Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 01, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'ReachLocal Inc | ' |
Document Type | '10-Q | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 27,783,154 |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001297336 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current Assets: | ' | ' |
Cash and cash equivalents | $84,989 | $92,336 |
Short-term investments | 553 | 3,149 |
Accounts receivable, net of allowance for doubtful accounts of $405 and $259 at September 30, 2013 and December 31, 2012, respectively | 10,099 | 5,689 |
Other receivables and prepaid expenses | 14,404 | 8,957 |
Total current assets | 110,045 | 110,131 |
Property and equipment, net | 12,136 | 11,066 |
Capitalized software development costs, net | 18,795 | 14,704 |
Restricted certificates of deposit | 1,697 | 1,226 |
Intangible assets, net | 1,525 | 2,442 |
Other assets | 9,254 | 4,044 |
Goodwill (in Dollars) | 42,083 | 42,083 |
Total assets | 195,535 | 185,696 |
Current Liabilities: | ' | ' |
Accounts payable | 47,145 | 35,297 |
Accrued expenses | 30,647 | 27,422 |
Deferred revenue and other current liabilities | 37,444 | 36,304 |
Liabilities of discontinued operations | 794 | 767 |
Total current liabilities | 116,030 | 99,790 |
Deferred rent and other liabilities | 4,626 | 4,020 |
Total liabilities | 120,656 | 103,810 |
Commitments and contingencies (Note 8) | ' | ' |
Stockholders’ Equity: | ' | ' |
Common stock, $0.00001 par value—140,000 shares authorized; 27,746 and 28,154 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 0 | 0 |
Receivable from stockholder | -78 | -89 |
Additional paid-in capital | 107,078 | 110,573 |
Accumulated deficit | -28,974 | -27,076 |
Accumulated other comprehensive loss | -3,147 | -1,522 |
Total stockholders’ equity | 74,879 | 81,886 |
Total liabilities and stockholders’ equity | $195,535 | $185,696 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (unaudited) (Parentheticals) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Per Share data, unless otherwise specified | ||
Allowance for doubtful accounts (in Dollars) | $405 | $259 |
Common stock, par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 140,000 | 140,000 |
Common stock, shares issued | 27,746 | 28,154 |
Common stock, shares outstanding | 27,746 | 28,154 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenue | $133,148 | $118,891 | $382,023 | $335,106 |
Cost of revenue | 66,764 | 59,500 | 192,564 | 167,546 |
Operating expenses: | ' | ' | ' | ' |
Selling and marketing | 48,980 | 42,860 | 140,470 | 122,579 |
Product and technology | 5,901 | 5,448 | 17,574 | 14,180 |
General and administrative | 11,376 | 9,966 | 30,588 | 30,241 |
Total operating expenses | 66,257 | 58,274 | 188,632 | 167,000 |
Income from operations | 127 | 1,117 | 827 | 560 |
Other income, net | 181 | 33 | 522 | 338 |
Income from operations before provision for income taxes | 308 | 1,150 | 1,349 | 898 |
Provision for income taxes | 1,430 | 314 | 3,247 | 736 |
Net income (loss) | ($1,122) | $836 | ($1,898) | $162 |
Net income (loss) per share, basic (in Dollars per share) | ($0.04) | $0.03 | ($0.07) | $0.01 |
Net income (loss) per share, diluted (in Dollars per share) | ($0.04) | $0.03 | ($0.07) | $0.01 |
Weighted average common shares used in computation of net income (loss) per share, basic (in Shares) | 27,507 | 28,403 | 27,843 | 28,379 |
Weighted average common shares used in computation of net income (loss) per share, diluted (in Shares) | 27,507 | 29,342 | 27,843 | 28,902 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Loss (unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net income (loss) | ($1,122) | $836 | ($1,898) | $162 |
Other comprehensive income (loss): | ' | ' | ' | ' |
Foreign currency translation adjustments | 241 | -197 | -1,625 | -445 |
Comprehensive income (loss) | ($881) | $639 | ($3,523) | ($283) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flow from operating activities: | ' | ' |
Net income (loss) | ($1,898) | $162 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 12,006 | 9,669 |
Stock-based compensation | 8,410 | 6,929 |
Excess tax benefits from stock-based awards | -1,127 | ' |
Provision for doubtful accounts | 513 | 18 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -4,908 | -679 |
Other receivables and prepaid expenses | -5,448 | -1,291 |
Other assets | -1,509 | -216 |
Accounts payable and accrued expenses | 16,777 | 10,510 |
Deferred revenue, rent and other liabilities | 2,919 | 6,958 |
Net cash provided by operating activities, continuing operations | 25,735 | 32,060 |
Net cash used in operating activities, discontinued operations | ' | -182 |
Net cash provided by operating activities | 25,735 | 31,878 |
Cash flow from investing activities: | ' | ' |
Additions to property, equipment and software | -16,148 | -12,067 |
Acquisitions, net of acquired cash | -363 | -4,120 |
Loan to franchisee | -1,221 | -1,863 |
Investment in partnership | -2,500 | ' |
Maturities of certificates of deposits and short-term investments | 2,566 | 466 |
Purchases of certificates of deposits and short-term investments | -563 | -8,447 |
Net cash used in investing activities | -18,229 | -26,031 |
Cash flow from financing activities: | ' | ' |
Proceeds from exercise of stock options | 5,333 | 1,639 |
Excess tax benefits from stock-based awards | 1,127 | ' |
Common stock repurchases | -18,904 | -5,395 |
Net cash used in financing activities | -12,444 | -3,756 |
Effect of exchange rate changes on cash and cash equivalents | -2,409 | 94 |
Net change in cash and cash equivalents | -7,347 | 2,185 |
Cash and cash equivalents—beginning of period | 92,336 | 84,525 |
Cash and cash equivalents—end of period | 84,989 | 86,710 |
Supplemental disclosure of non-cash investing and financing activities: | ' | ' |
Capitalized software development costs resulting from stock-based compensation and deferred payment obligations | 443 | 228 |
Deferred payment obligation decrease | ($122) | ($75) |
Note_1_Organization_and_Descri
Note 1 - Organization and Description of Business | 9 Months Ended |
Sep. 30, 2013 | |
Disclosure Text Block [Abstract] | ' |
Nature of Operations [Text Block] | ' |
1. Organization and Description of Business | |
ReachLocal, Inc. (the “Company”) was incorporated in the state of Delaware in August 2003. The Company’s operations are located in North America, Australia, the United Kingdom, the Netherlands, Germany, Austria, Belgium, Japan, Brazil and India. The Company’s mission is to help small- and medium-sized businesses (“SMBs”) acquire, transact with, maintain and retain customers via the Internet. The Company offers a comprehensive suite of online marketing solutions, including search engine marketing (ReachSearch™), Web presence (ReachCast™), display advertising (ReachDisplay™), display retargeting (ReachRetargeting™), online marketing analytics (TotalTrack®), and assisted chat service (TotalLiveChat™), each targeted to the SMB market. In 2013, the Company expanded its product suite to include a software-as-a-service, or SaaS, product, ReachEdge, which is a marketing system that combines an optimized website and automated lead management. The Company delivers its suite of services to SMBs through a combination of its proprietary technology platform, the RL Platform, its sales force of Internet Marketing Consultants, or IMCs, and select third-party agencies and resellers. The Company also has two services in beta: ClubLocal™, a consumer service through which it creates a direct relationship with consumers and provides home-related services by engaging third-party suppliers which perform the agreed services on the Company’s behalf, and ReachCommerce™, a SaaS product which supports online booking, transaction and back office processes. |
Note_2_Summary_of_Significant_
Note 2 - Summary of Significant Accounting Policies | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Significant Accounting Policies [Text Block] | ' | ||||||||||||||||
2. Summary of Significant Accounting Policies | |||||||||||||||||
Principles of Consolidation | |||||||||||||||||
The condensed consolidated financial statements include the accounts of ReachLocal, Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||||||
Basis of Presentation | |||||||||||||||||
The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012. The Condensed Consolidated Balance Sheet as of December 31, 2012 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, included in those audited consolidated financial statements. | |||||||||||||||||
The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments (consisting only of normal recurring adjustments) necessary for the fair presentation of the Company’s statement of financial position at September 30, 2013, the Company’s results of operations for the three and nine months ended September 30, 2013 and 2012, and the Company’s cash flows for the nine months ended September 30, 2013 and 2012. The results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the year ending December 31, 2013. All references to the three and nine months ended September 30, 2013 and 2012 in the notes to the condensed consolidated financial statements are unaudited. | |||||||||||||||||
Discontinued Operations | |||||||||||||||||
As a result of winding down and closing the operations of Bizzy, effective November 2011, the Company has reclassified and presented all related historical financial information as “discontinued operations” in the accompanying Condensed Consolidated Balance Sheets and Consolidated Statements of Cash Flows. In addition, all Bizzy-related activities have been excluded from the notes unless specifically referenced. | |||||||||||||||||
Reclassifications and Adjustments | |||||||||||||||||
Certain prior period amounts have been reclassified to conform to the current period. These reclassifications did not have a material impact on the Company's previously reported consolidated financial statements. | |||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the consolidated financial statements. Therefore, actual results could differ from those estimates. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company recognizes revenue for its services when all of the following criteria are satisfied: | |||||||||||||||||
• | persuasive evidence of an arrangement exists; | ||||||||||||||||
• | services have been performed; | ||||||||||||||||
• | the selling price is fixed or determinable; and | ||||||||||||||||
• | collectability is reasonably assured. | ||||||||||||||||
