Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2015shares | |
Document and Entity Information [Abstract] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2015 |
Entity Registrant Name | Perion Network Ltd. |
Entity Central Index Key | 1,338,940 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2,015 |
Entity Filer Category | Accelerated Filer |
Entity Common Stock, Shares Outstanding | 75,811,487 |
Entity Current Reporting Status | Yes |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 17,519 | $ 101,183 |
Short-term bank deposits | 42,442 | 15,000 |
Accounts receivable (net of allowance of $1,035 and $1,063 at December 31, 2014 and 2015, respectively) | 66,662 | 30,808 |
Prepaid expenses and other current assets | 17,396 | 9,164 |
Total Current Assets | 144,019 | 156,155 |
Property and equipment, net | 12,714 | 12,180 |
Intangible assets, net | 66,072 | 16,890 |
Goodwill | 203,693 | 164,092 |
Deferred taxes | 12,344 | 4,917 |
Other assets | 3,456 | 1,905 |
Total Assets | 442,298 | 356,139 |
Current Liabilities: | ||
Accounts payable | 40,388 | 21,173 |
Accrued expenses and other liabilities | 22,857 | 25,517 |
Short-term loans and current maturities of long-term and convertible debt | 23,756 | 2,300 |
Deferred revenues | 7,731 | 7,323 |
Payment obligation related to acquisitions | 11,893 | 8,587 |
Total Current Liabilities | 106,625 | 64,900 |
Long-Term Liabilities: | ||
Long-term debt, net of current maturities | 46,920 | 1,950 |
Convertible debt, net of current maturities | 28,371 | 35,752 |
Payment obligation related to acquisitions | 37,231 | 5,058 |
Deferred taxes | 19,456 | 331 |
Other long- term liabilities | 3,858 | 2,151 |
Total Liabilities | $ 242,461 | $ 110,142 |
Commitments and Contingencies | ||
Shareholders' Equity: | ||
Ordinary shares of ILS 0.01 par value - Authorized: 120,000,000 shares; Issued: 69,548,450 and 76,157,506 shares at December 31, 2014 and 2015, respectively; Outstanding: 69,202,431 and 75,811,487 shares at December 31, 2014 and 2015, respectively | $ 206 | $ 189 |
Additional paid-in capital | 227,258 | 203,984 |
Treasury shares at cost (346,019 shares at December 31, 2014 and 2015) | (1,002) | $ (1,002) |
Accumulated other comprehensive loss | (794) | |
Retained earnings (accumulated deficit) | (25,831) | $ 42,826 |
Total Shareholders' Equity | 199,837 | 245,997 |
Total Liabilities and Shareholders' Equity | $ 442,298 | $ 356,139 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares |
CONSOLIDATED BALANCE SHEETS [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ | $ 1,063 | $ 1,035 |
Ordinary shares, shares authorized | 120,000,000 | 120,000,000 |
Ordinary shares, shares issued | 76,157,506 | 69,548,450 |
Ordinary shares, shares outstanding | 75,811,487 | 69,202,431 |
Treasury shares | 346,019 | 346,019 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | |||
Search | $ 172,277 | $ 330,757 | $ 277,275 |
Advertising and other | 48,673 | 57,974 | 48,233 |
Total Revenues | 220,950 | 388,731 | 325,508 |
Costs and Expenses: | |||
Cost of revenues | 16,195 | 27,817 | 6,104 |
Customer acquisition and media buy costs | 91,217 | 174,575 | 185,355 |
Research and development | 26,377 | 44,129 | 22,394 |
Selling and marketing | 28,270 | 25,388 | 10,298 |
General and administrative | 31,520 | 37,605 | $ 19,115 |
Restructuring charges | 1,052 | 3,981 | |
Impairment, net of change in fair value of contingent consideration | 92,340 | 19,941 | |
Total Costs and Expenses | 286,971 | 333,436 | $ 243,266 |
Income (Loss) from Operations | (66,021) | 55,295 | 82,242 |
Financial income (expense), net | (1,939) | (2,888) | 2,782 |
Income (Loss) before Taxes on Income | (67,960) | 52,407 | 85,024 |
Taxes on income | 697 | 9,581 | 22,616 |
Net Income (Loss) from Continuing Operations | $ (68,657) | $ 42,826 | 62,408 |
Net loss from discontinued operations | (33,795) | ||
Net Income (Loss) | $ (68,657) | $ 42,826 | $ 28,613 |
Net Earnings (Loss) per Share - Basic: | |||
Continuing operations | $ (0.96) | $ 0.63 | $ 1.16 |
Discontinued operations | (0.63) | ||
Net income (Loss) | $ (0.96) | $ 0.63 | 0.53 |
Net Earnings (Loss) per Share - Diluted: | |||
Continuing operations | $ (0.96) | $ 0.58 | 1.14 |
Discontinued operations | (0.62) | ||
Net income (Loss) | $ (0.96) | $ 0.58 | $ 0.52 |
Weighted average number of shares - Basic: | |||
Continuing operations | 71,300,432 | 68,213,209 | 53,910,741 |
Discontinued operations | 53,910,741 | ||
Weighted average number of shares - Diluted: | |||
Continuing operations | 71,300,432 | 70,327,411 | 54,837,307 |
Discontinued operations | 54,837,307 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME [Abstract] | |||
Net Income (Loss) | $ (68,657) | $ 42,826 | $ 28,613 |
Cash Flow Hedge: | |||
Unrealized gain (loss) from cash flow hedges | 206 | (62) | |
Less: reclassification adjustment for net gains included in net income (loss) | (178) | $ 62 | |
Net change | 28 | ||
Change in foreign currency translation adjustment | (822) | ||
Other comprehensive (loss) | (794) | ||
Comprehensive Income (Loss) | $ (69,451) | $ 42,826 | $ 28,613 |
STATEMENTS OF CHANGES IN SHAREH
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common stock | Preferred stock | Additional paid-in capital | Accumulated other comprehensive income | Retained earnings | Treasury shares |
Balance at Dec. 31, 2012 | $ 244,021 | $ 100 | $ 44 | $ 22,830 | $ 222,049 | $ (1,002) | |
Balance, shares at Dec. 31, 2012 | 37,303,298 | 16,602,292 | |||||
Conversion of preferred shares into ordinary shares | $ 44 | $ (44) | |||||
Conversion of preferred shares into ordinary shares, shares | 16,602,292 | (16,602,292) | |||||
Dividend paid upon consummation of the spin-off | $ (65,009) | $ (65,009) | |||||
Dividend in-kind upon consummation of the spin-off | (211,668) | $ (26,015) | $ (185,653) | ||||
Stock-based compensation | 13,220 | 13,220 | |||||
Exercise of stock options | $ 850 | $ 3 | $ 847 | ||||
Exercise of stock options, shares | 847,992 | ||||||
Other comprehensive loss | |||||||
Net income (loss) | $ 28,613 | $ 28,613 | |||||
Balance at Dec. 31, 2013 | 10,027 | $ 147 | $ 10,882 | $ (1,002) | |||
Balance, shares at Dec. 31, 2013 | 54,753,582 | ||||||
Issuance of shares related to acquisitions | 171,552 | $ 38 | 171,514 | ||||
Issuance of shares related to acquisitions, shares | 13,124,100 | ||||||
Acquisition related expenses paid by the shareholders | 3,060 | 3,060 | |||||
Contribution by shareholders | 1,803 | 1,803 | |||||
Stock-based compensation | 15,145 | 15,145 | |||||
Exercise of stock options | $ 1,584 | $ 4 | $ 1,580 | ||||
Exercise of stock options, shares | 1,324,749 | ||||||
Other comprehensive loss | |||||||
Net income (loss) | $ 42,826 | $ 42,826 | |||||
Balance at Dec. 31, 2014 | $ 245,997 | $ 189 | $ 203,984 | $ 42,826 | $ (1,002) | ||
Balance, shares at Dec. 31, 2014 | 69,202,431 | 69,202,431 | |||||
Issuance of shares related to acquisitions | $ 5,579 | $ 5 | 5,574 | ||||
Issuance of shares related to acquisitions, shares | 1,798,837 | ||||||
Issuance of shares in private placement, net of issuance cost of $105 | 10,020 | $ 11 | 10,009 | ||||
Issuance of shares in private placement, net of issuance cost of $105, shares | 4,436,898 | ||||||
Stock-based compensation | $ 7,679 | 7,679 | |||||
Exercise of stock options, shares | 6,923 | ||||||
Exercise of stock option and vesting of restricted stock units | $ 13 | $ 1 | $ 12 | ||||
Exercise of stock option and vesting of restricted stock units, shares | 373,321 | ||||||
Other comprehensive loss | (794) | $ (794) | |||||
Net income (loss) | (68,657) | $ (68,657) | |||||
Balance at Dec. 31, 2015 | $ 199,837 | $ 206 | $ 227,258 | $ (794) | $ (25,831) | $ (1,002) | |
Balance, shares at Dec. 31, 2015 | 75,811,487 | 75,811,487 |
STATEMENTS OF CHANGES IN SHARE7
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY [Abstract] | |
Issuance of shares in private placement, issuance cost | $ 105 |
Accumulated unrealized gain from hedging activities | 28 |
Accumulated other comprehensive loss | $ (822) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities: | |||
Net income (loss) | $ (68,657) | $ 42,826 | $ 28,613 |
Loss from discontinued operations, net | (33,795) | ||
Income (loss) from continuing operations | $ (68,657) | $ 42,826 | 62,408 |
Adjustments required to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 11,972 | 21,413 | $ 2,110 |
Impairment of intangible assets and goodwill | 98,904 | 19,941 | |
Restructuring costs related to impairment of property and equipment | 124 | 632 | |
Stock-based compensation expense | 7,429 | $ 15,145 | $ 10,405 |
Issuance of ordinary shares related to acquisition employees retention | 63 | ||
Foreign currency translation | $ (347) | ||
Acquisition related expenses paid by shareholders | $ 3,060 | ||
Accretion of payment obligation related to acquisition | $ 311 | 1,067 | |
Accrued interest, net | 37 | 655 | $ 1,170 |
Deferred taxes, net | (8,973) | (13,851) | |
Accrued severance pay, net | 238 | 392 | $ 24 |
Change in payment obligation related to acquisitions | (5,937) | 713 | |
Fair value revaluation - convertible debt | 175 | (2,566) | |
Loss from sale of property and equipment | 17 | 121 | |
Net changes in operating assets and liabilities: | |||
Accounts receivable, net | 3,362 | (23,568) | $ 18,032 |
Prepaid expenses and other | (3,402) | (5,020) | (2,533) |
Accounts payable | (3,725) | 2,228 | 8,681 |
Accrued expenses and other liabilities | (13,250) | 9,741 | (8,756) |
Deferred revenues | (772) | (887) | (6,250) |
Net cash provided by continuing operating activities | $ 17,569 | $ 72,042 | 85,291 |
Net cash used in discontinued operating activities | (23,939) | ||
Net cash provided by operating activities | $ 17,569 | $ 72,042 | 61,352 |
Investing activities: | |||
Purchases of property and equipment | (2,029) | (10,882) | $ (1,916) |
Proceeds from sale of property and equipment | 24 | $ 58 | |
Capitalization of development costs | (4,005) | ||
Restricted cash, net | 50 | $ (202) | |
Investments in short-term deposits, net | (27,442) | (15,000) | $ (75,957) |
Net cash acquired in (paid in) in connection with acquisition, net | (87,044) | 19,042 | |
Net cash used in continuing investing activities | $ (120,446) | $ (6,984) | $ (77,873) |
Net cash provided by discontinued investing activities | 898 | ||
Net cash used in investing activities | $ (120,446) | $ (6,984) | $ (76,975) |
Financing activities: | |||
Issuance of shares in private placement, net | $ 10,020 | ||
Dividend paid upon consummation of spin-off | $ (65,009) | ||
Exercise of stock options | $ 13 | $ 1,584 | $ 850 |
Contribution by shareholders | 585 | ||
Payments made in connection with acquisition | $ (1,534) | (2,545) | |
Proceeds from the issuance of convertible debt | $ 37,852 | ||
Proceeds from short-term loans | $ 13,000 | ||
Repayment of long-term loans | (2,300) | $ (2,300) | |
Net cash provided by (used in) continuing financing activities | 19,199 | $ 35,176 | $ (64,159) |
Effect of exchange rate changes on cash and cash equivalents | 14 | ||
Net increase (decrease) in cash and cash equivalents | $ (83,664) | $ 100,234 | $ (79,782) |
Decrease in cash and cash equivalents - discontinued activities | 2,336 | ||
Cash and cash equivalents at beginning of year | $ 101,183 | $ 949 | 78,395 |
Cash and cash equivalents at end of year | 17,519 | 101,183 | 949 |
Cash paid during the year for: | |||
Income taxes | 21,340 | 20,855 | $ 40,694 |
Interest | 2,260 | 260 | |
Purchase of property and equipment on credit | 312 | 1,205 | |
Non-cash financing activities | |||
Issuance of shares in connection with acquisitions | $ 5,579 | 171,552 | |
Contribution by shareholders | 1,218 | ||
Acquisition related expenses paid by shareholders | $ 3,060 | ||
Dividend in kind upon consummation of spin-off | $ 211,668 | ||
Stock-based compensation that was capitalized as part of capitalization of software development costs | $ 187 |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2015 | |
GENERAL [Abstract] | |
GENERAL | NOTE 1: GENERAL Perion Network Ltd. ("Perion") and its wholly-owned subsidiaries (collectively referred to as the "Company"), is a global technology company, providing high-quality advertising solutions to brands and publishers, high-impact ad formats that capture consumer attention and drives engagement, branded search providing publishers with engagement and monetization solutions and a unified social and mobile programmatic platform for acquiring and engaging app users. On February 10, 2015, the Company completed the acquisition of Make Me Reach SAS ("MMR") and on November 30, 2015, completed the acquisition of Interactive Holding Corp (see Note 3). |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Basis of consolidation The consolidated financial statements include the accounts of Perion and its subsidiaries. All Intercompany balances and transactions have been eliminated. Commencing in 2014, the acquisition of ClientConnect Ltd. (“ClientConnect”) is reflected in the Company's financial statements as a reverse acquisition of all of Perion's outstanding shares and options by ClientConnect, in accordance with Accounting Standards Codification (“ASC”) 805, "Business Combinations". Under ASC 805, ClientConnect is considered as the acquirer and the Company is viewed as the acquiree and therefore, the comparative amounts as included in these financial statements, namely, the related consolidated statements of income, comprehensive income, changes in shareholders' equity and cash flows for the year ended December 31, 2013, represent ClientConnect's amounts and results for those periods. Use of estimates The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, the Company's management evaluates its estimates, including those related to accounts receivable, intangible assets and goodwill, fair values and useful lives of intangible assets, fair values of stock-based awards, allowance for doubtful accounts, realizability of deferred tax assets, income taxes, and contingent liabilities, among others. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of the Company's assets and liabilities. Financial statements in U.S. dollars The reporting currency of the Company is the U.S. dollar (“USD”). Major parts of the Company's operations are carried out by the Company and its subsidiaries in the United States and Israel. The functional currency of these entities is the USD. Accordingly, monetary accounts maintained in currencies other than the USD are remeasured into USD, in accordance with ASC 830, "Foreign Currency Matters". All transaction gains and losses resulting from the remeasurement of the monetary balance sheet items are reflected in the statement of income as financial income or expenses, as appropriate. Management believes that the USD is the currency of the primary economic environment in which the Company operates. The financial statements of other subsidiaries, whose functional currency is determined to be their local currency, have been translated into dollars. All balance sheet accounts have been translated using the exchange rates in effect at the balance sheet date. Statement of operations amounts have been translated using the average exchange rate for the applicable year. The resulting translation adjustments are reported as an accumulated other comprehensive income (loss) component of shareholders' equity. Cash and cash equivalents and short-term deposits The Company considers all short-term, highly liquid and unrestricted cash balances, with stated maturities of three months or less from date of purchase, as cash equivalents. Short-term deposits are bank deposits with maturities of more than three months, but less than one year. The short-term deposits as of December 31, 2014 and 2015 are denominated in USD and bear interest at an average annual rate of 0.49 0.72 Restricted cash Restricted cash is comprised primarily of security deposits that are held to secure the Company's hedging activity, lease obligations and certain letter of credits associated with lease obligation. Restricted cash in the amount of $ 696 646 1,182 Accounts receivable and allowance for doubtful accounts Trade accounts receivables are stated at realizable value, net of an allowance for doubtful accounts. The Company evaluating its outstanding accounts receivable and establishes an allowance for doubtful accounts based on information available on their credit condition, current aging, and historical experience. These allowances are reevaluated and adjusted periodically as additional information is available. Property and equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following annual rates: % Computers and peripheral equipment 33 Office furniture and equipment 6 15 Leasehold improvements are amortized using the straight-line method over the term of the lease or the estimated useful life of the improvements, whichever is shorter. Internally Developed Software The Company capitalizes certain internal and external software development costs, consisting primarily of direct labor associated with creating the internally developed software. Software development projects generally include three stages: the preliminary project stage (all costs expensed as incurred), the application development stage (costs are capitalized) and the post implementation/operation stage (all costs expensed as incurred). The costs capitalized in the application development stage primarily include the costs of designing the application, coding and testing of the system. Capitalized costs are amortized using the straight line method over the estimated useful life of the software, generally 3 4,192 187 245 3,390 557 are Impairment of long-lived assets and intangible assets subject to amortization Property and equipment and intangible assets subject to amortization are reviewed for impairment in accordance with ASC 360, "Accounting for the Impairment or Disposal of Long-Lived Assets", whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The recoverability of these assets is measured by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If property and equipment and intangible assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. In determining the fair values of long-lived assets for purpose of measuring impairment, the Company's assumptions include those that market participants will consider in valuations of similar assets. In 2014 and 2015, the Company recorded impairment charges of $ 19,941 8,471 ecorded, an impairment of $ 632 159 Goodwill and other intangible assets Goodwill reflects the excess of the purchase price of business acquired over the fair value of net assets acquired. Goodwill is not amortized but instead is tested for impairment, in accordance with ASC 350, “Intangibles – Goodwill and Other”, at least annually at December 31 each year, or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. The first step, identifying a potential impairment, compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds its fair value, the second step would need to be performed; otherwise, no further step is required. The second step, measuring the impairment loss, compares the implied fair value of the goodwill with the carrying amount of the goodwill. Any excess of the carrying amount over the applied fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. The Company determined that certain indicators of potential impairment existed during 2015, which triggered goodwill impairment analysis for its reporting units. These indicators included a decrease in the Company's share price and lower than expected sales and cash flow as well as management decisions to abandon certain R&D projects. Based on the goodwill assessment for the search monetization reporting unit and Growmobile reporting unit, the Company determined that the carrying amount of the reporting units exceeds their fair value and recorded an impairment of $ 87,043 The majority of the inputs used in the discounted cash flow model to determine the fair value of the reporting units are unobservable and thus are considered to be Level 3 inputs. Intangible assets that are not considered to have an indefinite useful life are amortized over their estimated useful lives. The acquired customer arrangements, technology and logo are amortized over their estimated useful lives in proportion to the economic benefits realized. This accounting policy results in accelerated amortization of such intangible assets as compared to the straight-line method. Deferred Financing Costs Direct and incremental costs related to the issuance of debt are capitalized as deferred financing costs and are deducted from the carrying amount of that debt in the consolidated balance sheets. The Company amortizes deferred financing costs using the effective-interest method and records such amortization as interest expense. Revenue recognition The Company generates revenues primarily from two major sources: Search Revenues Advertising Revenues The Company evaluates whether Search and Advertising Revenues should be presented on a gross basis, which is the amount that a customer pays for the service, or on a net basis, which is the customer payment less amounts the Company pays to suppliers. In making that evaluation, the Company considers indicators such as whether the Company is the primary obligor in the arrangement and assumes risks and rewards as a principal or an agent, including the credit risk, whether the Company has latitude in establishing prices and selects its suppliers and whether it changes the products or performs part of the service. The evaluation of these factors is subject to significant judgment and subjectivity. Generally, when the Company is primarily obligated in a transaction, is subject to risk, involved in the determination of the product or the service specifications, separately negotiates each revenue service agreement or publisher agreement and can have several additional indicators, revenue is recorded on a gross basis. The Company recognizes revenue when all four revenue recognition criteria have been met: persuasive evidence of an arrangement exists, services are rendered, the fee or price charged is fixed or determinable and collectability is reasonably assured. Deferred revenue is recorded when payments are received from customers in advance of the Company's rendering of services. Cost of revenues Cost of revenues consists primarily of expenses associated with the operation of the Company's data centers, including depreciation, labor, energy, and bandwidth costs, amortization of acquisition-related intangible assets, as well as content acquisition costs. The direct cost relating to search and advertising revenues is immaterial. Customer acquisition and media buy costs Customer acquisition and media buy costs consist of amounts paid to publishers and app developers who distribute the Company's applications and other products and the costs of advertising inventory incurred to deliver ads. These amounts are primarily based on fixed fee and revenue share arrangements with minimum guaranty and are charged as incurred. Research and development costs Research and development costs are charged to the statement of income as incurred, except for certain costs relating to internally developed software, which are capitalized and amortized on a straight line basis over their estimated useful life once the asset is placed in service. Income taxes The Company accounts for income taxes in accordance with ASC 740, "Income Taxes". This Statement prescribes the use of the liability method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. To the extent necessary, the Company provides a valuation allowance, to reduce deferred tax assets to their estimated realizable value. The Company accounts for uncertain tax positions in accordance with ASC 740, which contains a two-step approach for recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company accrued interest and penalties related to unrecognized tax benefits in its financial expenses. Severance pay With regards to employees in Israel, where there is a mandated severance liability, most of the Company's agreements with employees are in accordance with section 14 of the Severance Pay Law, 1963 (“Section 14”), where the Company's contributions for severance pay shall be instead of its severance liability. Upon contribution based on the full amount of the employee's monthly salary, and release of the policy to the employee, no additional severance payments shall be made by the Company to the employee. Therefore, the related obligation and amounts deposited on behalf of such obligation are not stated on the balance sheet, as the Company is legally released from obligation to employees once the deposit amounts have been paid. The Company's liability for severance pay to employees not under Section 14, is calculated pursuant to Israel's Severance Pay Law based on the most recent monthly salaries of such employees, multiplied by the number of years of their employment, or a portion thereof, as of the balance sheet date. This liability is fully provided for by monthly deposits in insurance policies and by an accrual. The deposited funds include profits and losses accumulated up to the balance sheet date and they may be withdrawn only upon the fulfillment of the obligation pursuant to Israel's Severance Pay Law or labor agreements. Severance expenses from continuing operations for the years ended December 31, 2013, 2014 and 2015 amounted to $ 1,296 3,330 2,310 1,080 Employee benefit plan The Company's U.S. operations maintain a retirement plan (the “U.S. Plan”) that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Participants in the U.S. Plan may elect to defer a portion of their pre-tax earnings, up to the Internal Revenue Service annual contribution limit. The Company matches 100 3 50 2 Total employer 401(k) contributions for the years ended December 31, 2013, 2014 and 2015 were $ 61 116 247 Comprehensive income (loss) The Company accounts for comprehensive income (loss) in accordance with ASC 220, "Comprehensive Income". This statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its other comprehensive income (loss) relates to hedging derivative instruments and foreign currency translation. Net earnings per share In accordance with ASC 260, "Earnings Per Share", basic net earnings per share ("Basic EPS") is computed by dividing net earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net earnings per share ("Diluted EPS") reflects the potential dilution that could occur if stock options and other commitments to issue ordinary shares were exercised or equity awards vested, resulting in the issuance of ordinary shares that could share in the net earnings of the Company. 