdom | 545 | 821 | ||||||||||
Israel | 129 | 276 | ||||||||||
$ | 319,423 | $ | 233,277 | |||||||||
Quarterly_Financial_Informatio1
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||
Quarterly financial information | The following table sets forth the reviewed consolidated quarterly financial information for 2014 and 2013: | |||||||||||||||||||
For the Quarter Ended | ||||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | Total | ||||||||||||||||
Year Ended 2014 | ||||||||||||||||||||
Revenue | $ | 220,733 | $ | 218,882 | $ | 214,737 | $ | 214,601 | $ | 868,953 | ||||||||||
Net income attributable to Vonage | 4,588 | 5,518 | 4,556 | 5,604 | 20,266 | |||||||||||||||
Net income attributable to Vonage per common share: | ||||||||||||||||||||
Basic | 0.02 | 0.03 | 0.02 | 0.03 | ||||||||||||||||
Diluted | 0.02 | 0.02 | 0.02 | 0.03 | ||||||||||||||||
Year Ended 2013 | ||||||||||||||||||||
Revenue | $ | 209,087 | $ | 204,776 | $ | 203,984 | $ | 211,220 | $ | 829,067 | ||||||||||
Net income (loss) | 13,047 | 7,447 | 4,207 | 3,588 | 28,289 | |||||||||||||||
Net income (loss) per common share: | ||||||||||||||||||||
Basic | 0.06 | 0.04 | 0.02 | 0.02 | ||||||||||||||||
Diluted | 0.06 | 0.03 | 0.02 | 0.02 | ||||||||||||||||
Basis_of_Presentation_and_Sign3
Basis of Presentation and Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2014 | |
billing_cycle | |
Concentration risk: | |
Maximum original maturity term of investments to be considered cash and cash equivalents | 3 months |
Number of unsuccessful billing cycles before account termination | 3 |
Purchased Intangible Assets | Minimum | |
Concentration risk: | |
Intangible asset useful life | 2 years |
Purchased Intangible Assets | Maximum | |
Concentration risk: | |
Intangible asset useful life | 10 years |
United States | Subscriber lines | Geographic concentration | |
Concentration risk: | |
Percentage of subscriber lines represented by the United States | 93.00% |
Basis_of_Presentation_and_Sign4
Basis of Presentation and Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Minimum | Network equipment | |
Property and Equipment: | |
Useful life of property and equipment | 3 years |
Minimum | Computer hardware | |
Property and Equipment: | |
Useful life of property and equipment | 3 years |
Minimum | Furniture | |
Property and Equipment: | |
Useful life of property and equipment | 3 years |
Maximum | Network equipment | |
Property and Equipment: | |
Useful life of property and equipment | 5 years |
Maximum | Computer hardware | |
Property and Equipment: | |
Useful life of property and equipment | 5 years |
Maximum | Furniture | |
Property and Equipment: | |
Useful life of property and equipment | 5 years |
Basis_of_Presentation_and_Sign5
Basis of Presentation and Significant Accounting Policies - Software Costs (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 30, 2012 |
Software Costs: | ||||
Loss from abandonment of software assets | $0 | $0 | $25,262 | |
Software | ||||
Software Costs: | ||||
Loss from abandonment of software assets | $25,262 | |||
Minimum | ||||
Software Costs: | ||||
Useful life of software | 2 years | |||
Maximum | ||||
Software Costs: | ||||
Useful life of software | 5 years |
Basis_of_Presentation_and_Sign6
Basis of Presentation and Significant Accounting Policies - Restricted Cash and Letters of Credit (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Restricted cash: | ||
Restricted cash | $3,405,000 | $4,405,000 |
Restricted cash, noncurrent | 3,405,000 | 4,405,000 |
Letter of credit | ||
Restricted cash: | ||
Restricted cash | 3,311,000 | 4,306,000 |
Letter of credit-lease deposits | ||
Restricted cash: | ||
Restricted cash | $3,311,000 | $4,306,000 |
Basis_of_Presentation_and_Sign7
Basis of Presentation and Significant Accounting Policies - Valuation and Qualifying Accounts - Income Taxes (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2011 | Dec. 31, 2012 |
Valuation and qualifying accounts disclosure: | ||
Non-cash deferred tax adjustment for stock compensation previously considered nondeductible | $4,077 | |
Valuation allowance, operating loss carryforwards | ||
Valuation and qualifying accounts disclosure: | ||
Adjustment to valuation allowance | ($325,601) |
Basis_of_Presentation_and_Sign8
Basis of Presentation and Significant Accounting Policies - Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||
Numerator for earnings per share-net income attributable to Vonage | $5,604 | $4,556 | $5,518 | $4,588 | $3,588 | $4,207 | $7,447 | $13,047 | $20,266 | $28,289 | $36,627 |
Basic weighted average common shares outstanding (in shares) | 209,822 | 211,563 | 224,264 | ||||||||
Dilutive effect of stock options and restricted stock units (in shares) | 9,597 | 8,957 | 8,369 | ||||||||
Diluted weighted average common shares outstanding (in shares) | 219,419 | 220,520 | 232,633 | ||||||||
Basic net income per share (USD per share) | $0.03 | $0.02 | $0.03 | $0.02 | $0.02 | $0.02 | $0.04 | $0.06 | $0.10 | $0.13 | $0.16 |
Diluted net income per share (USD per share) | $0.03 | $0.02 | $0.02 | $0.02 | $0.02 | $0.02 | $0.03 | $0.06 | $0.09 | $0.13 | $0.16 |
Basis_of_Presentation_and_Sign9
Basis of Presentation and Significant Accounting Policies - Earnings Per Share, Antidilutive Securities (Details) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings per share, antidilutive securities: | |||
Antidilutive securities excluded from earnings per common share | 23,882 | 29,062 | 35,214 |
Restricted stock units | |||
Earnings per share, antidilutive securities: | |||
Antidilutive securities excluded from earnings per common share | 5,454 | 3,625 | 2,468 |
Stock options | |||
Earnings per share, antidilutive securities: | |||
Antidilutive securities excluded from earnings per common share | 18,428 | 25,437 | 32,746 |
Recovered_Sheet1
Basis of Presentation and Significant Accounting Policies Reclassifications (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies, Reclassifications [Abstract] | ||
Prior period reclassification adjustment | $23,582 | $27,347 |
Supplemental_Balance_Sheet_Acc2
Supplemental Balance Sheet Account Information (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Prepaid expenses and other current assets: | ||
Nontrade receivables | $2,511 | $7,402 |
Services | 7,415 | 7,084 |
Telecommunications | 459 | 479 |
Insurance | 803 | 757 |
Marketing | 519 | 312 |
Other prepaids | 958 | 858 |
Prepaid expenses and other current assets | 12,665 | 16,892 |
Debt related costs, net: | ||
Senior secured term loan | 6,617 | 4,706 |
Less: accumulated amortization | -4,466 | -3,393 |
Debt related costs, net | 2,151 | 1,313 |
Other assets | ||
Long term non-trade receivable | 6,623 | 0 |
Others | 1,125 | 1,882 |
Other assets | 7,748 | 1,882 |
Accrued expenses: | ||
Compensation and related taxes and temporary labor | 25,555 | 20,276 |
Marketing | 17,871 | 23,277 |
Taxes and fees | 17,300 | 18,207 |
Litigation and settlements | 23 | 89 |
Telecommunications | 8,134 | 7,942 |
Other accruals | 9,645 | 6,063 |
Customer credits | 1,883 | 1,719 |
Professional fees | 2,178 | 2,490 |
Accrued interest | 133 | 12 |
Inventory | 1,267 | 769 |
Credit card fees | 207 | 283 |
Accrued expenses | 84,196 | 81,127 |
Accumulated other comprehensive (loss) income | ||
Foreign currency translation adjustment | -3,123 | 519 |
Unrealized loss on available-for-sale securities | -8 | 0 |
Accumulated other comprehensive (loss) income | ($3,131) | $519 |
Supplemental_Balance_Sheet_Acc3
Supplemental Balance Sheet Account Information - Property and Equipment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property and Equipment: | ||
Property equipment, gross | $153,211 | $149,083 |
Less: accumulated depreciation and amortization | -103,581 | -96,840 |
Property and equipment, net | 49,630 | 52,243 |
Building (under capital lease) | ||
Property and Equipment: | ||
Property equipment, gross | 25,709 | 25,709 |
Network equipment and computer hardware | ||
Property and Equipment: | ||
Property equipment, gross | 73,599 | 78,312 |
Leasehold improvements | ||
Property and Equipment: | ||
Property equipment, gross | 48,574 | 44,141 |
Customer premise equipment | ||
Property and Equipment: | ||
Property equipment, gross | 3,220 | 0 |
Less: accumulated depreciation and amortization | -74 | 0 |
