Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 21, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | TYPE | |
Entity Registrant Name | MONOTYPE IMAGING HOLDINGS INC. | |
Entity Central Index Key | 1,385,292 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 40,662,961 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 95,441 | $ 87,520 |
Accounts receivable, net of allowance for doubtful accounts of $263 at March 31, 2016 and $264 at December 31, 2015 | 16,378 | 15,179 |
Income tax refunds receivable | 2,132 | 2,558 |
Prepaid expenses and other current assets | 3,857 | 3,846 |
Total current assets | 117,808 | 109,103 |
Property and equipment, net | 14,637 | 15,204 |
Goodwill | 187,514 | 185,735 |
Intangible assets, net | 67,982 | 69,264 |
Restricted cash | 9,323 | 9,304 |
Other assets | 3,104 | 3,177 |
Total assets | 400,368 | 391,787 |
Current liabilities: | ||
Accounts payable | 2,281 | 1,385 |
Accrued expenses and other current liabilities | 19,507 | 21,422 |
Accrued income taxes payable | 1,094 | 2,395 |
Deferred revenue | 9,932 | 10,086 |
Total current liabilities | 32,814 | 35,288 |
Other long-term liabilities | 7,480 | 6,914 |
Deferred income taxes | 38,756 | 35,159 |
Reserve for income taxes, net of current portion | 2,376 | 2,316 |
Accrued pension benefits | $ 5,199 | $ 4,928 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, Authorized shares: 10,000,000; Issued and outstanding: none | ||
Common stock, $0.001 par value, Authorized shares: 250,000,000; Shares issued: 42,683,188 at March 31, 2016 and 42,019,646 at December 31, 2015. | $ 43 | $ 42 |
Additional paid-in capital | 259,865 | 256,215 |
Treasury stock, at cost, 2,035,825 shares at March 31, 2016 and 1,999,354 shares at December 31, 2015 | (50,455) | (50,455) |
Retained earnings | 109,795 | 108,908 |
Accumulated other comprehensive loss | (5,505) | (7,528) |
Total stockholders' equity | 313,743 | 307,182 |
Total liabilities and stockholders' equity | $ 400,368 | $ 391,787 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 263 | $ 264 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 42,683,188 | 42,019,646 |
Treasury stock, shares | 2,035,825 | 1,999,354 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Revenue | $ 49,842 | $ 46,046 |
Cost of revenue | 8,319 | 7,410 |
Cost of revenue-amortization of acquired technology | 1,131 | 1,133 |
Total cost of revenue | 9,450 | 8,543 |
Gross profit | 40,392 | 37,503 |
Operating expenses: | ||
Marketing and selling | 14,087 | 12,976 |
Research and development | 7,336 | 5,799 |
General and administrative | 8,849 | 6,899 |
Amortization of other intangible assets | 735 | 702 |
Total operating expenses | 31,007 | 26,376 |
Income from operations | 9,385 | 11,127 |
Other (income) expense: | ||
Interest expense | 162 | 346 |
Interest income | (54) | (112) |
Loss on foreign exchange | 807 | 114 |
Gain on derivatives | (6) | (136) |
Other | 11 | (1) |
Total other expense | 920 | 211 |
Income before provision for income taxes | 8,465 | 10,916 |
Provision for income taxes | 3,107 | 3,559 |
Net income | 5,358 | 7,357 |
Net income available to common stockholders-basic | 5,218 | 7,211 |
Net income available to common stockholders-diluted | $ 5,219 | $ 7,212 |
Net income per common share: | ||
Basic | $ 0.13 | $ 0.19 |
Diluted | $ 0.13 | $ 0.18 |
Weighted average number of shares outstanding: | ||
Basic | 39,122,649 | 38,829,169 |
Diluted | 39,521,619 | 39,522,139 |
Dividends declared per common share | $ 0.11 | $ 0.10 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 5,358 | $ 7,357 |
Other comprehensive (loss) income, net of tax: | ||
Unrecognized actuarial gain, net of tax of $4 and $0, respectively | 9 | |
Foreign currency translation adjustments, net of tax of $1,166 and $2,177, respectively | 2,014 | (4,106) |
Comprehensive income | $ 7,381 | $ 3,251 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Unrecognized actuarial gain, tax | $ 4 | $ 0 |
Foreign currency translation adjustments, tax | $ 1,166 | $ 2,177 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities | ||
Net income | $ 5,358 | $ 7,357 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,874 | 2,302 |
Amortization of deferred financing costs and accretion of interest | 55 | 85 |
Share based compensation | 3,778 | 2,771 |
Excess tax benefit on stock options | (159) | (1,225) |
Provision for doubtful accounts | 30 | 20 |
Deferred income taxes | 1,673 | 1,631 |
Unrealized currency loss (gain) on foreign denominated intercompany transactions | 1,130 | (9) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,134) | (1,073) |
Prepaid expenses and other assets | (32) | 1,443 |
Restricted cash | (18) | |
Accounts payable | 872 | 566 |
Accrued income taxes | (1,085) | (1,193) |
Accrued expenses and other liabilities | (1,995) | (3,080) |
Deferred revenue | (158) | 1,327 |
Net cash provided by operating activities | 11,189 | 10,922 |
Cash flows from investing activities | ||
Purchases of property and equipment | (527) | (4,173) |
Acquisition of business, net of cash acquired | (101) | (14,303) |
Net cash used in investing activities | (628) | (18,476) |
Cash flows from financing activities | ||
Excess tax benefit on stock options | 159 | 1,225 |
Common stock dividends paid | (4,002) | (3,151) |
Purchase of treasury stock | (6,072) | |
Proceeds from exercises of common stock options | 790 | 4,594 |
Net cash used in financing activities | (3,053) | (3,404) |
Effect of exchange rates on cash and cash equivalents | 413 | (602) |
Increase (decrease) in cash and cash equivalents | 7,921 | (11,560) |
Cash and cash equivalents at beginning of period | 87,520 | 90,325 |
Cash and cash equivalents at end of period | $ 95,441 | $ 78,765 |
Nature of the Business
Nature of the Business | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business | 1. Nature of the Business Monotype Imaging Holdings Inc. (the “Company” or “we”) is a leading provider of type, technology and expertise for creative professionals and consumer device manufacturers. Our end-user and embedded solutions for print, web and mobile environments enable consumers and professionals to create and consume dynamic content across multiple devices and mediums. Our technologies and fonts enable the display and printing of high quality digital text. Our solutions power the visual expression of the leading makers of a wide range of devices, including laser printers, digital copiers, mobile phones, e-book readers, tablets, automotive displays, digital cameras, navigation devices, digital televisions, set-top boxes, consumer appliances and Internet of Things devices, as well as provide a high-quality text experience in numerous software applications and operating systems. We also provide printer drivers and printer user interface technology to printer manufacturers and OEMs (original equipment manufacturers). We license our fonts and technologies to consumer device manufacturers, independent software vendors and creative and business professionals and we are headquartered in Woburn, Massachusetts. We operate in one business segment: the development, marketing and licensing of technologies and fonts. We also maintain various offices worldwide for selling and marketing, research and development and administration. We conduct our operations through four domestic operating subsidiaries, Monotype Imaging Inc., Monotype ITC Inc., MyFonts Inc. and Swyft Media Inc., and five foreign operating subsidiaries, Monotype Ltd., Monotype GmbH (“Monotype Germany”) and its wholly-owned subsidiary, FontShop International Inc., Monotype Solutions India Pvt. Ltd., Monotype Hong Kong Ltd. and Monotype KK. