Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Sep. 30, 2016 | Nov. 07, 2016 | |
Document Information [Line Items] | ||
Entity Registrant Name | MAM SOFTWARE GROUP, INC. | |
Entity Central Index Key | 832,488 | |
Trading Symbol | mams | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 12,220,264 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 |
Amortizable Intangible Assets, Except Computer Software [Member] | ||
Other Assets | ||
Intangible assets, net | $ 697 | $ 739 |
Computer Software, Intangible Asset [Member] | ||
Other Assets | ||
Intangible assets, net | 5,853 | 5,234 |
Cash and cash equivalents | 333 | 491 |
Accounts receivable, net of allowance of $451 and $359, respectively | 5,016 | 4,627 |
Inventories | 235 | 221 |
Prepaid expenses and other current assets | 1,207 | 1,495 |
Income tax receivable | 178 | 535 |
Total Current Assets | 6,969 | 7,369 |
Property and Equipment, Net | 551 | 581 |
Goodwill | 8,177 | 8,363 |
Other long-term assets | 93 | 68 |
TOTAL ASSETS | 22,340 | 22,354 |
Current Liabilities | ||
Accounts payable | 1,618 | 1,618 |
Accrued expenses and other liabilities | 1,471 | 1,811 |
Payroll and other taxes | 1,001 | 1,188 |
Current portion of long-term debt | 1,882 | 1,879 |
Current portion of deferred revenues | 1,015 | 939 |
Sales tax payable | 705 | 750 |
Income tax payable | 31 | 1 |
Total Current Liabilities | 7,723 | 8,186 |
Long-Term Liabilities | ||
Deferred revenues, net of current portion | 371 | 273 |
Deferred income taxes | 518 | 535 |
Long-term debt, net of current portion | 7,412 | 7,808 |
Other long-term liabilities | 546 | 533 |
Total Liabilities | 16,570 | 17,335 |
Commitments and Contingencies | ||
Stockholders' Equity | ||
Preferred stock: Par value $0.0001 per share; 2,000 shares authorized, none issued and outstanding | ||
Common stock: Par value $0.0001 per share; 18,000 shares authorized, 13,134 shares issued and 12,344 shares outstanding at September 30, 2016 and 13,199 shares issued and 12,409 shares outstanding at June 30, 2016 | 1 | 1 |
Additional paid-in capital | 16,176 | 16,162 |
Accumulated other comprehensive loss | (3,461) | (2,985) |
Accumulated deficit | (4,572) | (5,785) |
Treasury stock at cost, 790 shares at September 30, 2016 and 790 shares at June 30, 2016 | (2,374) | (2,374) |
Total Stockholders' Equity | 5,770 | 5,019 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 22,340 | $ 22,354 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 |
Allowance of accounts receivable | $ 451 | $ 359 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 18,000,000,000 | 18,000,000,000 |
Common stock, shares issued (in shares) | 13,134,000 | 13,199,000 |
Common stock, shares outstanding (in shares) | 12,344,000 | 12,409,000 |
Treasury stock, shares (in shares) | 790,000 | 790,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Net revenues | $ 8,062,000 | $ 7,995,000 |
Cost of revenues | 3,318,000 | 3,714,000 |
Gross Profit | 4,744,000 | 4,281,000 |
Operating Expenses | ||
Research and development | 895,000 | 830,000 |
Sales and marketing | 910,000 | 1,071,000 |
General and administrative | 1,510,000 | 1,267,000 |
Depreciation and amortization | 62,000 | 89,000 |
Total Operating Expenses | 3,377,000 | 3,257,000 |
Operating Income | 1,367,000 | 1,024,000 |
Other Income (Expense) | ||
Interest expense, net | (120,000) | (10,000) |
Total other expense, net | (120,000) | (10,000) |
Income before provision for income taxes | 1,247,000 | 1,014,000 |
Provision for income taxes | 34,000 | 184,000 |
Net Income | $ 1,213,000 | $ 830,000 |
Earnings per share attributed to common stockholders – basic (in dollars per share) | $ 0.10 | $ 0.06 |
Earnings per share attributed to common stockholders - diluted (in dollars per share) | $ 0.10 | $ 0.06 |
Weighted average common shares outstanding – basic (in shares) | 11,699 | 13,395 |
Weighted average common shares outstanding – diluted (in shares) | 11,795 | 13,490 |
Net income | $ 1,213,000 | $ 830,000 |
Foreign currency translation loss | (476,000) | (605,000) |
Total Comprehensive Income | $ 737,000 | $ 225,000 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 1,213 | $ 830 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Bad debt expense | 120 | 34 |
Depreciation and amortization | 128 | 153 |
Amortization of debt discount and debt issuance costs | 12 | |
Deferred income taxes | 2 | (1) |
Stock-based compensation expense | 84 | 41 |
Changes in assets and liabilities: | ||
Accounts receivable | (592) | 354 |
Inventories | (19) | (9) |
Prepaid expenses and other assets | 232 | 458 |
Income tax receivable | 357 | |
Accounts payable | 24 | (795) |
Accrued expenses and other liabilities | (154) | (693) |
Payroll and other taxes | (193) | 277 |
Deferred revenues | 196 | (36) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 1,410 | 613 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (24) | (14) |
Capitalized software development costs | (749) | (633) |
Business acquisition, net of cash acquired | (453) | |
NET CASH USED IN INVESTING ACTIVITIES | (773) | (1,100) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repurchase of common stock for treasury | (161) | |
Proceeds from long-term debt | 250 | |
Repayment of long-term debt | (655) | |
Common stock surrendered to pay for tax withholding | (149) | |
NET CASH USED IN FINANCING ACTIVITIES | (554) | (161) |
Effect of exchange rate changes | (241) | (321) |
Net change in cash and cash equivalents | (158) | (969) |
Cash and cash equivalents at beginning of period | 491 | 6,793 |
Cash and cash equivalents at end of period | 333 | 5,824 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Issuance of common stock in settlement of accrued liabilities | $ 77 | $ 93 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation | 3 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Basis of Accounting [Text Block] | NOTE 1. BASIS OF PRESENTATION The condensed consolidated financial statements included herein have been prepared by MAM Software Group, Inc. (“MAM” or the “Company”), without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information normally included in the condensed consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US”) has been omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting primarily of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2017. It is suggested that the condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2016, which was filed with the SEC on September 26, 2016. The Company has evaluated subsequent events through the filing date of this Quarterly Report on Form 10-Q, and determined that no subsequent events have occurred that would require recognition in the condensed consolidated financial statements or disclosure in the notes thereto. |
Note 2 - Nature of Operations a
Note 2 - Nature of Operations and Summary of Significant Accounting Policies | 3 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Significant Accounting Policies [Text Block] | NOTE 2. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES MAM Software Group, Inc . is a leading provider of integrated information management solutions and services and a leading provider of cloud-based software solutions for the automotive aftermarket sector. The Company conducts its businesses through wholly owned subsidiaries with operations in Europe and North America. MAM Software Ltd. (“MAM Ltd.”) is based in Tankersley, Barnsley, United Kingdom (“UK”), Origin Software Solutions, Ltd. (“Origin”) is based in the UK (MAM Ltd. and Origin are collectively referred to as “MAM UK”), and MAM Software, Inc. (“MAM NA”) is based in the United States of America ("US") in Blue Bell, Pennsylvania. Principles of Consolidation The condensed consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements. Concentrations of Credit Risk The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. Cash and Cash Equivalents In the US, the Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At times deposits held with financial institutions in the US may exceed the $250,000 limit. In the UK, the Company maintains cash balances at financial institutions that are insured by the Financial Services Compensation Scheme (“FSCS”) up to 75,000GBP. At times deposits held with financial institutions in the UK may exceed the 75,000GBP limit. The Company maintains its cash accounts at financial institutions which it believes to be credit worthy. The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. Customers The Company performs periodic evaluations of its customers and maintains allowances for potential credit losses as deemed necessary. The Company generally does not require collateral to secure its accounts receivable. Credit risk is managed by discontinuing sales to customers who are