2,778,618 3,766,080 14,179,439 Concentrations of credit risk Financial instruments that potentially subject the Company to a concentration of credit risk, consist primarily of cash and cash equivalents, bank deposits, restricted cash and accounts receivable. The majority of the Company's cash and cash equivalents, bank deposits and restricted cash are invested in USD instruments with major banks in the U.S. and Israel. Deposits in the U.S. may be in excess of insured limits and are not insured in other jurisdictions. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal risk. The Company's major customers are financially sound, and the Company believes low credit risk is associated with these customers. To date, the Company has not experienced any material bad debt losses. Total expenses for doubtful debts during 2013, 2014 and 2015 amounted to $ 0 1,035 104 Stock-based compensation The Company accounts for stock-based compensation under ASC 718, "Compensation - Stock Compensation", which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to employees and directors. ASC 718 requires companies to estimate the fair value of equity-based awards on the date of grant, using an option-pricing model. The value of the portion of the award that is ultimately expected to vest, is recognized as an expense over the requisite service periods in the Company's consolidated statement of income. ASC The Company recognizes compensation expenses for the value of its awards, which have graded vesting based on service conditions, using the straight line method, over the requisite service period of each of the awards, net of estimated forfeitures. Estimated forfeitures are based on actual historical pre-vesting forfeitures. For performance-based stock units, the Company recognizes compensation expenses for the value of such awards, if and when the Company concludes that it is probable that a performance condition will be achieved based on the accelerated attribution method over the requisite service period. The Company should reassess the probability of vesting at each reporting period for awards with performance conditions and adjust compensation cost based on its probability assessment. Prior to 2014 and the acquisition of Perion, ClientConnect used the Black-Scholes-Merton option pricing model to determine the fair value of its stock-based awards. Following Perion's acquisition on January 2, 2014, the Company estimates the fair value of its new stock-based awards using the Binomial option-pricing model. The change from the Black-Scholes-Merton to the Binomial option-pricing model is considered a change in accounting estimate and its impact on the estimated fair value of the Company's stock-based awards is minimal . The following table presents the various assumptions used to estimate the fair value of the Company's stock-based awards granted to employees and directors in the periods presented: Year ended December 31 2013 2014 2015 Risk-free interest rate 0.93 1.91 % 0.10 1.72 % 0.17 1.76 % Expected volatility 50 % 44.44 51.62 % 43.49 50.31 % Expected term (years) 6.25 - - Early exercise factor - 100 256 % 160 210 % Forfeiture rate post vesting - 0 15 % 0 18 % Dividend yield 0 % 0 % 0 % The stock-based awards prior to 2014 were granted by Conduit Ltd. (“Conduit”), the previous owner of the ClientConnect business, which was not a publicly traded company and therefore, the expected volatility of grants in those periods was calculated based on certain peer companies that Conduit considered to be comparable. Starting in 2014, the expected volatility is calculated based on the actual historical stock price movements of the Company's stock. The expected option term represents the period that the Company's stock options are expected to be outstanding. Prior to 2014, the expected option term for share-option awards which were at the money when granted has been determined by Conduit based on the simplified method in accordance with Staff Accounting Bulletin No. 110, as adequate historical experience was not available to provide a reasonable estimate. For share-option awards which were in the money when granted, Conduit used an expected term which it believed to be appropriate under these circumstances. Such estimate was not materially different than determining the expected term based on a lattice model, and then use it as an input to the Black-Scholes-Merton option pricing model. Starting in 2014, the early exercise factor and the forfeiture rate post-vesting are calculated based on the Company's estimated early exercise and post-vesting forfeiture multiples, which are based on comparable companies and on actual historical data. The risk-free interest rate is based on the yield from U.S. Treasury zero-coupon bonds, with a term which is equivalent to the expected term of the stock-based awards. The dividend yield is based on the current decision of the Company's management not to distribute any dividends. The fair value of restricted stock units (“RSU”) is based on the market value of the underlying shares on the date of grant. Derivative instruments The Company accounts for derivatives and hedging based on ASC 815, "Derivatives and Hedging", which requires recognizing all derivatives on the balance sheet at fair value. If the derivatives meet the definition of a cash flow hedge and are so designated, depending on the nature of the hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period, or periods, during which the hedged transaction affects earnings. The ineffective portion of a derivative's change in fair value, if any, is recognized in earnings, as well as gains and losses from a derivative's change in fair value that are not designated as hedges are recognized in earnings immediately. Starting 2014, in order to mitigate the potential adverse impact on cash flows resulting from fluctuations in the exchange rate of the new Israeli shekels (“ILS”), the Company started to hedge portions of its forecasted expenses denominated in ILS with swap and options contracts. In addition, the Company has entered into a cross currency interest rate swap agreement in order to transform cash flow in ILS into USD of interest payments and principal as derived from the Company's convertible debt conditions (see note 9). The Company does not speculate in these hedging instruments in order to profit from foreign currency exchanges, nor does it enter into trades for which there are no underlying exposures. The swap contracts were not designated as hedging instruments and therefore gains or losses resulting from the change of their fair value are recognized in "financial income, net". As of December 31, 2014 and 2015, the Company had derivative assets of $ 1,349 608 1,779 214 175 125 The notional value of the Company's derivative instruments as of December 31, 2014 and 2015, amounted to $ 43,520 57,052 Fair value of financial instruments The carrying amounts of financial instruments carried at cost, including cash and cash equivalents, short-term deposits, restricted cash, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses and other liabilities approximate their fair value due to the short-term maturities of such instruments. The Company follows the provisions of ASC No. 820, “Fair Value Measurement” (“ASC 820”), which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining a fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability, based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect assumptions that market participants would use in pricing an asset or liability, based on the best information available under given circumstances. The hierarchy is broken down into three levels, based on the observability of inputs and assumptions, as follows: • Level 1 • Level 2 • Level 3 The following table present assets and liabilities, measured at fair value on a recurring basis, as of December 31, 2015: Fair value measurements using input type Level 1 Level 2 Level 3 Total Assets: Derivative assets $ - $ 608 $ - $ 608 Total financial assets $ - $ 608 $ - $ 608 Liabilities: Payment obligation in connection with acquisitions $ - $ - $ 49,124 $ 49,124 Derivative liabilities - 214 - 214 Convertible debt 35,463 - - 35,463 Total financial liabilities $ 35,463 $ 214 $ 49,124 $ 84,801 The following table present assets and liabilities, measured at fair value on a recurring basis, as of December 31, 2014: Fair value measurements using input type Level 1 Level 2 Level 3 Total Assets: Derivative assets $ - $ 1,349 $ - $ 1,349 Total financial assets $ - $ 1,349 $ - $ 1,349 Liabilities: Payment obligation in connection with acquisitions $ - $ - $ 13,645 $ 13,645 Derivative liabilities - 1,779 - 1,779 Convertible debt 35,752 - - 35,752 Total financial liabilities $ 35,752 $ 1,779 $ 13,645 $ 51,176 The following table summarizes the changes in the Company's liabilities, measured at fair value, using significant unobservable inputs (Level 3), during the year ended December 31, 2015: Total fair value as of January 1, 2015 $ 13,645 Accretion of contingent liability related to acquisition 311 Change in fair value of contingent consideration related to acquisition (6,564 ) Settlements (2,500 ) Fair value of payment obligation in connection with Undertone acquisition 44,023 Reclassification to accrued expenses (189 ) Changes in fair value recognized in earnings with respect to the employees of Grow Mobile 398 Total fair value as of December 31, 2015 $ 49,124 Treasury shares In the past, the Company repurchased its ordinary shares on the open market. The Company holds those shares as treasury shares and presents their cost as a reduction of shareholders' equity. Business combinations The Company accounted for business combination in accordance with ASC 805, "Business Combinations". ASC 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date, measured at their fair values as of that date. Any excess of the fair value of net assets acquired over purchase price and any subsequent changes in estimated contingencies are to be recorded in earnings. In addition, changes in valuation allowance related to acquired deferred tax assets and in acquired income tax position are to be recognized in earnings. Acquisition related costs are expensed to the statement of income in the period incurred. Discontinued operations Under ASC 205, "Presentation of Financial Statements - Discontinued Operation", when a component of an entity, as defined in ASC 205, has been disposed of or is classified as held for sale, the results of its operations, including the gain or loss on its disposal are classified as discontinued operations and the assets and liabilities of such component are classified as assets and liabilities attributed to discontinued operations; that is, provided that the operations, assets and liabilities and cash flows of the component have been eliminated from the entity's consolidated operations and the entity will no longer have any significant continuing involvement in the operations of the component. Accordingly, the statements of income and statements of cash flow, related to certain business initiatives at ClientConnect prior to Perion's acquisition, are classified as discontinued operations for the year ended December 31, 2013. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 requires that long-term lease arrangements be recognized on the balance sheet. The standard is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (ASU 2015-17) “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the consolidated balance sheet statement of financial position. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the consolidated balance sheet. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods therein and may be applied either prospectively or retrospectively to all periods presented. Early adoption is permitted. The Company has early adopted this standard in the fourth quarter of 2015 on a retrospective basis. Prior periods have been retrospectively adjusted. 3,000 3,000 In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments (Topic 805): Business Combinations, In April 2015, the FASB issued guidance on debt issuance costs. The guidance requires entities to present debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt in the balance sheet. This guidance does not contain guidance for debt issuance costs related to line-of-credit arrangements. Consequently, in August 2015, the FASB issued additional guidance to add paragraphs indicating that the SEC staff would not object to an entity deferring and presenting debt issuance costs related to line-of-credit arrangements as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The guidance is effective for the interim and annual periods beginning on or after December 15, 2015. The Company early adopted the guidance for debt outstanding as of December 31, 2015. There was no effect on prior year's presentation. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (ASU 2014-09) "Revenue from Contracts with Customers." ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued and amended, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, though early adoption is permitted for annual reporting periods beginning after December 15, 2016. The Company is currently in the process of evaluating the impact of the adoption of ASU 2014-09 on its consolidated financial statements. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2015 | |
ACQUISITIONS [Abstract] | |
ACQUISITIONS | NOTE 3: ACQUISITIONS a. Interactive Holding Corp. On November 30, 2015, The Company consummated the acquisition of 100 for a total purchase price of $133,101, comprised of the following: 1. $ 89,078 2. $ 16,000 14,391 14,476 3. An amount of $ 3,000 2,804 2,820 4. An amount of $ 20,000 10 22,005 21,859 5. An amount of $ 1,182 6. An amount of $ 2,143 7. Working capital final adjustment as calculated 90 days after closing in the amount of $ 1,498 In addition, the Company incurred acquisition related costs totaling$ 4,804 The main reason for the acquisition is to continue the strategic evolution of the Company into a global technology company delivering high-quality advertising solutions to brands and publishers. The strategic benefits are to create a differentiated independent ad tech platform with significant scale and profitability, add noteworthy relationships with premium brands, agencies and publishers, enhance mobile footprint, extend programmatic capabilities, broaden product suite with the addition of proprietary, high-impact creative formats and substantially diversify revenue base. Under business combination accounting principles, the total purchase price was allocated to Undertone's net tangible and intangible assets based on their estimated fair values as set forth below. The excess of the purchase price over the net tangible and identifiable intangible assets was recorded as goodwill. The goodwill is attributable primarily to the strategic opportunities aforementioned. The related goodwill and intangible assets are not deductible for tax purposes. The estimated fair values are preliminary and based on the information that was available as of the closing date. The Company believes that the information provides a reasonable basis for estimating the fair values, but the Company is waiting for additional information necessary to finalize these amounts, particularly with respect to the estimated fair value of intangible assets. Thus the preliminary measurements of fair value reflected are subject to changes and such changes could be significant. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable, but no later than one The preliminary allocation of the purchase price to assets acquired and liabilities assumed is as follows: Cash $ 7,378 Accounts receivable 38,493 Prepaid expenses and other assets 4,934 Long term restricted cash 1,182 Property and equipment 1,905 Deferred taxes 815 Accounts payable (23,428 ) Accrued expenses and other liabilities (11,083 ) Deferred revenues (1,047 ) Long term loan (including current maturities) (48,601 ) Deferred tax liability (20,095 ) Intangible assets 63,200 Goodwill 119,448 Total purchase price $ 133,101 Intangible assets: The fair value of intangible assets was based on market participant approach to valuation, performed by a third party valuation firm using estimates and assumptions provided by management. The following table sets forth the components of intangible assets associated with Undertone acquisition: Estimated useful Acquired technology (1) $ 19,500 5 Customer relationships (2) 30,000 6 Backlog (3) 4,200 less than 1 year Tradename 9,500 4 Total amount allocated to intangible assets $ 63,200 (1) Acquired technology represents the combined technology for delivering and administering Undertone's attention-grabbing, full-page video adverts and other advertising formats. (2) Customer relationships represent the existing relationships and agreements with Undertone brands and advertisers. (3) Backlog represents customer insertion orders that are highly probable to be turned into revenues in the near future. (4) Tradename represents trade names and logos under which Undertone markets and sells its services. The following unaudited condensed combined pro forma information for years ended December 31, 2015 and 2014, gives effect to the acquisition of Undertone as if it had occurred on January 1, 2014. The pro forma information is not necessarily indicative of the results of operations, which actually would have occurred had the acquisition been consummated on that date, nor does it purport to represent the results of operations for future periods. For the purposes of the pro forma information, the Company has assumed that net income (loss) includes additional amortization of intangible assets related to the acquisition of $ 14,981 19,610 December 31, 2014 2015 Revenues $ 556,042 $ 350,908 Net income (Loss) 40,129 (84,979 ) Net income (loss) per ordinary share: Basic 0.59 (1.19 ) Diluted $ 0.57 $ (1.19 ) b. Make Me Reach SAS On February 10, 2015, the Company consummated the acquisition of 100 The acquisition of MMR is part of the Company's strategy to channel its future growth efforts towards the mobile advertising market, to extend its mobile marketing technology by adding the ability to advertise on social media and to provide developers a more effective mobile advertising tool. Additionally, the acquisition of MMR establishes the Company's first office in Europe which will lead the European sales efforts. The acquisition has been accounted for as a business combination under ASC No. 805, “Business Combination”. The Purchase price was $ 6,394 4,378 1,437,510 442 442 144 63 18,998 266 208 92,348 139 The allocation of the purchase price to assets acquired and liabilities assumed was as follows: Cash $ 1,050 Accounts receivable 666 Prepaid expenses and other assets 86 Property and equipment 87 Accounts payable (305 ) Accrued expenses and other liabilities (433 ) Deferred revenues (126 ) Deferred tax liability (1,159 ) Intangible assets 3,454 Goodwill 7,452 Total purchase price $ 10,772 The following table sets forth the components of intangible assets associated with the acquisition: Estimated useful Acquired technology $ 1,261 5 Customer relationship 395 5 Distribution channel 1,798 5 Total amount allocated to intangible assets $ 3,454 In performing the purchase price allocation, the Company considered, among other factors, analysis of historical financial performance, the best use of the acquired assets and estimates of future performance of MMR's products. In its allocation, the Company also conducted a valuation of intangible assets based on a market participant approach to valuation using an income approach and in connection therewith considered the report of an independent third party valuation firm and estimates and assumptions provided by management. Pro forma results of operations for the acquisition of MMR have not been presented because they are not material to the consolidated results of operations. c. Grow Mobile LLC On July 15, 2014 ("Closing Date"), the Company completed the acquisition of 100 For the acquisition of Grow Mobile, the Company paid a total consideration of $ 17,000 25,000 The total consideration was composed as follows: a. $ 10,000 1,800 1,300 b. $ 7,000 1,100 5,545 c. Up to $ 7,000 2,740 d. Up to $ 18,000 4,670 The following table shows a summary of the purchase price at the Closing Date: Cash $ 6,892 Share consideration 5,545 Contingent consideration 7,410 Total purchase price at the Closing Date $ 19,847 On July 8, 2015, the Company and Grow Mobile's former security holders, entered into an agreement which amended the acquisition agreement that was signed in July 2014 (the “Amendment”). Under the Amendment, the Contingent Payment was cancelled and in exchange, the Company agreed to pay $ 2,500 1,500 1,000 315,263 1,500 1,000 500 6,564 9,064 2,500 Additionally, as part of the acquisition, the Company established an incentive plan for the benefit of the holders of unvested options and restricted shares of Grow Mobile (“Merger Consideration Incentive Plan”). The unvested options and restricted shares were cancelled upon Closing Date and converted into the right to receive an allocable portion of the consideration subject to ratable vesting, for the remainder of their preexisting vesting schedules. The allocable consideration is withheld subject to continued vesting. In connection with the Merger Consideration Incentive Plan following the acquisition, the First and Second Contingent Payment, the Company recorded $ 947 927 474 The Company also incurred acquisition related costs in a total amount of $ 940 Under business combination accounting, the total purchase price was allocated to Grow Mobile's net tangible and intangible assets based on their estimated fair values as set forth below: Cash $ 2,767 Accounts receivable 1,398 Prepaid expenses and other assets 249 Property and equipment 13 Accounts payable (3,307 ) Accrued expenses and other liabilities (820 ) Deferred revenues (1,465 ) Deferred tax liability (2,320 ) Intangible assets 5,640 Goodwill 17,692 Total purchase price $ 19,847 In performing the purchase price allocation, the Company considered, among other factors, an analysis of historical financial performance, highest and best use of the acquired assets and estimates of future performance of Grow Mobile's products. The fair value of intangible assets was based on market participant approach to valuation, performed by a third party valuation firm using estimates and assumptions provided by management. The following table sets forth the components of intangible assets associated with the Grow Mobile acquisition: Estimated useful Acquired technology $ 4,025 4 Customer relationships 1,615 5 Total amount allocated to intangible assets $ 5,640 During 2015 the Company recorded full impairment of all the acquired intangible assets associated with the Grow Mobile acquisition. (See note 5b). Pro forma results of operations for the acquisition of Grow Mobile have not been presented because it is not material to the consolidated results of operations. d. ClientConnect Ltd. On