DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 3 Months Ended | |
Jun. 30, 2016 | Aug. 01, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Covisint Corp | |
Entity Central Index Key | 1,563,699 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 40,577,687 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Mar. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 41,759 | $ 39,681 |
Accounts receivable, net | 8,876 | 12,836 |
Prepaid expenses | 2,549 | 2,167 |
Other current assets | 1,110 | 1,603 |
Total current assets | 54,294 | 56,287 |
PROPERTY AND EQUIPMENT, NET | 7,079 | 7,847 |
CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS, NET | 11,330 | 11,486 |
OTHER: | ||
Goodwill | 25,385 | 25,385 |
Deferred costs | 485 | 580 |
Deferred tax asset, net | 163 | 171 |
Other assets | 243 | 289 |
Total other assets | 26,276 | 26,425 |
TOTAL ASSETS | 98,979 | 102,045 |
CURRENT LIABILITIES: | ||
Accounts payable | 5,157 | 5,061 |
Accrued commissions | 1,026 | 1,071 |
Deferred revenue | 19,467 | 15,952 |
Accrued expenses | 2,228 | 2,377 |
Total current liabilities | 27,878 | 24,461 |
DEFERRED REVENUE | 1,607 | 3,595 |
ACCRUED LIABILITIES | 2,402 | 2,327 |
DEFERRED TAX LIABILITY, NET | 349 | 353 |
Total liabilities | 32,236 | 30,736 |
COMMITMENTS AND CONTINGENCIES | ||
Preferred stock, no par value - authorized 5,000,000 shares; none issued and outstanding | 0 | 0 |
Common stock, no par value - authorized 50,000,000 shares; issued and outstanding 40,516,956 (40,490,928 issued and outstanding as of March 31, 2016) | 0 | 0 |
Additional paid-in capital | 162,529 | 161,997 |
Retained deficit | (95,530) | (90,527) |
Accumulated other comprehensive loss | (256) | (161) |
Total shareholders' equity | 66,743 | 71,309 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 98,979 | $ 102,045 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Jun. 30, 2016 | Mar. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, no par value (in dollars per share) | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, no par value (in dollars per share) | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 40,516,956 | 40,490,928 |
Common stock, shares outstanding | 40,516,956 | 40,490,928 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
REVENUE | $ 17,445 | $ 18,482 |
COST OF REVENUE | 8,220 | 9,777 |
GROSS PROFIT | 9,225 | 8,705 |
OPERATING EXPENSES: | ||
Research and development | 3,776 | 3,663 |
Sales and marketing | 7,210 | 7,476 |
General and administrative | 3,208 | 4,087 |
Total operating expenses | 14,194 | 15,226 |
OPERATING LOSS | (4,969) | (6,521) |
Other income | 16 | 2 |
LOSS BEFORE INCOME TAX PROVISION | (4,953) | (6,519) |
INCOME TAX PROVISION | 50 | 67 |
NET LOSS | $ (5,003) | $ (6,586) |
Basic and diluted loss per share (in dollars per share) | $ (0.12) | $ (0.17) |
OTHER COMPREHENSIVE INCOME, NET OF TAX | ||
Foreign currency translation adjustments | $ (95) | $ 3 |
OTHER COMPREHENSIVE INCOME, NET OF TAX | (95) | 3 |
COMPREHENSIVE LOSS | $ (5,098) | $ (6,583) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - 3 months ended Jun. 30, 2016 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Deficit | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Mar. 31, 2016 | 40,490,928 | ||||
Beginning balance at Mar. 31, 2016 | $ 71,309 | $ 0 | $ 161,997 | $ (90,527) | $ (161) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (5,003) | (5,003) | |||
Covisint stock based compensation expense (Note 5) | $ 491 | 491 | |||
Covisint stock option exercise (in shares) | 26,000 | 26,028 | |||
Covisint stock option exercise | $ 45 | 45 | |||
Income tax items | (4) | (4) | |||
Foreign currency translation | (95) | (95) | |||
Ending balance (in shares) at Jun. 30, 2016 | 40,516,956 | ||||
Ending balance at Jun. 30, 2016 | $ 66,743 | $ 0 | $ 162,529 | $ (95,530) | $ (256) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | ||
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: | |||
Net loss | $ (5,003) | $ (6,586) | |
Adjustments to reconcile net loss to cash provided by (used in) operations: | |||
Depreciation and amortization | 1,642 | 1,738 | |
Deferred income taxes | 13 | 67 | |
Stock award compensation | 491 | 1,149 | |
Other | 0 | 32 | |
Net change in assets and liabilities: | |||
Accounts receivable | 3,931 | 2,542 | |
Other assets | 244 | 2,004 | |
Accounts payable and accrued expenses (1) | [1] | 47 | (3,280) |
Deferred revenue | 1,551 | 2,429 | |
Net cash provided by operating activities | 2,916 | 95 | |
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: | |||
Property and equipment (1) | [1] | (25) | (2,874) |
Capitalized software | (688) | (401) | |
Net cash (used in) investing activities | (713) | (3,275) | |