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 2. Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X. Accordingly, such financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. The results for interim periods are not necessarily indicative of results to be expected for the year or for any future periods. In management’s opinion, these unaudited condensed consolidated interim financial statements contain all adjustments of a normal recurring nature necessary for a fair presentation of the financial statements for the interim periods presented. These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2015 as reported in the Company’s Annual Report on Form 10-K. The accompanying condensed consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the condensed consolidated financial statements. As of March 31, 2016, the Company’s significant accounting policies and estimates, which are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, have not changed. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Pronouncements | 3. Recently Issued Accounting Pronouncements Share Based Compensation In March 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2016-09, Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), Amendments to the FASB Accounting Standards Codification, Business Combinations In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement- Period Adjustments Internal-Use Software In April 2015, the FASB issued ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. Interest In April 2015, the FASB, issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs, Consolidation In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810), Amendments to the Consolidation Analysis Going Concern In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40); Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern Revenue Recognition In May 2014, the FASB and the International Accounting Standards Board jointly issued ASU 2014-9, Revenue from Contracts with Customers (Topic 606), |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | 4. Acquisitions Swyft Media On January 30, 2015, the Company purchased all of the outstanding stock of TextPride, Inc. operating under the name of Swyft Media, a privately-held mobile messaging company located in New York, New York. In connection with the acquisition, TextPride, Inc. was renamed Swyft Media Inc. and became a wholly-owned subsidiary of the registrant. Swyft Media’s expertise in the emerging world of branded, in-app mobile messaging content helps the Company reach new customers, with an opportunity to add value by including some of the world’s largest and most popular collections of fonts. The impact of this acquisition was not material to our consolidated financial statements. The Company acquired Swyft Media for an aggregate purchase price of approximately $17.0 million, consisting of $12.1 million in cash, plus contingent consideration of up to $15.0 million payable through 2018, which had an estimated net present value of $4.9 million at the date of acquisition. We paid $11.6 million from cash on hand at the time of the acquisition, net of cash acquired. Of the final purchase price, approximately $4.7 million and $13.6 million have been allocated to intangible assets and goodwill, respectively. The purchase price allocation was finalized as of December 31, 2015. The fair value of the assets acquired and liabilities assumed is less than the purchase price, resulting in the recognition of goodwill. The goodwill reflects the value of the synergies we expect to realize and the assembled workforce. The acquisition of Swyft Media was structured in such a manner that the goodwill is not expected to be deductible for tax purposes. The purchase price has been allocated to the tangible and intangible assets acquired and liabilities assumed based upon the respective estimates of fair value as of the date of the acquisition and using assumptions that the Company’s management believes are reasonable given the information available. Twelve employees joined the Company in connection with the acquisition. On November 9, 2015, the Merger Agreement was amended and the Company accelerated the payment of the contingent consideration. Under the Amendment to the Merger Agreement, the contingent consideration has been fixed at $15.0 million, and is to be paid over the next three years, beginning in the fourth quarter of 2015. The difference between the fixed payments due under the amended agreement of $15.0 million, and the fair value of the contingent acquisition consideration liability immediately prior to the amendment totaled approximately $9.9 million. The Company paid the non-employee shareholders of Swyft Media $5.4 million in the fourth quarter of 2015, of which approximately $3.8 million was recognized as a charge to operations. The remaining $9.3 million payable to the founder-shareholders of Swyft Media is due in installments of approximately $2.0 million and $7.3 million to be paid in January 2018 and October 2018, respectively, contingent upon their continued employment through such dates. Accordingly, the excess of these payments over the accreted balance of the contingent acquisition consideration liability recognized in purchase accounting of $6.1 million is being accounted for as deferred compensation to be recognized as operating expenses throughout the term over which they are earned, on a straight-line basis. In the quarter ended March 31, 2016, approximately $0.6 million of related compensation expense was recognized and has been included in marketing and selling expense in the accompanying consolidated statement of income. