Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 06, 2015 | |
Entity Registrant Name | ReachLocal Inc | |
Entity Central Index Key | 1,297,336 | |
Trading Symbol | rloc | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 29,421,308 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 17,813,000 | $ 43,720,000 |
Short-term investments | 81,000 | 904,000 |
Accounts receivable, net of allowance for doubtful accounts of $860 and $961 at September 30, 2015 and December 31, 2014, respectively | 6,689,000 | 7,844,000 |
Prepaid expenses and other current assets | 8,476,000 | 9,620,000 |
Total current assets | 33,059,000 | 62,088,000 |
Property and equipment, net | 15,547,000 | 19,639,000 |
Capitalized software development costs, net | 21,155,000 | $ 21,555,000 |
Restricted cash—term loan (Note 11) | 17,500,000 | |
Restricted cash | 3,267,000 | $ 3,589,000 |
Intangible assets, net | 4,210,000 | 5,492,000 |
Non-marketable investments | 9,000,000 | 9,000,000 |
Other assets | 3,405,000 | 3,518,000 |
Goodwill | 19,989,000 | 48,189,000 |
Total assets | 127,132,000 | 173,070,000 |
Current Liabilities: | ||
Accounts payable | 33,484,000 | 44,874,000 |
Accrued compensation and benefits | 14,188,000 | 15,972,000 |
Deferred revenue | 25,824,000 | 29,016,000 |
Accrued restructuring | 3,857,000 | $ 3,196,000 |
Term loan | 5,877,000 | |
Capital lease | 690,000 | $ 624,000 |
Other current liabilities | 11,454,000 | 12,316,000 |
Liabilities of discontinued operations | 779,000 | 850,000 |
Total current liabilities | 96,153,000 | $ 106,848,000 |
Term loan | 18,687,000 | |
Capital lease | 662,000 | $ 1,103,000 |
Deferred rent and other liabilities | 11,640,000 | 12,195,000 |
Total liabilities | $ 127,142,000 | $ 120,146,000 |
Commitments and contingencies (Note 7) | ||
Stockholders’ Equity: | ||
Common stock, $0.00001 par value—140,000 shares authorized; 29,419 and 29,269 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | $ 0 | $ 0 |
Receivable from stockholder | (52,000) | (65,000) |
Additional paid-in capital | 138,572,000 | 132,080,000 |
Accumulated deficit | (133,581,000) | (74,569,000) |
Accumulated other comprehensive loss | (4,949,000) | (4,522,000) |
Total stockholders’ equity | (10,000) | 52,924,000 |
Total liabilities and stockholders’ equity | $ 127,132,000 | $ 173,070,000 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Allowance for doubtful accounts | $ 860 | $ 961 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 140,000 | 140,000 |
Common stock, shares issued (in shares) | 29,419 | 29,269 |
Common stock, shares outstanding (in shares) | 29,419 | 29,269 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue | $ 95,282,000 | $ 117,623,000 | $ 293,620,000 | $ 365,912,000 |
Cost of revenue | 53,671,000 | 64,154,000 | 165,278,000 | 191,013,000 |
Operating expenses: | ||||
Selling and marketing | 30,634,000 | 45,479,000 | 99,964,000 | 140,386,000 |
Product and technology | 6,947,000 | 6,746,000 | 21,450,000 | 20,521,000 |
General and administrative | 9,310,000 | 12,183,000 | 29,933,000 | 40,877,000 |
Amounts accrued | 983,000 | $ 518,000 | 5,571,000 | $ 4,567,000 |
Impairment of goodwill | 27,800,000 | 27,800,000 | ||
Total operating expenses | 75,674,000 | $ 64,926,000 | 184,718,000 | $ 206,351,000 |
Operating loss | (34,063,000) | (11,457,000) | (56,376,000) | (31,452,000) |
Other income (expense), net | (1,179,000) | 208,000 | (2,182,000) | 591,000 |
Loss from continuing operations before income taxes | (35,242,000) | (11,249,000) | (58,558,000) | (30,861,000) |
Income tax provision (benefit) | 395,000 | 35,000 | 454,000 | (2,938,000) |
Loss from continuing operations | $ (35,637,000) | $ (11,284,000) | $ (59,012,000) | (27,923,000) |
Income from discontinued operations, net of income tax of $222 for the nine months ended September 30, 2014 | 371,000 | |||
Net loss | $ (35,637,000) | $ (11,284,000) | $ (59,012,000) | $ (27,552,000) |
Basic: | ||||
Loss from continuing operations (in dollars per share) | $ (1.22) | $ (0.40) | $ (2.03) | $ (0.98) |
Income from discontinued operations, net of income taxes (in dollars per share) | 0.01 | |||
Net loss per share (in dollars per share) | $ (1.22) | $ (0.40) | $ (2.03) | (0.97) |
Diluted: | ||||
Loss per share from continuing operations, diluted (in dollars per share) | $ (1.22) | $ (0.40) | $ (2.03) | (0.98) |
Income from discontinued operations, net of income taxes (in dollars per share) | 0.01 | |||
Net loss per share (in dollars per share) | $ (1.22) | $ (0.40) | $ (2.03) | $ (0.97) |
Weighted average common shares used in the computation of income (loss) per share: | ||||
Basic (in shares) | 29,194 | 28,515 | 29,120 | 28,360 |
Diluted (in shares) | 29,194 | 28,515 | 29,120 | 28,360 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations (Unaudited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income from discontinued operations, tax | $ 222 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net loss | $ (35,637) | $ (11,284) | $ (59,012) | $ (27,552) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (358) | (878) | (428) | (43) |
Comprehensive loss | $ (35,995) | $ (12,162) | $ (59,440) | $ (27,595) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Loss from continuing operations | $ (59,012,000) | $ (27,923,000) |
Adjustments to reconcile loss from continuing operations, net of income taxes, to net cash used in operating activities: | ||
Depreciation and amortization | 14,995,000 | 12,595,000 |
Stock-based compensation | 6,556,000 | 10,718,000 |
Restructuring charges | 5,571,000 | $ 4,567,000 |
Impairment of goodwill | 27,800,000 | |
Loss on disposal of fixed assets | $ 135,000 | |
Excess tax shortfalls from stock-based awards | $ 1,185,000 | |
Provision for doubtful accounts | $ (12,000) | 1,568,000 |
Non-cash interest expense, net | $ 387,000 | (243,000) |
Deferred taxes, net | (1,325,000) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | $ 789,000 | (728,000) |
Prepaid expenses and other current assets | 938,000 | 2,049,000 |
Other assets | 13,000 | (1,175,000) |
Accounts payable | (9,803,000) | (3,075,000) |
Accrued compensation and benefits | (1,574,000) | (119,000) |
Deferred revenue | (2,170,000) | (1,938,000) |
Accrued restructuring | (4,405,000) | (1,620,000) |
Deferred rent and other liabilities | 91,000 | (303,000) |
Net cash used in operating activities, continuing operations | (19,701,000) | (5,767,000) |
Net cash used in operating activities, discontinued operations | (70,000) | (1,402,000) |
Net cash used in operating activities | (19,771,000) | (7,169,000) |
Cash flows from investing activities: | ||
Additions to property, equipment and software | (11,171,000) | $ (18,987,000) |
Maturities of certificates of deposits and short-term investments | $ 582,000 | |
Purchases of certificates of deposits and short-term investments | $ (85,000) | |
Acquisitions, net of acquired cash | (1,789,000) | |
Investment in non-marketable securities | (2,000,000) | |
Net cash used in investing activities, continuing operations | $ (10,589,000) | $ (22,861,000) |
Cash flows from financing activities: | ||
Proceeds from term loan, net | 24,700,000 | |
Restricted cash—term loan | (17,500,000) | |
Payment of deferred and contingent consideration | (529,000) | |
Proceeds from exercise of stock options | $ 7,000 | $ 6,438,000 |
Excess shortfalls from stock-based awards | (1,185,000) | |
Principal payments on capital lease obligations | $ (504,000) | $ (65,000) |
Debt issuance costs | (194,000) | |
Common stock repurchases | (5,000) | $ (66,000) |
Net cash provided by financing activities | 5,975,000 | 5,122,000 |
Effect of exchange rate changes on cash and cash equivalents | (1,522,000) | (889,000) |
Net change in cash and cash equivalents | (25,907,000) | (25,797,000) |
Cash and cash equivalents—beginning of period | 43,720,000 | 77,514,000 |
Cash and cash equivalents—end of period | $ 17,813,000 | $ 51,717,000 |
Note 1 - Organization and Descr
Note 1 - Organization and Description of Business | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Nature of Operations [Text Block] | 1. Organization and Description of Business ReachLocal, Inc.’s (the “Company”) operations are located in the United States, Canada, Australia, New Zealand, Japan, the United Kingdom, Germany, the Netherlands, Austria, Brazil, Mexico, and India. The Company’s mission is to provide more customers to local businesses around the world. The Company offers online marketing products and solutions in three categories: software (ReachEdge™ and Kickserv™), web presence (including ReachSite + ReachEdge™, ReachSEO™, ReachCast™, and TotalLiveChat™), and digital advertising (including ReachSearch™, ReachDisplay™, ReachRetargeting™, and ReachDisplay InApp TM Liquidity and Capital Resources During the first nine months of 2015, the Company experienced declining revenues as a result of challenging market conditions and worse than expected performance in the Company’s international markets. In conjunction with the Company’s initiatives to transform the business and focus on profitable revenue, these conditions have had a significant negative impact on its operating results and cash flows. As a result the Company has taken a number of steps to reduce expenses and improve its business through, for example, its 2015 Restructuring Plan, including significant cost-saving measures such as workforce reductions, downsizing certain facilities in North America, as well as reductions of general corporate expenses and capital expenditures. In order to provide further liquidity to meet working capital and capital resource requirements, on April 30, 2015 the Company entered into a Loan and Security Agreement (the “Loan Agreement”) for a $25.0 million term loan. See Note 11, Term Loan, for more information. The Company received $24.7 million of net proceeds from the term loan, $17.5 million of which is considered restricted cash required under the terms of the Loan Agreement. The Company’s overall performance and capital expenditures more than offset the $7.2 million of net unrestricted cash from the term loan, resulting in cash balances at September 30, 2015, that decreased $25.9 million from December 31, 2014. The Company’s current liabilities exceeded its current assets by $63.1 million at September 30, 2015, and it has incurred an operating loss of $56.4 million for the nine months then ended. Under the Loan Agreement, the Company is required to maintain minimum cash in North America in an amount equal to $17.5 million at all times, unless the Company achieves positive “Adjusted EBITDA” as defined in the Loan Agreement for three consecutive quarters, in which case the minimum cash balance decreases to $12.5 million. The Company achieved positive “Adjusted EBITDA” during the quarter ended September 30, 2015, which qualifies as the potential first of the required three consecutive quarters. The Loan Agreement includes covenants applicable to the Company and its subsidiaries, which include restrictions on transferring collateral, incurring additional indebtedness, creating liens, selling assets, and undergoing a change in control, in each case subject to certain exceptions, as well as financial covenant requirements to maintain certain minimum levels of revenue and earnings during each three-month period, tested monthly, during the term. The Loan Agreement also contains a subjective acceleration clause that can be triggered if the Company experiences a Material Adverse Effect, as defined in the Loan Agreement, which would be considered an event of default. On August 3, 2015, the Company entered into an amendment to the Loan Agreement, which reduced the Loan Agreement’s covenant thresholds for revenue for the months ending September 30, 2015 through December 31, 2015. On November 9, 2015, the Company entered into an amendment to the Loan Agreement with Hercules, which waives compliance with the term loan’s revenue and earnings covenant thresholds for November and December 2015. In connection with the amendment, the Company (i) paid Hercules a one-time fee of $0.2 million, (ii) reset the schedule of prepayment fees to begin from the November 9, 2015, instead of April 30, 2016, and (iii) agreed to amend the Hercules warrant as described below no later than November 16, 2016. As of September 30, 2015, the Company was in compliance with all financial covenants of the Loan Agreement. The