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: | |||
Vendor financing repayment | (127) | 0 | |
Net proceeds from exercise of stock awards | 45 | 247 | |
Net cash provided by (used in) financing activities | (82) | 247 | |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (43) | 43 | |
NET CHANGE IN CASH | 2,078 | (2,890) | |
CASH AT BEGINNING OF PERIOD | 39,681 | 50,077 | |
CASH AT END OF PERIOD | $ 41,759 | 47,187 | |
Non-cash acquisitions of fixed assets | $ 500 | ||
[1] | Accounts payable and accrued expenses in the balance sheet as of June 30, 2015 include $0.5 million associated with purchases of property and equipment, which are non-cash acquisitions of fixed assets as of June 30, 2015. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The accompanying unaudited consolidated financial statements (“Financial Statements”) include the accounts of Covisint Corporation, a Michigan corporation, and subsidiaries (“Covisint”, the “Company”, “we”, “our”, and “us”). The Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), for interim financial information and with the instructions of Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, contingencies and results of operations. While management has based its assumptions and estimates on the facts and circumstances existing at June 30, 2016, final amounts may differ from these estimates. In the opinion of the Company’s management, the accompanying Financial Statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. The Company has evaluated subsequent events through the date these financial statements were issued. These financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2016 (“2016 Annual Report”). There have been no significant changes to the Company’s accounting policies as disclosed in the Company’s 2016 Annual Report. Recently Issued Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting, requiring all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. ASU 2016-09 will also allow an employer to repurchase more of an employee's shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the effect that the provisions of ASU 2016-09 will have on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases, requiring a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018. ASU 2016-02 requires entities to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited. The Company is currently evaluating the effect that the provisions of ASU 2016-02 will have on its consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires all deferred income taxes to be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for annual periods beginning after December 15, 2016, with early adoption permitted. The Company adopted this standard prospectively as of March 31, 2016. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), and a subsequent amendment to the standard in March 2016 with ASU 2016-08, a new comprehensive revenue recognition standard that will supersede all existing revenue recognition guidance under U.S. GAAP. The standard's core principle is that revenue should be recognized as goods or services are transferred to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. On July 9, 2015, the FASB agreed to delay the effective date by one year. In accordance with the delay, this ASU will now be effective for annual and interim periods beginning on or after December 15, 2017, with early adoption permitted. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in the ASU. The Company is currently evaluating the impact on its consolidated financial statements and related disclosures of adopting this guidance. |
CAPITALIZED SOFTWARE AND OTHER
CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS | CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS The components of the Company’s intangible assets are as follows (in thousands): June 30, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trademarks(1) $358 $358 Amortizing intangible assets: Capitalized software(2) $39,266 ($28,294 ) $10,972 Customer relationship agreements 2,585 (2,585 ) — Trademarks 80 (80 ) — Total amortizing intangible assets $41,931 ($30,959 ) $10,972 March 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trademarks(1) $358 $358 Amortizing intangible assets: Capitalized software(2) $38,578 ($27,450 ) $11,128 Customer relationship agreements 2,585 (2,585 ) — Trademarks 80 (80 ) — Total amortizing intangible assets $41,243 ($30,115 ) $11,128 _____________________________________________________ (1) The Covisint trademarks were acquired by Compuware in an acquisition in March 2004 and contributed to Covisint by Compuware effective January 1, 2013. These trademarks are deemed to have an indefinite life and therefore are not being