Property and equipment, net | 3,146 | 0 |
Furniture | ||
Property and Equipment: | ||
Property equipment, gross | 1,914 | 812 |
Vehicles | ||
Property and Equipment: | ||
Property equipment, gross | $195 | $109 |
Supplemental_Balance_Sheet_Acc4
Supplemental Balance Sheet Account Information - Software (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Software: | ||
Software, gross | $92,633 | $82,175 |
Less: accumulated amortization | -74,009 | -61,618 |
Software, net | 18,624 | 20,557 |
Total expected future annual amortization of software | ||
2015 | 11,354 | |
2016 | 5,258 | |
2017 | 1,976 | |
2018 | 36 | |
Purchased | ||
Software: | ||
Software, gross | 55,636 | 45,178 |
Licensed | ||
Software: | ||
Software, gross | 909 | 909 |
Internally developed | ||
Software: | ||
Software, gross | $36,088 | $36,088 |
Supplemental_Balance_Sheet_Acc5
Supplemental Balance Sheet Account Information - Restricted Cash (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Restricted cash: | ||
Restricted cash | $3,405,000 | $4,405,000 |
Letter of credit-lease deposits | ||
Restricted cash: | ||
Restricted cash | 3,311,000 | 4,306,000 |
Cash reserves | ||
Restricted cash: | ||
Restricted cash | $94,000 | $99,000 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets Goodwill (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill [Roll Forward] | ||
Beginning balance | $83,627 | $0 |
Increase in goodwill related to acquisition | 111,028 | 83,627 |
Tax related adjustment | -3,393 | |
Ending balance | $191,262 | $83,627 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Intangible assets: | ||
Intangible assets, gross | $88,324 | $93,824 |
Accumulated Amortization | -28,417 | -16,974 |
Net Carrying Amount | 59,907 | 76,850 |
Total expected future annual amortization: | ||
2015 | 14,184 | |
2016 | 12,560 | |
2017 | 9,480 | |
2018 | 7,505 | |
2019 | 5,796 | |
Thereafter | 10,382 | |
Net Carrying Amount | 59,907 | 76,850 |
Customer relationships | ||
Intangible assets: | ||
Intangible assets, gross | 39,100 | 39,100 |
Accumulated Amortization | -10,185 | -1,644 |
Net Carrying Amount | 28,915 | 37,456 |
Intangible asset useful life | 10 years | |
Total expected future annual amortization: | ||
Net Carrying Amount | 28,915 | 37,456 |
Developed technology | ||
Intangible assets: | ||
Intangible assets, gross | 35,200 | 35,200 |
Accumulated Amortization | -7,108 | -813 |
Net Carrying Amount | 28,092 | 34,387 |
Intangible asset useful life | 10 years | |
Total expected future annual amortization: | ||
Net Carrying Amount | 28,092 | 34,387 |
Patents and patent licenses | ||
Intangible assets: | ||
Intangible assets, gross | 12,764 | 18,264 |
Accumulated Amortization | -10,426 | -14,089 |
Net Carrying Amount | 2,338 | 4,175 |
Total expected future annual amortization: | ||
Net Carrying Amount | 2,338 | 4,175 |
Trademark | ||
Intangible assets: | ||
Intangible assets, gross | 560 | 560 |
Accumulated Amortization | -113 | -13 |
Net Carrying Amount | 447 | 547 |
Intangible asset useful life | 8 years | |
Total expected future annual amortization: | ||
Net Carrying Amount | 447 | 547 |
Trade names | ||
Intangible assets: | ||
Intangible assets, gross | 500 | 500 |
Accumulated Amortization | -472 | -402 |
Net Carrying Amount | 28 | 98 |
Intangible asset useful life | 5 years | |
Total expected future annual amortization: | ||
Net Carrying Amount | 28 | 98 |
Non-compete agreements | ||
Intangible assets: | ||
Intangible assets, gross | 200 | 200 |
Accumulated Amortization | -113 | -13 |
Net Carrying Amount | 87 | 187 |
Intangible asset useful life | 2 years | |
Total expected future annual amortization: | ||
Net Carrying Amount | $87 | $187 |
Supplemental_Income_Statement_2
Supplemental Income Statement Account Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues: | |||
USF fees | $71,188 | $70,009 | $77,781 |
Disconnect fee | 3,228 | 4,152 | 3,128 |
Initial activation fees | 1,085 | 1,278 | 2,079 |
Customer equipment fees | 715 | 418 | 614 |
Equipment recovery fees | 80 | 103 | 102 |
Shipping and handling fees | 2,374 | 1,178 | 1,385 |
Depreciation: | |||
Depreciation and amortization expense | 51,407 | 36,066 | 33,324 |
Debt related costs amortization | 1,072 | 1,515 | 1,235 |
Direct cost of telephony services | |||
Revenues: | |||
USF costs | 71,188 | 70,009 | 77,781 |
Direct cost of goods sold | |||
Revenues: | |||
Shipping and handling cost | 6,028 | 5,188 | 7,064 |
Selling, general and administrative expense | |||
Revenues: | |||
Advertising costs | 328 | 1,012 | 2,053 |
Acquisition related transaction costs | 2,466 | 2,681 | 0 |
Acquisition related integration costs | 100 | 87 | 0 |
Marketing | |||
Revenues: | |||
Advertising costs | 140,810 | 142,094 | 129,665 |
Depreciation and amortization expense | |||
Depreciation: | |||
Depreciation and amortization expense, excluding impairments | 49,333 | 35,672 | 33,271 |
Depreciation and amortization expense | 51,407 | 36,066 | 33,324 |
Depreciation and amortization expense | Software | |||
Depreciation: | |||
Depreciation and amortization expense, excluding impairments | 12,009 | 10,843 | 9,621 |
Software impairments | 115 | 385 | 55 |
Depreciation and amortization expense | Patents | |||
Depreciation: | |||
Depreciation and amortization expense, excluding impairments | 1,833 | 2,304 | 2,306 |
Depreciation and amortization expense | Trademark | |||
Depreciation: | |||
Depreciation and amortization expense, excluding impairments | 72 | 70 | 70 |
Depreciation and amortization expense | Customer relationships | |||
Depreciation: | |||
Depreciation and amortization expense, excluding impairments | 8,539 | 1,644 | 0 |
Depreciation and amortization expense | Acquired technology | |||
Depreciation: | |||
Depreciation and amortization expense, excluding impairments | 6,296 | 813 | 0 |
Depreciation and amortization expense | Trade names | |||
Depreciation: | |||
Depreciation and amortization expense, excluding impairments | 100 | 13 | 0 |
Depreciation and amortization expense | Non-compete agreements | |||
Depreciation: | |||
Depreciation and amortization expense, excluding impairments | 101 | 13 | 0 |
Depreciation and amortization expense | Property and Equipment [Member] | |||
Depreciation: | |||
Property and equipment impairments | 1,959 | 9 | -2 |
Depreciation and amortization expense | Network equipment and computer hardware | |||
Depreciation: | |||
Depreciation and amortization expense, excluding impairments | 13,449 | 13,475 | 14,943 |
Depreciation and amortization expense | Capital leases | |||
Depreciation: | |||
Depreciation and amortization expense, excluding impairments | 2,200 | 2,200 | 2,199 |
Depreciation and amortization expense | Other leasehold improvements | |||
Depreciation: | |||
Depreciation and amortization expense, excluding impairments | 4,434 | 4,167 | 3,986 |
Depreciation and amortization expense | Customer premise equipment | |||
Depreciation: | |||
Depreciation and amortization expense, excluding impairments | 75 | 0 | 0 |
Depreciation and amortization expense | Furniture | |||
Depreciation: | |||
Depreciation and amortization expense, excluding impairments | 194 | 120 | 130 |
Depreciation and amortization expense | Vehicles | |||
Depreciation: | |||
Depreciation and amortization expense, excluding impairments | 31 | 10 | 16 |
Interest expense | |||
Depreciation: | |||
Debt related costs amortization | 1,072 | 1,515 | 1,235 |
Other expense, net | |||
Depreciation: | |||
Net gains (losses) resulting from foreign exchange transactions | $10 | ($109) | ($11) |
Income_Taxes_Components_of_Inc
Income Taxes - Components of Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income (loss) before income tax expense: | |||
United States | $44,044 | $39,650 | $46,904 |
Foreign | -2,837 | 6,345 | 11,818 |
Income before income tax expense | 41,207 | 45,995 | 58,722 |
Current: | |||
Federal | -1,452 | -907 | -979 |
Foreign | -377 | -155 | -142 |
State and local taxes | -803 | -337 | -1,486 |
Current income tax expense (benefit) | -2,632 | -1,399 | -2,607 |
Deferred: | |||
Federal | -15,239 | -14,954 | -12,642 |
Foreign | -2,985 | -1,603 | -3,479 |
State and local taxes | -904 | -238 | -3,367 |
Deferred income tax expense (benefit) | -19,128 | -16,795 | -19,488 |