The Company recognizes revenue as the cost for the third-party media is incurred, which is upon delivery of the advertising on behalf of its clients. The Company recognizes revenue for its ReachSearch product as clicks are recorded on sponsored links on the various search engines and for its ReachDisplay and ReachRetargeting products when the display advertisements record impressions or as otherwise provided in its agreement with the applicable publisher. The Company recognizes revenue for its ReachCast and ReachEdge products on a straight line basis over the applicable service period for each campaign. The Company recognizes revenue when it charges set-up, management service or other fees on a straight-line basis over the term of the related campaign contract or the completion of any obligation for services, if shorter. When the Company receives advance payments from clients, management records these amounts as deferred revenue until the revenue is recognized. When the Company extends credit, management records a receivable when the revenue is recognized. | |||||||||||||||||
When the Company sells through agencies, it either receives payment in advance of services or in some cases extends credit. The Company pays each agency an agreed-upon commission based on the revenue it earns or cash it receives. Some agency clients who have been extended credit may offset the amount otherwise due to the Company by any commissions they have earned. Management evaluates whether it is appropriate to record the gross amount of campaign revenue or the net amount earned after commissions. As the Company is the primary party obligated in the arrangement, subject to the credit risk, with discretion over both price and media, management recognizes the gross amount of such sales as revenue and any commissions are recognized as a selling and marketing expense. | |||||||||||||||||
The Company also has a small number of resellers, including a franchisee. Resellers integrate the Company’s services, including ReachSearch, ReachDisplay, and TotalTrack, into their product offerings. In most cases, the resellers integrate with the Company’s RL Platform through a custom Application Programming Interface (API). Resellers are responsible for the price and specifications of the integrated product offered to their clients. Resellers pay the Company in arrears, net of commissions and other adjustments. Management recognizes revenue generated under reseller agreements net of the agreed-upon commissions and other adjustments earned or retained by the reseller, as management believes that the reseller has retained sufficient control and bears sufficient risks to be considered the primary obligor in those arrangements. | |||||||||||||||||
ClubLocal revenue is recognized when services have been provided. As the Company is the primary obligor under the arrangements, has discretion in supplier selection, has latitude in establishing prices, and bears the credit risk, it recognizes the gross amount of sales as revenue and records the cost of the service provided as cost of revenue. | |||||||||||||||||
The Company offers incentives to clients in exchange for minimum commitments. In these circumstances, management estimates the amount of the incentives that will be earned by clients and adjusts the recognition of revenue to reflect such incentives. Estimates are based upon a statistical analysis of previous campaigns for which such incentives were offered. | |||||||||||||||||
The Company accounts for sales and similar taxes imposed on its services on a net basis in the Condensed Consolidated Statements of Operations. | |||||||||||||||||
Software Development Costs | |||||||||||||||||
The Company capitalizes costs to develop software when management has determined that the development efforts will result in new or additional functionality, or new products. Costs capitalized as internal use software are amortized on a straight-line basis over the estimated three-year useful life. Costs incurred prior to meeting these criteria and costs associated with ongoing maintenance are expensed as incurred and are recorded along with amortization of capitalized software development costs as product and technology expenses within the accompanying Condensed Consolidated Statements of Operations. The Company monitors its existing capitalized software costs and reduces its carrying value as the result of releases that render previous features or functions obsolete or otherwise reduce the value of previously capitalized costs. | |||||||||||||||||
Goodwill | |||||||||||||||||
The Company’s total goodwill of $42.1 million as of both September 30, 2013 and December 31, 2012, is related to the Company’s acquired businesses. The Company operates in one reportable segment, in accordance with Accounting Standards Codification (“ASC”) 280, Segment Reporting, and has identified two reporting units—North America and Australia—for purposes of evaluating goodwill. These reporting units each constitute a business or group of businesses for which discrete financial information is available and is regularly reviewed by each reporting unit’s management. North America’s assigned goodwill was $9.7 million and Australia’s assigned goodwill was $32.4 million as of both September 30, 2013 and December 31, 2012. The Company reviews the carrying amounts of goodwill for possible impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. The Company performs its annual assessment of goodwill impairment as of the first day of each fourth quarter. | |||||||||||||||||
The Company follows the amended guidance for assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, in accordance with ASC 350-20, Intangibles – Goodwill and Other. Entities are provided with the option of first performing a qualitative assessment on any of its reporting units to determine whether further quantitative impairment testing is necessary. An entity may also bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative impairment test. If an entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing a two-step impairment test is necessary. The first step of the impairment test involves comparing the estimated fair values of each of our reporting units with their respective carrying amounts, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying amount, including goodwill, goodwill is considered not to be impaired and no additional steps are necessary. If, however, the estimated fair value of the reporting unit is less than its carrying amount, including goodwill, then the second step is performed to compare the carrying amount of the goodwill with its implied fair value. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess. The Company estimates fair value utilizing the projected discounted cash flow method and a discount rate determined by the Company to commensurate the risk inherent in its business model. | |||||||||||||||||
Long-Lived and Intangible Assets | |||||||||||||||||
The Company reports finite-lived, acquisition-related intangible assets at fair value, net of accumulated amortization. Identifiable intangible assets are amortized on a straight-line basis over their estimated useful lives of three years, or one year, in the case of certain customer relationships. Straight-line amortization is used because no other pattern over which the economic benefits will be consumed can be reliably determined. | |||||||||||||||||
The Company reviews the carrying values of long-lived assets, including intangible assets, for possible impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. In its analysis of other finite lived amortizable intangible assets, the Company applies the guidance of ASC 350-20, Intangibles – Goodwill and Other, in determining whether any impairment conditions exist. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. Intangible assets are attributable to the various developed technologies and client relationships of the businesses the Company has acquired. Long-lived assets to be disposed of are reported at the lower of carrying amount or estimated fair value less cost to sell. | |||||||||||||||||
Stock-Based Compensation | |||||||||||||||||
The Company accounts for stock-based compensation based on fair value. The Company follows the attribution method, which reduces current stock-based compensation expenses recorded by the effect of anticipated forfeitures. Management estimates forfeitures based upon its historical experience. | |||||||||||||||||
The fair value of each award is estimated on the date of the grant and amortized over the requisite service period, which is the vesting period. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option awards on the date of grant. Determining the fair value of stock option awards at the grant date under this model requires judgment, including estimating volatility, expected term and risk-free interest rate. The fair value of restricted stock and restricted stock unit awards is based on the closing market price of the Company's common stock on the date of grant. In addition, the Company uses a Monte Carlo simulation model to estimate the fair value of performance-vesting restricted stock and restricted stock units. Determining the fair value of these awards at the grant date under this model requires judgment, including estimating volatility, risk-free rate and expected future stock price. The assumptions used in calculating the fair value of stock-based awards represent management’s estimate based on judgment and subjective future expectations. These estimates involve inherent uncertainties. If any of the assumptions used in the Black-Scholes or Monte Carlo simulation models significantly change, stock-based compensation for future awards may differ materially from the awards granted previously. | |||||||||||||||||
Variable Interest Entities | |||||||||||||||||
In accordance with ASC 810, Consolidations, the applicable accounting guidance for the consolidation of variable interest entities (“VIE”), the Company analyzes its interests, including agreements, loans, guarantees, and equity investments, on a periodic basis to determine if such interests are variable interests. If variable interests are identified, then the related entity is assessed to determine if it is a VIE. The Company’s analysis includes both quantitative and qualitative reviews. The Company bases its quantitative analysis on the forecasted cash flows of the entity, and its qualitative analysis on the design of the entity, its organizational structure including its decision-making authority, and relevant agreements. If the Company determines that the entity is a VIE, the Company then assesses if it must consolidate the VIE as its primary beneficiary. The Company’s determination of whether it is the primary beneficiary is based upon qualitative and quantitative analyses, which assess the purpose and design of the VIE, the nature of the VIE’s risks and the risks that the Company absorbs, the power to direct activities that most significantly impact the economic performance of the VIE, and the obligation to absorb losses or the right to receive benefits that could be significant to the VIE. See Note 6, “Variable Interest Entities”, for more information. | |||||||||||||||||
Loan Receivable | |||||||||||||||||