amortized. (2) Amortization of capitalized software is included in “cost of revenue” in the consolidated statements of comprehensive loss. Historically, capitalized software has been amortized over five years . Beginning in fiscal year 2017, capitalized software is amortized over three years . Based on the current competitive environment and rapidly changing landscape for cloud based platform software, effective April 1, 2016, the Company changed its estimate of the useful life of capitalized software from five years to three years. This change in useful life has been accounted for as a change in accounting estimate, and will be applied to all new capitalized software. Remaining carrying amounts of capitalized software intangible assets will be amortized prospectively over a maximum of three years, or the remaining useful lives if less than three years. The change in estimated useful life did not have an impact on the earnings per share disclosed in the Consolidated Statements of Comprehensive Loss for the three months ended June 30, 2016 . Amortization expense of intangible assets was $0.8 million and $0.9 million for the three months ended June 30, 2016 and 2015 , respectively. Estimated future amortization expense, based on identified intangible assets at June 30, 2016 , is expected to be as follows (in thousands): At June 30, 2016 for the Year Ending March 31, 2017 2018 2019 2020 Capitalized software $3,608 $4,154 $2,800 $410 |
LOSS PER COMMON SHARE
LOSS PER COMMON SHARE | 3 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
LOSS PER COMMON SHARE | S PER COMMON SHARE Basic earnings per common share (“EPS”) is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS assumes the issuance of common stock for all potentially dilutive equivalent shares outstanding using the treasury method. EPS data were computed as follows (in thousands, except for per share data): Three Months Ended June 30, 2016 2015 Basic loss per share: Numerator: Net loss ($5,003 ) ($6,586 ) Denominator: Weighted-average common shares outstanding 40,500 39,059 Basic loss per share ($0.12 ) ($0.17 ) Diluted loss per share: Numerator: Net loss ($5,003 ) ($6,586 ) Denominator: Weighted-average common shares outstanding 40,500 39,059 Dilutive effect of stock awards — — Total shares 40,500 39,059 Diluted loss per share ($0.12 ) ($0.17 ) Stock awards to purchase approximately 3,299,000 and 4,641,000 shares for the three months ended June 30, 2016 and 2015 , respectively, were excluded from the diluted EPS calculation because they were anti-dilutive. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Contractual Obligations The Company conducts its business in various leased facilities which, based on the lease terms, are considered to be operating leases. There have been no material changes in our commitments under the lease agreements or other contractual obligations, as disclosed in our 2016 Annual Report. Legal Matters The Company is subject to legal proceedings, claims, investigations and proceedings in the ordinary course of business. In accordance with U.S. GAAP, the Company makes a provision for a liability when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. Beginning on May 30, 2014, two putative class actions were filed in the U.S. District Court for the Southern District of New York against us, our directors and former directors, and certain of our officers and former officers alleging violation of securities laws in connection with our IPO and seeking unspecified damages. These lawsuits were consolidated in the action entitled Desrocher v. Covisint Corporation, et al., No. 14-cv-03878 (the “Securities Class Action”). On October 14, 2014, the lead plaintiff filed a consolidated class action complaint (the “Complaint”) alleging violations of Regulation S-K and Sections 11 and 15 of the Securities Act. The Complaint alleges, among other things that the IPO’s registration statement contained (1) untrue statements and omissions of material facts related to the Company’s projected revenues for fiscal 2014, (2) materially inaccurate statements regarding the Company’s revenue recognition policy, and (3) omissions of known trends, uncertainties and significant risk factors as required to be disclosed by Regulation S-K. On May 5, 2016, the parties entered into a stipulation and agreement of settlement to dismiss all claims with prejudice and settle the Securities Class Action (the “Settlement”). The Settlement was reached after the Court denied defendants' motions to dismiss and granted class certification of a class of all persons who purchased the Company's stock in and/or traceable to the Company's IPO on or about September 26, 2013, seeking to pursue remedies under Section 11 and 15 of the Securities Act. The Settlement, which is subject to Court approval, provides for a payment by the defendants of $8.0 million . The Company's uninsured portion of the settlement amount is $0.4 million , which was recorded as a liability as of March 31, 2016 and paid in July 2016. The hearing on Court approval of the Settlement is currently scheduled for December 15, 2016. |