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. Fair Value Measurements Fair value is based on 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 order to increase consistency and comparability in fair value measurements, the Codification establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimizes the use of unobservable inputs to the extent possible as well as considers counterparty and our own credit risk in its assessment of fair value. The following table presents our financial assets and liabilities that are carried at fair value, classified according to the three categories described above (in thousands): Fair Value Measurement at March 31, 2016 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents—money market funds $ 21,367 $ 21,367 $ — $ — Cash equivalents—commercial paper 11,994 — 11,994 — Cash equivalents—corporate bonds 6,694 — 6,694 — Total assets $ 40,055 $ 21,367 $ 18,688 $ — Fair Value Measurement at December 31, 2015 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents—money market funds $ 21,808 $ 21,808 $ — $ — Cash equivalents—commercial paper 8,920 — 8,920 — Cash equivalents—U.S. government and agency securities 9,293 — 9,293 — Total assets $ 40,021 $ 21,808 $ 18,213 $ — The Company’s recurring fair value measures relate to short-term investments, which are classified as cash equivalents, derivative instruments and from time to time contingent consideration. The fair value of our cash equivalents are either based on quoted prices for similar assets or other observable inputs such as yield curves at commonly quoted intervals and other market corroborated inputs. The fair value of our derivatives is based on quoted market prices from various banking institutions or an independent third party provider for similar instruments. In determining the fair value, we consider our non-performance risk and that of our counterparties. At March 31, 2016, we had one contract to sell 2.4 million British pounds sterling and purchase $3.4 million that together, had an immaterial fair value. There were no outstanding forward contracts at December 31, 2015. The Company’s non-financial assets and non-financial liabilities subject to non-recurring measurements include goodwill and intangible assets. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 6. Intangible Assets Intangible assets as of March 31, 2016 and December 31, 2015 were as follows (dollar amounts in thousands): Weighted- March 31, 2016 December 31, 2015 Average Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Net Balance Gross Carrying Amount Accumulated Amortization Net Balance Customer relationships 10 $ 60,248 $ (49,423 ) $ 10,825 $ 59,994 $ (48,767 ) $ 11,227 Acquired technology 11 54,633 (40,686 ) 13,947 54,424 (39,336 ) 15,088 Non-compete agreements 4 13,007 (12,246 ) 761 12,946 (12,111 ) 835 Indefinite-lived intangible assets: Trademarks 38,049 — 38,049 37,714 — 37,714 Domain names 4,400 — 4,400 4,400 — 4,400 Total $ 170,337 $ (102,355 ) $ 67,982 $ 169,478 $ (100,214 ) $ 69,264 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | 7. Debt On September 15, 2015, the Company entered into a new credit agreement (the “New Credit Agreement”) by and among the Company, the Company’s subsidiary, Monotype Imaging Inc., any financial institution that becomes a Lender (as defined therein) and Silicon Valley Bank, as agent which provides for a five-year $150.0 million secured revolving credit facility (the “Credit Facility”). The Credit Facility permits the Company to request that the Lenders, at their election, increase the secured credit facility to a maximum of $200.0 million. The New Credit Agreement replaced the Company’s existing $120.0 million revolving credit facility (the “Original Credit Agreement”) by and between the Company and Wells Fargo Capital Finance, LLC. The Original Credit Agreement was terminated effective September 15, 2015 and was scheduled to expire on July 13, 2016. Borrowings under the Credit Facility bear interest at a variable rate not less than zero based upon, at the Company’s option, either LIBOR or the higher of (i) the prime rate as published in the Wall Street Journal, and (ii) 0.5% plus the overnight federal funds rate, plus in each case, an applicable margin. The applicable margin for LIBOR loans, based on the applicable leverage ratio, is 1.25%, 1.50% or 1.75% per annum, and the applicable margin for base rate loans, based on the applicable leverage ratio, is either 0.25%, 0.50% or 0.75%% per annum. At March 31, 2016 our rate, inclusive of applicable margins, was 1.9% for LIBOR. At March 31, 2016, the Company had no outstanding borrowings under the Credit Facility. The Company is required to pay a commitment fee, based on the applicable leverage ratio, equal to 0.20%, 0.25% or 0.30% per annum on the undrawn portion available under the revolving credit facility and variable per annum fees in respect of outstanding letters of credit. In connection with the New Credit Agreement, the Company incurred closing and legal fees of approximately $1.0 million, which have been accounted for as deferred financing costs and will be amortized to interest expense over the term of the New Credit Agreement. In addition to other covenants, the New Credit Agreement places limits on the Company and its subsidiaries’ ability to incur debt or liens and engage in sale-leaseback transactions, make loans and investments, incur additional indebtedness, engage in mergers, acquisitions and asset sales, transact with affiliates and alter its business. The New Credit Agreement also contains events of default, and affirmative covenants, including financial maintenance covenants which include (i) a maximum leverage ratio of consolidated total debt to consolidated adjusted EBITDA of 3.00 to 1.00, and (ii) a minimum fixed charge coverage ratio of 1.25 to 1.00. As of March 31, 2016, our leverage ratio was 0.00: 1.00 and our fixed charge ratio was 4.19: 1.00. Adjusted EBITDA, under the Credit Facility, is defined as consolidated net income (or loss), plus net interest expense, income taxes, depreciation and amortization, and share based compensation expense, plus acquisition expenses not to exceed $2.0 million on a trailing twelve month basis, plus restructuring, issuance costs, cash non-operating costs and other expenses or losses minus cash non-operating gains and other non-cash gains. Failure to comply with these covenants, or the occurrence of an event of default, could permit the Lenders under the New Credit Agreement to declare all amounts borrowed under the New Credit Agreement, together with accrued interest and fees, to be immediately due and payable. In addition, the Credit Facility is secured by a lien on substantially all of the Company’s and its domestic subsidiaries’ tangible and intangible property by a pledge of all of the equity interests of the Company’s direct and indirect domestic subsidiaries and by a pledge by the Company’s domestic subsidiaries of 65% of the equity of their direct foreign subsidiaries, subject to limited exceptions. The Company was in compliance with all covenants under our Credit Facility as of March 31, 2016 and 2015. |