The Company records loan receivables at carrying value, net of potential allowance for losses. Losses on the receivable are recorded when probable and estimable. The Company routinely evaluates receivables for potential collection issues that might indicate an impairment. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible that the Company will experience losses that are different from its current estimates. Write-offs are deducted from the allowance for losses when the Company judges the principal to be uncollectible. Any subsequent recoveries are added to other income at the time cash is received on a written-off balance. Interest income on loan receivables are accrued on a monthly basis over the life of the loan. See Note 6, “Variable Interest Entities”, for more information regarding the Company’s loan receivable. | |||||||||||||||||
Investment in Partnership | |||||||||||||||||
The Company accounts for investments in partnership under the cost method, which is periodically assessed for other-than-temporary impairment. If the Company determines that an other-than-temporary impairment has occurred, it will write-down the investment to its fair value. The fair value of a cost method investment is not evaluated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. However, if such significant adverse events were identified, the Company would estimate the fair value of its cost method investment considering available information at the time of the event, such as current cash position, earnings and cash flow forecasts, recent operational performance and any other readily available data. | |||||||||||||||||
Common Stock Repurchase and Retirement | |||||||||||||||||
Common stock repurchased is retired, and the excess of the cost over the par value of the common shares repurchased is recorded to additional paid-in capital. | |||||||||||||||||
Net Income (Loss) Per Share | |||||||||||||||||
Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common and potential dilutive shares outstanding during the period, to the extent such shares are dilutive. Potential dilutive shares are composed of incremental common shares issuable upon the exercise of stock options, warrants and unvested restricted shares using the treasury stock method. The Company was in a net loss position for each of the three and nine-month periods ended September 30, 2013, and therefore the number of diluted shares was equal to the number of basic shares for each of these periods. | |||||||||||||||||
The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share amounts): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Numerator: | |||||||||||||||||
Net income (loss) | $ | (1,122 | ) | $ | 836 | $ | (1,898 | ) | $ | 162 | |||||||
Denominator: | |||||||||||||||||
Weighted average common shares used in computation of net income (loss) per share, basic | 27,507 | 28,403 | 27,843 | 28,379 | |||||||||||||
Deferred stock consideration and unvested restricted stock | — | 93 | — | 53 | |||||||||||||
Stock options and warrant | — | 846 | — | 470 | |||||||||||||
Weighted average common shares used in computation of net income (loss) per share, diluted | 27,507 | 29,342 | 27,843 | 28,902 | |||||||||||||
Net income (loss) per share, basic | $ | (0.04 | ) | $ | 0.03 | $ | (0.07 | ) | $ | 0.01 | |||||||
Net income (loss) per share, diluted | $ | (0.04 | ) | $ | 0.03 | $ | (0.07 | ) | $ | 0.01 | |||||||
The following potentially dilutive securities have been excluded from the calculation of diluted net income (loss) per common share as they would be anti-dilutive for the periods below (in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Deferred stock consideration and unvested restricted stock | 403 | — | 304 | — | |||||||||||||
Stock options and warrant | 4,108 | 2,727 | 3,598 | 5,988 | |||||||||||||
4,511 | 2,727 | 3,902 | 5,988 | ||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The amendments in this update require an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. The amendments in this update do not require new recurring disclosures. The amendments in this update are effective for the Company as of January 1, 2014. The Company does not expect this update to have a material impact on its consolidated financial statements. |
Note_3_Fair_Value_of_Financial
Note 3 - Fair Value of Financial Instruments | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair Value Disclosures [Text Block] | ' | ||||||||||||||||
3. Fair Value of Financial Instruments | |||||||||||||||||
The following table summarizes the basis used to measure certain of the Company’s financial assets that are carried at fair value (in thousands): | |||||||||||||||||
Basis of Fair Value Measurement | |||||||||||||||||
Balance at | Quoted | Significant | Significant | ||||||||||||||
September 30, | Prices in | Other | Unobservable | ||||||||||||||
2013 | Active | Observable | Inputs | ||||||||||||||
Markets | Inputs | (Level 3) | |||||||||||||||
for Identical | (Level 2) | ||||||||||||||||
Items | |||||||||||||||||
(Level 1) | |||||||||||||||||
Certificates of deposit | $ | 2,250 | $ | 2,250 | $ | — | $ | — | |||||||||
Basis of Fair Value Measurement | |||||||||||||||||
Balance at | Quoted | Significant | Significant | ||||||||||||||
December 31, | Prices in | Other | Unobservable | ||||||||||||||
2012 | Active | Observable | Inputs | ||||||||||||||
Markets | Inputs | (Level 3) | |||||||||||||||
for Identical | (Level 2) | ||||||||||||||||
Items | |||||||||||||||||
(Level 1) | |||||||||||||||||
Certificates of deposit | $ | 4,375 | $ | 4,375 | $ | — | $ | — | |||||||||
The following table provides information about assets not carried at fair value in the Company’s Condensed Consolidated Balance Sheets (in thousands): | |||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||
Carrying | Estimated | Carrying | Estimated | ||||||||||||||
amount | fair value | amount | fair value | ||||||||||||||
Loan receivable | $ | 3,303 | $ | 3,268 | $ | 1,954 | $ | 1,954 | |||||||||
The OxataSMB B.V. (“OxataSMB”) loan receivable is not actively traded and its fair value is estimated based on valuation methodologies using current market interest rate data adjusted for inherent credit risk. See Note 6, “Variable Interest Entities”, for further information on the loan receivable. | |||||||||||||||||
The Company also has an investment in a privately held partnership, which is a service provider, in which the Company’s ownership is less than 20% and the Company does not have significant influence. The investment is accounted for under the cost method, which is periodically assessed for other-than-temporary impairment. If the Company determines that an other-than-temporary impairment has occurred, it will write-down the investment to its fair value. The fair value of a cost method investment is not evaluated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. However, if such significant adverse events were identified, the Company would estimate the fair value of its cost method investment considering available information at the time of the event, such as current cash position, earnings and cash flow forecasts, recent operational performance and any other readily available data. The carrying amount of the Company’s cost method investment was $2.5 million as of September 30, 2013, and is included in “Other assets” in the accompanying Condensed Consolidated Balance Sheet. |
Note_4_Acquisitions
Note 4 - Acquisitions | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Disclosure Text Block Supplement [Abstract] | ' | ||||
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | ' | ||||
4. Acquisitions | |||||
Deferred Consideration | |||||
In connection with its 2012 RealPractice acquisition, the Company is obligated to pay an additional $0.3 million in cash on January 3, 2014, subject to adjustment. | |||||
Pursuant to the terms of its 2011 acquisition of DealOn, on February 8, 2012, the Company made a deferred payment in the amount of $0.5 million, net of the working capital adjustment and certain other adjustments, and issued 10,649 shares of its common stock. On August 8, 2012, the Company made an additional deferred payment in the amount of $0.4 million and issued 5,324 shares of its common stock. On February 8, 2013, the Company made the final deferred payment in connection with the DealOn acquisition in the amount of $0.4 million and issued 5,324 shares of its common stock. | |||||
As part of consideration paid to acquire SMB:Live Corporation (“SMB:Live”), on February 22, 2012, the Company paid $0.6 million in cash and issued 181,224 shares of its common stock as final payment in connection with the acquisition. | |||||
Intangible Assets | |||||
As of September 30, 2013, intangible assets from acquisitions included developed technology of $1.5 million (net of accumulated amortization of $1.6 million) amortized over three years. As of December 31, 2012, intangible assets from acquisitions included developed technology of $2.4 million (net of accumulated amortization of $2.9 million) amortized over three years, and customer relationships of $25,000 (net of accumulated amortization of $25,000) amortized over one year. Based on the current amount of intangibles subject to amortization, the estimated amortization expense over the remaining lives is as follows (in thousands): | |||||
Year Ending December 31, | |||||
2013 (3 months) | $ | 255 | |||
2014 | 853 | ||||
2015 | 417 | ||||
Total | $ | 1,525 | |||
For the three months ended September 30, 2013 and 2012, amortization expense related to acquired intangibles was $0.2 million and $0.6 million, respectively. For the nine months ended September 30, 2013 and 2012, amortization expense related to acquired intangibles was $0.9 million and $1.5 million, respectively. |
Note_5_Software_Development_Co
Note 5 - Software Development Costs | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Research and Development [Abstract] | ' | ||||||||
Research, Development, and Computer Software Disclosure [Text Block] | ' | ||||||||
5. Software Development Costs | |||||||||
Capitalized software development costs consisted of the following (in thousands): | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Capitalized software development costs | $ | 42,627 | $ | 31,944 | |||||
Accumulated amortization | (23,832 | ) | (17,240 | ) | |||||
Capitalized software development costs, net | $ | 18,795 | $ | 14,704 | |||||
The Company recorded amortization expense of $2.2 million and $1.7 million for the three months ended September 30, 2013 and 2012, respectively, and $6.6 million and $4.7 million for the nine months ended September 30, 2013 and 2012, respectively. As of September 30, 2013 and December 31, 2012, $2.2 million and $3.3 million, respectively, of capitalized software development costs were related to projects still in process. |
Note_6_Variable_Interest_Entit
Note 6 - Variable Interest Entities | 9 Months Ended |
Sep. 30, 2013 | |