BENEFIT PLANS
BENEFIT PLANS | 3 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
BENEFIT PLANS | BENEFIT PLANS Covisint 401(k) Plan Under the Covisint 401(k) plan, the Company matches 33 percent of employees’ 401(k) contributions up to 2 percent of eligible earnings. Matching contributions vest 100 percent when an employee reaches one year of service. For the three months ended June 30, 2016 and 2015, the Company expensed $0.1 million and $0.1 million , respectively, related to this program. Covisint Stock-Based Compensation Plan In August 2009, Covisint established a 2009 Long-Term Incentive Plan (“2009 Covisint LTIP”) allowing the Board of Directors of Covisint to grant stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance-based cash or RSU awards and annual cash incentive awards to employees and directors of Covisint and its affiliates. The 2009 Covisint LTIP reserves 7.5 million common shares of Covisint for issuance under this plan. As of June 30, 2016 , there were 2.9 million stock options and 0.5 million RSUs outstanding from the 2009 Covisint LTIP. No options or RSUs issued contain performance conditions. For the three months ended June 30, 2016 and 2015 , 0.03 million options and 0.14 million options, respectively, were exercised by participants of the 2009 Covisint LTIP. Stock Option Activity A summary of option activity under the Company’s stock-based compensation plans as of June 30, 2016 , and changes during the three months then ended is presented below (shares and intrinsic value in thousands): Three Months Ended June 30, 2016 Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Options outstanding as of April 1, 2016 2,943 $4.52 Granted 235 1.79 Exercised (26 ) 1.73 Forfeited/Cancelled (263 ) 5.74 Options outstanding as of June 30, 2016 2,889 $4.21 7.43 $215 Options vested and expected to vest, net of estimated forfeitures, as of June 30, 2016 2,747 $4.29 7.35 $195 Options exercisable as of June 30, 2016 1,347 $5.03 6.17 $104 All options were originally granted at estimated fair market value for those granted prior to Covisint's initial public offering (“IPO”), and at fair market value for those granted post IPO. Options expire ten years from the date of grant unless expiration has been otherwise accelerated in accordance with a termination and/or separation agreement. Restricted Stock Unit Activity A summary of non-vested RSU activity as of June 30, 2016 , and changes during the three months then ended is presented below (shares and intrinsic value in thousands). Three Months Ended June 30, 2016 Shares Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value RSUs outstanding as of April 1, 2016 298 $ 3.50 Granted 175 2.34 Released — Forfeited — Dividend equivalents, net RSUs outstanding as of June 30, 2016 473 $ 3.07 $1,030 Stock Awards Compensation For the three months ended June 30, 2016 and 2015 , net stock awards compensation expense was recorded as follows (in thousands): Three Months Ended June 30, 2016 2015 Stock awards compensation classified as: Cost of revenue $5 $30 Research and development 4 26 Sales and marketing 49 109 General and administrative 433 984 Total stock awards compensation expense before income taxes $491 $1,149 For the three months ended June 30, 2016 , total stock compensation expense is comprised of $0.5 million according to the normal expense recognition of the grant. For the three months ended June 30, 2015 , stock compensation expense was comprised of $0.7 million according to the normal expense recognition schedule of the grant, and $0.4 million of accelerated expense recognized due to the cancellation of options for certain current employees. As of June 30, 2016 , total unrecognized compensation cost of $2.4 million , net of estimated forfeitures, related to nonvested equity awards granted is expected to be recognized over a weighted-average period of approximately 2.1 years. The following table summarizes the Company’s estimated future recognition of its unrecognized compensation cost related to stock awards as of June 30, 2016 (in thousands). Year Ending March 31, Covisint Stock-Based Compensation Plan: Total 2017 2018 2019 2020 2021 Stock Compensation Expense $2,398 $1,111 $731 $361 $171 $24 |
