Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Jan. 31, 2016 | Jun. 30, 2015 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | VONAGE HOLDINGS CORP | ||
Entity Central Index Key | 1,272,830 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 213,978,306 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 853,221,593 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 57,726 | $ 40,797 | |
Marketable securities | 9,908 | 7,162 | |
Accounts receivable, net of allowance of $1,091 and $607, respectively | 19,913 | 17,832 | |
Inventory, net of allowance of $686 and $181, respectively | 5,542 | 10,081 | |
Deferred customer acquisition costs, current | 4,074 | 4,854 | |
Deferred tax assets, current | 23,985 | 21,849 | |
Prepaid expenses and other current assets | 15,659 | 12,665 | |
Total current assets | 136,807 | 115,240 | |
Property and equipment, net | 49,483 | 49,630 | |
Goodwill | 222,106 | 142,544 | |
Software, net | 20,710 | 18,624 | |
Deferred customer acquisition costs, non-current | 431 | 87 | |
Debt related costs, net | 2,053 | 1,183 | |
Restricted cash | 2,587 | 3,405 | |
Intangible assets, net | 138,199 | 110,832 | |
Deferred tax assets, non-current | 202,587 | 225,167 | |
Other assets | 9,603 | 7,748 | |
Total assets | 784,566 | 674,460 | |
Current liabilities: | |||
Accounts payable | 42,798 | 42,564 | |
Accrued expenses | 96,127 | 84,322 | |
Deferred revenue, current portion | 32,605 | 35,570 | |
Current maturities of capital lease obligations | 4,398 | 3,365 | |
Current portion of notes payable | 15,000 | 20,000 | |
Total current liabilities | 190,928 | 185,821 | |
Indebtedness under revolving credit facility | 119,000 | 67,000 | |
Notes payable, net of debt related cost and current portion | 76,392 | 69,032 | |
Deferred revenue, net of current portion | 851 | 855 | |
Capital lease obligations, net of current maturities | 3,363 | 6,836 | |
Other liabilities, net of current portion in accrued expenses | 5,291 | 1,419 | |
Total liabilities | 395,825 | 330,963 | |
Commitments and Contingencies | 0 | 0 | |
Stockholders’ Equity | |||
Common stock, par value $0.001 per share; 596,950 shares authorized at December 31, 2015 and December 31, 2014; 268,947 and 262,423 shares issued at December 31, 2015 and December 31, 2014, respectively; 214,280 and 211,994 shares outstanding at December 31, 2015 and December 31, 2014, respectively | 270 | 264 | |
Additional paid-in capital | 1,224,947 | 1,184,662 | |
Accumulated deficit | (655,020) | (677,675) | |
Treasury stock, at cost, 54,667 shares at December 31, 2015 and 50,429 shares at December 31, 2014 | (179,779) | (159,775) | |
Accumulated other comprehensive (loss) income | (1,677) | (3,131) | |
Noncontrolling interest | 0 | (848) | |
Total stockholders’ equity | 388,741 | 343,497 | |
Total liabilities and stockholders’ equity | $ 784,566 | $ 674,460 | |
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 1,091 | $ 607 |
Inventory, allowance | $ 686 | $ 181 |
Common stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 596,950 | 596,950 |
Common stock, shares issued | 268,947 | 262,423 |
Common stock, shares outstanding | 214,280 | 211,994 |
Treasury stock, shares | 54,667 | 50,429 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||
Total revenues | $ 895,072 | $ 868,854 | $ 829,067 |
Operating Expenses: | |||
Cost of services (excluding depreciation and amortization of $24,868, $19,405, and $14,892, respectively) | 261,768 | 231,383 | 237,244 |
Cost of goods sold | 34,210 | 36,500 | 37,586 |
Sales and marketing | 347,896 | 373,737 | 366,307 |
Engineering and development | 27,220 | 20,869 | 14,794 |
General and administrative | 109,153 | 98,780 | 83,107 |
Depreciation and amortization | 61,833 | 49,514 | 36,054 |
Operating expenses | 842,080 | 810,783 | 775,092 |
Income from operations | 52,992 | 58,071 | 53,975 |
Other Income (Expense): | |||
Interest income | 89 | 207 | 307 |
Interest expense | (8,786) | (6,823) | (6,557) |
Other (expense) income, net | (842) | 11 | (104) |
Total other income (expense) | (9,539) | (6,605) | (6,354) |
Income from continuing operations before income tax expense | 43,453 | 51,466 | 47,621 |
Income tax expense | (18,418) | (21,759) | (18,194) |
Income from continuing operations | 25,035 | 29,707 | 29,427 |
Loss from discontinued operations | (1,615) | (10,260) | (1,626) |
Loss on disposal, net of taxes | (824) | 0 | 0 |
Discontinued operations | (2,439) | (10,260) | (1,626) |
Net income | 22,596 | 19,447 | 27,801 |
Plus: Net loss from discontinued operations attributable to noncontrolling interest | 59 | 819 | 488 |
Net income attributable to Vonage | $ 22,655 | $ 20,266 | $ 28,289 |
Net income per common share - continuing operations: | |||
Basic (USD per share) | $ 0.12 | $ 0.14 | $ 0.14 |
Diluted (USD per share) | 0.11 | 0.14 | 0.13 |
Net loss per common share - discontinued operations attributable to Vonage: | |||
Basic (USD per share) | (0.01) | (0.04) | (0.01) |
Diluted (USD per share) | (0.01) | (0.04) | (0.01) |
Net income per common share - attributable to Vonage: | |||
Basic (USD per share) | 0.11 | 0.10 | 0.13 |
Diluted (USD per share) | $ 0.10 | $ 0.09 | $ 0.13 |
Weighted-average common shares outstanding: | |||
Basic (in shares) | 213,147 | 209,822 | 211,563 |
Diluted (in shares) | 224,110 | 219,419 | 220,520 |
Consolidated Statements of Inc5
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Depreciation and Amortization | $ 24,868 | $ 19,405 | $ 14,892 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 22,596 | $ 19,447 | $ 27,801 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | 493 | (3,633) | (2,058) |
Discontinued operations cumulative translation adjustment | 974 | 0 | 0 |
Unrealized loss on available-for-sale securities | (13) | (8) | 0 |
Total other comprehensive income (loss) | 1,454 | (3,641) | (2,058) |
Comprehensive income | 24,050 | 15,806 | 25,743 |
Comprehensive loss attributable to noncontrolling interest: | |||
Comprehensive loss | 59 | 819 | 488 |
Comprehensive loss from discontinued operations | 0 | (9) | 5 |
Total comprehensive loss attributable to noncontrolling interest | 59 | 810 | 493 |
Comprehensive income attributable to Vonage | $ 24,109 | $ 16,616 | $ 26,236 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||
Cash flows from operating activities: | |||||
Net income | $ 22,596 | $ 19,447 | $ 27,801 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization and impairment charges | 35,620 | 34,464 | 31,208 | ||
Amortization of intangibles | 26,404 | 16,943 | 4,858 | ||
Deferred tax expense | 13,949 | 19,128 | 16,795 | ||
Loss on foreign currency | 1,358 | 0 | 0 | ||
Allowance for doubtful accounts | (8) | (193) | (256) | ||
Allowance for obsolete inventory | 1,882 | 757 | 663 | ||
Amortization of debt related costs | 997 | 1,072 | 1,515 | ||
Share-based expense | 27,541 | 21,070 | 17,843 | ||
Noncontrolling interest | 907 | 0 | 0 | ||
Changes in operating assets and liabilities, net of acquisitions: | |||||
Accounts receivable | 185 | 4,887 | 1,236 | ||
Inventory | 2,815 | 36 | (5,835) | ||
Prepaid expenses and other current assets | (1,904) | 4,106 | (662) | ||
Deferred customer acquisition costs | 421 | 230 | 621 | ||
Other assets | (1,660) | (5,790) | 1,970 | ||
Accounts payable | (3,830) | (8,454) | (26,335) | ||
Accrued expenses | 4,768 | (13,042) | 17,869 | ||
Deferred revenue | (3,682) | (1,910) | (1,111) | ||
Other liabilities | 1,372 | (209) | 63 | ||
Net cash provided by operating activities | 129,731 | 92,542 | 88,243 | ||
Cash flows from investing activities: | |||||
Capital expenditures | (17,323) | (12,436) | (9,889) | ||
Purchase of intangible assets | (2,500) | 0 | 0 | ||
Purchase of marketable securities | (9,982) | (7,170) | 0 | ||
Maturities and sales of marketable securities | 7,223 | 0 | 0 | ||
Acquisition and development of software assets | (14,183) | (11,819) | (12,291) | ||
Acquisition of business, net of cash acquired | (116,927) | (88,098) | (100,057) | ||
Decrease in restricted cash | 996 | 995 | 1,252 | ||
Net cash used in investing activities | (152,696) | (118,528) | (120,985) | ||
Cash flows from financing activities: | |||||
Principal payments on capital lease obligations | (3,549) | (2,889) | (3,471) | ||
Principal payments on notes and revolving credit facility | (47,500) | (41,666) | (23,334) | ||
Proceeds received from draw down of revolving credit facility and issuance of notes payable | 102,000 | 77,000 | 102,500 | ||
Debt related costs | (2,007) | (1,910) | (2,056) | ||
Common stock repurchases | (15,911) | (49,338) | (56,294) | ||
Acquisition of redeemable noncontrolling interest | 0 | 0 | 455 | ||
Proceeds from exercise of stock options | 7,172 | 4,564 | 4,091 | ||
Net cash provided by (used in) financing activities | 40,205 | (14,239) | 21,891 | ||
Effect of exchange rate changes on cash | (311) | (3,641) | (1,596) | ||
Net change in cash and cash equivalents | 16,929 | (43,866) | (12,447) | ||
Cash and cash equivalents, beginning of period | 40,797 | [1] | 84,663 | 97,110 | |
Cash and cash equivalents, end of period | 57,726 | 40,797 | [1] | 84,663 | |
Supplemental disclosures of cash flow information: | |||||
Interest | 7,834 | 5,252 | 4,722 | ||
Income taxes | 2,516 | 2,491 | 2,323 | ||
Non-cash financing transactions during the periods for: | |||||
Common stock repurchases | 0 | 661 | 736 | ||
Issuance of common stock in connection with acquisition of business | 5,578 | 22,727 | 26,186 | ||
Purchase of intangible assets | $ 5,000 | $ 0 | $ 0 | ||
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) and Redeemable Noncontrolling Interest - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Accumulated Other Comprehensive Income | Non-controlling interest | Parent | Redeemable non-controlling interest | |
Beginning 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 | 0 | $ 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 | (3,633) | ||||||
Unrealized loss on available-for-sale securities | (8) | (8) | ||||||||
Temporary Equity, Elimination as Part of Reorganization | (706) | (706) | 706 | |||||||
Net income (loss) | 19,447 | 20,266 | (151) | 20,115 | (668) | |||||
Ending Balance at Dec. 31, 2014 | 343,497 | [1] | 264 | 1,184,662 | (677,675) | (159,775) | (3,131) | (848) | $ 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock option exercises | 7,172 | 5 | 7,167 | |||||||
Share-based expense | 27,541 | 27,541 | ||||||||
Share-based award activity | (4,754) | (4,754) | ||||||||
Common stock repurchases | (15,250) | (15,250) | ||||||||
Acquisition of business | 5,578 | 1 | 5,577 | |||||||
Foreign currency translation adjustment | 493 | 1,467 | 1,467 | |||||||
Unrealized loss on available-for-sale securities | (13) | (13) | ||||||||
Net income (loss) | 22,596 | 22,655 | 848 | $ 23,503 | ||||||
Ending Balance at Dec. 31, 2015 | $ 388,741 | $ 270 | $ 1,224,947 | $ (655,020) | $ (179,779) | $ (1,677) | $ 0 | |||
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
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 combined subscriber lines and seats at December 31, 2015 , 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 had the ability to exercise controlling influence. The ownership interest of the noncontrolling party is presented as noncontrolling interest. On March 31, 2015, the Company completed its previously announced exit from the Brazilian market for consumer telephony services and the associated wind down of its joint venture operations in the country. The results of Brazilian operations are presented as discontinued operations for all periods presented. The results of companies acquired or disposed of are included in the consolidated financial statements from the effective date of the acquisition or up to the date of disposal. 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 believed 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 services revenues and customer equipment (which enables our 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 services, there are the following deliverables: > Providing equipment, if any, to the customer that enables our telephony services; and > Providing 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. Services Revenue Substantially all of our revenues are services revenues, which are derived primarily from monthly subscription fees that customers are charged under our service plans. We also derive 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. 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. Cost of Services Cost of service consists of costs that we pay to third parties in order to provide services. These costs include access and interconnection charges that we pay to other 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 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 universal service fund (“USF”) contributions and royalties for use of third parties’ intellectual property. In addition, these costs include certain personnel and related costs for network operations and technical support that are attributable to revenue generating activities. 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. Sales and Marketing Expenses Sales and marketing expenses consist primarily of personnel and related costs for employees and contractors directly associated with our sales and marketing activities, internet advertising fees, radio and billboard advertising, public relations, commissions paid to employees, resellers and other third parties, trade shows, marketing and promotional activities, customer support, credit card fees, collections, and systems and information technology support. Engineering and Development Expenses Engineering and development expenses primarily include personnel and related costs for developers responsible for new products, and software engineers maintaining and enhancing existing products. These costs have been reclassified from selling, general and administrative expenses. Research and development costs related to new product development included in engineering and development were $18,350 , $13,034 , and $5,948 for the years ended December 31, 2015 , 2014 , and 2013 , respectively. 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. General and Administrative Expenses General and administrative expenses primarily relate to our executive, finance, human resources, legal, and information technology organizations. General and administrative expenses primarily consist of personnel costs, stock compensation, board of directors' costs, professional fees for legal, accounting, tax, compliance and information systems, travel, recruiting expense and, rent and related expenses. 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. Generally, 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, software, furniture, 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. Goodwill Goodwill acquired in the 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. If such a determination is made, then 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, 2015 . Intangible Assets Intangible assets acquired in the settlement of litigation or by direct purchase are accounted for based upon the fair value of assets received. 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, 2015 , 2014 , or 2013 . 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. A portion of these costs are netted against the underlying notes payable in accordance with ASU 2015-15, "Interest-Imputation of 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. Restricted Cash and Letters of Credit We had a cash collateralized letter of credit for $2,498 and $3,311 as of December 31, 2015 and 2014 , respectively, mainly related to lease deposits for our Holmdel office. In the aggregate, cash reserves and collateralized letters of credit of $2,587 and $3,405 were recorded as long-term restricted cash at December 31, 2015 and 2014 , 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% 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. 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% 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 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 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, 2015 2014 2013 Numerator Income from continuing operations $ 25,035 $ 29,707 $ 29,427 Discontinued operations (2,439 ) (10,260 ) (1,626 ) Plus: Net loss from discontinued operations attributable to noncontrolling interest 59 819 488 Loss from discontinued operations attributable to Vonage (2,380 ) (9,441 ) (1,138 ) Net income attributable to Vonage $ 22,655 $ 20,266 $ 28,289 Denominator Basic weighted average common shares outstanding 213,147 209,822 211,563 Dilutive effect of stock options and restricted stock units 10,963 9,597 8,957 Diluted weighted average common shares outstanding 224,110 219,419 220,520 Basic net income per share Basic net income per share - from continuing operations 0.12 0.14 0.14 Basic net loss per share - from discontinued operations attributable to Vonage (0.01 ) (0.04 ) (0.01 ) Basic net income per share - attributable to Vonage $ 0.11 $ 0.10 $ 0.13 Diluted net income per share Diluted net income per share - from continuing operations 0.11 0.14 0.13 Diluted net loss per share - from discontinued operations attributable to Vonage (0.01 ) (0.04 ) (0.01 ) Diluted net income per share - attributable to Vonage $ 0.10 $ 0.09 $ 0.13 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, 2015 2014 2013 Restricted stock units 5,827 5,454 3,625 Employee stock options 13,600 18,428 25,437 19,427 23,882 29,062 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 January 2016, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities". This ASU provide guidance concerning certain matters involving the recognition, measurement, and disclosure of financial assets and financial liabilities. The guidance does not alter the basic framework for classifying debt instruments held as financial assets. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is not permitted, with some exceptions. The adoption of ASU 2016-01 will not have a material impact on our consolidated financial statements and related disclosures. In November 2015, FASB issued ASU 2015-17, "Balance Sheet Classification of Deferred Taxes". This ASU simplifies the presentation of deferred income taxes and requires deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. This ASU may be applied either prospectively or retrospectively to all periods presented. We are currently evaluating the impact of adopting ASU 2015-17 on our consolidated financial statements and related disclosures. In September 2015, FASB issued ASU 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments". This ASU simplifies the acco |
Supplemental Balance Sheet Acco
Supplemental Balance Sheet Account Information | 12 Months Ended |
Dec. 31, 2015 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Balance Sheet Account Information | Supplemental Balance Sheet Account Information Prepaid expenses and other current assets December 31, 2015 December 31, 2014 Nontrade receivables $ 2,113 $ 2,511 Services 8,066 7,415 Telecommunications 3,138 459 Insurance 939 803 Marketing 779 519 Other prepaids 624 958 Prepaid expenses and other current assets $ 15,659 $ 12,665 Property and equipment, net December 31, 2015 December 31, 2014 Building (under capital lease) $ 25,709 $ 25,709 Network equipment and computer hardware 89,025 73,599 Leasehold improvements 48,872 48,574 Customer premise equipment 7,292 3,220 Furniture 2,508 1,914 Vehicles 214 195 173,620 153,211 Less: accumulated depreciation and amortization (124,137 ) (103,581 ) Property and equipment, net $ 49,483 $ 49,630 Customer premise equipment, net December 31, 2015 December 31, 2014 Customer premise equipment $ 7,292 $ 3,220 Less: accumulated depreciation (2,068 ) (74 ) Customer premise equipment, net $ 5,224 $ 3,146 Software, net December 31, 2015 December 31, 2014 Purchased $ 67,248 $ 55,636 Licensed 909 909 Internally developed 36,088 36,088 104,245 92,633 Less: accumulated amortization (83,535 ) (74,009 ) Software, net $ 20,710 $ 18,624 The total expected future annual amortization of software is as follows: 2016 $ 9,552 2017 6,773 2018 3,629 2019 756 Total $ 20,710 Debt related costs, net December 31, 2015 December 31, 2014 Debt related costs related to Revolving Credit Facility $ 5,044 $ 3,640 Less: accumulated amortization (2,991 ) (2,457 ) Debt related costs, net $ 2,053 $ 1,183 Restricted cash December 31, 2015 December 31, 2014 Letter of credit-lease deposits $ 2,498 $ 3,311 Cash reserves 89 94 Restricted cash $ 2,587 $ 3,405 Other assets December 31, 2015 December 31, 2014 Long term non-trade receivable $ 6,623 $ 6,623 Others 2,980 1,125 Other assets $ 9,603 $ 7,748 Accrued expenses December 31, 2015 December 31, 2014 Compensation and related taxes and temporary labor $ 33,196 $ 25,555 Marketing 24,891 17,871 Taxes and fees 11,808 17,300 Litigation and settlements 23 23 Telecommunications 9,111 8,134 Other accruals 11,523 9,771 Customer credits 1,779 1,883 Professional fees 2,080 2,178 Accrued interest 22 133 Inventory 1,514 1,267 Credit card fees 180 207 Accrued expenses $ 96,127 $ 84,322 Accumulated other comprehensive (loss) income December 31, 2015 December 31, 2014 Foreign currency translation adjustment $ (1,656 ) $ (3,123 ) Unrealized loss on available-for-sale securities (21 ) (8 ) Accumulated other comprehensive (loss) income $ (1,677 ) $ (3,131 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
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, 2014 $ 83,627 Increase in goodwill related to acquisition of Telesphere 62,310 Decrease in goodwill related to tax adjustment of VBS (3,393 ) Balance at December 31, 2014 142,544 Increase in goodwill related to acquisition of Simple Signal 17,687 Increase in goodwill related to acquisition of iCore 63,294 Increase in goodwill related to acquisition of gUnify 660 Decrease in goodwill related to working capital and tax adjustments of Telesphere (2,079 ) Balance at December 31, 2015 $ 222,106 Intangible assets, net The carrying values of intangible assets were as follows: December 31, 2015 December 31, 2014 Customer relationships $ 92,609 $ 49,799 Developed technology 75,694 72,900 Patents and patent licenses 20,164 12,764 Trademark 560 560 Trade names 760 500 Non-compete agreements 2,933 2,726 Gross Carrying Amount 192,720 139,249 Customer relationships (21,777 ) (10,185 ) Developed technology (18,880 ) (7,108 ) Patents and patent licenses (12,066 ) (10,426 ) Trademark (543 ) (472 ) Trade names (260 ) (113 ) Non-compete agreements (995 ) (113 ) Accumulated Amortization (54,521 ) (28,417 ) Customer relationships 70,832 39,614 Developed technology 56,814 65,792 Patents and patent licenses 8,098 2,338 Trademark 17 88 Trade names 500 387 Non-compete agreements 1,938 2,613 Net Carrying Amount $ 138,199 $ 110,832 Represents customer relationships, developed technology, trade names and non-compete agreements identified in the acquisition of businesses. 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: 2016 $ 30,465 2017 26,278 2018 21,400 2019 18,412 2020 14,804 Thereafter 26,840 Total $ 138,199 |
Supplemental Income Statement A
Supplemental Income Statement Account Information | 12 Months Ended |
Dec. 31, 2015 | |
Income Statement Related Disclosures [Abstract] | |