Income tax expense (benefit) | ($21,760) | ($18,194) | ($22,095) |
Income_Taxes_Deferred_Tax_Asse
Income Taxes - Deferred Tax Assets and Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets and liabilities: | ||
Deferred revenue | $13,265 | $14,846 |
Accounts receivable and inventory allowances | 289 | 335 |
Accrued expenses | 8,295 | 3,180 |
Deferred tax assets, net, current | 21,849 | 18,361 |
Non-current assets and liabilities: | ||
Acquired intangible assets and property and equipment | -11,876 | -23,762 |
Accrued expenses | -1,937 | 0 |
Research and development and alternative minimum tax credit | 4,952 | 3,613 |
Stock option compensation | 17,802 | 17,317 |
Capital leases | -5,401 | -4,486 |
Deferred revenue | -524 | -627 |
Net operating loss carryforwards | 241,525 | 271,406 |
Deferred tax assets and liabilities, noncurrent | 244,541 | 263,461 |
Valuation allowance | -17,451 | -16,922 |
Deferred tax assets, non-current | $227,090 | $246,539 |
Income_Taxes_Income_Tax_Rate_R
Income Taxes - Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Reconciliation of income tax rate: | |||
U.S. Federal statutory tax rate | 35.00% | 35.00% | 35.00% |
Permanent items | 3.00% | 4.00% | 1.00% |
State and local taxes, net of federal benefit | 3.00% | 0.00% | 5.00% |
International tax (reflects effect of losses for which tax benefit not realized) | 11.00% | -1.00% | -1.00% |
Valuation reserve for income taxes and other | 1.00% | 1.00% | -2.00% |
Effective tax rate | 53.00% | 39.00% | 38.00% |
Income_Taxes_Net_Operating_Los
Income Taxes - Net Operating Loss Carryforwards (Details) (USD $) | 12 Months Ended | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2011 | Nov. 15, 2013 |
Net operating loss carryforwards: | |||
Tax benefit from share-based compensation | $15,482 | ||
Federal | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 639,981 | ||
Federal | 2015 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 0 | ||
Federal | 2016 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 0 | ||
Federal | 2017 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 0 | ||
Federal | 2018 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 0 | ||
Federal | 2019 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 0 | ||
Federal | 2020 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 0 | ||
Federal | 2021 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 0 | ||
Federal | 2022 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 0 | ||
Federal | 2023 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 0 | ||
Federal | 2024 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 0 | ||
Federal | 2025 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 84,670 | ||
Federal | 2026 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 190,275 | ||
Federal | 2027 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 232,525 | ||
Federal | 2028 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 29,166 | ||
Federal | 2029 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 4,664 | ||
Federal | 2030 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 96,056 | ||
Federal | 2031 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 1,908 | ||
Federal | 2032 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 0 | ||
Federal | 2033 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 717 | ||
State | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 214,238 | ||
State | 2015 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 21,668 | ||
State | 2016 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 6,015 | ||
State | 2017 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 2,433 | ||
State | 2018 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 2,866 | ||
State | 2019 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 14 | ||
State | 2020 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 356 | ||
State | 2021 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 4,388 | ||
State | 2022 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 18,408 | ||
State | 2023 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 12,448 | ||
State | 2024 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 1,374 | ||
State | 2025 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 7,087 | ||
State | 2026 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 12,914 | ||
State | 2027 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 37,213 | ||
State | 2028 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 13,253 | ||
State | 2029 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 4,516 | ||
State | 2030 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 45,830 | ||
State | 2031 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 5,371 | ||
State | 2032 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 7,769 | ||
State | 2033 | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 10,315 | ||
Canada | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 4,458 | ||
United Kingdom | |||
Net operating loss carryforwards: | |||
Net operating loss carryforwards | 44,853 | ||
Valuation allowance, operating loss carryforwards | |||
Net operating loss carryforwards: | |||
Valuation allowance, period for profitability analysis | 3 years | ||
Adjustment to valuation allowance | 325,601 | ||
Vocalocity | |||
Net operating loss carryforwards: | |||
Net deferred tax liability related to intangible assets | 24,000 | ||
Intangible assets | 75,000 | ||
Acquiree, deferred tax asset, net | 10,336 | ||
Valuation allowance available to reduce acquiree net operating losses | 4,336 | ||
Deferred tax | $3,393 |
LongTerm_Debt_and_Revolving_Cr2
Long-Term Debt and Revolving Credit Facility (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Schedule of long-term debt: | ||
Long-term Line of Credit | $137,000 | $98,333 |
Future payments under long-term debt obligations: | ||
2015 | 20,000 | |
2016 | 20,000 | |
2017 | 20,000 | |
2018 | 30,000 | |
Minimum future payments of principal | 90,000 | |
Current portion | 20,000 | 23,333 |
Long-term portion | 70,000 | |
Secured debt | 2014 Credit Facility | ||
Schedule of long-term debt: | ||
Long-term Line of Credit | 70,000 | 0 |
Stated interest rate, minimum | 2.88% | |
Stated interest rate, maximum | 3.38% | |
Secured debt | 2014 Revolving Credit Facility | ||
Schedule of long-term debt: | ||
Long-term Line of Credit | 67,000 | 0 |
Stated interest rate, minimum | 2.88% | |
Stated interest rate, maximum | 3.38% | |
Secured debt | 2013 Credit Facility | ||
Schedule of long-term debt: | ||
Long-term Line of Credit | 0 | 23,333 |
Stated interest rate, minimum | 3.13% | |
Stated interest rate, maximum | 3.63% | |
Secured debt | Revolving credit facility | ||
Schedule of long-term debt: | ||
Long-term Line of Credit | $0 | $75,000 |
Stated interest rate, minimum | 3.13% | |
Stated interest rate, maximum | 3.63% |
LongTerm_Debt_and_Revolving_Cr3
Long-Term Debt and Revolving Credit Facility - Financing (Details) (USD $) | 0 Months Ended | |||||
Dec. 15, 2014 | Nov. 15, 2013 | Aug. 13, 2014 | Feb. 11, 2013 | Jul. 29, 2011 | Jul. 26, 2013 | |
Senior secured term loan | Secured debt | 2014 Credit Facility | ||||||
Long-term debt and revolving credit facility: | ||||||
Line of credit facility, maximum borrowing capacity | $100,000,000 | |||||
Senior secured term loan | Secured debt | 2013 Credit Facility | ||||||
Long-term debt and revolving credit facility: | ||||||
Line of credit facility, maximum borrowing capacity | 70,000,000 | |||||
Senior secured term loan | Secured debt | 2011 Credit Facility | ||||||
Long-term debt and revolving credit facility: | ||||||
Line of credit facility, maximum borrowing capacity | 85,000,000 | |||||
Revolving credit facility | Secured debt | 2014 Credit Facility | ||||||
Long-term debt and revolving credit facility: | ||||||
Line of credit facility, maximum borrowing capacity | 125,000,000 | |||||
Revolving credit facility | Secured debt | 2013 Credit Facility | ||||||
Long-term debt and revolving credit facility: | ||||||
Line of credit facility, maximum borrowing capacity | 75,000,000 | |||||
Revolving credit facility | Secured debt | 2011 Credit Facility | ||||||
Long-term debt and revolving credit facility: | ||||||