SUMMARY OF SIGNIFICANT ACCOUN12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation - The accompanying unaudited consolidated financial statements (“Financial Statements”) include the accounts of Covisint Corporation, a Michigan corporation, and subsidiaries (“Covisint”, the “Company”, “we”, “our”, and “us”). The Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), for interim financial information and with the instructions of Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, contingencies and results of operations. While management has based its assumptions and estimates on the facts and circumstances existing at June 30, 2016, final amounts may differ from these estimates. In the opinion of the Company’s management, the accompanying Financial Statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. The Company has evaluated subsequent events through the date these financial statements were issued. These financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2016 (“2016 Annual Report”). There have been no significant changes to the Company’s accounting policies as disclosed in the Company’s 2016 Annual Report. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting, requiring all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. ASU 2016-09 will also allow an employer to repurchase more of an employee's shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. ASU 2016-09 is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the effect that the provisions of ASU 2016-09 will have on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases, requiring a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018. ASU 2016-02 requires entities to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited. The Company is currently evaluating the effect that the provisions of ASU 2016-02 will have on its consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires all deferred income taxes to be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for annual periods beginning after December 15, 2016, with early adoption permitted. The Company adopted this standard prospectively as of March 31, 2016. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), and a subsequent amendment to the standard in March 2016 with ASU 2016-08, a new comprehensive revenue recognition standard that will supersede all existing revenue recognition guidance under U.S. GAAP. The standard's core principle is that revenue should be recognized as goods or services are transferred to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. On July 9, 2015, the FASB agreed to delay the effective date by one year. In accordance with the delay, this ASU will now be effective for annual and interim periods beginning on or after December 15, 2017, with early adoption permitted. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in the ASU. The Company is currently evaluating the impact on its consolidated financial statements and related disclosures of adopting this guidance. |
CAPITALIZED SOFTWARE AND OTHE13
CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | The components of the Company’s intangible assets are as follows (in thousands): June 30, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trademarks(1) $358 $358 Amortizing intangible assets: Capitalized software(2) $39,266 ($28,294 ) $10,972 Customer relationship agreements 2,585 (2,585 ) — Trademarks 80 (80 ) — Total amortizing intangible assets $41,931 ($30,959 ) $10,972 March 31, 2016 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trademarks(1) $358 $358 Amortizing intangible assets: Capitalized software(2) $38,578 ($27,450 ) $11,128 Customer relationship agreements 2,585 (2,585 ) — Trademarks 80 (80 ) — Total amortizing intangible assets $41,243 ($30,115 ) $11,128 _____________________________________________________ (1) The Covisint trademarks were acquired by Compuware in an acquisition in March 2004 and contributed to Covisint by Compuware effective January 1, 2013. These trademarks are deemed to have an indefinite life and therefore are not being amortized. (2) Amortization of capitalized software is included in “cost of revenue” in the consolidated statements of comprehensive loss. Historically, capitalized software has been amortized over five years . Beginning in fiscal year 2017, capitalized software is amortized over three years . |
Schedule of intangible assets, future amortization expense | Estimated future amortization expense, based on identified intangible assets at June 30, 2016 , is expected to be as follows (in thousands): At June 30, 2016 for the Year Ending March 31, 2017 2018 2019 2020 Capitalized software $3,608 $4,154 $2,800 $410 |
LOSS PER COMMON SHARE (Tables)