Supplemental Income Statement Account Information | Supplemental Income Statement Account Information Amounts included in revenues For the years ended December 31, 2015 2014 2013 USF fees $ 75,570 $ 71,188 $ 70,009 Disconnect fee, net of credits and bad debt $ 706 $ 554 $ 955 Initial activation fees $ 779 $ 1,085 $ 1,278 Customer equipment rental $ 3,677 $ — $ — Customer equipment fees $ 6,141 $ 715 $ 418 Equipment recovery fees $ 77 $ 80 $ 103 Shipping and handling fees $ 2,473 $ 2,374 $ 1,178 Amounts included in cost of services For the years ended December 31, 2015 2014 2013 USF costs $ 75,599 $ 71,230 $ 70,009 Amounts included in cost of goods sold For the years ended December 31, 2015 2014 2013 Shipping and handling cost $ 5,197 $ 6,028 $ 5,188 Amounts included in sales and marketing For the years ended December 31, 2015 2014 2013 Advertising costs $ 103,320 $ 141,138 $ 142,094 Amounts included in general and administrative expense For the years ended December 31, 2015 2014 2013 Acquisition related transaction costs $ 2,585 $ 2,466 $ 2,681 Acquisition related integration costs $ 25 $ 100 $ 87 Depreciation and amortization expense For the years ended December 31, 2015 2014 2013 Network equipment and computer hardware $ 12,571 $ 13,449 $ 13,475 Software 12,627 10,116 10,831 Capital leases 2,200 2,200 2,200 Other leasehold improvements 5,190 4,434 4,167 Customer premise equipment 2,147 75 — Furniture 430 194 120 Vehicles 71 31 10 Patents 1,740 1,833 2,304 Trademarks 72 72 70 Customer relationships 11,594 8,539 1,644 Acquired technology 11,768 6,296 813 Trade names 148 100 13 Non-compete agreements 1,082 101 13 61,640 47,440 35,660 Property and equipment impairments 193 1,959 9 Software impairments — 115 385 Depreciation and amortization expense $ 61,833 $ 49,514 $ 36,054 Amounts included in interest expense For the years ended December 31, 2015 2014 2013 Debt related costs amortization $ 997 $ 1,072 $ 1,515 Amounts included in other income (expense), net For the years ended December 31, 2015 2014 2013 Net (losses) gains resulting from foreign exchange transactions $ (860 ) $ 10 $ (109 ) |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income from continuing operations before income tax expense are as follows: For the years ended December 31, 2015 2014 2013 United States $ 38,115 $ 44,044 $ 39,650 Foreign 5,338 7,422 7,971 $ 43,453 $ 51,466 $ 47,621 The components of the income tax expense are as follows: For the years ended December 31, 2015 2014 2013 Current: Federal $ (1,846 ) $ (1,452 ) $ (907 ) Foreign (1,667 ) (376 ) (155 ) State and local taxes (956 ) (803 ) (337 ) $ (4,469 ) $ (2,631 ) $ (1,399 ) Deferred: Federal $ (11,289 ) $ (15,239 ) $ (14,954 ) Foreign (1,088 ) (2,985 ) (1,603 ) State and local taxes (1,572 ) (904 ) (238 ) $ (13,949 ) $ (19,128 ) $ (16,795 ) $ (18,418 ) $ (21,759 ) $ (18,194 ) The following table summarizes deferred taxes resulting from differences between financial accounting basis and tax basis of assets and liabilities. December 31, 2015 December 31, 2014 Current assets and liabilities: Deferred revenue $ 12,096 $ 13,265 Accounts receivable and inventory allowances 640 289 Accrued expenses 11,249 8,295 Deferred tax assets, net, current $ 23,985 $ 21,849 Non-current assets and liabilities: Acquired intangible assets and property and equipment $ (33,129 ) $ (13,799 ) Accrued expenses (1,054 ) (1,937 ) Research and development and alternative minimum tax credit 6,630 4,952 Stock option compensation 20,545 17,802 Capital leases (6,442 ) (5,401 ) Deferred revenue (634 ) (524 ) Net operating loss carryforwards 237,127 241,525 223,043 242,618 Valuation allowance (20,456 ) (17,451 ) Deferred tax assets, net, non-current $ 202,587 $ 225,167 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 iCore, we recorded a deferred tax liability of $12,944 related to the $38,064 of identified intangible assets that will be amortized for financial reporting purposes but not for tax purposes and a deferred tax asset of $4,457 related to NOLs. In connection with the acquisition of Simple Signal, we recorded a deferred tax liability of $2,441 related to the $6,407 of identified intangible assets that will be amortized for financial reporting purposes but not for tax purposes and a deferred tax asset of $3,182 related to NOLs. In connection with the acquisition of Telesphere, we recorded a deferred tax liability of $17,050 related to the $50,925 of identified intangible assets that will be amortized for financial reporting purposes but not for tax purposes and a deferred tax asset of $17,101 related to NOLs. In connection with the acquisition of Vocalocity, we recorded a deferred tax liability of $30,000 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 $6,000 related to NOLs, which consists of $10,336 deferred tax asset and 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, 2015 2014 2013 U.S. Federal statutory tax rate 35 % 35 % 35 % Permanent items 3 % 3 % 4 % State and local taxes, net of federal benefit 2 % 3 % — % International tax (reflects effect of losses for which tax benefit not realized) 1 % — % (2 )% Valuation reserve for income taxes and other 2 % 1 % 1 % Effective tax rate 43 % 42 % 38 % As of December 31, 2015 , we had NOLs for United States federal and state tax purposes of $625,802 and $186,776 , respectively, expiring at various times from years ending 2016 through 2035 as follows: Federal State 2016 $ — $ 41,530 2017 — 21,823 2018 — 17,032 2019 — 9,880 2020 — 8,028 2021 — 6,075 2022 — 2,073 2023 — 8 2024 — — 2025 3,140 — 2026 192,209 — 2027 235,966 1,072 2028 39,145 4,554 2029 17,482 3,024 2030 107,085 5,181 2031 8,012 563 2032 2,808 625 2033 3,555 7,341 2034 3,814 14,080 2035 12,586 43,887 Total $ 625,802 $ 186,776 United States federal and state NOLs of $16,629 represent excess tax benefits from the exercise of share based awards which will be recorded in additional paid-in capital when realized. We had NOLs for United Kingdom tax purposes of $45,159 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, 2015 , there were no limitations on the use of our NOLs except for certain of the NOLs of Vocalocity as of the date of acquisition. |
Long-Term Debt and Revolving Cr
Long-Term Debt and Revolving Credit Facility | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt And Revolving Credit Facility | 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 term note 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 term note. 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." id="sjs-B4">Long-Term Debt and Revolving Credit Facility A schedule of long-term debt at December 31, 2015 and 2014 is as follows: December 31, 2015 December 31, 2014 2.875-3.375% Term note - due 2018, net of debt related costs (1) $ — $ 69,032 2.875-3.375% Revolving credit facility - due 2018 $ — $ 67,000 2.5-3.00% Term note - due 2019, net of debt related costs $ 76,392 $ — 2.5-3.0% Revolving credit facility - due 2019 $ 119,000 $ — Total Long-term note and revolving credit facility $ 195,392 $ 136,032 (1) Restated due to the adoption of ASU 2015-03 and ASU 2015-15 in the third quarter of 2015. At December 31, 2015 , future payments under long-term debt obligations over each of the next five years and thereafter are as follows: 2015 Credit Facility 2016 15,000 2017 15,000 2018 15,000 2019 47,500 Minimum future payments of principal 92,500 Less: unamortized debt related costs 1,108 current portion 15,000 Long-term portion $ 76,392 2015 Financing On July 27, 2015, we entered into a credit agreement (the “2015 Credit Facility”) consisting of a $100,000 term note and a $250,000 revolving credit facility. The co-borrowers under the 2015 Credit Facility are the Company and Vonage America Inc., the Company’s wholly owned subsidiary. Obligations under the 2015 Credit Facility are guaranteed, fully and unconditionally, by the Company’s other United States material subsidiaries and are secured by substantially all of the assets of each borrower and each guarantor. The lenders under the 2015 Credit Facility are JPMorgan Chase Bank, N.A., Citizens Bank, N.A., Fifth Third Bank, MUFG Union Bank, N.A., Silicon Valley Bank, SunTrust Bank, Keybank National Association, Santander Bank, N.A., Capital One National Association, and First Niagara 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 Fifth Third Bank, MUFG Union Bank, N.A., Silicon Valley Bank, 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., Fifth Third Bank, MUFG Union Bank, N.A., Silicon Valley Bank, and SunTrust Robinson Humphrey Inc. acted as joint lead arrangers. Use of Proceeds We used $167,000 of the net available proceeds of the 2015 Credit Facility to retire all of the debt under our 2014 Credit Facility. Remaining proceeds from the term note and the undrawn revolving credit facility under the 2015 Credit Facility will be used for general corporate purposes. We also incurred fees of $2,007 in connection with the 2015 Credit Facility, of which $602 was allocated to the term note and $1,405 was allocated to the revolving credit facility. The unamortized fees of $1,628 in connection with the 2014 Credit Facility was allocated as follows: $733 to the term note and $895 revolving credit facility. In adopting ASU 2015-03, fees allocated to the term note were reported in the balance sheet as a direct deduction from the face amount of the liability and in adopting ASU 2015-15, fees allocated to the revolving credit facility were reported in the balance sheet as as asset. These fees are amortized to interest expenses over the life of the debt using the effective interest method for the term note and straight line method for the revolving credit facility. We used $82,000 from our 2015 revolving credit facility in connection with the acquisition of iCore on August 31, 2015. Repayments In 2015 , we made mandatory repayment of $7,500 under the term note. In addition, we repaid the $30,000 outstanding under the revolving credit facility. 2015 Credit Facility Terms The following description summarizes the material terms of the 2015 Credit Facility: The loans under the 2015 Credit Facility mature in July 2019. Principal amounts under the 2015 Credit Facility are repayable in quarterly installments of $3,750 for the term note. The unused portion of our revolving credit facility incurs a 0.40% commitment fee. Such commitment fee will be reduced to 0.375% 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 to 0.35% if our consolidated leverage ratio is less than 0.75 to 1.00. Outstanding amounts under the 2015 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 2.50% if our consolidated leverage ratio is less than 0.75 to 1.00, 2.75% 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 3.00% 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 prime rate of JPMorgan Chase Bank, N.A., (b) the federal funds effective rate from time to time plus 0.50% , and (c) the adjusted LIBO rate applicable to one month interest periods plus 1.00% , plus an applicable margin equal to 1.50% if our consolidated leverage ratio is less than 0.75 to 1.00, 1.75% 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 2.00% 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 2015 Credit Facility. The 2015 Credit Facility provides greater flexibility to us in funding acquisitions and restricted payments, such as stock buybacks, than did the 2014 Credit Facility. We may prepay the 2015 Credit Facility at our option at any time without premium or penalty. The 2015 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 2015 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 $90,000 plus an amount equal to repayments of the term note upon providing documentation reasonably satisfactory to the administrative agent. The 2015 Credit Facility includes customary representations and warranties and affirmative covenants of the borrowers. In addition, the 2015 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, with a limited step-up to 2.75 to 1.00 for a period of four consecutive quarters, in connection with an acquisition made during the first two years of the 2015 Credit Facility; > a consolidated fixed coverage charge ratio of no less than 1.75 to 1.00 subject to adjustment to exclude up to $80,000 million 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 increases permitted capital expenditures. As of December 31, 2015 , we were in compliance with all covenants, including financial covenants, for the 2015 Credit Facility. The 2015 Credit Facility contains customary events of default that may permit acceleration of the debt. During the continuance of a payment default, interest will accrue on overdue amounts 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. 2014 Financing On August 13, 2014, we entered into a credit agreement (the “2014 Credit Facility”) consisting of a $100,000 term note and a $125,000 revolving credit facility. The co-borrowers under the 2014 Credit Facility were 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 were secured by substantially all of the assets of each borrower and each guarantor. The lenders under the 2014 Credit Facility were 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. was 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 term note and the undrawn revolving credit facility under the 2014 Credit Facility were to be used for general corporate purposes. We also incurred $1,910 of fees in connection with the 2014 Credit Facility, which were 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. We used $20,000 and $67,000 from our 2014 revolving credit facility in connection with the acquisitions of Simple Signal on April 1, 2015 and Telesphere on December 15, 2014, respectively. 2014 Credit Facility Terms The following description summarizes the material terms of the 2014 Credit Facility: The loans under the 2014 Credit Facility were to mature in August 2018. Principal amounts under the 2014 Credit Facility were repayable in quarterly installments of $5,000 per quarter for the term note. The unused portion of our revolving credit facility incurred a 0.40% commitment fee. Outstanding amounts under the 2014 Credit Facility, at our option, bore 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 provided greater flexibility to us in funding acquisitions and restricted payments, such as stock buybacks, than the 2013 Credit Facility. We were able to prepay the 2014 Credit Facility at our option at any time without premium or penalty. The 2014 Credit Facility was 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 permitted us to obtain one or more incremental term notes and/or revolving credit facilities in an aggregate principal amount of up to $60,000 plus an amount equal to repayments of the term note upon providing documentation reasonably satisfactory to the administrative agent. The 2014 Credit Facility included customary representations and warranties and affirmative covenants of the borrowers. In addition, the 2014 Credit Facility contained 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 were also required to 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 increased permitted capital expenditures. The 2014 Credit Facility contained customary events of default that may permit acceleration of the debt. During the continuance of a payment default, interest would 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. 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 consisted of a $70,000 term note and a $75,000 revolving credit facility. The co-borrowers under the 2013 Credit Facility were us and Vonage America Inc., our wholly owned subsidiary. Obligations under the 2013 Credit Facility were guaranteed, fully and unconditionally, by our other United States subsidiaries and were 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 amended 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 term note and the undrawn revolving credit facility under the 2013 Credit Facility were to be used for general corporate purposes. We also incurred $2,009 of fees in connection with the 2013 Credit Facility, which was 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 were to mature in February 2016. Principal amounts under the 2013 Credit Facility were repayable in quarterly installments of $5,833 per quarter for the term note. The unused portion of our revolving credit facility incurred a 0.45% commitment fee. Outstanding amounts under the 2013 Credit Facility, at our option, bore 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 term note 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 term note. 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 Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 and December 31, 2014 : December 31, 2015 December 31, 2014 Level 1 Assets Money market fund (1) $ 57 $ 2,786 Level 2 Assets Available-for-sale securities (2) $ 9,908 $ 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, 2015 and 2014 . We believe the fair value of our debt at December 31, 2015 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 July 27, 2015 for a similar debt instrument. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2015 | |
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 set to expire no later than the close of business June 7, 2013, unless extended by our board of directors. On June 6, 2013, at the Vonage 2013 annual meeting of stockholders, stockholders ratified the extension of the Preservation Plan through June 7, 2015. On April 2, 2015, after consultation with our advisors, our board of directors determined to extend the Preservation Plan through June 30, 2017, subject to ratification of the extension by stockholders at our 2015 annual meeting of stockholders. On June 3, 2015, at the Vonage 2015 annual meeting of stockholders, stockholders ratified the extension of the Preservation Plan through June 30, 2018. Common Stock Repurchases On July 25, 2012, our board of directors authorized a program to repurchase up to $50,000 of Vonage common stock (the "$50,000 repurchase program") through December 31, 2013. 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 (the "2012 $100,000 repurchase program) by December 31, 2014. We repurchased the following shares of common stock with cash resources under the 2012 $100,000 repurchase program as of December 31, 2014 : December 31, 2014 Shares of common stock repurchased 13,475 Value of common stock repurchased $ 49,128 (1) including 171 shares, or $660 , of common stock repurchases settled in January 2015; excluding commission of $2 . As of December 31, 2014 , approximately $219 remained of our 2012 $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 (the "2014 $100,000 repurchase program"). Repurchases under the 2014 $100,000 repurchase program program are expected to be made over a four -year period ending on December 31, 2018. Under the 2014 $100,000 repurchase 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. We repurchased the following shares of common stock with cash resources under the 2014 $100,000 repurchase program as of December 31, 2015 : December 31, 2015 Shares of common stock repurchased 3,320 Value of common stock repurchased $ 15,195 As of December 31, 2015 , approximately $84,805 remained of our 2014 $100,000 repurchase program. The repurchase program expires on December 31, 2018 but may be suspended or discontinued at any time without notice. In any period under the 2014 $100,000 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, 2015 | |
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: 2015 2014 2013 Risk-free interest rate 1.38-1.80% 1.78-2.19% 1.13-2.02% Expected stock price volatility 73.55-83.14% 85.28-86.93% 86.94-90.39% Dividend yield 0.00 % 0.00 % 0.00 % 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, 2015 and 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. 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. The assumptions used to value these market based restricted performance stock units are as follows: 2015 2014 2013 Risk-free interest rate 0.98 % 0.69 % — % Expected stock price volatility 40.21 % 48.91 % — % Dividend yield 0.00 % 0.00 % 0.00 % Expected life (in years) 2.79 2.79 0 Our stock incentive plans as of December 31, 2015 are summarized as follows (in thousands): Shares Authorized Shares Available for Grant Stock Options Outstanding Restricted Stock and Restricted Stock Units 2001 Incentive Plan — — 468 — 2006 Incentive Plan 71,669 — 19,463 8,703 2015 Incentive Plan 21,731 21,548 72 1,684 Total as of December 31, 2015 93,400 21,548 20,003 10,387 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-qualified 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. The 2006 Incentive Plan was terminated upon the adoption of our 2015 Equity Incentive Plan. No additional awards may be made pursuant to the 2006 Incentive Plan. 2015 Equity Incentive Plan On June 3, 2015, we adopted our 2015 Equity Incentive Plan. 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, 2015 , 21,548 shares were available for future grant under the 2015 Stock Incentive Plan. The 2015 Equity 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 2015 Equity Incentive Plan may be non-qualified stock options or may qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended. For purposes of complying with the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended, the maximum number of shares of common stock that may be subject to stock options, stock appreciation rights, performance-based restricted stock awards, performance-based RSUs and performance-based stock awards granted to any participant other than a non-employee director during any calendar year will be limited to 10,000 shares of common stock for each such award type individually. The maximum number of shares of common stock that may be subject to stock options, stock appreciation rights, restricted stock awards, RSUs and stock awards granted to any non-employee director during any calendar year will be limited to 10,000 shares of common stock for all such award types in the aggregate. Further, the maximum amount that may become payable to any one Participant during any one calendar year under all Cash Performance Awards intended to qualify as “performance-based compensation” under Section 162(m) of the Code is limited to $5,000. Our 2015 Equity Incentive Plan will terminate on June 3, 2025. 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 Shares Weighted Average Exercise Price Per Share Number of Shares Weighted Average Grant Date Fair Market Value Per Share (in thousands) (in thousands) 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 25,651 3.31 7,828 4.09 Stock options granted 505 4.41 Stock options exercised (3,495 ) 2.82 Stock options canceled (2,658 ) (4.41 ) Restricted stocks and restricted stock units granted 6,354 5.37 Restricted stocks and restricted stock units exercised (2,436 ) 3.63 Restricted stocks and restricted stock units canceled (1,359 ) 4.67 Balance at December 31, 2015-stock options 20,003 $ 3.28 Balance at December 31, 2015-Restricted stock and restricted stock units 10,387 $ 4.91 Exercisable at December 31, 2015 11,072 $ 3.32 Unvested shares at December 31, 2014 14,943 $ 3.10 Unvested shares at December 31, 2015 8,931 $ 3.23 The weighted average exercise price of options granted was $4.41 , $3.47 , and $2.89 for the years ended December 31, 2015 , 2014 , and 2013 , respectively. The weighted average grant date fair market value of restricted stock and restricted stock units granted was $5.37 , $4.71 , and $3.01 during the year ended December 31, 2015 , 2014 , and 2013 , respectively. The aggregate intrinsic value of exercised stock options for the years ended December 31, 2015 , 2014 , and 2013 was $8,040 , $22,962 , and $9,891 , respectively. The aggregate intrinsic value of exercised restricted stock and restricted stock units for the years ended December 31, 2015 , 2014 , and 2013 was $8,844 , $4,909 , and $3,788 , respectively. The weighted average grant date fair market value of stock options granted was $3.09 , $2.55 , and $2.16 for the years ended December 31, 2015 , 2014 , and 2013 . Total share-based compensation expense recognized for the years ended December 31, 2015 , 2014 , and 2013 was $27,541 , $21,070 , and $17,843 , respectively, which were recorded to selling, general and administrative expense in the consolidated statement of income. As of December 31, 2015 , total unamortized share-based compensation was $25,800 , 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, 2015 is summarized below: Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Stock Options Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Aggregate Intrinsic Value Stock Options Vested and Exercisable Weighted Average Remaining Contractual Life Weighted Average Exercise Price Aggregate Intrinsic Value (in thousands) (in years) (in thousands) (in thousands) (in years) (in thousands) $0.33 to $1.43 2,506 1.37 2,506 1.37 $1.44 to $1.99 94 1.71 63 1.71 $2.00 to $4.00 14,824 3.03 6,300 2.85 $4.01 to $7.34 2,076 4.78 1,701 4.78 $7.35 to $35.00 503 14.21 502 14.21 20,003 6.5 3.28 $ 53,609 11,072 5.3 3.32 $ 31,176 The aggregate intrinsic value of restricted stock units outstanding was $59,619 as of December 31, 2015 . 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 2013 , 2014 , and 2015 . Our expense related to the Retirement Plan was $3,676 , $2,959 , and $2,554 in 2015 , 2014 , and 2013 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