Variable Interest Entity [Abstract] | ' |
Variable Interest Entity [Text Block] | ' |
6. Variable Interest Entities | |
On July 6, 2012, the Company completed a transaction with OxataSMB, in which the Company entered into a franchise agreement with OxataSMB permitting OxataSMB to operate and resell the Company’s services under the ReachLocal brand in Slovakia, Czech Republic, Hungary, Poland and Russia. Pursuant to the franchise agreement, OxataSMB receives access to the RL platform, training, marketing and branding materials, media purchasing, campaign management and provisioning, sourcing of telephony, and technical support. The Company does not anticipate OxataSMB will pursue activities other than as a franchisee. In addition, the Company entered into a market development loan agreement with OxataSMB pursuant to which the Company agreed to provide financing to OxataSMB of up to €2.9 million ($3.9 million), of which €1.45 million ($2.0 million) was advanced in 2012. OxataSMB’s ability to draw down the remaining loan amount was dependent on OxataSMB achieving certain milestones by June 29, 2013. In August 2013, the Company advanced an additional €0.92 million ($1.2 million) to OxataSMB, and retains the discretion to advance some or all of the remaining amount of €0.53 million ($0.7 million) prior to December 29, 2013. The loan has a two-year term, maturing on June 29, 2014, and accrues interest at 4% per annum, but does not require principal or interest payments for two years, and can be extended for an additional 24 months based on achievement of certain milestones. Prior to advancement of the loan in 2012, OxataSMB had €1.45 million ($2.0 million) of contributed capital. In addition, the Company has an option to buy OxataSMB at an independently-determined fair value at the end of the initial loan term, subject to extension. | |
OxataSMB is considered a VIE with respect to the Company because, depending on its performance, OxataSMB may not have sufficient equity to finance its activities without additional financial support. Based on the Company’s initial assessment in 2012, the Company was not the primary beneficiary of OxataSMB because it did not have: (1) the power to direct the activities that most significantly impact OxataSMB’s economic performance or (2) the obligation to absorb losses of OxataSMB or the right to receive benefits from OxataSMB that could potentially be significant. Therefore, the Company did not consolidate the results of OxataSMB, and transactions with OxataSMB results were accounted for similarly to the Company’s resellers. At September 30, 2013, the Company concluded no events or changes in circumstances have occurred that would change the Company’s initial assessment of OxataSMB’s VIE status and that the Company was not a primary beneficiary of OxataSMB. The loan receivable is included in “Other assets” in the accompanying Condensed Consolidated Balance Sheets. As of September 30, 2013, the Company’s maximum exposure to loss related to the unconsolidated VIE consisted of its loan and accumulated interest receivable of $3.3 million. No allowance for loan losses has been recorded against the loan receivable. However, should the operating and financial performance of OxataSMB not perform within expectations, a provision for loan loss may be necessary in the future. |
Note_7_Current_Liabilities
Note 7 - Current Liabilities | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | ' | ||||||||
7. Current Liabilities | |||||||||
Accrued expenses consisted of the following (in thousands): | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accrued compensation and benefits | $ | 16,545 | $ | 14,558 | |||||
Other | 14,102 | 12,864 | |||||||
Total accrued expenses | $ | 30,647 | $ | 27,422 | |||||
Deferred revenue and other current liabilities consisted of the following (in thousands): | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Deferred revenue | $ | 36,379 | $ | 34,142 | |||||
Other | 1,065 | 2,162 | |||||||
Total deferred revenue and other current liabilities | $ | 37,444 | $ | 36,304 | |||||
Note_8_Commitments_and_Conting
Note 8 - Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies Disclosure [Text Block] | ' |
8. Commitments and Contingencies | |
Litigation | |
The Company is subject to various legal proceedings and claims arising in the ordinary course of business. Although occasional adverse decisions or settlements may occur, management believes that the final disposition of existing matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. |
Note_9_Stockholders_Equity
Note 9 - Stockholders' Equity | 9 Months Ended |
Sep. 30, 2013 | |
Stockholders' Equity Note [Abstract] | ' |
Stockholders' Equity Note Disclosure [Text Block] | ' |
9. Stockholders’ Equity | |
Common Stock Repurchases | |
On November 4, 2011, the Company announced that its Board of Directors authorized the repurchase of up to $20.0 million of the Company’s outstanding common stock. On December 13, 2012, the Company announced the Board of Directors increased the total authorized repurchase amount by $6.0 million, and on March 4, 2013, the Company announced that its Board of Directors increased the total authorized repurchase amount by an additional $21.0 million, to a total authorization of $47.0 million. At September 30, 2013, the Company had executed repurchases of 3.4 million shares of its common stock under the program for an aggregate of $36.3 million, of which $5.9 million or 475,000 shares were repurchased during the three months ended September 30, 2013, and $18.9 million or 1,395,000 shares were repurchased during the nine months ended September 30, 2013. Purchases may be made from time-to-time in open market or privately negotiated transactions as determined by the Company’s management. The amount and timing of the share repurchase will depend on business and market conditions, stock price, trading restrictions, acquisition activity, and other factors. The share repurchase program does not obligate the Company to acquire any particular amount of common stock, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. |
Note_10_StockBased_Compensatio
Note 10 - Stock-Based Compensation | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' | ||||||||||||||||
10. Stock-Based Compensation | |||||||||||||||||
Stock Options | |||||||||||||||||
Stock-based compensation cost is measured at the grant date, based on the fair value of the award, and recognized on a straight-line basis over the requisite service period, which is generally the vesting period. | |||||||||||||||||
The following table summarizes stock option activity (in thousands, except years and per share amounts): | |||||||||||||||||
Number of | Weighted | Weighted | Aggregate | ||||||||||||||
Shares | Average | Average | Intrinsic | ||||||||||||||
Exercise | Remaining Contractual | Value | |||||||||||||||
Price per | Life | ||||||||||||||||
Share | (in years) | ||||||||||||||||
Outstanding at December 31, 2012 | 7,052 | $ | 10.71 | ||||||||||||||
Granted | 1,143 | $ | 13.29 | ||||||||||||||
Exercised | (654 | ) | $ | 8.15 | |||||||||||||
Forfeited | (557 | ) | $ | 12.1 | |||||||||||||
Outstanding at September 30, 2013 | 6,984 | $ | 11.28 | 4.4 | $ | 9,878 | |||||||||||
Vested and exercisable at September 30, 2013 | 4,281 | $ | 10.84 | 3.4 | $ | 7,354 | |||||||||||
Unvested at September 30, 2013, net of estimated forfeitures | 2,532 | $ | 11.94 | 6 | $ | 2,450 | |||||||||||
The following table presents the weighted-average assumptions used to estimate the fair values of the stock options granted during the three and nine months ended September 30, 2013 and 2012. | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||
Risk-free interest rate | 1.36 | % | 0.61 | % | 0.92 | % | 0.78 | % | |||||||||
Expected life (in years) | 4.75 | 4.75 | 4.81 | 4.9 | |||||||||||||
Expected volatility | 57 | % | 60 | % | 59 | % | 59 | % | |||||||||
The per-share weighted-average grant date fair value of options granted during the nine months ended September 30, 2013 was $6.32. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2013 was $3.8 million. | |||||||||||||||||
Restricted Stock and Restricted Stock Units | |||||||||||||||||
The following table summarizes restricted stock and restricted stock unit awards (in thousands, except per share amounts): | |||||||||||||||||
Number of | Weighted | ||||||||||||||||
shares | Average Grant | ||||||||||||||||
Date Fair Value | |||||||||||||||||
Unvested at December 31, 2012 | 382 | $ | 11.09 | ||||||||||||||
Granted | 633 | $ | 5.88 | ||||||||||||||
Forfeited | (136 | ) | $ | 7.41 | |||||||||||||
Vested | (100 | ) | $ | 10.68 | |||||||||||||
Unvested at September 30, 2013 | 779 | $ | 7.49 | ||||||||||||||
Grants during the period included 506,000 performance-vesting shares of restricted stock and restricted stock units that will each vest based on achievement of both Company stock price targets and continued service. The grant date fair value of these awards were estimated using a Monte Carlo simulation model and were $5.52 per share. In addition, 30,000 performance-vesting shares of restricted stock were granted during the period that will vest based on achievement of certain business performance milestones. The grant date fair value of this award based on the Company’s closing stock price on that date was $13.45 per share and expense is recognized based on the achievement of certain business performance milestones. | |||||||||||||||||
Stock-Based Compensation Expense | |||||||||||||||||
The Company records stock-based compensation expense, net of amounts capitalized, as stock-based compensation in association with software development costs. The following table summarizes stock-based compensation (in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Stock-based compensation | $ | 3,358 | $ | 2,662 | $ | 8,853 | $ | 7,157 | |||||||||
Less: Capitalized stock-based compensation | 170 | 67 | 443 | 228 | |||||||||||||
Stock-based compensation expense, net | $ | 3,188 | $ | 2,595 | $ | 8,410 | $ | 6,929 | |||||||||
Stock-based compensation, net of capitalization, is included in the accompanying Condensed Consolidated Statements of Operations within the following captions (in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Stock-based compensation expense, net | |||||||||||||||||
Cost of revenue | $ | 176 | $ | 73 | $ | 471 | $ | 198 | |||||||||
Selling and marketing | 765 | 437 | 2,396 | 1,122 | |||||||||||||
Product and technology | 163 | 488 | 425 | 868 | |||||||||||||
General and administrative | 2,084 | 1,597 | 5,118 | 4,741 | |||||||||||||
$ | 3,188 | $ | 2,595 | $ | 8,410 | $ | 6,929 | ||||||||||
Stock-based compensation for the three and nine months ended September 30, 2013 included $0.7 million of expense related to the modification and acceleration of certain unvested stock options and restricted stock pursuant to the separation agreement between the Company and its former Chief Executive Officer. | |||||||||||||||||