Company will need to make further cost reductions in its operating expenses and capital expenditures to maintain a sufficient cash balance to fund its operations and maintain compliance with the minimum cash balance requirement under the Loan Agreement. Management is committed to execute further cost reductions throughout all aspects of the business, including in the areas of product and technology, sales and marketing, service and support, and general corporate expenses. These additional cost-saving measures are estimated to result in expense reductions of approximately $24.0 million during the next twelve months, although some of these cost-saving measures are expected to negatively impact revenues. The Company will continue to evaluate the extent and effectiveness of its cost-saving measures and monitor its expenses compared to revenue and intends to implement additional cost reductions in future periods if and as circumstances warrant. The Company believes that it will be able to maintain compliance with the minimum cash balance in North America in excess of $17.5 million in addition to the other financial covenants contained in the Loan Agreement through 2016 as a result of its cost control measures. The Company believes that it will be able to achieve the revenue and earnings targets under the Loan Agreement during the fourth quarter of 2015, as well as the revenue and earnings targets for 2016, which will equal 90% and 80% of the respective amounts contained in the Company’s 2016 operating plan, when approved by the Company’s board of directors. However, there can be no assurance that these actions will be successful or that further adverse events outside of the Company’s control may arise that would result in the Company’s inability to comply with the Loan Agreement’s covenants. If an event of default were to occur, the Company may be required to obtain a further amendment or a waiver to the Loan Agreement, refinance the term loan, divest non-core assets or operations and/or obtain additional equity or debt financing. If the Company was unable to obtain such a waiver or amendment, or consummate such transactions, the administrative agent could exercise remedies against the Company and the collateral securing the term loan, including potential foreclosure against the Company’s assets securing the Loan Agreement, including the Company’s cash. In consideration of these conditions, the Company currently anticipates that funds expected to be generated from operations, including cost-saving measures the Company has taken and intends to take, will be sufficient to meet the Company’s anticipated cash requirements for at least the next twelve months. However, there is no assurance that the results of operations and cash flows expected during that period of time will be achieved. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
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 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, 2014. The Condensed Consolidated Balance Sheet as of December 31, 2014 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, 2015, the Company’s results of operations for the three and nine months ended September 30, 2015 and 2014 and the Company’s cash flows for the nine months ended September 30, 2015 and 2014. The results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015. All references to the three and nine months ended September 30, 2015 and 2014 in the notes to the condensed consolidated financial statements are unaudited. Use of Estimates The preparation of 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 financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results may differ from those estimates. Reclassifications and Adjustments Certain prior period amounts have been reclassified to conform to the current period presentation. Cash and Cash Equivalents The Company reports all highly liquid short-term investments with original maturities of three months or less at the time of purchase as cash equivalents. As of September 30, 2015 and December 31, 2014, cash equivalents consist of demand deposits and money market accounts. Cash equivalents are stated at cost, which approximates fair value. Restricted Cash Term Loan Under the terms of the Loan Agreement, the Company is required to maintain, at all times, cash in North America of at least $17.5 million, unless the Company achieves positive “Adjusted EBITDA” as defined in the Loan Agreement for three consecutive quarters, in which case the minimum cash balance decreases to $12.5 million. Restricted cash—term loan represents the required minimum compensating balance to secure the term loan. See Note 11, Term Loan, for more information. Restricted Cash Restricted cash represents certificates of deposit held at financial institutions that are pledged as collateral for letters of credit related to lease commitments, collateral for the Company’s merchant accounts, and cash deposits in a restricted account in accordance with the Company’s employee health care self-insurance plan. The letters of credit will lapse at the end of the respective lease terms through 2024 and the certificates of deposit automatically renew for successive one-year periods over the duration of the lease term. The restrictions related to merchant accounts and the Company’s self-insurance plan will lapse upon termination of the respective underlying arrangements. At September 30, 2015 and December 31, 2014, the Company had restricted cash in the amount of $3.3 million and $3.6 million, respectively, of which, $0.2 million, related to the employee health care self-insurance plan. Recent Accounting Pronouncements In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-16, Business Combinations. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software. In April 2015, the FASB issued ASU No. 2015-03, Interest- Imputation of Interest. In February 2015, the FASB issued ASU No. 2015-02, Consolidation. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period Compensation – Stock Compensation In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers Revenue Recognition - Construction-Type and Production-Type Contracts Property, Plant, and Equipment, and intangible assets, within the scope of ASC 350 Intangibles - Goodwill and Other In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity |
Note 3 - Fair Value of Financia
Note 3 - Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | 3. Fair Value of Financial Instruments The Company applies the fair value hierarchy for its financial assets and liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last is considered unobservable, that are used to measure fair value: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table summarizes the basis used to measure certain of the Company’s financial assets and liabilities that are carried at fair value (in thousands): Basis of Fair Value Measurement Balance at September 30, 2015 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Cash and cash equivalents $ 17,813 $ 17,813 $ — $ — Restricted cash—term loan $ 17,500 $ 17,500 $ — $ — Short-term investments $ 81 $ 81 $ — $ — Restricted cash $ 3,062 $ — $ 3,062 $ — Basis of Fair Value Measurement Balance at December 31, 201 4 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Cash and cash equivalents $ 43,720 $ 43,720 $ — $ — Short-term investments $ 904 $ 904 $ — $ — Restricted cash $ 3,416 $ — $ 3,416 $ — Liabilities: Acquisition-related contingent consideration $ 349 $ — $ — $ 349 The Company’s restricted cash is valued using pricing sources and models utilizing market observable inputs, as provided to the Company by its broker. On April 10, 2015, ReachLocal New Zealand Limited (“RL NZ”) paid NZ$0.4 million ($0.3 million) of earn-out consideration due, offset by NZ$0.2 million ($0.1 million) pursuant to a net working capital adjustment in the Company’s favor. On September 18, 2015, RL NZ made the final payment of $0.1 million for the indemnity holdback. The Company also has an investment in a privately held partnership that is one of its service providers. During March 2013, the Company invested $2.5 million for a 4% equity interest in the service provider, and in March 2014, the Company invested $2.0 million for an additional 3.2% equity interest. The Company does not have significant influence over the entity. In addition, the Company has an equity interest of 14.2% in SERVIZ, Inc., the entity that acquired its former ClubLocal business, and does not have significant influence over the entity. The carrying amounts of the Company’s cost method investments were each $4.5 million at September 30, 2015, and are included in non-marketable investments in the accompanying condensed consolidated balance sheet. |
Note 4 - Acquisitions
Note 4 - Acquisitions | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | 4. Acquisitions Acquisition of Kickserv On November 21, 2014, the Company acquired Kickserv, Inc. (“Kickserv”) as part of the Company’s continued effort to expand its product offerings. Kickserv is a provider of cloud-based business management software for service businesses. The purchase price consisted of $6.75 million of initial consideration, subject to a holdback and certain adjustments, and up to $4.0 million of earn-out consideration. At closing, the Company paid $5.3 million in cash with the remaining balance of the initial purchase price payable after the 18-month anniversary of the closing date, subject to certain conditions. The Company also issued 250,000 restricted stock units to the hired employees, which are accounted for as stock-based compensation over the period in which they are earned. A liability was not recorded for the earn-out consideration as the financial targets, as defined in the purchase agreement, are not expected to be achieved. Any changes in the fair value of the earn-out consideration will be recorded as other income or expense. There has been no change in the fair value since the date of acquisition. The acquisition was accounted for using the acquisition method of accounting. The Company completed and finalized the purchase price allocation in the fourth quarter of 2014. The Company recorded assets acquired and liabilities assumed at their respective fair values. The following table summarizes the final fair value of assets acquired and liabilities assumed (in thousands): Assets acquired: Cash and cash equivalents $ 58 Intangible assets 4,280 Goodwill 3,985 Total assets acquired 8,323 Liabilities assumed: Non-interest bearing liabilities 24 Long-term debt 350 Deferred tax liabilities 1,249 Total liabilities assumed 1,623 Total fair value of net assets acquired $ 6,700 Intangible assets acquired from Kickserv included software technology of $3.0 million, trade names of $0.6 million and customer relationships of $0.7 million, amortized over eight, ten, and four years, their respective estimated useful lives, using the straight-line method. The estimated useful life of the technology was determined based on assumptions of its remaining economic life. The estimated useful life of trade names was determined based on assumptions of revenue attributable to the trade name, and the estimated useful life of the customer relationships was determined based on assumptions of customer attrition rates. The fair value of the intangible assets were determined by applying the income approach and based on significant inputs that are not observable in the market. Key assumptions include estimated future revenues from acquired customers and a discount rate of 15%, comprised of an estimated internal rate of return for this transaction and a weighted average cost of capital for comparable companies. The goodwill arising from the acquisition consists largely of the synergies expected from combining the operations of Kickserv and the Company. The acquired goodwill is not expected to be deductible for tax purposes. Acquisition costs in connection with the Kickserv acquisition were immaterial. The revenues and results of operations of the acquired businesses for the post-acquisition period were included in the consolidated statements of operations and were immaterial for the period ended September 30, 2015. The pro forma results are not shown as the impact is not material. Acquisition of SureFire On March 21, 2014, RL NZ acquired certain assets and hired certain employees