Line of credit facility, maximum borrowing capacity | 35,000,000 | |||||
Maximum | Secured debt | 2014 Credit Facility | ||||||
Long-term debt and revolving credit facility: | ||||||
Restricted payments adjusted amount for consolidated fixed coverage charge ratio requirement | 80,000,000 | |||||
Maximum | Secured debt | 2013 Credit Facility | ||||||
Long-term debt and revolving credit facility: | ||||||
Restricted payments adjusted amount for consolidated fixed coverage charge ratio requirement | 50,000,000 | 80,000,000 | ||||
Telesphere | ||||||
Long-term debt and revolving credit facility: | ||||||
Acquisition cash paid with financing | 67,000,000 | |||||
Vocalocity | ||||||
Long-term debt and revolving credit facility: | ||||||
Acquisition cash paid with financing | $75,000,000 |
LongTerm_Debt_and_Revolving_Cr4
Long-Term Debt and Revolving Credit Facility - Use of Proceeds (Details) (USD $) | 0 Months Ended | ||||
Aug. 13, 2014 | Feb. 11, 2013 | Jul. 29, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | |
Long-term debt and revolving credit facility: | |||||
Debt related costs, gross | $6,617,000 | $4,706,000 | |||
Secured debt | 2014 Credit Facility | |||||
Long-term debt and revolving credit facility: | |||||
Proceeds from the issuance of debt | 90,000,000 | ||||
Secured debt | 2013 Credit Facility | |||||
Long-term debt and revolving credit facility: | |||||
Proceeds from the issuance of debt | 27,500,000 | ||||
Secured debt | 2011 Credit Facility | |||||
Long-term debt and revolving credit facility: | |||||
Proceeds from the issuance of debt | 100,000,000 | ||||
Cash used in conjunction with debt to extinguish prior debt arrangements | 31,000,000 | ||||
Senior secured term loan | Secured debt | 2014 Credit Facility | |||||
Long-term debt and revolving credit facility: | |||||
Debt related costs, gross | 1,910,000 | ||||
Senior secured term loan | Secured debt | 2013 Credit Facility | |||||
Long-term debt and revolving credit facility: | |||||
Debt related costs, gross | 668,000 | 2,009,000 | |||
Senior secured term loan | Secured debt | 2011 Credit Facility | |||||
Long-term debt and revolving credit facility: | |||||
Debt related costs, gross | 670,000 | ||||
Senior secured term loan | Secured debt | 2010 Credit Facility | |||||
Long-term debt and revolving credit facility: | |||||
Debt related costs, gross | 2,697,000 | ||||
Debt instrument, prepayment fee | 1,000,000 | ||||
2011 Credit Facility | |||||
Long-term debt and revolving credit facility: | |||||
Extinguishment of debt | $42,500,000 |
LongTerm_Debt_and_Revolving_Cr5
Long-Term Debt and Revolving Credit Facility - Facility Terms (Details) (Secured debt, USD $) | 0 Months Ended | |||
Aug. 13, 2014 | Feb. 11, 2013 | Jul. 29, 2011 | Jul. 26, 2013 | |
2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Duration of interest period used to determine interest rate | 3 months | |||
Prepayment amount percentage of net cash proceeds from disposition of assets | 100.00% | |||
Prepayment amount percentage of net cash proceeds received with other non-ordinary course transaction | 100.00% | |||
Additional borrowing capacity allowed | $60,000,000 | |||
2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Duration of interest period used to determine interest rate | 3 months | |||
2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Duration of interest period used to determine interest rate | 3 months | |||
London Interbank Offered Rate (LIBOR) [Member] | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Description of variable rate basis | LIBOR | |||
London Interbank Offered Rate (LIBOR) [Member] | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Description of variable rate basis | LIBOR | |||
LIBOR, consolidated leverage ratio less than .75 to 1.00 | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Loans Receivable, Basis Spread on Variable Rate | 2.88% | |||
LIBOR, consolidated leverage ratio less than .75 to 1.00 | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Basis spread on variable rate | 3.13% | |||
LIBOR, consolidated leverage ratio less than .75 to 1.00 | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Basis spread on variable rate | 3.25% | |||
LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Loans Receivable, Basis Spread on Variable Rate | 3.13% | |||
LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Basis spread on variable rate | 3.38% | |||
LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Basis spread on variable rate | 3.50% | |||
LIBOR, consolidated leverage ratio greater than or equal to 1.50 to 1.00 | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Loans Receivable, Basis Spread on Variable Rate | 3.38% | |||
LIBOR, consolidated leverage ratio greater than or equal to 1.50 to 1.00 | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Basis spread on variable rate | 3.63% | |||
LIBOR, consolidated leverage ratio greater than or equal to 1.50 to 1.00 | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Basis spread on variable rate | 3.75% | |||
Base rate | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Description of variable rate basis | base rate | |||
Base rate | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Description of variable rate basis | base rate | |||
Base rate | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Description of variable rate basis | base rate | |||
Federal funds effective rate | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Description of variable rate basis | federal funds effective rate | |||
Loans Receivable, Basis Spread on Variable Rate | 0.50% | |||
Federal funds effective rate | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Description of variable rate basis | federal funds effective rate | |||
Basis spread on variable rate | 0.50% | |||
Federal funds effective rate | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Description of variable rate basis | federal funds effective rate | |||
Basis spread on variable rate | 0.50% | |||
Prime rate | 2014 Credit Facility | JP Morgan Chase Bank, N.A. | ||||
Long-term debt and revolving credit facility: | ||||
Description of variable rate basis | prime rate | |||
Prime rate | 2013 Credit Facility | JP Morgan Chase Bank, N.A. | ||||
Long-term debt and revolving credit facility: | ||||
Description of variable rate basis | prime rate | |||
Prime rate | 2011 Credit Facility | JP Morgan Chase Bank, N.A. | ||||
Long-term debt and revolving credit facility: | ||||
Description of variable rate basis | prime rate | |||
LIBOR applicable to one month interest periods | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Description of variable rate basis | LIBO rate applicable to one month interest periods | |||
Percentage in addition to basis spread on variable rate | 1.00% | |||
LIBOR applicable to one month interest periods | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Description of variable rate basis | LIBOR rate applicable to one month interest periods | |||
Percentage in addition to basis spread on variable rate | 1.00% | |||
LIBOR applicable to one month interest periods | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Description of variable rate basis | LIBOR rate applicable to one month interest periods | |||
Percentage in addition to basis spread on variable rate | 1.00% | |||
LIBOR applicable to one month interest periods, conolidated leverage ratio less than .75 to 1.00 | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Loans Receivable, Basis Spread on Variable Rate | 1.88% | |||
LIBOR applicable to one month interest periods, conolidated leverage ratio less than .75 to 1.00 | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Basis spread on variable rate | 2.13% | |||
LIBOR applicable to one month interest periods, conolidated leverage ratio less than .75 to 1.00 | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Basis spread on variable rate | 2.25% | |||
LIBOR applicable to one month interest periods, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Loans Receivable, Basis Spread on Variable Rate | 2.13% | |||
LIBOR applicable to one month interest periods, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Basis spread on variable rate | 2.28% | |||