September 16, 2013, the Company announced an agreement (the “Agreement”) to combine the ClientConnect business of Conduit Ltd. with Perion in an all-stock transaction. On December 31, 2013 Conduit spun off its ClientConnect business, which includes its monetization and distribution platform for publishers and developers. On January 2, 2014 (the "Closing Date") Perion issued 54,753,582 2,815,963 81 19 3,161 In connection with the spin off from Conduit, it was agreed between Conduit and ClientConnect that the working capital transferred to ClientConnect will be zero, except for the balance of Conduit with Perion (see Note 16). The transaction has been accounted for as an acquisition of Perion by ClientConnect in accordance with ASC 805, using the acquisition method of accounting with ClientConnect as the accounting acquirer (see Note 2). Under these accounting standards, the total purchase price has been calculated as follows: Number of shares of Perion ordinary shares outstanding on the Closing Date 12,524,000 Closing price per share of Perion's ordinary shares on the Closing Date $ 12.64 Total fair value of stock consideration $ 158,303 Fair value of vested Perion options (for accounting purposes only) $ 7,492 Total purchase price $ 165,795 The fair value of Perion's vested options represents the fair value of such options attributable to service periods prior to the Closing Date, using the stock price at the Closing Date as an input to the Binomial option-pricing model to determine the fair value of the options. Under the acquisition method of accounting, the total purchase price is allocated to the net tangible and intangible assets of Perion acquired in the acquisition, based on their fair values at the Closing Date. The allocation of the purchase price to assets acquired and liabilities assumed was as follows: Cash and restricted cash $ 25,582 Accounts receivable 18,665 Prepaid expenses and other assets 4,593 Property and equipment 1,376 Accounts payable (13,900 ) Accrued expenses and other liabilities (25 ,623 ) Deferred revenues (495 ) Deferred tax liability, net (6,663 ) Long term debt (6,550 ) Intangible assets 49,930 Goodwill 118,880 Total purchase price $ 165,795 The following table sets forth the components of intangible assets associated with the acquisition: Estimated useful life Acquired technology $ 28,390 3 5 In-process research and development 8,100 * tradename and other 13,440 4 11 Total amount allocated to intangible assets $ 49,930 * In 2014 the Company completed the development of $ 6,100 4 2,000 In performing the purchase price allocation, the Company considered, among other factors, an analysis of historical financial performance and estimates of future performance of Perion's revenues assuming best use of the acquired assets. The fair value of intangible assets was based on market participant approach to valuation, performed by a third party valuation firm using estimates and assumptions provided by management. The following condensed combined pro forma information for the period ended December 31, 2013, gives effect to the acquisition of Perion as if the acquisition had occurred on January 1, 2013. The pro forma information is not necessarily indicative of the results of operations, which actually would have occurred if the acquisition had been consummated on that date, nor does it purport to represent the results of operations for future periods. For the purposes of the pro forma information, the Company has assumed that net income includes additional amortization of intangible assets related to the acquisition in the amount of $ 5,140 Year Ended December 31, 2013 Unaudited Revenues $ 412,656 Net income from continuing operations $ 68,995 Net loss from discontinued operations $ (33,795 ) Net income from continuing operations per ordinary share: Basic $ 1.04 Diluted $ 1.00 Net loss from discontinued operations per ordinary share: Basic $ (0.51 ) Diluted $ (0.49 ) |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2015 | |
PROPERTY AND EQUIPMENT, NET [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 4: PROPERTY AND EQUIPMENT, NET December 31, 2014 2015 Cost: Computers and peripheral equipment $ 11,596 $ 11,775 Office furniture and equipment 2,397 2,837 Leasehold improvements 5,937 6,981 Capitalized software - 557 Total cost 19,930 22,150 Less: accumulated depreciation and amortization 7,750 9,436 Property and equipment, net $ 12,180 $ 12,714 Depreciation and amortization expenses from continued operations totaled $ 2,110 2,674 3,093 460 In connection with the 2014 restructuring plan, the Company impaired leasehold improvements in the amount of $ 632 In connection with the 2015 restructuring plan, the Company recorded an impairment of 159 3,390 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2015 | |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | NOTE 5: GOODWILL AND OTHER INTANGIBLE ASSETS, NET a. Goodwill The changes in the net carrying amount of goodwill in 2014 and 2015 were as follows: Balance as of January 1, 2014 $ 27,520 Acquisition of Perion 118,880 Acquisition of Grow Mobile 17,692 Balance as of December 31, 2014 $ 164,092 Acquisition of MMR 7,452 Acquisition of Undertone 119,448 Impairment (87,043 ) Revaluation (foreign currency exchange) (256 ) Balance as of December 31, 2015 $ 203,693 b. Intangible assets, net The following is a summary of intangible assets as of December 31, 2014: December 31, 2013 Additions Amortization Impairment December 31, 2014 $ $ $ $ $ Acquired technology - 38,515 - - 38,515 Accumulated amortization - - (15,698 ) - (15,698 ) Impairment - - - (14,347 ) (14,347 ) Acquired technology, net - 38,515 (15,698 ) (14,347 ) 8,470 In-process R&D - 2,000 - - 2,000 Impairment - - - (2,000 ) (2,000 ) In-process R&D, net - 2,000 - (2,000 ) - Tradename and other - 15,055 - - 15,055 Accumulated amortization - - (3,041 ) - (3,041 ) Impairment - - - (3,594 ) (3,594 ) Tradename and other, net - 15,055 (3,041 ) (3,594 ) 8,420 Intangible assets, net - 55,570 (18,739 ) (19,941 ) 16,890 The following is a summary of intangible assets as of December 31, 2015: December 31, 2014 Additions Amortization Impairment OCI Disposals December 31, 2015 $ $ $ $ $ $ $ Acquired technology 38,515 20,761 - - (46 ) (28,515 ) 30,715 Accumulated amortization (15,698 ) - (4,374 ) - 2 11,107 (8,963 ) Impairment (14,347 ) - - (4,017 ) - 17,408 (956 ) Acquired technology, net 8,470 20,761 (4,374 ) (4,017 ) (44 ) - 20,796 In-process R&D 2,000 - - - - (2,000 ) - Impairment (2,000 ) - - - - 2,000 - In-process R&D, net - - - - - - - Tradename and other 15,055 45,893 - - (80 ) (6,474 ) 54,394 Accumulated amortization (3,041 ) - (4,505 ) - 2 1,774 (5,770 ) Impairment (3,594 ) - - (4,454 ) - 4,700 (3,348 ) Tradename and other, net 8,420 45,893 (4,505 ) (4,454 ) (78 ) - 45,276 Intangible assets, net 16,890 66,654 (8,879 ) (8,471 ) (122 ) - 66,072 The estimated useful life of the intangible assets are as follows: Acquired technology 3 - 5 Tradename and other 4 - 11 In December 2014 and 2015, the Company performed an impairment review of several intangible assets that were recognized in connection with the acquisition of Perion and Grow Mobile, respectively. which resulted in total impairment charge of $ 19,941 8,471 3,191 2,291 Amortization of intangible assets, net, in each of the succeeding five years and thereafter is estimated as follows: 2016 $ 22,191 2017 16,093 2018 12,113 2019 10,021 2020 4,880 Thereafter 774 $ 66,072 |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | NOTE 6: ACCRUED EXPENSES AND OTHER LIABILITIES December 31, 2014 2015 Employees and payroll accruals $ 7,438 $ 10,190 Government authorities 8,719 1,850 Derivative liabilities 1,779 214 Accrued restructuring charges (see note 15) 2,257 1,756 Professional services accruals 2,149 3,171 Hosting, software and web services accruals 1,569 497 Other overhead related expenses 508 1,592 Other accruals 1,098 3,587 $ 25,517 $ 22,857 |
DERIVATIVES AND HEDGING ACTIVIT
DERIVATIVES AND HEDGING ACTIVITES | 12 Months Ended |
Dec. 31, 2015 | |
DERIVATIVES AND HEDGING ACTIVITES [Abstract] | |
DERIVATIVES AND HEDGING ACTIVITES | NOTE 7: The fair value of the Company's outstanding derivative instruments is as follows: December 31, 2014 2015 Derivative assets: SWAP $ 141 $ 366 Option contracts 1,208 242 Total $ 1,349 $ 608 Derivative liabilities: Option contracts $ 1,779 $ 214 The increase in unrealized gains (losses) recognized in accumulated other comprehensive income (loss) on derivatives, is as follows: December 31, 2014 2015 Derivatives designated as cash flow hedging instruments: Option contracts $ (62 ) $ 206 The net losses reclassified from accumulated other comprehensive income (loss) to the operating expenses are as follows: December 31, 2014 2015 Derivatives designated as cash flow hedging instruments: Option contracts $ (3 ) $ (41 ) Forward contracts (18 ) (137 ) $ (21 ) $ (178 ) |
LONG TERM DEBT
LONG TERM DEBT | 12 Months Ended |
Dec. 31, 2015 | |
LONG TERM DEBT [Abstract] | |
LONG TERM DEBT | NOTE 8: LONG TERM DEBT 1. On May 17, 2012 10,000 The Agreements contain various provisions including a pledge of all the Company's assets under a floating charge, compliance with certain financial covenants, restrictive covenants, including negative pledges, and other commitments, typically contained in facility agreements of this type. On April 1, 2015, the Company entered into an amended financial covenants agreement with one of the Banks, effective as of December 31, 2014, relating to both the long-term debt and the swap agreement in connection with the convertible debt (see Note 9). The Company was in compliance with all covenants as of December 31, 2015. The loans are repaid in 16 and 20 equal quarterly installments, respectively, starting July 17, 2012 4.35 4.64 2. On November 30, 2015, concurrently with the closing of the Undertone acquisition, Interactive Holding Corp. entered into a new secured credit agreement for $ 50,000 quarterly 625 1,250 35,000 LIBOR 5.5 1,399 Under the Undertone credit facility, Undertone is required to maintain financial covenants as of the end of each fiscal quarter as defined in the agreement. 3. On November 22, 2015, the Company borrowed $ 19,900 13,000 Libor 1.2 As of December 31, 2015, the aggregate principal annual maturities according to the loan agreement are as follows: Repayment amount 2016 $ 17,050 2017 4,150 2018 5,000 2019 38,750 Total principal payments 64,950 Less: unamortized original issue discount (1,366 ) Fair value of principal payments 63,584 Less: current portion (16,664 ) Long-term debt $ 46,920 |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 12 Months Ended |
Dec. 31, 2015 | |
CONVERTIBLE DEBT [Abstract] | |
CONVERTIBLE DEBT | NOTE 9: CONVERTIBLE DEBT In September 2014, the Company completed a public offering in Israel of its Series L Convertible Bonds (the "Bonds"), with an aggregate par value of approximately ILS 143,500 36,772 96.5 5 741 37,852 March 31, 2016 The Bonds are convertible, at the election of each holder, into the Company's ordinary shares at a conversion price of ILS 33.605 8.61 The Company may redeem the Bonds upon delisting of the Bonds from the TASE, subject to certain conditions. In addition, the Company may redeem the Bonds or any part thereof at its discretion after December 1, 2014, subject to certain conditions. The Company elected to apply the fair value option in accordance with ASC 825, “Financial Instruments”, to the Bonds and therefore all unrealized gains and losses are recognized in earnings. As of December 31, 2015, the fair value of the Bonds, based on its quoted price at the TASE and including accrued interest, was $ 35,926 The changes of the long-term convertible debt in 2014 and 2015 were as follows: Balance as of January 1, 2014 $ - Issuance of convertible debt 37,852 Accrued interest 466 Change in fair value (2,566 ) Balance as of December 31, 2014 35,752 Accrued interest 1,823 Change in fair value 175 Payment of interest (1,824 ) Balance as of December 31, 2015* $ 35,926 * include accrued interest of 463 In order to mitigate the potential adverse impact of the fluctuations in the ILS-USD exchange rate, the Company has entered into a cross currency interest rate swap agreement (the “Swap”) in order to hedge the future interest and principal payments, which are all denominated in ILS. As of December 31, 2015, the Company satisfies all of the financial covenants associated with both, the Bonds and the SWAP. As of December 31, 2015, the aggregate principal annual payments of the bonds are as follows: Repayment 2016 $ 7,354 2017 7,355 2018 7,354 2019 7,355 2020 7,354 $ 36,772 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 10: COMMITMENTS AND CONTINGENT LIABILITIES a. Office lease commitments In January 2014, the Company entered into a lease agreement for new corporate offices in Holon, Israel. The lease expires in January 2025, with an option by the Company to extend for two 24 Certain facilities of the Company are rented under operating lease agreements, which expire on various dates, the latest of which is in 2022. The Company recognizes rent expense under such arrangements on a straight-line basis. Furthermore, the Company leases motor vehicles for employees under operating lease agreements. Aggregate minimum lease commitments under the aforesaid non-cancelable operating leases as of December 31, 2015 are as follows: 2016 $ 5,953 2017 5,957 2018 5,827 2019 3,546 Thereafter 17,349 $ 38,632 Facilities leasing expenses from continued operations in the years 2013, 2014 and 2015 were 940 1,166 1,710 respectively. Car leases expenses continued operations in the years 2013, 2014 and 2015 were 545 1,163 1,046 . b. Contingent purchase obligation On November 30, 2012, the Company completed the acquisition of 100 7,500 2,500 5 ,000 . In April 2015, pursuant to the Share Purchase Agreement, an arbitration process with respect to this claim was commenced in Israel. c. Legal Matters 1. In November 2013, MyMail, Ltd. (“MyMail”), a non-practicing entity, filed a lawsuit in the Eastern District of Texas alleging that ClientConnect's toolbar technology infringes one of its U.S. patents issued in September 2012, and demanding an injunction and monetary payments. In November 2014, the Company filed a Petition for Inter Partes Review ("IPR") in the United States Patent & Trademark Office, challenging the validity of the asserted claims of the patent in question. On December 31, 2014, MyMail filed an unopposed motion to stay the district court case pending resolution of the Petition for IPR. On January 9, 2015, the court granted a stay pending resolution of the Petition for IPR. On January 5, 2016, the parties have entered into a settlement agreement regarding, inter alia, the patent claim between the parties. The case was dismissed on January 8, 2016. Conduit signed an agreement with Perion, pursuant to which, Conduit will reimburse Perion for 50 550 2. On December 22, 2015, Adtile Technologies Inc. filed a lawsuit against Perion and Intercept Interactive Inc. (“Intercept”), a subsidiary of Interactive Holding Corp., in the United States District Court for the District of Delaware. The lawsuit alleges various causes of action against Perion and Intercept related to Intercept's alleged unauthorized use and misappropriation of Adtile's proprietary information and trade secrets. Adtile is seeking injunctive relief and, unspecified monetary damages. The Company is unable to predict the outcome or range of possible loss at this stage and believes it has strong defenses against this lawsuit and intends to defend against it vigorously. From time to time, the Company is party to other various legal proceedings, claims and litigation that arise in the normal course of business. It is the opinion of management that the ultimate outcome of these matters will not have a material adverse effect on the Company's financial position, results of operations or cash flows. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2015 | |
SHAREHOLDERS' EQUITY [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 11: SHAREHOLDERS' EQUITY a. Ordinary shares On November 18, 2013, the shareholders resolved to increase the authorized share capital of the Company to 120,000,000 0.01 b. Private placement On December 3, 2015, (the “Effective date”), the 4,436,898 10,125 pursuant to a Securities Purchase Agreement (the “SPA”) 2.282 30 According to the terms in the SPA, in the event that on September 15 2.624 1 15 (the “Share Settlement”). Under ASC 480 "Distinguish Liabilities from Equity" as the investors can't sell, dispose of or otherwise transfer, directly or indirectly, the Ordinary Shares and retain the future right for Share Settlement, it was concluded that the Share Settlement is considered legally as embedded financial instrument. In addition, according to ASC 815-40 "Contracts in Entity's Own Equity", because the only variable that can affect the potential settlement amount is the Company's share price, and since the Company has sufficient authorized and unissued shares exists at the Effective Date and as of December 31, 2015 after taking into account the maximum number of shares that could be required to be delivered during the contract period under existing commitments, the Share Settlement is classified as a shareholders' equity. On November 30, 2015, the Company 1.0 10 c. Stock Options, Restricted Stock Units and Warrants The stock-based compensation included in the operating costs and expenses for the years prior to 2014, derives from equity awards that were granted under the option plans of Conduit, the previous owner of the ClientConnect business. In 2014, following the acquisition of ClientConnect on January 2, 2014 and the conversion of all outstanding equity awards of ClientConnect employees into stock options of Perion's shares, the stock-based compensation expenses derive from both, equity awards that were granted under Conduit as well as equity awards that were granted under the Company's Equity Incentive Plan (the "Plan"). Perion's Plan was initially adopted in 2003 and had an initial term of ten years from adoption. On December 9, 2012, the Company's Board of Directors extended the term of the Plan for an additional ten years. In addition, on August 7, 2013, the Company's Board of Directors approved amendments to the Plan which include the ability to grant RSUs and restricted stock. The contractual term of the stock options is generally no more than five 1 3 As of December 31, 2015, there were 5,545,844 The following table summarizes the activities for the Company's service-based Weighted average Number of options Exercise price Remaining term (in years) Aggregate intrinsic Outstanding at January 1, 2015 3,339,412 $ 8.85 2.93 $ 348 Granted 3,859,500 $ 3.12 Exercised (6,923 ) $ 2.00 Cancelled (1,724,652 ) $ 7.33 Outstanding at December 31, 2015 5,467,337 $ 5.30 3.17 $ 1,709 Exercisable at December 31, 2015 1,136,243 $ 7.66 1.93 $ 131 Vested and expected to vest at December 31, 2015 4,236,510 $ 5.80 3.02 $ 1,319 The weighted-average grant-date fair 3.00 4.49 1.14 . The aggregate intrinsic value of the outstanding stock options at December 31, 2015, represents the intrinsic value of 3,050,761 2,416,576 zero 11,218 9 The number of options expected to vest reflect an estimated forfeiture rate. The following table summarizes the activities for the Company's performance-based stock options for the year ended December 31, 2015: Weighted average Number of Performance based Exercise price Remaining contractual term (in Aggregate intrinsic value Outstanding at January 1, 2015 - - - - Granted 3,950,000 $ 2.37 Exercised - - - Cancelled (400,000 ) 2.28 Outstanding at December 31, 2015 3,550,000 $ 2.38 4.93 $ 4,793 Exercisable at December 31, 2015 - - - - Vested and expected to vest at December 31, 2015 2,676,859 $ 2.38 4.93 $ 3,550 The performance based options vesting is contingent upon achieving specific financial targets of the Company, set at the grant date. The weighted-average grant-date fair value of performance-based options granted during the year ended December 31, 2015, was $ 0.90 The aggregate intrinsic value of the outstanding performance-based options at 2015, represents the intrinsic value of 3,550,000 The number of options expected to vest reflect an estimated forfeiture rate. The following table summarizes additional information regarding Outstanding Exercisable Range of exercise price Number of options Weighted average contractual life ( Weighted average exercise Number of options Weighted average contractual life Weighted average exercise $ 0.34 2.00 95,261 2.93 $ 1.89 74,044 2.90 $ 1.86 $ 2.11 2.52 4,455,000 4.68 $ 2.28 - - - $ 3.27 3.77 2,505,500 3.41 $ 3.53 - - - $ 4.04 6.93 484,229 2.27 $ 5.14 414,283 1.73 $ 5.12 $ 7.11 9.93 334,443 1.17 $ 8.18 261,441 0.82 $ 8.14 $ 10.06 11.94 1,004,779 2.52 $ 11.26 301,061 2.74 $ 10.75 $ 12.56 13.54 138,125 3.62 $ 12.66 85,414 2.59 $ 12.66 9,017,337 3.83 $ 4.15 1,136,243 1.93 $ 7.66 The following table summarizes the activities for the Company's RSUs for the year ended December 31, Number of RSUs Weighted average grant date fair value Unvested at January 1, 2015 1,397,300 $ 12.45 Granted - - Vested (366,398 ) $ 12.39 Cancelled (338,582 ) $ 12.11 Unvested at December 31, 2015 692,320 $ 12.64 Expected to vest after December 31, 2015 605,061 $ 12.64 RSUs expected to vest after December 31, 2015 reflect an estimated forfeiture rate. The Company recognized share-based compensation expenses related to its in the consolidated statements of operations as follows: Year ended December 31, 2013 2014 2015 Cost of revenues $ - $ 249 $ 247 Research and development 1,077 2,435 1,036 Selling and marketing 690 2,944 1,856 General and administrative 8,638 9,297 4,290 Restructuring costs - 220 - Total $ 10,405 $ 15,145 $ 7,429 Share-based compensation in discontinued operations $ 2,815 $ - $ - As of December 31, 2015, there was $ 6,597 244 2,288 1.16 , 2.48 1.52 . To the extent the actual forfeiture rate is different from what has been estimated, stock-based compensation related to these awards will differ from the initial expectations. c. In connection with the termination of one of the Company officers' employment in 2014, the Company reached a settlement under which it accelerates 479,980 4,800 . d. In connection with the restructuring in November 2014 (see Note 15), the Company accelerated 33,333 220 n restructuring charges . e. I n connection with the Undertone acquisition the Company granted warrants to purchase 200,000 3.03 1.23 Total expense incurred in 2015 was $ 2.0 |
FINANCIAL INCOME (EXPENSE), NET
FINANCIAL INCOME (EXPENSE), NET | 12 Months Ended |
Dec. 31, 2015 | |
FINANCIAL INCOME (EXPENSE), NET [Abstract] | |