of SureFire Search Limited (“SureFire”) as part of the Company’s international expansion plan. From 2010 until the acquisition, SureFire was the Company’s exclusive reseller in New Zealand. At closing, RL NZ paid NZ$1.7 million ($1.5 million) in cash of the estimated NZ$2.8 million ($2.4 million) purchase price. The remaining balance of the estimated purchase price was deferred subject to meeting revenue targets and an indemnity holdback, payable, if at all, after the 12-month anniversary of the closing date, and the 12- and 18-month anniversaries of the closing date, respectively. The maximum amount of contingent consideration payable was NZ$2.0 million and the fair value of the contingent consideration was recorded as an accrued expense. The fair value of the earn-out consideration under the income approach was determined at the time of acquisition by using the Black-Scholes option pricing model. This approach is based on significant inputs that are not observable in the market, which are considered Level 3 inputs. Key assumptions include forecasted first year revenue, volatility of 30% based on volatilities of selected comparable companies, and a risk-free rate of 0.14% based on a one-year U.S. treasury yield rate. The liability for the indemnity holdback was recorded based on the assumption that there would be no claims made against the holdback and that 65% ($0.2 million) of the indemnity holdback would be paid April 2015 and the remaining 35% ($0.1 million) would be paid October 2015. The fair value of the indemnity holdback at the date of acquisition was NZ$0.4 million ($0.3 million). On April 10, 2015, RL NZ paid NZ$0.6 million ($0.4 million), which included NZ $0.4 million ($0.3 million) of earn-out consideration due and NZ $0.3 million ($0.2 million) for the 12-month indemnity holdback release, offset by NZ $0.2 million ($0.1 million) to a net working capital adjustment in the Company’s favor. On September 18, 2015, RL NZ made the final payment of $0.1 million for the indemnity holdback. The acquisition was accounted for using the acquisition method of accounting. The Company completed a preliminary purchase price allocation in the first quarter of 2014 and finalized the allocation in the third quarter of 2014 with respect to the timing of certain valuation adjustments. The Company recorded acquired assets and liabilities assumed at their respective fair values. The following table summarizes the final fair value of acquired assets and liabilities assumed (in thousands): Assets acquired: Goodwill $ 2,350 Intangible assets 1,280 Accounts receivable 330 Property and equipment 13 Total assets acquired 3,973 Liabilities assumed: Deferred tax liabilities 358 Deferred revenue 284 Accrued compensation and benefits 111 Other 782 Total liabilities assumed 1,535 Total fair value of net assets acquired $ 2,438 Intangible assets acquired from SureFire included customer relationships of $1.3 million which are amortized over three years, their estimated useful life, using the straight-line method. The estimated useful life was determined based on assumptions of customer attrition rates. The fair value of the intangible assets was determined by applying the income approach and based on Level 3 inputs. Key assumptions include estimated future revenues from acquired customers and a discount rate of 25%, comprised of an estimated internal rate of return for this transaction and a weighted average cost of capital for comparable companies. The goodwill arising from the acquisition consists largely of the synergies expected from combining the operations of SureFire. The Company expects to increase its presence in the Asia Pacific region as a result of this acquisition. The acquired goodwill is not expected to be deductible for tax purposes. Acquisition costs in connection with the SureFire acquisition were immaterial. The revenues and results of operations of the acquired businesses for the periods post-acquisition were included in the consolidated statements of operations and were immaterial for the period ended September 30, 2015. The pro forma results are not shown as the impact is not material. Acquisition of RealPractice On January 6, 2014, the Company made the final deferred payment in connection with its 2012 acquisition of RealPractice in the amount of $0.3 million. |
Note 5 - Goodwill and Finite-li
Note 5 - Goodwill and Finite-lived Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Goodwill and Intangible Assets Disclosure [Text Block] | 5. Goodwill and Finite-Lived Intangible Assets Goodwill represents the excess of the purchase price of our acquired businesses over the fair value of the net tangible and intangible assets acquired. The Company accounts for goodwill in accordance with ASC 350, Intangibles—Goodwill and Othe r tests the goodwill of its reporting units for impairment annually on the first day of the fourth quarter, and whenever events occur or circumstances change that would more likely than not indicate that the goodwill might be impaired. The goodwill impairment test involves a two-step process. However, for the annual goodwill assessment prior to performing the two-step quantitative test, the Company has the option to first assess qualitative factors. In the first step, the Company compares the fair value of each reporting unit to its carrying value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value or if the carrying value of the reporting unit is negative, the Company must perform the second step of the impairment test to measure the amount of impairment loss. In the second step, the reporting unit's fair value is allocated to the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of the reporting unit's goodwill is less than the carrying value, the difference is recorded as an impairment loss. Impairment of Goodwill During the quarter ended September 30, 2015, due to a decline in internal projections for the Asia-Pacific reporting unit of both revenue and profitability as a result of recent declines in its financial performance, the Company determined that sufficient indicators of potential impairment existed to require an interim quantitative goodwill impairment test for the Asia-Pacific reporting unit as of August 31, 2015. The amount of goodwill assigned to the Asia-Pacific reporting unit at August 31, 2015 was $32.4 million. Due to the complexity and the effort required to estimate the fair value of the Asia-Pacific reporting unit in step one of the impairment test and to estimate the fair value of all assets and liabilities of the Asia-Pacific reporting unit in step two of the test, the fair value estimates were derived based on preliminary assumptions and analysis that are subject to change. Based on the Company’s revised forecasts, the carrying value of goodwill exceeded the implied fair value of goodwill for the Asia-Pacific reporting unit. As a result, the Company recorded a preliminary impairment charge of $27.8 million for the goodwill in the Asia-Pacific reporting unit during the quarter ended September 30, 2015, which is included in impairment of goodwill in the accompanying consolidated statements of operations. Any adjustment to the estimated impairment charge will be recorded in the fourth quarter of 2015. The Company did not identify an impairment of its finite-lived intangible assets or other long-lived assets based on its estimates included in the second step of the quantitative test. The process of estimating the fair value of goodwill is subjective and requires the Company to make estimates that may significantly impact the outcome of the analyses. The estimated fair value of the Asia-Pacific reporting unit was determined using both an income-based valuation approach, and a market-based valuation approach, each weighted 50%. Under the income approach, fair value of the reporting unit is estimated using the discounted cash flow method. The discounted cash flow method is dependent upon a number of factors, including projections of the amounts and timing of future revenues and cash flows, assumed discount rates determined to be commensurate with the risks inherent in its business model, and other assumptions. The future cash flows for the reporting unit were projected based on the Company’s estimates, at that time, of future revenues, operating income and other factors (such as working capital and capital expenditures). The Company took into account expected competitive global industry and market conditions. Under the market-based valuation approach, each reporting unit’s fair value is estimated based on industry multiples of revenues and operating earnings. The inputs of the discounted cash flow method used to determine the fair value of the Asia-Pacific reporting unit included a conservative average 3% growth rate to calculate the terminal value and a discount rate of 17%. Factors that have the potential to create variances in the estimated fair value of the Asia-Pacific reporting unit include, but are not limited to, fluctuations in (i) number of clients and active campaigns, which can be driven by multiple external factors affecting demand, including macroeconomic factors, competitive dynamics and changes in consumer preferences; (ii) marketing costs to generate new campaigns; and (iii) equity valuations of peer companies. The changes in the carrying amount of goodwill for the nine months ended September 30, 2015 were as follows (in thousands): North America Asia-Pacific Total Goodwill at December 31, 2014 $ 13,680 $ 34,509 $ 48,189 Accumulated impairment loss — (27,800 ) (27,800 ) Foreign currency translation — (400 ) (400 ) Balance at September 30, 2015 $ 13,680 $ 6,309 $ 19,989 Finite-Lived Intangible Assets At September 30, 2015 and December 31, 2014, finite-lived intangible assets consisted of the following (in thousands): September 30, 2015 Useful Life (years) Gross Value Accumulated Amortization Net Developed technology 3 - 8 $ 5,490 $ (2,827 ) $ 2,663 Customer contracts and relationships 2 - 4 1,658 (631 ) 1,027 Trade names 10 570 (50 ) 520 Total $ 7,718 $ (3,508 ) $ 4,210 December 31, 2014 Useful Life (years) Gross Value Accumulated Amortization Net Developed technology 3 - 8 $ 5,490 $ (2,130 ) $ 3,360 Customer contracts and relationships 2 - 4 1,875 (306 ) 1,569 Trade names 10 570 (7 ) 563 Total $ 7,935 $ (2,443 ) $ 5,492 Based on the current amount of intangibles subject to amortization, the estimated amortization expense over the remaining lives is as follows (in thousands): Years Ending December 31, Remaining 2015 $ 234 2016 935 2017 675 2018 584 2019 431 Thereafter 1,351 Total $ 4,210 For the three months ended September 30, 2015 and 2014, amortization expense related to acquired intangible assets was $0.2 million and $0.3 million, respectively. For the nine months ended September 30, 2015 and 2014, amortization expense related to acquired intangible assets was $1.2 million and $0.9 million, respectively |
Note 6 - Software Development C
Note 6 - Software Development Costs | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Research, Development, and Computer Software Disclosure [Text Block] | 6. Software Development Costs Capitalized software development costs consisted of the following (in thousands): September 30, 2015 December 31, 201 4 Capitalized software development costs $ 65,019 $ 56,498 Accumulated amortization (43,864 ) (34,943 ) Capitalized software development costs, net $ 21,155 $ 21,555 For the three months ended September 30, 2015 and 2014, the Company recorded amortization expense of $2.8 million and $2.5 million, respectively. For the nine months ended September 30, 2015 and 2014, the Company recorded amortization expense of $8.6 million and $7.2 million, respectively. At September 30, 2015 and December 31, 2014, $2.7 million and $5.0 million, respectively, of capitalized software development costs were related to projects still in process. |
Note 7 - Commitments and Contin