delinquent. The Company estimates credit losses and returns based on management ’s evaluation of historical experience and current industry trends. Although the Company expects to collect amounts due, actual collections may differ from the estimated amounts. No customer accounted for more than 10% of the Company ’s accounts receivable at September 30, 2016 and June 30, 2016. No customer accounted for more than 10% of the Company’s revenues for the three months ended September 30, 2016 and 2015. Segment Reporting The Company operates in one reportable segment. Though the Company has two operational segments (MAM UK and MAM NA), the Company evaluated its operations in accordance with ASC 280-10-50, Segment Reporting, 1. The products and services are software and professional services 2. The products are produced through professional services 3. The customers for these products are primarily for the automotive aftermarket 4. The methods used to distribute these products are via software that the customer can host locally or that the Company will host 5. They both operate in a non-regulatory environment Geographic Concentrations The Company conducts business in the US, Canada, the UK and Ireland (UK and Ireland are collectively referred to as the “UK Market”). For customers headquartered in their respective countries, the Company derived approximately 62% of its net revenues from the UK, 36% from the US, 1% from Ireland, and 1% from Canada during the three months ended September 30, 2016, compared to 72% of its net revenues from the UK, 27% from the US and 1% from Canada during the three months ended September 30, 2015. At September 30, 2016, the Company maintained 77% of its net property and equipment in the UK and the remaining 23% in the US. At June 30, 2016, the Company maintained 79% of its net property and equipment in the UK and the remaining 21% in the US. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U S requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by the Company’s management include, but are not limited to, the collectability of accounts receivable, the realizability of inventories, the recoverability of goodwill and other long-lived assets, valuation of deferred tax assets and liabilities and the estimated fair value of stock options, warrants and shares issued for compensation and non-cash consideration. Actual results could materially differ from those estimates. Fair Value of Financial Instruments The Company ’s financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and debt. Financial assets and liabilities that are remeasured and reported at fair value at each reporting period are classified and disclosed in one of the following three categories: • Level 1 – Fair value based on quoted prices in active markets for identical assets or liabilities. • Level 2 – Fair value based on significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities, or (iii) information derived from or corroborated by observable market data. • Level 3 – Fair value based on prices or valuation techniques that require significant unobservable data inputs. Inputs would normally be a reporting entity’s own data and judgments about assumptions that market participants would use in pricing the asset or liability. Determining into which category within the hierarchy an asset or liability may require significant judgment. The Company evaluates its hierarchy disclosures each quarter. Inventories Inventories are stated at the lower of cost or current estimated market value. Cost is determined using the first-in, first-out method. Inventories consist primarily of hardware that will be sold to customers. The Company periodically reviews its inventories and records a provision for excess and obsolete inventories based primarily on the Company ’s estimated forecast of product demand and production requirements. Once established, write-downs of inventories are considered permanent adjustments to the cost basis of the obsolete or excess inventories. Property and Equipment Property and equipment are stated at cost, and are being depreciated using the straight-line method over the estimated useful lives of the related assets, ranging from three to five years. Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful lives of the assets or the related lease terms. Equipment under capital lease obligations is depreciated over the shorter of the estimated useful lives of the related assets or the term of the lease. Maintenance and routine repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the condensed consolidated statements of comprehensive income. Depreciation expense was $41,000 and $63,000 for the three months ended September 30, 2016 and 2015, respectively. Software Development Costs Costs incurred to develop computer software products to be sold or otherwise marketed are charged to expense until technological feasibility of the product has been established. Once technological feasibility has been established, computer software development costs (consisting primarily of internal labor costs) are capitalized and reported at the lower of amortized cost or estimated realizable value. Purchased software development cost is recorded at its estimated fair market value. When a product is ready for general release, its capitalized costs are amortized on a product-by-product basis. The annual amortization is the greater of the amounts of: the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product; and, the straight-line method over the remaining estimated economic life (a period of three years) of the product including the period being reported on. Amortization of capitalized software development costs are included in the cost of revenues line on the consolidated statements of comprehensive income. If the future market viability of a software product is less than anticipated, impairment of the related unamortized development costs could occur, which could significantly impact the Company’s results of operations. Amortization expense on software development costs was $67,000 and $64,000 for the three months ended September 30, 2016 and 2015, respectively. Amortizable Intangible Assets Amortizable intangible assets consist of completed software technology, customer contracts/relationships, automotive data services and acquired intellectual property and are recorded at cost. Completed software technology and customer contracts/relationships are amortized using the straight-line method over their estimated useful lives of 9 to 10 years, automotive data services are amortized using the straight-line method over their estimated useful lives of 20 years and acquired intellectual property is amortized over the estimated useful life of 10 years. 20,000 and $26,000 for the three months ended September 30, 2016 and 2015, respectively. Goodwill Goodwill is not amortized, but rather is tested at least annually for impairment. Goodwill is subject to impairment reviews by applying a fair-value-based test at the reporting unit level, which generally represents operations one level below the segments reported by the Company. As of September 30, 2016, the Company does not believe there is an impairment of its goodwill. There can be no assurance, however, that market conditions will not change and/or demand for the Company’s products and services will continue at a level consistent with past results, which could result in impairment of goodwill in the future. For the three months ended September 30, 2016 and 2015, goodwill activity was as follows: In thousands For the three months ended, September 30, 2016 2015 Beginning Balance $ 8,363 $ 9,202 Acquisition of Origin - 202 Effect of exchange rate changes (186 ) (238 ) Ending Balance $ 8,177 9,166 Long-Lived Assets The Company ’s management assesses the recoverability of long-lived assets (other than goodwill discussed above) upon the occurrence of a triggering event by determining whether the carrying value of long-lived assets can be recovered through projected undiscounted future cash flows over their remaining lives. The amount of long-lived asset impairment, if any, is measured based on fair value and is charged to operations during the period in which long-lived asset impairment is determined by management. At September 30, 2016, management believes there is no impairment of its long-lived assets. There can be no assurance, however, that market conditions will not change or demand for the Company’s products and services will continue, which could result in impairment of long-lived assets in the future. Issuance of Equity Instruments to Non-Employees All issuances of the Company ’s equity instruments to non-employees are measured based upon either the fair value of the equity instruments issued or the fair value of consideration received, depending on which option is more readily determinable. The majority of stock issuance for non-cash consideration received pertains to services rendered by consultants and others and has been valued at the fair value of the equity instruments on the dates issued. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor ’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. Assets acquired in exchange for the issuance of fully vested, non-forfeitable equity instruments should not be presented or classified as an offset to equity on the grantor’s balance sheet once the equity instrument is granted for accounting purposes. Stock-Based Compensation The Company accounts for stock-based compensation under the provisions of ASC No. 718, Compensation - Stock Compensation For valuing stock options awards, the Company has elected to use the Black-Scholes model . For the expected term, the Company uses a simple average of the vesting period and the contractual term of the option. Volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate during the expected term of the option. For volatility, the Company considers its own volatility as applicable for valuing its options and warrants. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The risk-free interest rate is based on the relevant US Treasury Bill Rate at the time of each grant. The dividend yield represents the dividend rate expected to be paid over the option’s expected term; the Company currently has no plans to pay dividends. The fair value of stock-based awards is amortized over the vesting period of the award or expected vesting date of the market-based restricted shares and the Company elected to use the straight-line method for awards granted. Revenue Recognition Software license revenue is recognized when persuasive evidence of an arrangement exists, delivery of the product component has occurred, the fee is fixed and determinable, and collectability is reasonably assured. If any of these criteria are not met, revenue recognition is deferred until such time as all of the criteria are met. The Company accounts for delivered elements in accordance with the selling price when arrangements include multiple product components or other elements and vendor-specific objective evidence exists for the value of all undelivered elements. Revenues on undelivered elements are recognized once delivery is complete. In those instances, in which arrangements include significant customization, contractual milestones, acceptance criteria or other contingencies (which represents the majority of the Company ’s arrangements), the Company accounts for the arrangements using contract accounting, as follows: 1) When customer acceptance can be estimated, but reliable estimated costs to complete cannot be determined, expenditures are capitalized as work-in process and deferred until completion of the contract at which time the costs and revenues are recognized. 2) When customer acceptance cannot be estimated based on historical evidence, costs are expensed as incurred and revenue is recognized at the completion of the contract when customer acceptance is obtained. The Company records amounts collected from customers in excess of recognizable revenue as deferred revenue in the accompanying consolidated balance sheets. Revenues for maintenance agreements, software support, on-line services and information products are recognized ratably over the term of the service agreement. The Company recognizes revenue on a net basis, which excludes sales tax collected from customers and remitted to governmental authorities. Advertising Expense The Company expenses advertising costs as incurred. For the three months ended September 30, 2016 and 2015, advertising expense totaled $57,000 and $136,000, respectively. Foreign Currency Management has determined that the functional currency of its subsidiaries is the local currency. Assets and liabilities of the UK subsidiaries are translated into US dollars at the quarter-end exchange rates. Income and expenses are translated at an average exchange rate for the period and the resulting translation gain adjustments are accumulated as a separate component of stockholders’ equity. Foreign currency translation income (loss) totaled $(476,000) and $(605,000) for the three months ended September 30, 2016 and 2015, respectively. Foreign currency gains and losses from transactions denominated in currencies other than the respective local currencies are included in income. The Company had no foreign currency transaction gain (loss) for all periods presented. Comprehensive Income Comprehensive income includes all changes in equity (net assets) during a period from non-owner sources. For the three months ended September 30, 2016 and 2015, the components of comprehensive income consist of foreign currency translation gain (loss). Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. Deferred taxation is provided in full in respect of timing differences between the treatment of certain items for taxation and accounting purposes. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company ’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties on the Company’s condensed consolidated balance sheets at September 30, 2016 and June 30, 2016, and has not recognized interest and/or penalties in the condensed consolidated statements of comprehensive income for the three months ended September 30, 2016 and 2015. Basic and Diluted Earnings Per Share Basic earnings per share (“BEPS”) is computed by dividing the net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share (“DEPS”) is computed giving effect to all dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of incremental shares issuable upon the exercise of stock options and warrants using the “treasury stock” method. The computation of DEPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. For the three months ended September 30, 2016 and 2015, there were 95,757 and 95,287, respectively, common share equivalents included in the computation of the DEPS. For the three months ended September 30, 2016 and 2015, 635,054 and 866,252, respectively, shares of common stock vest based on the market price of the Company’s common stock and were excluded from the computation of DEPS because the shares have not vested, but no stock options were excluded from the computation of DEPS. The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computation for three months ended September 30, 2016 and 2015 (in thousands, except for per share amounts): Three Months Ended September 30, 2016 2015 Numerator: Net income $ 1,213 $ 830 Denominator: Basic weighted-average shares outstanding 11,699 13,395 Effect of dilutive securities 96 95 Diluted weighted-average diluted shares 11,795 13,490 Basic earnings per common share $ 0.10 $ 0.06 Diluted earnings per common share $ 0.10 $ 0.06 Reclassification Certain expenses were reclassified from depreciation and amortization to cost of revenues in the accompanying condensed consolidated statement of comprehensive income for the three months ended September 30, 2015 in order to conform to the current period presentation. The Company adopted Accounting Standards Update ("ASU") 2015-03, Imputation of Interest - Simplifying the Presentation of Debt Issuance Costs, Recent Accounting Pronouncements In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. In February 2016, the FASB issued ASU 2016-02, Leases In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes In April 2015, the FASB issued ASU 2015-03, Imputation of Interest - Simplifying the Presentation of Debt Issuance Costs. In May 2014, the FASB issued ASU 2014-09 , Revenue from Contracts with Customers In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern |
Note 3 - Commitments and Contin
Note 3 - Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 3. COMMITMENTS AND CONTINGENCIES Legal Matters From time to time, the Company is subject to various legal claims and proceedings arising in the ordinary course of business. The ultimate disposition of such a proceeding if initiated could have material adverse effect s on the consolidated financial position or results of operations of the Company. There are currently no pending material legal proceedings. Indemnities and Guarantees The Company has made certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party, in relation to certain actions or transactions. The Company indemnifies its directors, officers, employees and agents, as permitted under the laws of the State of Delaware. In connection with its credit facility (see Note 6), the Company indemnified the lender for certain losses, claims, and other liabilities that are standard for this type of agreement. In connection with its facility leases, the Company has indemnified its lessors for certain claims arising from the use of the facilities. In connection with its customers’ contracts the Company indemnifies the customer that the software provided does not violate any US patent. The duration of the guarantees and indemnities varies, and is generally tied to the life of the agreement. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated nor incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying condensed consolidated balance sheets. |