FINANCIAL INCOME (EXPENSE), NET | NOTE 12: FINANCIAL INCOME (EXPENSE), NET Year ended December 31, 2013 2014 2015 Financial income: Interest income $ 1,569 $ 93 $ 551 Foreign currency translation gains, net 1,245 - 572 Change in fair value of convertible debt - 2,566 - Change in fair value of SWAP - - 225 $ 2,814 $ 2,659 $ 1,348 Financial expense: Foreign currency translation losses, net $ - $ (2,669 ) $ - Interest and change in fair value of payment obligation related to acquisitions - (1,067 ) (489 ) Issuance costs of convertible debt - (741 ) - Interest expense on debts - (733 ) (2,313 ) Change in fair value of convertible debt - - (175 ) Bank charges and other (32 ) (337 ) (310 ) $ (32 ) $ (5,547 ) $ (3,287 ) Financial income (expense), net $ 2,782 $ (2,888 ) $ (1,939 ) |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | NOTE 13: INCOME TAXES a. Income (Loss) before taxes on income Income (Loss) before taxes on income is comprised as follows: Year ended December 31 2013 2014 2015 Domestic $ 83,388 $ 55,272 $ (43,711 ) Foreign 1,636 (2,865 ) (24,249 ) Total $ 85,024 $ 52,407 $ (67,960 ) b. Taxes on income Taxes on income are comprised as follows: Year ended December 31 2013 2014 2015 Current taxes $ 10,778 $ 23,432 $ 9,670 Deferred tax benefit - (13,851 ) (8,973 ) Taxes in respect of previous years * 11,838 - - Total $ 22,616 $ 9,581 $ 697 * The year 2013 include non-recurring tax expenses in respect of the release of Conduit's trapped earnings (see Note 13 f below). Taxes on income by jurisdiction were as follows: Year ended December 31 2013 2014 2015 Domestic $ 22,616 $ 11,716 $ 8,830 Foreign - (2,135 ) (8,133 ) Total $ 22,616 $ 9,581 $ 697 Domestic: Current taxes $ 10,778 $ 23,272 $ 8,943 Deferred tax benefit - (11,556 ) (113 ) Taxes in respect of previous years 11,838 - - Total - Domestic $ 22,616 $ 11,716 $ 8,830 Foreign: Current taxes $ - $ 160 $ 727 Deferred tax benefit - (2,295 ) (8,860 ) Total - Foreign $ - $ (2,135 ) $ (8,133 ) Total income tax expense $ 22,616 $ 9,581 $ 697 c. Deferred Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of the Company's deferred tax assets and liabilities are as follows: December 31, 2014 2015 Deferred tax assets: Net operating loss carry forwards $ 5,699 $ 10,280 Research and development 4,463 4,008 Other temporary differences mainly relating to reserve and allowances 1,929 4,058 Deferred tax assets, before valuation allowance 12,091 18,346 Valuation allowance 3,985 4,212 Total deferred tax assets, net $ 8,106 $ 14,134 Deferred tax liabilities: Intangible assets $ (3,189 ) $ (17,971 ) Property and equipment, net (331 ) (3,275 ) Total deferred tax liabilities $ (3,520 ) $ (21,246 ) Total deferred tax asset (liability), net $ 4,586 $ (7,112 ) Domestic: Long term deferred tax asset, net $ 4,893 $ 5,006 Long term deferred tax liability - (261 ) $ 4,893 $ 4,745 Foreign: Long term deferred tax asset, net $ 24 $ 7,338 Long term deferred tax liability (331 ) (19,195 ) $ (307 ) $ (11,857 ) Total deferred tax asset (liability), net $ 4,586 $ (7,112 ) The net change in total valuation allowance in 2015 is immaterial. d. Reconciliation of the Company's effective tax rate to the statutory tax rate in Israel A reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company, and the actual tax expense as reported in the statement of income is as follows: Year ended December 31 2013 2014 2015 Income (Loss) before taxes on income $ 85,024 $ 52,407 $ (67,960 ) Statutory tax rate in Israel 25.0 % 26.5 % 26.5 % Theoretical tax expense (income) $ 21,256 $ 13,888 $ (18,009 ) Increase (decrease) in tax expenses resulting from: "Preferred Enterprise" benefits * (10,495 ) (10,644 ) (5,654 ) Non-deductible expenses including impairment charges 1,971 4,059 26,702 Taxes in respect to release of "trapped earnings" 11,838 - - Deferred taxes on losses and other temporary differences, for which a valuation allowance was provided, net - 1,962 (3,426 ) Tax adjustment in respect of different tax rate of foreign subsidiaries - (461 ) 1,185 Other (1,954 ) 777 (101 ) Taxes on income $ 22,616 $ 9,581 $ 697 * Benefit per ordinary share from "Preferred Enterprise" status: Basic $ 0.19 $ 0.16 $ 0.08 Diluted $ 0.19 $ 0.15 $ 0.08 e. Income tax rates Taxable income of Israeli companies is generally subject to corporate tax at the rate of 25% for the 2013 tax year, and 26.5% for the 2014 and 2015 tax years. The corporate tax rate is scheduled to return to a rate of 25% for future tax years. However, the effective tax rate payable by a company that derives income from a Preferred Enterprise (as further discussed below) may be considerably lower. Non-Israeli subsidiaries are taxed according to the tax laws in their respective countries of residence. Taxes were not provided for undistributed earnings of the Company's foreign subsidiaries. Currently the Company does not intend to distribute any amounts of its undistributed earnings as dividend. The Company intends to reinvest these earnings indefinitely in the foreign subsidiaries. Accordingly, no deferred income taxes have been provided. If these earnings were distributed to Israel in the form of dividends or otherwise, the Company would be subject to additional Israeli income taxes (subject to an adjustment for foreign tax credits) and foreign withholding taxes. The amount of undistributed earnings of foreign subsidiaries is immaterial. f. Law for the Encouragement of Capital Investments, 1959 T he Law for Encouragement of Capital Investments, 1959 (the "Investment Law") provides tax benefits for income of Israeli companies meeting certain requirements and criteria. The Investment Law has undergone certain amendments and reforms in recent years. The Israeli parliament enacted a reform to the Investment Law, effective January 2011. According to the reform, a flat rate tax applies to companies eligible for the "Preferred Enterprise" status. In order to be eligible for Preferred Enterprise status, a company must meet minimum requirements to establish that it contributes to the country's economic growth and is a competitive factor for the gross domestic product. The Company's “Preferred Enterprise” Benefits granted to a Preferred Enterprise include reduced tax rates. In peripheral regions (Development Area A) the reduced tax rate was 7 9 9 9 12.5 16 16 16 A distribution from a Preferred Enterprise out of the "Preferred Income" would be subject to 15 20 In January 2014 and as part of ClientConnect's spin-off that occurred on December 31, 2013, Conduit received a ruling from the Israel Tax Authority (the “Spin-off Ruling”), pursuant to which Conduit released an additional amount of $ 270,840 11,838 g. Uncertain tax position The following table summarizes the activity related to the Company's gross unrecognized tax benefits from January 1, 2015 to December 31, 2015: 2015 Balance at January 1 $ 724 Decrease related to prior year tax positions (22 ) Increase related to current year tax positions 1,665 Balance at December 31 $ 2,367 Accrued interest at December 31, 2014 and 2015 is immaterial. Perion does not expect uncertain tax positions to change significantly over the next 12 months, except in the case of settlements with tax authorities, the likelihood and timing of which is difficult to estimate. The Company believes that it has adequately provided for any reasonably foreseeable outcome related to tax audits and settlements. The final tax outcome of its tax audits could be different from that which is reflected in the Company's income tax provisions and accruals. Such differences could have a material effect on the Company's income tax provision and net income in the period in which such determination is made. The Company's tax assessments in Israel and the U.S. for tax years prior to 2011 are considered final. h. Tax loss carry-forwards As of December 31, 2015, the Company's 16,000 Net operating losses in the U.S. may be carried forward through periods which will expire in the years starting from 2024 up to 2034. Utilization of U.S. net operating losses may be subject to substantial annual limitation due to the "change in ownership" provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization. As of December 31, 2015, Perion network Ltd. has net operating loss carry-forwards, in Israel, in the amount of $ 14,000 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2015 | |
EARNINGS PER SHARE [Abstract] | |
EARNINGS PER SHARE | NOTE 14: EARNINGS PER SHARE The table below presents the computation of basic and diluted net earnings per common share: Year ended December 31 2013 2014 2015 Numerator: Net income (Loss) attributable to ordinary shares - basic $ 62,408 $ 42,826 $ (68,657 ) Gains related to convertible debt, net - (2,100 ) - Net income (Loss) from continuing operations - diluted $ 62,408 $ 40,726 $ ( 68,657 ) Net loss from discontinued operations – basic and diluted $ ( 33,795 ) $ - $ - Denominator: Weighted average number of ordinary shares outstanding during the year 53,910,741 68,213,209 71,300,432 Weighted average effect of dilutive securities: Assumed conversion of convertible debt - 1,090,906 - Shares to be issued in connection with acquisition - 52,664 - Employee stock options and restricted stock units 926,566 970,632 - Diluted number of ordinary shares outstanding - Continuing operations 54,837,307 70,327,411 71,300,432 Diluted number of ordinary shares outstanding - Discontinued operations 54,837,307 - - Basic net earnings (loss) per ordinary share Continuing operations $ 1.16 $ 0.63 $ (0.96 ) Discontinued operations $ ( 0.63 ) $ - $ - Net income $ 0.53 $ 0.63 $ ( 0.96 ) Diluted net earnings (loss) per ordinary share Continuing operations $ 1.14 $ 0.58 $ ( 0.96 ) Discontinued operations $ ( 0.62 ) $ - $ - Net income $ 0.52 $ 0.58 $ ( 0.96 ) Ordinary shares equivalents excluded because their effect would have been anti-dilutive 2,778,618 3,766,080 14,179,439 |
RESTRUCTURING COSTS
RESTRUCTURING COSTS | 12 Months Ended |
Dec. 31, 2015 | |
RESTRUCTURING COSTS [Abstract] | |
RESTRUCTURING COSTS | NOTE 15: RESTRUCTURING COSTS In November 2014, the Company initiated a restructuring plan of its search monetization business, mainly to reduce workforce,close certain facilities, as well as other cost saving measures. Pursuant to this restructuring plan, in 2014 the Company has incurred cumulative charges of $3,981 as follows: $ Payroll and s hare-based compensation expenses 1,993 Lease facilities and related expenses 1,248 Property and equipment impairment 632 Other 108 Total restructuring costs 3,981 In October 2015, the Company initiated a restructuring plan of one of its consumer app development project, mainly to reduce workforce, close certain facilities, as well as other cost saving measures. Pursuant to this restructuring plan, in 2015 the Company has incurred cumulative charges of $1,052 as follows: $ Severance and Payroll related 1,022 Property and equipment impairment 159 Write-off of prepaid royalties 219 Other (348 ) Total restructuring costs 1,052 As of December 31, 2014 and 2015 the restructuring accrual amounted to $ 2,257 1,756 The additions and adjustments to the accrued restructuring liability for the year ended December 31, 2015 are as follows: December 31, 2014 Additional costs Cash payments Adjustments December 31, 2015 2014 Restructuring Plan: Severance and payroll related $ 1,027 $ - $ (1,027 ) $ - $ - Rent and related expenses 1,155 - (807 ) (348 ) - Other charges 75 - (75 ) - - 2015 Restructuring Plan: Severance and Payroll related - 1,022 (270 ) - 752 Restructuring accrual assumed upon acquisition - - - 1,004 1,004 $ 2,257 $ 1,022 $ (2,179 ) $ 656 $ 1,756 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 16: RELATED PARTY TRANSACTIONS a. ClientConnect and Conduit entered into agreements pursuant to which the parties agreed to provide and receive certain administrative and business support services and systems, including data services, information technology, information security and management information systems, for consideration at market terms, from each other. In September 2014, following the Company's moving of its offices to Holon, the above mentioned services are no longer being provided. During 2014, ClientConnect received $ 1,645 142 b. In connection with a commercial agreement signed between Perion and Conduit in August 2013, as described in note 2(i) of Perion's 2013 consolidated financial statements included on Form 20-F filed with the SEC on April 10, 2014 18,271 c. As a condition precedent to the closing of ClientConnect Acquisition on January 2, 2014, Conduit and ClientConnect entered into ancillary agreements. As a result of the ClientConnect Acquisition, two d. On December 31, 2013, Conduit and ClientConnect entered into the Working Capital Financing Agreement pursuant to which Conduit agreed to make available to ClientConnect a credit line of up to $ 20,000 3 14,750 April 2014 117 |
MAJOR CUSTOMERS
MAJOR CUSTOMERS | 12 Months Ended |
Dec. 31, 2015 | |
MAJOR CUSTOMERS [Abstract] | |
MAJOR CUSTOMERS | NOTE 17: MAJOR CUSTOMERS A substantial portion of the Company's revenue is derived from search fees and online advertising, the market for which is highly competitive and rapidly changing. Significant changes in this industry or in customer buying behavior could adversely affect the Company's operating results. The following table sets forth the customers that represented 10% or more of the Company's total revenues in each of the years presented below: Year ended December 31, 2013 2014 2015 Customer A 63 % 74 % 81 % Customer B 22 % * * * less than 10% The following is a summary of customers that accounted for at least 10% of the total accounts receivable as of December 31, 2014 and 2015: December 31 2014 2015 Customer A 65 % 23 % Customer B * * * less than 10% |
GEOGRAPHIC INFORMATION
GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
GEOGRAPHIC INFORMATION [Abstract] | |
GEOGRAPHIC INFORMATION | NOTE 18: GEOGRAPHIC INFORMATION The Company operates as one The following table presents the total revenues for the years ended December 31, 2013, 2014 and 2015, allocated to the geographic areas in which it was generated: Year ended December 31 2013 2014 2015 North America (mainly U.S.) $ 239,884 $ 292,409 $ 173,424 Europe 69,833 69,281 40,612 Other 15,791 27,041 6,914 $ 325,508 $ 388,731 $ 220,950 The total revenues are attributed to geographic areas based on the location of the end-users. The following table presents the locations of the Company's property and equipment as of December 31, 2014 and 2015: December 31, 2014 2015 Israel $ 9,952 $ 9,161 U.S. 1,460 3,071 Europe 768 482 $ 12,180 $ 12,714 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | NOTE 19: SUBSEQUENT EVENTS On March 4, 2016, Interactive Holding Corp. entered into an amendment to the secured credit agreement, adding a $ 10,000 3,000 3,000 On March 17, 2016, the Company decided to discontinue the operations of the engagement product of Growmobile business and to redeploy certain parts of the mobile marketing platform so that it will no longer function as an independent business. The company intends to strengthen the social platform, both as an independent service provider and servicing the Undertone high-impact offering with social distribution. |
SIGNIFICANT ACCOUNTING POLICI28
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Basis of consolidation | Basis of consolidation The consolidated financial statements include the accounts of Perion and its subsidiaries. All Intercompany balances and transactions have been eliminated. Commencing in 2014, the acquisition of ClientConnect Ltd. (“ClientConnect”) is reflected in the Company's financial statements as a reverse acquisition of all of Perion's outstanding shares and options by ClientConnect, in accordance with Accounting Standards Codification (“ASC”) 805, "Business Combinations". Under ASC 805, ClientConnect is considered as the acquirer and the Company is viewed as the acquiree and therefore, the comparative amounts as included in these financial statements, namely, the related consolidated statements of income, comprehensive income, changes in shareholders' equity and cash flows for the year ended December 31, 2013, represent ClientConnect's amounts and results for those periods. |
Use of estimates | Use of estimates The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, the Company's management evaluates its estimates, including those related to accounts receivable, intangible assets and goodwill, fair values and useful lives of intangible assets, fair values of stock-based awards, allowance for doubtful accounts, realizability of deferred tax assets, income taxes, and contingent liabilities, among others. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of the Company's assets and liabilities. |
Financial statements in U.S. dollars | Financial statements in U.S. dollars The reporting currency of the Company is the U.S. dollar (“USD”). Major parts of the Company's operations are carried out by the Company and its subsidiaries in the United States and Israel. The functional currency of these entities is the USD. Accordingly, monetary accounts maintained in currencies other than the USD are remeasured into USD, in accordance with ASC 830, "Foreign Currency Matters". All transaction gains and losses resulting from the remeasurement of the monetary balance sheet items are reflected in the statement of income as financial income or expenses, as appropriate. Management believes that the USD is the currency of the primary economic environment in which the Company operates. The financial statements of other subsidiaries, whose functional currency is determined to be their local currency, have been translated into dollars. All balance sheet accounts have been translated using the exchange rates in effect at the balance sheet date. Statement of operations amounts have been translated using the average exchange rate for the applicable year. The resulting translation adjustments are reported as an accumulated other comprehensive income (loss) component of shareholders' equity. |
Cash and cash equivalents and Short-term deposits | Cash and cash equivalents and short-term deposits The Company considers all short-term, highly liquid and unrestricted cash balances, with stated maturities of three months or less from date of purchase, as cash equivalents. Short-term deposits are bank deposits with maturities of more than three months, but less than one year. The short-term deposits as of December 31, 2014 and 2015 are denominated in USD and bear interest at an average annual rate of 0.49 0.72 |
Restricted cash | Restricted cash Restricted cash is comprised primarily of security deposits that are held to secure the Company's hedging activity, lease obligations and certain letter of credits associated with lease obligation. Restricted cash in the amount of $ 696 646 1,182 |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts Trade accounts receivables are stated at realizable value, net of an allowance for doubtful accounts. The Company evaluating its outstanding accounts receivable and establishes an allowance for doubtful accounts based on information available on their credit condition, current aging, and historical experience. These allowances are reevaluated and adjusted periodically as additional information is available. |
Property and equipment | Property and equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following annual rates: % Computers and peripheral equipment 33 Office furniture and equipment 6 15 Leasehold improvements are amortized using the straight-line method over the term of the lease or the estimated useful life of the improvements, whichever is shorter. |
Internally Developed Software | Internally Developed Software The Company capitalizes certain internal and external software development costs, consisting primarily of direct labor associated with creating the internally developed software. Software development projects generally include three stages: the preliminary project stage (all costs expensed as incurred), the application development stage (costs are capitalized) and the post implementation/operation stage (all costs expensed as incurred). The costs capitalized in the application development stage primarily include the costs of designing the application, coding and testing of the system. Capitalized costs are amortized using the straight line method over the estimated useful life of the software, generally 3 4,192 187 245 3,390 557 are |
Impairment of long-lived assets and intangible assets subject to amortization | Impairment of long-lived assets and intangible assets subject to amortization Property and equipment and intangible assets subject to amortization are reviewed for impairment in accordance with ASC 360, "Accounting for the Impairment or Disposal of Long-Lived Assets", whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The recoverability of these assets is measured by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If property and equipment and intangible assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value. In determining the fair values of long-lived assets for purpose of measuring impairment, the Company's assumptions include those that market participants will consider in valuations of similar assets. In 2014 and 2015, the Company recorded impairment charges of $ 19,941 8,471 ecorded, an impairment of $ 632 159 |
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill reflects the excess of the purchase price of business acquired over the fair value of net assets acquired. Goodwill is not amortized but instead is tested for impairment, in accordance with ASC 350, “Intangibles – Goodwill and Other”, at least annually at December 31 each year, or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. The first step, identifying a potential impairment, compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds its fair value, the second step would need to be performed; otherwise, no further step is required. The second step, measuring the impairment loss, compares the implied fair value of the goodwill with the carrying amount of the goodwill. Any excess of the carrying amount over the applied fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. The Company determined that certain indicators of potential impairment existed during 2015, which triggered goodwill impairment analysis for its reporting units. These indicators included a decrease in the Company's share price and lower than expected sales and cash flow as well as management decisions to abandon certain R&D projects. Based on the goodwill assessment for the search monetization reporting unit and Growmobile reporting unit, the Company determined that the carrying amount of the reporting units exceeds their fair value and recorded an impairment of $ 87,043 The majority of the inputs used in the discounted cash flow model to determine the fair value of the reporting units are unobservable and thus are considered to be Level 3 inputs. Intangible assets that are not considered to have an indefinite useful life are amortized over their estimated useful lives. The acquired customer arrangements, technology and logo are amortized over their estimated useful lives in proportion to the economic benefits realized. This accounting policy results in accelerated amortization of such intangible assets as compared to the straight-line method. |
Deferred Financing Costs | Deferred Financing Costs Direct and incremental costs related to the issuance of debt are capitalized as deferred financing costs and are deducted from the carrying amount of that debt in the consolidated balance sheets. The Company amortizes deferred financing costs using the effective-interest method and records such amortization as interest expense. |
Revenue recognition | Revenue recognition The Company generates revenues primarily from two major sources: Search Revenues Advertising Revenues The Company evaluates whether Search and Advertising Revenues should be presented on a gross basis, which is the amount that a customer pays for the service, or on a net basis, which is the customer payment less amounts the Company pays to suppliers. In making that evaluation, the Company considers indicators such as whether the Company is the primary obligor in the arrangement and assumes risks and rewards as a principal or an agent, including the credit risk, whether the Company has latitude in establishing prices and selects its suppliers and whether it changes the products or performs part of the service. The evaluation of these factors is subject to significant judgment and subjectivity. Generally, when the Company is primarily obligated in a transaction, is subject to risk, involved in the determination of the product or the service specifications, separately negotiates each revenue service agreement or publisher agreement and can have several additional indicators, revenue is recorded on a gross basis. The Company recognizes revenue when all four revenue recognition criteria have been met: persuasive evidence of an arrangement exists, services are rendered, the fee or price charged is fixed or determinable and collectability is reasonably assured. Deferred revenue is recorded when payments are received from customers in advance of the Company's rendering of services. |
Cost of revenues | Cost of revenues Cost of revenues consists primarily of expenses associated with the operation of the Company's data centers, including depreciation, labor, energy, and bandwidth costs, amortization of acquisition-related intangible assets, as well as content acquisition costs. The direct cost relating to search and advertising revenues is immaterial. |
Customer acquisition and media buy costs | Customer acquisition and media buy costs Customer acquisition and media buy costs consist of amounts paid to publishers and app developers who distribute the Company's applications and other products and the costs of advertising inventory incurred to deliver ads. These amounts are primarily based on fixed fee and revenue share arrangements with minimum guaranty and are charged as incurred. |
Research and development costs | Research and development costs Research and development costs are charged to the statement of income as incurred, except for certain costs relating to internally developed software, which are capitalized and amortized on a straight line basis over their estimated useful life once the asset is placed in service. |
Income taxes | Income taxes The Company accounts for income taxes in accordance with ASC 740, "Income Taxes". This Statement prescribes the use of the liability method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. To the extent necessary, the Company provides a valuation allowance, to reduce deferred tax assets to their estimated realizable value. The Company accounts for uncertain tax positions in accordance with ASC 740, which contains a two-step approach for recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company accrued interest and penalties related to unrecognized tax benefits in its financial expenses. |