Note 7 - Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | 7. Commitments and Contingencies Legal Matters From time to time, the Company is involved in legal proceedings arising in the ordinary course of its business. The Company believes that there is no litigation or claims pending or threatened that are likely to have a material adverse effect on its financial position, results of operations or cash flows. North America On May 2, 2014, a lawsuit, purporting to be a class action, was filed by one of the Company’s former clients in the United States District Court in Los Angeles. The complaint alleges breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of California’s unfair competition law. The complaint seeks monetary damages, restitution and attorneys’ fees. The Company filed a motion to dismiss on June 20, 2014, which was denied on December 4, 2014. While the case is at an early stage, the Company believes that the case is substantively and procedurally without merit. The Company’s insurance carrier is providing defense under a reservation of rights. Europe Over the past 21 months, the Company’s United Kingdom subsidiary (“RL UK”), has been involved in a number of disputes with former clients that allege RL UK made misrepresentations in connection with sales to those clients. The Company resolved a number of these disputes in 2014 and believes it may face similar claims in the future. On June 15, 2015, one former client filed a lawsuit in the High Court of Justice alleging fraudulent misrepresentations and breach of contract. The Company’s insurance carrier is providing a defense under a reservation of rights. The Company has adequately reserved for this matter based on the current estimate of outcomes. Other Commitments The Company engaged a third party facilitator to provide direct support in the execution of its 2015 Restructuring Plan. In addition to fees incurred during the nine months ended September 30, 2015, the Company will continue to make payments for the final committed fees based on the future projected value of results achieved by the facilitator-led program. See Note 10, Restructuring Charges, for more information. |
Note 8 - Stockholders' Equity
Note 8 - Stockholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | 8. Stockholders’ Equity Common Stock Repurchases The Company’s Board of Directors previously authorized the repurchase of up to $47.0 million of the Company’s outstanding common stock. At December 31, 2014, the Company had executed repurchases of 3.4 million shares of its common stock under the program for an aggregate of $36.3 million. There were no repurchases under the program during 2015. On April 29, 2015, the Board of Directors terminated the Company’s repurchase program. The Company is deemed to repurchase common stock surrendered by participants to cover tax withholding obligations with respect to the vesting of restricted stock and restricted stock units. |
Note 9 - Stock-based Compensati
Note 9 - Stock-based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 9. Stock-Based Compensation Stock Options The following table summarizes stock option activity (in thousands, except years and per share amounts): Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at December 31, 2014 6,096 $ 9.48 Granted 5,571 $ 4.43 Exercised (31 ) $ 0.24 Forfeited (4,398 ) $ 9.67 Outstanding at September 30, 2015 7,238 $ 5.52 6.5 $ — Vested and exercisable at September 30, 2015 1,961 $ 8.87 5.4 $ — Unvested at September 30, 2015, net of estimated forfeitures 4,194 $ 4.28 6.9 $ — 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, 2015 and 2014: Three Months Ended September 30 , Nine Months Ended September 30 , 201 5 201 4 2015 2014 Expected dividend yield 0 % 0 % 0 % 0 % Risk-free interest rate 1.68 % 1.62 % 1.54 % 1.63 % Expected life (in years) 4.75 4.75 4.92 5.08 Expected volatility 57 % 54 % 57 % 54 % The per-share weighted average grant date fair value of options granted during the nine months ended September 30, 2015 was $2.31. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2015 and 2014, were $0.1 million and $2.7 million, respectively. 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 shares Weighted Average Grant Date Fair Value Unvested at December 31, 2014 912 $ 5.98 Granted — $ — Forfeited (88 ) $ 9.80 Vested (192 ) $ 10.48 Unvested at September 30, 2015 632 $ 6.64 Stock-Based Compensation Expense The Company records stock-based compensation expense, net of amounts capitalized as software development costs. The following table summarizes stock-based compensation (in thousands): Three Months Ended September 30 , Nine Months Ended September 30 , 201 5 201 4 2015 2014 Stock-based compensation $ 2,281 $ 2,798 $ 6,861 $ 11,064 Less: Capitalized stock-based compensation 86 127 305 346 Stock-based compensation expense, net $ 2,195 $ 2,671 $ 6,556 $ 10,718 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 September 30 , Nine Months Ended September 30 , 201 5 201 4 2015 2014 Stock-based compensation expense, net Cost of revenue $ 115 $ 205 $ 405 $ 735 Selling and marketing 400 616 1,306 2,352 Product and technology 197 — 491 608 General and administrative 1,483 1,850 4,354 7,023 $ 2,195 $ 2,671 $ 6,556 $ 10,718 At September 30, 2015, there was $13.2 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 1.53 years. Future stock-based compensation expense for these awards may differ to the extent actual forfeitures vary from management estimates. Stock-based compensation for the nine months ended September 30, 2014 includes $1.9 million of expense related to modification of grants to 73 option holders in March 2014, which extended the time to exercise from seven years to ten years for certain options granted during 2008 and 2009 with an exercise price of $10.91. Commencing in 2015, 50% of the Company’s annual corporate bonus plan for certain executives and senior level employees will be settled with fully vested restricted stock units, and is payable in the first quarter of the following fiscal year. The plan does not limit the number of shares that can be issued to settle the obligation. During the three and nine months ended September 30, 2015, the Company has recognized stock-based compensation expense related to this plan of $0.2 million and $0.6 million, respectively. As of September 30, 2015, 295,000 shares would be required to satisfy the obligation relating to the 2015 annual corporate bonus plan. Stock Option Exchange On December 2, 2014, the Company commenced an option exchange to permit employee option holders to surrender certain outstanding stock options for cancellation in exchange for the grant of new replacement options to purchase an equal number of shares having an exercise price equal to the greater of $6.00 and the fair market value of the Company’s common stock on the replacement grant date. The option exchange was completed on January 9, 2015. Exchanged options were cancelled at that time and immediately thereafter, the Company granted replacement options under the Amended and Restated ReachLocal 2008 Stock Incentive Plan with exercise prices of $6.00 per share. A total of 2.8 million options were exchanged. The Company will amortize the incremental expense of $1.5 million in addition to the remaining expense attributable to the exchanged awards over the vesting period of the new awards. |
Note 10 - Restructuring Charges
Note 10 - Restructuring Charges | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Restructuring and Related Activities Disclosure [Text Block] | 10. Restructuring Charges The Company has implemented various restructuring plans to reduce its cost structure, align resources with its product strategy, improve operating efficiency and implement cost savings, which have resulted in workforce reductions and the consolidation of certain real estate facilities and data centers. 201 5 Restructuring Plan In accordance with the Company’s ongoing efforts to reduce expenses and improve the operating performance of its business, the Company commenced its 2015 Restructuring Plan. The initiative is focused on enhancing earnings through an analysis of opportunities to both improve revenue performance and reduce costs. Operational efficiency improvements under the 2015 Restructuring Plan are identified and implemented through strategic realignment and targeted cost reductions, including workforce costs, facility-related expenditures and other operating expenses. The charges incurred during the nine months ended September 30, 2015 primarily involved down-sizing certain facilities in North America, costs to utilize a third party facilitator to aid execution of the plan, and a reduction of the Company’s North American and international workforces. The Company expects to have continued restructuring activity under this plan, including estimated additional expenses relating to facilitation and execution of the plan of $1.2 million, estimated to be incurred through the third quarter of 2016. A summary of the accrued restructuring liability related to this plan, which is recorded in “Accrued restructuring” on the condensed consolidated balance sheet is as follows (in thousands): Workforce Reduction Costs Facility Closures and Equipment Write-down s Other Associated Costs Total Balance at December 31, 2014 $ — $ — $ — $ — Amounts accrued 1,376 1,148 3,236 5,760 Amounts paid (1,041 ) (157 ) (2,248 ) (3,446 ) Accretion — 11 — 11 Non-cash items (3 ) (574 ) — (577 ) Balance at September 30, 2015 $ 332 $ 428 $ 988 $ 1,748 The Company expects the facility closures and equipment write-downs to be paid through the third quarter of 2024 and the workforce reduction costs to be paid through the fourth quarter of 2015. 2014 Restructuring Plans As a result of declining performance in the Company’s North American operations during the first quarter of 2014, the Company implemented a restructuring plan which primarily involved a reduction of the Company’s North American and international workforces as well as the closure of facilities in North America and certain international markets. The Company does not expect to have continued restructuring activity under this plan, other than settlement of associated liabilities. A summary of the accrued restructuring liability related to this plan, which is recorded in “Accrued restructuring” on the condensed consolidated balance sheet is as follows (in thousands): Facility Closures Total Balance at December 31, 2014 $ 2,519 $ 2,519 Amounts paid (548 ) (548 ) Accretion 33 33 Balance at September 30, 2015 $ 2,004 $ 2,004 The Company expects the facility closures and equipment write-downs to be paid through the third quarter of 2024. During the second quarter of 2014, the Company implemented a business restructuring plan which involved the elimination of certain senior management positions, a reduction of international workforce, as well as the closure of facilities in certain international markets. The Company does not expect to have continued restructuring activity under this plan, other than settlement of associated liabilities. A summary of the accrued restructuring liability related to this plan, which is recorded in “Accrued restructuring” on the condensed consolidated balance sheet is as follows (in thousands): Workforce Reduction Costs Facility Closures Total Balance at December 31, 2014 $ 51 $ 626 $ 677 Amounts accrued — (189 ) (189 ) Amounts paid (50 ) (361 ) (411 ) Non-cash items (1 ) 29 28 Balance at September 30, 2015 $ — $ 105 $ 105 The Company expects the facility costs to be paid through the second quarter of 2016. |
Note 11 - Term Loan