Note 4 - Stockholders' Equity
Note 4 - Stockholders' Equity | 3 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | NOTE 4. STOCKHOLDERS ’ EQUITY Common Stock T he Company issues shares of common stock to the non-management members of the Board of Directors under the Company’s 2007 LTIP in respect of quarterly compensation. The shares vest over a three-year period and are issued quarterly. The Company also gives the non-management members of the Board of Directors the option to receive shares of common stock in lieu of cash compensation. On July 1, 2015 , the Company approved the issuance of 47,663 shares of common stock to the non-management members of the Board of Directors under the Company’s 2007 LTIP in respect of quarterly compensation. The shares vest over a three-year period and are issued quarterly. The shares were valued at approximately $255,000, based on the closing market price of the Company’s common stock on the date of the grant. During the three months ended September 30, 2016, t he Company issued 10,709 shares of common stock for the vesting of shares granted to the non-management members of the Board of Directors under the Company’s 2007 LTIP and in lieu of cash compensation. T ender Offer On December 1, 2015, the Company completed a cash tender offer (the “Tender Offer”) and purchased 2.0 million shares of its common stock at a purchase price of $7.50 per share for a total purchase price of $15.0 million. The Company canceled and retired the shares purchased pursuant to the Tender Offer. Treasury Stock From July 1, 2015 until September 30, 2015, the Company repurchased 29,695 shares of common stock at a cost of $161,000. As of September 30, 2016, the Company has repurchased 1,982,235 shares at a cost of $4,698,000, pursuant to a stock repurchase program approved by the Company’s Board of Directors. The stock repurchase program was cancelled on October 30, 2015 in connection with the Tender Offer. Stock-Based Compensation Total stock-based compensation expense related to management grants, non-management members of the Board of Directors grants and the employee stock purchase plan for restricted stock and stock issuances of $84,000 and $41,000 was recorded in the three months ended September 30, 2016 and 2015, respectively and was recorded in the general and administrative line of the condensed consolidated statements of comprehensive income. A summary of the Company's common stock option activity is presented below (shares in thousands) : Options Outstanding Weighted- Number of Weighted- Average Shares Average Remaining (in Exercise Contractual thousands) Price Life (in years) Options outstanding - July 1, 201 6 121 $ 1.23 Options granted - - Options exercised - - Options cancelled - - Options outstanding – September 30, 2016 121 $ 1.23 4.7 Options exercisable - September 30, 2016 121 $ 1.23 4.7 Options exercisable and vest ed - September 30, 2016 121 $ 1.23 4.7 A summary of the Company's restricted common stock activity is presented below (shares in thousands): Number of Weighted Average Shares Initial Value Price (in thousands) Per Share Restricted stock outstanding - July 1, 2016 776 $ 0.87 Issuance of restricted stock - - Vesting (85 ) 0.39 Forfeitures (56 ) 0.39 Restricted stock outstanding - September 30, 2016 635 $ 0.81 A summary of the vesting levels of the Company's restricted common stock is presented below (shares in thousands): Number of Weighted Average Shares Initial Value Price Per Share 30 day VWAP per share vesting level (1): $8.00 per share 425 $ 0.44 $9.00 per share 82 $ 1.25 $10.00 per share 48 $ 1.79 $11.00 per share 48 $ 1.79 $12.00 per share 32 $ 1.79 (1) The restricted stock becomes vested when the Company’s 30 day volume weighted average price (“VWAP”) per share is at or above these levels. Employee Stock Purchase Plan On September 21, 2011, the Company approved the MAM Software Group, Inc. Employee Stock Purchase Plan (“ESPP” or the “Plan”). On December 16, 2011, the shareholders approved the ESPP. Under the ESPP the Company will grant eligible employees the right to purchase common stock through payroll deductions at a price equal to the lesser of 85 percent of the fair market value of a share of the Company’s common stock on the Exercise Date of the current Offering Period or 85 percent of the fair market value of our common stock on the Grant Date of the Offering Period. No employee will be granted an option to purchase more than $2,400 of fair market value common stock in a calendar year. The Plan is intended to be an “employee stock purchase plan” as defined in Section 423 of the Internal Revenue Code. The Plan covers a maximum of 100,000 shares of common stock which will be offered to employees until January 2, 2022 or until the Plan is terminated by the Board of Directors. During the three months ended September 30, 2016, the Company issued 7,008 shares of common stock to employees including executive officers, under the ESPP in lieu of compensation. During the three months ended September 30, 2015, the Company issued 7,748 shares of common stock to employees including an executive officer, under the ESPP in lieu of compensation. |
Note 5 - Acquisition
Note 5 - Acquisition | 3 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Business Combination Disclosure [Text Block] | NOTE 5 . ACQUISITION On July 1, 2015, MAM Ltd. acquired 100% of the stock of Origin, a UK-based provider of e-commerce solutions for the automotive aftermarket. With the acquisition of Origin, MAM is able to strengthen its e-commerce strategy by being able to provide customers with a range of e-commerce solutions for the automotive aftermarket. The Company paid $503,000 at closing of the acquisition. The Company will also make future cash payments of $416,000 and issue stock consideration of $283,000 in the future if Origin reaches established earnings targets. The Company recorded the estimated fair value of the contingent consideration of $520,000 in other long-term liabilities on its condensed consolidated balance sheet as of September 30, 2016. In connection with the acquisition, the Company incurred acquisition-related costs of $43,000, which were expensed and included in general and administrative expenses in the accompanying condensed consolidated statement of comprehensive income for the three months ended September 30, 2015. The Company allocated the purchase consideration to acquire Origin to (1) net assets acquired of $177,000, (2) finite-lived intangible assets of $1.0 million for acquired intellectual property (with an estimated useful life of 10 years), (3) a deferred tax liability of $202,000, and (4) goodwill of $202,000. The goodwill from this acquisition is non-deductible for tax purposes. The results of operations of Origin have been included in the Company's condensed consolidated statements of comprehensive income from the date of acquisition, however the results from Origin were not significant to the Company ’s consolidated results of operations and thus proforma information is not presented. |
Note 6 - Long-term Debt