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 $2,315 at December 31, 2015 . The gross amount of the building recorded under capital leases totaled $25,709 as of December 31, 2015 and accumulated depreciation was approximately $22,045 as of December 31, 2015 . In November 2015, we entered into the fourth amendment to our headquarters lease effective December 1, 2015. The amendment extend the term of the lease for a period of seventy-four months to commence September 1, 2017 and continue through October 31, 2023. Based on the terms of the lease, it is considered an operating lease when it becomes effective on September 1, 2017. 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 2016 and 2023. We are committed to pay a portion of the buildings’ operating expenses as determined under the agreements. At December 31, 2015 , 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, 2015 Capital Leases Operating Leases 2016 $ 5,038 $ 6,817 2017 3,503 6,471 2018 — 8,936 2019 — 8,939 2020 — 8,288 Thereafter — 17,798 Total minimum payments required 8,541 $ 57,249 Less amounts representing interest (780 ) Minimum future payments of principal 7,761 Current portion 4,398 Long-term portion $ 3,363 Rent expense was $6,378 for 2015 , $7,007 for 2014 , and $6,071 for 2013 . Stand-by Letters of Credit We have stand-by letters of credit totaling $2,498 and $3,311 , as of December 31, 2015 and 2014 , 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 services, customer care services, carrier operation, networks and telephone related services, license patents to us, provide marketing infrastructure and services, and partner with us in international operations, provide customer caller ID, and process LNP orders. In certain cases, we may terminate these arrangements early upon payment of specified fees. These commitments total $251,888 . Of this total amount, we expect to purchase $101,042 in 2016 , $75,008 in 2017 , $69,880 in 2018 , and $5,958 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. (the latter two entities being former subsidiaries of Vonage Holdings Corp. now merged into Vonage America Inc. and Vonage Business Inc., respectively) in the United States District Court for the Eastern District of Virginia 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. On August 17, 2011, the Court dismissed Bear Creek’s case against the Vonage entities and Aptela, and all but one of the other defendants. Later, on August 17, 2011, Bear Creek re-filed its complaint in the United States District Court for the District of Delaware against the same Vonage entities; and re-filed its complaint against Aptela in the United States District Court for the Eastern District of Virginia against Aptela. On May 2, 2012, the litigations against Vonage and Aptela were consolidated for pretrial proceedings with twelve other actions in the District of Delaware. 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. On November 5, 2012, Bear Creek filed an answer to Vonage’s counterclaims. On July 17, 2013, the Court stayed the case pending resolution of the reexamination of the ‘722 patent requested by Cisco Systems, Inc. (“Cisco”), described below. On May 5, 2015, the Court closed the case, with leave to reopen if further attention by the Court is required. A request for reexamination of the validity of the ‘722 Patent was filed on September 12, 2012 by Cisco. Cisco’s request was granted on November 28, 2012. On March 24, 2014, the United States Patent and Trademark Office issued an Action Closing Prosecution, confirming its rejection of all claims of the ‘722 patent. On November 14, 2014, Bear Creek submitted its Appeal of the Action Closing Prosecution to the Patent Trial and Appeal Board. On December 29, 2015, Bear Creek’s Appeal was denied and the Examiner’s rejection of the ‘722 patent was affirmed. 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 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 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. On September 17, 2015, the Court ordered the consolidation for pre-trial purposes of this case with other cases by RPost against third-parties Epsilon Data Management, LLC., Experian Marketing Solutions, LLC, and Vocus, Inc. The lead case has been administratively closed and stayed since January 30, 2014 due to multiple pending actions by third parties regarding ownership of the patents at issue. On December 1, 2015, the parties in the consolidated actions filed their most recent joint notice regarding status of the co-pending actions. Plaintiffs requested that the stay be lifted, while defendants maintain that the stay should remain in place. 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 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 November 10, 2015, the Federal Circuit rejected AIP’s appeal and affirmed the Patent Office’s rejection of the ‘879 patent. 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. On May 20, 2015, the Patent Office issued a Final Written Decision, finding all challenged claims of the ‘879 patent to be invalid. On July 17, 2015, AIP filed a Notice of Appeal to the Patent Office’s rejection. AIP’s request to voluntarily dismiss its appeal was granted on December 2, 2015. Cisco petitioned for inter partes review of the ‘247 patent on November 25, 2014. On May 20, 2015, the Patent Office granted Cisco’s request, setting oral argument for January 27, 2016. 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 November 26, 2013, Vonage filed its Answer to the Complaint. On December 4, 2013, Vonage filed a Motion to Compel Arbitration, which the Court denied on February 4, 2014. On March 5, 2014, Vonage appealed that decision to the United States Court of Appeals for the Ninth Circuit. On March 26, 2014, the district court proceedings were stayed pending the appeal. Oral argument on the appeal took place on February 2, 2016. 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 make it more difficult for broadband Internet service providers to block or discriminate against Vonage service. In addition, explicitly applying net neutrality rules to wireless broadband Internet service providers could create greater opportunities for VoIP applications that run on wireless broadband Internet service. In December 2010, the FCC adopted net neutrality rules that applied strong net neutrality rules to wired broadband Internet service providers and limited rules to wireless broadband Internet service providers. On January 14, 2014, the D.C. Circuit Court of Appeals vacated a significant portion of the 2010 rules. On May 15, 2014, the FCC issued a Notice of Proposed Rulemaking (NPRM) proposing new net neutrality rules. After public response to the NPRM, the FCC adopted new neutrality rules on February 26, 2015. These rules prohibit broadband Internet service providers from: (1) blocking or throttling lawful content applications, or services; (2) imposing paid prioritization arrangements; and (3) unreasonably interfering or unreasonably disadvantaging consumers or edge providers. In addition, broadband Internet service providers are required to make certain disclosures regarding their network management practices, network performance, and commercial terms. These net neutrality rules apply the same requirements to wired and wireless broadband Internet service providers. Several parties have filed appeals which are pending at the D.C. Circuit Court of Appeals. Oral arguments at the D.C. Circuit Court of Appeals were held on December 4, 2015. 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. In addition, communications industry revenues, in general, have shifted away from USF assessable voice services to non-assessable broadband services. Both of these trends have reduced the USF contribution base and caused the assessment rate to increase to cover USF costs. In the order adopting the 2015 net neutrality rules, the FCC applied some universal service provisions to broadband internet service, but forbore from applying USF contribution obligations pending a recommendation from the Federal State Joint Board on Universal Service. If the FCC does reform USF contributions or add services to the contribution base, 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 $3.9 B in available annual funding. This represents an approximately $1.5 B 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 (NPRM) on rural call completion issues. The 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 imposing new reporting obligations and restricting certain call signaling practices. The call signaling rules went into effect on January 31, 2014. We filed for extensions of the rules, which the FCC granted, and as of April 17, 2014, we were compliant with the FCC call signaling rules. The effective date for the reporting requirements was April 1, 2015 with the first report covering the 2nd quarter of 2015 due August 1, 2015. 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. On June 18, 2015, the FCC adopted an order that modifies its rules to allow interconnected VoIP providers to directly access telephone numbers. Part of the order requires approval from the Office of Management and Budget ("OMB") prior to the rule change becoming effective. On February 4, 2016, the FCC announced that OMB had approved the order and would begin accepting applications for authorization beginning on February 18, 2015. On December 23, 2015, the National Association of Regulatory Utility Commissioners filed an appeal of the June 18, 2015 FCC order at the D.C. Circuit Court of Appeals. This appeal is pending. 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 (“MPUC”) 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. 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. More recently on July 28, 2015, the MPUC found that it has authority to regulate Charter’s fixed, interconnected VoIP service. Charter challenged the MPUC’s order at the U.S. District Court for Minnesota. This challenge is currently pending. 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 $3,903 as of December 31, 2015 as our best estimate of the potential tax exposure for any retroactive assessment. We believe the maximum estimated exposure for retroactive assessments is approximately $12,000 as of December 31, 2015 . 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, 2015 | |
Business Combinations [Abstract] | |
Acquisition of Business | an increase in amortization expense of $3,970 and $7,666 for the year ended 2015 and 2014, respectively, related to the identified intangible assets of Simple Signal and iCore; > a decrease in income tax expense of $1,511 and $1,888 for the year ended 2015 and 2014, respectively, related to pro forma adjustments and Simple Signal and iCore's results prior to acquisition; > the exclusion of our transaction-related expenses of $2,610 for the year ended 2015; > an increase in interest expense of $1,790 and $3,060 for the years ended 2015 and 2014, respectively associated with borrowings under our revolving credit facility. The Company recorded revenue of $34,243 and net loss of $2,385 attributable to iCore and Simple Signal for the year ended December 31, 2015 ." id="sjs-B4">Acquisition of Business Acquisition of iCore Pursuant to the Agreement and Plan of Merger dated August 19, 2015 by and among the Company, Cirrus Acquisition Corp., a Delaware corporation and newly formed indirect, wholly owned subsidiary of Vonage (“Merger Sub”), iCore, and Stephen G. Canton, as representative of the security holders of iCore, on August 31, 2015, Merger Sub, on the terms and subject to the conditions thereof, merged with and into iCore, and iCore became a wholly owned indirect subsidiary of Vonage. iCore provides cloud-based unified communications and collaboration services, delivering voice, video, and mobile communications solutions to business customers. iCore is a natural complement to our rapid growing UCaaS business and strengthens our national footprint. We acquired iCore for $92,689 in cash consideration, subject to adjustments pursuant to the merger agreement for closing cash and working capital of iCore, reductions for indebtedness and transaction expenses of iCore that remained unpaid as of closing, and escrow fund deposits. We financed the transaction with $10,689 of cash and $82,000 from our 2015 revolving credit facility. The aggregate consideration will be allocated among iCore equity holders. Pursuant to the merger agreement, $9,200 of the cash consideration was placed in escrow for unknown liabilities that may have existed as of the acquisition date. During 2015, we incurred $1,353 in acquisition related transaction costs, which were recorded in general and administrative expense in the accompanying Consolidated Statements of Income. The results of operations of the iCore 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 acquisition was accounted for using the acquisition method of accounting under which assets and liabilities of iCore 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 acquisition price was allocated to the tangible and identified intangible assets acquired and liabilities assumed as of the closing date. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. The estimated fair values of assets acquired and 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 the fair values of assets acquired and liabilities assumed, 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 iCore assets acquired and liabilities assumed as of August 31, 2015: Estimated Fair Value Assets Current assets: Cash and cash equivalents $ 1,014 Accounts receivable 1,492 Inventory 191 Prepaid expenses and other current assets 1,017 Total current assets 3,714 Property and equipment 4,437 Software 281 Intangible assets 38,064 Restricted cash 183 Other assets 195 Total assets acquired 46,874 Liabilities Current liabilities: Accounts payable 3,344 Accrued expenses 3,963 Deferred revenue, current portion 576 Current maturities of capital lease obligations 557 Total current liabilities 8,440 Capital lease obligations, net of current maturities 552 Deferred tax liabilities, net, non-current 8,487 Total liabilities assumed 17,479 Net identifiable assets acquired 29,395 Goodwill 63,294 Total purchase price $ 92,689 The intangible assets as of the closing date of the Acquisition included: Amount Customer relationships $ 37,720 Non-compete agreements 104 Trade names 240 $ 38,064 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 are being amortized on an accelerated basis over an estimated useful life of ten years; developed technology is being amortized on an accelerated basis over an estimated useful life of eight years; and the non-compete agreements and trade names are being amortized on a straight-line basis over two years. In addition, we recorded a deferred tax liability of $12,944 related to the $38,064 of identified intangible assets that will be amortized for financial reporting purposes but not for tax purposes and a deferred tax asset of $4,457 related to NOLs. 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 with expertise in the small and medium business market, as well as other intangible assets that do not qualify for separate recognition. Acquisition of Simple Signal Pursuant to the Agreement and Plan of Merger dated March 15, 2015, by and among Vonage Holdings Corp., a Delaware corporation, Stratus Acquisition Corp., a California corporation and an indirect wholly owned subsidiary of Parent (“Merger Sub”), Simple Signal Inc., a California corporation (“Simple Signal”) and Simplerep, LLC, a Colorado limited liability company, as representative of the security holders of Simple Signal, on April 1, 2015, Merger Sub merged with and into Simple Signal, and Simple Signal became a wholly owned indirect subsidiary of Vonage. Simple Signal provides cloud-based unified communications and collaboration services, delivering voice, video, and mobile communications solutions to business customers. Simple Signal is a natural complement to our expanding UCaaS business. We acquired Simple Signal for $25,578 , including 1,111 shares of Vonage common stock (which shares had an aggregate value of approximately $5,578 based upon the closing stock price on April 1, 2015) and cash consideration of $20,000 , subject to adjustments pursuant to the merger agreement for closing cash and working capital of Simple Signal, reductions for indebtedness and transaction expenses of Simple Signal that remained unpaid as of closing, and escrow fund deposits. We financed the transaction with $20,000 from our 2014 revolving credit facility. The aggregate consideration will be allocated among Simple Signal equityholders. Pursuant to the merger agreement, $2,356 of the cash consideration and $1,144 of the stock consideration was placed in escrow for unknown liabilities that may have existed as of the acquisition date. During 2015, we incurred $470 in acquisition related transaction costs, which were recorded in general and administrative expense in the accompanying Consolidated Statements of Income. The results of operations of the Simple Signal 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 acquisition was accounted for using the acquisition method of accounting under which assets and liabilities of Simple Signal 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 acquisition price was allocated to the tangible and identified intangible assets acquired and liabilities assumed as of the closing date. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. The estimated fair values of assets acquired and 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 the fair values of assets acquired and liabilities assumed, 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 Simple Signal assets acquired and liabilities assumed as of April 1, 2015: Estimated Fair Value Assets Current assets: Cash and cash equivalents $ 53 Accounts receivable 832 Inventory 67 Prepaid expenses and other current assets 159 Total current assets 1,111 Property and equipment 979 Software 401 Intangible assets 6,407 Deferred tax assets, net, non-current 741 Total assets acquired 9,639 Liabilities Current liabilities: Accounts payable 785 Accrued expenses 593 Deferred revenue, current portion 370 Total current liabilities 1,748 Total liabilities assumed 1,748 Net identifiable assets acquired 7,891 Goodwill 17,687 Total purchase price $ 25,578 The intangible assets as of the closing date of the Acquisition included: Amount Customer relationships $ 5,090 Developed technologies 994 Non-compete agreements 303 Trade names 20 $ 6,407 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 are being amortized on an accelerated basis over an estimated useful life of ten years; developed technology is being amortized on an accelerated basis over an estimated useful life of eight years; and the non-compete agreements and trade names are being amortized on a straight-line basis over two years. In addition, we recorded a deferred tax liability of $2,441 related to the $6,407 of identified intangible assets that will be amortized for financial reporting purposes but not for tax purposes and a deferred tax asset of $3,182 related to NOLs. 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 with expertise in the small and medium business market, as well as other intangible assets that do not qualify for separate recognition. Acquisition of Telesphere 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”). 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. We acquired Telesphere for $114,330 , 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 $91,603 (of which $3,610 was paid in January 2015) including payment of $676 for excess cash as of closing date, a reduction for closing working capital of $105 , reductions for indebtedness and transaction expenses of Telesphere that remained unpaid as of closing, and deposits into the escrow funds. We financed the transaction with $24,603 of cash and $67,000 from our 2014 revolving credit facility. The aggregate consideration will be allocated among Telesphere equity holders. 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 2015 and 2014, we incurred $102 and $2,446 , respectively, 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 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. During the first quarter of 2015, the Company completed the process of allocating the acquisition price to identified intangible assets acquired as of the closing date, which had been in process as of December 31, 2014. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. The estimated fair values of assets acquired and 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 the fair values of assets acquired and liabilities assumed, but we are waiting for additional information, primarily related to income, sales, excise, and ad valorem taxes which are subject to change. The December 31, 2014 balance sheet has been revised to reflect the allocation of the purchase price for Telesphere based upon completion of our valuation analysis of intangible assets. The key revision was to record identified intangible assets of $50,925 with a corresponding reduction to goodwill. The table below summarizes the Telesphere 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 2,925 Inventory 386 Prepaid expenses and other current assets 398 Total current assets 3,779 Property and equipment 5,731 Software 3 Intangible assets 50,925 Deferred tax assets, net, non-current 51 Other assets 76 Total assets acquired 60,565 Liabilities Current liabilities: Accounts payable 1,202 Accrued expenses 4,108 Deferred revenue, current portion 1,156 Total current liabilities 6,466 Total liabilities assumed 6,466 Net identifiable assets acquired 54,099 Goodwill 60,231 Total purchase price $ 114,330 The intangible assets as of the closing date of the Acquisition included: Amount Customer relationships $ 10,699 Developed technologies 35,508 Non-compete agreements 2,526 MPLS network 2,192 $ 50,925 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 MPLS network are being amortized on an accelerated basis over an estimated useful life of seven years ; developed technology is being amortized on an accelerated basis over an estimated useful life of ten years ; and the non-compete agreements are being amortized on a straight-line basis over three years . In addition, we recorded a deferred tax liability of $17,050 related to the $50,925 of identified intangible assets that will be amortized for financial reporting purposes but not for tax purposes and a deferred tax asset of $17,101 related to NOLs. 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 with expertise in the small and medium business market, as well as other intangible assets that do not qualify for separate recognition. Acquisition of Vocalocity Vocalocity is an industry-leading provider of cloud-based communication services to small and medium businesses (SMB). The acquisition of Vocalocity positioned Vonage as a leader in the SMB hosted VoIP market. Subsequent to the acquisition, SMB and small office, home office (SOHO) services previously offered by Vonage were 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 2013 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 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. In addition, we recorded a deferred tax liability of $30,000 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 $6,000 related to NOLs, which consists of $10,336 deferred tax asset and 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. 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. Pro forma financial information (unaudited) The following unaudited supplemental pro forma information presents the combined historical results of operations of Vonage, Simple Signal, and iCore for the years 2015 and 2014, as if the Acquisitions had been completed at the beginning of 2014. For the years ended December 31, 2015 2014 Revenue $ 943,554 $ 942,882 Net income attributable to Vonage 20,653 14,036 Net income attributable to Vonage per share - basic 0.10 0.07 Net income attributable to Vonage per share - diluted 0.09 0.06 The pro forma financial information includes certain adjustments to reflect expenses in the appropriate pro forma periods as though the companies were combined as of the beginning of 2014. These adjustments include: > an increase in amortization expense of $3,970 and $7,666 for the year ended 2015 and 2014, respectively, related to the identified intangible assets of Simple Signal and iCore; > a decrease in income tax expense of $1,511 and $1,888 for the year ended 2015 and 2014, respectively, related to pro forma adjustments and Simple Signal and iCore's results prior to acquisition; > the exclusion of our transaction-related expenses of $2,610 for the year ended 2015; > an increase in interest expense of $1,790 and $3,060 for the years ended 2015 and 2014, respectively associated with borrowings under our revolving credit facility. The Company recorded revenue of $34,243 and net loss of $2,385 attributable to iCore and Simple Signal for the year ended December 31, 2015 . |
Noncontrolling Interest and Red
Noncontrolling Interest and Redeemable Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2015 | |