Severance pay | Severance pay With regards to employees in Israel, where there is a mandated severance liability, most of the Company's agreements with employees are in accordance with section 14 of the Severance Pay Law, 1963 (“Section 14”), where the Company's contributions for severance pay shall be instead of its severance liability. Upon contribution based on the full amount of the employee's monthly salary, and release of the policy to the employee, no additional severance payments shall be made by the Company to the employee. Therefore, the related obligation and amounts deposited on behalf of such obligation are not stated on the balance sheet, as the Company is legally released from obligation to employees once the deposit amounts have been paid. The Company's liability for severance pay to employees not under Section 14, is calculated pursuant to Israel's Severance Pay Law based on the most recent monthly salaries of such employees, multiplied by the number of years of their employment, or a portion thereof, as of the balance sheet date. This liability is fully provided for by monthly deposits in insurance policies and by an accrual. The deposited funds include profits and losses accumulated up to the balance sheet date and they may be withdrawn only upon the fulfillment of the obligation pursuant to Israel's Severance Pay Law or labor agreements. Severance expenses from continuing operations for the years ended December 31, 2013, 2014 and 2015 amounted to $ 1,296 3,330 2,310 1,080 |
Employee benefit plan | Employee benefit plan The Company's U.S. operations maintain a retirement plan (the “U.S. Plan”) that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Participants in the U.S. Plan may elect to defer a portion of their pre-tax earnings, up to the Internal Revenue Service annual contribution limit. The Company matches 100 3 50 2 Total employer 401(k) contributions for the years ended December 31, 2013, 2014 and 2015 were $ 61 116 247 |
Comprehensive income (loss) | Comprehensive income (loss) The Company accounts for comprehensive income (loss) in accordance with ASC 220, "Comprehensive Income". This statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income generally represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its other comprehensive income (loss) relates to hedging derivative instruments and foreign currency translation. |
Net earnings per share | Net earnings per share In accordance with ASC 260, "Earnings Per Share", basic net earnings per share ("Basic EPS") is computed by dividing net earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net earnings per share ("Diluted EPS") reflects the potential dilution that could occur if stock options and other commitments to issue ordinary shares were exercised or equity awards vested, resulting in the issuance of ordinary shares that could share in the net earnings of the Company. 2,778,618 3,766,080 14,179,439 |
Concentrations of credit risk | Concentrations of credit risk Financial instruments that potentially subject the Company to a concentration of credit risk, consist primarily of cash and cash equivalents, bank deposits, restricted cash and accounts receivable. The majority of the Company's cash and cash equivalents, bank deposits and restricted cash are invested in USD instruments with major banks in the U.S. and Israel. Deposits in the U.S. may be in excess of insured limits and are not insured in other jurisdictions. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal risk. The Company's major customers are financially sound, and the Company believes low credit risk is associated with these customers. To date, the Company has not experienced any material bad debt losses. Total expenses for doubtful debts during 2013, 2014 and 2015 amounted to $ 0 1,035 104 |
Stock-based compensation | Stock-based compensation The Company accounts for stock-based compensation under ASC 718, "Compensation - Stock Compensation", which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to employees and directors. ASC 718 requires companies to estimate the fair value of equity-based awards on the date of grant, using an option-pricing model. The value of the portion of the award that is ultimately expected to vest, is recognized as an expense over the requisite service periods in the Company's consolidated statement of income. ASC The Company recognizes compensation expenses for the value of its awards, which have graded vesting based on service conditions, using the straight line method, over the requisite service period of each of the awards, net of estimated forfeitures. Estimated forfeitures are based on actual historical pre-vesting forfeitures. For performance-based stock units, the Company recognizes compensation expenses for the value of such awards, if and when the Company concludes that it is probable that a performance condition will be achieved based on the accelerated attribution method over the requisite service period. The Company should reassess the probability of vesting at each reporting period for awards with performance conditions and adjust compensation cost based on its probability assessment. Prior to 2014 and the acquisition of Perion, ClientConnect used the Black-Scholes-Merton option pricing model to determine the fair value of its stock-based awards. Following Perion's acquisition on January 2, 2014, the Company estimates the fair value of its new stock-based awards using the Binomial option-pricing model. The change from the Black-Scholes-Merton to the Binomial option-pricing model is considered a change in accounting estimate and its impact on the estimated fair value of the Company's stock-based awards is minimal . The following table presents the various assumptions used to estimate the fair value of the Company's stock-based awards granted to employees and directors in the periods presented: Year ended December 31 2013 2014 2015 Risk-free interest rate 0.93 1.91 % 0.10 1.72 % 0.17 1.76 % Expected volatility 50 % 44.44 51.62 % 43.49 50.31 % Expected term (years) 6.25 - - Early exercise factor - 100 256 % 160 210 % Forfeiture rate post vesting - 0 15 % 0 18 % Dividend yield 0 % 0 % 0 % The stock-based awards prior to 2014 were granted by Conduit Ltd. (“Conduit”), the previous owner of the ClientConnect business, which was not a publicly traded company and therefore, the expected volatility of grants in those periods was calculated based on certain peer companies that Conduit considered to be comparable. Starting in 2014, the expected volatility is calculated based on the actual historical stock price movements of the Company's stock. The expected option term represents the period that the Company's stock options are expected to be outstanding. Prior to 2014, the expected option term for share-option awards which were at the money when granted has been determined by Conduit based on the simplified method in accordance with Staff Accounting Bulletin No. 110, as adequate historical experience was not available to provide a reasonable estimate. For share-option awards which were in the money when granted, Conduit used an expected term which it believed to be appropriate under these circumstances. Such estimate was not materially different than determining the expected term based on a lattice model, and then use it as an input to the Black-Scholes-Merton option pricing model. Starting in 2014, the early exercise factor and the forfeiture rate post-vesting are calculated based on the Company's estimated early exercise and post-vesting forfeiture multiples, which are based on comparable companies and on actual historical data. The risk-free interest rate is based on the yield from U.S. Treasury zero-coupon bonds, with a term which is equivalent to the expected term of the stock-based awards. The dividend yield is based on the current decision of the Company's management not to distribute any dividends. The fair value of restricted stock units (“RSU”) is based on the market value of the underlying shares on the date of grant. |
Derivative instruments | Derivative instruments The Company accounts for derivatives and hedging based on ASC 815, "Derivatives and Hedging", which requires recognizing all derivatives on the balance sheet at fair value. If the derivatives meet the definition of a cash flow hedge and are so designated, depending on the nature of the hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period, or periods, during which the hedged transaction affects earnings. The ineffective portion of a derivative's change in fair value, if any, is recognized in earnings, as well as gains and losses from a derivative's change in fair value that are not designated as hedges are recognized in earnings immediately. Starting 2014, in order to mitigate the potential adverse impact on cash flows resulting from fluctuations in the exchange rate of the new Israeli shekels (“ILS”), the Company started to hedge portions of its forecasted expenses denominated in ILS with swap and options contracts. In addition, the Company has entered into a cross currency interest rate swap agreement in order to transform cash flow in ILS into USD of interest payments and principal as derived from the Company's convertible debt conditions (see note 9). The Company does not speculate in these hedging instruments in order to profit from foreign currency exchanges, nor does it enter into trades for which there are no underlying exposures. The swap contracts were not designated as hedging instruments and therefore gains or losses resulting from the change of their fair value are recognized in "financial income, net". As of December 31, 2014 and 2015, the Company had derivative assets of $ 1,349 608 1,779 214 175 125 The notional value of the Company's derivative instruments as of December 31, 2014 and 2015, amounted to $ 43,520 57,052 |
Fair value of financial instruments | Fair value of financial instruments The carrying amounts of financial instruments carried at cost, including cash and cash equivalents, short-term deposits, restricted cash, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses and other liabilities approximate their fair value due to the short-term maturities of such instruments. The Company follows the provisions of ASC No. 820, “Fair Value Measurement” (“ASC 820”), which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining a fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability, based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect assumptions that market participants would use in pricing an asset or liability, based on the best information available under given circumstances. The hierarchy is broken down into three levels, based on the observability of inputs and assumptions, as follows: • Level 1 • Level 2 • Level 3 The following table present assets and liabilities, measured at fair value on a recurring basis, as of December 31, 2015: Fair value measurements using input type Level 1 Level 2 Level 3 Total Assets: Derivative assets $ - $ 608 $ - $ 608 Total financial assets $ - $ 608 $ - $ 608 Liabilities: Payment obligation in connection with acquisitions $ - $ - $ 49,124 $ 49,124 Derivative liabilities - 214 - 214 Convertible debt 35,463 - - 35,463 Total financial liabilities $ 35,463 $ 214 $ 49,124 $ 84,801 The following table present assets and liabilities, measured at fair value on a recurring basis, as of December 31, 2014: Fair value measurements using input type Level 1 Level 2 Level 3 Total Assets: Derivative assets $ - $ 1,349 $ - $ 1,349 Total financial assets $ - $ 1,349 $ - $ 1,349 Liabilities: Payment obligation in connection with acquisitions $ - $ - $ 13,645 $ 13,645 Derivative liabilities - 1,779 - 1,779 Convertible debt 35,752 - - 35,752 Total financial liabilities $ 35,752 $ 1,779 $ 13,645 $ 51,176 The following table summarizes the changes in the Company's liabilities, measured at fair value, using significant unobservable inputs (Level 3), during the year ended December 31, 2015: Total fair value as of January 1, 2015 $ 13,645 Accretion of contingent liability related to acquisition 311 Change in fair value of contingent consideration related to acquisition (6,564 ) Settlements (2,500 ) Fair value of payment obligation in connection with Undertone acquisition 44,023 Reclassification to accrued expenses (189 ) Changes in fair value recognized in earnings with respect to the employees of Grow Mobile 398 Total fair value as of December 31, 2015 $ 49,124 |
Treasury shares | Treasury shares In the past, the Company repurchased its ordinary shares on the open market. The Company holds those shares as treasury shares and presents their cost as a reduction of shareholders' equity. |
Business combinations | Business combinations The Company accounted for business combination in accordance with ASC 805, "Business Combinations". ASC 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date, measured at their fair values as of that date. Any excess of the fair value of net assets acquired over purchase price and any subsequent changes in estimated contingencies are to be recorded in earnings. In addition, changes in valuation allowance related to acquired deferred tax assets and in acquired income tax position are to be recognized in earnings. Acquisition related costs are expensed to the statement of income in the period incurred. |
Discontinued operations | Discontinued operations Under ASC 205, "Presentation of Financial Statements - Discontinued Operation", when a component of an entity, as defined in ASC 205, has been disposed of or is classified as held for sale, the results of its operations, including the gain or loss on its disposal are classified as discontinued operations and the assets and liabilities of such component are classified as assets and liabilities attributed to discontinued operations; that is, provided that the operations, assets and liabilities and cash flows of the component have been eliminated from the entity's consolidated operations and the entity will no longer have any significant continuing involvement in the operations of the component. Accordingly, the statements of income and statements of cash flow, related to certain business initiatives at ClientConnect prior to Perion's acquisition, are classified as discontinued operations for the year ended December 31, 2013. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 requires that long-term lease arrangements be recognized on the balance sheet. The standard is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements. In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (ASU 2015-17) “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the consolidated balance sheet statement of financial position. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the consolidated balance sheet. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods therein and may be applied either prospectively or retrospectively to all periods presented. Early adoption is permitted. The Company has early adopted this standard in the fourth quarter of 2015 on a retrospective basis. Prior periods have been retrospectively adjusted. 3,000 3,000 In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments (Topic 805): Business Combinations, In April 2015, the FASB issued guidance on debt issuance costs. The guidance requires entities to present debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt in the balance sheet. This guidance does not contain guidance for debt issuance costs related to line-of-credit arrangements. Consequently, in August 2015, the FASB issued additional guidance to add paragraphs indicating that the SEC staff would not object to an entity deferring and presenting debt issuance costs related to line-of-credit arrangements as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The guidance is effective for the interim and annual periods beginning on or after December 15, 2015. The Company early adopted the guidance for debt outstanding as of December 31, 2015. There was no effect on prior year's presentation. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (ASU 2014-09) "Revenue from Contracts with Customers." ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued and amended, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, though early adoption is permitted for annual reporting periods beginning after December 15, 2016. The Company is currently in the process of evaluating the impact of the adoption of ASU 2014-09 on its consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI29
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Schedule of Estimated Useful Lives at an Annual Rate | % Computers and peripheral equipment 33 Office furniture and equipment 6 15 |
Schedule of assumptions used to estimate the fair value of the stock-based awards granted to employees and directors | Year ended December 31 2013 2014 2015 Risk-free interest rate 0.93 1.91 % 0.10 1.72 % 0.17 1.76 % Expected volatility 50 % 44.44 51.62 % 43.49 50.31 % Expected term (years) 6.25 - - Early exercise factor - 100 256 % 160 210 % Forfeiture rate post vesting - 0 15 % 0 18 % Dividend yield 0 % 0 % 0 % |
Schedule of Fair Value Measurements | Fair value measurements using input type Level 1 Level 2 Level 3 Total Assets: Derivative assets $ - $ 608 $ - $ 608 Total financial assets $ - $ 608 $ - $ 608 Liabilities: Payment obligation in connection with acquisitions $ - $ - $ 49,124 $ 49,124 Derivative liabilities - 214 - 214 Convertible debt 35,463 - - 35,463 Total financial liabilities $ 35,463 $ 214 $ 49,124 $ 84,801 Fair value measurements using input type Level 1 Level 2 Level 3 Total Assets: Derivative assets $ - $ 1,349 $ - $ 1,349 Total financial assets $ - $ 1,349 $ - $ 1,349 Liabilities: Payment obligation in connection with acquisitions $ - $ - $ 13,645 $ 13,645 Derivative liabilities - 1,779 - 1,779 Convertible debt 35,752 - - 35,752 Total financial liabilities $ 35,752 $ 1,779 $ 13,645 $ 51,176 |
Schedule of liabilities measured at fair value using significant unobservable inputs (Level 3) | Total fair value as of January 1, 2015 $ 13,645 Accretion of contingent liability related to acquisition 311 Change in fair value of contingent consideration related to acquisition (6,564 ) Settlements (2,500 ) Fair value of payment obligation in connection with Undertone acquisition 44,023 Reclassification to accrued expenses (189 ) Changes in fair value recognized in earnings with respect to the employees of Grow Mobile 398 Total fair value as of December 31, 2015 $ 49,124 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Undertone [Member] | |
Business Acquisition [Line Items] | |
Schedule of allocation of purchase price to net tangible and intangible assets based on their estimated fair values | Cash $ 7,378 Accounts receivable 38,493 Prepaid expenses and other assets 4,934 Long term restricted cash 1,182 Property and equipment 1,905 Deferred taxes 815 Accounts payable (23,428 ) Accrued expenses and other liabilities (11,083 ) Deferred revenues (1,047 ) Long term loan (including current maturities) (48,601 ) Deferred tax liability (20,095 ) Intangible assets 63,200 Goodwill 119,448 Total purchase price $ 133,101 |
Schedule of components of intangible assets associated with the acquisition | Estimated useful Acquired technology (1) $ 19,500 5 Customer relationships (2) 30,000 6 Backlog (3) 4,200 less than 1 year Tradename 9,500 4 Total amount allocated to intangible assets $ 63,200 (1) Acquired technology represents the combined technology for delivering and administering Undertone's attention-grabbing, full-page video adverts and other advertising formats. (2) Customer relationships represent the existing relationships and agreements with Undertone brands and advertisers. (3) Backlog represents customer insertion orders that are highly probable to be turned into revenues in the near future. (4) Tradename represents trade names and logos under which Undertone markets and sells its services. |
Schedule of pro forma information | December 31, 2014 2015 Revenues $ 556,042 $ 350,908 Net income (Loss) 40,129 (84,979 ) Net income (loss) per ordinary share: Basic 0.59 (1.19 ) Diluted $ 0.57 $ (1.19 ) |
Make Me Reach SAS [Member] | |
Business Acquisition [Line Items] | |
Schedule of allocation of purchase price to net tangible and intangible assets based on their estimated fair values | Cash $ 1,050 Accounts receivable 666 Prepaid expenses and other assets 86 Property and equipment 87 Accounts payable (305 ) Accrued expenses and other liabilities (433 ) Deferred revenues (126 ) Deferred tax liability (1,159 ) Intangible assets 3,454 Goodwill 7,452 Total purchase price $ 10,772 |
Schedule of components of intangible assets associated with the acquisition | Estimated useful Acquired technology $ 1,261 5 Customer relationship 395 5 Distribution channel 1,798 5 Total amount allocated to intangible assets $ 3,454 |
Grow Mobile, Inc [Member] | |
Business Acquisition [Line Items] | |
Schedule of purchase price | Cash $ 6,892 Share consideration 5,545 Contingent consideration 7,410 Total purchase price at the Closing Date $ 19,847 |
Schedule of allocation of purchase price to net tangible and intangible assets based on their estimated fair values | Cash $ 2,767 Accounts receivable 1,398 Prepaid expenses and other assets 249 Property and equipment 13 Accounts payable (3,307 ) Accrued expenses and other liabilities (820 ) Deferred revenues (1,465 ) Deferred tax liability (2,320 ) Intangible assets 5,640 Goodwill 17,692 Total purchase price $ 19,847 |
Schedule of components of intangible assets associated with the acquisition | Estimated useful Acquired technology $ 4,025 4 Customer relationships 1,615 5 Total amount allocated to intangible assets $ 5,640 |
Perion Network Ltd [Member] | |
Business Acquisition [Line Items] | |
Schedule of purchase price | Number of shares of Perion ordinary shares outstanding on the Closing Date 12,524,000 Closing price per share of Perion's ordinary shares on the Closing Date $ 12.64 Total fair value of stock consideration $ 158,303 Fair value of vested Perion options (for accounting purposes only) $ 7,492 Total purchase price $ 165,795 |
Schedule of allocation of purchase price to net tangible and intangible assets based on their estimated fair values | Cash and restricted cash $ 25,582 Accounts receivable 18,665 Prepaid expenses and other assets 4,593 Property and equipment 1,376 Accounts payable (13,900 ) Accrued expenses and other liabilities (25 ,623 ) Deferred revenues (495 ) Deferred tax liability, net (6,663 ) Long term debt (6,550 ) Intangible assets 49,930 Goodwill 118,880 Total purchase price $ 165,795 |
Schedule of components of intangible assets associated with the acquisition | Estimated useful life Acquired technology $ 28,390 3 5 In-process research and development 8,100 * tradename and other 13,440 4 11 Total amount allocated to intangible assets $ 49,930 * In 2014 the Company completed the development of $ 6,100 4 2,000 |
Schedule of pro forma information | Year Ended December 31, 2013 Unaudited Revenues $ 412,656 Net income from continuing operations $ 68,995 Net loss from discontinued operations $ (33,795 ) Net income from continuing operations per ordinary share: Basic $ 1.04 Diluted $ 1.00 Net loss from discontinued operations per ordinary share: Basic $ (0.51 ) Diluted $ (0.49 ) |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
PROPERTY AND EQUIPMENT, NET [Abstract] | |
Schedule of Property and Equipment | December 31, 2014 2015 Cost: Computers and peripheral equipment $ 11,596 $ 11,775 Office furniture and equipment 2,397 2,837 Leasehold improvements 5,937 6,981 Capitalized software - 557 Total cost 19,930 22,150 Less: accumulated depreciation and amortization 7,750 9,436 Property and equipment, net $ 12,180 $ 12,714 |
GOODWILL AND OTHER INTANGIBLE32
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET [Abstract] | |
Schedule of Changes in Goodwill | Balance as of January 1, 2014 $ 27,520 Acquisition of Perion 118,880 Acquisition of Grow Mobile 17,692 Balance as of December 31, 2014 $ 164,092 Acquisition of MMR 7,452 Acquisition of Undertone 119,448 Impairment (87,043 ) Revaluation (foreign currency exchange) (256 ) Balance as of December 31, 2015 $ 203,693 |