LIBOR applicable to one month interest periods, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Basis spread on variable rate | 2.50% | |||
LIBOR applicable to one month interest periods, consolidated levarage ratio greater than or equal to 1.50 to 1.00 | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Loans Receivable, Basis Spread on Variable Rate | 2.38% | |||
LIBOR applicable to one month interest periods, consolidated levarage ratio greater than or equal to 1.50 to 1.00 | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Basis spread on variable rate | 2.63% | |||
LIBOR applicable to one month interest periods, consolidated levarage ratio greater than or equal to 1.50 to 1.00 | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Basis spread on variable rate | 2.75% | |||
Minimum | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Cash requirement for financial covenants | 25,000,000 | |||
Minimum | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 75.00% | |||
Minimum | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 75.00% | |||
Minimum | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 75.00% | |||
Minimum | LIBOR, consolidated leverage ratio greater than or equal to 1.50 to 1.00 | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 150.00% | |||
Minimum | LIBOR, consolidated leverage ratio greater than or equal to 1.50 to 1.00 | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 150.00% | |||
Minimum | LIBOR, consolidated leverage ratio greater than or equal to 1.50 to 1.00 | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 150.00% | |||
Minimum | LIBOR applicable to one month interest periods, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 75.00% | |||
Minimum | LIBOR applicable to one month interest periods, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 75.00% | |||
Minimum | LIBOR applicable to one month interest periods, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 75.00% | |||
Minimum | LIBOR applicable to one month interest periods, consolidated levarage ratio greater than or equal to 1.50 to 1.00 | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 150.00% | |||
Minimum | LIBOR applicable to one month interest periods, consolidated levarage ratio greater than or equal to 1.50 to 1.00 | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 150.00% | |||
Minimum | LIBOR applicable to one month interest periods, consolidated levarage ratio greater than or equal to 1.50 to 1.00 | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 150.00% | |||
Maximum | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio permitted by financial covenants | 225.00% | |||
Consolidated fixed coverage charge ratio permitted by financial covenants | 175.00% | |||
Restricted payments adjusted amount for consolidated fixed coverage charge ratio requirement | 80,000,000 | |||
Annual capital expenditures permitted by financial covenants | 55,000,000 | |||
Annual excess cash flow in addition to unused capital expenditures limit carried forward permitted by financial covenants | 8,000,000 | |||
Maximum | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Restricted payments adjusted amount for consolidated fixed coverage charge ratio requirement | 50,000,000 | 80,000,000 | ||
Maximum | LIBOR, consolidated leverage ratio less than .75 to 1.00 | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 75.00% | |||
Maximum | LIBOR, consolidated leverage ratio less than .75 to 1.00 | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 75.00% | |||
Maximum | LIBOR, consolidated leverage ratio less than .75 to 1.00 | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 75.00% | |||
Maximum | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 150.00% | |||
Maximum | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 150.00% | |||
Maximum | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 150.00% | |||
Maximum | LIBOR applicable to one month interest periods, conolidated leverage ratio less than .75 to 1.00 | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 75.00% | |||
Maximum | LIBOR applicable to one month interest periods, conolidated leverage ratio less than .75 to 1.00 | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 75.00% | |||
Maximum | LIBOR applicable to one month interest periods, conolidated leverage ratio less than .75 to 1.00 | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 75.00% | |||
Maximum | LIBOR applicable to one month interest periods, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 150.00% | |||
Maximum | LIBOR applicable to one month interest periods, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 150.00% | |||
Maximum | LIBOR applicable to one month interest periods, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Consolidated leverage ratio | 150.00% | |||
Senior secured term loan | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Periodic payment amount | 5,000,000 | |||
Senior secured term loan | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Periodic payment amount | 5,833,000 | |||
Senior secured term loan | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Periodic payment amount | 7,083,000 | |||
Revolving credit facility | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Commitment fee percentage | 0.40% | |||
Revolving credit facility | 2013 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Commitment fee percentage | 0.45% | |||
Revolving credit facility | 2011 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Commitment fee percentage | 0.50% | |||
Revolving credit facility | London Interbank Offered Rate (LIBOR) [Member] | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Description of variable rate basis | LIBOR | |||
Loans payable | 2014 Credit Facility | ||||
Long-term debt and revolving credit facility: | ||||
Additional interest rate applied in the event of default | 2.00% |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments fair value asset measured on recurring (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Money market fund | $40,797 | $84,663 | $97,110 | $58,863 |
Available-for-sale securities | 7,162 | 0 | ||
Level 1 Assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Money market fund | 2,786 | 0 | ||
Level 2 Assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale securities | $7,162 | $0 |
Common_Stock_Details
Common Stock (Details) (USD $) | 0 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Feb. 19, 2013 | Jun. 07, 2012 | Dec. 31, 2013 |
Equity [Abstract] | |||
Ownership percentage limit for 5-percentage points shareholders under the NOL Rights Agreement | 50.00% | ||
Rolling period determining ownership percentage limit under NOL Rights Agreement | 3 years | ||
Maximum ownership percentage limit under the NOL Rights Agreement in which significant dilution would be imposed | 4.90% | ||
Stock option cancellation (in shares) | 4,500 | ||
Stock option cancellation | $5,463 | $5,463 |
Common_Stock_Common_Stock_Repu
Common Stock - Common Stock Repurchases (Details) (USD $) | 12 Months Ended | |||||||
Share data in Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 12, 2013 | Jul. 25, 2012 | Dec. 09, 2014 | ||
Common stock repurchases: | ||||||||
Value of common stock repurchased | $49,263,000 | $56,386,000 | ||||||
Stock repurchased during period, unpaid, value | 661,000 | 736,000 | 644,000 | |||||
$100,000 repurchase program | January 2014 | ||||||||
Common stock repurchases: | ||||||||
Stock repurchased during period, unpaid, shares | 171 | |||||||
Stock repurchased during period, unpaid, value | 660,000 | |||||||
Payments for commission costs from common stock repurchase | 2,000 | |||||||
Common Stock | $50,000 repurchase program | ||||||||
Common stock repurchases: | ||||||||
Authorized amount of stock repurchase | 50,000,000 | |||||||
Remaining authorized amount of stock repurchase program | 16,682,000 | |||||||
Stock repurchased during period (in shares) | 2,189 | |||||||
Value of common stock repurchased | 5,374,000 | |||||||
Common Stock | $100,000 repurchase program | ||||||||
Common stock repurchases: | ||||||||
Authorized amount of stock repurchase | 100,000,000 | 100,000 | ||||||
Remaining authorized amount of stock repurchase program | 219,000 | |||||||
Stock repurchased during period (in shares) | 13,475 | [1] | 16,954 | [2] | ||||