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, which created 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 was no longer contingently redeemable. As such, we 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 our joint venture operations in the country. We completed the process at the end of the first quarter of 2015. We expect to avoid material operating losses in Brazil in 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 incurred approximately $500 in cash charges in 2015 related to contract terminations and severance-related expenses. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On March 31, 2015, the Company completed its previously announced exit from the Brazilian market for consumer telephony services and the associated wind down of its joint venture operations in the country. The Company incurred a loss on disposal of $824 . The loss on disposal is comprised of the write-off of noncontrolling interest of $907 , foreign currency loss on intercompany loan forgiveness of $783 , and residual cumulative translation of $192 , partially offset by a tax benefit of $1,058 . The results of operations of this discontinued operation are as follows: For the years ended December 31, (In thousands, except per share amounts) 2015 2014 2013 Revenues 33 99 — Operating expenses $ 1,648 $ 10,358 $ 1,626 Loss from discontinued operations (1,615 ) (10,259 ) (1,626 ) Loss on disposal, net of taxes (824 ) (1 ) — Net loss from discontinued operations (2,439 ) (10,260 ) (1,626 ) Plus: Net loss from discontinued operations attributable to noncontrolling interest 59 819 488 Net loss from discontinued operations attributable to Vonage $ (2,380 ) $ (9,441 ) $ (1,138 ) |
Geographic Information
Geographic Information | 12 Months Ended |
Dec. 31, 2015 | |
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 and marketing expenses for consumer services and business services 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, 2015 2014 2013 Revenue: United States $ 854,706 $ 823,857 $ 784,665 Canada 25,935 30,294 32,348 United Kingdom 14,431 14,703 12,054 $ 895,072 $ 868,854 $ 829,067 December 31, 2015 December 31, 2014 Long-lived assets: United States $ 430,150 $ 320,811 Brazil — 145 United Kingdom 270 545 Israel 78 129 $ 430,498 $ 321,630 |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
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 2015 and 2014 : For the Quarter Ended March 31, June 30, September 30, December 31, Total Year Ended 2015 Revenue 219,730 221,858 223,360 230,124 895,072 Income from continuing operations 9,849 8,347 3,433 3,406 25,035 Loss from discontinued operations attributable to Vonage (2,380 ) — — — (2,380 ) Net income attributable to Vonage 7,469 8,347 3,433 3,406 22,655 Net income attributable to Vonage per common share: Basic net income per share Basic net income per share-from continuing operations 0.05 0.04 0.02 0.02 Basic net income per share-from discontinued operations attributable to Vonage (0.01 ) — — — Basic net income per share-net income attributable to Vonage 0.04 0.04 0.02 0.02 Diluted net income per share Diluted net income per share-from continuing operations 0.04 0.04 0.02 0.01 Diluted net income per share-from discontinued operations attributable to Vonage (0.01 ) — — — Diluted net income per share-net income attributable to Vonage 0.03 0.04 0.02 0.01 Year Ended 2014 Revenue 220,733 218,878 214,710 214,533 868,854 Income from continuing operations 5,484 6,890 7,327 10,006 29,707 Loss from discontinued operations attributable to Vonage (896 ) (1,372 ) (2,771 ) (4,402 ) (9,441 ) Net income attributable to Vonage 4,588 5,518 4,556 5,604 20,266 Net income attributable to Vonage per common share: Basic net income per share Basic net income per share-from continuing operations 0.03 0.03 0.04 0.05 Basic net income per share-from discontinued operations attributable to Vonage — (0.01 ) (0.01 ) (0.02 ) Basic net income per share-net income attributable to Vonage 0.02 0.03 0.02 0.03 Diluted net income per share Diluted net income per share-from continuing operations 0.02 0.03 0.03 0.05 Diluted net income per share-from discontinued operations attributable to Vonage — (0.01 ) (0.01 ) (0.02 ) Diluted net income per share-net income attributable to Vonage 0.02 0.02 0.02 0.03 |
Basis of Presentation and Sig24
Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
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 had the ability to exercise controlling influence. The ownership interest of the noncontrolling party is presented as noncontrolling interest. On March 31, 2015, the Company completed its previously announced exit from the Brazilian market for consumer telephony services and the associated wind down of its joint venture operations in the country. The results of Brazilian operations are presented as discontinued operations for all periods presented. The results of companies acquired or disposed of are included in the consolidated financial statements from the effective date of the acquisition or up to the date of disposal. |
Revenue Recognition | Revenue Recognition Operating revenues consist of services revenues and customer equipment (which enables our 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 services, there are the following deliverables: > Providing equipment, if any, to the customer that enables our telephony services; and > Providing 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. Services Revenue Substantially all of our revenues are services revenues, which are derived primarily from monthly subscription fees that customers are charged under our service plans. We also derive 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. 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. |
Cost of Services | Cost of Services Cost of service consists of costs that we pay to third parties in order to provide services. These costs include access and interconnection charges that we pay to other 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 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 universal service fund (“USF”) contributions and royalties for use of third parties’ intellectual property. In addition, these costs include certain personnel and related costs for network operations and technical support that are attributable to revenue generating activities. |
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. |
Sales and Marketing Expenses | Sales and Marketing Expenses Sales and marketing expenses consist primarily of personnel and related costs for employees and contractors directly associated with our sales and marketing activities, internet advertising fees, radio and billboard advertising, public relations, commissions paid to employees, resellers and other third parties, trade shows, marketing and promotional activities, customer support, credit card fees, collections, and systems and information technology support. |
Engineering and Development Expenses | Engineering and Development Expenses Engineering and development expenses primarily include personnel and related costs for developers responsible for new products, and software engineers maintaining and enhancing existing products. These costs have been reclassified from selling, general and administrative expenses. Research and development costs related to new product development included in engineering and development were $18,350 , $13,034 , and $5,948 for the years ended December 31, 2015 , 2014 , and 2013 , respectively. 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. |
General and Administrative Expenses | General and Administrative Expenses General and administrative expenses primarily relate to our executive, finance, human resources, legal, and information technology organizations. General and administrative expenses primarily consist of personnel costs, stock compensation, board of directors' costs, professional fees for legal, accounting, tax, compliance and information systems, travel, recruiting expense and, rent and related expenses. |
Cash and Cash Equivalents | 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. |
Marketable Securities | 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 | 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. Generally, 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, software, furniture, 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 | Goodwill Goodwill acquired in the 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. If such a determination is made, then 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, 2015 . |
Intangible Assets | Intangible Assets Intangible assets acquired in the settlement of litigation or by direct purchase are accounted for based upon the fair value of assets received. 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, 2015 , 2014 , or 2013 . 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. A portion of these costs are netted against the underlying notes payable in accordance with ASU 2015-15, "Interest-Imputation of Interest". |
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. |
Restricted Cash and Letters of Credit | Restricted Cash and Letters of Credit We had a cash collateralized letter of credit for $2,498 and $3,311 as of December 31, 2015 and 2014 , respectively, mainly related to lease deposits for our Holmdel office. In the aggregate, cash reserves and collateralized letters of credit of $2,587 and $3,405 were recorded as long-term restricted cash at December 31, 2015 and 2014 , respectively. |
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% 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. 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% 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 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 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 | 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. |
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 January 2016, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities". This ASU provide guidance concerning certain matters involving the recognition, measurement, and disclosure of financial assets and financial liabilities. The guidance does not alter the basic framework for classifying debt instruments held as financial assets. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is not permitted, with some exceptions. The adoption of ASU 2016-01 will not have a material impact on our consolidated financial statements and related disclosures. In November 2015, FASB issued ASU 2015-17, "Balance Sheet Classification of Deferred Taxes". This ASU simplifies the presentation of deferred income taxes and requires deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. This ASU may be applied either prospectively or retrospectively to all periods presented. We are currently evaluating the impact of adopting ASU 2015-17 on our consolidated financial statements and related disclosures. In September 2015, FASB issued ASU 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments". This ASU simplifies the accounting for adjustments made to provisional amounts recognized in a business combination and eliminates the requirement to retrospectively account for those adjustments. This ASU is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. This ASU should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this ASU with earlier application permitted for financial statements that have not been issued. We are currently evaluating the impact of adopting ASU 2015-16 on our consolidated financial statements and related disclosures. In August 2015, FASB issued ASU 2015-15, "Interest-Imputation of Interest". This ASU provides guidance not addressed in ASU 2015-03 related to the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. The SEC staff stated that they would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. We adopted this ASU along with the adoption of ASU 2015-03 in the third quarter of 2015 and restated the prior periods presentation. The adoption of ASU 2015-15 did not have a material impact on our consolidated financial statements and related disclosures. In July 2015, FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory". This ASU applies to inventory that is measured using first-in, first-out ("FIFO") or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predicable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, first-out ("LIFO") or the retail inventory. This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption only permitted at the beginning of an interim and annual reporting period. We are currently evaluating the impact of adopting ASU 2015-11 on our consolidated financial statements and related disclosures. In April 2015, FASB issued ASU 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement”. This ASU provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new guidance does not change the accounting for a customer’s accounting for service contracts. ASU 2015-05 is effective for interim and annual reporting periods beginning after December 15, 2015. We are currently evaluating the impact of adopting ASU 2015-05 on our consolidated financial statements and related disclosures. In April 2015, FASB issued ASU 2015-03, "Interest-Imputation of Interest". This ASU requires that debt issuance costs be reported in the balance sheet as a direct deduction from the face amount of the related liability, consistent with the presentation of debt discounts. Prior to the amendments, debt issuance costs were presented as a deferred charge (i.e., an asset) on the balance sheet. This ASU is effective for annual reporting periods beginning after December 15, 2015 and interim periods within fiscal years beginning after December 15, 2016. The amendments must be applied retrospectively. All entities have the option of adopting the new requirements as of an earlier date for financial statements that have not been previously issued. Applicable disclosures for a change in an accounting principle are required in the year of adoption, including interim periods. We adopted this ASU in the third quarter of 2015 and conformed the prior period presentation. The adoption of ASU 2015-03 did not have a material impact on our consolidated financial statements and related disclosures. In May 2014, FASB issued 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 goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14 deferring the effective date to annual and interim periods beginning on or after December 15, 2017, and early adoption will be permitted, but not earlier than the original effective date of annual and interim periods beginning on or after December 15, 2016, for public entities. We will adopt this ASU when effective. 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 As the Company's business evolves, positioning us as a Unified Communications as a Service ("UCaaS") provider, we have made certain changes to our income statement presentation. Sales expenses have been separated from selling, general, and administrative expenses and combined with marketing in a new sales and marketing caption. A new caption, engineering and development, has also been reclassified from selling, general and administrative expenses. The remaining selling, general and administrative expenses, after the above reclassifications, have been renamed as general and administrative expenses. The reclassifications have been reflected in all periods presented and had no impact on net earnings previously reported. Certain reclassifications have been made to prior year's balance sheet in order to conform to the current year's presentation due to the adoption of ASU 2015-03 and ASU 2015-15 in the third quarter of 2015. The reclassifications had no impact on net earnings previously reported. |
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 Sig25
Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 2014 2013 Numerator Income from continuing operations $ 25,035 $ 29,707 $ 29,427 Discontinued operations (2,439 ) (10,260 ) (1,626 ) Plus: Net loss from discontinued operations attributable to noncontrolling interest 59 819 488 Loss from discontinued operations attributable to Vonage (2,380 ) (9,441 ) (1,138 ) Net income attributable to Vonage $ 22,655 $ 20,266 $ 28,289 Denominator Basic weighted average common shares outstanding 213,147 209,822 211,563 Dilutive effect of stock options and restricted stock units 10,963 9,597 8,957 Diluted weighted average common shares outstanding 224,110 219,419 220,520 Basic net income per share Basic net income per share - from continuing operations 0.12 0.14 0.14 Basic net loss per share - from discontinued operations attributable to Vonage (0.01 ) (0.04 ) (0.01 ) Basic net income per share - attributable to Vonage $ 0.11 $ 0.10 $ 0.13 Diluted net income per share Diluted net income per share - from continuing operations 0.11 0.14 0.13 Diluted net loss per share - from discontinued operations attributable to Vonage (0.01 ) (0.04 ) (0.01 ) Diluted net income per share - attributable to Vonage $ 0.10 $ 0.09 $ 0.13 |
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, 2015 2014 2013 Restricted stock units 5,827 5,454 3,625 Employee stock options 13,600 18,428 25,437 19,427 23,882 29,062 |
Supplemental Balance Sheet Ac26
Supplemental Balance Sheet Account Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental balance sheet account information | Prepaid expenses and other current assets December 31, 2015 December 31, 2014 Nontrade receivables $ 2,113 $ 2,511 Services 8,066 7,415 Telecommunications 3,138 459 Insurance 939 803 Marketing 779 519 Other prepaids 624 958 Prepaid expenses and other current assets $ 15,659 $ 12,665 Property and equipment, net December 31, 2015 December 31, 2014 Building (under capital lease) $ 25,709 $ 25,709 Network equipment and computer hardware 89,025 73,599 Leasehold improvements 48,872 48,574 Customer premise equipment 7,292 3,220 Furniture 2,508 1,914 Vehicles 214 195 173,620 153,211 Less: accumulated depreciation and amortization (124,137 ) (103,581 ) Property and equipment, net $ 49,483 $ 49,630 Customer premise equipment, net December 31, 2015 December 31, 2014 Customer premise equipment $ 7,292 $ 3,220 Less: accumulated depreciation (2,068 ) (74 ) Customer premise equipment, net $ 5,224 $ 3,146 Software, net December 31, 2015 December 31, 2014 Purchased $ 67,248 $ 55,636 Licensed 909 909 Internally developed 36,088 36,088 104,245 92,633 Less: accumulated amortization (83,535 ) (74,009 ) Software, net $ 20,710 $ 18,624 The total expected future annual amortization of software is as follows: 2016 $ 9,552 2017 6,773 2018 3,629 2019 756 Total $ 20,710 Debt related costs, net December 31, 2015 December 31, 2014 Debt related costs related to Revolving Credit Facility $ 5,044 $ 3,640 Less: accumulated amortization (2,991 ) (2,457 ) Debt related costs, net $ 2,053 $ 1,183 Restricted cash December 31, 2015 December 31, 2014 Letter of credit-lease deposits $ 2,498 $ 3,311 Cash reserves 89 94 Restricted cash $ 2,587 $ 3,405 Other assets December 31, 2015 December 31, 2014 Long term non-trade receivable $ 6,623 $ 6,623 Others 2,980 1,125 Other assets $ 9,603 $ 7,748 Accrued expenses December 31, 2015 December 31, 2014 Compensation and related taxes and temporary labor $ 33,196 $ 25,555 Marketing 24,891 17,871 Taxes and fees 11,808 17,300 Litigation and settlements 23 23 Telecommunications 9,111 8,134 Other accruals 11,523 9,771 Customer credits 1,779 1,883 Professional fees 2,080 2,178 Accrued interest 22 133 Inventory 1,514 1,267 Credit card fees 180 207 Accrued expenses $ 96,127 $ 84,322 Accumulated other comprehensive (loss) income December 31, 2015 December 31, 2014 Foreign currency translation adjustment $ (1,656 ) $ (3,123 ) Unrealized loss on available-for-sale securities (21 ) (8 ) Accumulated other comprehensive (loss) income $ (1,677 ) $ (3,131 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table provides a summary of the changes in the carrying amounts of goodwill: Balance at January 1, 2014 $ 83,627 Increase in goodwill related to acquisition of Telesphere 62,310 Decrease in goodwill related to tax adjustment of VBS (3,393 ) Balance at December 31, 2014 142,544 Increase in goodwill related to acquisition of Simple Signal 17,687 Increase in goodwill related to acquisition of iCore 63,294 Increase in goodwill related to acquisition of gUnify 660 Decrease in goodwill related to working capital and tax adjustments of Telesphere (2,079 ) Balance at December 31, 2015 $ 222,106 |
Intangible assets, net | The carrying values of intangible assets were as follows: December 31, 2015 December 31, 2014 Customer relationships $ 92,609 $ 49,799 Developed technology 75,694 72,900 Patents and patent licenses 20,164 12,764 Trademark 560 560 Trade names 760 500 Non-compete agreements 2,933 2,726 Gross Carrying Amount 192,720 139,249 Customer relationships (21,777 ) (10,185 ) Developed technology (18,880 ) (7,108 ) Patents and patent licenses (12,066 ) (10,426 ) Trademark (543 ) (472 ) Trade names (260 ) (113 ) Non-compete agreements (995 ) (113 ) Accumulated Amortization (54,521 ) (28,417 ) Customer relationships 70,832 39,614 Developed technology 56,814 65,792 Patents and patent licenses 8,098 2,338 Trademark 17 88 Trade names 500 387 Non-compete agreements 1,938 2,613 Net Carrying Amount $ 138,199 $ 110,832 |
Total expected future annual amortization | The total expected future annual amortization is as follows: 2016 $ 30,465 2017 26,278 2018 21,400 2019 18,412 2020 14,804 Thereafter 26,840 Total $ 138,199 |
Supplemental Income Statement28
Supplemental Income Statement Account Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Statement Related Disclosures [Abstract] | |
Supplemental income statement information | Amounts included in revenues For the years ended December 31, 2015 2014 2013 USF fees $ 75,570 $ 71,188 $ 70,009 Disconnect fee, net of credits and bad debt $ 706 $ 554 $ 955 Initial activation fees $ 779 $ 1,085 $ 1,278 Customer equipment rental $ 3,677 $ — $ — Customer equipment fees $ 6,141 $ 715 $ 418 Equipment recovery fees $ 77 $ 80 $ 103 Shipping and handling fees $ 2,473 $ 2,374 $ 1,178 Amounts included in cost of services For the years ended December 31, 2015 2014 2013 USF costs $ 75,599 $ 71,230 $ 70,009 Amounts included in cost of goods sold For the years ended December 31, 2015 2014 2013 Shipping and handling cost $ 5,197 $ 6,028 $ 5,188 Amounts included in sales and marketing For the years ended December 31, 2015 2014 2013 Advertising costs $ 103,320 $ 141,138 $ 142,094 Amounts included in general and administrative expense For the years ended December 31, 2015 2014 2013 Acquisition related transaction costs $ 2,585 $ 2,466 $ 2,681 Acquisition related integration costs $ 25 $ 100 $ 87 Depreciation and amortization expense For the years ended December 31, 2015 2014 2013 Network equipment and computer hardware $ 12,571 $ 13,449 $ 13,475 Software 12,627 10,116 10,831 Capital leases 2,200 2,200 2,200 Other leasehold improvements 5,190 4,434 4,167 Customer premise equipment 2,147 75 — Furniture 430 194 120 Vehicles 71 31 10 Patents 1,740 1,833 2,304 Trademarks 72 72 70 Customer relationships 11,594 8,539 1,644 Acquired technology 11,768 6,296 813 Trade names 148 100 13 Non-compete agreements 1,082 101 13 61,640 47,440 35,660 Property and equipment impairments 193 1,959 9 Software impairments — 115 385 Depreciation and amortization expense $ 61,833 $ 49,514 $ 36,054 Amounts included in interest expense For the years ended December 31, 2015 2014 2013 Debt related costs amortization $ 997 $ 1,072 $ 1,515 Amounts included in other income (expense), net For the years ended December 31, 2015 2014 2013 Net (losses) gains resulting from foreign exchange transactions $ (860 ) $ 10 $ (109 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Components of income before income tax expense | The components of income from continuing operations before income tax expense are as follows: For the years ended December 31, 2015 2014 2013 United States $ 38,115 $ 44,044 $ 39,650 Foreign 5,338 7,422 7,971 $ 43,453 $ 51,466 $ 47,621 |
Components of income tax expense | The components of the income tax expense are as follows: For the years ended December 31, 2015 2014 2013 Current: Federal $ (1,846 ) $ (1,452 ) $ (907 ) Foreign (1,667 ) (376 ) (155 ) State and local taxes (956 ) (803 ) (337 ) $ (4,469 ) $ (2,631 ) $ (1,399 ) Deferred: Federal $ (11,289 ) $ (15,239 ) $ (14,954 ) Foreign (1,088 ) (2,985 ) (1,603 ) State and local taxes (1,572 ) (904 ) (238 ) $ (13,949 ) $ (19,128 ) $ (16,795 ) $ (18,418 ) $ (21,759 ) $ (18,194 ) |