LOSS PER COMMON SHARE (Tables) | 3 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | EPS data were computed as follows (in thousands, except for per share data): Three Months Ended June 30, 2016 2015 Basic loss per share: Numerator: Net loss ($5,003 ) ($6,586 ) Denominator: Weighted-average common shares outstanding 40,500 39,059 Basic loss per share ($0.12 ) ($0.17 ) Diluted loss per share: Numerator: Net loss ($5,003 ) ($6,586 ) Denominator: Weighted-average common shares outstanding 40,500 39,059 Dilutive effect of stock awards — — Total shares 40,500 39,059 Diluted loss per share ($0.12 ) ($0.17 ) |
BENEFIT PLANS (Tables)
BENEFIT PLANS (Tables) | 3 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock option activity | A summary of option activity under the Company’s stock-based compensation plans as of June 30, 2016 , and changes during the three months then ended is presented below (shares and intrinsic value in thousands): Three Months Ended June 30, 2016 Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Options outstanding as of April 1, 2016 2,943 $4.52 Granted 235 1.79 Exercised (26 ) 1.73 Forfeited/Cancelled (263 ) 5.74 Options outstanding as of June 30, 2016 2,889 $4.21 7.43 $215 Options vested and expected to vest, net of estimated forfeitures, as of June 30, 2016 2,747 $4.29 7.35 $195 Options exercisable as of June 30, 2016 1,347 $5.03 6.17 $104 |
Schedule of RSU activity | A summary of non-vested RSU activity as of June 30, 2016 , and changes during the three months then ended is presented below (shares and intrinsic value in thousands). Three Months Ended June 30, 2016 Shares Weighted Average Grant-Date Fair Value Aggregate Intrinsic Value RSUs outstanding as of April 1, 2016 298 $ 3.50 Granted 175 2.34 Released — Forfeited — Dividend equivalents, net RSUs outstanding as of June 30, 2016 473 $ 3.07 $1,030 |
Schedule of allocation of award costs | For the three months ended June 30, 2016 and 2015 , net stock awards compensation expense was recorded as follows (in thousands): Three Months Ended June 30, 2016 2015 Stock awards compensation classified as: Cost of revenue $5 $30 Research and development 4 26 Sales and marketing 49 109 General and administrative 433 984 Total stock awards compensation expense before income taxes $491 $1,149 |
Schedule of unrecognized compensation | The following table summarizes the Company’s estimated future recognition of its unrecognized compensation cost related to stock awards as of June 30, 2016 (in thousands). Year Ending March 31, Covisint Stock-Based Compensation Plan: Total 2017 2018 2019 2020 2021 Stock Compensation Expense $2,398 $1,111 $731 $361 $171 $24 |
CAPITALIZED SOFTWARE AND OTHE16
CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Mar. 31, 2016 | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Gross Carrying Amount | $ 41,931 | $ 41,243 | ||
Accumulated Amortization | (30,959) | (30,115) | ||
Net Carrying Amount | 10,972 | 11,128 | ||
Amortization expense of intangible assets | 800 | $ 900 | ||
Trademarks | ||||
Schedule of Intangible Assets [Line Items] | ||||
Unamortized intangible assets | [1] | 358 | 358 | |
Capitalized software | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Gross Carrying Amount | [2] | 39,266 | 38,578 | |
Accumulated Amortization | [2] | (28,294) | (27,450) | |
Net Carrying Amount | [2] | $ 10,972 | $ 11,128 | |
Finite-lived intangible asset, useful life | 3 years | 5 years | ||
Estimated future amortization expense | ||||
2,017 | $ 3,608 | |||
2,018 | 4,154 | |||
2,019 | 2,800 | |||
2,020 | 410 | |||
Customer relationship agreements | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Gross Carrying Amount | 2,585 | $ 2,585 | ||
Accumulated Amortization | (2,585) | (2,585) | ||
Net Carrying Amount | 0 | 0 | ||
Trademarks | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Gross Carrying Amount | 80 | 80 | ||
Accumulated Amortization | (80) | (80) | ||
Net Carrying Amount | $ 0 | $ 0 | ||
[1] | The Covisint trademarks were acquired by Compuware in an acquisition in March 2004 and contributed to Covisint by Compuware effective January 1, 2013. These trademarks are deemed to have an indefinite life and therefore are not being amortized. | |||
[2] | Amortization of capitalized software is included in “cost of revenue” in the consolidated statements of comprehensive loss. Historically, capitalized software has been amortized over five years. Beginning in fiscal year 2017, capitalized software is amortized over three years. |
LOSS PER COMMON SHARE (Details)
LOSS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Basic loss per share: | ||
Numerator: Net loss (in dollars) | $ (5,003) | $ (6,586) |
Basic loss per share (in dollars per share) | $ (0.12) | $ (0.17) |
Diluted loss per share: | ||
Numerator: Net loss (in dollars) | $ (5,003) | $ (6,586) |
Denominator: | ||