Value of common stock repurchased | 49,128,000 | [1] | 50,653,000 | [2] | ||||
Stock repurchased during period, unpaid, shares | 220 | |||||||
Stock repurchased during period, unpaid, value | 734,000 | |||||||
Payments for commission costs from common stock repurchase | $2,000 | |||||||
[1] | including 171 shares, or $660, of common stock repurchases settled in January 2015; excluding commission of $2. | |||||||
[2] | including 220 shares, or $734, of common stock repurchases settled in January 2014; excluding commission of $2. |
Employee_Benefit_Plans_Details
Employee Benefit Plans (Details) (USD $) | 0 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Apr. 02, 2010 | Mar. 31, 2010 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based compensation: | |||||
Award vesting period | 4 years | 3 years | |||
Period until award expiration | 10 years | 5 years | |||
Total unamortized share-based compensation | $27,130 | ||||
Total unamortized share-based compensation, period for recognition | 48 months | ||||
Restricted stock units | |||||
Share-based compensation: | |||||
Equity instruments other than options, aggregate intrinsic value | 29,825 | ||||
Selling, general and administrative expense | |||||
Share-based compensation: | |||||
Share-based compensation expense | $21,070 | $17,843 | $11,975 |
Employee_Benefit_Plans_Shareba
Employee Benefit Plans - Share-based Compensation, Assumptions Used (Details) (Stock options) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stock options | |||
Assumptions used to value options: | |||
Risk-free interest rate, minimum | 1.13% | 1.13% | 0.94% |
Risk-free interest rate, maximum | 2.02% | 2.02% | 1.36% |
Expected stock price volatility, minimum | 86.94% | 86.94% | 90.37% |
Expected stock price volatility, maximum | 90.39% | 90.39% | 93.57% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected life (in years) | 6 years 3 months | 6 years 3 months | 6 years 3 months |
Employee_Benefit_Plans_SBC_Tot
Employee Benefit Plans - SBC, Total Share Return (Details) (Restricted stock and restricted stock units, USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Share-based compensation: | |
Fair value restricted performance stock | $6.56 |
Vesting percentage | 100.00% |
Volatility rate | 4891.00% |
Risk free interest rate | 0.69% |
Dividend yield | 0.00% |
Expected life | 2 years 9 months 15 days |
Minimum | US treasury bond securities | |
Share-based compensation: | |
Debt instrument term | 2 years |
Maximum | US treasury bond securities | |
Share-based compensation: | |
Debt instrument term | 3 years |
Tranche One | |
Share-based compensation: | |
Percentile Ranking | 30.00% |
% of Target Earned | 0.00% |
Tranche Two | |
Share-based compensation: | |
Percentile Ranking | 30.00% |
% of Target Earned | 50.00% |
Tranche Three | |
Share-based compensation: | |
Percentile Ranking | 50.00% |
% of Target Earned | 100.00% |
Tranche Four | |
Share-based compensation: | |
Percentile Ranking | 80.00% |
% of Target Earned | 200.00% |
Employee_Benefit_Plans_Shareba1
Employee Benefit Plans - Share-based Compensation, by Incentive Plan (Details) (USD $) | 0 Months Ended | |||||||
Apr. 02, 2010 | Mar. 31, 2010 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 30, 2010 | 31-May-06 | |
Share-based compensation: | ||||||||
Shares Authorized | 77,400,000 | |||||||
Shares Available for Grant | 10,235,000 | |||||||
Stock Options Outstanding | 25,651,000 | 32,837,000 | 40,240,000 | 37,282,000 | ||||
Period until award expiration | 10 years | 5 years | ||||||
Restricted stock and restricted stock units | ||||||||
Share-based compensation: | ||||||||
Restricted Stock and Restricted Stock Units | 7,828,000 | 5,182,000 | 3,343,000 | 2,275,000 | ||||
2001 Incentive Plan | ||||||||
Share-based compensation: | ||||||||
Shares Authorized | 0 | |||||||
Shares Available for Grant | 0 | |||||||
Stock Options Outstanding | 1,058,000 | |||||||
2001 Incentive Plan | Restricted stock and restricted stock units | ||||||||
Share-based compensation: | ||||||||
Restricted Stock and Restricted Stock Units | 0 | |||||||
2006 Incentive Plan | ||||||||
Share-based compensation: | ||||||||
Shares Authorized | 77,400,000 | 77,400,000 | ||||||
Shares Available for Grant | 10,235,000 | |||||||
Stock Options Outstanding | 24,593,000 | |||||||
Number of shares available for grant, annual maximum | 10,000,000 | |||||||
Maximum annual monetary award | $10,000,000 | |||||||
2006 Incentive Plan | Restricted stock and restricted stock units | ||||||||
Share-based compensation: | ||||||||
Restricted Stock and Restricted Stock Units | 7,828,000 | |||||||
2006 Incentive Plan | Stock options | ||||||||
Share-based compensation: | ||||||||
Shares Authorized | 20,000,000 | |||||||
2006 Incentive Plan | Stock options and stock appreciation rights | ||||||||
Share-based compensation: | ||||||||
Number of shares available for grant, annual maximum | 10,000,000 | |||||||
2006 Incentive Plan | Annual awards | ||||||||
Share-based compensation: | ||||||||
Maximum annual monetary award | $5,000,000 |
Employee_Benefit_Plans_Shareba2
Employee Benefit Plans - Share-based Compensation, Award Activity (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock Options Outstanding, Number of Shares: | |||
Stock options, outstanding, balance at beginning of period (in shares) | 32,837 | 40,240 | 37,282 |
Stock options granted (in shares) | 6,865 | 9,315 | 8,701 |
Stock options exercised (in shares) | -10,504 | -7,842 | -1,237 |
Stock options canceled (in shares) | -3,547 | -8,876 | -4,506 |
Stock options, outstanding, balance at end of period (in shares) | 25,651 | 32,837 | 40,240 |
Stock Options Outstanding, Weighted Average Exercise Price Per Share: | |||
Stock options, outstanding, weighted average exercise price, beginning of period (USD per share) | $2.73 | $2.32 | $2.51 |
Stock options granted, weighted average exercise price (USD per share) | $3.47 | $2.89 | $2.22 |
Stock options exercised, weighted average exercise price (USD per share) | $1.65 | $1.47 | $1.39 |
Stock options canceled, weighted average exercise price (USD per share) | $3.19 | $2.14 | $3.99 |
Stock options, outstanding, weighted average exercise price, end of period (USD per share) | $3.31 | $2.73 | $2.32 |
Stock Options Outstanding, additional disclosures: | |||
Stock options, exercisable (in shares) | 10,708 | ||
Stock options, exercisable, weighted average exercise price (USD per share) | $3.60 | ||
Stock options, unvested shares, beginning of period (in shares) | 17,048 | ||
Stock options, unvested shares, end of period (in shares) | 14,943 | 17,048 | |
Stock options, unvested shares, weighted average exercise price, beginning of period (USD per share) | $2.71 | ||
Stock options, unvested shares, weighted average exercise price, end of period (USD per share) | $3.10 | $2.71 | |
Stock options, exercises in period, aggregate intrinsic value | $22,962 | $9,891 | $1,042 |
Stock options, grants in period, weighted average grant date fair value (USD per share) | $2.55 | $2.16 | $1.58 |
Restricted stock and restricted stock units | |||
Restricted Stock and Restricted Stock Units, Number of Shares: | |||
Restricted stocks and restricted stock units, outstanding, beginning of period (in shares) | 5,182 | 3,343 | 2,275 |
Restricted stocks and restricted stock units, granted (in shares) | 5,240 | 3,896 | 2,400 |
Restricted stocks and restricted stock units, exercised (in shares) | -1,734 | -1,549 | -1,022 |
Restricted stocks and restricted stock units, canceled (in shares) | -860 | -508 | -310 |
Restricted stocks and restricted stock units, outstanding, end of period (in shares) | 7,828 | 5,182 | 3,343 |
Restricted Stock and Restricted Stock Units, Weighted Average Grant Date Fair Market Value Per Share: | |||
Restricted stocks and restricted stock units, outstanding, weighted average exercise price, beginning of period (USD per share) | $2.92 | $2.59 | $2.79 |
Restricted stocks and restricted stock units, granted, weighted average exercise price (USD per share) | $4.71 | $3.01 | $2.29 |
Restricted stocks and restricted stock units, exercised, weighted average exercise price (USD per share) | $2.83 | $2.48 | $2.31 |