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, 2015 December 31, 2014 Current assets and liabilities: Deferred revenue $ 12,096 $ 13,265 Accounts receivable and inventory allowances 640 289 Accrued expenses 11,249 8,295 Deferred tax assets, net, current $ 23,985 $ 21,849 Non-current assets and liabilities: Acquired intangible assets and property and equipment $ (33,129 ) $ (13,799 ) Accrued expenses (1,054 ) (1,937 ) Research and development and alternative minimum tax credit 6,630 4,952 Stock option compensation 20,545 17,802 Capital leases (6,442 ) (5,401 ) Deferred revenue (634 ) (524 ) Net operating loss carryforwards 237,127 241,525 223,043 242,618 Valuation allowance (20,456 ) (17,451 ) Deferred tax assets, net, non-current $ 202,587 $ 225,167 |
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, 2015 2014 2013 U.S. Federal statutory tax rate 35 % 35 % 35 % Permanent items 3 % 3 % 4 % State and local taxes, net of federal benefit 2 % 3 % — % International tax (reflects effect of losses for which tax benefit not realized) 1 % — % (2 )% Valuation reserve for income taxes and other 2 % 1 % 1 % Effective tax rate 43 % 42 % 38 % |
Summary of net operating loss carryforwards | As of December 31, 2015 , we had NOLs for United States federal and state tax purposes of $625,802 and $186,776 , respectively, expiring at various times from years ending 2016 through 2035 as follows: Federal State 2016 $ — $ 41,530 2017 — 21,823 2018 — 17,032 2019 — 9,880 2020 — 8,028 2021 — 6,075 2022 — 2,073 2023 — 8 2024 — — 2025 3,140 — 2026 192,209 — 2027 235,966 1,072 2028 39,145 4,554 2029 17,482 3,024 2030 107,085 5,181 2031 8,012 563 2032 2,808 625 2033 3,555 7,341 2034 3,814 14,080 2035 12,586 43,887 Total $ 625,802 $ 186,776 |
Long-Term Debt and Revolving 30
Long-Term Debt and Revolving Credit Facility (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | December 31, 2015 December 31, 2014 2.875-3.375% Term note - due 2018, net of debt related costs (1) $ — $ 69,032 2.875-3.375% Revolving credit facility - due 2018 $ — $ 67,000 2.5-3.00% Term note - due 2019, net of debt related costs $ 76,392 $ — 2.5-3.0% Revolving credit facility - due 2019 $ 119,000 $ — Total Long-term note and revolving credit facility $ 195,392 $ 136,032 (1) Restated due to the adoption of ASU 2015-03 and ASU 2015-15 in the third quarter of 2015. |
Future payments under long-term debt obligations | At December 31, 2015 , future payments under long-term debt obligations over each of the next five years and thereafter are as follows: 2015 Credit Facility 2016 15,000 2017 15,000 2018 15,000 2019 47,500 Minimum future payments of principal 92,500 Less: unamortized debt related costs 1,108 current portion 15,000 Long-term portion $ 76,392 |
Fair Value of Financial Instr31
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 and December 31, 2014 : December 31, 2015 December 31, 2014 Level 1 Assets Money market fund (1) $ 57 $ 2,786 Level 2 Assets Available-for-sale securities (2) $ 9,908 $ 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, 2015 | |
2012 Share 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 2012 $100,000 repurchase program as of December 31, 2014 : December 31, 2014 Shares of common stock repurchased 13,475 Value of common stock repurchased $ 49,128 |
2014 Share 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 2014 $100,000 repurchase program as of December 31, 2015 : December 31, 2015 Shares of common stock repurchased 3,320 Value of common stock repurchased $ 15,195 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Share-based compensation: | |
Payout vesting schedule | For the market-based restricted performance stock units issued during the year ended December 31, 2015 and 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% —% |
Summary of stock incentive plans | Our stock incentive plans as of December 31, 2015 are summarized as follows (in thousands): Shares Authorized Shares Available for Grant Stock Options Outstanding Restricted Stock and Restricted Stock Units 2001 Incentive Plan — — 468 — 2006 Incentive Plan 71,669 — 19,463 8,703 2015 Incentive Plan 21,731 21,548 72 1,684 Total as of December 31, 2015 93,400 21,548 20,003 10,387 |
Summary of award activity | . The 2015 Equity 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 2015 Equity Incentive Plan may be non-qualified stock options or may qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended. For purposes of complying with the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended, the maximum number of shares of common stock that may be subject to stock options, stock appreciation rights, performance-based restricted stock awards, performance-based RSUs and performance-based stock awards granted to any participant other than a non-employee director during any calendar year will be limited to 10,000 shares of common stock for each such award type individually. The maximum number of shares of common stock that may be subject to stock options, stock appreciation rights, restricted stock awards, RSUs and stock awards granted to any non-employee director during any calendar year will be limited to 10,000 shares of common stock for all such award types in the aggregate. Further, the maximum amount that may become payable to any one Participant during any one calendar year under all Cash Performance Awards intended to qualify as “performance-based compensation” under Section 162(m) of the Code is limited to $5,000. Our 2015 Equity Incentive Plan will terminate on June 3, 2025. 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 Shares Weighted Average Exercise Price Per Share Number of Shares Weighted Average Grant Date Fair Market Value Per Share (in thousands) (in thousands) 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 25,651 3.31 7,828 4.09 Stock options granted 505 4.41 Stock options exercised (3,495 ) 2.82 Stock options canceled (2,658 ) (4.41 ) Restricted stocks and restricted stock units granted 6,354 5.37 Restricted stocks and restricted stock units exercised (2,436 ) 3.63 Restricted stocks and restricted stock units canceled (1,359 ) 4.67 Balance at December 31, 2015-stock options 20,003 $ 3.28 Balance at December 31, 2015-Restricted stock and restricted stock units 10,387 $ 4.91 Exercisable at December 31, 2015 11,072 $ 3.32 Unvested shares at December 31, 2014 14,943 $ 3.10 Unvested shares at December 31, 2015 8,931 $ 3.23 |
Information regarding options outstanding by exercise price range | Information regarding the options outstanding as of December 31, 2015 is summarized below: Stock Options Outstanding Stock Options Exercisable Range of Exercise Prices Stock Options Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Aggregate Intrinsic Value Stock Options Vested and Exercisable Weighted Average Remaining Contractual Life Weighted Average Exercise Price Aggregate Intrinsic Value (in thousands) (in years) (in thousands) (in thousands) (in years) (in thousands) $0.33 to $1.43 2,506 1.37 2,506 1.37 $1.44 to $1.99 94 1.71 63 1.71 $2.00 to $4.00 14,824 3.03 6,300 2.85 $4.01 to $7.34 2,076 4.78 1,701 4.78 $7.35 to $35.00 503 14.21 502 14.21 20,003 6.5 3.28 $ 53,609 11,072 5.3 3.32 $ 31,176 |
Stock options | |
Share-based compensation: | |
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: 2015 2014 2013 Risk-free interest rate 1.38-1.80% 1.78-2.19% 1.13-2.02% Expected stock price volatility 73.55-83.14% 85.28-86.93% 86.94-90.39% Dividend yield 0.00 % 0.00 % 0.00 % Expected life (in years) 6.25 6.25 6.25 |
Restricted stock and restricted stock units | |
Share-based compensation: | |
Assumptions used to value options | The assumptions used to value these market based restricted performance stock units are as follows: 2015 2014 2013 Risk-free interest rate 0.98 % 0.69 % — % Expected stock price volatility 40.21 % 48.91 % — % Dividend yield 0.00 % 0.00 % 0.00 % Expected life (in years) 2.79 2.79 0 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future payments under capital leases and minimum payments under non-cancelable operating leases | At December 31, 2015 , 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, 2015 Capital Leases Operating Leases 2016 $ 5,038 $ 6,817 2017 3,503 6,471 2018 — 8,936 2019 — 8,939 2020 — 8,288 Thereafter — 17,798 Total minimum payments required 8,541 $ 57,249 Less amounts representing interest (780 ) Minimum future payments of principal 7,761 Current portion 4,398 Long-term portion $ 3,363 |
Acquisition of Business (Tables
Acquisition of Business (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Acquisition [Line Items] | |
Pro forma financial information | Pro forma financial information (unaudited) The following unaudited supplemental pro forma information presents the combined historical results of operations of Vonage, Simple Signal, and iCore for the years 2015 and 2014, as if the Acquisitions had been completed at the beginning of 2014. For the years ended December 31, 2015 2014 Revenue $ 943,554 $ 942,882 Net income attributable to Vonage 20,653 14,036 Net income attributable to Vonage per share - basic 0.10 0.07 Net income attributable to Vonage per share - diluted 0.09 0.06 |
iCore | |
Business Acquisition [Line Items] | |
Estimated fair values of assets acquired and liabilities assumed | The table below summarizes the iCore assets acquired and liabilities assumed as of August 31, 2015: Estimated Fair Value Assets Current assets: Cash and cash equivalents $ 1,014 Accounts receivable 1,492 Inventory 191 Prepaid expenses and other current assets 1,017 Total current assets 3,714 Property and equipment 4,437 Software 281 Intangible assets 38,064 Restricted cash 183 Other assets 195 Total assets acquired 46,874 Liabilities Current liabilities: Accounts payable 3,344 Accrued expenses 3,963 Deferred revenue, current portion 576 Current maturities of capital lease obligations 557 Total current liabilities 8,440 Capital lease obligations, net of current maturities 552 Deferred tax liabilities, net, non-current 8,487 Total liabilities assumed 17,479 Net identifiable assets acquired 29,395 Goodwill 63,294 Total purchase price $ 92,689 |
Intangible Assets Acquired | The intangible assets as of the closing date of the Acquisition included: Amount Customer relationships $ 37,720 Non-compete agreements 104 Trade names 240 $ 38,064 |
Simple Signal | |
Business Acquisition [Line Items] | |
Estimated fair values of assets acquired and liabilities assumed | The table below summarizes the Simple Signal assets acquired and liabilities assumed as of April 1, 2015: Estimated Fair Value Assets Current assets: Cash and cash equivalents $ 53 Accounts receivable 832 Inventory 67 Prepaid expenses and other current assets 159 Total current assets 1,111 Property and equipment 979 Software 401 Intangible assets 6,407 Deferred tax assets, net, non-current 741 Total assets acquired 9,639 Liabilities Current liabilities: Accounts payable 785 Accrued expenses 593 Deferred revenue, current portion 370 Total current liabilities 1,748 Total liabilities assumed 1,748 Net identifiable assets acquired 7,891 Goodwill 17,687 Total purchase price $ 25,578 |
Intangible Assets Acquired | The intangible assets as of the closing date of the Acquisition included: Amount Customer relationships $ 5,090 Developed technologies 994 Non-compete agreements 303 Trade names 20 $ 6,407 |
Telesphere | |
Business Acquisition [Line Items] | |
Estimated fair values of assets acquired and liabilities assumed | The table below summarizes the Telesphere 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 2,925 Inventory 386 Prepaid expenses and other current assets 398 Total current assets 3,779 Property and equipment 5,731 Software 3 Intangible assets 50,925 Deferred tax assets, net, non-current 51 Other assets 76 Total assets acquired 60,565 Liabilities Current liabilities: Accounts payable 1,202 Accrued expenses 4,108 Deferred revenue, current portion 1,156 Total current liabilities 6,466 Total liabilities assumed 6,466 Net identifiable assets acquired 54,099 Goodwill 60,231 Total purchase price $ 114,330 |
Intangible Assets Acquired | The intangible assets as of the closing date of the Acquisition included: Amount Customer relationships $ 10,699 Developed technologies 35,508 Non-compete agreements 2,526 MPLS network 2,192 $ 50,925 |
Vocalocity | |
Business Acquisition [Line Items] | |
Estimated fair values of assets acquired and liabilities assumed | 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 |
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 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | The results of operations of this discontinued operation are as follows: For the years ended December 31, (In thousands, except per share amounts) 2015 2014 2013 Revenues 33 99 — Operating expenses $ 1,648 $ 10,358 $ 1,626 Loss from discontinued operations (1,615 ) (10,259 ) (1,626 ) Loss on disposal, net of taxes (824 ) (1 ) — Net loss from discontinued operations (2,439 ) (10,260 ) (1,626 ) Plus: Net loss from discontinued operations attributable to noncontrolling interest 59 819 488 Net loss from discontinued operations attributable to Vonage $ (2,380 ) $ (9,441 ) $ (1,138 ) |
Geographic Information (Tables)
Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Operations information by geographic location | Information about our operations by geographic location is as follows: For the years ended December 31, 2015 2014 2013 Revenue: United States $ 854,706 $ 823,857 $ 784,665 Canada 25,935 30,294 32,348 United Kingdom 14,431 14,703 12,054 $ 895,072 $ 868,854 $ 829,067 December 31, 2015 December 31, 2014 Long-lived assets: United States $ 430,150 $ 320,811 Brazil — 145 United Kingdom 270 545 Israel 78 129 $ 430,498 $ 321,630 |
Quarterly Financial Informati38
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly financial information | The following table sets forth the reviewed consolidated quarterly financial information for 2015 and 2014 : For the Quarter Ended March 31, June 30, September 30, December 31, Total Year Ended 2015 Revenue 219,730 221,858 223,360 230,124 895,072 Income from continuing operations 9,849 8,347 3,433 3,406 25,035 Loss from discontinued operations attributable to Vonage (2,380 ) — — — (2,380 ) Net income attributable to Vonage 7,469 8,347 3,433 3,406 22,655 Net income attributable to Vonage per common share: Basic net income per share Basic net income per share-from continuing operations 0.05 0.04 0.02 0.02 Basic net income per share-from discontinued operations attributable to Vonage (0.01 ) — — — Basic net income per share-net income attributable to Vonage 0.04 0.04 0.02 0.02 Diluted net income per share Diluted net income per share-from continuing operations 0.04 0.04 0.02 0.01 Diluted net income per share-from discontinued operations attributable to Vonage (0.01 ) — — — Diluted net income per share-net income attributable to Vonage 0.03 0.04 0.02 0.01 Year Ended 2014 Revenue 220,733 218,878 214,710 214,533 868,854 Income from continuing operations 5,484 6,890 7,327 10,006 29,707 Loss from discontinued operations attributable to Vonage (896 ) (1,372 ) (2,771 ) (4,402 ) (9,441 ) Net income attributable to Vonage 4,588 5,518 4,556 5,604 20,266 Net income attributable to Vonage per common share: Basic net income per share Basic net income per share-from continuing operations 0.03 0.03 0.04 0.05 Basic net income per share-from discontinued operations attributable to Vonage — (0.01 ) (0.01 ) (0.02 ) Basic net income per share-net income attributable to Vonage 0.02 0.03 0.02 0.03 Diluted net income per share Diluted net income per share-from continuing operations 0.02 0.03 0.03 0.05 Diluted net income per share-from discontinued operations attributable to Vonage — (0.01 ) (0.01 ) (0.02 ) Diluted net income per share-net income attributable to Vonage 0.02 0.02 0.02 0.03 |
Basis of Presentation and Sig39
Basis of Presentation and Significant Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2011USD ($) | Dec. 31, 2015USD ($)billing_cycle | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | ||
Concentration risk: | |||||
Percentage of Net Deferred Tax Assets being Realized | 50.00% | ||||
General and administrative | $ 109,153 | $ 98,780 | $ 83,107 | ||
Maximum original maturity term of investments to be considered cash and cash equivalents | 3 months | ||||
Number of unsuccessful billing cycles before account termination | billing_cycle | 3 | ||||
Restricted cash | $ 2,587 | 3,405 | |||
Restricted cash | $ 2,587 | 3,405 | [1] | ||
Likelihood of unfavorable settlement | 0.50 | ||||
Minimum | |||||
Concentration risk: | |||||
Useful life of software | 2 years | ||||
Maximum | |||||
Concentration risk: | |||||
Useful life of software | 5 years | ||||
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% | ||||
Engineering and Development | |||||
Concentration risk: | |||||
General and administrative | $ 18,350 | 13,034 | $ 5,948 | ||
Network equipment | Minimum | |||||
Concentration risk: | |||||
Useful life of property and equipment | 3 years | ||||
Network equipment | Maximum | |||||
Concentration risk: | |||||
Useful life of property and equipment | 5 years | ||||
Customer premise equipment | |||||
Concentration risk: | |||||
Useful life of property and equipment | 3 years | ||||
Goodwill | |||||
Concentration risk: | |||||
Goodwill impairment testing, likelihood fair value is below carrying value | 50.00% | ||||
Letter of credit-lease deposits | |||||
Concentration risk: | |||||
Restricted cash | $ 2,498 | $ 3,311 | |||
Valuation allowance, operating loss carryforwards | |||||
Concentration risk: | |||||
Adjustment to valuation allowance | $ (325,601) | ||||
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Basis of Presentation and Sig40
Basis of Presentation and Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator | |||||||||||
Income from continuing operations | $ 3,406 | $ 3,433 | $ 8,347 | $ 9,849 | $ 10,006 | $ 7,327 | $ 6,890 | $ 5,484 | $ 25,035 | $ 29,707 | $ 29,427 |
Discontinued operations | (2,439) | (10,260) | (1,626) | ||||||||
Plus: Net loss from discontinued operations attributable to noncontrolling interest | 59 | 819 | 488 | ||||||||
Loss from discontinued operations attributable to Vonage | 0 | 0 | 0 | (2,380) | (4,402) | (2,771) | (1,372) | (896) | (2,380) | (9,441) | (1,138) |
Net income attributable to Vonage | $ 3,406 | $ 3,433 | $ 8,347 | $ 7,469 | $ 5,604 | $ 4,556 | $ 5,518 | $ 4,588 | $ 22,655 | $ 20,266 | $ 28,289 |
Denominator | |||||||||||
Basic weighted average common shares outstanding (in shares) | 213,147 | 209,822 | 211,563 | ||||||||
Dilutive effect of stock options and restricted stock units (in shares) | 10,963 | 9,597 | 8,957 | ||||||||
Diluted weighted average common shares outstanding (in shares) | 224,110 | 219,419 | 220,520 | ||||||||
Basic net income per share | |||||||||||
Basic net income per share-from continuing operations (USD per share) | $ 0.02 | $ 0.02 | $ 0.04 | $ 0.05 | $ 0.05 | $ 0.04 | $ 0.03 | $ 0.03 | $ 0.12 | $ 0.14 | $ 0.14 |
Basic net income per share-from discontinued operations attributable to Vonage (USD per share) | 0 | 0 | 0 | (0.01) | (0.02) | (0.01) | (0.01) | 0 | (0.01) | (0.04) | (0.01) |
Basic net income per share - attributable to Vonage (USD per share) | 0.02 | 0.02 | 0.04 | 0.04 | 0.03 | 0.02 | 0.03 | 0.02 | 0.11 | 0.10 | 0.13 |
Diluted net income per share | |||||||||||
Diluted net income per share-from continuing operations (USD per share) | 0.01 | 0.02 | 0.04 | 0.04 | 0.05 | 0.03 | 0.03 | 0.02 | 0.11 | 0.14 | 0.13 |
Diluted net income per share-from discontinued operations attributable to Vonage (USD per share) | 0 | 0 | 0 | (0.01) | (0.02) | (0.01) | (0.01) | 0 | (0.01) | (0.04) | (0.01) |
Diluted net income per share - attributable to Vonage (USD per share) | $ 0.01 | $ 0.02 | $ 0.04 | $ 0.03 | $ 0.03 | $ 0.02 | $ 0.02 | $ 0.02 | $ 0.10 | $ 0.09 | $ 0.13 |
Basis of Presentation and Sig41
Basis of Presentation and Significant Accounting Policies - Earnings Per Share, Antidilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings per share, antidilutive securities: | |||
Antidilutive securities excluded from earnings per common share | 19,427 | 23,882 | 29,062 |
Restricted stock units | |||
Earnings per share, antidilutive securities: | |||
Antidilutive securities excluded from earnings per common share | 5,827 | 5,454 | 3,625 |
Stock options | |||
Earnings per share, antidilutive securities: | |||
Antidilutive securities excluded from earnings per common share | 13,600 | 18,428 | 25,437 |
Supplemental Balance Sheet Ac42
Supplemental Balance Sheet Account Information - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Prepaid expenses and other current assets: | |||
Nontrade receivables | $ 2,113 | $ 2,511 | |
Services | 8,066 | 7,415 | |
Telecommunications | 3,138 | 459 | |
Insurance | 939 | 803 | |
Marketing | 779 | 519 | |
Other prepaids | 624 | 958 | |
Prepaid expenses and other current assets | $ 15,659 | $ 12,665 | [1] |
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Supplemental Balance Sheet Ac43
Supplemental Balance Sheet Account Information - Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Property and Equipment: | |||
Property equipment, gross | $ 173,620 | $ 153,211 | |
Less: accumulated depreciation and amortization | (124,137) | (103,581) | |
Property and equipment, net | 49,483 | 49,630 | [1] |
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 | 89,025 | 73,599 | |
Leasehold improvements | |||
Property and Equipment: | |||
Property equipment, gross | 48,872 | 48,574 | |
Customer premise equipment | |||
Property and Equipment: | |||
Property equipment, gross | 7,292 | 3,220 | |
Less: accumulated depreciation and amortization | (2,068) | (74) | |
Property and equipment, net | 5,224 | 3,146 | |
Furniture | |||
Property and Equipment: | |||
Property equipment, gross | 2,508 | 1,914 | |
Vehicles | |||
Property and Equipment: | |||
Property equipment, gross | $ 214 | $ 195 | |
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Supplemental Balance Sheet Ac44
Supplemental Balance Sheet Account Information - Software (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Software: | ||
Software, gross | $ 104,245 | $ 92,633 |
Less: accumulated amortization | (83,535) | (74,009) |
Software, net | 20,710 | 18,624 |
Purchased | ||
Software: | ||
Software, gross | 67,248 | 55,636 |
Licensed | ||
Software: | ||
Software, gross | 909 | 909 |
Internally developed | ||
Software: | ||
Software, gross | $ 36,088 | $ 36,088 |
Supplemental Balance Sheet Ac45
Supplemental Balance Sheet Account Information - Software Future Annual Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Balance Sheet Related Disclosures [Abstract] | ||
2,016 | $ 9,552 | |
2,017 | 6,773 | |
2,018 | 3,629 | |
2,019 | 756 | |
Software, net | $ 20,710 | $ 18,624 |
Supplemental Balance Sheet Ac46
Supplemental Balance Sheet Account Information - Debt Related Costs, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Balance Sheet Related Disclosures [Abstract] | |||
Debt related costs related to Revolving Credit Facility | $ 5,044 | $ 3,640 | |
Less: accumulated amortization | (2,991) | (2,457) | |
Debt related costs, net | $ 2,053 | $ 1,183 | [1] |
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Supplemental Balance Sheet Ac47
Supplemental Balance Sheet Account Information - Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Restricted cash: | ||
Restricted cash | $ 2,587 | $ 3,405 |
Letter of credit-lease deposits | ||
Restricted cash: | ||
Restricted cash | 2,498 | 3,311 |
Cash reserves | ||
Restricted cash: | ||
Restricted cash | $ 89 | $ 94 |
Supplemental Balance Sheet Ac48
Supplemental Balance Sheet Account Information - Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Balance Sheet Related Disclosures [Abstract] | |||
Long term non-trade receivable | $ 6,623 | $ 6,623 | |
Others | 2,980 | 1,125 | |
Other assets | $ 9,603 | $ 7,748 | [1] |
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Supplemental Balance Sheet Ac49
Supplemental Balance Sheet Account Information - Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Balance Sheet Related Disclosures [Abstract] | ||
Compensation and related taxes and temporary labor | $ 33,196 | $ 25,555 |
Marketing | 24,891 | 17,871 |
Taxes and fees | 11,808 | 17,300 |
Litigation and settlements | 23 | 23 |
Telecommunications | 9,111 | 8,134 |
Other accruals | 11,523 | 9,771 |
Customer credits | 1,779 | 1,883 |
Professional fees | 2,080 | 2,178 |
Accrued interest | 22 | 133 |
Inventory | 1,514 | 1,267 |
Credit card fees | 180 | 207 |
Accrued expenses | $ 96,127 | $ 84,322 |
Supplemental Balance Sheet Ac50
Supplemental Balance Sheet Account Information - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Balance Sheet Related Disclosures [Abstract] | |||
Foreign currency translation adjustment | $ (1,656) | $ (3,123) | |
Unrealized loss on available-for-sale securities | (21) | (8) | |
Accumulated other comprehensive (loss) income | $ (1,677) | $ (3,131) | [1] |
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets - Goodwill Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | |||