As of September 30, 2013, there was $19.9 million of unrecognized stock-based compensation related to restricted stock, restricted stock units and outstanding stock options, net of estimated forfeitures. This amount is expected to be recognized over a weighted average period of 1.4 years. Future stock-based compensation expense for these awards may differ in the event actual forfeitures deviate from management’s estimates. |
Note_11_Income_Taxes
Note 11 - Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' |
Income Tax Disclosure [Text Block] | ' |
11. Income Taxes | |
The Company follows ASC Topic 740-270, Income taxes—Interim Reporting, for the computation and presentation of its interim period tax provision. Accordingly, management estimates the effective annual tax rate and applies this rate to the year-to-date pre-tax book income or loss to determine the interim provision for income taxes. Additionally, unusual or infrequent items are booked in the period in which they occur. The Company’s policy is to recognize interest and penalties related to tax in income tax expense. For the three months ended September 30, 2013 and 2012, the income tax provisions were $1.4 million and $0.3 million, respectively, and for the nine months ended September 30, 2013 and 2012, the income tax provisions were $3.2 million and $0.7 million, respectively. The income tax provision for the nine months ended September 30, 2013 relates to federal, state and foreign income taxes, including the deferred tax impact of prior business combinations. | |
The Company and its subsidiaries file income tax returns in the U.S. federal, various state and foreign jurisdictions. With the use of net operating losses in recent periods and the filing in additional states, certain statutes will begin to expire as early as 2016, but the majority remain open at this time. |
Note_12_Segment_Information
Note 12 - Segment Information | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Segment Reporting Disclosure [Text Block] | ' | ||||||||||||||||
12. Segment Information | |||||||||||||||||
The Company operates in one operating segment. The Company’s chief operating decision maker (“CODM”) manages the Company’s operations on a consolidated basis for purposes of evaluating financial performance and allocating resources. | |||||||||||||||||
Revenue by geographic region with respect to the Direct Local and National Brands channels is based on the physical location of the sales office, and with respect to Agencies and Resellers, is based on the physical location of the agency or reseller. The following summarizes revenue and long-lived assets by geographic region (in thousands): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenue: | |||||||||||||||||
North America | $ | 88,501 | $ | 84,212 | $ | 257,941 | $ | 243,364 | |||||||||
International | 44,647 | 34,679 | 124,082 | 91,742 | |||||||||||||
$ | 133,148 | $ | 118,891 | $ | 382,023 | $ | 335,106 | ||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Long-lived assets (excluding patents and other intangibles): | |||||||||||||||||
North America | $ | 6,575 | $ | 6,395 | |||||||||||||
International | 5,553 | 4,671 | |||||||||||||||
$ | 12,128 | $ | 11,066 | ||||||||||||||
The results of the Australia geographic region have been included in the Company’s condensed consolidated financial statements and include revenues of $21.4 million and $19.0 million for the three months ended September 30, 2013 and 2012, respectively, and $62.1 million and $52.9 million for the nine months ended September 30, 2013 and 2012, respectively. Long-lived assets of the Australia geographic region were $1.1 million and $1.7 million at September 30, 2013 and December 31, 2012, respectively. |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 9 Months Ended | ||
Sep. 30, 2013 | |||
Accounting Policies [Abstract] | ' | ||
Consolidation, Policy [Policy Text Block] | ' | ||
Principles of Consolidation | |||
The condensed consolidated financial statements include the accounts of ReachLocal, Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. | |||
Basis of Accounting, Policy [Policy Text Block] | ' | ||
Basis of Presentation | |||
The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012. The Condensed Consolidated Balance Sheet as of December 31, 2012 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, included in those audited consolidated financial statements. | |||
The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments (consisting only of normal recurring adjustments) necessary for the fair presentation of the Company’s statement of financial position at September 30, 2013, the Company’s results of operations for the three and nine months ended September 30, 2013 and 2012, and the Company’s cash flows for the nine months ended September 30, 2013 and 2012. The results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the year ending December 31, 2013. All references to the three and nine months ended September 30, 2013 and 2012 in the notes to the condensed consolidated financial statements are unaudited. | |||
Discontinued Operations, Policy [Policy Text Block] | ' | ||
Discontinued Operations | |||
As a result of winding down and closing the operations of Bizzy, effective November 2011, the Company has reclassified and presented all related historical financial information as “discontinued operations” in the accompanying Condensed Consolidated Balance Sheets and Consolidated Statements of Cash Flows. In addition, all Bizzy-related activities have been excluded from the notes unless specifically referenced. | |||
Reclassification, Policy [Policy Text Block] | ' | ||
Reclassifications and Adjustments | |||
Certain prior period amounts have been reclassified to conform to the current period. | |||
Use of Estimates, Policy [Policy Text Block] | ' | ||
Use of Estimates | |||
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the consolidated financial statements. Therefore, actual results could differ from those estimates. | |||
Revenue Recognition, Policy [Policy Text Block] | ' | ||
Revenue Recognition | |||
The Company recognizes revenue for its services when all of the following criteria are satisfied: | |||
• | persuasive evidence of an arrangement exists; | ||
• | services have been performed; | ||
• | the selling price is fixed or determinable; and | ||
• | collectability is reasonably assured. | ||
The Company recognizes revenue as the cost for the third-party media is incurred, which is upon delivery of the advertising on behalf of its clients. The Company recognizes revenue for its ReachSearch product as clicks are recorded on sponsored links on the various search engines and for its ReachDisplay and ReachRetargeting products when the display advertisements record impressions or as otherwise provided in its agreement with the applicable publisher. The Company recognizes revenue for its ReachCast and ReachEdge products on a straight line basis over the applicable service period for each campaign. The Company recognizes revenue when it charges set-up, management service or other fees on a straight-line basis over the term of the related campaign contract or the completion of any obligation for services, if shorter. When the Company receives advance payments from clients, management records these amounts as deferred revenue until the revenue is recognized. When the Company extends credit, management records a receivable when the revenue is recognized. | |||
When the Company sells through agencies, it either receives payment in advance of services or in some cases extends credit. The Company pays each agency an agreed-upon commission based on the revenue it earns or cash it receives. Some agency clients who have been extended credit may offset the amount otherwise due to the Company by any commissions they have earned. Management evaluates whether it is appropriate to record the gross amount of campaign revenue or the net amount earned after commissions. As the Company is the primary party obligated in the arrangement, subject to the credit risk, with discretion over both price and media, management recognizes the gross amount of such sales as revenue and any commissions are recognized as a selling and marketing expense. | |||
The Company also has a small number of resellers, including a franchisee. Resellers integrate the Company’s services, including ReachSearch, ReachDisplay, and TotalTrack, into their product offerings. In most cases, the resellers integrate with the Company’s RL Platform through a custom Application Programming Interface (API). Resellers are responsible for the price and specifications of the integrated product offered to their clients. Resellers pay the Company in arrears, net of commissions and other adjustments. Management recognizes revenue generated under reseller agreements net of the agreed-upon commissions and other adjustments earned or retained by the reseller, as management believes that the reseller has retained sufficient control and bears sufficient risks to be considered the primary obligor in those arrangements. | |||
ClubLocal revenue is recognized when services have been provided. As the Company is the primary obligor under the arrangements, has discretion in supplier selection, has latitude in establishing prices, and bears the credit risk, it recognizes the gross amount of sales as revenue and records the cost of the service provided as cost of revenue. | |||
The Company offers incentives to clients in exchange for minimum commitments. In these circumstances, management estimates the amount of the incentives that will be earned by clients and adjusts the recognition of revenue to reflect such incentives. Estimates are based upon a statistical analysis of previous campaigns for which such incentives were offered. | |||
The Company accounts for sales and similar taxes imposed on its services on a net basis in the Condensed Consolidated Statements of Operations. | |||
Research, Development, and Computer Software, Policy [Policy Text Block] | ' | ||
Software Development Costs | |||
The Company capitalizes costs to develop software when management has determined that the development efforts will result in new or additional functionality, or new products. Costs capitalized as internal use software are amortized on a straight-line basis over the estimated three-year useful life. Costs incurred prior to meeting these criteria and costs associated with ongoing maintenance are expensed as incurred and are recorded along with amortization of capitalized software development costs as product and technology expenses within the accompanying Condensed Consolidated Statements of Operations. The Company monitors its existing capitalized software costs and reduces its carrying value as the result of releases that render previous features or functions obsolete or otherwise reduce the value of previously capitalized costs. | |||