Summary of Intangible Assets | December 31, 2013 Additions Amortization Impairment December 31, 2014 $ $ $ $ $ Acquired technology - 38,515 - - 38,515 Accumulated amortization - - (15,698 ) - (15,698 ) Impairment - - - (14,347 ) (14,347 ) Acquired technology, net - 38,515 (15,698 ) (14,347 ) 8,470 In-process R&D - 2,000 - - 2,000 Impairment - - - (2,000 ) (2,000 ) In-process R&D, net - 2,000 - (2,000 ) - Tradename and other - 15,055 - - 15,055 Accumulated amortization - - (3,041 ) - (3,041 ) Impairment - - - (3,594 ) (3,594 ) Tradename and other, net - 15,055 (3,041 ) (3,594 ) 8,420 Intangible assets, net - 55,570 (18,739 ) (19,941 ) 16,890 December 31, 2014 Additions Amortization Impairment OCI Disposals December 31, 2015 $ $ $ $ $ $ $ Acquired technology 38,515 20,761 - - (46 ) (28,515 ) 30,715 Accumulated amortization (15,698 ) - (4,374 ) - 2 11,107 (8,963 ) Impairment (14,347 ) - - (4,017 ) - 17,408 (956 ) Acquired technology, net 8,470 20,761 (4,374 ) (4,017 ) (44 ) - 20,796 In-process R&D 2,000 - - - - (2,000 ) - Impairment (2,000 ) - - - - 2,000 - In-process R&D, net - - - - - - - Tradename and other 15,055 45,893 - - (80 ) (6,474 ) 54,394 Accumulated amortization (3,041 ) - (4,505 ) - 2 1,774 (5,770 ) Impairment (3,594 ) - - (4,454 ) - 4,700 (3,348 ) Tradename and other, net 8,420 45,893 (4,505 ) (4,454 ) (78 ) - 45,276 Intangible assets, net 16,890 66,654 (8,879 ) (8,471 ) (122 ) - 66,072 |
Schedule of Estimated Useful Life of the Intangible Assets | Acquired technology 3 - 5 Tradename and other 4 - 11 |
Schedule of Estimated Future Amortization Expense | 2016 $ 22,191 2017 16,093 2018 12,113 2019 10,021 2020 4,880 Thereafter 774 $ 66,072 |
ACCRUED EXPENSES AND OTHER LI33
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | December 31, 2014 2015 Employees and payroll accruals $ 7,438 $ 10,190 Government authorities 8,719 1,850 Derivative liabilities 1,779 214 Accrued restructuring charges (see note 15) 2,257 1,756 Professional services accruals 2,149 3,171 Hosting, software and web services accruals 1,569 497 Other overhead related expenses 508 1,592 Other accruals 1,098 3,587 $ 25,517 $ 22,857 |
DERIVATIVES AND HEDGING ACTIV34
DERIVATIVES AND HEDGING ACTIVITES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
DERIVATIVES AND HEDGING ACTIVITES [Abstract] | |
Schedule of fair value of the Companys outstanding derivative instruments | December 31, 2014 2015 Derivative assets: SWAP $ 141 $ 366 Option contracts 1,208 242 Total $ 1,349 $ 608 Derivative liabilities: Option contracts $ 1,779 $ 214 |
Schedule of increase in unrealized gains (losses) recognized in accumulated other comprehensive income (loss) on derivatives | December 31, 2014 2015 Derivatives designated as cash flow hedging instruments: Option contracts $ (62 ) $ 206 |
Schedule of net losses reclassified from accumulated other comprehensive income (loss) to the operating expenses | December 31, 2014 2015 Derivatives designated as cash flow hedging instruments: Option contracts $ (3 ) $ (41 ) Forward contracts (18 ) (137 ) $ (21 ) $ (178 ) |
LONG TERM DEBT (Tables)
LONG TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Loan Agreements [Member] | |
Debt Instrument [Line Items] | |
Schedule of aggregate principal annual payments of the bonds | Repayment amount 2016 $ 17,050 2017 4,150 2018 5,000 2019 38,750 Total principal payments 64,950 Less: unamortized original issue discount (1,366 ) Fair value of principal payments 63,584 Less: current portion (16,664 ) Long-term debt $ 46,920 |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
CONVERTIBLE DEBT [Abstract] | |
Schedule of Changes of Long-term Convertible Debt | Balance as of January 1, 2014 $ - Issuance of convertible debt 37,852 Accrued interest 466 Change in fair value (2,566 ) Balance as of December 31, 2014 35,752 Accrued interest 1,823 Change in fair value 175 Payment of interest (1,824 ) Balance as of December 31, 2015* $ 35,926 * include accrued interest of 463 |
Series L Convertible Bonds [Member] | |
Debt Instrument [Line Items] | |
Schedule of aggregate principal annual payments of the bonds | Repayment 2016 $ 7,354 2017 7,355 2018 7,354 2019 7,355 2020 7,354 $ 36,772 |
COMMITMENTS AND CONTINGENT LI37
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract] | |
Schedule of Aggregate Minimum Lease Commitments | 2016 $ 5,953 2017 5,957 2018 5,827 2019 3,546 Thereafter 17,349 $ 38,632 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Stock Option Activity | Weighted average Number of options Exercise price Remaining term (in years) Aggregate intrinsic Outstanding at January 1, 2015 3,339,412 $ 8.85 2.93 $ 348 Granted 3,859,500 $ 3.12 Exercised (6,923 ) $ 2.00 Cancelled (1,724,652 ) $ 7.33 Outstanding at December 31, 2015 5,467,337 $ 5.30 3.17 $ 1,709 Exercisable at December 31, 2015 1,136,243 $ 7.66 1.93 $ 131 Vested and expected to vest at December 31, 2015 4,236,510 $ 5.80 3.02 $ 1,319 |
Schedule of Option Activity by Price Range | Outstanding Exercisable Range of exercise price Number of options Weighted average contractual life ( Weighted average exercise Number of options Weighted average contractual life Weighted average exercise $ 0.34 2.00 95,261 2.93 $ 1.89 74,044 2.90 $ 1.86 $ 2.11 2.52 4,455,000 4.68 $ 2.28 - - - $ 3.27 3.77 2,505,500 3.41 $ 3.53 - - - $ 4.04 6.93 484,229 2.27 $ 5.14 414,283 1.73 $ 5.12 $ 7.11 9.93 334,443 1.17 $ 8.18 261,441 0.82 $ 8.14 $ 10.06 11.94 1,004,779 2.52 $ 11.26 301,061 2.74 $ 10.75 $ 12.56 13.54 138,125 3.62 $ 12.66 85,414 2.59 $ 12.66 9,017,337 3.83 $ 4.15 1,136,243 1.93 $ 7.66 |
Schedule of Restricted Stock Unit Activity | Number of RSUs Weighted average grant date fair value Unvested at January 1, 2015 1,397,300 $ 12.45 Granted - - Vested (366,398 ) $ 12.39 Cancelled (338,582 ) $ 12.11 Unvested at December 31, 2015 692,320 $ 12.64 Expected to vest after December 31, 2015 605,061 $ 12.64 |
Schedule of Stock-Based Compensation Expense | Year ended December 31, 2013 2014 2015 Cost of revenues $ - $ 249 $ 247 Research and development 1,077 2,435 1,036 Selling and marketing 690 2,944 1,856 General and administrative 8,638 9,297 4,290 Restructuring costs - 220 - Total $ 10,405 $ 15,145 $ 7,429 Share-based compensation in discontinued operations $ 2,815 $ - $ - |
Performance-based Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Stock Option Activity | Weighted average Number of Performance based Exercise price Remaining contractual term (in Aggregate intrinsic value Outstanding at January 1, 2015 - - - - Granted 3,950,000 $ 2.37 Exercised - - - Cancelled (400,000 ) 2.28 Outstanding at December 31, 2015 3,550,000 $ 2.38 4.93 $ 4,793 Exercisable at December 31, 2015 - - - - Vested and expected to vest at December 31, 2015 2,676,859 $ 2.38 4.93 $ 3,550 |
FINANCIAL INCOME (EXPENSE), N39
FINANCIAL INCOME (EXPENSE), NET (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
FINANCIAL INCOME (EXPENSE), NET [Abstract] | |
Schedule of Financial Income (Expense), Net | Year ended December 31, 2013 2014 2015 Financial income: Interest income $ 1,569 $ 93 $ 551 Foreign currency translation gains, net 1,245 - 572 Change in fair value of convertible debt - 2,566 - Change in fair value of SWAP - - 225 $ 2,814 $ 2,659 $ 1,348 Financial expense: Foreign currency translation losses, net $ - $ (2,669 ) $ - Interest and change in fair value of payment obligation related to acquisitions - (1,067 ) (489 ) Issuance costs of convertible debt - (741 ) - Interest expense on debts - (733 ) (2,313 ) Change in fair value of convertible debt - - (175 ) Bank charges and other (32 ) (337 ) (310 ) $ (32 ) $ (5,547 ) $ (3,287 ) Financial income (expense), net $ 2,782 $ (2,888 ) $ (1,939 ) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES [Abstract] | |
Schedule of Income (Loss) Before Taxes | Year ended December 31 2013 2014 2015 Domestic $ 83,388 $ 55,272 $ (43,711 ) Foreign 1,636 (2,865 ) (24,249 ) Total $ 85,024 $ 52,407 $ (67,960 ) |
Schedule of Income Taxes | Year ended December 31 2013 2014 2015 Current taxes $ 10,778 $ 23,432 $ 9,670 Deferred tax benefit - (13,851 ) (8,973 ) Taxes in respect of previous years * 11,838 - - Total $ 22,616 $ 9,581 $ 697 * The year 2013 include non-recurring tax expenses in respect of the release of Conduit's trapped earnings (see Note 13 f below). |
Schedule of Income Taxes by Jurisdiction | Year ended December 31 2013 2014 2015 Domestic $ 22,616 $ 11,716 $ 8,830 Foreign - (2,135 ) (8,133 ) Total $ 22,616 $ 9,581 $ 697 Domestic: Current taxes $ 10,778 $ 23,272 $ 8,943 Deferred tax benefit - (11,556 ) (113 ) Taxes in respect of previous years 11,838 - - Total - Domestic $ 22,616 $ 11,716 $ 8,830 Foreign: Current taxes $ - $ 160 $ 727 Deferred tax benefit - (2,295 ) (8,860 ) Total - Foreign $ - $ (2,135 ) $ (8,133 ) Total income tax expense $ 22,616 $ 9,581 $ 697 |
Schedule of Deferred Tax Assets (Liabilities) | December 31, 2014 2015 Deferred tax assets: Net operating loss carry forwards $ 5,699 $ 10,280 Research and development 4,463 4,008 Other temporary differences mainly relating to reserve and allowances 1,929 4,058 Deferred tax assets, before valuation allowance 12,091 18,346 Valuation allowance 3,985 4,212 Total deferred tax assets, net $ 8,106 $ 14,134 Deferred tax liabilities: Intangible assets $ (3,189 ) $ (17,971 ) Property and equipment, net (331 ) (3,275 ) Total deferred tax liabilities $ (3,520 ) $ (21,246 ) Total deferred tax asset (liability), net $ 4,586 $ (7,112 ) Domestic: Long term deferred tax asset, net $ 4,893 $ 5,006 Long term deferred tax liability - (261 ) $ 4,893 $ 4,745 Foreign: Long term deferred tax asset, net $ 24 $ 7,338 Long term deferred tax liability (331 ) (19,195 ) $ (307 ) $ (11,857 ) Total deferred tax asset (liability), net $ 4,586 $ (7,112 ) |
Schedule of the Reconciliation of the Effective Tax Rate | Year ended December 31 2013 2014 2015 Income (Loss) before taxes on income $ 85,024 $ 52,407 $ (67,960 ) Statutory tax rate in Israel 25.0 % 26.5 % 26.5 % Theoretical tax expense (income) $ 21,256 $ 13,888 $ (18,009 ) Increase (decrease) in tax expenses resulting from: "Preferred Enterprise" benefits * (10,495 ) (10,644 ) (5,654 ) Non-deductible expenses including impairment charges 1,971 4,059 26,702 Taxes in respect to release of "trapped earnings" 11,838 - - Deferred taxes on losses and other temporary differences, for which a valuation allowance was provided, net - 1,962 (3,426 ) Tax adjustment in respect of different tax rate of foreign subsidiaries - (461 ) 1,185 Other (1,954 ) 777 (101 ) Taxes on income $ 22,616 $ 9,581 $ 697 * Benefit per ordinary share from "Preferred Enterprise" status: Basic $ 0.19 $ 0.16 $ 0.08 Diluted $ 0.19 $ 0.15 $ 0.08 |
Schedule of Unrecognized Tax Benefits | 2015 Balance at January 1 $ 724 Decrease related to prior year tax positions (22 ) Increase related to current year tax positions 1,665 Balance at December 31 $ 2,367 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
EARNINGS PER SHARE [Abstract] | |
Schedule of the computation of basic and diluted net earnings per common share | Year ended December 31 2013 2014 2015 Numerator: Net income (Loss) attributable to ordinary shares - basic $ 62,408 $ 42,826 $ (68,657 ) Gains related to convertible debt, net - (2,100 ) - Net income (Loss) from continuing operations - diluted $ 62,408 $ 40,726 $ ( 68,657 ) Net loss from discontinued operations – basic and diluted $ ( 33,795 ) $ - $ - Denominator: Weighted average number of ordinary shares outstanding during the year 53,910,741 68,213,209 71,300,432 Weighted average effect of dilutive securities: Assumed conversion of convertible debt - 1,090,906 - Shares to be issued in connection with acquisition - 52,664 - Employee stock options and restricted stock units 926,566 970,632 - Diluted number of ordinary shares outstanding - Continuing operations 54,837,307 70,327,411 71,300,432 Diluted number of ordinary shares outstanding - Discontinued operations 54,837,307 - - Basic net earnings (loss) per ordinary share Continuing operations $ 1.16 $ 0.63 $ (0.96 ) Discontinued operations $ ( 0.63 ) $ - $ - Net income $ 0.53 $ 0.63 $ ( 0.96 ) Diluted net earnings (loss) per ordinary share Continuing operations $ 1.14 $ 0.58 $ ( 0.96 ) Discontinued operations $ ( 0.62 ) $ - $ - Net income $ 0.52 $ 0.58 $ ( 0.96 ) Ordinary shares equivalents excluded because their effect would have been anti-dilutive 2,778,618 3,766,080 14,179,439 |
RESTRUCTURING COSTS (Tables)
RESTRUCTURING COSTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
RESTRUCTURING COSTS [Abstract] | |
Schedule of restructuring accruals | $ Payroll and s hare-based compensation expenses 1,993 Lease facilities and related expenses 1,248 Property and equipment impairment 632 Other 108 Total restructuring costs 3,981 $ Severance and Payroll related 1,022 Property and equipment impairment 159 Write-off of prepaid royalties 219 Other (348 ) Total restructuring costs 1,052 |
Schedule of accrued restructuring liability | December 31, 2014 Additional costs Cash payments Adjustments December 31, 2015 2014 Restructuring Plan: Severance and payroll related $ 1,027 $ - $ (1,027 ) $ - $ - Rent and related expenses 1,155 - (807 ) (348 ) - Other charges 75 - (75 ) - - 2015 Restructuring Plan: Severance and Payroll related - 1,022 (270 ) - 752 Restructuring accrual assumed upon acquisition - - - 1,004 1,004 $ 2,257 $ 1,022 $ (2,179 ) $ 656 $ 1,756 |
MAJOR CUSTOMERS (Tables)
MAJOR CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
MAJOR CUSTOMERS [Abstract] | |
Schedule of Revenues and Receivables by Major Customer | Year ended December 31, 2013 2014 2015 Customer A 63 % 74 % 81 % Customer B 22 % * * * less than 10% December 31 2014 2015 Customer A 65 % 23 % Customer B * * * less than 10% |
GEOGRAPHIC INFORMATION (Tables)
GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
GEOGRAPHIC INFORMATION [Abstract] | |
Schedule of total revenues attributed to geographic areas | Year ended December 31 2013 2014 2015 North America (mainly U.S.) $ 239,884 $ 292,409 $ 173,424 Europe 69,833 69,281 40,612 Other 15,791 27,041 6,914 $ 325,508 $ 388,731 $ 220,950 |
Schedule of property and equipment attributed to geographic areas | December 31, 2014 2015 Israel $ 9,952 $ 9,161 U.S. 1,460 3,071 Europe 768 482 $ 12,180 $ 12,714 |
SIGNIFICANT ACCOUNTING POLICI45
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||
Short-term deposits average rate (as a percent) | 0.72% | 0.49% | |
Summary of Significant Accounting Policies [Line Items] | |||
Restricted cash, current | $ 646 | $ 696 | |
Restricted cash, non-current | 1,182 | ||
Stock-based compensation that capitalized | 187 | ||
Amortization expense | 8,879 | $ 18,739 | |
Impairment charges recorded as a result of certain abondon projects | 3,390 | ||
Capitalized development cost | 22,150 | 19,930 | |
Impairment of intangible assets | 8,471 | 19,941 | |
Impairment charges recorded in connection with the restructuring plans, related to its property and equipment | 159 | 632 | |
Goodwill impairment loss | 87,043 | 0 | $ 0 |
Severance expenses from continuing operations | $ 2,310 | 3,330 | 1,296 |
Severance expenses from discontinued operations | 1,080 | ||
Percentage of matching contribution for three percent of employee deferral | 100.00% | ||
Percentage of employee deferral | 3.00% | ||
Percentage of matching contribution for two percent of employee deferral | 50.00% | ||
Percentage of employee deferral for fifty percent of participant's contributions | 2.00% | ||
Total employer 401(k) contributions | $ 247 | $ 116 | $ 61 |
Weighted average number of anti-dilutive securities excluded from diluted earnings per share | 14,179,439 | 3,766,080 | 2,778,618 |
Total expenses for doubtful debts | $ 104 | $ 1,035 | $ 0 |
Derivative assets | 608 | 1,349 | |
Derivative liabilities | 214 | 1,779 | |
Net gains (loss) from hedging transactions recognized | (175) | 125 | $ 0 |
Notional value of derivative instruments | 57,052 | 43,520 | |
Current deferred tax asset | 12,344 | 4,917 | |
Noncurrent deferred tax liability | 19,456 | $ 331 | |
Adoption of ASU 2015-17 [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Current deferred tax asset | (3,000) | ||
Noncurrent deferred tax asset | 3,000 | ||
Current deferred tax liability | 0 | ||
Noncurrent deferred tax liability | $ 0 | ||
Capitalized software [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 3 years | ||
Capitalized software development costs | $ 4,192 | ||
Stock-based compensation that capitalized | 187 | ||
Amortization expense | 245 | ||
Capitalized development cost | $ 557 |
SIGNIFICANT ACCOUNTING POLICI46
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Estimated Useful Lives at Annual Rates) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Computers and peripheral equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives, annual rate | 33.00% |
Office furniture and equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives, annual rate | 6.00% |
Office furniture and equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives, annual rate | 15.00% |
SIGNIFICANT ACCOUNTING POLICI47
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Stock-Based Compensation Assumptions) (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate, minimum | 0.17% | 0.10% | 0.93% |
Risk-free interest rate, maximum | 1.76% | 1.72% | 1.91% |
Expected volatility, minimum | 43.49% | 44.44% | |
Expected volatility, maximum | 50.31% | 51.62% | |
Expected volatility | 50.00% | ||
Expected term (years) | 0 years | 0 years | 6 years 3 months |
Early exercise factor (as a percent) | |||
Forfeiture rate post vesting | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Early exercise factor (as a percent) | 160.00% | 100.00% | |
Forfeiture rate post vesting | 0.00% | 0.00% | |
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Early exercise factor (as a percent) | 210.00% | 256.00% | |
Forfeiture rate post vesting | 18.00% | 15.00% |
SIGNIFICANT ACCOUNTING POLICI48
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Fair Value Measurements) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets: | ||
Derivative assets | $ 608 | $ 1,349 |
Total financial assets | 608 | 1,349 |
Liabilities: | ||
Payment obligation in connection with acquisitions | 49,124 | 13,645 |
Derivative liabilities | 214 | 1,779 |
Convertible debt | 35,463 | 35,752 |
Total financial liabilities | $ 84,801 | $ 51,176 |
Level 1 [Member] | ||
Assets: | ||
Derivative assets | ||
Total financial assets | ||
Liabilities: | ||
Payment obligation in connection with acquisitions | ||
Derivative liabilities | ||
Convertible debt | $ 35,463 | $ 35,752 |
Total financial liabilities | 35,463 | 35,752 |
Level 2 [Member] | ||
Assets: | ||
Derivative assets | 608 | 1,349 |
Total financial assets | $ 608 | $ 1,349 |
Liabilities: | ||
Payment obligation in connection with acquisitions | ||
Derivative liabilities | $ 214 | $ 1,779 |
Convertible debt | ||
Total financial liabilities | $ 214 | $ 1,779 |
Level 3 [Member] | ||
Assets: | ||
Derivative assets | ||
Total financial assets | ||
Liabilities: | ||
Payment obligation in connection with acquisitions | $ 49,124 | $ 13,645 |
Derivative liabilities | ||
Convertible debt | ||
Total financial liabilities | $ 49,124 | $ 13,645 |
SIGNIFICANT ACCOUNTING POLICI49
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Company's liabilities measured at fair value using significant unobservable inputs (Level 3)) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Company's liabilities measured at fair value using significant unobservable inputs (Level 3) [Line Items] | |
Beginning balance | $ 13,645 |
Accretion of contingent liability related to acquisition | 311 |
Change in fair value of contingent consideration related to acquisition | (6,564) |
Settlements | (2,500) |
Fair value of payment obligation in connection with Undertone acquisition | 44,023 |
Reclassification to accrued expenses | (189) |
Changes in fair value recognized in earnings with respect to the employees of Grow Mobile | 398 |
Ending balance | $ 49,124 |
ACQUISITIONS (Narrative) (Detai
ACQUISITIONS (Narrative) (Details) - USD ($) $ in Thousands | Feb. 29, 2016 | Nov. 30, 2015 | Jul. 08, 2015 | Jul. 08, 2015 | Feb. 10, 2015 | Feb. 10, 2015 | Jul. 15, 2014 | Jul. 15, 2014 | Jan. 02, 2014 | Feb. 29, 2016 | Jan. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||||||||||||
Amortization of intangible assets | $ 8,879 | $ 18,739 | ||||||||||||
Value of shares of common stock paid in acquisition | 5,579 | 171,552 | ||||||||||||
Expenses related to Merger Consideration Incentive Plan recorded as operating expenses | $ 7,429 | $ 15,145 | $ 10,405 | |||||||||||
Dividends paid | $ 65,009 | |||||||||||||
Undertone [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Percent of equity acquired | 100.00% | |||||||||||||
Amortization of intangible assets | $ 14,981 | $ 19,610 | ||||||||||||
Consideration paid with cash | $ 89,078 | |||||||||||||
Retained amount as holdback to cover potential claims | 16,000 | |||||||||||||
Contingent consideration liability | 14,391 | 14,476 | ||||||||||||
Installments amount | 3,000 | |||||||||||||
Installments due amount | 2,804 | 2,820 | ||||||||||||
Deferred consideration payment | $ 20,000 | |||||||||||||
Interest rate (as a percent) | 10.00% | |||||||||||||
Deferred consideration payment due amount | $ 22,005 | 21,859 | ||||||||||||
Deferred payment amount | 1,182 | |||||||||||||
Excess in tax advances which will be paid upon refund from tax authorities | 2,143 | |||||||||||||
Amount to be paid in cash for working capital final adjustment as calculated 90 days after closing | 1,498 | |||||||||||||
Acquisition related costs incurred | 4,804 | |||||||||||||
Expected maximum period to finalize valuation and purchase price allocation | 1 year | |||||||||||||
Make Me Reach SAS [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Percent of equity acquired | 100.00% | 100.00% | ||||||||||||
Consideration paid with cash | $ 6,394 | |||||||||||||
Acquisition related costs incurred | $ 139 | $ 139 | ||||||||||||
Value of shares of common stock paid in acquisition | $ 4,378 | |||||||||||||
Shares issued for acquisition | 1,437,510 | |||||||||||||
Make Me Reach SAS [Member] | MakeMeReach Founder [Member] | Subsequent Event [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Additional consideration required to be paid with cash subject to retention conditions | $ 442 | $ 442 | ||||||||||||
Value of shares of common stock paid or to be paid in acquisition subject to retention conditions | 442 | 442 | ||||||||||||
Make Me Reach SAS [Member] | MakeMeReach Employee [Member] | Subsequent Event [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Consideration paid with cash | 144 | |||||||||||||
Additional consideration required to be paid with cash subject to retention conditions | 266 | 266 | ||||||||||||
Value of shares of common stock paid or to be paid in acquisition subject to retention conditions | 208 | $ 208 | ||||||||||||
Value of shares of common stock paid in acquisition | $ 63 | |||||||||||||
Shares issued for acquisition | 18,998 | |||||||||||||
Shares issued for acquisition subject to retention conditions | 92,348 | |||||||||||||
Grow Mobile [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Percent of equity acquired | 100.00% | 100.00% | ||||||||||||
Total consideration of in cash and in shares | $ 2,500 | |||||||||||||
Maximum milestones-based contingent consideration | $ 25,000 | $ 25,000 | ||||||||||||
Consideration paid with cash | 1,500 | 6,892 | ||||||||||||
Acquisition related costs incurred | 940 | |||||||||||||
Working capital adjustments which reduce cash payment | 1,800 | 1,800 | ||||||||||||
Amount of deposit to be release from escrow fund | 1,500 | $ 1,500 | ||||||||||||
Amount of escrow deposit to be released immediately | $ 1,000 | 1,000 | ||||||||||||
Amount of escrow deposit to be released remaining balance | 500 | |||||||||||||
Net gain on reversal of contingent payment | 6,564 | |||||||||||||
Change in fair value of previously accrued Contingent Payment | 9,064 | |||||||||||||
Release of accrued contingent payment | 2,500 | |||||||||||||
Amount to be paid to the employees under Merger Consideration Incentive Plan, which reduce cash payment | 1,300 | 1,300 | ||||||||||||
Amount to be paid to the employees under Merger Consideration Incentive Plan which reduce share payment | 1,100 | 1,100 | ||||||||||||
Amount of ordinary shares issued | 5,545 | |||||||||||||
Value of shares of common stock paid in acquisition | $ 1,000 | 5,545 | ||||||||||||
Shares issued for acquisition | 315,263 | |||||||||||||
Expenses related to Merger Consideration Incentive Plan recorded as operating expenses | 927 | 947 | ||||||||||||
Payment obligation | $ 0 | 474 | ||||||||||||
Grow Mobile [Member] | Before Adjustment [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Total consideration of in cash and in shares | 17,000 | |||||||||||||
Consideration paid with cash | 10,000 | |||||||||||||
Amount of ordinary shares issued | 7,000 | |||||||||||||
Grow Mobile [Member] | First Contingent Payment [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Maximum milestones-based contingent consideration | 7,000 | 7,000 | ||||||||||||
Liability recorded for contingent consideration | 2,740 | 2,740 | ||||||||||||
Grow Mobile [Member] | Second Contingent Payment [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Maximum milestones-based contingent consideration | 18,000 | 18,000 | ||||||||||||
Liability recorded for contingent consideration | $ 4,670 | $ 4,670 | ||||||||||||
ClientConnect [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquisition related costs incurred | $ 3,161 | |||||||||||||