Defined Benefit Pension Plan
Defined Benefit Pension Plan | 3 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Defined Benefit Pension Plan | 8. Defined Benefit Pension Plan Our German subsidiary maintains an unfunded defined benefit pension plan which covers substantially all employees who joined the company prior to the plan’s closure to new participants in 2006. Participants are entitled to benefits in the form of retirement, disability and surviving dependent pensions. Benefits generally depend on years of service and the salary of the employees. The components of net periodic benefit cost included in the accompanying condensed consolidated statements of income were as follows (in thousands): Three Months Ended March 31, 2016 2015 Service cost $ 23 $ 29 Interest cost 30 28 Amortization 13 19 Net periodic benefit cost $ 66 $ 76 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes A reconciliation of income taxes computed at federal statutory rates to income tax expense is as follows (dollar amounts in thousands): Three Months Ended March 31, 2016 2015 Provision for income taxes at statutory rate $ 2,963 35.0 % $ 3,821 35.0 % State and local income taxes, net of federal tax benefit 120 1.4 % 156 1.4 % Stock compensation 41 0.5 % 32 0.3 % Reversal of reserves — — (342 ) (3.1 )% Foreign rate differential (101 ) (1.2 )% (87 ) (0.8 )% Research credits (69 ) (0.8 )% — — Permanent non-deductible acquisition-related expense 161 1.9 % — — Other, net (8 ) (0.1 )% (21 ) (0.2 )% Reported income tax provision $ 3,107 36.7 % $ 3,559 32.6 % As of March 31, 2016, the reserve for uncertain tax positions was approximately $5.7 million. Of this amount, $3.3 million is recorded as a reduction of deferred tax assets and $2.4 million is classified as long term liabilities. During the first quarter of 2015, the Company settled a tax audit related to its Japan subsidiary. As a result of this settlement, the Company recognized a tax benefit of $0.3 million. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | 10. Net Income Per Share Basic and diluted earnings per share are computed pursuant to the two-class method. The two-class method determines earnings per share for each class of common stock and participating security according to their respective participation rights in undistributed earnings. Unvested restricted stock awards granted to employees are considered participating securities as they receive non-forfeitable rights to cash dividends at the same rate as common stock. In accordance with ASC Topic No. 260, Earnings Per Share, 1. Assume exercise of stock options and vesting of restricted stock using the treasury stock method. 2. Assume exercise of stock options using the treasury stock method, but assume participating securities (unvested restricted stock) are not vested and allocate earnings to common shares and participating securities using the two-class method. For the periods presented the two-class method was used in the computation of diluted net income per share, as the result was more dilutive. The following presents a reconciliation of the numerator and denominator used in the calculation of basic net income per share and a reconciliation of the numerator and denominator used in the calculation of diluted net income per share (in thousands, except share and per share data): Three Months Ended March 31, 2016 2015 Numerator: Net income, as reported $ 5,358 $ 7,357 Less: net income attributable to participating securities (140 ) (146 ) Net income available to common shareholders—basic $ 5,218 $ 7,211 Denominator: Basic: Weighted-average shares of common stock outstanding 40,230,488 39,642,889 Less: weighted-average shares of unvested restricted common stock outstanding (1,107,839 ) (813,720 ) Weighted-average number of common shares used in computing basic net income per common share 39,122,649 38,829,169 Net income per share applicable to common shareholders—basic $ 0.13 $ 0.19 Three Months Ended March 31, 2016 2015 Numerator: Net income available to common shareholders—basic $ 5,218 $ 7,211 Add-back: undistributed earnings allocated to unvested shareholders 26 70 Less: undistributed earnings reallocated to unvested shareholders (25 ) (69 ) Net income available to common shareholders—diluted $ 5,219 $ 7,212 Denominator: Diluted: Weighted-average shares of common stock outstanding 40,230,488 39,642,889 Less: weighted-average shares of unvested restricted common stock outstanding (1,107,839 ) (813,720 ) Weighted-average number of common shares issuable upon exercise of outstanding stock options, based on the treasury stock method 398,970 692,970 Weighted-average number of common shares used in computing diluted net income per common share 39,521,619 39,522,139 Net income per share applicable to common shareholders—diluted $ 0.13 $ 0.18 The following common share equivalents have been excluded from the computation of diluted weighted-average shares outstanding, as their effect would have been anti-dilutive: Three Months Ended March 31, 2016 2015 Options 682,262 306,940 Unvested restricted stock 319,504 90,014 Unvested restricted stock units 12,794 7,857 |
Share Based Compensation
Share Based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share Based Compensation | 11. Share Based Compensation We account for share based compensation in accordance with ASC Topic No. 718, Compensation – Stock Compensation, Three Months Ended March 31, 2016 2015 Marketing and selling $ 1,581 $ 1,266 Research and development 813 542 General and administrative 1,384 963 Total expensed 3,778 2,771 Property and equipment — 42 Total share based compensation $ 3,778 $ 2,813 In the first quarter of 2015, approximately $42 thousand of share based compensation was capitalized as part of an internal software project, and this amount is included in property and equipment, net in our condensed consolidated balance sheet. As of March 31, 2016, the Company had $34.2 million of unrecognized compensation expense related to employees and directors unvested stock options and restricted stock awards that are expected to be recognized over a weighted average period of 3.1 years. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | 12. Segment Reporting We view our operations and manage our business as one segment: the development, marketing and licensing of technologies and fonts. Factors used to identify our single segment include the financial information available for evaluation by our chief operating decision maker in making decisions about how to allocate resources and assess performance. While our technologies and services are sold into two principal markets, Creative Professional and OEM, expenses and assets are not formally allocated to these market segments, and operating results are assessed on an aggregate basis to make decisions about the allocation of resources. The following table presents revenue for these two major markets (in thousands): Three Months Ended March 31, 2016 2015 Creative Professional $ 23,915 $ 20,504 OEM 25,927 25,542 Total $ 49,842 $ 46,046 Geographic segment information The Company attributes revenue to geographic areas based on the location of our subsidiary receiving such revenue. For example, licenses may be sold to large international companies which may be headquartered in the Republic of Korea, but the sales are received and recorded by our subsidiary located in the United States, or U.S. In this example, the revenue would be reflected in the U.S. totals in the table below. We market our products and services through offices in the U.S., United Kingdom, Germany, China, Republic of Korea and Japan. The following summarizes revenue by location (in thousands of dollars, except percentages): Three Months Ended March 31, 2016 2015 Revenue % of Total Revenue % of Total United States $ 26,511 53.2 % $ 24,843 54.0 % United Kingdom 4,325 8.7 1,848 4.0 Germany 6,032 12.1 5,844 12.7 Japan 12,816 25.7 13,207 28.6 Other Asia 158 0.3 304 0.7 Total $ 49,842 100.0 % $ 46,046 100.0 % Long-lived assets, which include property and equipment, goodwill and intangibles, but exclude other assets, long-term investments and deferred tax assets, are attributed to geographic areas in which Company assets reside and is shown below (in thousands): March 31, 2016 December 31, 2015 Long-lived assets: United States $ 204,842 $ 206,822 United Kingdom 4,359 4,581 Germany 57,441 55,269 Asia (including Japan) 3,491 3,531 Total $ 270,133 $ 270,203 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. Commitments and Contingencies Legal Proceedings From time to time, we may be a party to various claims, suits and complaints. We do not believe that there are claims or legal proceedings that, if determined adversely to us, would have a material adverse effect on our business, results of operations or financial condition. Licensing Warranty Under our standard license agreement with our OEM customers, we warrant that the licensed technologies are free of infringement claims of intellectual property rights and will meet the specifications as defined in the licensing agreement for a one year period. Under the licensing agreements, liability for such indemnity obligations is limited, generally to the total arrangement fee; however, exceptions have been made on a case-by-case basis, increasing the maximum potential liability to agreed upon amounts at the time the contract is entered into or unlimited liability. We have never incurred costs payable to a customer or business partner to defend lawsuits or settle claims related to these warranties, and as a result, management believes the estimated fair value of these warranties is minimal. Accordingly, there are no liabilities recorded for these warranties as of March 31, 2016 and December 31, 2015. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events Dividend Declaration On April 26, 2016 the Company’s Board of Directors declared an $0.11 per share quarterly cash dividend on our outstanding common stock. The record date is set for July 1, 2016 and the dividend is payable to shareholders of record on July 21, 2016. Dividends are declared at the discretion of the Company’s Board of Directors and depend on actual cash from operations, the Company’s financial condition and capital requirements and any other factors the Company’s Board of Directors may consider relevant. Future dividend declarations, as well as the record and payment dates for such dividends, will be determined by the Company’s Board of Directors on a quarterly basis. |
Recently Issued Accounting Pr22
Recently Issued Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Share Based Compensation | Share Based Compensation In March 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2016-09, Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. |
Leases | Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), Amendments to the FASB Accounting Standards Codification, |
Business Combinations | Business Combinations In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement- Period Adjustments |
Internal-Use Software | Internal-Use Software In April 2015, the FASB issued ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. |
Interest | Interest In April 2015, the FASB, issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs, |
Consolidation | Consolidation In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810), Amendments to the Consolidation Analysis |
Going Concern | Going Concern In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40); Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern |
Revenue Recognition | Revenue Recognition In May 2014, the FASB and the International Accounting Standards Board jointly issued ASU 2014-9, Revenue from Contracts with Customers (Topic 606), |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value | The following table presents our financial assets and liabilities that are carried at fair value, classified according to the three categories described above (in thousands): Fair Value Measurement at March 31, 2016 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents—money market funds $ 21,367 $ 21,367 $ — $ — Cash equivalents—commercial paper 11,994 — 11,994 — Cash equivalents—corporate bonds 6,694 — 6,694 — Total assets $ 40,055 $ 21,367 $ 18,688 $ — Fair Value Measurement at December 31, 2015 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents—money market funds $ 21,808 $ 21,808 $ — $ — Cash equivalents—commercial paper 8,920 — 8,920 — Cash equivalents—U.S. government and agency securities 9,293 — 9,293 — Total assets $ 40,021 $ 21,808 $ 18,213 $ — |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible assets as of March 31, 2016 and December 31, 2015 were as follows (dollar amounts in thousands): Weighted- March 31, 2016 December 31, 2015 Average Amortization Period (Years) Gross Carrying Amount Accumulated Amortization Net Balance Gross Carrying Amount Accumulated Amortization Net Balance Customer relationships 10 $ 60,248 $ (49,423 ) $ 10,825 $ 59,994 $ (48,767 ) $ 11,227 Acquired technology 11 54,633 (40,686 ) 13,947 54,424 (39,336 ) 15,088 Non-compete agreements 4 13,007 (12,246 ) 761 12,946 (12,111 ) 835 Indefinite-lived intangible assets: Trademarks 38,049 — 38,049 37,714 — 37,714 Domain names 4,400 — 4,400 4,400 — 4,400 Total $ 170,337 $ (102,355 ) $ 67,982 $ 169,478 $ (100,214 ) $ 69,264 |
Defined Benefit Pension Plan (T