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | ' | ||
Goodwill | |||
The Company’s total goodwill of $42.1 million as of both September 30, 2013 and December 31, 2012, is related to the Company’s acquired businesses. The Company operates in one reportable segment, in accordance with Accounting Standards Codification (“ASC”) 280, Segment Reporting, and has identified two reporting units—North America and Australia—for purposes of evaluating goodwill. These reporting units each constitute a business or group of businesses for which discrete financial information is available and is regularly reviewed by each reporting unit’s management. North America’s assigned goodwill was $9.7 million and Australia’s assigned goodwill was $32.4 million as of both September 30, 2013 and December 31, 2012. The Company reviews the carrying amounts of goodwill for possible impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. The Company performs its annual assessment of goodwill impairment as of the first day of each fourth quarter. | |||
The Company follows the amended guidance for assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, in accordance with ASC 350-20, Intangibles – Goodwill and Other. Entities are provided with the option of first performing a qualitative assessment on any of its reporting units to determine whether further quantitative impairment testing is necessary. An entity may also bypass the qualitative assessment for any reporting unit in any period and proceed directly to the quantitative impairment test. If an entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing a two-step impairment test is necessary. The first step of the impairment test involves comparing the estimated fair values of each of our reporting units with their respective carrying amounts, including goodwill. If the estimated fair value of a reporting unit exceeds its carrying amount, including goodwill, goodwill is considered not to be impaired and no additional steps are necessary. If, however, the estimated fair value of the reporting unit is less than its carrying amount, including goodwill, then the second step is performed to compare the carrying amount of the goodwill with its implied fair value. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess. The Company estimates fair value utilizing the projected discounted cash flow method and a discount rate determined by the Company to commensurate the risk inherent in its business model. | |||
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | ' | ||
Long-Lived and Intangible Assets | |||
The Company reports finite-lived, acquisition-related intangible assets at fair value, net of accumulated amortization. Identifiable intangible assets are amortized on a straight-line basis over their estimated useful lives of three years, or one year, in the case of certain customer relationships. Straight-line amortization is used because no other pattern over which the economic benefits will be consumed can be reliably determined. | |||
The Company reviews the carrying values of long-lived assets, including intangible assets, for possible impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. In its analysis of other finite lived amortizable intangible assets, the Company applies the guidance of ASC 350-20, Intangibles – Goodwill and Other, in determining whether any impairment conditions exist. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. Intangible assets are attributable to the various developed technologies and client relationships of the businesses the Company has acquired. Long-lived assets to be disposed of are reported at the lower of carrying amount or estimated fair value less cost to sell. | |||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' | ||
Stock-Based Compensation | |||
The Company accounts for stock-based compensation based on fair value. The Company follows the attribution method, which reduces current stock-based compensation expenses recorded by the effect of anticipated forfeitures. Management estimates forfeitures based upon its historical experience. | |||
The fair value of each award is estimated on the date of the grant and amortized over the requisite service period, which is the vesting period. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option awards on the date of grant. Determining the fair value of stock option awards at the grant date under this model requires judgment, including estimating volatility, expected term and risk-free interest rate. The fair value of restricted stock and restricted stock unit awards is based on the closing market price of the Company's common stock on the date of grant. In addition, the Company uses a Monte Carlo simulation model to estimate the fair value of performance-vesting restricted stock and restricted stock units. Determining the fair value of these awards at the grant date under this model requires judgment, including estimating volatility, risk-free rate and expected future stock price. The assumptions used in calculating the fair value of stock-based awards represent management’s estimate based on judgment and subjective future expectations. These estimates involve inherent uncertainties. If any of the assumptions used in the Black-Scholes or Monte Carlo simulation models significantly change, stock-based compensation for future awards may differ materially from the awards granted previously. | |||
Consolidation, Variable Interest Entity, Policy [Policy Text Block] | ' | ||
Variable Interest Entities | |||
In accordance with ASC 810, Consolidations, the applicable accounting guidance for the consolidation of variable interest entities (“VIE”), the Company analyzes its interests, including agreements, loans, guarantees, and equity investments, on a periodic basis to determine if such interests are variable interests. If variable interests are identified, then the related entity is assessed to determine if it is a VIE. The Company’s analysis includes both quantitative and qualitative reviews. The Company bases its quantitative analysis on the forecasted cash flows of the entity, and its qualitative analysis on the design of the entity, its organizational structure including its decision-making authority, and relevant agreements. If the Company determines that the entity is a VIE, the Company then assesses if it must consolidate the VIE as its primary beneficiary. The Company’s determination of whether it is the primary beneficiary is based upon qualitative and quantitative analyses, which assess the purpose and design of the VIE, the nature of the VIE’s risks and the risks that the Company absorbs, the power to direct activities that most significantly impact the economic performance of the VIE, and the obligation to absorb losses or the right to receive benefits that could be significant to the VIE. See Note 6, “Variable Interest Entities”, for more information. | |||
Loan Receivable | |||
The Company records loan receivables at carrying value, net of potential allowance for losses. Losses on the receivable are recorded when probable and estimable. The Company routinely evaluates receivables for potential collection issues that might indicate an impairment. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible that the Company will experience losses that are different from its current estimates. Write-offs are deducted from the allowance for losses when the Company judges the principal to be uncollectible. Any subsequent recoveries are added to other income at the time cash is received on a written-off balance. Interest income on loan receivables are accrued on a monthly basis over the life of the loan. | |||
Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block] | ' | ||
Loan Receivable | |||
The Company records loan receivables at carrying value, net of potential allowance for losses. Losses on the receivable are recorded when probable and estimable. The Company routinely evaluates receivables for potential collection issues that might indicate an impairment. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible that the Company will experience losses that are different from its current estimates. Write-offs are deducted from the allowance for losses when the Company judges the principal to be uncollectible. Any subsequent recoveries are added to other income at the time cash is received on a written-off balance. Interest income on loan receivables are accrued on a monthly basis over the life of the loan. | |||
Investment, Policy [Policy Text Block] | ' | ||
Investment in Partnership | |||
The Company accounts for investments in partnership under the cost method, which is periodically assessed for other-than-temporary impairment. If the Company determines that an other-than-temporary impairment has occurred, it will write-down the investment to its fair value. The fair value of a cost method investment is not evaluated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. However, if such significant adverse events were identified, the Company would estimate the fair value of its cost method investment considering available information at the time of the event, such as current cash position, earnings and cash flow forecasts, recent operational performance and any other readily available data. | |||
Common Stock Repurchase And Retirement [Policy Text Block] | ' | ||
Common Stock Repurchase and Retirement | |||
Common stock repurchased is retired, and the excess of the cost over the par value of the common shares repurchased is recorded to additional paid-in capital. | |||
Earnings Per Share, Policy [Policy Text Block] | ' | ||
Net Income (Loss) Per Share | |||
Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common and potential dilutive shares outstanding during the period, to the extent such shares are dilutive. Potential dilutive shares are composed of incremental common shares issuable upon the exercise of stock options, warrants and unvested restricted shares using the treasury stock method. The Company was in a net loss position for each of the three and nine-month periods ended September 30, 2013, and therefore the number of diluted shares was equal to the number of basic shares for each of these periods. |
Note_2_Summary_of_Significant_1
Note 2 - Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Numerator: | |||||||||||||||||
Net income (loss) | $ | (1,122 | ) | $ | 836 | $ | (1,898 | ) | $ | 162 | |||||||
Denominator: | |||||||||||||||||
Weighted average common shares used in computation of net income (loss) per share, basic | 27,507 | 28,403 | 27,843 | 28,379 | |||||||||||||
Deferred stock consideration and unvested restricted stock | — | 93 | — | 53 | |||||||||||||
Stock options and warrant | — | 846 | — | 470 | |||||||||||||
Weighted average common shares used in computation of net income (loss) per share, diluted | 27,507 | 29,342 | 27,843 | 28,902 | |||||||||||||