Note 6 - Long-term Debt | 3 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | NOTE 6. LONG-TERM DEBT Debt obligations consisted of the following at September 30, 2016 and June 30, 2016: As of ( in thousands) September 30, 2016 June 30, 2016 Debt obligations : R evolving loan facility $ 1,250 $ 1,150 Term loan 8,050 8,550 Equipment financing 73 78 Less: unamortized debt issuance costs (79 ) (91 ) Total 9,294 9,687 Less current portion (1,882 ) (1,879 ) Long-term debt $ 7,412 $ 7,808 On December 1, 2015 , the Company entered into a new credit agreement with J.P. Morgan Chase Bank, N.A. to provide for borrowings up to $12.0 million consisting of a $9.5 million term loan and a $2.5 million revolver. On September 26, 2016, the Company entered into an amendment to its credit facility with J.P. Morgan Chase Bank, N.A. (the "Amendment" and as amended, the "Amended Credit Agreements"). The Amendment changed certain loan covenants, including the financial ratios and liquidity requirements. The borrowings under the Credit Facility bear interest at a variable rate based on either LIBO Rate or a Prime Rate, as defined in the Amended Credit Agreement, plus an applicable margin of 3.50% to 4.00%, based upon financial covenants. The maturity date under the Amended Credit Agreements remains unchanged at December 1, 2018. As of September 30, 2016, the interest rate was 4.56%. Under the terms of the Amended Credit Agreements, the Company is required to comply with certain loan covenants, which include, but are not limited to, the maintenance of certain financial ratios as well as certain financial reporting requirements and limitations. The Company’s obligations under the Amended Credit Agreements are secured by all of the Company’s US assets and are guaranteed by the Company’s US wholly-owned subsidiary. Additionally, the Company pledged 65% of the stock of MAM Software Limited, its UK subsidiary. As of September 30, 2016, the Company was in compliance with its loan covenants. On December 1, 2015 , the Company borrowed $10.5 million under the Credit Facility to fund a portion of the Tender Offer (see Note 4). |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | The condensed consolidated financial statements included herein have been prepared by MAM Software Group, Inc. (“MAM” or the “Company”), without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information normally included in the condensed consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US”) has been omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting primarily of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2017. It is suggested that the condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2016, which was filed with the SEC on September 26, 2016. The Company has evaluated subsequent events through the filing date of this Quarterly Report on Form 10-Q, and determined that no subsequent events have occurred that would require recognition in the condensed consolidated financial statements or disclosure in the notes thereto. |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The condensed consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations of Credit Risk The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents In the US, the Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At times deposits held with financial institutions in the US may exceed the $250,000 limit. In the UK, the Company maintains cash balances at financial institutions that are insured by the Financial Services Compensation Scheme (“FSCS”) up to 75,000GBP. At times deposits held with financial institutions in the UK may exceed the 75,000GBP limit. The Company maintains its cash accounts at financial institutions which it believes to be credit worthy. The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. |
Major Customers, Policy [Policy Text Block] | Customers The Company performs periodic evaluations of its customers and maintains allowances for potential credit losses as deemed necessary. The Company generally does not require collateral to secure its accounts receivable. Credit risk is managed by discontinuing sales to customers who are delinquent. The Company estimates credit losses and returns based on management ’s evaluation of historical experience and current industry trends. Although the Company expects to collect amounts due, actual collections may differ from the estimated amounts. No customer accounted for more than 10% of the Company ’s accounts receivable at September 30, 2016 and June 30, 2016. No customer accounted for more than 10% of the Company’s revenues for the three months ended September 30, 2016 and 2015. |
Segment Reporting, Policy [Policy Text Block] | Segment Reporting The Company operates in one reportable segment. Though the Company has two operational segments (MAM UK and MAM NA), the Company evaluated its operations in accordance with ASC 280-10-50, Segment Reporting, 1. The products and services are software and professional services 2. The products are produced through professional services 3. The customers for these products are primarily for the automotive aftermarket 4. The methods used to distribute these products are via software that the customer can host locally or that the Company will host 5. They both operate in a non-regulatory environment |
Geographic Concentrations [Policy Text Block] | Geographic Concentrations The Company conducts business in the US, Canada, the UK and Ireland (UK and Ireland are collectively referred to as the “UK Market”). For customers headquartered in their respective countries, the Company derived approximately 62% of its net revenues from the UK, 36% from the US, 1% from Ireland, and 1% from Canada during the three months ended September 30, 2016, compared to 72% of its net revenues from the UK, 27% from the US and 1% from Canada during the three months ended September 30, 2015. At September 30, 2016, the Company maintained 77% of its net property and equipment in the UK and the remaining 23% in the US. At June 30, 2016, the Company maintained 79% of its net property and equipment in the UK and the remaining 21% in the US. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U S requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by the Company’s management include, but are not limited to, the collectability of accounts receivable, the realizability of inventories, the recoverability of goodwill and other long-lived assets, valuation of deferred tax assets and liabilities and the estimated fair value of stock options, warrants and shares issued for compensation and non-cash consideration. Actual results could materially differ from those estimates. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments The Company ’s financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and debt. Financial assets and liabilities that are remeasured and reported at fair value at each reporting period are classified and disclosed in one of the following three categories: • Level 1 – Fair value based on quoted prices in active markets for identical assets or liabilities. • Level 2 – Fair value based on significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in inactive markets for identical or similar assets or liabilities, or (iii) information derived from or corroborated by observable market data. • Level 3 – Fair value based on prices or valuation techniques that require significant unobservable data inputs. Inputs would normally be a reporting entity’s own data and judgments about assumptions that market participants would use in pricing the asset or liability. Determining into which category within the hierarchy an asset or liability may require significant judgment. The Company evaluates its hierarchy disclosures each quarter. |
Inventory, Policy [Policy Text Block] | Inventories Inventories are stated at the lower of cost or current estimated market value. Cost is determined using the first-in, first-out method. Inventories consist primarily of hardware that will be sold to customers. The Company periodically reviews its inventories and records a provision for excess and obsolete inventories based primarily on the Company ’s estimated forecast of product demand and production requirements. Once established, write-downs of inventories are considered permanent adjustments to the cost basis of the obsolete or excess inventories. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are stated at cost, and are being depreciated using the straight-line method over the estimated useful lives of the related assets, ranging from three to five years. Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful lives of the assets or the related lease terms. Equipment under capital lease obligations is depreciated over the shorter of the estimated useful lives of the related assets or the term of the lease. Maintenance and routine repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. At the time of retirement or other disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the condensed consolidated statements of comprehensive income. Depreciation expense was $41,000 and $63,000 for the three months ended September 30, 2016 and 2015, respectively. |