Note 11 - Term Loan | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | 11. Term Loan On April 30, 2015, the Company entered into the Loan Agreement with its direct and indirect domestic subsidiaries, as co-borrowers, Hercules Technology Growth Capital, Inc. (“Hercules”), as administrative agent, and the lenders party thereto from time to time (the “Lenders”), including Hercules, pursuant to which the Lenders agreed to make a term loan available to the Company for working capital and general business purposes, in a principal amount of $25.0 million. The term loan has an annual interest rate equal to the greater of (i) 11.75% and (ii) the sum of (a) the prime rate, plus (b) 8.50%. On the closing date the Company paid a fee of $0.3 million, which is to be credited against the final payment, and debt issuance costs of $0.2 million. Debt issuance costs will be amortized over the life of the loan of 3 years and calculated using the effective interest method. The Company is required to make interest-only payments on the term loan through May 1, 2016, though such payments may be extended through August 1, 2016 and November 1, 2016 if the Company remains in continuous compliance with the financial covenants under the Loan Agreement through April 1, 2016 and July 1, 2016, respectively, and no default or event of default has occurred and is continuing on such dates. The term loan will begin amortizing at the end of the applicable interest-only period, with monthly payments of principal and interest to the Lenders in consecutive monthly installments following the end of such interest-only period. The term loan matures on April 1, 2018; provided, however, that if the interest-only payments are extended through November 1, 2016, the term loan will instead mature October 1, 2018. Upon repayment of the term loan, the Company is also required to make a final payment to the Lenders equal to $1.5 million, which is accrued as interest based on the effective interest method over the 3-year term of the Loan Agreement. The term loan is secured by substantially all of the Company’s personal property, including its intellectual property. At the Company’s option, the outstanding principal balance of the term loan may be prepaid in whole, or in part in a minimum amount of $2.5 million, subject to a prepayment fee of 3% of any amount prepaid if the prepayment occurs on or prior to April 30, 2016, or 2% of the amount prepaid if the prepayment occurs after April 30, 2016 but on or prior to April 30, 2017. If the prepayment occurs after April 30, 2017, there is no prepayment fee. The Loan Agreement includes covenants applicable to the Company and its subsidiaries, which include restrictions on transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, selling assets, and undergoing a change in control, in each case subject to certain exceptions, as well as financial covenant requirements to maintain certain minimum levels of revenue and earnings during each three-month period, tested monthly, during the term. The Company is also required to maintain minimum cash in North America in an amount equal to $17.5 million at all times, unless the Company achieves positive “Adjusted EBITDA” as defined in the Loan Agreement for three consecutive quarters, in which case the minimum cash balance decreases to $12.5 million. The Loan Agreement also includes events of default, the occurrence and continuation of which provide Hercules, as administrative agent, with the right to exercise remedies against the Company and the collateral securing the term loan, including potential foreclosure against the Company’s assets securing the Loan Agreement, including the Company’s cash. The Loan Agreement contains a subjective acceleration clause that can be triggered if the Company experiences a Material Adverse Effect, as defined in the Loan Agreement, which would be considered an event of default. On August 3, 2015, the Company entered into an amendment to the Loan Agreement with Hercules, which reduced the term loan’s covenant thresholds for revenue for the months ending September 30, 2015 through December 31, 2015. On November 9, 2015, the Company entered into an amendment to the Loan Agreement with Hercules, which waives compliance with the term loan’s revenue and earnings covenant thresholds for November and December 2015. In connection with the amendment, the Company (i) paid Hercules a one-time fee of $0.2 million, (ii) reset the schedule of prepayment fees to begin from the November 9, 2015, instead of April 30, 2016, and (iii) agreed to amend the Hercules warrant as described below no later than November 16, 2016. Warrant Concurrently with entrance into the Loan Agreement, the Company issued to Hercules, as the sole lender on the closing date, a warrant to purchase up to 177,304 shares of the Company’s common stock at an exercise price of $2.82 per share. In connection with the November 9, 2015 Loan Agreement amendment, the Company agreed to amend the warrant to increase the number of shares to 300,000 and reduce the exercise price to $0.85. The warrant would be exercisable in full and not in part. In addition, if upon the sale of all shares issued upon exercise of the warrant, or in the case of a merger or sale transaction involving other securities in whole or in part, upon the sale of such securities, the absolute return on the warrant exceeds $2.55 per share underlying the warrant, the warrant holder will pay to the Company the excess in cash. |
Note 12 - Income Taxes
Note 12 - Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | 12. Income Taxes The Company provides for income taxes in interim periods based on the estimated effective income tax rate for the complete fiscal year. For the three months and nine months ended September 30, 2015, the Company recorded provisions for income taxes of $0.4 million and $0.5 million, respectively. This is compared to a provision for income taxes of $35,000 for the three months ended September 30, 2014 and a benefit from income taxes of $2.9 million for the nine months ended September 30, 2014. The Company’s tax provision notwithstanding pre-tax losses is due to its full valuation allowance against its net deferred tax assets in the US and certain foreign jurisdictions. Generally, a full valuation allowance will result in a zero net tax provision, since the income tax expense or benefit that would otherwise be recognized is offset by the change in the valuation allowance. However, the income tax provisions for the three and nine months ended September 30, 2015 relate primarily to income taxes in the Company’s state and foreign jurisdictions and a non-cash income tax liability related to tax deductible goodwill that cannot be considered when determining a need for a valuation allowance. The income tax provision is computed on the year to date pretax income of the consolidated entities located within each taxing jurisdiction based on current tax law. Deferred tax assets and liabilities are determined based on the future tax consequences associated with temporary differences between income and expenses reported for financial accounting and tax reporting purposes. A valuation allowance for deferred tax assets is recorded to the extent the Company determines that it is more likely than not that the deferred tax assets will not be realized. Realization of deferred tax assets is principally dependent upon future taxable income, the estimation of which requires significant management judgment. The Company’s judgment regarding future profitability may change due to many factors, including future market conditions and the Company’s ability to successfully execute its business plans and/or tax planning strategies. These changes, if any, may require material adjustments to these deferred tax asset balances. On a quarterly basis, the Company reassesses the need for these valuation allowances based on operating results and its assessment of the likelihood of future taxable income and developments in the relevant tax jurisdictions. The Company continues to maintain a valuation allowance against its net deferred tax assets in US and various foreign jurisdictions, where the Company believes it is more likely than not that deferred tax assets will not be realized. The Company strives to resolve open matters with each tax authority at the examination level and could reach an agreement with a tax authority at any time. While the Company has accrued for amounts it believes are the expected outcomes, the final outcome with a tax authority may result in a tax liability that is more or less than that reflected in the financial statements. In addition, the Company may later decide to challenge any assessments, if made, and may exercise its right to appeal. The liability is reviewed quarterly and adjusted as events occur that affect potential liabilities for additional taxes, such as lapsing of applicable statutes of limitations, proposed assessments by tax authorities, negotiations between tax authorities, identification of new issues, and issuance of new legislation, regulations or case law. Management believes that adequate amounts of tax and related interest, if any, have been provided for any adjustments that may result from these examinations of uncertain tax positions. Interest and penalties are included in income tax expense. The Company and its subsidiaries file income tax returns in the U.S. federal, various state and foreign jurisdictions. The Company has used net operating losses in recent periods, which extended the statutes of limitations with respect to a number of the Company’s tax years. Currently a majority of the Company’s tax years remain subject to audit, however, certain jurisdiction’s statutes of limitations will begin to expire in 2016. |
Note 13 - Net Loss Per Share
Note 13 - Net Loss Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | 13. Net 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. Basic income (loss) from continuing operations per share is computed by dividing income (loss) from continuing operations for the period by the weighted average number of common shares outstanding during the period. Shares of unvested restricted stock are excluded from the calculation of basic weighted average shares outstanding, but their dilutive impact is added back in the calculation of diluted weighted average shares outstanding. Diluted income (loss) from continuing operations per share is computed by dividing income (loss) from continuing operations for the period by the weighted average number of common and potentially dilutive securities outstanding during the period, to the extent such shares are dilutive. The Company had a loss from continuing operations for the three and nine months ended September 30, 2015 and 2014, and therefore the number of diluted shares was equal to the number of basic shares for the period. The following weighted average number of 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 September 30 , Nine Months Ended September 30 , 2015 2014 2015 2014 Deferred stock consideration and unvested restricted stock 656 893 664 739 Stock options and warrant 7,504 6,696 6,982 6,621 8,160 7,589 7,646 7,360 The following table sets forth the computation of basic and diluted income from continuing operations per share (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 201 5 201 4 2015 2014 Numerator: Loss from continuing operations $ (35,637 ) $ (11,284 ) $ (59,012 ) $ (27,923 ) Denominator: Weighted average common shares used in computation of loss per share from continuing operations, basic 29,194 28,515 29,120 28,360 Loss per share from continuing operations, basic $ (1.22 ) $ (0.40 ) $ (2.03 ) $ (0.98 ) Loss per share from continuing operations, diluted $ (1.22 ) $ (0.40 ) $ (2.03 ) $ (0.98 ) |
Note 14 - Segment Information
Note 14 - Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | 14. Segment Information The Company operates in one operating segment. The Company’s chief operating decision maker manages the Company’s operations on a consolidated basis for purposes of evaluating financial performance and allocating resources. |
Note 15 - Supplemental Cash Flo
Note 15 - Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Cash Flow, Supplemental Disclosures [Text Block] | 15. Supplemental Cash Flow Information The following table sets forth supplemental cash flow disclosures (in thousands): Nine Months Ended September 30 , 2015 2014 Non-cash investing and financing activities: Capitalized software development costs resulting from stock-based compensation and deferred payment obligations $ 305 $ 346 Deferred payment obligation decrease $ — $ (290 ) Unpaid purchases of property and equipment $ 113 $ 172 Assets acquired under capital leases $ 130 $ 823 Investment related to the ClubLocal disposition $ — $ 4,500 Issuance of warrant $ 250 $ — |
Note 16 - Discontinued Operatio
Note 16 - Discontinued Operations | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | 16. Discontinued Operations ClubLocal In the fourth quarter of 2013, the Company’s Board of Directors approved a plan to dispose of the Company’s ClubLocal business, and on February 18, 2014, the Company closed a transaction in which it transferred its ClubLocal business to SERVIZ, Inc. in exchange for a minority equity interest. The Company has an equity interest in the new entity of 14.2%, with a recorded fair value of $4.5 million. As a result of the disposition, the Company recorded a gain on disposal of $0.8 million, net of income tax of $0.4 million in the first quarter of 2014. This business has been accounted for as discontinued operations. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