Net income (loss) per share, basic | $ | (0.04 | ) | $ | 0.03 | $ | (0.07 | ) | $ | 0.01 | |||||||
Net income (loss) per share, diluted | $ | (0.04 | ) | $ | 0.03 | $ | (0.07 | ) | $ | 0.01 | |||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Deferred stock consideration and unvested restricted stock | 403 | — | 304 | — | |||||||||||||
Stock options and warrant | 4,108 | 2,727 | 3,598 | 5,988 | |||||||||||||
4,511 | 2,727 | 3,902 | 5,988 |
Note_3_Fair_Value_of_Financial1
Note 3 - Fair Value of Financial Instruments (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | ' | ||||||||||||||||
Basis of Fair Value Measurement | |||||||||||||||||
Balance at | Quoted | Significant | Significant | ||||||||||||||
September 30, | Prices in | Other | Unobservable | ||||||||||||||
2013 | Active | Observable | Inputs | ||||||||||||||
Markets | Inputs | (Level 3) | |||||||||||||||
for Identical | (Level 2) | ||||||||||||||||
Items | |||||||||||||||||
(Level 1) | |||||||||||||||||
Certificates of deposit | $ | 2,250 | $ | 2,250 | $ | — | $ | — | |||||||||
Basis of Fair Value Measurement | |||||||||||||||||
Balance at | Quoted | Significant | Significant | ||||||||||||||
December 31, | Prices in | Other | Unobservable | ||||||||||||||
2012 | Active | Observable | Inputs | ||||||||||||||
Markets | Inputs | (Level 3) | |||||||||||||||
for Identical | (Level 2) | ||||||||||||||||
Items | |||||||||||||||||
(Level 1) | |||||||||||||||||
Certificates of deposit | $ | 4,375 | $ | 4,375 | $ | — | $ | — | |||||||||
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block] | ' | ||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||
Carrying | Estimated | Carrying | Estimated | ||||||||||||||
amount | fair value | amount | fair value | ||||||||||||||
Loan receivable | $ | 3,303 | $ | 3,268 | $ | 1,954 | $ | 1,954 |
Note_4_Acquisitions_Tables
Note 4 - Acquisitions (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Disclosure Text Block Supplement [Abstract] | ' | ||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | ' | ||||
Year Ending December 31, | |||||
2013 (3 months) | $ | 255 | |||
2014 | 853 | ||||
2015 | 417 | ||||
Total | $ | 1,525 |
Note_5_Software_Development_Co1
Note 5 - Software Development Costs (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Research and Development [Abstract] | ' | ||||||||
' | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Capitalized software development costs | $ | 42,627 | $ | 31,944 | |||||
Accumulated amortization | (23,832 | ) | (17,240 | ) | |||||
Capitalized software development costs, net | $ | 18,795 | $ | 14,704 |
Note_7_Current_Liabilities_Tab
Note 7 - Current Liabilities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Schedule of Accrued Liabilities [Table Text Block] | ' | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accrued compensation and benefits | $ | 16,545 | $ | 14,558 | |||||
Other | 14,102 | 12,864 | |||||||
Total accrued expenses | $ | 30,647 | $ | 27,422 | |||||
Schedule Of Deferred Revenue and Other Current Liabilities [Text Block] | ' | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Deferred revenue | $ | 36,379 | $ | 34,142 | |||||
Other | 1,065 | 2,162 | |||||||
Total deferred revenue and other current liabilities | $ | 37,444 | $ | 36,304 |
Note_10_StockBased_Compensatio1
Note 10 - Stock-Based Compensation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | ' | ||||||||||||||||
Number of | Weighted | Weighted | Aggregate | ||||||||||||||
Shares | Average | Average | Intrinsic | ||||||||||||||
Exercise | Remaining Contractual | Value | |||||||||||||||
Price per | Life | ||||||||||||||||
Share | (in years) | ||||||||||||||||
Outstanding at December 31, 2012 | 7,052 | $ | 10.71 | ||||||||||||||
Granted | 1,143 | $ | 13.29 | ||||||||||||||
Exercised | (654 | ) | $ | 8.15 | |||||||||||||
Forfeited | (557 | ) | $ | 12.1 | |||||||||||||
Outstanding at September 30, 2013 | 6,984 | $ | 11.28 | 4.4 | $ | 9,878 | |||||||||||
Vested and exercisable at September 30, 2013 | 4,281 | $ | 10.84 | 3.4 | $ | 7,354 | |||||||||||
Unvested at September 30, 2013, net of estimated forfeitures | 2,532 | $ | 11.94 | 6 | $ | 2,450 | |||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||
Risk-free interest rate | 1.36 | % | 0.61 | % | 0.92 | % | 0.78 | % | |||||||||
Expected life (in years) | 4.75 | 4.75 | 4.81 | 4.9 | |||||||||||||
Expected volatility | 57 | % | 60 | % | 59 | % | 59 | % | |||||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | ' | ||||||||||||||||
Number of | Weighted | ||||||||||||||||
shares | Average Grant | ||||||||||||||||
Date Fair Value | |||||||||||||||||
Unvested at December 31, 2012 | 382 | $ | 11.09 | ||||||||||||||
Granted | 633 | $ | 5.88 | ||||||||||||||
Forfeited | (136 | ) | $ | 7.41 | |||||||||||||
Vested | (100 | ) | $ | 10.68 | |||||||||||||
Unvested at September 30, 2013 | 779 | $ | 7.49 | ||||||||||||||
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block] | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Stock-based compensation | $ | 3,358 | $ | 2,662 | $ | 8,853 | $ | 7,157 | |||||||||
Less: Capitalized stock-based compensation | 170 | 67 | 443 | 228 | |||||||||||||
Stock-based compensation expense, net | $ | 3,188 | $ | 2,595 | $ | 8,410 | $ | 6,929 | |||||||||
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Stock-based compensation expense, net | |||||||||||||||||
Cost of revenue | $ | 176 | $ | 73 | $ | 471 | $ | 198 | |||||||||
Selling and marketing | 765 | 437 | 2,396 | 1,122 | |||||||||||||
Product and technology | 163 | 488 | 425 | 868 | |||||||||||||
General and administrative | 2,084 | 1,597 | 5,118 | 4,741 | |||||||||||||
$ | 3,188 | $ | 2,595 | $ | 8,410 | $ | 6,929 |
Note_12_Segment_Information_Ta
Note 12 - Segment Information (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenue: | |||||||||||||||||
North America | $ | 88,501 | $ | 84,212 | $ | 257,941 | $ | 243,364 | |||||||||
International | 44,647 | 34,679 | 124,082 | 91,742 | |||||||||||||
$ | 133,148 | $ | 118,891 | $ | 382,023 | $ | 335,106 | ||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Long-lived assets (excluding patents and other intangibles): | |||||||||||||||||
North America | $ | 6,575 | $ | 6,395 | |||||||||||||
International | 5,553 | 4,671 | |||||||||||||||
$ | 12,128 | $ | 11,066 |
Note_2_Summary_of_Significant_2
Note 2 - Summary of Significant Accounting Policies (Details) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Goodwill (in Dollars) | 42,083 | 42,083 |
Number of Reportable Segments | 1 | ' |
Number of Reporting Units | 2 | ' |
Finite-Lived Intangible Asset, Useful Life | '3 years | ' |
North America [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Goodwill (in Dollars) | 9,700 | 9,700 |
Australia [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Goodwill (in Dollars) | 32,400 | 32,400 |
Customer Relationships [Member] | ' | ' |
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items] | ' | ' |
Finite-Lived Intangible Asset, Useful Life | '1 year | '1 year |
Note_2_Summary_of_Significant_3
Note 2 - Summary of Significant Accounting Policies (Details) - The following table sets forth the computation of basic and diluted net income (loss) per share (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Numerator: | ' | ' | ' | ' |
Net income (loss) (in Dollars) | ($1,122) | $836 | ($1,898) | $162 |
Denominator: | ' | ' | ' | ' |
Weighted average common shares used in computation of net income (loss) per share, basic | 27,507 | 28,403 | 27,843 | 28,379 |
Deferred stock consideration and unvested restricted stock | ' | 93 | ' | 53 |
Stock options and warrant | ' | 846 | ' | 470 |
Weighted average common shares used in computation of net income (loss) per share, diluted | 27,507 | 29,342 | 27,843 | 28,902 |
Net income (loss) per share, basic (in Dollars per share) | ($0.04) | $0.03 | ($0.07) | $0.01 |
Net income (loss) per share, diluted (in Dollars per share) | ($0.04) | $0.03 | ($0.07) | $0.01 |
Note_2_Summary_of_Significant_4
Note 2 - Summary of Significant Accounting Policies (Details) - Potentially Dilutive Securities | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potentially Dilutive Securities | 4,511 | 2,727 | 3,902 | 5,988 |
Deferred Stock Consideration [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potentially Dilutive Securities | 403 | ' | 304 | ' |
Stock Options and Warrant [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potentially Dilutive Securities | 4,108 | 2,727 | 3,598 | 5,988 |
Note_3_Fair_Value_of_Financial2
Note 3 - Fair Value of Financial Instruments (Details) (USD $) | Sep. 30, 2013 |
In Millions, unless otherwise specified | |
Fair Value Disclosures [Abstract] | ' |
Cost Method Investments | $2.50 |
Note_3_Fair_Value_of_Financial3
Note 3 - Fair Value of Financial Instruments (Details) - Basis of Fair Value Measurement (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Note 3 - Fair Value of Financial Instruments (Details) - Basis of Fair Value Measurement [Line Items] | ' | ' |
Certificates of deposit | $2,250 | $4,375 |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Note 3 - Fair Value of Financial Instruments (Details) - Basis of Fair Value Measurement [Line Items] | ' | ' |
Certificates of deposit | 2,250 | 4,375 |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Note 3 - Fair Value of Financial Instruments (Details) - Basis of Fair Value Measurement [Line Items] | ' | ' |
Certificates of deposit | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Note 3 - Fair Value of Financial Instruments (Details) - Basis of Fair Value Measurement [Line Items] | ' | ' |
Certificates of deposit | $0 | $0 |
Note_3_Fair_Value_of_Financial4
Note 3 - Fair Value of Financial Instruments (Details) - Assets Not Carried at Fair Value (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets Not Carried at Fair Value [Abstract] | ' | ' |
Loan receivable | $3,268 | $1,954 |
Loan receivable | $3,303 | $1,954 |
Note_4_Acquisitions_Details
Note 4 - Acquisitions (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Feb. 22, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Feb. 08, 2013 | Aug. 08, 2012 | Feb. 08, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |
RealPractice [Member] | DealOn [Member] | DealOn [Member] | DealOn [Member] | Developed Technology [Member] | Developed Technology [Member] | Customer Relationships [Member] | Customer Relationships [Member] | ||||||
Note 4 - Acquisitions (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Combination, Contingent Consideration, Liability | ' | ' | ' | ' | ' | $300,000 | ' | ' | ' | ' | ' | ' | ' |
Deferred Payment | ' | ' | ' | ' | ' | ' | 400,000 | 400,000 | 500,000 | ' | ' | ' | ' |
Deferred Payment Shares (in Shares) | ' | ' | ' | ' | ' | ' | 5,324 | 5,324 | 10,649 | ' | ' | ' | ' |
Payments to Acquire Businesses, Gross | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares) | 181,224 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-lived Intangible Assets Acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | 2,400,000 | ' | 25,000 |