Weighted-average common shares outstanding | 40,500 | 39,059 |
Dilutive effect of stock awards | 0 | 0 |
Total shares | 40,500 | 39,059 |
Diluted loss per share (in dollars per share) | $ (0.12) | $ (0.17) |
Antidilutive shares | 3,299 | 4,641 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | May 05, 2016USD ($) | May 30, 2014claim | Mar. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |||
Number of putative class actions filed | claim | 2 | ||
Litigation settlement, amount | $ 8 | ||
Estimated litigation liability | $ 0.4 |
BENEFIT PLANS (Details)
BENEFIT PLANS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employer matching contribution, percent of match | 33.00% | |
Employer matching contribution, percent of employees' gross pay | 2.00% | |
Contribution vesting rights, percentage | 100.00% | |
Contribution vesting period | 1 year | |
401(k) cost recognized | $ 100 | $ 100 |
Common shares reserved for issuance (in shares) | 7,500,000 | |
Number of Options | ||
Outstanding, beginning balance (in shares) | 2,943,000 | |
Granted (shares) | 235,000 | |
Exercised (shares) | (26,000) | |
Forfeited/Cancelled | (263,000) | |
Outstanding, beginning balance (in shares) | 2,889,000 | |
Number of Options vested and expected to vest, net of estimated forfeitures (in shares) | 2,747,000 | |
Number of Options exercisable (in shares) | 1,347,000 | |
Weighted Average Exercise Price | ||
Outstanding, beginning balance (in dollars per share) | $ 4.52 | |
Granted (in dollars per share) | 1.79 | |
Exercised (in dollars per share) | 1.73 | |
Forfeited/Canceled (in dollars per share) | 5.74 | |
Outstanding, ending balance (in dollars per share) | 4.21 | |
Options vested and expected to vest, net of estimated forfeitures, Weighted Average Exercise Price (in dollars per share) | 4.29 | |
Options exercisable, Weighted Average Exercise Price (in dollars per share) | $ 5.03 | |
Additional Disclosures [Abstract] | ||
Outstanding options, Weighted Average Remaining Contractual Term in Years | 7 years 5 months 6 days | |
Outstanding vested and expected to vest, net of estimated forfeitures, Weighted Average Remaining Contractual Term in Years | 7 years 4 months 7 days | |
Options exercisable, Weighted Average Remaining Contractual Term in Years | 6 years 2 months 2 days | |
Options outstanding, Aggregate Intrinsic Value | $ 215 | |
Options vested and expected to vest, net of estimated forfeitures, Aggregate Intrinsic Value | 195 | |
Options exercisable, Aggregate Intrinsic Value | 104 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Stock awards compensation expense before income taxes | 491 | 1,149 |
Stock awards compensation expense before income taxes, normal expense recognition of grant | $ 500 | 700 |
Stock awards compensation expense before income taxes, expense recognized due to employee terminations | $ 400 | |
Unrecognized compensation cost, weighted-average period | 2 years 1 month 10 days | |
Unrecognized compensation cost | ||
Total | $ 2,400 | |
2009 Covisint LTIP | ||
Number of Options | ||
Exercised (shares) | (30,000) | (140,000) |
Unrecognized compensation cost | ||
Total | $ 2,398 | |
2,017 | 1,111 | |
2,018 | 731 | |
2,019 | 361 | |
2,020 | 171 | |
2,021 | 24 | |
Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Stock awards compensation expense before income taxes | 5 | $ 30 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Stock awards compensation expense before income taxes | 4 | 26 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Stock awards compensation expense before income taxes | 49 | 109 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Stock awards compensation expense before income taxes | $ 433 | $ 984 |
Stock options | ||
Additional Disclosures [Abstract] | ||
Expiration period | 10 years | |
Stock options | 2009 Covisint LTIP | ||
Number of Options | ||
Outstanding, beginning balance (in shares) | 2,900,000 | |
Restricted Stock Units (RSUs) | ||
Shares | ||
Non-vested RSU outstanding, beginning balance (in shares) | 298,000 | |
Granted (in shares) | 175,000 | |
Released (in shares) | 0 | |
Forfeited (in shares) | 0 | |
Dividend equivalents, net (in shares) | ||
Non-vested RSU outstanding, ending balance (in shares) | 473,000 | |
Weighted Average Grant-Date Fair Value | ||
Non-vested RSU outstanding, beginning balance (in dollars per share) | $ 3.50 | |
Granted (in dollars per share) | 2.34 | |
Non-vested RSU outstanding, ending balance (in dollars per share) | $ 3.07 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Non-vested RSU outstanding at end of period | $ 1,030 | |
Restricted Stock Units (RSUs) | 2009 Covisint LTIP | ||
Number of Options | ||
Outstanding, beginning balance (in shares) | 500,000 |