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 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, 2014. The Condensed Consolidated Balance Sheet as of December 31, 2014 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, 2015, the Company’s results of operations for the three and nine months ended September 30, 2015 and 2014 and the Company’s cash flows for the nine months ended September 30, 2015 and 2014. The results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015. All references to the three and nine months ended September 30, 2015 and 2014 in the notes to the condensed consolidated financial statements are unaudited. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of 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 financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results may differ from those estimates. |
Reclassification, Policy [Policy Text Block] | Reclassifications and Adjustments Certain prior period amounts have been reclassified to conform to the current period presentation. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company reports all highly liquid short-term investments with original maturities of three months or less at the time of purchase as cash equivalents. As of September 30, 2015 and December 31, 2014, cash equivalents consist of demand deposits and money market accounts. Cash equivalents are stated at cost, which approximates fair value. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash Term Loan Under the terms of the Loan Agreement, the Company is required to maintain, at all times, cash in North America of at least $17.5 million, unless the Company achieves positive “Adjusted EBITDA” as defined in the Loan Agreement for three consecutive quarters, in which case the minimum cash balance decreases to $12.5 million. Restricted cash—term loan represents the required minimum compensating balance to secure the term loan. See Note 11, Term Loan, for more information. Restricted Cash Restricted cash represents certificates of deposit held at financial institutions that are pledged as collateral for letters of credit related to lease commitments, collateral for the Company’s merchant accounts, and cash deposits in a restricted account in accordance with the Company’s employee health care self-insurance plan. The letters of credit will lapse at the end of the respective lease terms through 2024 and the certificates of deposit automatically renew for successive one-year periods over the duration of the lease term. The restrictions related to merchant accounts and the Company’s self-insurance plan will lapse upon termination of the respective underlying arrangements. At September 30, 2015 and December 31, 2014, the Company had restricted cash in the amount of $3.3 million, of which, $0.2 million, related to the employee health care self-insurance plan. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-16, Business Combinations. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software. In April 2015, the FASB issued ASU No. 2015-03, Interest- Imputation of Interest. In February 2015, the FASB issued ASU No. 2015-02, Consolidation. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period Compensation – Stock Compensation In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers Revenue Recognition - Construction-Type and Production-Type Contracts Property, Plant, and Equipment, and intangible assets, within the scope of ASC 350 Intangibles - Goodwill and Other In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity |
Note 3 - Fair Value of Financ25
Note 3 - Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | Basis of Fair Value Measurement Balance at September 30, 2015 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Cash and cash equivalents $ 17,813 $ 17,813 $ — $ — Restricted cash—term loan $ 17,500 $ 17,500 $ — $ — Short-term investments $ 81 $ 81 $ — $ — Restricted cash $ 3,062 $ — $ 3,062 $ — Basis of Fair Value Measurement Balance at December 31, 201 4 Quoted Prices in Active Markets for Identical Items (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Cash and cash equivalents $ 43,720 $ 43,720 $ — $ — Short-term investments $ 904 $ 904 $ — $ — Restricted cash $ 3,416 $ — $ 3,416 $ — Liabilities: Acquisition-related contingent consideration $ 349 $ — $ — $ 349 |
Note 4 - Acquisitions (Tables)
Note 4 - Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | Assets acquired: Cash and cash equivalents $ 58 Intangible assets 4,280 Goodwill 3,985 Total assets acquired 8,323 Liabilities assumed: Non-interest bearing liabilities 24 Long-term debt 350 Deferred tax liabilities 1,249 Total liabilities assumed 1,623 Total fair value of net assets acquired $ 6,700 Assets acquired: Goodwill $ 2,350 Intangible assets 1,280 Accounts receivable 330 Property and equipment 13 Total assets acquired 3,973 Liabilities assumed: Deferred tax liabilities 358 Deferred revenue 284 Accrued compensation and benefits 111 Other 782 Total liabilities assumed 1,535 Total fair value of net assets acquired $ 2,438 |
Note 5 - Goodwill and Finite-27
Note 5 - Goodwill and Finite-lived Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Goodwill [Table Text Block] | North America Asia-Pacific Total Goodwill at December 31, 2014 $ 13,680 $ 34,509 $ 48,189 Accumulated impairment loss — (27,800 ) (27,800 ) Foreign currency translation — (400 ) (400 ) Balance at September 30, 2015 $ 13,680 $ 6,309 $ 19,989 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | September 30, 2015 Useful Life (years) Gross Value Accumulated Amortization Net Developed technology 3 - 8 $ 5,490 $ (2,827 ) $ 2,663 Customer contracts and relationships 2 - 4 1,658 (631 ) 1,027 Trade names 10 570 (50 ) 520 Total $ 7,718 $ (3,508 ) $ 4,210 December 31, 2014 Useful Life (years) Gross Value Accumulated Amortization Net Developed technology 3 - 8 $ 5,490 $ (2,130 ) $ 3,360 Customer contracts and relationships 2 - 4 1,875 (306 ) 1,569 Trade names 10 570 (7 ) 563 Total $ 7,935 $ (2,443 ) $ 5,492 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Years Ending December 31, Remaining 2015 $ 234 2016 935 2017 675 2018 584 2019 431 Thereafter 1,351 Total $ 4,210 |
Note 6 - Software Development28
Note 6 - Software Development Costs (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Capitalized Computer Software [Table Text Block] | September 30, 2015 December 31, 201 4 Capitalized software development costs $ 65,019 $ 56,498 Accumulated amortization (43,864 ) (34,943 ) Capitalized software development costs, net $ 21,155 $ 21,555 |
Note 9 - Stock-based Compensa29
Note 9 - Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at December 31, 2014 6,096 $ 9.48 Granted 5,571 $ 4.43 Exercised (31 ) $ 0.24 Forfeited (4,398 ) $ 9.67 Outstanding at September 30, 2015 7,238 $ 5.52 6.5 $ — Vested and exercisable at September 30, 2015 1,961 $ 8.87 5.4 $ — Unvested at September 30, 2015, net of estimated forfeitures 4,194 $ 4.28 6.9 $ — |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | Three Months Ended September 30 , Nine Months Ended September 30 , 201 5 201 4 2015 2014 Expected dividend yield 0 % 0 % 0 % 0 % Risk-free interest rate 1.68 % 1.62 % 1.54 % 1.63 % Expected life (in years) 4.75 4.75 4.92 5.08 Expected volatility 57 % 54 % 57 % 54 % |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | Number of shares Weighted Average Grant Date Fair Value Unvested at December 31, 2014 912 $ 5.98 Granted — $ — Forfeited (88 ) $ 9.80 Vested (192 ) $ 10.48 Unvested at September 30, 2015 632 $ 6.64 |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block] | Three Months Ended September 30 , Nine Months Ended September 30 , 201 5 201 4 2015 2014 Stock-based compensation $ 2,281 $ 2,798 $ 6,861 $ 11,064 Less: Capitalized stock-based compensation 86 127 305 346 Stock-based compensation expense, net $ 2,195 $ 2,671 $ 6,556 $ 10,718 |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | Three Months Ended September 30 , Nine Months Ended September 30 , 201 5 201 4 2015 2014 Stock-based compensation expense, net Cost of revenue $ 115 $ 205 $ 405 $ 735 Selling and marketing 400 616 1,306 2,352 Product and technology 197 — 491 608 General and administrative 1,483 1,850 4,354 7,023 $ 2,195 $ 2,671 $ 6,556 $ 10,718 |
Note 10 - Restructuring Charg30
Note 10 - Restructuring Charges (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring Plan 2, 2014 [Member] | |
Notes Tables | |
Restructuring and Related Costs [Table Text Block] | Workforce Reduction Costs Facility Closures Total Balance at December 31, 2014 $ 51 $ 626 $ 677 Amounts accrued — (189 ) (189 ) Amounts paid (50 ) (361 ) (411 ) Non-cash items (1 ) 29 28 Balance at September 30, 2015 $ — $ 105 $ 105 |
Restructuring Plan 1, 2014 [Member] | |
Notes Tables | |
Restructuring and Related Costs [Table Text Block] | Facility Closures Total Balance at December 31, 2014 $ 2,519 $ 2,519 Amounts paid (548 ) (548 ) Accretion 33 33 Balance at September 30, 2015 $ 2,004 $ 2,004 |
Restructuring Plan 2015 [Member] | |
Notes Tables | |
Restructuring and Related Costs [Table Text Block] | Workforce Reduction Costs Facility Closures and Equipment Write-down s Other Associated Costs Total Balance at December 31, 2014 $ — $ — $ — $ — Amounts accrued 1,376 1,148 3,236 5,760 Amounts paid (1,041 ) (157 ) (2,248 ) (3,446 ) Accretion — 11 — 11 Non-cash items (3 ) (574 ) — (577 ) Balance at September 30, 2015 $ 332 $ 428 $ 988 $ 1,748 |
Note 13 - Net Loss Per Share (T
Note 13 - Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Three Months Ended September 30 , Nine Months Ended September 30 , 2015 2014 2015 2014 Deferred stock consideration and unvested restricted stock 656 893 664 739 Stock options and warrant 7,504 6,696 6,982 6,621 8,160 7,589 7,646 7,360 |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended September 30, Nine Months Ended September 30, 201 5 201 4 2015 2014 Numerator: Loss from continuing operations $ (35,637 ) $ (11,284 ) $ (59,012 ) $ (27,923 ) Denominator: Weighted average common shares used in computation of loss per share from continuing operations, basic 29,194 28,515 29,120 28,360 Loss per share from continuing operations, basic $ (1.22 ) $ (0.40 ) $ (2.03 ) $ (0.98 ) Loss per share from continuing operations, diluted $ (1.22 ) $ (0.40 ) $ (2.03 ) $ (0.98 ) |
Note 15 - Supplemental Cash F32
Note 15 - Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Tables | |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | Nine Months Ended September 30 , 2015 2014 Non-cash investing and financing activities: Capitalized software development costs resulting from stock-based compensation and deferred payment obligations $ 305 $ 346 Deferred payment obligation decrease $ — $ (290 ) Unpaid purchases of property and equipment $ 113 $ 172 Assets acquired under capital leases $ 130 $ 823 Investment related to the ClubLocal disposition $ — $ 4,500 Issuance of warrant $ 250 $ — |
Note 1 - Organization and Des33
Note 1 - Organization and Description of Business (Details Textual) - USD ($) $ in Thousands | Nov. 09, 2015 | Apr. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Hercules [Member] | Cash [Member] | ||||||
Proceeds from Issuance of Long-term Debt | $ 17,500 | |||||
Hercules [Member] | Unrestricted Cash [Member] | ||||||
Proceeds from Issuance of Long-term Debt | 7,200 | |||||
Hercules [Member] | Subsequent Event [Member] | ||||||
Loan Processing Fee | $ 200 | |||||
Hercules [Member] | ||||||
Debt Instrument, Face Amount | 25,000 | |||||
Proceeds from Issuance of Long-term Debt | 24,700 | |||||
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents | 17,500 | |||||
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents, Positive Earnings Achieved | 12,500 | |||||
Proceeds from Issuance of Long-term Debt | $ 24,700 | |||||
Cash and Cash Equivalents, Period Increase (Decrease) | (25,907) | $ (25,797) | ||||
Working Capital | $ 63,100 | 63,100 | ||||
Operating Income (Loss) | $ (34,063) | $ (11,457) | (56,376) | $ (31,452) | ||
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents | 17,500 | |||||
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents, Positive Earnings Achieved | $ 12,500 | |||||
Projected Expense Reductions, Next Twelve Months | $ 24,000 |
Note 2 - Summary of Significa34