Finite-Lived Intangible Assets, Accumulated Amortization | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,600,000 | 2,900,000 | ' | 25,000 |
Finite-Lived Intangible Asset, Useful Life | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | '3 years | '3 years | '1 year | '1 year |
Amortization of Intangible Assets | ' | $200,000 | $600,000 | $900,000 | $1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Note_4_Acquisitions_Details_Es
Note 4 - Acquisitions (Details) - Estimated Amortization Expense Over the Remaining lives (USD $) | Sep. 30, 2013 |
In Thousands, unless otherwise specified | |
Estimated Amortization Expense Over the Remaining lives [Abstract] | ' |
2013 (3 months) | $255 |
2014 | 853 |
2015 | 417 |
Total | $1,525 |
Note_5_Software_Development_Co2
Note 5 - Software Development Costs (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Research and Development [Abstract] | ' | ' | ' | ' | ' |
Capitalized Computer Software, Amortization | $2.20 | $1.70 | $6.60 | $4.70 | ' |
Capitalized Software Development Costs For Projects In Process | $2.20 | ' | $2.20 | ' | $3.30 |
Note_5_Software_Development_Co3
Note 5 - Software Development Costs (Details) - Capitalized Software Development Costs (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Capitalized Software Development Costs [Abstract] | ' | ' |
Capitalized software development costs | $42,627 | $31,944 |
Accumulated amortization | -23,832 | -17,240 |
Capitalized software development costs, net | $18,795 | $14,704 |
Note_6_Variable_Interest_Entit1
Note 6 - Variable Interest Entities (Details) | 9 Months Ended | 1 Months Ended | 12 Months Ended | 9 Months Ended | |||||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Dec. 29, 2013 | Dec. 29, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
USD ($) | EUR (€) | Amount Advanced [Member] | Amount Advanced [Member] | Increase In Amount Advanced [Member] | Increase In Amount Advanced [Member] | Amount Available [Member] | Amount Available [Member] | Other Ownership Interests Value [Member] | Other Ownership Interests Value [Member] | Contingent Commitment [Member] | |
USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | |||
Note 6 - Variable Interest Entities (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan To Franchisee (in Euro) | $3.90 | € 2.90 | $2 | € 1.45 | $1.20 | € 0.92 | $0.70 | € 0.53 | $2 | € 1.45 | ' |
Loan To Franchisee | 3.9 | 2.9 | 2 | 1.45 | 1.2 | 0.92 | 0.7 | 0.53 | 2 | 1.45 | ' |
Debt Instrument, Term | '2 years | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | 4.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3.30 |
Note_7_Current_Liabilities_Det
Note 7 - Current Liabilities (Details) - Accrued expenses (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Accrued expenses [Abstract] | ' | ' |
Accrued compensation and benefits | $16,545 | $14,558 |
Other | 14,102 | 12,864 |
Total accrued expenses | $30,647 | $27,422 |
Note_7_Current_Liabilities_Det1
Note 7 - Current Liabilities (Details) - Deferred Revenue and Other Current Liabilities (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred Revenue and Other Current Liabilities [Abstract] | ' | ' |
Deferred revenue | $36,379 | $34,142 |
Other | 1,065 | 2,162 |
Total deferred revenue and other current liabilities | $37,444 | $36,304 |
Note_9_Stockholders_Equity_Det
Note 9 - Stockholders' Equity (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 23 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Mar. 04, 2013 | Dec. 13, 2012 | Nov. 04, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Stockholders' Equity Note [Abstract] | ' | ' | ' | ' | ' | ' |
Stock Repurchase Program, Authorized Amount | $47 | ' | $20 | ' | ' | ' |
Stock Repurchase Program Increase In Total Authorized Repurchase Amount | 21 | 6 | ' | ' | ' | ' |
Stock Repurchased During Period, Shares (in Shares) | ' | ' | ' | 475,000 | 1,395,000 | 3,400,000 |
Stock Repurchased During Period, Value | ' | ' | ' | $5.90 | $18.90 | $36.30 |
Note_10_StockBased_Compensatio2
Note 10 - Stock-Based Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Note 10 - Stock-Based Compensation (Details) [Line Items] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share) | ' | ' | $6.32 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | ' | ' | $3,800,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares) | ' | ' | 633,000 | ' |
Share-based Compensation | 3,188,000 | 2,595,000 | 8,410,000 | 6,929,000 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | 19,900,000 | ' | 19,900,000 | ' |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | ' | ' | '1 year 146 days | ' |
Performance Shares [Member] | Stock Price Targets and Service [Member] | ' | ' | ' | ' |
Note 10 - Stock-Based Compensation (Details) [Line Items] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share) | ' | ' | $5.52 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares) | ' | ' | 506,000 | ' |
Performance Shares [Member] | Business Performance Milestones [Member] | ' | ' | ' | ' |
Note 10 - Stock-Based Compensation (Details) [Line Items] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share) | ' | ' | $13.45 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares) | ' | ' | 30,000 | ' |
Employee Stock Option [Member] | Separation Agreement with Former CEO [Member] | ' | ' | ' | ' |
Note 10 - Stock-Based Compensation (Details) [Line Items] | ' | ' | ' | ' |
Share-based Compensation | $700,000 | ' | $700,000 | ' |
Note_10_StockBased_Compensatio3
Note 10 - Stock-Based Compensation (Details) - Summary of Vested and Unvested Options Activity (USD $) | 9 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 |
Summary of Vested and Unvested Options Activity [Abstract] | ' |
Outstanding at December 31, 2012 | 7,052 |
Outstanding at December 31, 2012 (in Dollars per share) | $10.71 |
Outstanding at September 30, 2013 | 6,984 |
Outstanding at September 30, 2013 (in Dollars per share) | $11.28 |
Outstanding at September 30, 2013 | '4 years 146 days |
Outstanding at September 30, 2013 (in Dollars) | $9,878 |
Vested and exercisable at September 30, 2013 | 4,281 |
Vested and exercisable at September 30, 2013 (in Dollars per share) | $10.84 |
Vested and exercisable at September 30, 2013 | '3 years 146 days |
Vested and exercisable at September 30, 2013 (in Dollars) | 7,354 |
Unvested at September 30, 2013, net of estimated forfeitures | 2,532 |
Unvested at September 30, 2013, net of estimated forfeitures (in Dollars per share) | $11.94 |
Unvested at September 30, 2013, net of estimated forfeitures | '6 years |
Unvested at September 30, 2013, net of estimated forfeitures (in Dollars) | $2,450 |
Granted | 1,143 |
Granted (in Dollars per share) | $13.29 |
Exercised | -654 |
Exercised (in Dollars per share) | $8.15 |
Forfeited | -557 |
Forfeited (in Dollars per share) | $12.10 |
Note_10_StockBased_Compensatio4
Note 10 - Stock-Based Compensation (Details) - Weighted Average Assumptions Used to Estimate Fair Value of Stock Options Granted | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Weighted Average Assumptions Used to Estimate Fair Value of Stock Options Granted [Abstract] | ' | ' | ' | ' |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 1.36% | 0.61% | 0.92% | 0.78% |
Expected life (in years) | '4 years 9 months | '4 years 9 months | '4 years 295 days | '4 years 328 days |
Expected volatility | 57.00% | 60.00% | 59.00% | 59.00% |
Note_10_StockBased_Compensatio5
Note 10 - Stock-Based Compensation (Details) - Summary of Restricted Stock Awards and Restricted Stock Unit Awards (USD $) | 9 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 |
Summary of Restricted Stock Awards and Restricted Stock Unit Awards [Abstract] | ' |
Unvested at December 31, 2012 | 382 |
Unvested at December 31, 2012 (in Dollars per share) | $11.09 |
Unvested at September 30, 2013 | 779 |
Unvested at September 30, 2013 (in Dollars per share) | $7.49 |
Granted | 633 |
Granted (in Dollars per share) | $5.88 |
Forfeited | -136 |
Forfeited (in Dollars per share) | $7.41 |
Vested | -100 |
Vested (in Dollars per share) | $10.68 |
Note_10_StockBased_Compensatio6
Note 10 - Stock-Based Compensation (Details) - Summary of Stock Based Compensation (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Summary of Stock Based Compensation [Abstract] | ' | ' | ' | ' |
Stock-based compensation | $3,358 | $2,662 | $8,853 | $7,157 |
Less: Capitalized stock-based compensation | 170 | 67 | 443 | 228 |
Stock-based compensation expense, net | $3,188 | $2,595 | $8,410 | $6,929 |
Note_10_StockBased_Compensatio7
Note 10 - Stock-Based Compensation (Details) - Stock Based Compensation Expense, Net of Capitalization, Included in the Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Stock-based compensation expense, net | ' | ' | ' | ' |
$3,188 | $2,595 | $8,410 | $6,929 | |
Cost of Sales [Member] | ' | ' | ' | ' |
Stock-based compensation expense, net | ' | ' | ' | ' |
Allocated stock-based compensation expense | 176 | 73 | 471 | 198 |
Selling and Marketing Expense [Member] | ' | ' | ' | ' |
Stock-based compensation expense, net | ' | ' | ' | ' |
Allocated stock-based compensation expense | 765 | 437 | 2,396 | 1,122 |
Product and Technology [Member] | ' | ' | ' | ' |
Stock-based compensation expense, net | ' | ' | ' | ' |
Allocated stock-based compensation expense | 163 | 488 | 425 | 868 |
General and Administrative Expense [Member] | ' | ' | ' | ' |
Stock-based compensation expense, net | ' | ' | ' | ' |
Allocated stock-based compensation expense | $2,084 | $1,597 | $5,118 | $4,741 |
Note_11_Income_Taxes_Details
Note 11 - Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Income Tax Expense (Benefit) | $1,430 | $314 | $3,247 | $736 |
Note_12_Segment_Information_De
Note 12 - Segment Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Note 12 - Segment Information (Details) [Line Items] | ' | ' | ' | ' | ' |
Number of Operating Segments | ' | ' | 1 | ' | ' |
Revenues | $133,148 | $118,891 | $382,023 | $335,106 | ' |
Long-Lived Assets | 12,128 | ' | 12,128 | ' | 11,066 |
Australia [Member] | ' | ' | ' | ' | ' |
Note 12 - Segment Information (Details) [Line Items] | ' | ' | ' | ' | ' |
Revenues | 21,400 | 19,000 | 62,100 | 52,900 | ' |
Long-Lived Assets | $1,100 | ' | $1,100 | ' | $1,700 |
Note_12_Segment_Information_De1
Note 12 - Segment Information (Details) - Revenue and Long Lived Assets by Geographic Area (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Revenue | $133,148 | $118,891 | $382,023 | $335,106 | ' |
Long-lived Assets | 12,128 | ' | 12,128 | ' | 11,066 |
North America [Member] | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Revenue | 88,501 | 84,212 | 257,941 | 243,364 | ' |
Long-lived Assets | 6,575 | ' | 6,575 | ' | 6,395 |
International [Member] | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Revenue | 44,647 | 34,679 | 124,082 | 91,742 | ' |
Long-lived Assets | $5,553 | ' | $5,553 | ' | $4,671 |