Goodwill [Roll Forward] | ||||
Goodwill, beginning of period | $ 142,544 | [1] | $ 83,627 | |
Goodwill, end of period | 222,106 | 142,544 | [1] | |
Simple Signal | ||||
Goodwill [Roll Forward] | ||||
Goodwill acquired | 17,687 | |||
iCore | ||||
Goodwill [Roll Forward] | ||||
Goodwill acquired | 63,294 | |||
gUnify | ||||
Goodwill [Roll Forward] | ||||
Goodwill acquired | 660 | |||
Telesphere | ||||
Goodwill [Roll Forward] | ||||
Goodwill acquired | 62,310 | |||
Decrease due to tax adjustment | $ (2,079) | |||
Vocalocity | ||||
Goodwill [Roll Forward] | ||||
Decrease due to tax adjustment | $ (3,393) | |||
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Intangible assets: | |||
Gross Carrying Amount | $ 192,720 | $ 139,249 | |
Accumulated Amortization | (54,521) | (28,417) | |
Net Carrying Amount | 138,199 | 110,832 | [1] |
Customer relationships | |||
Intangible assets: | |||
Gross Carrying Amount | 92,609 | 49,799 | |
Accumulated Amortization | (21,777) | (10,185) | |
Net Carrying Amount | 70,832 | 39,614 | |
Acquired technology | |||
Intangible assets: | |||
Gross Carrying Amount | 75,694 | 72,900 | |
Accumulated Amortization | (18,880) | (7,108) | |
Net Carrying Amount | 56,814 | 65,792 | |
Patents | |||
Intangible assets: | |||
Gross Carrying Amount | 20,164 | 12,764 | |
Accumulated Amortization | (12,066) | (10,426) | |
Net Carrying Amount | 8,098 | 2,338 | |
Trademark | |||
Intangible assets: | |||
Gross Carrying Amount | 560 | 560 | |
Accumulated Amortization | (543) | (472) | |
Net Carrying Amount | 17 | 88 | |
Trade names | |||
Intangible assets: | |||
Gross Carrying Amount | 760 | 500 | |
Accumulated Amortization | (260) | (113) | |
Net Carrying Amount | 500 | 387 | |
Non-compete agreements | |||
Intangible assets: | |||
Gross Carrying Amount | 2,933 | 2,726 | |
Accumulated Amortization | (995) | (113) | |
Net Carrying Amount | $ 1,938 | $ 2,613 | |
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Goodwill and Intangible Asset53
Goodwill and Intangible Assets - Expected Future Annual Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | [1] |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
2,016 | $ 30,465 | ||
2,017 | 26,278 | ||
2,018 | 21,400 | ||
2,019 | 18,412 | ||
2,020 | 14,804 | ||
Thereafter | 26,840 | ||
Net Carrying Amount | $ 138,199 | $ 110,832 | |
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Goodwill and Intangible Asset54
Goodwill and Intangible Assets - Narrative (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Customer relationships | |
Intangible assets: | |
Intangible asset useful life | 10 years |
Trademark | |
Intangible assets: | |
Intangible asset useful life | 8 years |
Trade names | |
Intangible assets: | |
Intangible asset useful life | 5 years |
Non-compete agreements | |
Intangible assets: | |
Intangible asset useful life | 2 years |
Supplemental Income Statement55
Supplemental Income Statement Account Information - Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement Related Disclosures [Abstract] | |||
USF fees | $ 75,570 | $ 71,188 | $ 70,009 |
Disconnect fee, net of credits and bad debt | 706 | 554 | 955 |
Initial activation fees | 779 | 1,085 | 1,278 |
Customer equipment rental | 3,677 | 0 | 0 |
Customer equipment fees | 6,141 | 715 | 418 |
Equipment recovery fees | 77 | 80 | 103 |
Shipping and handling fees | $ 2,473 | $ 2,374 | $ 1,178 |
Supplemental Income Statement56
Supplemental Income Statement Account Information - Cost of Services (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Direct cost of telephony services | |||
Supplemental Income Statement Information [Line Items] | |||
USF costs | $ 75,599 | $ 71,230 | $ 70,009 |
Supplemental Income Statement57
Supplemental Income Statement Account Information - Cost of Goods Sold (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Direct cost of goods sold | |||
Supplemental Income Statement Information [Line Items] | |||
Shipping and handling cost | $ 5,197 | $ 6,028 | $ 5,188 |
Supplemental Income Statement58
Supplemental Income Statement Account Information - Sales and Marketing (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Marketing | |||
Supplemental Income Statement Information [Line Items] | |||
Advertising costs | $ 103,320 | $ 141,138 | $ 142,094 |
Supplemental Income Statement59
Supplemental Income Statement Account Information - General and Administrative (Details) - Selling, general and administrative expense - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Supplemental Income Statement Information [Line Items] | |||
Acquisition related transaction costs | $ 2,585 | $ 2,466 | $ 2,681 |
Acquisition related integration costs | $ 25 | $ 100 | $ 87 |
Supplemental Income Statement60
Supplemental Income Statement Account Information - Deprecation and Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Supplemental Income Statement Information [Line Items] | |||
Depreciation and amortization | $ 61,833 | $ 49,514 | $ 36,054 |
Depreciation and amortization expense | |||
Supplemental Income Statement Information [Line Items] | |||
Depreciation and amortization expense, excluding impairments | 61,640 | 47,440 | 35,660 |
Depreciation and amortization | 61,833 | 49,514 | 36,054 |
Depreciation and amortization expense | Network equipment and computer hardware | |||
Supplemental Income Statement Information [Line Items] | |||
Depreciation and amortization expense, excluding impairments | 12,571 | 13,449 | 13,475 |
Depreciation and amortization expense | Capital leases | |||
Supplemental Income Statement Information [Line Items] | |||
Depreciation and amortization expense, excluding impairments | 2,200 | 2,200 | 2,200 |
Depreciation and amortization expense | Leasehold improvements | |||
Supplemental Income Statement Information [Line Items] | |||
Depreciation and amortization expense, excluding impairments | 5,190 | 4,434 | 4,167 |
Depreciation and amortization expense | Customer premise equipment | |||
Supplemental Income Statement Information [Line Items] | |||
Depreciation and amortization expense, excluding impairments | 2,147 | 75 | 0 |
Depreciation and amortization expense | Furniture | |||
Supplemental Income Statement Information [Line Items] | |||
Depreciation and amortization expense, excluding impairments | 430 | 194 | 120 |
Depreciation and amortization expense | Vehicles | |||
Supplemental Income Statement Information [Line Items] | |||
Depreciation and amortization expense, excluding impairments | 71 | 31 | 10 |
Depreciation and amortization expense | Property and equipment impairments | |||
Supplemental Income Statement Information [Line Items] | |||
Property and equipment impairments | 193 | 1,959 | 9 |
Software | Depreciation and amortization expense | |||
Supplemental Income Statement Information [Line Items] | |||
Depreciation and amortization expense, excluding impairments | 12,627 | 10,116 | 10,831 |
Software impairments | 0 | 115 | 385 |
Patents | Depreciation and amortization expense | |||
Supplemental Income Statement Information [Line Items] | |||
Depreciation and amortization expense, excluding impairments | 1,740 | 1,833 | 2,304 |
Trademark | Depreciation and amortization expense | |||
Supplemental Income Statement Information [Line Items] | |||
Depreciation and amortization expense, excluding impairments | 72 | 72 | 70 |
Customer relationships | Depreciation and amortization expense | |||
Supplemental Income Statement Information [Line Items] | |||
Depreciation and amortization expense, excluding impairments | 11,594 | 8,539 | 1,644 |
Acquired technology | Depreciation and amortization expense | |||
Supplemental Income Statement Information [Line Items] | |||
Depreciation and amortization expense, excluding impairments | 11,768 | 6,296 | 813 |
Trade names | Depreciation and amortization expense | |||
Supplemental Income Statement Information [Line Items] | |||
Depreciation and amortization expense, excluding impairments | 148 | 100 | 13 |
Non-compete agreements | Depreciation and amortization expense | |||
Supplemental Income Statement Information [Line Items] | |||
Depreciation and amortization expense, excluding impairments | $ 1,082 | $ 101 | $ 13 |
Supplemental Income Statement61
Supplemental Income Statement Account Information - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Supplemental Income Statement Information [Line Items] | |||
Amortization of debt related costs | $ 997 | $ 1,072 | $ 1,515 |
Interest expense | |||
Supplemental Income Statement Information [Line Items] | |||
Amortization of debt related costs | $ 997 | $ 1,072 | $ 1,515 |
Supplemental Income Statement62
Supplemental Income Statement Account Information - Other Income (Expense), Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Other expense, net | |||
Supplemental Income Statement Information [Line Items] | |||
Net (losses) gains resulting from foreign exchange transactions | $ (860) | $ 10 | $ (109) |
Income Taxes - Components of In
Income Taxes - Components of Income Before Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
United States | $ 38,115 | $ 44,044 | $ 39,650 |
Foreign | 5,338 | 7,422 | 7,971 |
Income from continuing operations before income tax expense | $ 43,453 | $ 51,466 | $ 47,621 |
Income Taxes - Components of I
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||
Federal | $ (1,846) | $ (1,452) | $ (907) |
Foreign | (1,667) | (376) | (155) |
State and local taxes | (956) | (803) | (337) |
Current income tax expense (benefit) | (4,469) | (2,631) | (1,399) |
Deferred: | |||
Federal | (11,289) | (15,239) | (14,954) |
Foreign | (1,088) | (2,985) | (1,603) |
State and local taxes | (1,572) | (904) | (238) |
Deferred income tax expense (benefit) | (13,949) | (19,128) | (16,795) |
Income tax expense (benefit) | $ (18,418) | $ (21,759) | $ (18,194) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Current assets and liabilities: | |||
Deferred revenue | $ 12,096 | $ 13,265 | |
Accounts receivable and inventory allowances | 640 | 289 | |
Accrued expenses | 11,249 | 8,295 | |
Deferred tax assets, net, current | 23,985 | 21,849 | [1] |
Non-current assets and liabilities: | |||
Acquired intangible assets and property and equipment | (33,129) | (13,799) | |
Accrued expenses | (1,054) | (1,937) | |
Research and development and alternative minimum tax credit | 6,630 | 4,952 | |
Stock option compensation | 20,545 | 17,802 | |
Capital leases | (6,442) | (5,401) | |
Deferred revenue | (634) | (524) | |
Net operating loss carryforwards | 237,127 | 241,525 | |
Deferred tax assets and liabilities, noncurrent | 223,043 | 242,618 | |
Valuation allowance | (20,456) | (17,451) | |
Deferred tax assets, non-current | $ 202,587 | $ 225,167 | [1] |
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Income Taxes - Income Tax Rate
Income Taxes - Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of income tax rate: | |||
U.S. Federal statutory tax rate | 35.00% | 35.00% | 35.00% |
Permanent items | 3.00% | 3.00% | 4.00% |
State and local taxes, net of federal benefit | 2.00% | 3.00% | 0.00% |
International tax (reflects effect of losses for which tax benefit not realized) | 1.00% | 0.00% | (2.00%) |
Valuation reserve for income taxes and other | 2.00% | 1.00% | 1.00% |
Effective tax rate | 43.00% | 42.00% | 38.00% |
Income Taxes - Net Operating Lo
Income Taxes - Net Operating Loss Carryforwards (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Federal | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | $ 625,802 |
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 | 3,140 |
Federal | 2026 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 192,209 |
Federal | 2027 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 235,966 |
Federal | 2028 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 39,145 |
Federal | 2029 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 17,482 |
Federal | 2030 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 107,085 |
Federal | 2031 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 8,012 |
Federal | 2032 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 2,808 |
Federal | 2033 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 3,555 |
Federal | 2034 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 3,814 |
Federal | 2035 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 12,586 |
State | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 186,776 |
State | 2016 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 41,530 |
State | 2017 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 21,823 |
State | 2018 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 17,032 |
State | 2019 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 9,880 |
State | 2020 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 8,028 |
State | 2021 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 6,075 |
State | 2022 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 2,073 |
State | 2023 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 8 |
State | 2024 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 0 |
State | 2025 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 0 |
State | 2026 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 0 |
State | 2027 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 1,072 |
State | 2028 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 4,554 |
State | 2029 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 3,024 |
State | 2030 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 5,181 |
State | 2031 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 563 |
State | 2032 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 625 |
State | 2033 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 7,341 |
State | 2034 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | 14,080 |
State | 2035 | |
Net operating loss carryforwards: | |
Net operating loss carryforwards | $ 43,887 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2011 | Dec. 31, 2015 | Aug. 31, 2015 | Apr. 01, 2015 | Dec. 15, 2014 | Nov. 15, 2013 | |
Net operating loss carryforwards: | ||||||
Tax benefit from share-based compensation | $ 16,629 | |||||
Federal | ||||||
Net operating loss carryforwards: | ||||||
Net operating loss carryforwards | 625,802 | |||||
State | ||||||
Net operating loss carryforwards: | ||||||
Net operating loss carryforwards | 186,776 | |||||
United Kingdom | ||||||
Net operating loss carryforwards: | ||||||
Net operating loss carryforwards | $ 45,159 | |||||
Valuation allowance, operating loss carryforwards | ||||||
Net operating loss carryforwards: | ||||||
Valuation allowance, period for profitability analysis | 3 years | |||||
Adjustment to valuation allowance | $ 325,601 | |||||
Deferred Tax Assets, Net | $ 325,601 | |||||
iCore | ||||||
Net operating loss carryforwards: | ||||||
Deferred tax liabilities, net, non-current | $ 12,944 | |||||
Intangible assets | 38,064 | |||||
Deferred tax assets, operating loss carryforwards | $ 4,457 | |||||
Simple Signal | ||||||
Net operating loss carryforwards: | ||||||
Deferred tax liabilities, net, non-current | $ 2,441 | |||||
Intangible assets | 6,407 | |||||
Deferred tax assets, operating loss carryforwards | $ 3,182 | |||||
Telesphere | ||||||
Net operating loss carryforwards: | ||||||
Intangible assets | $ 50,925 | |||||
Deferred tax assets, operating loss carryforwards | 17,101 | |||||
Vocalocity | ||||||
Net operating loss carryforwards: | ||||||
Deferred tax liabilities, net, non-current | $ 30,000 | |||||
Intangible assets | 75,000 | |||||
Valuation allowance | 4,336 | |||||
Deferred tax assets, operating loss carryforwards | 6,000 | |||||
Deferred Tax Assets, Gross | $ 10,336 | |||||
Deferred tax | $ 3,393 | |||||
Purchased Intangible Assets | Telesphere | ||||||
Net operating loss carryforwards: | ||||||
Deferred tax liabilities, net, non-current | $ 17,050 |
Long-Term Debt and Revolving 69
Long-Term Debt and Revolving Credit Facility - Long-term Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of long-term debt: | ||
Total Long-term note and revolving credit facility | $ 195,392 | $ 136,032 |
Secured debt | 2.875-3.375% Term note - due 2018, net of debt related costs | ||
Schedule of long-term debt: | ||
Total Long-term note and revolving credit facility | $ 0 | 69,032 |
Stated interest rate, minimum | 2.875% | |
Stated interest rate, maximum | 3.375% | |
Secured debt | 2.875-3.375% Revolving credit facility - due 2018 | ||
Schedule of long-term debt: | ||
Total Long-term note and revolving credit facility | $ 0 | 67,000 |
Stated interest rate, minimum | 2.875% | |
Stated interest rate, maximum | 3.375% | |
Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | ||
Schedule of long-term debt: | ||
Total Long-term note and revolving credit facility | $ 76,392 | 0 |
Stated interest rate, minimum | 2.50% | |
Stated interest rate, maximum | 3.00% | |
Secured debt | 2.5-3.0% Revolving credit facility - due 2019 | ||
Schedule of long-term debt: | ||
Total Long-term note and revolving credit facility | $ 119,000 | $ 0 |
Stated interest rate, minimum | 2.50% | |
Stated interest rate, maximum | 3.00% |
Long-Term Debt and Revolving 70
Long-Term Debt and Revolving Credit Facility - Future Payments Under Long-term Debt Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | [1] |
Debt Instrument [Line Items] | |||
Less: unamortized debt related costs | $ 2,053 | $ 1,183 | |
Current portion of notes payable | 15,000 | $ 20,000 | |
Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | |||
Debt Instrument [Line Items] | |||
2,016 | 15,000 | ||
2,017 | 15,000 | ||
2,018 | 15,000 | ||
2,019 | 47,500 | ||
Minimum future payments of principal | 92,500 | ||
Less: unamortized debt related costs | 1,108 | ||
Current portion of notes payable | 15,000 | ||
Long-term portion | $ 76,392 | ||
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Long-Term Debt and Revolving 71
Long-Term Debt and Revolving Credit Facility - Narrative (Details) - USD ($) | Aug. 31, 2015 | Jul. 27, 2015 | Apr. 01, 2015 | Dec. 15, 2014 | Aug. 13, 2014 | Nov. 15, 2013 | Feb. 11, 2013 | Jul. 29, 2011 | Dec. 31, 2015 | Dec. 31, 2014 | Jul. 26, 2013 |
Debt Instrument [Line Items] | |||||||||||
Debt related costs related to Revolving Credit Facility | $ 5,044,000 | $ 3,640,000 | |||||||||
Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | |||||||||||
Debt Instrument [Line Items] | |||||||||||
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 | $ 90,000,000 | ||||||||||
Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.75% | ||||||||||
Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | LIBOR, consolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.50% | ||||||||||
Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | LIBOR | ||||||||||
Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | LIBOR, Consolidated Leverage Ratio Greater Than or Equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 3.00% | ||||||||||
Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | Base rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | base rate | ||||||||||
Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | Federal funds effective rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | federal funds effective rate | ||||||||||
Basis spread on variable rate | 0.50% | ||||||||||
Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | LIBOR applicable to one month interest periods | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | LIBO rate applicable to one month interest periods | ||||||||||
Percentage in addition to basis spread on variable rate | 1.00% | ||||||||||
Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | LIBOR applicable to one month interest periods, conolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.50% | ||||||||||
Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | 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 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Basis spread on variable rate | 1.75% | ||||||||||
Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | LIBOR applicable to one month interest periods, consolidated levarage ratio greater than or equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.00% | ||||||||||
Secured debt | 2015 Credit Facility and Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Proceeds from the issuance of debt | $ 167,000,000 | ||||||||||
Secured debt | 2014 Financing | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Proceeds from the issuance of debt | $ 90,000,000 | ||||||||||
Duration of interest period used to determine interest rate | 3 months | 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 | $ 60,000,000 | ||||||||||
Secured debt | 2014 Financing | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 3.125% | ||||||||||
Secured debt | 2014 Financing | LIBOR, consolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.875% | ||||||||||
Secured debt | 2014 Financing | LIBOR, Consolidated Leverage Ratio Greater Than or Equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 3.375% | ||||||||||
Secured debt | 2014 Financing | Base rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | base rate | ||||||||||
Secured debt | 2014 Financing | Federal funds effective rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | federal funds effective rate | ||||||||||
Basis spread on variable rate | 0.50% | ||||||||||
Secured debt | 2014 Financing | LIBOR applicable to one month interest periods | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | LIBO rate applicable to one month interest periods | ||||||||||
Percentage in addition to basis spread on variable rate | 1.00% | ||||||||||
Secured debt | 2014 Financing | LIBOR applicable to one month interest periods, conolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.875% | ||||||||||
Secured debt | 2014 Financing | 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 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.125% | ||||||||||
Secured debt | 2014 Financing | LIBOR applicable to one month interest periods, consolidated levarage ratio greater than or equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.375% | ||||||||||
Secured debt | 2013 Financing | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Proceeds from the issuance of debt | $ 27,500,000 | ||||||||||
Duration of interest period used to determine interest rate | 3 months | ||||||||||
Secured debt | 2013 Financing | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 3.375% | ||||||||||
Secured debt | 2013 Financing | LIBOR, consolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 3.125% | ||||||||||
Secured debt | 2013 Financing | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | LIBOR | ||||||||||
Secured debt | 2013 Financing | LIBOR, Consolidated Leverage Ratio Greater Than or Equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 3.625% | ||||||||||
Secured debt | 2013 Financing | Base rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | base rate | ||||||||||
Secured debt | 2013 Financing | Federal funds effective rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | federal funds effective rate | ||||||||||
Basis spread on variable rate | 0.50% | ||||||||||
Secured debt | 2013 Financing | LIBOR applicable to one month interest periods | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | LIBOR rate applicable to one month interest periods | ||||||||||
Percentage in addition to basis spread on variable rate | 1.00% | ||||||||||
Secured debt | 2013 Financing | LIBOR applicable to one month interest periods, conolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.125% | ||||||||||
Secured debt | 2013 Financing | 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 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.275% | ||||||||||
Secured debt | 2013 Financing | LIBOR applicable to one month interest periods, consolidated levarage ratio greater than or equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.625% | ||||||||||
Secured debt | 2011 Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Proceeds from the issuance of debt | $ 100,000,000 | ||||||||||
Duration of interest period used to determine interest rate | 3 months | ||||||||||
Cash used in conjunction with debt to extinguish prior debt arrangements | $ 31,000,000 | ||||||||||
Secured debt | 2011 Credit Facility | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 3.50% | ||||||||||
Secured debt | 2011 Credit Facility | LIBOR, consolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 3.25% | ||||||||||
Secured debt | 2011 Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | LIBOR | ||||||||||
Secured debt | 2011 Credit Facility | LIBOR, Consolidated Leverage Ratio Greater Than or Equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 3.75% | ||||||||||