Note 2 - Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Millions | Sep. 30, 2015 | Apr. 30, 2015 | Dec. 31, 2014 |
Health Care Benefit Reserve [Member] | |||
Restricted Cash and Cash Equivalents | $ 0.2 | $ 0.2 | |
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents | $ 17.5 | ||
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents, Positive Earnings Achieved | $ 12.5 | ||
Restricted Cash and Cash Equivalents | $ 3.3 | $ 3.6 |
Note 3 - Fair Value of Financ35
Note 3 - Fair Value of Financial Instruments (Details Textual) NZD in Millions | Sep. 18, 2015USD ($) | Apr. 10, 2015USD ($) | Apr. 10, 2015NZD | Mar. 31, 2014USD ($) | Mar. 31, 2013USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) |
Sure Fire [Member] | Earnout Consideration Payment [Member] | ||||||||
Payments of Merger Related Costs, Financing Activities | $ 300,000 | NZD 0.4 | ||||||
Sure Fire [Member] | ||||||||
Payments of Merger Related Costs, Financing Activities | $ 100,000 | |||||||
Net Working Capital Adjustments | $ 100,000 | NZD 0.2 | ||||||
Investment in Service Provider [Member] | ||||||||
Payments to Acquire Other Investments | $ 2,000,000 | $ 2,500,000 | ||||||
Cost Method Investment, Ownership Percentage Acquired | 3.20% | 4.00% | ||||||
Club Local [Member] | Non-marketable Investments [Member] | ||||||||
Cost Method Investments | $ 4,500,000 | |||||||
Club Local [Member] | ||||||||
Cost Method Investment, Ownership Percentage | 14.20% | |||||||
Cost Method Investments | $ 4,500,000 | |||||||
Payments of Merger Related Costs, Financing Activities | $ 529,000 | |||||||
Payments to Acquire Other Investments | $ 2,000,000 | |||||||
Cost Method Investments | $ 9,000,000 | $ 9,000,000 |
Note 3 - Basis of Fair Value Me
Note 3 - Basis of Fair Value Measurement (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets: | ||
Cash and cash equivalents | $ 17,813,000 | $ 43,720,000 |
Restricted cash—term loan | 17,500,000 | |
Short-term investments | $ 81,000 | $ 904,000 |
Restricted cash | ||
Liabilities: | ||
Acquisition-related contingent consideration | ||
Fair Value, Inputs, Level 2 [Member] | ||
Assets: | ||
Cash and cash equivalents | ||
Restricted cash—term loan | ||
Short-term investments | ||
Restricted cash | $ 3,062,000 | $ 3,416,000 |
Liabilities: | ||
Acquisition-related contingent consideration | ||
Fair Value, Inputs, Level 3 [Member] | ||
Assets: | ||
Cash and cash equivalents | ||
Restricted cash—term loan | ||
Short-term investments | ||
Restricted cash | ||
Liabilities: | ||
Acquisition-related contingent consideration | $ 349,000 | |
Cash and cash equivalents | $ 17,813,000 | $ 43,720,000 |
Restricted cash—term loan | 17,500,000 | |
Short-term investments | 81,000 | $ 904,000 |
Restricted cash | $ 3,062,000 | 3,416,000 |
Acquisition-related contingent consideration | $ 349,000 |
Note 4 - Acquisitions (Details
Note 4 - Acquisitions (Details Textual) NZD in Millions | Sep. 18, 2015USD ($) | Apr. 10, 2015USD ($) | Apr. 10, 2015NZD | Nov. 21, 2014USD ($)shares | Mar. 21, 2014USD ($) | Mar. 21, 2014NZD | Jan. 06, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014 | Mar. 21, 2014NZD |
Sure Fire [Member] | Customer Relationships [Member] | |||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 1,300,000 | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 3 years | 3 years | |||||||||
Sure Fire [Member] | Maximum [Member] | |||||||||||
Business Combination, Contingent Consideration, Liability | NZD | NZD 2 | ||||||||||
Sure Fire [Member] | Paid April 2015 [Member] | |||||||||||
Business Acquisition, Percentage of Indemnity Holdback | 65.00% | 65.00% | |||||||||
Business Acquisition, Indemnity Holdback, Current | $ 200,000 | ||||||||||
Sure Fire [Member] | Paid October 2015 [Member] | |||||||||||
Business Acquisition, Percentage of Indemnity Holdback | 35.00% | 35.00% | |||||||||
Business Acquisition, Indemnity Holdback, Current | $ 100,000 | ||||||||||
Sure Fire [Member] | Earnout Consideration Payment [Member] | |||||||||||
Payments of Merger Related Costs, Financing Activities | $ 300,000 | NZD 0.4 | |||||||||
Sure Fire [Member] | Indemnity Holdback Release [Member] | |||||||||||
Payments of Merger Related Costs | 200,000 | 0.3 | |||||||||
Sure Fire [Member] | |||||||||||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | $ 0 | ||||||||||
Business Combination, Consideration Transferred | 2,400,000 | NZD 2.8 | |||||||||
Payments to Acquire Businesses, Gross | $ 1,500,000 | NZD 1.7 | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 1,280,000 | ||||||||||
Fair Value Inputs, Discount Rate | 25.00% | 25.00% | |||||||||
Fair Value Assumptions, Expected Volatility Rate | 30.00% | 30.00% | |||||||||
Fair Value Assumptions, Risk Free Interest Rate | 0.14% | 0.14% | |||||||||
Business Acquisition, Fair Value of Indemnity Holdback | $ 300,000 | NZD 0.4 | |||||||||
Payments of Merger Related Costs | 400,000 | 0.6 | |||||||||
Payments of Merger Related Costs, Financing Activities | $ 100,000 | ||||||||||
Net Working Capital Adjustments | $ 100,000 | NZD 0.2 | |||||||||
Kickserv [Member] | Trade Names [Member] | |||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 600,000 | ||||||||||
Kickserv [Member] | Developed Technology Rights [Member] | |||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 8 years | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 3,000,000 | ||||||||||
Kickserv [Member] | Customer Relationships [Member] | |||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 700,000 | ||||||||||
Kickserv [Member] | Restricted Stock Units (RSUs) [Member] | |||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 250,000 | ||||||||||
Kickserv [Member] | |||||||||||
Business Combination, Consideration Transferred | $ 6,750,000 | ||||||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 4,000,000 | ||||||||||
Payments to Acquire Businesses, Gross | $ 5,300,000 | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 4,280,000 | ||||||||||
Fair Value Inputs, Discount Rate | 15.00% | ||||||||||
Real Practice [Member] | |||||||||||
Payments to Acquire Businesses, Gross | $ 300,000 | ||||||||||
Trade Names [Member] | Maximum [Member] | |||||||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | 10 years | |||||||||
Developed Technology Rights [Member] | Maximum [Member] | |||||||||||
Finite-Lived Intangible Asset, Useful Life | 8 years | 8 years | |||||||||
Customer Relationships [Member] | Maximum [Member] | |||||||||||
Finite-Lived Intangible Asset, Useful Life | 4 years | 4 years | |||||||||
Payments of Merger Related Costs, Financing Activities | $ 529,000 |
Note 4 - Assets Acquired and Li
Note 4 - Assets Acquired and Liabilities Assumed (Details) $ in Thousands | Sep. 30, 2015USD ($) |
Kickserv [Member] | |
Assets acquired: | |
Cash and cash equivalents | $ 58 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 4,280 |
Goodwill | 3,985 |
Total assets acquired | 8,323 |
Liabilities assumed: | |
Non-interest bearing liabilities | 24 |
Long-term debt | 350 |
Deferred tax liabilities | 1,249 |
Total liabilities assumed | 1,623 |
Total fair value of net assets acquired | 6,700 |
Sure Fire [Member] | |
Assets acquired: | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 1,280 |
Goodwill | 2,350 |
Total assets acquired | 3,973 |
Accounts receivable | 330 |
Property and equipment | 13 |
Liabilities assumed: | |
Deferred tax liabilities | 358 |
Total liabilities assumed | 1,535 |
Total fair value of net assets acquired | 2,438 |
Deferred revenue | 284 |
Accrued compensation and benefits | 111 |
Other | 782 |
Goodwill | $ 19,989 |
Note 5 - Goodwill and Finite-39
Note 5 - Goodwill and Finite-lived Intangible Assets (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Aug. 31, 2015 | Dec. 31, 2014 | |
Asia Pacific [Member] | Income Approach Valuation Technique [Member] | ||||||
Goodwill Valuation Approach, Percentage | 50.00% | |||||
Asia Pacific [Member] | Market Approach Valuation Technique [Member] | ||||||
Goodwill Valuation Approach, Percentage | 50.00% | |||||
Asia Pacific [Member] | ||||||
Goodwill | $ 6,309 | $ 6,309 | $ 32,400 | $ 34,509 | ||
Goodwill, Impairment Loss | 27,800 | $ 27,800 | ||||
Fair Value Inputs, Long-term Revenue Growth Rate | 3.00% | |||||
Fair Value Inputs, Discount Rate | 17.00% | |||||
Goodwill | 19,989 | $ 19,989 | $ 48,189 | |||
Goodwill, Impairment Loss | 27,800 | 27,800 | ||||
Amortization of Intangible Assets | $ 200 | $ 300 | $ 1,200 | $ 900 |
Note 5 - Goodwill (Details)
Note 5 - Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
North America [Member] | ||
Goodwill | $ 13,680 | |
Accumulated impairment loss | ||
Foreign currency translation | ||
Goodwill | $ 13,680 | $ 13,680 |
Asia Pacific [Member] | ||
Goodwill | 34,509 | |
Accumulated impairment loss | (27,800) | (27,800) |
Foreign currency translation | (400) | |
Goodwill | 6,309 | 6,309 |
Goodwill | 48,189 | |
Accumulated impairment loss | (27,800) | (27,800) |
Foreign currency translation | (400) | |
Goodwill | $ 19,989 | $ 19,989 |
Note 5 - Intangible Assets (Det
Note 5 - Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Minimum [Member] | Developed Technology Rights [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | 3 years |
Minimum [Member] | Customer Relationships [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 2 years | 2 years |
Maximum [Member] | Developed Technology Rights [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 8 years | 8 years |
Maximum [Member] | Customer Relationships [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 4 years | 4 years |
Maximum [Member] | Trade Names [Member] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | 10 years |
Developed Technology Rights [Member] | ||
Gross Value | $ 5,490 | $ 5,490 |
Accumulated Amortization | (2,827) | (2,130) |
Net | 2,663 | 3,360 |
Customer Relationships [Member] | ||
Gross Value | 1,658 | 1,875 |
Accumulated Amortization | (631) | (306) |
Net | 1,027 | 1,569 |
Trade Names [Member] | ||
Gross Value | 570 | 570 |
Accumulated Amortization | (50) | (7) |
Net | 520 | 563 |
Gross Value | 7,718 | 7,935 |
Accumulated Amortization | (3,508) | (2,443) |
Net | $ 4,210 | $ 5,492 |
Note 5 - Estimated Amortization
Note 5 - Estimated Amortization Expense Over the Remaining Lives (Details) $ in Thousands | Sep. 30, 2015USD ($) |
Remaining 2,015 | $ 234 |
2,016 | 935 |
2,017 | 675 |
2,018 | 584 |
2,019 | 431 |
Thereafter | 1,351 |
Total | $ 4,210 |
Note 6 - Software Development43
Note 6 - Software Development Costs (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Capitalized Computer Software, Amortization | $ 2.8 | $ 2.5 | $ 8.6 | $ 7.2 | |
Capitalized Software Development Costs for Projects in Process | $ 2.7 | $ 2.7 | $ 5 |
Note 6 - Capitalized Software D
Note 6 - Capitalized Software Development Costs (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Capitalized software development costs | $ 65,019 | $ 56,498 |
Accumulated amortization | (43,864) | (34,943) |
Capitalized software development costs, net | $ 21,155 | $ 21,555 |
Note 8 - Stockholders' Equity (
Note 8 - Stockholders' Equity (Details Textual) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Stock Repurchased and Retired During Period, Shares | 0 | 3,400,000 |
Stock Repurchase Program, Authorized Amount | $ 47 | |
Stock Repurchased and Retired During Period, Value | $ 36.3 |
Note 9 - Stock-based Compensa46
Note 9 - Stock-based Compensation (Details Textual) $ / shares in Units, $ in Thousands | Jan. 09, 2015USD ($)$ / sharesshares | Feb. 28, 2014 | Mar. 31, 2014$ / shares | Sep. 30, 2015USD ($)shares | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014USD ($) | Dec. 02, 2014$ / shares |
Certain Options [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Incremental Compensation Cost | $ 1,900 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Number of Employees Affected | 73 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 7 years | 10 years | ||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares | $ 10.91 | |||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Allocated Share-based Compensation Expense | $ 200 | $ 600 | ||||||
Stock Option Exchange [Member] | ||||||||
Allocated Share-based Compensation Expense | $ 1,500 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 2.31 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 100 | 2,700 | ||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | 13,200 | $ 13,200 | ||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 193 days | |||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares | $ 6 | $ 4.43 | ||||||