ClientConnect [Member] | Stock Options [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Shares issued for acquisition | 2,815,963 | |||||||||||||
ClientConnect [Member] | Common stock | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Shares issued for acquisition | 54,753,582 | |||||||||||||
Perion Network Ltd [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Amortization of intangible assets | $ 5,140 | |||||||||||||
Amount of ordinary shares issued | $ 158,303 | |||||||||||||
Perion Network Ltd [Member] | Conduit Shareholders [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Percent of equity acquired | 81.00% | |||||||||||||
Perion Network Ltd [Member] | Perion Shareholders [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Percent of equity acquired | 19.00% |
ACQUISITIONS (Schedule of Purch
ACQUISITIONS (Schedule of Purchase Price of Acquisition) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 08, 2015 | Jul. 15, 2014 | Jan. 02, 2014 |
Grow Mobile [Member] | |||
Business Acquisition [Line Items] | |||
Cash | $ 1,500 | $ 6,892 | |
Total fair value of stock consideration | 5,545 | ||
Contingent consideration | 7,410 | ||
Total purchase price | $ 19,847 | ||
Perion Network Ltd [Member] | |||
Business Acquisition [Line Items] | |||
Number of shares of Perion ordinary shares outstanding on the Closing Date | 12,524,000 | ||
Closing price per share of Perion's ordinary shares on the Closing Date | $ 12.64 | ||
Total fair value of stock consideration | $ 158,303 | ||
Fair value of vested Perion options (for accounting purposes only) | 7,492 | ||
Total purchase price | $ 165,795 |
ACQUISITIONS (Schedule of Alloc
ACQUISITIONS (Schedule of Allocation of Purchase Price to Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Nov. 30, 2015 | Feb. 10, 2015 | Dec. 31, 2014 | Jul. 15, 2014 | Jan. 02, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 203,693 | $ 164,092 | $ 27,520 | ||||
Undertone [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash | $ 7,378 | ||||||
Accounts receivable | 38,493 | ||||||
Prepaid expenses and other assets | 4,934 | ||||||
Long term restricted cash | 1,182 | ||||||
Property and equipment | 1,905 | ||||||
Deferred taxes | 815 | ||||||
Accounts payable | (23,428) | ||||||
Accrued expenses and other liabilities | (11,083) | ||||||
Deferred revenues | (1,047) | ||||||
Long term loan (including current maturities) | (48,601) | ||||||
Deferred tax liability | (20,095) | ||||||
Intangible assets | 63,200 | ||||||
Goodwill | 119,448 | ||||||
Total purchase price | $ 133,101 | ||||||
Make Me Reach SAS [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash | $ 1,050 | ||||||
Accounts receivable | 666 | ||||||
Prepaid expenses and other assets | 86 | ||||||
Property and equipment | 87 | ||||||
Accounts payable | (305) | ||||||
Accrued expenses and other liabilities | (433) | ||||||
Deferred revenues | (126) | ||||||
Deferred tax liability | (1,159) | ||||||
Intangible assets | 3,454 | ||||||
Goodwill | 7,452 | ||||||
Total purchase price | $ 10,772 | ||||||
Grow Mobile [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash | $ 2,767 | ||||||
Accounts receivable | 1,398 | ||||||
Prepaid expenses and other assets | 249 | ||||||
Property and equipment | 13 | ||||||
Accounts payable | (3,307) | ||||||
Accrued expenses and other liabilities | (820) | ||||||
Deferred revenues | (1,465) | ||||||
Deferred tax liability | (2,320) | ||||||
Intangible assets | 5,640 | ||||||
Goodwill | 17,692 | ||||||
Total purchase price | $ 19,847 | ||||||
Perion Network Ltd [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Cash and restricted cash | $ 25,582 | ||||||
Accounts receivable | 18,665 | ||||||
Prepaid expenses and other assets | 4,593 | ||||||
Property and equipment | 1,376 | ||||||
Accounts payable | (13,900) | ||||||
Accrued expenses and other liabilities | (25,623) | ||||||
Deferred revenues | (495) | ||||||
Long term loan (including current maturities) | (6,550) | ||||||
Deferred tax liability | (6,663) | ||||||
Intangible assets | 49,930 | ||||||
Goodwill | 118,880 | ||||||
Total purchase price | $ 165,795 |
ACQUISITIONS (Schedule of Compo
ACQUISITIONS (Schedule of Components of Intangible Assets Associated with Acquisition) (Details) - USD ($) $ in Thousands | Nov. 30, 2015 | Feb. 10, 2015 | Jul. 15, 2014 | Jan. 02, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | |||||||
Impairment | $ 8,471 | $ 19,941 | |||||
In-process R&D [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Impairment | 2,000 | ||||||
Undertone [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 63,200 | ||||||
Undertone [Member] | Acquired Technology [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | [1] | $ 19,500 | |||||
Estimated useful lives | 5 years | ||||||
Undertone [Member] | Customer relationships [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | [2] | $ 30,000 | |||||
Estimated useful lives | 6 years | ||||||
Undertone [Member] | Backlog [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | [3] | $ 4,200 | |||||
Undertone [Member] | Backlog [Member] | Maximum [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Estimated useful lives | 1 year | ||||||
Undertone [Member] | Trade name [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | [4] | $ 9,500 | |||||
Estimated useful lives | 4 years | ||||||
Make Me Reach SAS [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 3,454 | ||||||
Make Me Reach SAS [Member] | Acquired Technology [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 1,261 | ||||||
Estimated useful lives | 5 years | ||||||
Make Me Reach SAS [Member] | Customer relationships [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 395 | ||||||
Estimated useful lives | 5 years | ||||||
Make Me Reach SAS [Member] | Distribution channel [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 1,798 | ||||||
Estimated useful lives | 5 years | ||||||
Grow Mobile [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 5,640 | ||||||
Impairment | $ 8,471 | ||||||
Grow Mobile [Member] | Acquired Technology [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 4,025 | ||||||
Estimated useful lives | 4 years | ||||||
Grow Mobile [Member] | Customer relationships [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 1,615 | ||||||
Estimated useful lives | 5 years | ||||||
Perion Network Ltd [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 49,930 | ||||||
Amount of intangible assets for which development is completed | 2,000 | ||||||
Impairment | $ 19,941 | ||||||
Perion Network Ltd [Member] | Acquired Technology [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 28,390 | ||||||
Perion Network Ltd [Member] | Acquired Technology [Member] | Minimum [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Estimated useful lives | 3 years | ||||||
Perion Network Ltd [Member] | Acquired Technology [Member] | Maximum [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Estimated useful lives | 5 years | ||||||
Perion Network Ltd [Member] | In-process R&D [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 8,100 | ||||||
Estimated useful lives | [5] | 4 years | |||||
Amount of intangible assets for which development is completed | $ 6,100 | ||||||
Perion Network Ltd [Member] | Trade name [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 13,440 | ||||||
Perion Network Ltd [Member] | Trade name [Member] | Minimum [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Estimated useful lives | 4 years | ||||||
Perion Network Ltd [Member] | Trade name [Member] | Maximum [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Estimated useful lives | 11 years | ||||||
[1] | Acquired technology represents the combined technology for delivering and administering Undertone's attention-grabbing, full-page video adverts and other advertising formats. | ||||||
[2] | Customer relationships represent the existing relationships and agreements with Undertone brands and advertisers. | ||||||
[3] | Backlog represents customer insertion orders that are highly probable to be turned into revenues in the near future. | ||||||
[4] | Tradename represents trade names and logos under which Undertone markets and sells its services. | ||||||
[5] | In 2014 the Company completed the development of $6,100 and estimated the useful life at 4 years, the remaining balance of $2,000 was impaired (see Note 5) |
ACQUISITIONS (Schedule of Pro F
ACQUISITIONS (Schedule of Pro Forma Information) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Undertone [Member] | |||
Business Acquisition [Line Items] | |||
Revenues | $ 350,908 | $ 556,042 | |
Net income (Loss) | $ (84,979) | $ 40,129 | |
Net income (Loss) per ordinary share: Basic | $ (1.19) | $ 0.59 | |
Net income (Loss) per ordinary share: Diluted | $ (1.19) | $ 0.57 | |
Perion Network Ltd [Member] | |||
Business Acquisition [Line Items] | |||
Revenues | $ 412,656 | ||
Net income (Loss) | 68,995 | ||
Net loss from discontinued operations | $ (33,795) | ||
Net income (Loss) per ordinary share: Basic | $ 1.04 | ||
Net income (Loss) per ordinary share: Diluted | 1 | ||
Net income from discontinued operations per ordinary share: Basic | (0.51) | ||
Net income from discontinued operations per ordinary share: Diluted | $ (0.49) |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 22,150 | $ 19,930 | |
Less: accumulated depreciation and amortization | 9,436 | 7,750 | |
Property and equipment, net | 12,714 | 12,180 | |
Depreciation and amortization expenses, continued operations | 3,093 | 2,674 | $ 2,110 |
Depreciation expenses, discontinued operations | $ 460 | ||
Impairment charges of asset that will no longer be in use | 159 | 632 | |
Impairment charges recorded as a result of certain abondon projects | 3,390 | ||
Computers and peripheral equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 11,775 | 11,596 | |
Office furniture and equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 2,837 | 2,397 | |
Impairment charges of asset that will no longer be in use | 159 | ||
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 6,981 | 5,937 | |
Impairment charges of asset that will no longer be in use | $ 632 | ||
Capitalized software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 557 |
GOODWILL AND OTHER INTANGIBLE56
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Schedule of Changes in Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill [Line Items] | |||
Balance as of January 1 | $ 164,092 | $ 27,520 | |
Impairment on goodwill | (87,043) | 0 | $ 0 |
Revaluation (foreign currency exchange) | (256) | ||
Balance as of December 31 | 203,693 | 164,092 | $ 27,520 |
Perion [Member] | |||
Goodwill [Line Items] | |||
Acquisitions | 118,880 | ||
Grow Mobile, Inc [Member] | |||
Goodwill [Line Items] | |||
Acquisitions | $ 17,692 | ||
MMR [Member] | |||
Goodwill [Line Items] | |||
Acquisitions | 7,452 | ||
Undertone [Member] | |||
Goodwill [Line Items] | |||
Acquisitions | $ 119,448 |
GOODWILL AND OTHER INTANGIBLE57
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Summary of Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated amortization | ||
Amortization | $ (8,879) | $ (18,739) |
Impairment | ||
Impairment | (8,471) | (19,941) |
Intangible assets, Net | ||
Balance at beginning of period | 16,890 | |
Additions | 66,654 | 55,570 |
Amortization | (8,879) | (18,739) |
Impairment | (8,471) | (19,941) |
OCI | (122) | |
Balance at end of period | 66,072 | 16,890 |
Acquired technology [Member] | ||
Intangible assets, Gross | ||
Balance at beginning of period | 38,515 | |
Additions | 20,761 | 38,515 |
OCI | (46) | |
Disposals | (28,515) | |
Balance at end of period | 30,715 | 38,515 |
Accumulated amortization | ||
Balance at beginning of period | (15,698) | |
Amortization | (4,374) | (15,698) |
OCI | 2 | |
Disposals | 11,107 | |
Balance at end of period | (8,963) | (15,698) |
Impairment | ||
Balance at beginning of period | (14,347) | |
Impairment | (4,017) | (14,347) |
Disposals | 17,408 | |
Balance at end of period | (956) | (14,347) |
Intangible assets, Net | ||
Balance at beginning of period | 8,470 | |
Additions | 20,761 | 38,515 |
Amortization | (4,374) | (15,698) |
Impairment | (4,017) | (14,347) |
OCI | (44) | |
Balance at end of period | 20,796 | 8,470 |
In-process R&D [Member] | ||
Intangible assets, Gross | ||
Balance at beginning of period | 2,000 | |
Additions | 2,000 | |
Disposals | (2,000) | |
Balance at end of period | 2,000 | |
Impairment | ||
Balance at beginning of period | (2,000) | |
Impairment | (2,000) | |
Disposals | 2,000 | |
Balance at end of period | (2,000) | |
Intangible assets, Net | ||
Additions | 2,000 | |
Impairment | (2,000) | |
Tradename and other [Member] | ||
Intangible assets, Gross | ||
Balance at beginning of period | 15,055 | |
Additions | 45,893 | 15,055 |
OCI | (80) | |
Disposals | (6,474) | |
Balance at end of period | 54,394 | 15,055 |
Accumulated amortization | ||
Balance at beginning of period | (3,041) | |
Amortization | (4,505) | (3,041) |
OCI | 2 | |
Disposals | 1,774 | |
Balance at end of period | (5,770) | (3,041) |
Impairment | ||
Balance at beginning of period | (3,594) | |
Impairment | (4,454) | (3,594) |
Disposals | 4,700 | |
Balance at end of period | (3,348) | (3,594) |
Intangible assets, Net | ||
Balance at beginning of period | 8,420 | |
Additions | 45,893 | 15,055 |
Amortization | (4,505) | (3,041) |
Impairment | (4,454) | (3,594) |
OCI | (78) | |
Balance at end of period | $ 45,276 | $ 8,420 |
GOODWILL AND OTHER INTANGIBLE58
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Schedule of Estimated Useful Life of Intangible Assets) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Acquired technology [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Avarage Useful Life | 3 years |
Acquired technology [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Avarage Useful Life | 5 years |
Tradename and other [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Avarage Useful Life | 4 years |
Tradename and other [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Weighted Avarage Useful Life | 11 years |
GOODWILL AND OTHER INTANGIBLE59
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Schedule Of Estimated Future Amortization Expense) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET [Abstract] | ||
2,016 | $ 22,191 | |
2,017 | 16,093 | |
2,018 | 12,113 | |
2,019 | 10,021 | |
2,020 | 4,880 | |
Thereafter | 774 | |
Net carrying amount | $ 66,072 | $ 16,890 |
GOODWILL AND OTHER INTANGIBLE60
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and other intangible assets, net | ||
Impairment | $ 8,471 | $ 19,941 |
Perion Network Ltd [Member] | ||
Goodwill and other intangible assets, net | ||
Impairment | 19,941 | |
Deferred tax liability written off and included in taxed on income as tax benefit | $ 3,191 | |
Grow Mobile [Member] | ||
Goodwill and other intangible assets, net | ||
Impairment | 8,471 | |
Deferred tax liability written off and included in taxed on income as tax benefit | $ 2,291 |
ACCRUED EXPENSES AND OTHER LI61
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract] | ||
Employees and payroll accruals | $ 10,190 | $ 7,438 |
Government authorities | 1,850 | 8,719 |
Derivative liabilities | 214 | 1,779 |
Accrued restructuring charges (see note 15) | 1,756 | 2,257 |
Professional services accruals | 3,171 | 2,149 |
Hosting, software and web services accruals | 497 | 1,569 |
Other overhead related expenses | 1,592 | 508 |
Other accruals | 3,587 | 1,098 |
Accrued expenses and other liabilities, total | $ 22,857 | $ 25,517 |
DERIVATIVES AND HEDGING ACTIV62
DERIVATIVES AND HEDGING ACTIVITES (Schedule of Fair Value of Company's Outstanding Derivative Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Derivative assets: | ||
Total assets | $ 608 | $ 1,349 |
Derivative liabilities: | ||
Total liabilities | 214 | 1,779 |
SWAP [Member] | ||
Derivative assets: | ||
Total assets | 366 | 141 |
Option contracts [Member] | ||
Derivative assets: | ||
Total assets | 242 | 1,208 |
Derivative liabilities: | ||
Total liabilities | $ 214 | $ 1,779 |
DERIVATIVES AND HEDGING ACTIV63
DERIVATIVES AND HEDGING ACTIVITES (Schedule of Increase in Unrealized Gains (Losses) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivatives) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Option contracts [Member] | Other comprehensive income (loss) [Member] | ||
Unrealized gains (losses) recognized in accumulated other comprehensive income (loss) on derivatives [Line Items] | ||
Total unrealized gain (loss) | $ 206 | $ (62) |
DERIVATIVES AND HEDGING ACTIV64
DERIVATIVES AND HEDGING ACTIVITES (Schedule of Net (Gains) Losses Reclassified from Accumulated Other Comprehensive Income (Loss) to Operating Expenses) (Details) - Operating expenses [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Net losses reclassified from accumulated other comprehensive income (loss) to operating expenses [Line Items] | ||
Total realized loss | $ (178) | $ (21) |
Option contracts [Member] | ||
Net losses reclassified from accumulated other comprehensive income (loss) to operating expenses [Line Items] | ||
Total realized loss | (41) | (3) |
Forward contracts [Member] | ||
Net losses reclassified from accumulated other comprehensive income (loss) to operating expenses [Line Items] | ||
Total realized loss | $ (137) | $ (18) |
LONG TERM DEBT (Narrative) (Det
LONG TERM DEBT (Narrative) (Details) - USD ($) | Nov. 22, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 30, 2015 |
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 10,000 | ||||
Debt issuance cost, deducted from the carrying amount of that debt in the consolidated balance sheets | $ 741,000 | ||||
New credit facility from an Israeli Bank [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, description of variable rate basis | Libor | ||||
Debt instrument, basis spread on variable rate | 1.20% | ||||
Amount borrowed under credit facility | $ 19,900,000 | ||||
Unpaid balance of the credit facility | $ 13,000,000 | ||||
New secured credit agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 50,000,000 | ||||
Frequency of payments | quarterly | ||||
Debt instrument, starting per quarter installment amount | $ 625,000 | ||||
Debt instrument, per quarter installment amount from March 2018 | 1,250,000 | ||||
Final payment required to be made upon maturity | $ 35,000,000 | ||||
Debt instrument, description of variable rate basis | LIBOR | ||||
Debt instrument, basis spread on variable rate | 5.50% | ||||
Debt issuance cost, deducted from the carrying amount of that debt in the consolidated balance sheets | $ 1,399,000 | ||||
Israeli Bank One [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, date of issuance | May 17, 2012 | ||||
Debt instrument, term | 4 years | ||||
Frequency of payments | Quarterly | ||||
Date of first required payment | Jul. 17, 2012 | ||||
Debt instrument, interest rate | 4.35% | ||||
Frequency of interest payments | Monthly | ||||
Date of first required interest payment | May 17, 2012 | ||||
Israeli Bank Two [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, date of issuance | May 17, 2012 | ||||
Debt instrument, term | 5 years | ||||
Frequency of payments | Quarterly | ||||
Date of first required payment | Jul. 17, 2012 | ||||
Debt instrument, interest rate | 4.64% | ||||
Frequency of interest payments | Monthly | ||||
Date of first required interest payment | May 17, 2012 |
LONG TERM DEBT (Schedule of Agg
LONG TERM DEBT (Schedule of Aggregate Annual Maturities) (Details) - Loan Agreements [Member] $ in Thousands | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | |
2,016 | $ 17,050 |
2,017 | 4,150 |
2,018 | 5,000 |
2,019 | 38,750 |
Total principal payments | 64,950 |
Less: unamortized original issue discount | (1,366) |
Fair value of principal payments | 63,584 |
Less: current portion | (16,664) |
Long-term debt | $ 46,920 |
CONVERTIBLE DEBT (Narrative) (D
CONVERTIBLE DEBT (Narrative) (Details) ₪ / shares in Units, $ / shares in Units, ₪ in Thousands | Dec. 03, 2015USD ($) | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($) | Sep. 30, 2014ILS (₪)₪ / shares | Dec. 31, 2013USD ($) | |
Debt Instrument [Line Items] | ||||||
Convertible bonds, aggregate par value | $ 10,000 | |||||
Proceeds from private placement | $ 10,125,000 | |||||
Fair value of the Bonds, including accrued interest | 28,371,000 | $ 35,752,000 | ||||
Series L Convertible Bonds [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Convertible bonds, aggregate par value | $ 36,772,000 | ₪ 143,500 | ||||
Bond purchase price expressed as a percentage of par value | 96.50% | |||||
Convertible bonds, annual interest rate | 5.00% | |||||
Issuance cost | $ 741,000 | |||||
Proceeds from private placement | $ 37,852,000 | |||||
Date of first required payment | Mar. 31, 2016 | |||||
Convertible bonds, conversion price | (per share) | $ 8.61 | ₪ 33.605 | ||||
Fair value of the Bonds, including accrued interest | $ 35,926,000 | [1] | $ 35,752,000 | |||
[1] | include accrued interest of 463 |
CONVERTIBLE DEBT (Schedule of C
CONVERTIBLE DEBT (Schedule of Changes of Long-term Convertible Debt) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
CONVERTIBLE DEBT [Abstract] | ||||
Interest Payable | $ 463 | |||
Convertible Debt [Roll Forward] | ||||
Balance at the beginning of period | $ 35,752 | |||
Issuance of convertible debt | $ 37,852 | |||
Change in fair value | (2,566) | |||
Balance at the end of period | $ 28,371 | $ 35,752 | ||
Series L Convertible Bonds [Member] | ||||
Convertible Debt [Roll Forward] | ||||
Balance at the beginning of period | 35,752 | |||
Issuance of convertible debt | $ 37,852 | |||
Accrued interest | 1,823 | 466 | ||
Change in fair value | 175 | (2,566) | ||
Payment of interest | (1,824) | |||
Balance at the end of period | 35,926 | [1] | $ 35,752 | |
2,016 | 7,354 | |||
2,017 | 7,355 | |||
2,018 | 7,354 | |||
2,019 | 7,355 | |||
2,020 | 7,354 | |||
Fair value of principal payments | $ 36,772 | |||
[1] | include accrued interest of 463 |
COMMITMENTS AND CONTINGENT LI69
COMMITMENTS AND CONTINGENT LIABILITIES (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | May. 28, 2014USD ($) | Nov. 30, 2012USD ($) | |
Business Acquisition [Line Items] | |||
Number of additional lease periods | item | 2 | ||
Number of periods in additional lease | 24 months | ||
Lease expiration date | Jan. 31, 2025 | ||
SweetIM Ltd. [Member] | |||
Business Acquisition [Line Items] | |||
Percentage of shares acquired | 100.00% | ||
Maximum subsequent consideration due for acquisition | $ 7,500 | ||
Estimated contingent payment | $ 2,500 | ||
Liability to be maintained | $ 5,000 | ||
Client Connect [Member] | |||
Business Acquisition [Line Items] | |||
Percentage of amount incurred to be reimbursed | 50.00% | ||
Amount accrued for the settlement | $ 550 |
COMMITMENTS AND CONTINGENT LI70
COMMITMENTS AND CONTINGENT LIABILITIES (Schedule of Aggregate minimum lease commitments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
New offices in Holon, Israel [Member] | |||
Future minimum payments, operating leases: | |||
2,016 | $ 5,953 | ||
2,017 | 5,957 | ||
2,018 | 5,827 | ||
2,019 | 3,546 | ||
Thereafter | 17,349 | ||
Total | 38,632 | ||
Lease expense | 1,710 | $ 1,166 | $ 940 |
Vehicles [Member] | |||
Future minimum payments, operating leases: | |||
Lease expense | $ 1,046 | $ 1,163 | $ 545 |
SHAREHOLDERS' EQUITY (Narrative
SHAREHOLDERS' EQUITY (Narrative) (Details) | Dec. 03, 2015USD ($)$ / sharesshares | Nov. 30, 2015 | Nov. 01, 2014USD ($)shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / shares | Dec. 31, 2015₪ / shares | Dec. 31, 2014₪ / sharesshares | Nov. 18, 2013₪ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Ordinary shares, shares authorized | shares | 120,000,000 | 120,000,000 | 120,000,000 | ||||||
Ordinary shares, par value per share | ₪ / shares | ₪ 0.01 | ₪ 0.01 | ₪ 0.01 | ||||||
Ordinary shares issued in private placement | shares | 4,436,898 | ||||||||
Gross proceeds from private placement | $ 10,125,000 | ||||||||
Purchase price per share (in dollars per share) | $ / shares | $ 2.282 | ||||||||
Period taken to calculate the average closing price of an ordinary share | 30 days | ||||||||
Period taken to calculate the weighted average closing price of an ordinary share, to adjust purchase price downwards | 15 days | ||||||||
Percentage of downwards adjustment to purchase price for each whole 1% decrease in price of ordinary share | 1.00% | ||||||||
Maximum percentage of downwards adjustment to purchase price | 15.00% | ||||||||
Liquidated damages as a percentage of aggregate Subscription Amount | 1.00% | ||||||||
Maximum percentage of the Subscription Amount that entity may incur as liquidated damages | 10.00% | ||||||||
Weighted average fair value of stock options granted | $ / shares | $ 1.14 | $ 4.49 | $ 3 | ||||||
Options outstanding, in-the-money | shares | 3,050,761 | ||||||||
Options outstanding, out of the money | shares | 2,416,576 | ||||||||