Defined Benefit Pension Plan (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost included in the accompanying condensed consolidated statements of income were as follows (in thousands): Three Months Ended March 31, 2016 2015 Service cost $ 23 $ 29 Interest cost 30 28 Amortization 13 19 Net periodic benefit cost $ 66 $ 76 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Reconciliation Computed at Federal Statutory Rates to Income Tax Expense | A reconciliation of income taxes computed at federal statutory rates to income tax expense is as follows (dollar amounts in thousands): Three Months Ended March 31, 2016 2015 Provision for income taxes at statutory rate $ 2,963 35.0 % $ 3,821 35.0 % State and local income taxes, net of federal tax benefit 120 1.4 % 156 1.4 % Stock compensation 41 0.5 % 32 0.3 % Reversal of reserves — — (342 ) (3.1 )% Foreign rate differential (101 ) (1.2 )% (87 ) (0.8 )% Research credits (69 ) (0.8 )% — — Permanent non-deductible acquisition-related expense 161 1.9 % — — Other, net (8 ) (0.1 )% (21 ) (0.2 )% Reported income tax provision $ 3,107 36.7 % $ 3,559 32.6 % |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following presents a reconciliation of the numerator and denominator used in the calculation of basic net income per share and a reconciliation of the numerator and denominator used in the calculation of diluted net income per share (in thousands, except share and per share data): Three Months Ended March 31, 2016 2015 Numerator: Net income, as reported $ 5,358 $ 7,357 Less: net income attributable to participating securities (140 ) (146 ) Net income available to common shareholders—basic $ 5,218 $ 7,211 Denominator: Basic: Weighted-average shares of common stock outstanding 40,230,488 39,642,889 Less: weighted-average shares of unvested restricted common stock outstanding (1,107,839 ) (813,720 ) Weighted-average number of common shares used in computing basic net income per common share 39,122,649 38,829,169 Net income per share applicable to common shareholders—basic $ 0.13 $ 0.19 Three Months Ended March 31, 2016 2015 Numerator: Net income available to common shareholders—basic $ 5,218 $ 7,211 Add-back: undistributed earnings allocated to unvested shareholders 26 70 Less: undistributed earnings reallocated to unvested shareholders (25 ) (69 ) Net income available to common shareholders—diluted $ 5,219 $ 7,212 Denominator: Diluted: Weighted-average shares of common stock outstanding 40,230,488 39,642,889 Less: weighted-average shares of unvested restricted common stock outstanding (1,107,839 ) (813,720 ) Weighted-average number of common shares issuable upon exercise of outstanding stock options, based on the treasury stock method 398,970 692,970 Weighted-average number of common shares used in computing diluted net income per common share 39,521,619 39,522,139 Net income per share applicable to common shareholders—diluted $ 0.13 $ 0.18 |
Schedule of Anti-Dilutive Securities Excluded from Computation of Earnings Per Share | The following common share equivalents have been excluded from the computation of diluted weighted-average shares outstanding, as their effect would have been anti-dilutive: Three Months Ended March 31, 2016 2015 Options 682,262 306,940 Unvested restricted stock 319,504 90,014 Unvested restricted stock units 12,794 7,857 |
Share Based Compensation (Table
Share Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share Based Compensation Expense | The following presents the impact of share based compensation expense on our condensed consolidated statements of income (in thousands): Three Months Ended March 31, 2016 2015 Marketing and selling $ 1,581 $ 1,266 Research and development 813 542 General and administrative 1,384 963 Total expensed 3,778 2,771 Property and equipment — 42 Total share based compensation $ 3,778 $ 2,813 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Revenue for Major Markets | The following table presents revenue for these two major markets (in thousands): Three Months Ended March 31, 2016 2015 Creative Professional $ 23,915 $ 20,504 OEM 25,927 25,542 Total $ 49,842 $ 46,046 |
Schedule of Revenue by Geographic Segments | The following summarizes revenue by location (in thousands of dollars, except percentages): Three Months Ended March 31, 2016 2015 Revenue % of Total Revenue % of Total United States $ 26,511 53.2 % $ 24,843 54.0 % United Kingdom 4,325 8.7 1,848 4.0 Germany 6,032 12.1 5,844 12.7 Japan 12,816 25.7 13,207 28.6 Other Asia 158 0.3 304 0.7 Total $ 49,842 100.0 % $ 46,046 100.0 % |
Schedule of Assets by Geographic Segments | Long-lived assets, which include property and equipment, goodwill and intangibles, but exclude other assets, long-term investments and deferred tax assets, are attributed to geographic areas in which Company assets reside and is shown below (in thousands): March 31, 2016 December 31, 2015 Long-lived assets: United States $ 204,842 $ 206,822 United Kingdom 4,359 4,581 Germany 57,441 55,269 Asia (including Japan) 3,491 3,531 Total $ 270,133 $ 270,203 |
Nature of the Business - Additi
Nature of the Business - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2016SegmentSubsidiary | |
Nature Of Business [Abstract] | |
Number of business segments | Segment | 1 |
Number of subsidiaries, domestic | 4 |
Number of subsidiaries, foreign | 5 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) $ in Thousands | Oct. 31, 2018USD ($) | Jan. 31, 2018USD ($) | Nov. 09, 2015USD ($) | Jan. 30, 2015USD ($)Employees | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Mar. 31, 2015USD ($) |
Business Acquisition [Line Items] | |||||||
Business acquisition, cash paid net of cash acquired | $ 101 | $ 14,303 | |||||
Swyft Media [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Total purchase price | $ 17,000 | ||||||
Business acquisition, cash paid | 12,100 | ||||||
Contingent consideration | $ 15,000 | 15,000 | |||||
Contingent consideration, net present value | 4,900 | ||||||
Goodwill acquired | 13,600 | ||||||
Business acquisition, cash paid net of cash acquired | 11,600 | ||||||
Intangible assets acquired | $ 4,700 | ||||||
Number of employees joined in connection with the acquisition | Employees | 12 | ||||||
Contingent consideration payment period | 3 years | ||||||
Business combination fair value adjustment to consideration liability | $ 9,900 | ||||||
Business acquisition related expenses | $ 3,800 | ||||||
Contingent consideration change in amount | 6,100 | ||||||
Swyft Media [Member] | Non Employee Shareholders [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business acquisition, cash paid | $ 5,400 | ||||||
Swyft Media [Member] | Founder Shareholders [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Purchase consideration payable | $ 9,300 | ||||||
Swyft Media [Member] | Founder Shareholders [Member] | Scenario, Forecast [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Purchase consideration payable | $ 7,300 | $ 2,000 | |||||
Swyft Media [Member] | Marketing and Selling [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business acquisition related expenses | $ 600 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 40,055 | $ 40,021 |
Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 21,367 | 21,808 |
Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 11,994 | 8,920 |
U.S. Government and Agency Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 9,293 | |
Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 6,694 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 21,367 | 21,808 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 21,367 | 21,808 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 18,688 | 18,213 |
Significant Other Observable Inputs (Level 2) [Member] | Commercial Paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 11,994 | 8,920 |
Significant Other Observable Inputs (Level 2) [Member] | U.S. Government and Agency Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 9,293 | |
Significant Other Observable Inputs (Level 2) [Member] | Corporate Bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 6,694 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) | Mar. 31, 2016USD ($)Contract | Mar. 31, 2016GBP (£)Contract | Dec. 31, 2015Contract |
Forward Contract to Sell [Member] | |||
Derivative [Line Items] | |||
Number of forward contract outstanding | 0 | ||
Forward contract outstanding | £ | £ 2,400,000 | ||
Forward Contract to Purchase [Member] | |||
Derivative [Line Items] | |||
Number of forward contract outstanding | 1 | 1 | |
Forward contract outstanding | $ | $ 3,400,000 |
Intangible Assets - Intangible
Intangible Assets - Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Customer relationships, Gross Carrying Amount | $ 60,248 | $ 59,994 |
Acquired technology, Gross Carrying Amount | 54,633 | 54,424 |
Non-compete agreements, Gross Carrying Amount | 13,007 | 12,946 |
Indefinite-lived intangible assets: | ||
Gross Carrying Amount | 170,337 | 169,478 |
Accumulated Amortization | (102,355) | (100,214) |
Net Balance | 67,982 | 69,264 |
Trademarks [Member] | ||
Indefinite-lived intangible assets: | ||
Net Balance, Indefinite-Lived Intangible Assets | 38,049 | 37,714 |
Net Balance, Indefinite-Lived Intangible Assets | 38,049 | 37,714 |
Domain Names [Member] | ||
Indefinite-lived intangible assets: | ||
Net Balance, Indefinite-Lived Intangible Assets | 4,400 | 4,400 |
Net Balance, Indefinite-Lived Intangible Assets | $ 4,400 | 4,400 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Weighted-Average Amortization Period (Years) | 10 years | |
Indefinite-lived intangible assets: | ||
Accumulated Amortization | $ (49,423) | (48,767) |
Net Balance, Finite-Lived Intangible Assets | $ 10,825 | 11,227 |
Acquired Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Weighted-Average Amortization Period (Years) | 11 years | |
Indefinite-lived intangible assets: | ||
Accumulated Amortization | $ (40,686) | (39,336) |
Net Balance, Finite-Lived Intangible Assets | $ 13,947 | 15,088 |
Non-compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Weighted-Average Amortization Period (Years) | 4 years | |
Indefinite-lived intangible assets: | ||
Accumulated Amortization | $ (12,246) | (12,111) |
Net Balance, Finite-Lived Intangible Assets | $ 761 | $ 835 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Sep. 15, 2015 | Mar. 31, 2016 |
Debt Instrument [Line Items] | ||
New credit agreement entering date | Sep. 15, 2015 | |
Maximum increase in secured credit facility | $ 200,000,000 | |
Interest rate on outstanding borrowings | Borrowings under the Credit Facility bear interest through September 15, 2020 at a variable rate not less than zero based upon, at the Company’s option, either LIBOR or the higher of (i) the prime rate as published in the Wall Street Journal, and (ii) 0.5% plus the overnight federal funds rate, plus in each case, an applicable margin. The applicable margin for LIBOR loans, based on the applicable leverage ratio, is 1.25%, 1.50% or 1.75% per annum, and the applicable margin for base rate loans, based on the applicable leverage ratio, is either 0.25%, 0.50% or 0.75%% per annum. At March 31, 2016 our rate, inclusive of applicable margins, was 1.9% for LIBOR. | |
Outstanding borrowings under credit facility | $ 0 | |
New Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Closing and legal fees | $ 1,000,000 | |
Silicon Valley Bank [Member] | New Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Secured revolving credit facility term, years | 5 years | |
Secured revolving credit facility, current borrowing capacity | $ 150,000,000 | |
Percentage of fee payment on unused line of credit facility, lower end | 0.20% | |
Percentage of fee payment on unused line of credit facility | 0.25% | |
Percentage of fee payment on unused line of credit facility, higher end | 0.30% | |
Maximum acquisition expense | $ 2,000,000 | |
Period of calculating EBITDA (in month) | 12 months | |
Percentage of equity interest in direct foreign subsidiaries pledged | 65.00% | |
Credit facility financial covenants terms | (i) a maximum leverage ratio of consolidated total debt to consolidated adjusted EBITDA of 3.00 to 1.00, and (ii) a minimum fixed charge coverage ratio of 1.25 to 1.00. As of March 31, 2016, our leverage ratio was 0.00 1.00 and our fixed charge ratio was 4.19 1.00. | |
Leverage ratio | 0.00% | |
Fixed charge ratio | 4.19% | |
Silicon Valley Bank [Member] | New Credit Agreement [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Secured revolving credit facility, minimum variable rate | 0.00% | |
Wells Fargo Capital Finance, LLC [Member] | Original Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Secured revolving credit facility, current borrowing capacity | $ 120,000,000 | |
Secured revolving credit facility, expiration date | Jul. 13, 2016 | |
Federal Funds Rate [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate on outstanding borrowings | 0.5% plus the overnight federal funds rate | |
LIBOR Rate [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility basis spread on variable rate LIBOR | 0.50% | |
Variable interest rate | 1.90% | |
LIBOR Rate [Member] | Silicon Valley Bank [Member] | New Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Applicable leverage ratio, lower end | 1.25% | |
Applicable leverage ratio | 1.50% | |
Applicable leverage ratio, higher end | 1.75% | |
Base Rate [Member] | Silicon Valley Bank [Member] | New Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Applicable leverage ratio, lower end | 0.25% | |
Applicable leverage ratio | 0.50% | |
Applicable leverage ratio, higher end | 0.75% |
Defined Benefit Pension Plan -
Defined Benefit Pension Plan - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Postemployment Benefits [Abstract] | ||
Service cost | $ 23 | $ 29 |
Interest cost | 30 | 28 |
Amortization | 13 | 19 |
Net periodic benefit cost | $ 66 | $ 76 |
Income Taxes - Income Tax Recon