Annual Corporate Bonus Plan, Percentage to be Settled With Restricted Stock Units | 50.00% | |||||||
Allocated Share-based Compensation Expense | $ 2,195 | $ 2,671 | $ 6,556 | $ 10,718 | ||||
Annual Corporate Bonus Plan, Shares Required to Satisfy Bonus Obligation | shares | 295,000 | 295,000 | ||||||
Option Exchange Share Price | $ / shares | $ 6 | |||||||
Options Exchanged in Option Exchange | shares | 2,800,000 |
Note 9 - Summary of Vested and
Note 9 - Summary of Vested and Unvested Options Activity (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Outstanding, number of shares (in shares) | 6,096 |
Outstanding, weighted average exercise price per share (in dollars per share) | $ / shares | $ 9.48 |
Granted, number of shares (in shares) | 5,571 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares | $ 4.43 |
Exercised, number of shares (in shares) | (31) |
Exercised, weighted average exercise price per share (in dollars per share) | $ / shares | $ 0.24 |
Forfeited, number of shares (in shares) | (4,398) |
Forfeited, weighted average exercise price per share (in dollars per share) | $ / shares | $ 9.67 |
Outstanding, number of shares (in shares) | 7,238 |
Outstanding, weighted average exercise price per share (in dollars per share) | $ / shares | $ 5.52 |
Outstanding, weighted average remaining contractual life (in years) | 6 years 182 days |
Vested and exercisable at June 30, 2015, number of shares (in shares) | 1,961 |
Vested and exercisable at June 30, 2015, weighted average exercise price per share (in dollars per share) | $ / shares | $ 8.87 |
Vested and exercisable at June 30, 2015, weighted average remaining contractual life (in years) | 5 years 146 days |
Unvested at June 30, 2015, net of estimated forfeitures, number of shares (in shares) | 4,194 |
Unvested at June 30, 2015, net of estimated forfeitures, weighted average exercise price per share (in dollars per share) | $ / shares | $ 4.28 |
Unvested at June 30, 2015, net of estimated forfeitures, weighted average remaining contractual life (in years) | 6 years 328 days |
Note 9 - Weighted Average Assum
Note 9 - Weighted Average Assumptions Used to Estimate Fair Value of Stock Options Granted (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 1.68% | 1.62% | 1.54% | 1.63% |
Expected life (in years) | 4 years 273 days | 4 years 273 days | 4 years 335 days | 5 years 29 days |
Expected volatility | 57.00% | 54.00% | 57.00% | 54.00% |
Note 9 - Summary of Restricted
Note 9 - Summary of Restricted Stock Awards and Restricted Stock Unit Awards (Details) - Restricted Stock and Restricted Stock Units [Member] | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Unvested at December 31, 2014, number of shares (in shares) | 912,000 |
Unvested at December 31, 2014, weighted average grant date fair value (in dollars per share) | $ / shares | $ 5.98 |
Granted, number of shares (in shares) | 0 |
Forfeited, number of shares (in shares) | (88,000) |
Forfeited, weighted average grant date fair value (in dollars per share) | $ / shares | $ 9.80 |
Vested, number of shares (in shares) | (192,000) |
Vested, weighted average grant date fair value (in dollars per share) | $ / shares | $ 10.48 |
Unvested at September 30, 2015, number of shares (in shares) | 632,000 |
Unvested at September 30, 2015, weighted average grant date fair value (in dollars per share) | $ / shares | $ 6.64 |
Note 9 - Summary of Stock Based
Note 9 - Summary of Stock Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Stock-based compensation | $ 2,281 | $ 2,798 | $ 6,861 | $ 11,064 |
Less: Capitalized stock-based compensation | 86 | 127 | 305 | 346 |
Stock-based compensation expense, net | $ 2,195 | $ 2,671 | $ 6,556 | $ 10,718 |
Note 9 - Stock-based Compensa51
Note 9 - Stock-based Compensation Expense, Net of Capitalization, Included in the Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Cost of Sales [Member] | ||||
Stock-based compensation expense, net | ||||
Allocated Share-based Compensation Expense | $ 115 | $ 205 | $ 405 | $ 735 |
Selling and Marketing Expense [Member] | ||||
Stock-based compensation expense, net | ||||
Allocated Share-based Compensation Expense | 400 | $ 616 | 1,306 | 2,352 |
Product and Technology [Member] | ||||
Stock-based compensation expense, net | ||||
Allocated Share-based Compensation Expense | 197 | 491 | 608 | |
General and Administrative Expense [Member] | ||||
Stock-based compensation expense, net | ||||
Allocated Share-based Compensation Expense | 1,483 | $ 1,850 | 4,354 | 7,023 |
Allocated Share-based Compensation Expense | $ 2,195 | $ 2,671 | $ 6,556 | $ 10,718 |
Note 10 - Restructuring Charg52
Note 10 - Restructuring Charges (Details Textual) $ in Millions | Sep. 30, 2015USD ($) |
Restructuring Plan 2015 [Member] | Expenses Relating to Facilitation and Execution of the Plan [Member] | |
Restructuring and Related Cost, Expected Cost | $ 1.2 |
Note 10 - Summary of the 2015 A
Note 10 - Summary of the 2015 Accrued Restructuring Liability (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Restructuring Plan 2015 [Member] | Employee Severance [Member] | ||
Balance at December 31, 2014 | $ 0 | |
Amounts accrued | 1,376,000 | |
Amounts paid | $ (1,041,000) | |
Accretion | ||
Non-cash items | $ (3,000) | |
Balance at September 30, 2015 | $ 332,000 | 332,000 |
Restructuring Plan 2015 [Member] | Facility Closing [Member] | ||
Balance at December 31, 2014 | 0 | |
Amounts accrued | 1,148,000 | |
Amounts paid | (157,000) | |
Accretion | 11,000 | |
Non-cash items | (574,000) | |
Balance at September 30, 2015 | 428,000 | 428,000 |
Restructuring Plan 2015 [Member] | Other Restructuring [Member] | ||
Balance at December 31, 2014 | 0 | |
Amounts accrued | 3,236,000 | |
Amounts paid | $ (2,248,000) | |
Accretion | ||
Non-cash items | ||
Balance at September 30, 2015 | 988,000 | $ 988,000 |
Restructuring Plan 2015 [Member] | ||
Balance at December 31, 2014 | 0 | |
Amounts accrued | 5,760,000 | |
Amounts paid | (3,446,000) | |
Accretion | 11,000 | |
Non-cash items | (577,000) | |
Balance at September 30, 2015 | 1,748,000 | 1,748,000 |
Balance at December 31, 2014 | 3,196,000 | |
Amounts accrued | 983,000 | 5,571,000 |
Balance at September 30, 2015 | $ 3,857,000 | $ 3,857,000 |
Note 10 - Summary of the 2014 A
Note 10 - Summary of the 2014 Accrued Restructuring Liability (Details) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Facility Closing [Member] | Restructuring Plan 1, 2014 [Member] | |
Balance at December 31, 2014 | $ 2,519,000 |
Amounts paid | (548,000) |
Accretion | 33,000 |
Balance at September 30, 2015 | 2,004,000 |
Restructuring Plan 1, 2014 [Member] | |
Balance at December 31, 2014 | 2,519,000 |
Amounts paid | (548,000) |
Accretion | 33,000 |
Balance at September 30, 2015 | 2,004,000 |
Balance at December 31, 2014 | 3,196,000 |
Balance at September 30, 2015 | $ 3,857,000 |
Note 10 - Summary of the Accrue
Note 10 - Summary of the Accrued Restructuring Liability (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Restructuring Plan 2, 2014 [Member] | Employee Severance [Member] | ||
Balance at December 31, 2014 | $ 51,000 | |
Amounts accrued | ||
Amounts paid | $ (50,000) | |
Non-cash items | $ (1,000) | |
Balance at September 30, 2015 | ||
Restructuring Plan 2, 2014 [Member] | Facility Closing [Member] | ||
Balance at December 31, 2014 | $ 626,000 | |
Amounts accrued | (189,000) | |
Amounts paid | (361,000) | |
Non-cash items | 29,000 | |
Balance at September 30, 2015 | $ 105,000 | 105,000 |
Restructuring Plan 2, 2014 [Member] | ||
Balance at December 31, 2014 | 677,000 | |
Amounts accrued | (189,000) | |
Amounts paid | (411,000) | |
Non-cash items | 28,000 | |
Balance at September 30, 2015 | 105,000 | 105,000 |
Balance at December 31, 2014 | 3,196,000 | |
Amounts accrued | 983,000 | 5,571,000 |
Balance at September 30, 2015 | $ 3,857,000 | $ 3,857,000 |
Note 11 - Term Loan (Details Te
Note 11 - Term Loan (Details Textual) - USD ($) $ / shares in Units, $ in Millions | Nov. 09, 2015 | Apr. 30, 2015 |
If Prepayment Occurs After April 30, 2017 [Member] | Hercules [Member] | ||
Debt Instrument Prepayment Fee, Percentage | 0.00% | |
If Prepayment Occurs on or Prior to April 30, 2016 [Member] | Hercules [Member] | ||
Debt Instrument Prepayment Fee, Percentage | 3.00% | |
If Prepayment Occurs After April 30, 2016 but on or Prior to April 30, 2017 [Member] | Hercules [Member] | ||
Debt Instrument Prepayment Fee, Percentage | 2.00% | |
Hercules [Member] | Prime Rate [Member] | ||
Debt Instrument, Basis Spread on Variable Rate | 8.50% | |
Hercules [Member] | Subsequent Event [Member] | ||
Loan Processing Fee | $ 0.2 | |
Hercules [Member] | ||
Debt Instrument, Face Amount | $ 25 | |
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Minimum | 11.75% | |
Debt Instrument, Fee Amount | $ 0.3 | |
Debt Issuance Cost | $ 0.2 | |
Debt Instrument, Term | 3 years | |
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | $ 1.5 | |
Debt Instrument Minimum Prepayment, Amount | 2.5 | |
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents | 17.5 | |
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents, Positive Earnings Achieved | 12.5 | |
Subsequent Event [Member] | ||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 300,000 | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.85 | |
Class of Warrant or Right, Absolute Return Per Share, Maximum | $ 2.55 | |
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents | 17.5 | |
Debt Instrument, Covenant Description, Minimum Cash and Cash Equivalents, Positive Earnings Achieved | $ 12.5 | |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 177,304 | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.82 | |
Warrants and Rights Outstanding | $ 0.3 |
Note 12 - Income Taxes (Details
Note 12 - Income Taxes (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Expense (Benefit) | $ 395,000 | $ 35,000 | $ 454,000 | $ (2,938,000) |
Note 13 - Antidilutive Securiti
Note 13 - Antidilutive Securities Excluded in Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Deferred Stock Consideration and Unvested Restricted Stock [Member] | ||||
Antidilutive securities (in shares) | 656 | 893 | 664 | 739 |
Stock Option and Warrant [Member] | ||||
Antidilutive securities (in shares) | 7,504 | 6,696 | 6,982 | 6,621 |
Antidilutive securities (in shares) | 8,160 | 7,589 | 7,646 | 7,360 |
Note 13 - Earning Per Share (De
Note 13 - Earning Per Share (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator: | ||||
Loss from continuing operations | $ (35,637) | $ (11,284) | $ (59,012) | $ (27,923) |
Denominator: | ||||
Weighted average common shares used in computation of loss per share from continuing operations, basic (in shares) | 29,194 | 28,515 | 29,120 | 28,360 |
Loss per share from continuing operations, basic (in dollars per share) | $ (1.22) | $ (0.40) | $ (2.03) | $ (0.98) |
Loss per share from continuing operations, diluted (in dollars per share) | $ (1.22) | $ (0.40) | $ (2.03) | $ (0.98) |
Note 14 - Segment Information (
Note 14 - Segment Information (Details Textual) | 9 Months Ended |
Sep. 30, 2015 | |
Number of Operating Segments | 1 |
Note 15 - Supplemental Cash F61
Note 15 - Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Non-cash investing and financing activities: | ||
Capitalized software development costs resulting from stock-based compensation and deferred payment obligations | $ 305 | $ 346 |
Deferred payment obligation decrease | (290) | |
Unpaid purchases of property and equipment | $ 113 | 172 |
Assets acquired under capital leases | $ 130 | 823 |
Investment related to the ClubLocal disposition | $ 4,500 | |
Issuance of warrant | $ 250 |
Note 16 - Discontinued Operat62
Note 16 - Discontinued Operations (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Club Local [Member] | ||||||
Cost Method Investment, Ownership Percentage | 14.20% | 14.20% | ||||
Cost Method Investments | $ 4,500,000 | $ 4,500,000 | ||||
Club Local [Member] | ||||||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | $ 800,000 | |||||
Discontinued Operation, Tax (Expense) Benefit from Provision for (Gain) Loss on Disposal | $ 400,000 | |||||
Cost Method Investments | $ 9,000,000 | $ 9,000,000 | $ 9,000,000 | |||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | $ 371,000 |