Restricted stocks and restricted stock units, canceled, weighted average exercise price (USD per share) | $3.32 | $2.84 | $2.58 |
Restricted stocks and restricted stock units, outstanding, weighted average exercise price, end of period (USD per share) | $4.09 | $2.92 | $2.59 |
Restricted Stock and Restricted Stock Units, additional disclosures: | |||
Restricted stocks and restricted stock units, exercised, aggregate intrinsic value | 4,909 | 3,788 | 2,250 |
Restricted stock units | |||
Share-based compensation: | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value | $29,825 |
Employee_Benefit_Plans_Range_o
Employee Benefit Plans - Range of Exercise Prices (Details) (USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 |
Share-based compensation by range of exercise prices: | |
Stock Options Outstanding (in shares) | 25,651 |
Stock Options Outstanding, Weighted Average Remaining Contractual Life | 7 years 2 months 0 days |
Stock Options Outstanding, Weighted Average Exercise Price (USD per share) | $3.31 |
Stock Options Outstanding, Aggregate Intrinsic Value | $24,203 |
Stock Options Exercisable, Stock Options Vested and Exercisable (in shares) | 10,708 |
Stock Options Exercisable, Weighted Average Remaining Contractual Life | 5 years 3 months 0 days |
Stock Options Exercisable, Weighted Average Exercise Price (USD per share) | $3.60 |
Stock Options Exercisable, Aggregate Intrinsic Value | $13,033 |
$0.33 to $1.43 | |
Share-based compensation by range of exercise prices: | |
Stock Options Outstanding (in shares) | 3,092 |
Stock Options Outstanding, Weighted Average Exercise Price (USD per share) | $1.37 |
Stock Options Exercisable, Stock Options Vested and Exercisable (in shares) | 3,092 |
Stock Options Exercisable, Weighted Average Exercise Price (USD per share) | $1.37 |
Range of Exercise Prices, minimum | $0.33 |
Range of Exercise Prices, maximum | $1.43 |
$1.44 to $1.99 | |
Share-based compensation by range of exercise prices: | |
Stock Options Outstanding (in shares) | 164 |
Stock Options Outstanding, Weighted Average Exercise Price (USD per share) | $1.69 |
Stock Options Exercisable, Stock Options Vested and Exercisable (in shares) | 102 |
Stock Options Exercisable, Weighted Average Exercise Price (USD per share) | $1.68 |
Range of Exercise Prices, minimum | $1.44 |
Range of Exercise Prices, maximum | $1.99 |
$2.00 to $4.00 | |
Share-based compensation by range of exercise prices: | |
Stock Options Outstanding (in shares) | 18,434 |
Stock Options Outstanding, Weighted Average Exercise Price (USD per share) | $2.92 |
Stock Options Exercisable, Stock Options Vested and Exercisable (in shares) | 4,238 |
Stock Options Exercisable, Weighted Average Exercise Price (USD per share) | $2.56 |
Range of Exercise Prices, minimum | $2 |
Range of Exercise Prices, maximum | $4 |
$4.01 to $7.34 | |
Share-based compensation by range of exercise prices: | |
Stock Options Outstanding (in shares) | 2,826 |
Stock Options Outstanding, Weighted Average Exercise Price (USD per share) | $4.73 |
Stock Options Exercisable, Stock Options Vested and Exercisable (in shares) | 2,141 |
Stock Options Exercisable, Weighted Average Exercise Price (USD per share) | $4.77 |
Range of Exercise Prices, minimum | $4.01 |
Range of Exercise Prices, maximum | $7.34 |
$7.35 to $35.00 | |
Share-based compensation by range of exercise prices: | |
Stock Options Outstanding (in shares) | 1,135 |
Stock Options Outstanding, Weighted Average Exercise Price (USD per share) | $11.47 |
Stock Options Exercisable, Stock Options Vested and Exercisable (in shares) | 1,135 |
Stock Options Exercisable, Weighted Average Exercise Price (USD per share) | $11.47 |
Range of Exercise Prices, minimum | $7.35 |
Range of Exercise Prices, maximum | $35 |
Employee_Benefit_Plans_Retirem
Employee Benefit Plans - Retirement Plan (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Compensation and Retirement Disclosure [Abstract] | |||
Maximum employer contribution percentage | 50.00% | 50.00% | 50.00% |
Annual contribution limit per employee | $6,000 | $6,000 | $6,000 |
Retirement plan expense | $2,959,000 | $2,554,000 | $2,160,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Leases (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||
Mar. 24, 2005 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Capital leases, future minimum payments due: | ||||
2015 | $4,457,000 | |||
2016 | 4,545,000 | |||
2017 | 3,071,000 | |||
2018 | 0 | |||
2019 | 0 | |||
Total minimum payments required | 12,073,000 | |||
Less amounts representing interest | -1,872,000 | |||
Minimum future payments of principal | 10,201,000 | |||
Current portion | 3,365,000 | 2,889,000 | ||
Long-term portion | 6,836,000 | 10,201,000 | ||
Operating leases, future minimum payments due: | ||||
2015 | 4,487,000 | |||
2016 | 2,336,000 | |||
2017 | 2,222,000 | |||
2018 | 2,144,000 | |||
2019 | 2,136,000 | |||
Capital Leases, Future Minimum Payments Due Thereafter | 0 | |||
Total minimum payments required | 15,167,000 | |||
Operating Leases, Future Minimum Payments, Due Thereafter | 1,842,000 | |||
Capital leased assets: | ||||
Restricted cash | 3,405,000 | 4,405,000 | ||
Property, plant and equipment, gross | 153,211,000 | 149,083,000 | ||
Rent expense | 7,007,000 | 6,071,000 | 4,995,000 | |
Lease duration | 12 years 5 months | |||
Building (under capital lease) | ||||
Capital leased assets: | ||||
Property, plant and equipment, gross | 25,709,000 | 25,709,000 | ||
Capital leased assets, accumulated depreciation | 19,846,000 | |||
Capital lease deposit | ||||
Capital leased assets: | ||||
Restricted cash | 7,350,000 | |||
Letter of credit-lease deposits | ||||
Capital leased assets: | ||||
Restricted cash | $3,311,000 | $4,306,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Commitments and contingencies: | ||
Restricted cash | $3,405,000 | $4,405,000 |
Vendor Commitments: | ||
Total vendor commitments | 234,390,000 | |
2015 | 128,809,000 | |
2016 | 67,891,000 | |
2017 | 17,686,000 | |
2018 | 14,158,000 | |
2019 | 5,846,000 | |
Reserve for potential tax liability pending new requirements from state or municipal agencies | 3,125,000 | |
Estimated maximum potential exposure for retroactive tax assessments | 5,000,000 | |
Letter of credit | ||
Commitments and contingencies: | ||
Restricted cash | $3,311,000 | $4,306,000 |
Commitments_and_Contingencies_3
Commitments and Contingencies - Litigation (Details) (Patent claims, Threatened litigation, Bear Creek litigation case) | 0 Months Ended | |
2-May-12 | Jan. 25, 2012 | |
claim | claim | |
Patent claims | Threatened litigation | Bear Creek litigation case | ||
Litigation: | ||
New claims filed (in claims) | 12 | |
Claims coordinated or consolidated for pretrial proceedings (in claims) | 14 |
Commitments_and_Contingencies_4
Commitments and Contingencies - Employment Agreements (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Employment agreements: | |
Officers' Compensation, Duration of Severance Payments | 12 months |
Chief Executive Officer | |
Employment agreements: | |
Duration of salary used for severance payments | 12 months |
Acquisition_of_Business_Detail
Acquisition of Business (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 15, 2014 | Mar. 31, 2015 | Nov. 15, 2013 |
Business Acquisition [Line Items] | ||||||||||||||
Revenues | $214,601 | $214,737 | $218,882 | $220,733 | $211,220 | $203,984 | $204,776 | $209,087 | $868,953 | $829,067 | $849,114 | |||
Net income (loss) | 5,604 | 4,556 | 5,518 | 4,588 | 3,588 | 4,207 | 7,447 | 13,047 | 20,266 | 28,289 | 36,627 | |||
Telesphere | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquisition consideration transferred | 114,435 | |||||||||||||
Acquisition shares issued (in shares) | 6,825 | |||||||||||||
Acquisition shares issued, value | 22,727 | |||||||||||||
Acquisition cash paid | 91,708 | |||||||||||||
Acquisition cash paid, excess cash | 676 | |||||||||||||
Acquisition cash on hand | 24,708 | |||||||||||||
Acquisition cash paid with financing | 67,000 | |||||||||||||
Acquisition, escrow deposit from cash consideration | 10,725 | |||||||||||||
Acquisition, escrow deposit from stock consideration | 2,875 | |||||||||||||
Period from acquisition date to finalize valuations | 1 year | |||||||||||||
Revenues | 1,751 | |||||||||||||