Research, Development, and Computer Software, Policy [Policy Text Block] | Software Development Costs Costs incurred to develop computer software products to be sold or otherwise marketed are charged to expense until technological feasibility of the product has been established. Once technological feasibility has been established, computer software development costs (consisting primarily of internal labor costs) are capitalized and reported at the lower of amortized cost or estimated realizable value. Purchased software development cost is recorded at its estimated fair market value. When a product is ready for general release, its capitalized costs are amortized on a product-by-product basis. The annual amortization is the greater of the amounts of: the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product; and, the straight-line method over the remaining estimated economic life (a period of three years) of the product including the period being reported on. Amortization of capitalized software development costs are included in the cost of revenues line on the consolidated statements of comprehensive income. If the future market viability of a software product is less than anticipated, impairment of the related unamortized development costs could occur, which could significantly impact the Company’s results of operations. Amortization expense on software development costs was $67,000 and $64,000 for the three months ended September 30, 2016 and 2015, respectively. |
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | Amortizable Intangible Assets Amortizable intangible assets consist of completed software technology, customer contracts/relationships, automotive data services and acquired intellectual property and are recorded at cost. Completed software technology and customer contracts/relationships are amortized using the straight-line method over their estimated useful lives of 9 to 10 years, automotive data services are amortized using the straight-line method over their estimated useful lives of 20 years and acquired intellectual property is amortized over the estimated useful life of 10 years. 20,000 and $26,000 for the three months ended September 30, 2016 and 2015, respectively. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill is not amortized, but rather is tested at least annually for impairment. Goodwill is subject to impairment reviews by applying a fair-value-based test at the reporting unit level, which generally represents operations one level below the segments reported by the Company. As of September 30, 2016, the Company does not believe there is an impairment of its goodwill. There can be no assurance, however, that market conditions will not change and/or demand for the Company’s products and services will continue at a level consistent with past results, which could result in impairment of goodwill in the future. For the three months ended September 30, 2016 and 2015, goodwill activity was as follows: In thousands For the three months ended, September 30, 2016 2015 Beginning Balance $ 8,363 $ 9,202 Acquisition of Origin - 202 Effect of exchange rate changes (186 ) (238 ) Ending Balance $ 8,177 9,166 |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Long-Lived Assets The Company ’s management assesses the recoverability of long-lived assets (other than goodwill discussed above) upon the occurrence of a triggering event by determining whether the carrying value of long-lived assets can be recovered through projected undiscounted future cash flows over their remaining lives. The amount of long-lived asset impairment, if any, is measured based on fair value and is charged to operations during the period in which long-lived asset impairment is determined by management. At September 30, 2016, management believes there is no impairment of its long-lived assets. There can be no assurance, however, that market conditions will not change or demand for the Company’s products and services will continue, which could result in impairment of long-lived assets in the future. |
Issuance of Equity Instruments to Non-employees [Policy Text Block] | Issuance of Equity Instruments to Non-Employees All issuances of the Company ’s equity instruments to non-employees are measured based upon either the fair value of the equity instruments issued or the fair value of consideration received, depending on which option is more readily determinable. The majority of stock issuance for non-cash consideration received pertains to services rendered by consultants and others and has been valued at the fair value of the equity instruments on the dates issued. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor ’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. Assets acquired in exchange for the issuance of fully vested, non-forfeitable equity instruments should not be presented or classified as an offset to equity on the grantor’s balance sheet once the equity instrument is granted for accounting purposes. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation The Company accounts for stock-based compensation under the provisions of ASC No. 718, Compensation - Stock Compensation For valuing stock options awards, the Company has elected to use the Black-Scholes model . For the expected term, the Company uses a simple average of the vesting period and the contractual term of the option. Volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate during the expected term of the option. For volatility, the Company considers its own volatility as applicable for valuing its options and warrants. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The risk-free interest rate is based on the relevant US Treasury Bill Rate at the time of each grant. The dividend yield represents the dividend rate expected to be paid over the option’s expected term; the Company currently has no plans to pay dividends. The fair value of stock-based awards is amortized over the vesting period of the award or expected vesting date of the market-based restricted shares and the Company elected to use the straight-line method for awards granted. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition Software license revenue is recognized when persuasive evidence of an arrangement exists, delivery of the product component has occurred, the fee is fixed and determinable, and collectability is reasonably assured. If any of these criteria are not met, revenue recognition is deferred until such time as all of the criteria are met. The Company accounts for delivered elements in accordance with the selling price when arrangements include multiple product components or other elements and vendor-specific objective evidence exists for the value of all undelivered elements. Revenues on undelivered elements are recognized once delivery is complete. In those instances, in which arrangements include significant customization, contractual milestones, acceptance criteria or other contingencies (which represents the majority of the Company ’s arrangements), the Company accounts for the arrangements using contract accounting, as follows: 1) When customer acceptance can be estimated, but reliable estimated costs to complete cannot be determined, expenditures are capitalized as work-in process and deferred until completion of the contract at which time the costs and revenues are recognized. 2) When customer acceptance cannot be estimated based on historical evidence, costs are expensed as incurred and revenue is recognized at the completion of the contract when customer acceptance is obtained. The Company records amounts collected from customers in excess of recognizable revenue as deferred revenue in the accompanying consolidated balance sheets. Revenues for maintenance agreements, software support, on-line services and information products are recognized ratably over the term of the service agreement. The Company recognizes revenue on a net basis, which excludes sales tax collected from customers and remitted to governmental authorities. |
Advertising Costs, Policy [Policy Text Block] | Advertising Expense The Company expenses advertising costs as incurred. For the three months ended September 30, 2016 and 2015, advertising expense totaled $57,000 and $136,000, respectively. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Management has determined that the functional currency of its subsidiaries is the local currency. Assets and liabilities of the UK subsidiaries are translated into US dollars at the quarter-end exchange rates. Income and expenses are translated at an average exchange rate for the period and the resulting translation gain adjustments are accumulated as a separate component of stockholders’ equity. Foreign currency translation income (loss) totaled $(476,000) and $(605,000) for the three months ended September 30, 2016 and 2015, respectively. Foreign currency gains and losses from transactions denominated in currencies other than the respective local currencies are included in income. The Company had no foreign currency transaction gain (loss) for all periods presented. |
Comprehensive Income, Policy [Policy Text Block] | Comprehensive Income Comprehensive income includes all changes in equity (net assets) during a period from non-owner sources. For the three months ended September 30, 2016 and 2015, the components of comprehensive income consist of foreign currency translation gain (loss). |