Secured debt | 2011 Credit Facility | Base rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | base rate | ||||||||||
Secured debt | 2011 Credit Facility | Federal funds effective rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | federal funds effective rate | ||||||||||
Basis spread on variable rate | 0.50% | ||||||||||
Secured debt | 2011 Credit Facility | LIBOR applicable to one month interest periods | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | LIBOR rate applicable to one month interest periods | ||||||||||
Percentage in addition to basis spread on variable rate | 1.00% | ||||||||||
Secured debt | 2011 Credit Facility | LIBOR applicable to one month interest periods, conolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.25% | ||||||||||
Secured debt | 2011 Credit Facility | 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 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.50% | ||||||||||
Secured debt | 2011 Credit Facility | LIBOR applicable to one month interest periods, consolidated levarage ratio greater than or equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.75% | ||||||||||
Senior Secured Term Loan | Secured debt | 2010 Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt related costs related to Revolving Credit Facility | $ 2,697,000 | ||||||||||
Debt instrument, prepayment fee | 1,000,000 | ||||||||||
Senior Secured Term Loan | Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 100,000,000 | ||||||||||
Debt related costs related to Revolving Credit Facility | 602,000 | ||||||||||
Periodic payment amount | 3,750,000 | (7,500,000) | |||||||||
Senior Secured Term Loan | Secured debt | 2.5-3.0% Revolving credit facility - due 2019 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt related costs related to Revolving Credit Facility | 1,405,000 | ||||||||||
Periodic payment amount | $ (30,000,000) | ||||||||||
Senior Secured Term Loan | Secured debt | 2015 Credit Facility and Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt related costs related to Revolving Credit Facility | 2,007,000 | ||||||||||
Senior Secured Term Loan | Secured debt | 2014 Credit Facility and Revolving Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt related costs related to Revolving Credit Facility | 1,628,000 | ||||||||||
Senior Secured Term Loan | Secured debt | 2014 Financing | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 100,000,000 | ||||||||||
Debt related costs related to Revolving Credit Facility | 733,000 | 1,910,000 | |||||||||
Periodic payment amount | 5,000,000 | ||||||||||
Senior Secured Term Loan | Secured debt | 2013 Financing | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 70,000,000 | ||||||||||
Debt related costs related to Revolving Credit Facility | 668,000 | 2,009,000 | |||||||||
Periodic payment amount | 5,833,000 | ||||||||||
Senior Secured Term Loan | Secured debt | 2011 Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | 85,000,000 | ||||||||||
Debt related costs related to Revolving Credit Facility | 670,000 | ||||||||||
Periodic payment amount | 7,083,000 | ||||||||||
Senior Secured Term Loan | Secured debt | 2014 Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt related costs related to Revolving Credit Facility | 895,000 | ||||||||||
Revolving Credit Facility | Secured debt | 2.5-3.0% Revolving credit facility - due 2019 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 250,000,000 | ||||||||||
Commitment fee percentage | 0.40% | ||||||||||
Revolving Credit Facility | Secured debt | 2014 Financing | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 125,000,000 | ||||||||||
Commitment fee percentage | 0.40% | ||||||||||
Revolving Credit Facility | Secured debt | 2014 Financing | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | LIBOR | ||||||||||
Revolving Credit Facility | Secured debt | 2013 Financing | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 75,000,000 | ||||||||||
Commitment fee percentage | 0.45% | ||||||||||
Revolving Credit Facility | Secured debt | 2011 Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 35,000,000 | ||||||||||
Commitment fee percentage | 0.50% | ||||||||||
Loans payable | Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Additional interest rate applied in the event of default | 2.00% | ||||||||||
Loans payable | Secured debt | 2014 Financing | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Additional interest rate applied in the event of default | 2.00% | ||||||||||
Simple Signal | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Acquisition cash paid with financing | $ 20,000,000 | ||||||||||
Telesphere | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Acquisition cash paid with financing | $ 67,000,000 | ||||||||||
Vocalocity | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Acquisition cash paid with financing | $ 75,000,000 | ||||||||||
iCore | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Acquisition cash paid with financing | $ 82,000,000 | ||||||||||
Minimum | Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Cash requirement for financial covenants | $ 25,000,000 | ||||||||||
Minimum | Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Minimum | Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | LIBOR, Consolidated Leverage Ratio Greater Than or Equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Minimum | Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | LIBOR applicable to one month interest periods, consolidated levarage ratio greater than or equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Minimum | Secured debt | 2.5-3.0% Revolving credit facility - due 2019 | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Commitment fee percentage | 0.375% | ||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Minimum | Secured debt | 2014 Financing | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Cash requirement for financial covenants | $ 25,000,000 | ||||||||||
Minimum | Secured debt | 2014 Financing | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Minimum | Secured debt | 2014 Financing | LIBOR, Consolidated Leverage Ratio Greater Than or Equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Minimum | Secured debt | 2014 Financing | 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 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Minimum | Secured debt | 2014 Financing | LIBOR applicable to one month interest periods, consolidated levarage ratio greater than or equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Minimum | Secured debt | 2013 Financing | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Minimum | Secured debt | 2013 Financing | LIBOR, Consolidated Leverage Ratio Greater Than or Equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Minimum | Secured debt | 2013 Financing | 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 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Minimum | Secured debt | 2013 Financing | LIBOR applicable to one month interest periods, consolidated levarage ratio greater than or equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Minimum | Secured debt | 2011 Credit Facility | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Minimum | Secured debt | 2011 Credit Facility | LIBOR, Consolidated Leverage Ratio Greater Than or Equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Minimum | Secured debt | 2011 Credit Facility | 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 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Minimum | Secured debt | 2011 Credit Facility | LIBOR applicable to one month interest periods, consolidated levarage ratio greater than or equal to 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Maximum | Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | |||||||||||
Debt Instrument [Line Items] | |||||||||||
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 | ||||||||||
Maximum | Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Maximum | Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | LIBOR applicable to one month interest periods, conolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Maximum | Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | 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 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Maximum | Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | Consolidated leverage ratio limited step-up to 2.75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio permitted by financial covenants | 275.00% | ||||||||||
Maximum | Secured debt | 2.5-3.0% Revolving credit facility - due 2019 | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Maximum | Secured debt | 2.5-3.0% Revolving credit facility - due 2019 | LIBOR, consolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Commitment fee percentage | 0.35% | ||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Maximum | Secured debt | 2014 Financing | |||||||||||
Debt Instrument [Line Items] | |||||||||||
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 | Secured debt | 2014 Financing | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Maximum | Secured debt | 2014 Financing | LIBOR, consolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Maximum | Secured debt | 2014 Financing | LIBOR applicable to one month interest periods, conolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Maximum | Secured debt | 2014 Financing | 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 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Maximum | Secured debt | 2013 Financing | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Restricted payments adjusted amount for consolidated fixed coverage charge ratio requirement | $ 50,000,000 | $ 80,000,000 | |||||||||
Maximum | Secured debt | 2013 Financing | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Maximum | Secured debt | 2013 Financing | LIBOR, consolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Maximum | Secured debt | 2013 Financing | LIBOR applicable to one month interest periods, conolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Maximum | Secured debt | 2013 Financing | 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 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Maximum | Secured debt | 2011 Credit Facility | LIBOR, consolidated leverage ratio greater than or equal to .75 to 1.00 and less than 1.50 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
Maximum | Secured debt | 2011 Credit Facility | LIBOR, consolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Maximum | Secured debt | 2011 Credit Facility | LIBOR applicable to one month interest periods, conolidated leverage ratio less than .75 to 1.00 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 75.00% | ||||||||||
Maximum | Secured debt | 2011 Credit Facility | 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 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Consolidated leverage ratio | 150.00% | ||||||||||
JP Morgan Chase Bank, N.A. | Secured debt | 2.5-3.00% Term note - due 2019, net of debt related costs | Prime rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | prime rate | ||||||||||
JP Morgan Chase Bank, N.A. | Secured debt | 2014 Financing | Prime rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | prime rate | ||||||||||
JP Morgan Chase Bank, N.A. | Secured debt | 2013 Financing | Prime rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | prime rate | ||||||||||
JP Morgan Chase Bank, N.A. | Secured debt | 2011 Credit Facility | Prime rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of variable rate basis | prime rate | ||||||||||
2011 Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Extinguishment of debt | $ 42,500,000 |
Fair Value of Financial Instr72
Fair Value of Financial Instruments Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Money market fund | $ 57,726 | $ 40,797 | [1] | $ 84,663 | $ 97,110 |
Available-for-sale securities | 9,908 | 7,162 | [1] | ||
Level 1 Assets | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Money market fund | 57 | 2,786 | |||
Level 2 Assets | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Available-for-sale securities | $ 9,908 | $ 7,162 | |||
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Common Stock - Narrative (Detai
Common Stock - Narrative (Details) - USD ($) | Dec. 09, 2014 | Feb. 19, 2013 | Jun. 07, 2012 | Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 12, 2013 | Jul. 25, 2012 |
Common stock repurchases: | |||||||||
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 | ||||||||
Conversion of common to preferred shares under declared dividend right | 1 | ||||||||
Maximum ownership percentage limit under the NOL Rights Agreement in which significant dilution would be imposed | 4.90% | ||||||||
Stock repurchased during period, unpaid, value | $ 0 | $ 661,000 | $ 736,000 | ||||||
Stock option cancellation (in shares) | 4,500,000 | ||||||||
Stock option cancellation | $ 5,463,000 | ||||||||
$100,000 repurchase program | |||||||||
Common stock repurchases: | |||||||||
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 | ||||||||
Common Stock | $100,000 repurchase program | |||||||||
Common stock repurchases: | |||||||||
Authorized amount of stock repurchase | $ 100,000,000 | $ 100,000,000 | |||||||
Repurchase period | 4 years | ||||||||
Remaining authorized amount of stock repurchase program | $ 84,805,000 | $ 219,000 | |||||||
Stock repurchased during period, unpaid, shares | 171,000 |
Common Stock - Repurchased Shar
Common Stock - Repurchased Shares of Common Stock (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Class of Stock [Line Items] | |||
Value of common stock repurchased | $ 15,250 | $ 49,263 | $ 56,386 |
$100,000 repurchase program | Common Stock | |||
Class of Stock [Line Items] | |||
Stock repurchased during period (in shares) | 3,320 | 13,475 | |
Value of common stock repurchased | $ 15,195 | $ 49,128 |
Employee Benefit Plans - Narra
Employee Benefit Plans - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | May. 31, 2006 | |
Share-based compensation: | ||||
Shares Authorized | 93,400,000 | |||
Shares Available for Grant | 21,548,000 | |||
Stock options granted, weighted average exercise price (USD per share) | $ 4.41 | $ 3.47 | $ 2.89 | |
Stock options, exercises in period, aggregate intrinsic value | $ 8,040,000 | $ 22,962,000 | $ 9,891,000 | |
Stock options, grants in period, weighted average grant date fair value (USD per share) | $ 3.09 | $ 2.55 | $ 2.16 | |
Total unamortized share-based compensation | $ 25,800,000 | |||
Total unamortized share-based compensation, period for recognition | 48 months | |||
Maximum employer contribution percentage | 50.00% | |||
Annual contribution limit per employee | $ 6,000 | |||
Retirement plan expense | $ 3,676,000 | $ 2,959,000 | $ 2,554,000 | |
Restricted stock and restricted stock units | ||||
Share-based compensation: | ||||
Vesting percentage | 100.00% | |||
Volatility rate | 40.21% | 48.91% | 0.00% | |
Risk free interest rate | 0.98% | 0.69% | 0.00% | |
Dividend yield | 0.00% | 0.00% | 0.00% | |
Expected life (in years) | 2 years 9 months 15 days | 2 years 9 months 15 days | 0 years | |
Restricted stocks and restricted stock units, granted, weighted average exercise price (USD per share) | $ 5.37 | $ 4.71 | $ 3.01 | |
Restricted stocks and restricted stock units, exercised, aggregate intrinsic value | $ 8,844,000 | $ 4,909,000 | $ 3,788,000 | |
Stock options | ||||
Share-based compensation: | ||||
Dividend yield | 0.00% | 0.00% | 0.00% | |
Expected life (in years) | 6 years 3 months | 6 years 3 months | 6 years 3 months | |
Restricted stock units | ||||
Share-based compensation: | ||||
Equity instruments other than options, aggregate intrinsic value | $ 59,619,000 | |||
Selling, general and administrative expense | ||||
Share-based compensation: | ||||
Share-based compensation expense | $ 27,541,000 | $ 21,070,000 | $ 17,843,000 | |
2001 and 2006 Stock Incentive Plan | ||||
Share-based compensation: | ||||
Period until award expiration | 10 years | |||
2006 Incentive Plan | ||||
Share-based compensation: | ||||
Shares Authorized | 71,669,000 | |||
Number of shares available for grant, annual maximum | 10,000,000 | |||
Maximum annual monetary award | $ 10,000,000 | |||
Shares Available for Grant | 0 | |||
2006 Incentive Plan | Stock options | ||||
Share-based compensation: | ||||
Shares Authorized | 20,000,000 | |||
2006 Incentive Plan | Stock option 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 | |||
2015 Incentive Plan | ||||
Share-based compensation: | ||||
Shares Authorized | 21,731,000 | |||
Shares Available for Grant | 21,548,000 | |||
Tranche Four | Restricted stock and restricted stock units | ||||
Share-based compensation: | ||||
% of Target Earned | 200.00% | |||
Minimum | 2001 and 2006 Stock Incentive Plan | ||||
Share-based compensation: | ||||
Award vesting period | 3 years | |||
Period until award expiration | 5 years | |||
Maximum | 2001 and 2006 Stock Incentive Plan | ||||
Share-based compensation: | ||||
Award vesting period | 4 years | |||
Period until award expiration | 10 years |
Employee Benefit Plans - Share-
Employee Benefit Plans - Share-based Compensation, Assumptions Used (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Restricted stock and restricted stock units | |||
Share-based compensation: | |||
Risk free interest rate | 0.98% | 0.69% | 0.00% |
Volatility rate | 40.21% | 48.91% | 0.00% |
Assumptions used to value options: | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected life (in years) | 2 years 9 months 15 days | 2 years 9 months 15 days | 0 years |
Stock options | |||
Assumptions used to value options: | |||
Risk-free interest rate, minimum | 1.38% | 1.78% | 1.13% |
Risk-free interest rate, maximum | 1.80% | 2.19% | 2.02% |
Expected stock price volatility, minimum | 73.55% | 85.28% | 86.94% |
Expected stock price volatility, maximum | 83.14% | 86.93% | 90.39% |
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, T
Employee Benefit Plans - SBC, Total Share Return (Details) - Restricted stock and restricted stock units | 12 Months Ended |
Dec. 31, 2015 | |
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 - Shar78
Employee Benefit Plans - Share-based Compensation, by Incentive Plan (Details) - shares | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based compensation: | ||||
Shares Authorized | 93,400,000 | |||
Shares Available for Grant | 21,548,000 | |||
Stock Options Outstanding | 20,003,000 | 25,651,000 | 32,837,000 | 40,240,000 |
Restricted stock and restricted stock units | ||||
Share-based compensation: | ||||
Restricted Stock and Restricted Stock Units | 10,387,000 | 7,828,000 | 5,182,000 | 3,343,000 |
2001 Incentive Plan | ||||
Share-based compensation: | ||||
Shares Authorized | 0 | |||
Shares Available for Grant | 0 | |||
Stock Options Outstanding | 468,000 | |||
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 | 71,669,000 | |||
Shares Available for Grant | 0 | |||
Stock Options Outstanding | 19,463,000 | |||
2006 Incentive Plan | Restricted stock and restricted stock units | ||||
Share-based compensation: | ||||
Restricted Stock and Restricted Stock Units | 8,703,000 | |||
2015 Incentive Plan | ||||
Share-based compensation: | ||||
Shares Authorized | 21,731,000 | |||
Shares Available for Grant | 21,548,000 | |||
Stock Options Outstanding | 72,000 | |||
2015 Incentive Plan | Restricted stock and restricted stock units | ||||
Share-based compensation: | ||||
Restricted Stock and Restricted Stock Units | 1,684,000 |
Employee Benefit Plans - Shar79
Employee Benefit Plans - Share-based Compensation, Award Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock Options Outstanding, Number of Shares: | |||
Stock options, outstanding, balance at beginning of period (in shares) | 25,651 | 32,837 | 40,240 |
Stock options granted (in shares) | 505 | 6,865 | 9,315 |
Stock options exercised (in shares) | (3,495) | (10,504) | (7,842) |
Stock options canceled (in shares) | (2,658) | (3,547) | (8,876) |
Stock options, outstanding, balance at end of period (in shares) | 20,003 | 25,651 | 32,837 |
Stock Options Outstanding, Weighted Average Exercise Price Per Share: | |||
Stock options, outstanding, weighted average exercise price, beginning of period (USD per share) | $ 3.31 | $ 2.73 | $ 2.32 |
Stock options granted, weighted average exercise price (USD per share) | 4.41 | 3.47 | 2.89 |
Stock options exercised, weighted average exercise price (USD per share) | 2.82 | 1.65 | 1.47 |
Stock options canceled, weighted average exercise price (USD per share) | (4.41) | 3.19 | 2.14 |
Stock options, outstanding, weighted average exercise price, end of period (USD per share) | $ 3.28 | $ 3.31 | $ 2.73 |
Stock Options Outstanding, additional disclosures: | |||
Stock options, exercisable (in shares) | 11,072 | ||
Stock options, exercisable, weighted average exercise price (USD per share) | $ 3.32 | ||
Stock options, unvested (in shares) | 8,931 | 14,943 | |
Stock options, unvested shares, weighted average exercise price (USD per share) | $ 3.23 | $ 3.10 | |
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) | 7,828 | 5,182 | 3,343 |
Restricted stocks and restricted stock units, granted (in shares) | 6,354 | 5,240 | 3,896 |
Restricted stocks and restricted stock units, exercised (in shares) | (2,436) | (1,734) | (1,549) |
Restricted stocks and restricted stock units, canceled (in shares) | (1,359) | (860) | (508) |
Restricted stocks and restricted stock units, outstanding, end of period (in shares) | 10,387 | 7,828 | 5,182 |
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) | $ 4.09 | $ 2.92 | $ 2.59 |
Restricted stocks and restricted stock units, granted, weighted average exercise price (USD per share) | 5.37 | 4.71 | 3.01 |
Restricted stocks and restricted stock units, exercised, weighted average exercise price (USD per share) | 3.63 | 2.83 | 2.48 |
Restricted stocks and restricted stock units, canceled, weighted average exercise price (USD per share) | 4.67 | 3.32 | 2.84 |
Restricted stocks and restricted stock units, outstanding, weighted average exercise price, end of period (USD per share) | $ 4.91 | $ 4.09 | $ 2.92 |
Employee Benefit Plans - Range
Employee Benefit Plans - Range of Exercise Prices (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Share-based compensation by range of exercise prices: | |
Stock Options Outstanding (in shares) | shares | 20,003 |
Stock Options Outstanding, Weighted Average Remaining Contractual Life | 6 years 6 months |
Stock Options Outstanding, Weighted Average Exercise Price (USD per share) | $ 3.28 |
Stock Options Outstanding, Aggregate Intrinsic Value | $ | $ 53,609 |
Stock Options Exercisable, Stock Options Vested and Exercisable (in shares) | shares | 11,072 |
Stock Options Exercisable, Weighted Average Remaining Contractual Life | 5 years 3 months |
Stock Options Exercisable, Weighted Average Exercise Price (USD per share) | $ 3.32 |
Stock Options Exercisable, Aggregate Intrinsic Value | $ | $ 31,176 |
$0.33 to $1.43 | |
Share-based compensation by range of exercise prices: | |
Stock Options Outstanding (in shares) | shares | 2,506 |
Stock Options Outstanding, Weighted Average Exercise Price (USD per share) | $ 1.37 |
Stock Options Exercisable, Stock Options Vested and Exercisable (in shares) | shares | 2,506 |
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) | shares | 94 |
Stock Options Outstanding, Weighted Average Exercise Price (USD per share) | $ 1.71 |
Stock Options Exercisable, Stock Options Vested and Exercisable (in shares) | shares | 63 |
Stock Options Exercisable, Weighted Average Exercise Price (USD per share) | $ 1.71 |
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) | shares | 14,824 |
Stock Options Outstanding, Weighted Average Exercise Price (USD per share) | $ 3.03 |
Stock Options Exercisable, Stock Options Vested and Exercisable (in shares) | shares | 6,300 |
Stock Options Exercisable, Weighted Average Exercise Price (USD per share) | $ 2.85 |
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) | shares | 2,076 |
Stock Options Outstanding, Weighted Average Exercise Price (USD per share) | $ 4.78 |
Stock Options Exercisable, Stock Options Vested and Exercisable (in shares) | shares | 1,701 |
Stock Options Exercisable, Weighted Average Exercise Price (USD per share) | $ 4.78 |
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) | shares | 503 |
Stock Options Outstanding, Weighted Average Exercise Price (USD per share) | $ 14.21 |
Stock Options Exercisable, Stock Options Vested and Exercisable (in shares) | shares | 502 |
Stock Options Exercisable, Weighted Average Exercise Price (USD per share) | $ 14.21 |
Range of Exercise Prices, minimum | 7.35 |