Income Taxes - Income Tax Reconciliation Computed at Federal Statutory Rates to Income Tax Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes at statutory rate | $ 2,963 | $ 3,821 |
State and local income taxes, net of federal tax benefit | 120 | 156 |
Stock compensation | 41 | 32 |
Reversal of reserves | (342) | |
Foreign rate differential | (101) | (87) |
Research credits | (69) | |
Permanent non-deductible acquisition-related expense | 161 | |
Other, net | (8) | (21) |
Reported income tax provision | $ 3,107 | $ 3,559 |
Provision for income taxes at statutory rate, tax rate | 35.00% | 35.00% |
State and local income taxes, net of federal tax benefit, tax rate | 1.40% | 1.40% |
Stock compensation, tax rate | 0.50% | 0.30% |
Reversal of reserves, tax rate | (3.10%) | |
Foreign rate differential, tax rate | (1.20%) | (0.80%) |
Research credits, tax rate | (0.80%) | |
Permanent non-deductible acquisition-related expense, tax rate | 1.90% | |
Other, net, tax rate | (0.10%) | (0.20%) |
Reported income tax provision, tax rate | 36.70% | 32.60% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2016 | |
Schedule Of Income Taxes [Line Items] | ||
Reserve for uncertain tax positions | $ 5.7 | |
Uncertain tax position reduction in deferred tax assets | 3.3 | |
Uncertain tax positions long term liabilities | $ 2.4 | |
Japan Subsidiaries [Member] | ||
Schedule Of Income Taxes [Line Items] | ||
Income tax settlement, benefit recognized | $ 0.3 |
Net Income Per Share - Schedule
Net Income Per Share - Schedule of Earnings Per Share, Basic and Diluted (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Numerator: | ||
Net income, as reported | $ 5,358 | $ 7,357 |
Less: net income attributable to participating securities | (140) | (146) |
Net income available to common shareholders-basic | $ 5,218 | $ 7,211 |
Basic: | ||
Weighted-average shares of common stock outstanding | 40,230,488 | 39,642,889 |
Less: weighted-average shares of unvested restricted common stock outstanding | (1,107,839) | (813,720) |
Weighted-average number of common shares used in computing basic net income per common share | 39,122,649 | 38,829,169 |
Net income per share applicable to common shareholders-basic | $ 0.13 | $ 0.19 |
Net income available to common shareholders-basic | $ 5,218 | $ 7,211 |
Add-back: undistributed earnings allocated to unvested shareholders | 26 | 70 |
Less: undistributed earnings reallocated to unvested shareholders | (25) | (69) |
Net income available to common shareholders-diluted | $ 5,219 | $ 7,212 |
Weighted-average shares of common stock outstanding | 40,230,488 | 39,642,889 |
Less: weighted-average shares of unvested restricted common stock outstanding | (1,107,839) | (813,720) |
Weighted-average number of common shares used in computing diluted net income per common share | 39,521,619 | 39,522,139 |
Net income per share applicable to common shareholders-diluted | $ 0.13 | $ 0.18 |
Weighted Average [Member] | ||
Basic: | ||
Weighted-average number of common shares issuable upon exercise of outstanding stock options, based on the treasury stock method | 398,970 | 692,970 |
Net Income Per Share - Schedu40
Net Income Per Share - Schedule of Anti-Dilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share | 682,262 | 306,940 |
Unvested Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share | 319,504 | 90,014 |
Unvested Restricted Stock Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share | 12,794 | 7,857 |
Share Based Compensation - Sche
Share Based Compensation - Schedule of Share Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share based compensation, Total expensed | $ 3,778 | $ 2,771 |
Property and equipment | 42 | |
Total share based compensation | 3,778 | 2,813 |
Marketing and Selling [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share based compensation, Total expensed | 1,581 | 1,266 |
Research and Development [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share based compensation, Total expensed | 813 | 542 |
General and Administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share based compensation, Total expensed | $ 1,384 | $ 963 |
Share Based Compensation - Addi
Share Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Share based compensation, capitalized | $ 42 | |
Unrecognized compensation expense | $ 34,200 | |
Weighted-average period, years | 3 years 1 month 6 days |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2016SegmentMarkets | |
Segment Reporting [Abstract] | |
Number of operating segment | Segment | 1 |
Number of major markets, segment reporting | Markets | 2 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Revenue for Major Markets (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Total | $ 49,842 | $ 46,046 |
Creative Professional [Member] | ||
Segment Reporting Information [Line Items] | ||
Total | 23,915 | 20,504 |
OEM [Member] | ||
Segment Reporting Information [Line Items] | ||
Total | $ 25,927 | $ 25,542 |
Segment Reporting - Schedule 45
Segment Reporting - Schedule of Revenue by Geographic Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Total | $ 49,842 | $ 46,046 |
% of Total | 100.00% | 100.00% |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Total | $ 26,511 | $ 24,843 |
% of Total | 53.20% | 54.00% |
United Kingdom [Member] | ||
Segment Reporting Information [Line Items] | ||
Total | $ 4,325 | $ 1,848 |
% of Total | 8.70% | 4.00% |
Germany [Member] | ||
Segment Reporting Information [Line Items] | ||
Total | $ 6,032 | $ 5,844 |
% of Total | 12.10% | 12.70% |
Japan [Member] | ||
Segment Reporting Information [Line Items] | ||
Total | $ 12,816 | $ 13,207 |
% of Total | 25.70% | 28.60% |
Other Asia [Member] | ||
Segment Reporting Information [Line Items] | ||
Total | $ 158 | $ 304 |
% of Total | 0.30% | 0.70% |
Segment Reporting - Schedule 46
Segment Reporting - Schedule of Assets by Geographic Segments (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Long-lived assets: | ||
Total | $ 270,133 | $ 270,203 |
United States [Member] | ||
Long-lived assets: | ||
Total | 204,842 | 206,822 |
United Kingdom [Member] | ||
Long-lived assets: | ||
Total | 4,359 | 4,581 |
Germany [Member] | ||
Long-lived assets: | ||
Total | 57,441 | 55,269 |
Asia (Including Japan) [Member] | ||
Long-lived assets: | ||
Total | $ 3,491 | $ 3,531 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Period of licensing agreement term | 1 year | |
Warranty liabilities | $ 0 | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - $ / shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 26, 2016 | |
Subsequent Event [Line Items] | ||
Dividend payable, date of record | Jul. 1, 2016 | |
Dividend payable, date to be paid | Jul. 21, 2016 | |
Subsequent Events [Member] | ||
Subsequent Event [Line Items] | ||
Dividend approved, amount per share | $ 0.11 |