Intrinsic value of options outstanding, out of the money | $ 0 | ||||||||
Total intrinsic value of options exercised | 9,000 | $ 11,218,000 | |||||||
Number of stock options accelerated | shares | 479,980 | ||||||||
Total expense incurred in connection with the acceleration | $ 4,800,000 | ||||||||
Total expense incurred | $ 7,429,000 | $ 15,145,000 | $ 10,405,000 | ||||||
Interactive Holding Corp. [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Warrants to purchase ordinary shares granted | shares | 200,000 | ||||||||
Weighted average exercise price of warrants | $ / shares | $ 3.03 | ||||||||
Weighted-average grant-date fair value | $ / shares | $ 1.23 | ||||||||
Total expense incurred | $ 2,000 | ||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of stock options accelerated | shares | 33,333 | ||||||||
Total expense incurred in connection with the acceleration | $ 220,000 | ||||||||
Performance-based Stock Options [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Weighted average fair value of stock options granted | $ / shares | $ 0.90 | ||||||||
Options outstanding, in-the-money | shares | 3,550,000 | ||||||||
Total intrinsic value of options exercised | |||||||||
Unrecognized compensation cost related to outstanding stock options and RSUs | $ 2,288,000 | ||||||||
Unrecognized compensation cost related to outstanding stock options and RSUs, expected period of recognition | 1 year 6 months 7 days | ||||||||
Stock Options And Restricted Stock Units RSU [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Unrecognized compensation cost related to outstanding stock options and RSUs | $ 6,597,000 | ||||||||
Unrecognized compensation cost related to outstanding stock options and RSUs, expected period of recognition | 1 year 1 month 28 days | ||||||||
Outstanding Warrants [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Unrecognized compensation cost related to outstanding stock options and RSUs | $ 244,000 | ||||||||
Unrecognized compensation cost related to outstanding stock options and RSUs, expected period of recognition | 2 years 5 months 23 days | ||||||||
Maximum [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share price | $ / shares | $ 2.624 | ||||||||
2003 Option Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares available for grant | shares | 5,545,844 | ||||||||
2003 Option Plan [Member] | Employee Stock Option [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Option expiration term | 5 years | ||||||||
2003 Option Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Option expiration term | 5 years | ||||||||
2003 Option Plan [Member] | Maximum [Member] | Employee Stock Option [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period for plan | 3 years | ||||||||
2003 Option Plan [Member] | Maximum [Member] | Restricted Stock Units (RSUs) [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period for plan | 3 years | ||||||||
2003 Option Plan [Member] | Minimum [Member] | Employee Stock Option [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period for plan | 1 year | ||||||||
2003 Option Plan [Member] | Minimum [Member] | Restricted Stock Units (RSUs) [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period for plan | 1 year |
SHAREHOLDERS' EQUITY (Schedule
SHAREHOLDERS' EQUITY (Schedule of Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Number of options | ||
Outstanding at January 1, 2015 | 3,339,412 | |
Granted | 3,859,500 | |
Exercised | (6,923) | |
Cancelled | (1,724,652) | |
Outstanding at December 31, 2015 | 5,467,337 | 3,339,412 |
Exercisable at December 31, 2015 | 1,136,243 | |
Vested and expected to vest at December 31, 2015 | 4,236,510 | |
Weighted average Exercise price | ||
Outstanding at January 1, 2015 | $ 8.85 | |
Granted | 3.12 | |
Exercised | 2 | |
Cancelled | 7.33 | |
Outstanding at December 31, 2015 | 5.30 | $ 8.85 |
Exercisable at December 31, 2015 | 7.66 | |
Vested and expected to vest at December 31, 2015 | $ 5.80 | |
Weighted average Remaining contractual term | ||
Outstanding at January 1, 2015 | 3 years 2 months 1 day | 2 years 11 months 5 days |
Outstanding at December 31, 2015 | 3 years 2 months 1 day | 2 years 11 months 5 days |
Exercisable at December 31, 2015 | 1 year 11 months 5 days | |
Vested and expected to vest at December 31, 2015 | 3 years 7 days | |
Aggregate intrinsic value | ||
Outstanding at January 1, 2015 | $ 348 | |
Exercised | 9 | $ 11,218 |
Outstanding at December 31, 2015 | 1,709 | $ 348 |
Exercisable at December 31, 2015 | 131 | |
Vested and expected to vest at December 31, 2015 | $ 1,319 | |
Performance-based Stock Options [Member] | ||
Number of options | ||
Outstanding at January 1, 2015 | ||
Granted | 3,950,000 | |
Exercised | ||
Cancelled | (400,000) | |
Outstanding at December 31, 2015 | 3,550,000 | |
Exercisable at December 31, 2015 | ||
Vested and expected to vest at December 31, 2015 | 2,676,859 | |
Weighted average Exercise price | ||
Outstanding at January 1, 2015 | ||
Granted | $ 2.37 | |
Exercised | ||
Cancelled | $ 2.28 | |
Outstanding at December 31, 2015 | $ 2.38 | |
Exercisable at December 31, 2015 | ||
Vested and expected to vest at December 31, 2015 | $ 2.38 | |
Weighted average Remaining contractual term | ||
Outstanding at January 1, 2015 | 4 years 11 months 5 days | |
Outstanding at December 31, 2015 | 4 years 11 months 5 days | |
Exercisable at December 31, 2015 | ||
Vested and expected to vest at December 31, 2015 | 4 years 11 months 5 days | |
Aggregate intrinsic value | ||
Outstanding at January 1, 2015 | ||
Exercised | ||
Outstanding at December 31, 2015 | $ 4,793 | |
Exercisable at December 31, 2015 | ||
Vested and expected to vest at December 31, 2015 | $ 3,550 |
SHAREHOLDERS' EQUITY (Schedul73
SHAREHOLDERS' EQUITY (Schedule of Option Activity by Price Range) (Details) | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Outstanding | |
Number of options | shares | 9,017,337 |
Weighted average remaining contractual life | 3 years 9 months 29 days |
Weighted average exercise price | $ 4.15 |
Exercisable | |
Number of options | shares | 1,136,243 |
Weighted average remaining contractual life | 1 year 11 months 5 days |
Weighted average exercise price | $ 7.66 |
$0.34-$2.00 [Member] | |
Outstanding | |
Ranges of exercise price, minimum | 0.34 |
Ranges of exercise price, maximum | $ 2 |
Number of options | shares | 95,261 |
Weighted average remaining contractual life | 2 years 11 months 5 days |
Weighted average exercise price | $ 1.89 |
Exercisable | |
Number of options | shares | 74,044 |
Weighted average remaining contractual life | 2 years 10 months 24 days |
Weighted average exercise price | $ 1.86 |
$2.11-$2.52 [Member] | |
Outstanding | |
Ranges of exercise price, minimum | 2.11 |
Ranges of exercise price, maximum | $ 2.52 |
Number of options | shares | 4,455,000 |
Weighted average remaining contractual life | 4 years 8 months 5 days |
Weighted average exercise price | $ 2.28 |
Exercisable | |
Number of options | shares | |
Weighted average remaining contractual life | |
Weighted average exercise price | |
$3.27-$3.77 [Member] | |
Outstanding | |
Ranges of exercise price, minimum | $ 3.27 |
Ranges of exercise price, maximum | $ 3.77 |
Number of options | shares | 2,505,500 |
Weighted average remaining contractual life | 3 years 4 months 28 days |
Weighted average exercise price | $ 3.53 |
Exercisable | |
Number of options | shares | |
Weighted average remaining contractual life | |
Weighted average exercise price | |
$4.04-$6.93 [Member] | |
Outstanding | |
Ranges of exercise price, minimum | $ 4.04 |
Ranges of exercise price, maximum | $ 6.93 |
Number of options | shares | 484,229 |
Weighted average remaining contractual life | 2 years 3 months 7 days |
Weighted average exercise price | $ 5.14 |
Exercisable | |
Number of options | shares | 414,283 |
Weighted average remaining contractual life | 1 year 8 months 23 days |
Weighted average exercise price | $ 5.12 |
$7.11-$9.93 [Member] | |
Outstanding | |
Ranges of exercise price, minimum | 7.11 |
Ranges of exercise price, maximum | $ 9.93 |
Number of options | shares | 334,443 |
Weighted average remaining contractual life | 1 year 2 months 1 day |
Weighted average exercise price | $ 8.18 |
Exercisable | |
Number of options | shares | 261,441 |
Weighted average remaining contractual life | 9 months 25 days |
Weighted average exercise price | $ 8.14 |
$10.06-$11.94 [Member] | |
Outstanding | |
Ranges of exercise price, minimum | 10.06 |
Ranges of exercise price, maximum | $ 11.94 |
Number of options | shares | 1,004,779 |
Weighted average remaining contractual life | 2 years 6 months 7 days |
Weighted average exercise price | $ 11.26 |
Exercisable | |
Number of options | shares | 301,061 |
Weighted average remaining contractual life | 2 years 8 months 26 days |
Weighted average exercise price | $ 10.75 |
$12.56-$13.54 [Member] | |
Outstanding | |
Ranges of exercise price, minimum | 12.56 |
Ranges of exercise price, maximum | $ 13.54 |
Number of options | shares | 138,125 |
Weighted average remaining contractual life | 3 years 7 months 13 days |
Weighted average exercise price | $ 12.66 |
Exercisable | |
Number of options | shares | 85,414 |
Weighted average remaining contractual life | 2 years 7 months 2 days |
Weighted average exercise price | $ 12.66 |
SHAREHOLDERS' EQUITY (Schedul74
SHAREHOLDERS' EQUITY (Schedule of Restricted Stock Unit Activity) (Details) - RSUs [Member] | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Number of Shares: | |
Outstanding at the beginning of year | shares | 1,397,300 |
Granted | shares | |
Vested | shares | (366,398) |
Cancelled | shares | (338,582) |
Outstanding at the end of year | shares | 692,320 |
Expected to vest after December 31, 2015 | shares | 605,061 |
Weighted average grant date fair value | |
Outstanding, beginning balance | $ / shares | $ 12.45 |
Granted | $ / shares | |
Vested | $ / shares | $ 12.39 |
Cancelled | $ / shares | 12.11 |
Outstanding, ending balance | $ / shares | 12.64 |
Expected to vest after December 31, 2015 | $ / shares | $ 12.64 |
SHAREHOLDERS' EQUITY (Schedul75
SHAREHOLDERS' EQUITY (Schedule of Stock Based Compensation Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 7,429 | $ 15,145 | $ 10,405 |
Share-based compensation in discontinued operations | $ 2,815 | ||
Cost of Revenues [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 247 | $ 249 | |
Research and Development [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 1,036 | 2,435 | $ 1,077 |
Sales and Marketing [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 1,856 | 2,944 | 690 |
General and Administrative [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 4,290 | 9,297 | $ 8,638 |
Restructuring Costs [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 220 |
FINANCIAL INCOME (EXPENSE), N76
FINANCIAL INCOME (EXPENSE), NET (Schedule of Financial Income (Expense), Net) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Financial income: | |||
Interest income | $ 551 | $ 93 | $ 1,569 |
Foreign currency translation gains, net | $ 572 | $ 1,245 | |
Change in fair value of convertible debt | $ 2,566 | ||
Change in fair value of SWAP | $ 225 | ||
Financial income | $ 1,348 | $ 2,659 | $ 2,814 |
Financial expense: | |||
Foreign currency translation losses, net | (2,669) | ||
Interest and change in fair value of payment obligation related to acquisitions | $ (489) | (1,067) | |
Issuance costs of convertible debt | (741) | ||
Interest expense on debts | $ (2,313) | $ (733) | |
Change in fair value of convertible debt | (175) | ||
Bank charges and other | (310) | $ (337) | $ (32) |
Financial expenses | (3,287) | (5,547) | (32) |
Financial income (expense), net | $ (1,939) | $ (2,888) | $ 2,782 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Taxes On Income [Line Items] | ||||
Dividend distrubutions, withholding tax rate | 20.00% | 15.00% | ||
Amount of trapped earning out of Beneficiary Enterprise released | $ 270,840 | |||
Additional corporate tax incurred on trapped earnings released | $ 11,838 | |||
Net operating loss carry forward | $ 14,000 | |||
United States [Member] | ||||
Taxes On Income [Line Items] | ||||
Net operating loss carry forward | $ 16,000 | |||
United States [Member] | Earliest Tax Year [Member] | ||||
Taxes On Income [Line Items] | ||||
Expiration of operating loss carry forwards | Dec. 31, 2024 | |||
United States [Member] | Latest Tax Year [Member] | ||||
Taxes On Income [Line Items] | ||||
Expiration of operating loss carry forwards | Dec. 31, 2034 | |||
Development Area A [Member] | ||||
Taxes On Income [Line Items] | ||||
Preferred Enterprise tax rate | 9.00% | 9.00% | 7.00% | |
Other regions [Member] | ||||
Taxes On Income [Line Items] | ||||
Preferred Enterprise tax rate | 16.00% | 16.00% | 12.50% | |
Preferred Enterprise Income Tax Rate, 2016 and Thereafter [Member] | Development Area A [Member] | ||||
Taxes On Income [Line Items] | ||||
Preferred Enterprise tax rate | 9.00% | |||
Preferred Enterprise Income Tax Rate, 2016 and Thereafter [Member] | Other regions [Member] | ||||
Taxes On Income [Line Items] | ||||
Preferred Enterprise tax rate | 16.00% |
INCOME TAXES (Schedule of Incom
INCOME TAXES (Schedule of Income (Loss) Before Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
INCOME TAXES [Abstract] | |||
Domestic | $ (43,711) | $ 55,272 | $ 83,388 |
Foreign | (24,249) | (2,865) | 1,636 |
Income (Loss) before Taxes on Income | $ (67,960) | $ 52,407 | $ 85,024 |
INCOME TAXES (Schedule of Taxes
INCOME TAXES (Schedule of Taxes on Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
INCOME TAXES [Abstract] | ||||
Current taxes | $ 9,670 | $ 23,432 | $ 10,778 | |
Deferred tax benefit | $ (8,973) | $ (13,851) | ||
Taxes in respect of previous years | [1] | $ 11,838 | ||
Taxes on income | $ 697 | $ 9,581 | $ 22,616 | |
[1] | The year 2013 include non-recurring tax expenses in respect of the release of Conduit's trapped earnings (see Note 13 f below). |
INCOME TAXES (Schedule of Tax80
INCOME TAXES (Schedule of Taxes on Income by Jurisdiction (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Taxes on income by jurisdiction | ||||
Domestic | $ 8,830 | $ 11,716 | $ 22,616 | |
Foreign | (8,133) | (2,135) | ||
Taxes on income | 697 | 9,581 | $ 22,616 | |
Domestic: | ||||
Current taxes | 8,943 | 23,272 | $ 10,778 | |
Deferred tax benefit | $ (113) | $ (11,556) | ||
Taxes in respect of previous years | [1] | $ 11,838 | ||
Total - Domestic | $ 8,830 | $ 11,716 | $ 22,616 | |
Foreign: | ||||
Current taxes | 727 | 160 | ||
Deferred tax benefit | (8,860) | (2,295) | ||
Total - Foreign | (8,133) | (2,135) | ||
Taxes on income | $ 697 | $ 9,581 | $ 22,616 | |
[1] | The year 2013 include non-recurring tax expenses in respect of the release of Conduit's trapped earnings (see Note 13 f below). |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Assets (Liabilities)) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Net operating loss carry forwards | $ 10,280 | $ 5,699 |
Research and development | 4,008 | 4,463 |
Other temporary differences mainly relating to reserve and allowances | 4,058 | 1,929 |
Deferred tax assets, before valuation allowance | 18,346 | 12,091 |
Valuation allowance | 4,212 | 3,985 |
Total deferred tax assets, net | 14,134 | 8,106 |
Deferred tax liabilities: | ||
Intangible assets | (17,971) | (3,189) |
Property and equipment, net | (3,275) | (331) |
Deferred tax liability | (21,246) | (3,520) |
Total deferred tax asset (liability), net | (7,112) | 4,586 |
Deferred tax asset (liability), net [Line Items] | ||
Long term deferred tax liability | (19,456) | (331) |
Total deferred tax asset (liability), net | (7,112) | 4,586 |
Domestic [Member] | ||
Deferred tax liabilities: | ||
Total deferred tax asset (liability), net | 4,745 | 4,893 |
Deferred tax asset (liability), net [Line Items] | ||
Long term deferred tax asset, net | 5,006 | $ 4,893 |
Long term deferred tax liability | (261) | |
Total deferred tax asset (liability), net | 4,745 | $ 4,893 |
Foreign [Member] | ||
Deferred tax liabilities: | ||
Total deferred tax asset (liability), net | (11,857) | (307) |
Deferred tax asset (liability), net [Line Items] | ||
Long term deferred tax asset, net | 7,338 | 24 |
Long term deferred tax liability | (19,195) | (331) |
Total deferred tax asset (liability), net | $ (11,857) | $ (307) |
INCOME TAXES (Schedule of the R
INCOME TAXES (Schedule of the Reconciliation of the Effective Tax Rate) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
INCOME TAXES [Abstract] | |||
Income (loss) before taxes on income | $ (67,960) | $ 52,407 | $ 85,024 |
Statutory tax rate in Israel | 26.50% | 26.50% | 25.00% |
Theoretical tax expense (income) | $ (18,009) | $ 13,888 | $ 21,256 |
Increase (decrease) in tax expenses resulting from: | |||
"Preferred Enterprise" benefits | (5,654) | (10,644) | (10,495) |
Non-deductible expenses including impairment charges | $ 26,702 | $ 4,059 | 1,971 |
Taxes in respect to release of "trapped earnings" | $ 11,838 | ||
Deferred taxes on losses and other temporary differences, for which a valuation allowance was provided, net | $ (3,426) | $ 1,962 | |
Tax adjustment in respect of different tax rate of foreign subsidiaries | 1,185 | (461) | |
Other | (101) | 777 | $ (1,954) |
Taxes on income | $ 697 | $ 9,581 | $ 22,616 |
Benefit per ordinary share from "Preferred Enterprise" status: | |||
Basic | $ 0.08 | $ 0.16 | $ 0.19 |
Diluted | $ 0.08 | $ 0.15 | $ 0.19 |
INCOME TAXES (Schedule of Unrec
INCOME TAXES (Schedule of Unrecognized Tax Benefits) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
INCOME TAXES [Abstract] | |
Balance at January 1 | $ 724 |
Decrease related to prior year tax positions | (22) |
Increase related to current year tax positions | 1,665 |
Balance at December 31 | $ 2,367 |
EARNINGS PER SHARE (Schedule of
EARNINGS PER SHARE (Schedule of Computation of Basic and Diluted Net Earnings Per Common Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator: | |||
Net income (Loss) attributable to ordinary shares - basic | $ (68,657) | $ 42,826 | $ 62,408 |
Gains related to convertible debt, net | (2,100) | ||
Net income (Loss) from continuing operations - diluted | $ (68,657) | $ 40,726 | $ 62,408 |
Net loss from discontinued operations - basic and diluted | $ (33,795) | ||
Denominator: | |||
Weighted average number of ordinary shares outstanding during the year | 71,300,432 | 68,213,209 | 53,910,741 |
Weighted average effect of dilutive securities: | |||
Assumed conversion of convertible debt | 1,090,906 | ||
Shares to be issued in connection with acquisition | 52,664 | ||
Employee stock options and restricted stock units | 970,632 | 926,566 | |
Diluted number of ordinary shares outstanding - Continuing operations | 71,300,432 | 70,327,411 | 54,837,307 |
Diluted number of ordinary shares outstanding - Discontinued operations | 54,837,307 | ||
Basic net earnings (loss) per ordinary share | |||
Continuing operations | $ (0.96) | $ 0.63 | $ 1.16 |
Discontinued operations | (0.63) | ||
Net income (Loss) | $ (0.96) | $ 0.63 | 0.53 |
Diluted net earnings (loss) per ordinary share | |||
Continuing operations | $ (0.96) | $ 0.58 | 1.14 |
Discontinued operations | (0.62) | ||
Net income (Loss) | $ (0.96) | $ 0.58 | $ 0.52 |
Ordinary shares equivalents excluded because their effect would have been anti-dilutive | 14,179,439 | 3,766,080 | 2,778,618 |
RESTRUCTURING COSTS (Schedule o
RESTRUCTURING COSTS (Schedule of Restructuring Accruals) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
RESTRUCTURING COSTS [Line item] | ||
Total restructuring costs | $ 1,052 | $ 3,981 |
Restructuring accrual | 1,756 | 2,257 |
Severance and payroll related [Member] | ||
RESTRUCTURING COSTS [Line item] | ||
Total restructuring costs | 1,022 | 1,993 |
Lease facilities and related expenses [Member] | ||
RESTRUCTURING COSTS [Line item] | ||
Total restructuring costs | 1,248 | |
Property and equipment impairment [Member] | ||
RESTRUCTURING COSTS [Line item] | ||
Total restructuring costs | 159 | 632 |
Write-off of prepaid royalties [Member] | ||
RESTRUCTURING COSTS [Line item] | ||
Total restructuring costs | 219 | |
Other [Member] | ||
RESTRUCTURING COSTS [Line item] | ||
Total restructuring costs | $ (348) | $ 108 |
RESTRUCTURING COSTS (Schedule86
RESTRUCTURING COSTS (Schedule of Accrued Restructuring Liability) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
RESTRUCTURING COSTS [Line item] | |
Balance at beginning of period | $ 2,257 |
Additional costs | 1,022 |
Cash payments | (2,179) |
Adjustments | 656 |
Balance at end of period | 1,756 |
2014 Restructuring Plan [Member] | Severance and payroll related [Member] | |
RESTRUCTURING COSTS [Line item] | |
Balance at beginning of period | $ 1,027 |
Additional costs | |
Cash payments | $ (1,027) |
Adjustments | |
Balance at end of period | |
2014 Restructuring Plan [Member] | Rent and related expenses [Member] | |
RESTRUCTURING COSTS [Line item] | |
Balance at beginning of period | $ 1,155 |
Additional costs | |
Cash payments | $ (807) |
Adjustments | $ (348) |
Balance at end of period | |
2014 Restructuring Plan [Member] | Other charges [Member] | |
RESTRUCTURING COSTS [Line item] | |
Balance at beginning of period | $ 75 |
Additional costs | |
Cash payments | $ (75) |
Adjustments | |
Balance at end of period | |
2015 Restructuring Plan [Member] | Severance and payroll related [Member] | |
RESTRUCTURING COSTS [Line item] | |
Balance at beginning of period | |
Additional costs | $ 1,022 |
Cash payments | $ (270) |
Adjustments | |
Balance at end of period | $ 752 |
2015 Restructuring Plan [Member] | Restructuring accrual assumed upon acquisition [Member] | |
RESTRUCTURING COSTS [Line item] | |
Balance at beginning of period | |
Additional costs | |
Cash payments | |
Adjustments | $ 1,004 |
Balance at end of period | $ 1,004 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Related Party Transaction [Line Items] | |||
Interest expense | $ 2,313 | $ 733 | |
Conduit Shareholders [Member] | ClientConnect [Member] | |||
Related Party Transaction [Line Items] | |||
Services provided by related party to Client Connect, Ltd. | 1,645 | ||
Revenue from transactions with related party to Client Connect, Ltd. | 142 | ||
Number of officers | item | 2 | ||
Conduit Shareholders [Member] | ClientConnect [Member] | Line of Credit [Member] | |||
Related Party Transaction [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 20,000 | ||
Debt instrument, interest rate | 3.00% | ||
Proceeds from lines of credit | $ 14,750 | ||
Debt instrument, maturity date | Apr. 1, 2014 | ||
Interest expense | $ 117 | ||
Perion Network Ltd [Member] | |||
Related Party Transaction [Line Items] | |||
Customer acquisition costs | $ 18,271 |
MAJOR CUSTOMERS (Details)
MAJOR CUSTOMERS (Details) | 12 Months Ended | |||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||||
Revenues [Member] | Credit Concentration Risk [Member] | Customer A [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | 81.00% | 74.00% | 63.00% | |||
Revenues [Member] | Credit Concentration Risk [Member] | Customer B [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | [1] | [1] | 22.00% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer A [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | 23.00% | 65.00% | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk, percentage | [1] | |||||
[1] | less than 10% |
GEOGRAPHIC INFORMATION (Details
GEOGRAPHIC INFORMATION (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Number of operating segments | item | 1 | ||
Total Revenues | $ 220,950 | $ 388,731 | $ 325,508 |
Property and equipment, net | 12,714 | 12,180 | |
Israel [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property and equipment, net | 9,161 | 9,952 | |
North America (mainly U.S.) [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total Revenues | 173,424 | 292,409 | 239,884 |
Property and equipment, net | 3,071 | 1,460 | |
Europe [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total Revenues | 40,612 | 69,281 | 69,833 |
Property and equipment, net | 482 | 768 | |
Other [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total Revenues | $ 6,914 | $ 27,041 | $ 15,791 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | Mar. 04, 2016 | Dec. 31, 2013 |
Client Connect [Member] | Conduit Shareholders [Member] | Line of Credit [Member] | ||
Subsequent Event [Line Items] | ||
Line of credit, maximum borrowing capacity | $ 20,000 | |
Subsequent Event [Member] | Interactive Holding Corp. [Member] | Revolving loan facility [Member] | ||
Subsequent Event [Line Items] | ||
Line of credit, maximum borrowing capacity | $ 10,000 | |
Subsequent Event [Member] | Interactive Holding Corp. [Member] | Swing line loan commitment [Member] | ||
Subsequent Event [Line Items] | ||
Line of credit, maximum borrowing capacity | 3,000 | |
Subsequent Event [Member] | Interactive Holding Corp. [Member] | Letter of credit commitment [Member] | ||
Subsequent Event [Line Items] | ||
Line of credit, maximum borrowing capacity | $ 3,000 |