Range of Exercise Prices, maximum | $ 35 |
Commitments and Contingencies -
Commitments and Contingencies - Leases (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 24, 2005 | ||
Capital leases, future minimum payments due: | |||||
2,016 | $ 5,038,000 | ||||
2,017 | 3,503,000 | ||||
2,018 | 0 | ||||
2,019 | 0 | ||||
2,020 | 0 | ||||
Thereafter | 0 | ||||
Total minimum payments required | 8,541,000 | ||||
Less amounts representing interest | (780,000) | ||||
Minimum future payments of principal | 7,761,000 | ||||
Current portion | 4,398,000 | $ 3,365,000 | [1] | ||
Long-term portion | 3,363,000 | 6,836,000 | [1] | ||
Operating leases, future minimum payments due: | |||||
2,016 | 6,817,000 | ||||
2,017 | 6,471,000 | ||||
2,018 | 8,936,000 | ||||
2,019 | 8,939,000 | ||||
2,020 | 8,288,000 | ||||
Thereafter | 17,798,000 | ||||
Total minimum payments required | 57,249,000 | ||||
Capital leased assets: | |||||
Restricted cash | 2,587,000 | 3,405,000 | |||
Property, plant and equipment, gross | 173,620,000 | 153,211,000 | |||
Rent expense | 6,378,000 | 7,007,000 | $ 6,071,000 | ||
Building (under capital lease) | |||||
Capital leased assets: | |||||
Property, plant and equipment, gross | 25,709,000 | 25,709,000 | |||
Capital leased assets, accumulated depreciation | 22,045,000 | ||||
Capital lease deposit | |||||
Capital leased assets: | |||||
Restricted cash | 2,315,000 | $ 7,350,000 | |||
Letter of credit-lease deposits | |||||
Capital leased assets: | |||||
Restricted cash | $ 2,498,000 | $ 3,311,000 | |||
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Commitments and Contingencies
Commitments and Contingencies - Narrative (Details) | Dec. 09, 2013USD ($) | Feb. 11, 2013Defendant | Aug. 17, 2011Defendant | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 19, 2013USD ($) | May. 02, 2012claim | Mar. 24, 2005USD ($) |
Commitments and contingencies: | |||||||||
Restricted cash | $ 2,587,000 | $ 3,405,000 | |||||||
Property, plant and equipment, gross | 173,620,000 | 153,211,000 | |||||||
Rent expense | 6,378,000 | 7,007,000 | $ 6,071,000 | ||||||
Vendor Commitments: | |||||||||
Total vendor commitments | 251,888,000 | ||||||||
2,016 | 101,042,000 | ||||||||
2,017 | 75,008,000 | ||||||||
2,018 | 69,880,000 | ||||||||
2,019 | 5,958,000 | ||||||||
Reserve for potential tax liability pending new requirements from state or municipal agencies | 3,903,000 | ||||||||
Estimated maximum potential exposure for retroactive tax assessments | $ 12,000,000 | ||||||||
Officers' compensation, duration of severance payments | 12 months | ||||||||
Capital lease deposit | |||||||||
Commitments and contingencies: | |||||||||
Restricted cash | $ 2,315,000 | $ 7,350,000 | |||||||
Letter of credit-lease deposits | |||||||||
Commitments and contingencies: | |||||||||
Restricted cash | 2,498,000 | 3,311,000 | |||||||
Letter of credit | |||||||||
Commitments and contingencies: | |||||||||
Restricted cash | 2,498,000 | 3,311,000 | |||||||
Building (under capital lease) | |||||||||
Commitments and contingencies: | |||||||||
Property, plant and equipment, gross | 25,709,000 | $ 25,709,000 | |||||||
Capital leased assets, accumulated depreciation | $ 22,045,000 | ||||||||
Judicial Ruling | Unfavorable Regulatory Action | |||||||||
Loss Contingencies [Line Items] | |||||||||
USF Component | 1 | ||||||||
Federal Universal Service Fund Size | $ 0 | ||||||||
Federal Universal Service Fund Amount Increase | $ 0 | ||||||||
Federal Universal Service Fund Percentage Increase | 0.00% | ||||||||
Chief Executive Officer | |||||||||
Vendor Commitments: | |||||||||
Duration of salary used for severance payments | 12 months | ||||||||
Bear Creek litigation case | Threatened litigation | Patent claims | |||||||||
Loss Contingencies [Line Items] | |||||||||
Loss Contingency, Number of Defendants | Defendant | 1 | ||||||||
Loss Contingency, Pending Claims, Number | claim | 12 | ||||||||
RPost Holdings Inc. Litigation Case | Threatened litigation | Patent claims | |||||||||
Loss Contingencies [Line Items] | |||||||||
Loss Contingency, Number of Defendants | Defendant | 27 |
Acquisition of Business - Narr
Acquisition of Business - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands | Aug. 31, 2015 | Apr. 01, 2015 | Dec. 15, 2014 | Dec. 15, 2014 | Nov. 15, 2013 | Jan. 31, 2015 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||||||||||||||||
Pro forma net income (loss) | $ 20,653 | $ 14,036 | ||||||||||||||||
Total revenues | $ 230,124 | $ 223,360 | $ 221,858 | $ 219,730 | $ 214,533 | $ 214,710 | $ 218,878 | $ 220,733 | 895,072 | 868,854 | $ 829,067 | |||||||
Net income | 22,596 | 19,447 | 27,801 | |||||||||||||||
iCore | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Acquisition cash paid | $ 92,689 | |||||||||||||||||
Acquisition cash on hand | 10,689 | |||||||||||||||||
Acquisition cash paid with financing | 82,000 | |||||||||||||||||
Acquisition, escrow deposit from cash consideration | 9,200 | |||||||||||||||||
Acquisition and integration related costs | 1,353 | |||||||||||||||||
Deferred tax liabilities, net, non-current | 12,944 | |||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 29,395 | |||||||||||||||||
Intangible assets | 38,064 | |||||||||||||||||
Deferred tax assets, operating loss carryforwards | 4,457 | |||||||||||||||||
Intangible assets acquired | $ 38,064 | |||||||||||||||||
Simple Signal | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Acquisition cash paid | $ 20,000 | |||||||||||||||||
Acquisition cash paid with financing | 20,000 | |||||||||||||||||
Acquisition, escrow deposit from cash consideration | 2,356 | |||||||||||||||||
Acquisition and integration related costs | 470 | |||||||||||||||||
Deferred tax liabilities, net, non-current | 2,441 | |||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 7,891 | |||||||||||||||||
Intangible assets | 6,407 | |||||||||||||||||
Deferred tax assets, operating loss carryforwards | 3,182 | |||||||||||||||||
Acquisition consideration transferred | $ 25,578 | |||||||||||||||||
Acquisition shares issued (in shares) | 1,111 | |||||||||||||||||
Acquisition shares issued, value | $ 5,578 | |||||||||||||||||
Acquisition, escrow deposit from stock consideration | 1,144 | |||||||||||||||||
Intangible assets acquired | $ 6,407 | |||||||||||||||||
Telesphere | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Acquisition cash paid | $ 91,603 | $ 3,610 | ||||||||||||||||
Acquisition cash on hand | 24,603 | |||||||||||||||||
Acquisition cash paid with financing | 67,000 | |||||||||||||||||
Acquisition, escrow deposit from cash consideration | 10,725 | $ 10,725 | ||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 54,099 | 54,099 | ||||||||||||||||
Intangible assets | 50,925 | 50,925 | ||||||||||||||||
Deferred tax assets, operating loss carryforwards | 17,101 | 17,101 | ||||||||||||||||
Acquisition consideration transferred | $ 114,330 | |||||||||||||||||
Acquisition shares issued (in shares) | 6,825 | |||||||||||||||||
Acquisition shares issued, value | $ 22,727 | |||||||||||||||||
Acquisition, escrow deposit from stock consideration | 2,875 | 2,875 | ||||||||||||||||
Acquisition cash paid, excess cash | 676 | $ 105 | ||||||||||||||||
Intangible assets acquired | 50,925 | |||||||||||||||||
Telesphere | Selling, general and administrative expense | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Acquisition and integration related costs | $ 102 | 2,446 | ||||||||||||||||
Vocalocity | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Acquisition cash paid | $ 107,981 | |||||||||||||||||
Acquisition cash on hand | 32,981 | |||||||||||||||||
Acquisition cash paid with financing | 75,000 | |||||||||||||||||
Deferred tax liabilities, net, non-current | 30,000 | |||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 50,540 | |||||||||||||||||
Intangible assets | 75,000 | |||||||||||||||||
Deferred tax assets, operating loss carryforwards | 6,000 | |||||||||||||||||
Acquisition consideration transferred | $ 134,167 | |||||||||||||||||
Acquisition shares issued (in shares) | 7,983 | |||||||||||||||||
Acquisition shares issued, value | $ 26,186 | |||||||||||||||||
Acquisition cash paid, excess cash | 2,869 | |||||||||||||||||
Deferred tax | $ 3,393 | 3,393 | ||||||||||||||||
Deferred Tax Assets, Gross | 10,336 | |||||||||||||||||
Valuation allowance | $ 4,336 | |||||||||||||||||
Vocalocity | Selling, general and administrative expense | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Acquisition and integration related costs | $ 2,768 | |||||||||||||||||
Depreciation and amortization expense | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Pro forma net income (loss) | 3,970 | 7,666 | ||||||||||||||||
Income Tax Expense | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Pro forma net income (loss) | 1,511 | 1,888 | ||||||||||||||||
Acquisition-related costs | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Pro forma net income (loss) | 2,610 | |||||||||||||||||
Interest expense | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Pro forma net income (loss) | 1,790 | $ 3,060 | ||||||||||||||||
iCore and Simple Signal [Member] | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Total revenues | 34,243 | |||||||||||||||||
Net income | $ 2,385 | |||||||||||||||||
Liability | Telesphere | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Acquisition, escrow deposit from cash consideration | $ 11,600 | 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 | $ 2,000 | ||||||||||||||||
Maximum duration for escrow distribution from date of acquisition | 36 months | |||||||||||||||||
Customer relationships | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible asset useful life | 10 years | |||||||||||||||||
Customer relationships | iCore | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible asset useful life | 10 years | |||||||||||||||||
Intangible assets acquired | $ 37,720 | |||||||||||||||||
Customer relationships | Simple Signal | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible asset useful life | 10 years | |||||||||||||||||
Intangible assets acquired | $ 5,090 | |||||||||||||||||
Customer relationships | Telesphere | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible asset useful life | 7 years | |||||||||||||||||
Intangible assets acquired | $ 10,699 | |||||||||||||||||
Customer relationships | Vocalocity | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible asset useful life | 10 years | |||||||||||||||||
Intangible assets acquired | $ 39,100 | |||||||||||||||||
Trade names | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible asset useful life | 5 years | |||||||||||||||||
Trade names | iCore | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible assets acquired | $ 240 | |||||||||||||||||
Trade names | Simple Signal | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible assets acquired | $ 20 | |||||||||||||||||
Trade names | Vocalocity | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible asset useful life | 5 years | |||||||||||||||||
Intangible assets acquired | $ 500 | |||||||||||||||||
Acquired technology | iCore | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible asset useful life | 8 years | |||||||||||||||||
Acquired technology | Simple Signal | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible asset useful life | 8 years | |||||||||||||||||
Intangible assets acquired | $ 994 | |||||||||||||||||
Acquired technology | Telesphere | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible asset useful life | 10 years | |||||||||||||||||
Intangible assets acquired | $ 35,508 | |||||||||||||||||
Acquired technology | Vocalocity | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible assets acquired | $ 35,200 | |||||||||||||||||
Non-compete agreements | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible asset useful life | 2 years | |||||||||||||||||
Non-compete agreements | iCore | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible asset useful life | 2 years | |||||||||||||||||
Intangible assets acquired | $ 104 | |||||||||||||||||
Non-compete agreements | Simple Signal | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible asset useful life | 2 years | |||||||||||||||||
Intangible assets acquired | $ 303 | |||||||||||||||||
Non-compete agreements | Telesphere | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible asset useful life | 3 years | |||||||||||||||||
Intangible assets acquired | $ 2,526 | |||||||||||||||||
Non-compete agreements | Vocalocity | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Intangible asset useful life | 2 years | |||||||||||||||||
Intangible assets acquired | $ 200 | |||||||||||||||||
Purchased Intangible Assets | Telesphere | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Deferred tax liabilities, net, non-current | $ 17,050 | $ 17,050 |
Acquisition of Business - Asse
Acquisition of Business - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Aug. 31, 2015 | Apr. 01, 2015 | Dec. 31, 2014 | [1] | Dec. 15, 2014 | Dec. 31, 2013 | Nov. 15, 2013 |
Current liabilities: | ||||||||
Goodwill | $ 222,106 | $ 142,544 | $ 83,627 | |||||
iCore | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ 1,014 | |||||||
Accounts receivable | 1,492 | |||||||
Inventory | 191 | |||||||
Prepaid expenses and other current assets | 1,017 | |||||||
Total current assets | 3,714 | |||||||
Property and equipment | 4,437 | |||||||
Software | 281 | |||||||
Intangible assets | 38,064 | |||||||
Restricted cash | 183 | |||||||
Other assets | 195 | |||||||
Total assets acquired | 46,874 | |||||||
Current liabilities: | ||||||||
Accounts payable | 3,344 | |||||||
Accrued expenses | 3,963 | |||||||
Deferred revenue, current portion | 576 | |||||||
Current maturities of capital lease obligations | 557 | |||||||
Total current liabilities | 8,440 | |||||||
Deferred tax liabilities, net, non-current | 8,487 | |||||||
Capital lease obligations, net of current maturities | 552 | |||||||
Total liabilities assumed | 17,479 | |||||||
Net identifiable assets acquired | 29,395 | |||||||
Goodwill | 63,294 | |||||||
Total purchase price | $ 92,689 | |||||||
Simple Signal | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ 53 | |||||||
Accounts receivable | 832 | |||||||
Inventory | 67 | |||||||
Prepaid expenses and other current assets | 159 | |||||||
Total current assets | 1,111 | |||||||
Property and equipment | 979 | |||||||
Software | 401 | |||||||
Intangible assets | 6,407 | |||||||
Deferred tax assets, net, non-current | 741 | |||||||
Total assets acquired | 9,639 | |||||||
Current liabilities: | ||||||||
Accounts payable | 785 | |||||||
Accrued expenses | 593 | |||||||
Deferred revenue, current portion | 370 | |||||||
Total current liabilities | 1,748 | |||||||
Total liabilities assumed | 1,748 | |||||||
Net identifiable assets acquired | 7,891 | |||||||
Goodwill | 17,687 | |||||||
Total purchase price | $ 25,578 | |||||||
Telesphere | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ 70 | |||||||
Accounts receivable | 2,925 | |||||||
Inventory | 386 | |||||||
Prepaid expenses and other current assets | 398 | |||||||
Total current assets | 3,779 | |||||||
Property and equipment | 5,731 | |||||||
Software | 3 | |||||||
Intangible assets | 50,925 | |||||||
Other assets | 76 | |||||||
Deferred tax assets, net, non-current | 51 | |||||||
Total assets acquired | 60,565 | |||||||
Current liabilities: | ||||||||
Accounts payable | 1,202 | |||||||
Accrued expenses | 4,108 | |||||||
Deferred revenue, current portion | 1,156 | |||||||
Total current liabilities | 6,466 | |||||||
Total liabilities assumed | 6,466 | |||||||
Net identifiable assets acquired | 54,099 | |||||||
Goodwill | 60,231 | |||||||
Total purchase price | $ 114,330 | |||||||
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 | |||||||
[1] | See Note 6 Long-Term Debt and Revolving Credit Facility and Note 11 Acquisition of Business. |
Acquisition of Business - Intan
Acquisition of Business - Intangible Assets Acquired (Details) - USD ($) $ in Thousands | Aug. 31, 2015 | Apr. 01, 2015 | Dec. 15, 2014 | Nov. 15, 2013 | Dec. 31, 2015 |
Customer relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset useful life | 10 years | ||||
Non-compete agreements | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset useful life | 2 years | ||||
Trade names | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset useful life | 5 years | ||||
Simple Signal | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets acquired | $ 6,407 | ||||
Simple Signal | Customer relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset useful life | 10 years | ||||
Intangible assets acquired | $ 5,090 | ||||
Simple Signal | Acquired technology | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset useful life | 8 years | ||||
Intangible assets acquired | $ 994 | ||||
Simple Signal | Non-compete agreements | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset useful life | 2 years | ||||
Intangible assets acquired | $ 303 | ||||
Simple Signal | Trade names | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets acquired | $ 20 | ||||
iCore | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets acquired | $ 38,064 | ||||
iCore | Customer relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset useful life | 10 years | ||||
Intangible assets acquired | $ 37,720 | ||||
iCore | Acquired technology | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset useful life | 8 years | ||||
iCore | Non-compete agreements | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset useful life | 2 years | ||||
Intangible assets acquired | $ 104 | ||||
iCore | Trade names | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets acquired | $ 240 | ||||
Telesphere | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets acquired | $ 50,925 | ||||
Telesphere | Customer relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset useful life | 7 years | ||||
Intangible assets acquired | $ 10,699 | ||||
Telesphere | Acquired technology | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset useful life | 10 years | ||||
Intangible assets acquired | $ 35,508 | ||||
Telesphere | Non-compete agreements | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset useful life | 3 years | ||||
Intangible assets acquired | $ 2,526 | ||||
Telesphere | MPLS network | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets acquired | $ 2,192 | ||||
Vocalocity | Customer relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset useful life | 10 years | ||||
Intangible assets acquired | $ 39,100 | ||||
Vocalocity | Acquired technology | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets acquired | $ 35,200 | ||||
Vocalocity | Non-compete agreements | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset useful life | 2 years | ||||
Intangible assets acquired | $ 200 | ||||
Vocalocity | Trade names | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset useful life | 5 years | ||||
Intangible assets acquired | $ 500 |
Acquisition of Business - Pro F
Acquisition of Business - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Business Combinations [Abstract] | ||
Revenue | $ 943,554 | $ 942,882 |
Net income attributable to Vonage | $ 20,653 | $ 14,036 |
Net income attributable to Vonage per share - basic (USD per share) | $ 0.10 | $ 0.07 |
Net income attributable to Vonage per share - diluted (USD per share) | $ 0.09 | $ 0.06 |
Noncontrolling Interest and R87
Noncontrolling Interest and Redeemable Noncontrolling Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2015 | Sep. 30, 2013 | |
Noncontrolling Interest [Abstract] | |||
Ownership by redeemable noncontrolling owners, percent | 30.00% | ||
Redeemable noncontrolling interest ownership percentage held by joint venture partner | 4.00% | ||
Payments for restructuring | $ 111 | $ 500 | |
Business exit costs | $ 1,972 |
Discontinued Operations Narrati
Discontinued Operations Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss on disposal, net of taxes | $ (824) | $ (824) | $ 0 | $ 0 |
Partial offset by tax benefit | 1,058 | |||
Noncontrolling Interest [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Write-off of noncontrolling interest | (907) | |||
Foreign Currency Gain (Loss) [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Write-off of noncontrolling interest | (783) | |||
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Write-off of noncontrolling interest | $ (192) |
Discontinued Operations Results
Discontinued Operations Results of Operations From Discontinued Operation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Loss from discontinued operations | $ (1,615) | $ (10,260) | $ (1,626) | ||||||||
Loss on disposal, net of taxes | $ (824) | (824) | 0 | 0 | |||||||
Discontinued operations | (2,439) | (10,260) | (1,626) | ||||||||
Plus: Net loss from discontinued operations attributable to noncontrolling interest | 59 | 819 | 488 | ||||||||
Loss from discontinued operations attributable to Vonage | $ 0 | $ 0 | $ 0 | $ (2,380) | $ (4,402) | $ (2,771) | $ (1,372) | $ (896) | (2,380) | (9,441) | (1,138) |
Subsidiaries [Member] | Brazil | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Revenues | 33 | 99 | 0 | ||||||||
Operating expenses | 1,648 | 10,358 | 1,626 | ||||||||
Loss from discontinued operations | (1,615) | (10,259) | (1,626) | ||||||||
Loss on disposal, net of taxes | (824) | (1) | 0 | ||||||||
Discontinued operations | (2,439) | (10,260) | (1,626) | ||||||||
Plus: Net loss from discontinued operations attributable to noncontrolling interest | 59 | 819 | 488 | ||||||||
Loss from discontinued operations attributable to Vonage | $ (2,380) | $ (9,441) | $ (1,138) |
Geographic Information (Details
Geographic Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment Reporting [Abstract] | |||||||||||
Number of operating segments | segment | 2 | ||||||||||
Number of reportable segments | segment | 1 | ||||||||||
Operations information by geographic location: | |||||||||||
Total revenues | $ 230,124 | $ 223,360 | $ 221,858 | $ 219,730 | $ 214,533 | $ 214,710 | $ 218,878 | $ 220,733 | $ 895,072 | $ 868,854 | $ 829,067 |
Long-lived assets | 430,498 | 321,630 | 430,498 | 321,630 | |||||||
United States | |||||||||||
Operations information by geographic location: | |||||||||||
Total revenues | 854,706 | 823,857 | 784,665 | ||||||||
Long-lived assets | 430,150 | 320,811 | 430,150 | 320,811 | |||||||
Brazil | |||||||||||
Operations information by geographic location: | |||||||||||
Long-lived assets | 0 | 145 | 0 | 145 | |||||||
Canada | |||||||||||
Operations information by geographic location: | |||||||||||
Total revenues | 25,935 | 30,294 | 32,348 | ||||||||
United Kingdom | |||||||||||
Operations information by geographic location: | |||||||||||
Total revenues | 14,431 | 14,703 | $ 12,054 | ||||||||
Long-lived assets | 270 | 545 | 270 | 545 | |||||||
Israel | |||||||||||
Operations information by geographic location: | |||||||||||
Long-lived assets | $ 78 | $ 129 | $ 78 | $ 129 |
Quarterly Financial Informati91
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Selected quarterly financial information: | |||||||||||
Total revenues | $ 230,124 | $ 223,360 | $ 221,858 | $ 219,730 | $ 214,533 | $ 214,710 | $ 218,878 | $ 220,733 | $ 895,072 | $ 868,854 | $ 829,067 |
Income from continuing operations | 3,406 | 3,433 | 8,347 | 9,849 | 10,006 | 7,327 | 6,890 | 5,484 | 25,035 | 29,707 | 29,427 |
Loss from discontinued operations attributable to Vonage | 0 | 0 | 0 | (2,380) | (4,402) | (2,771) | (1,372) | (896) | (2,380) | (9,441) | (1,138) |
Net income attributable to Vonage | $ 3,406 | $ 3,433 | $ 8,347 | $ 7,469 | $ 5,604 | $ 4,556 | $ 5,518 | $ 4,588 | $ 22,655 | $ 20,266 | $ 28,289 |
Basic net income per share | |||||||||||
Basic net income per share-from continuing operations (USD per share) | $ 0.02 | $ 0.02 | $ 0.04 | $ 0.05 | $ 0.05 | $ 0.04 | $ 0.03 | $ 0.03 | $ 0.12 | $ 0.14 | $ 0.14 |
Basic net income per share-from discontinued operations attributable to Vonage (USD per share) | 0 | 0 | 0 | (0.01) | (0.02) | (0.01) | (0.01) | 0 | (0.01) | (0.04) | (0.01) |
Basic net income per share - attributable to Vonage (USD per share) | 0.02 | 0.02 | 0.04 | 0.04 | 0.03 | 0.02 | 0.03 | 0.02 | 0.11 | 0.10 | 0.13 |
Diluted net income per share | |||||||||||
Diluted net income per share-from continuing operations (USD per share) | 0.01 | 0.02 | 0.04 | 0.04 | 0.05 | 0.03 | 0.03 | 0.02 | 0.11 | 0.14 | 0.13 |
Diluted net income per share-from discontinued operations attributable to Vonage (USD per share) | 0 | 0 | 0 | (0.01) | (0.02) | (0.01) | (0.01) | 0 | (0.01) | (0.04) | (0.01) |
Diluted net income per share - attributable to Vonage (USD per share) | $ 0.01 | $ 0.02 | $ 0.04 | $ 0.03 | $ 0.03 | $ 0.02 | $ 0.02 | $ 0.02 | $ 0.10 | $ 0.09 | $ 0.13 |