Income Tax, Policy [Policy Text Block] | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. Deferred taxation is provided in full in respect of timing differences between the treatment of certain items for taxation and accounting purposes. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company ’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties on the Company’s condensed consolidated balance sheets at September 30, 2016 and June 30, 2016, and has not recognized interest and/or penalties in the condensed consolidated statements of comprehensive income for the three months ended September 30, 2016 and 2015. |
Earnings Per Share, Policy [Policy Text Block] | Basic and Diluted Earnings Per Share Basic earnings per share (“BEPS”) is computed by dividing the net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share (“DEPS”) is computed giving effect to all dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of incremental shares issuable upon the exercise of stock options and warrants using the “treasury stock” method. The computation of DEPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. For the three months ended September 30, 2016 and 2015, there were 95,757 and 95,287, respectively, common share equivalents included in the computation of the DEPS. For the three months ended September 30, 2016 and 2015, 635,054 and 866,252, respectively, shares of common stock vest based on the market price of the Company’s common stock and were excluded from the computation of DEPS because the shares have not vested, but no stock options were excluded from the computation of DEPS. The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computation for three months ended September 30, 2016 and 2015 (in thousands, except for per share amounts): Three Months Ended September 30, 2016 2015 Numerator: Net income $ 1,213 $ 830 Denominator: Basic weighted-average shares outstanding 11,699 13,395 Effect of dilutive securities 96 95 Diluted weighted-average diluted shares 11,795 13,490 Basic earnings per common share $ 0.10 $ 0.06 Diluted earnings per common share $ 0.10 $ 0.06 |
Reclassification, Policy [Policy Text Block] | Reclassification Certain expenses were reclassified from depreciation and amortization to cost of revenues in the accompanying condensed consolidated statement of comprehensive income for the three months ended September 30, 2015 in order to conform to the current period presentation. The Company adopted Accounting Standards Update ("ASU") 2015-03, Imputation of Interest - Simplifying the Presentation of Debt Issuance Costs, |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. In February 2016, the FASB issued ASU 2016-02, Leases In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes In April 2015, the FASB issued ASU 2015-03, Imputation of Interest - Simplifying the Presentation of Debt Issuance Costs. In May 2014, the FASB issued ASU 2014-09 , Revenue from Contracts with Customers In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern |
Note 2 - Nature of Operations13
Note 2 - Nature of Operations and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Goodwill [Table Text Block] | In thousands For the three months ended, September 30, 2016 2015 Beginning Balance $ 8,363 $ 9,202 Acquisition of Origin - 202 Effect of exchange rate changes (186 ) (238 ) Ending Balance $ 8,177 9,166 |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended September 30, 2016 2015 Numerator: Net income $ 1,213 $ 830 Denominator: Basic weighted-average shares outstanding 11,699 13,395 Effect of dilutive securities 96 95 Diluted weighted-average diluted shares 11,795 13,490 Basic earnings per common share $ 0.10 $ 0.06 Diluted earnings per common share $ 0.10 $ 0.06 |
Note 4 - Stockholders' Equity (
Note 4 - Stockholders' Equity (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Options Outstanding Weighted- Number of Weighted- Average Shares Average Remaining (in Exercise Contractual thousands) Price Life (in years) Options outstanding - July 1, 201 6 121 $ 1.23 Options granted - - Options exercised - - Options cancelled - - Options outstanding – September 30, 2016 121 $ 1.23 4.7 Options exercisable - September 30, 2016 121 $ 1.23 4.7 Options exercisable and vest ed - September 30, 2016 121 $ 1.23 4.7 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | Number of Weighted Average Shares Initial Value Price (in thousands) Per Share Restricted stock outstanding - July 1, 2016 776 $ 0.87 Issuance of restricted stock - - Vesting (85 ) 0.39 Forfeitures (56 ) 0.39 Restricted stock outstanding - September 30, 2016 635 $ 0.81 |
Schedule of Vesting Level of Restricted Stock [Table Text Block] | Number of Weighted Average Shares Initial Value Price Per Share 30 day VWAP per share vesting level (1): $8.00 per share 425 $ 0.44 $9.00 per share 82 $ 1.25 $10.00 per share 48 $ 1.79 $11.00 per share 48 $ 1.79 $12.00 per share 32 $ 1.79 (1) The restricted stock becomes vested when the Company’s 30 day volume weighted average price (“VWAP”) per share is at or above these levels. |
Note 6 - Long-term Debt (Tables
Note 6 - Long-term Debt (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Debt [Table Text Block] | As of ( in thousands) September 30, 2016 June 30, 2016 Debt obligations : R evolving loan facility $ 1,250 $ 1,150 Term loan 8,050 8,550 Equipment financing 73 78 Less: unamortized debt issuance costs (79 ) (91 ) Total 9,294 9,687 Less current portion (1,882 ) (1,879 ) Long-term debt $ 7,412 $ 7,808 |
Note 2 - Nature of Operations16
Note 2 - Nature of Operations and Summary of Significant Accounting Policies (Details Textual) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2016USD ($)shares | Sep. 30, 2015USD ($)shares | Jun. 30, 2016USD ($) | Sep. 30, 2016GBP (£) | |
UNITED STATES | Geographic Concentration Risk [Member] | Sales Revenue, Net [Member] | ||||
Concentration Risk, Percentage | 36.00% | 27.00% | ||
UNITED STATES | ||||
Cash, FDIC Insured Amount | $ 250,000 | |||
Percentage of Property, Plant and Equipment, Net | 23.00% | 21.00% | 23.00% | |
UNITED KINGDOM | Geographic Concentration Risk [Member] | Sales Revenue, Net [Member] | ||||
Concentration Risk, Percentage | 62.00% | 72.00% | ||
UNITED KINGDOM | ||||
Cash, FSCS Insured Amount | £ | £ 75,000 | |||
Percentage of Property, Plant and Equipment, Net | 77.00% | 79.00% | 77.00% | |
IRELAND | Geographic Concentration Risk [Member] | Sales Revenue, Net [Member] | ||||
Concentration Risk, Percentage | 1.00% | |||
CANADA | Geographic Concentration Risk [Member] | Sales Revenue, Net [Member] | ||||
Concentration Risk, Percentage | 1.00% | 1.00% | ||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | ||||
Number of Major Customers | 0 | 0 | ||
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | ||||
Number of Major Customers | 0 | 0 | ||
Minimum [Member] | Computer Software, Intangible Asset [Member] | ||||
Finite-Lived Intangible Asset, Useful Life | 9 years | |||
Minimum [Member] | Customer Relationships [Member] | ||||
Finite-Lived Intangible Asset, Useful Life | 9 years | |||
Minimum [Member] | ||||
Property, Plant and Equipment, Useful Life | 3 years | |||
Maximum [Member] | Computer Software, Intangible Asset [Member] | ||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||
Maximum [Member] | Customer Relationships [Member] | ||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||
Maximum [Member] | ||||
Property, Plant and Equipment, Useful Life | 5 years | |||
Automotive Data Services [Member] | ||||
Finite-Lived Intangible Asset, Useful Life | 20 years | |||
Acquired Intellectual Property [Member] | ||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||
Reclassification of Net Debt Issuance Costs From Other Long-term Assets to An Offset of Long-term Debt [Member] | ||||
Current Period Reclassification Adjustment | $ 79,000 | |||
Prior Period Reclassification Adjustment | $ 91,000 | |||
Number of Operating Segments | 2 | |||
Number of Reportable Segments | 1 | |||
Depreciation, Depletion and Amortization | $ 41,000 | $ 63,000 | ||
Amortization | 67,000 | 64,000 | ||
Amortization of Intangible Assets | 20,000 | 26,000 | ||
Advertising Expense | 57,000 | 136,000 | ||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | $ (476,000) | $ (605,000) | ||
Weighted Average Number Diluted Shares Outstanding Adjustment | shares | 95,757 | 95,287 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | shares | 635,054 | 866,252 | ||
Impairment of Long-Lived Assets Held-for-use | $ 0 | |||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 0 | $ 0 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | $ 0 | $ 0 |
Note 2 - Nature of Operations17
Note 2 - Nature of Operations and Summary of Significant Accounting Policies - Goodwill Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Beginning Balance | $ 8,363 | $ 9,202 |
Acquisition of Origin | 202 | |