Net income (loss) | 258 | |||||||||||||
Telesphere | Subsequent event | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquisition cash paid | 3,610 | |||||||||||||
Telesphere | Selling, general and administrative expense | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquisition and integration related costs | 2,446 | |||||||||||||
Vocalocity | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquisition consideration transferred | 134,167 | |||||||||||||
Acquisition shares issued (in shares) | 7,983 | |||||||||||||
Acquisition shares issued, value | 26,186 | |||||||||||||
Acquisition cash paid | 107,981 | |||||||||||||
Acquisition cash paid, excess cash | 2,869 | |||||||||||||
Acquisition cash on hand | 32,981 | |||||||||||||
Acquisition cash paid with financing | 75,000 | |||||||||||||
Deferred tax | 3,393 | 3,393 | ||||||||||||
Vocalocity | Selling, general and administrative expense | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquisition and integration related costs | 2,768 | |||||||||||||
Liability | Telesphere | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquisition, escrow deposit from cash consideration | 11,600 | |||||||||||||
Maximum duration for escrow distribution from date of acquisition | 18 months | |||||||||||||
Tax liability | Telesphere | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquisition, escrow deposit from cash consideration | $2,000 | |||||||||||||
Maximum duration for escrow distribution from date of acquisition | 36 months |
Acquisition_of_Business_Assets
Acquisition of Business - Assets Acquired and Liabilities Assumed (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 15, 2014 | Nov. 15, 2013 |
In Thousands, unless otherwise specified | |||||
Current liabilities: | |||||
Goodwill | $191,262 | $83,627 | $0 | ||
Telesphere | |||||
Current assets: | |||||
Cash and cash equivalents | 70 | ||||
Accounts receivable | 3,083 | ||||
Inventory | 386 | ||||
Prepaid expenses and other current assets | 398 | ||||
Total current assets | 3,937 | ||||
Property and equipment | 5,731 | ||||
Software | 3 | ||||
Other assets | 76 | ||||
Total assets acquired | 9,747 | ||||
Current liabilities: | |||||
Accounts payable | 1,202 | ||||
Accrued expenses | 3,982 | ||||
Deferred revenue, current portion | 1,156 | ||||
Total current liabilities | 6,340 | ||||
Total liabilities assumed | 6,340 | ||||
Net identifiable assets acquired | 3,407 | ||||
Goodwill | 111,028 | ||||
Total purchase price | 114,435 | ||||
Vocalocity | |||||
Current assets: | |||||
Cash and cash equivalents | 7,924 | ||||
Accounts receivable | 275 | ||||
Prepaid expenses and other current assets | 787 | ||||
Total current assets | 8,986 | ||||
Property and equipment | 1,777 | ||||
Intangible assets | 75,000 | ||||
Other assets | 53 | ||||
Total assets acquired | 85,816 | ||||
Current liabilities: | |||||
Accounts payable | 2,226 | ||||
Accrued expenses | 7,064 | ||||
Deferred revenue, current portion | 1,986 | ||||
Total current liabilities | 11,276 | ||||
Deferred tax liabilities, net, non-current | 24,000 | ||||
Total liabilities assumed | 35,276 | ||||
Net identifiable assets acquired | 50,540 | ||||
Goodwill | 83,627 | ||||
Total purchase price | $134,167 |
Acquisition_of_Business_Pro_Fo
Acquisition of Business - Pro Forma Information (Details) (Telesphere, USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Telesphere | ||
Business Acquisition, Pro Forma Information [Abstract] | ||
Revenue | $906,827 | $860,798 |
Net income attributable to Vonage | $16,977 | $24,168 |
Net income attributable to Vonage per share - basic (USD per share) | $0.08 | $0.11 |
Net income attributable to Vonage per share - diluted (USD per share) | $0.08 | $0.11 |
Acquisition_of_Business_Intang
Acquisition of Business - Intangible Assets Acquired (Details) (USD $) | 12 Months Ended | 0 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 15, 2014 | Nov. 15, 2013 |
Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible asset useful life | 10 years | ||
Developed technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible asset useful life | 10 years | ||
Trade names | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible asset useful life | 5 years | ||
Non-compete agreements | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible asset useful life | 2 years | ||
Telesphere | Developed technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible asset useful life | 10 years | ||
Vocalocity | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | $75,000 | ||
Vocalocity | Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | 39,100 | ||
Intangible asset useful life | 10 years | ||
Vocalocity | Developed technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | 35,200 | ||
Intangible asset useful life | 10 years | ||
Vocalocity | Trade names | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | 500 | ||
Intangible asset useful life | 5 years | ||
Vocalocity | Non-compete agreements | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | $200 | ||
Intangible asset useful life | 2 years |
Acquisition_of_Business_Pro_Fo1
Acquisition of Business - Pro Forma Information, Nonrecurring Adjustments (Details) (Telesphere, USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Pro forma net income (loss) | $16,977 | $24,168 |
Depreciation and amortization expense | ||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Pro forma net income (loss) | -842 | |
Income tax expense | ||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Pro forma net income (loss) | 1,447 | 861 |
Acquisition-related costs | ||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Pro forma net income (loss) | -4,927 | |
Interest expense | ||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Pro forma net income (loss) | ($2,152) | ($2,152) |
Noncontrolling_Interest_and_Re1
Noncontrolling Interest and Redeemable Noncontrolling Interest (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Mar. 31, 2015 | Sep. 30, 2013 |
Noncontrolling Interest [Line Items] | |||
Noncontrolling Interest, Ownership Percentage by Redeemable Noncontrolling Owners | 30.00% | ||
Redeemable noncontrolling interest ownership percentage held by joint venture partner | 4.00% | ||
Payments for restructuring | $111 | ||
Business exit costs | 1,972 | ||
Forecast | |||
Noncontrolling Interest [Line Items] | |||
Payments for restructuring | $500 |
Geographic_Information_Details
Geographic Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operations information by geographic location: | |||||||||||
Revenues | $214,601 | $214,737 | $218,882 | $220,733 | $211,220 | $203,984 | $204,776 | $209,087 | $868,953 | $829,067 | $849,114 |
Long-lived assets | 319,423 | 233,277 | 319,423 | 233,277 | |||||||
United States | |||||||||||
Operations information by geographic location: | |||||||||||
Revenues | 823,858 | 784,665 | 804,870 | ||||||||
Long-lived assets | 318,604 | 231,335 | 318,604 | 231,335 | |||||||
Brazil | |||||||||||
Operations information by geographic location: | |||||||||||
Revenues | 98 | 0 | 0 | ||||||||
Long-lived assets | 145 | 845 | 145 | 845 | |||||||
Canada | |||||||||||
Operations information by geographic location: | |||||||||||
Revenues | 30,294 | 32,348 | 32,570 | ||||||||
United Kingdom | |||||||||||
Operations information by geographic location: | |||||||||||
Revenues | 14,703 | 12,054 | 11,674 | ||||||||
Long-lived assets | 545 | 821 | 545 | 821 | |||||||
Israel | |||||||||||
Operations information by geographic location: | |||||||||||
Long-lived assets | $129 | $276 | $129 | $276 |
Quarterly_Financial_Informatio2
Quarterly Financial Information (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Selected quarterly financial information: | |||||||||||
Revenues | $214,601 | $214,737 | $218,882 | $220,733 | $211,220 | $203,984 | $204,776 | $209,087 | $868,953 | $829,067 | $849,114 |
Net income (loss) | $5,604 | $4,556 | $5,518 | $4,588 | $3,588 | $4,207 | $7,447 | $13,047 | $20,266 | $28,289 | $36,627 |
Net income (loss) per common share: | |||||||||||
Basic (USD per share) | $0.03 | $0.02 | $0.03 | $0.02 | $0.02 | $0.02 | $0.04 | $0.06 | $0.10 | $0.13 | $0.16 |
Diluted (USD per share) | $0.03 | $0.02 | $0.02 | $0.02 | $0.02 | $0.02 | $0.03 | $0.06 | $0.09 | $0.13 | $0.16 |