Effect of exchange rate changes | (186) | (238) |
Ending Balance | $ 8,177 | $ 9,166 |
Note 2 - Nature of Operations18
Note 2 - Nature of Operations and Summary of Significant Accounting Policies - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Numerator: | ||
Net income | $ 1,213 | $ 830 |
Denominator: | ||
Basic weighted-average shares outstanding (in shares) | 11,699,000 | 13,395,000 |
Weighted Average Number Diluted Shares Outstanding Adjustment | 95,757 | 95,287 |
Diluted weighted-average diluted shares (in shares) | 11,795,000 | 13,490,000 |
Basic earnings per common share (in dollars per share) | $ 0.10 | $ 0.06 |
Diluted earnings per common share (in dollars per share) | $ 0.10 | $ 0.06 |
Note 4 - Stockholders' Equity19
Note 4 - Stockholders' Equity (Details Textual) - USD ($) | Dec. 01, 2015 | Jul. 01, 2015 | Sep. 21, 2011 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 16, 2011 |
LITP 2007 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 47,663 | 10,709 | ||||
Employee Stock Purchase Plan [Member] | ||||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 7,008 | 7,748 | ||||
Maximum Fair Market Value of Common Stock to be Granted to Employees | $ 2,400 | |||||
Maximum Number of Common Stock Covered | 100,000 | |||||
Common Stock [Member] | ||||||
Stock Issued During Period, Value, New Issues | $ 255,000 | |||||
Treasury Stock [Member] | ||||||
Stock Repurchased During Period, Shares | 29,695 | |||||
Treasury Stock, Retired, Cost Method, Amount | $ 161,000 | |||||
Tender Offer [Member] | ||||||
Purchases of Common Stock During Period | 2,000,000 | |||||
Purchases of Common Stock Price Per Share | $ 7.50 | |||||
Purchases of Common Stock During Period, Value | $ 15,000,000 | |||||
Restricted Stock [Member] | ||||||
Allocated Share-based Compensation Expense | $ 84,000 | $ 41,000 | ||||
Common Stock, Percent of Fair Market Value, Exercise Date | 85.00% | |||||
Common Stock, Percent of Fair Market Value, Grant Date | 85.00% | |||||
Stock Repurchase Program, Number of Aggregate Shares Repurchased | 1,982,235 | |||||
Stock Repurchase Program, Number of Aggregate Shares Repurchased, Value | $ 4,698,000 |
Note 4 - Stockholders' Equity -
Note 4 - Stockholders' Equity - Stock Option Activity (Details) | 3 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Number of options outstanding (in shares) | shares | 121,000 |
Options outstanding, weighted-average exercise price (in dollars per share) | $ / shares | $ 1.23 |
Number of options granted (in shares) | shares | 0 |
Options granted, weighted-average exercise price (in dollars per share) | $ / shares | $ 0 |
Number of options exercised (in shares) | shares | 0 |
Options exercised, weighted-average exercise price (in dollars per share) | $ / shares | $ 0 |
Number of options cancelled (in shares) | shares | 0 |
Options cancelled, weighted-average exercise price (in dollars per share) | $ / shares | $ 0 |
Number of options outstanding (in shares) | shares | 121,000 |
Options outstanding, weighted-average exercise price (in dollars per share) | $ / shares | $ 1.23 |
Options outstanding, weighted-average remaining contractual life | 4 years 255 days |
Number of options exercisable (in shares) | shares | 121,000 |
Options exercisable, weighted-average exercise price (in dollars per share) | $ / shares | $ 1.23 |
Options exercisable, weighted-average remaining contractual life | 4 years 255 days |
Number of options exercisable and vested (in shares) | shares | 121,000 |
Options exercisable and vested, weighted-average exercise price (in dollars per share) | $ / shares | $ 1.23 |
Options exercisable and vested, weighted-average remaining contractual life | 4 years 255 days |
Note 4 - Stockholders' Equity21
Note 4 - Stockholders' Equity - Restricted Stock Activity (Details) - Restricted Stock [Member] | 3 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Number of shares, restricted stock outstanding, beginning balance (in shares) | shares | 776,000 |
Weighted average initial value price per share, beginning balance (in dollars per share) | $ / shares | $ 0.87 |
Number of shares, issuance of restricted stock (in shares) | shares | 0 |
Weighted average initial value price per share, issuance of restricted stock (in dollars per share) | $ / shares | $ 0 |
Number of shares, vesting (in shares) | shares | (85,000) |
Weighted average initial value price per share, vesting (in dollars per share) | $ / shares | $ 0.39 |
Number of shares, forfeitures (in shares) | shares | (56,000) |
Weighted average initial value price per share, forfeitures (in dollars per share) | $ / shares | $ 0.39 |
Number of shares, restricted stock outstanding, ending balance (in shares) | shares | 635,000 |
Weighted average initial value price per share, ending balance (in dollars per share) | $ / shares | $ 0.81 |
Note 4 - Stockholders' Equity22
Note 4 - Stockholders' Equity - Vesting Levels of Restricted Stock (Details) - Restricted Stock [Member] - $ / shares | Sep. 30, 2016 | Jun. 30, 2016 | |
Share-based Compensation Award, Tranche One [Member] | |||
Number of Shares (in shares) | [1] | 425,000 | |
Weighted Average Initial Value Price Per Share (in dollars per share) | [1] | $ 0.44 | |
Share-based Compensation Award, Tranche Two [Member] | |||
Number of Shares (in shares) | [1] | 82,000 | |
Weighted Average Initial Value Price Per Share (in dollars per share) | [1] | $ 1.25 | |
Share-based Compensation Award, Tranche Three [Member] | |||
Number of Shares (in shares) | [1] | 48,000 | |
Weighted Average Initial Value Price Per Share (in dollars per share) | [1] | $ 1.79 | |
Share-based Compensation Award, Tranche Four [Member] | |||
Number of Shares (in shares) | [1] | 48,000 | |
Weighted Average Initial Value Price Per Share (in dollars per share) | [1] | $ 1.79 | |
Share-based Compensation Award, Tranche Five [Member] | |||
Number of Shares (in shares) | [1] | 32,000 | |
Weighted Average Initial Value Price Per Share (in dollars per share) | [1] | $ 1.79 | |
Number of Shares (in shares) | 635,000 | 776,000 | |
Weighted Average Initial Value Price Per Share (in dollars per share) | $ 0.81 | $ 0.87 | |
[1] | The restricted stock becomes vested when the Company’s 30 day volume weighted average price (“VWAP”) per share is at or above these levels. |
Note 5 - Acquisition (Details T
Note 5 - Acquisition (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2015 | Jul. 01, 2015 | Jun. 30, 2015 | |
Origin Software Solutions Ltd [Member] | Other Noncurrent Liabilities [Member] | |||||
Business Combination, Contingent Consideration, Liability, Noncurrent | $ 520,000 | ||||
Origin Software Solutions Ltd [Member] | General and Administrative Expense [Member] | |||||
Business Combination, Acquisition Related Costs | 43,000 | ||||
Origin Software Solutions Ltd [Member] | |||||
Equity Method Investment, Ownership Percentage | 100.00% | ||||
Payments to Acquire Businesses, Gross | $ 503,000 | ||||
Business Combination, Contingent Consideration, Liability | 416,000 | ||||
Business Acquisition, Contingent Consideration, Equity Interest Issuable Value | $ 283,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets | $ 177,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 1,000,000 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities Noncurrent | 202,000 | ||||
Goodwill | $ 202,000 | ||||
Goodwill | $ 8,177,000 | $ 8,363,000 | $ 9,166,000 | $ 9,202,000 |
Note 6 - Long-term Debt (Detail
Note 6 - Long-term Debt (Details Textual) - USD ($) $ in Thousands | Dec. 01, 2015 | Sep. 30, 2016 | Jun. 30, 2016 |
J.P. Morgan Chase Bank, N.A. [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,500 | ||
J.P. Morgan Chase Bank, N.A. [Member] | Minimum [Member] | LIBOR Rate or Prime Rate [Member] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.50% | ||
J.P. Morgan Chase Bank, N.A. [Member] | Maximum [Member] | LIBOR Rate or Prime Rate [Member] | |||
Debt Instrument, Basis Spread on Variable Rate | 4.00% | ||
J.P. Morgan Chase Bank, N.A. [Member] | |||
Debt Agreement, Maximum Borrowing Capacity | 12,000 | ||
Long-term Debt | 9,500 | ||
Debt Instrument, Interest Rate, Effective Percentage | 4.56% | ||
Percentage of Pledged Stock | 65.00% | ||
Proceeds from Lines of Credit | $ 10,500 | ||
Long-term Debt | $ 9,294 | $ 9,687 |
Note 6 - Long-term Debt - Long-
Note 6 - Long-term Debt - Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 |
Line of Credit [Member] | ||
Long-term debt, gross | $ 1,250 | $ 1,150 |
Term Loan [Member] | ||
Long-term debt, gross | 8,050 | 8,550 |
Equipment Financing [Member] | ||
Long-term debt, gross | 73 | 78 |
Less: unamortized debt issuance costs | (79) | (91) |
Long-term debt | 9,294 | 9,687 |
Less current portion | (1,882) | (1,879) |
Long-term debt, noncurrent | $ 7,412 | $ 7,808 |