Document And Entity Information
Document And Entity Information - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 10, 2016 | Jun. 30, 2015 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | NUMEREX CORP /PA/ | ||
Entity Central Index Key | 870,753 | ||
Trading Symbol | nmrx | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Common Stock, Shares Outstanding | 19.4 | ||
Entity Public Float | $ 130.6 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 16,237 | $ 17,270 |
Accounts receivable, less allowance for doubtful accounts of $618 and $652 | 9,237 | 12,287 |
Financing receivables, current | 1,780 | 1,595 |
Inventory, net of reserves | 7,617 | 8,410 |
Prepaid expenses and other current assets | 2,037 | 2,329 |
Deferred tax assets, current | 603 | 3,161 |
TOTAL CURRENT ASSETS | 37,511 | 45,052 |
Financing receivables, less current portion | 2,330 | 2,984 |
Property and equipment, net of accumulated depreciation and amortization | 4,795 | 4,889 |
Software, net of accumulated amortization | 7,146 | 7,385 |
Other intangible assets, net of accumulated amortization | 15,722 | 17,884 |
Goodwill | 43,424 | 44,348 |
Deferred tax assets, less current portion | 5,816 | |
Other assets | 699 | 2,585 |
TOTAL ASSETS | 111,627 | 130,943 |
CURRENT LIABILITIES | ||
Accounts payable | 11,390 | 12,257 |
Accrued expenses and other current liabilities | 2,864 | 2,471 |
Deferred revenues | 1,942 | 2,258 |
Current portion of long-term debt | 3,750 | 4,251 |
Obligations under capital lease | 148 | |
TOTAL CURRENT LIABILITIES | 19,946 | 21,385 |
Long-term debt, less current portion | 15,599 | 19,350 |
Deferred tax liabilities, noncurrent | 1,595 | |
Other liabilities | 1,891 | 1,346 |
TOTAL LIABILITIES | $ 39,031 | $ 42,081 |
COMMITMENTS AND CONTINGENCIES (NOTE N) | ||
SHAREHOLDERS' EQUITY | ||
Preferred stock, no par value; 3,000 authorized; none issued | ||
Additional paid-in capital | $ 102,108 | $ 99,056 |
Treasury stock, at cost; 1,316 and 1,292 shares | (5,444) | (5,352) |
Accumulated other comprehensive loss | (117) | (48) |
Accumulated deficit | (23,951) | (4,794) |
TOTAL SHAREHOLDERS' EQUITY | 72,596 | 88,862 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 111,627 | $ 130,943 |
Class A common stock | ||
SHAREHOLDERS' EQUITY | ||
Common stock value | ||
Class B common stock | ||
SHAREHOLDERS' EQUITY | ||
Common stock value |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 618 | $ 652 |
Preferred stock, no par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized | 3,000 | 3,000 |
Preferred stock, shares issued | 0 | 0 |
Treasury stock, a cost, shares | 1,316 | 1,292 |
Class A common stock | ||
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 30,000 | 30,000 |
Common stock, shares issued | 20,652 | 20,284 |
Common stock, shares outstanding | 19,177 | 18,922 |
Class B common stock | ||
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 5,000 | 5,000 |
Common stock, shares issued | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net revenues: | |||
Subscription and support revenues | $ 64,371 | $ 65,020 | $ 51,640 |
Embedded devices and hardware | 25,079 | 28,849 | 26,192 |
Total net revenues | 89,450 | 93,869 | 77,832 |
Cost of sales, exclusive of a portion of depreciation and amortization shown below: | |||
Subscription and support revenues | 25,410 | 25,371 | 21,754 |
Embedded devices and hardware | 22,981 | 24,690 | 23,131 |
Inventory reserves | 1,343 | 544 | 807 |
Impairment of other asset | 1,275 | ||
Gross profit | 38,441 | 43,264 | 32,140 |
Operating expenses: | |||
Sales and marketing | 12,446 | 11,876 | 9,544 |
General and administrative | 15,798 | 15,063 | 13,281 |
Engineering and development | 8,952 | 8,009 | 4,915 |
Depreciation and amortization | 7,116 | 6,201 | 4,819 |
Impairment of goodwill and other intangible assets | 2,712 | ||
Operating (loss) income | (8,583) | 2,115 | (419) |
Interest expense | 806 | 798 | 304 |
Other income, net | (134) | (1,338) | (319) |
(Loss) income from continuing operations before income taxes | (9,255) | 2,655 | (404) |
Income tax expense (benefit) | 9,902 | 419 | (2,369) |
(Loss) income from continuing operations, net of income taxes | (19,157) | 2,236 | 1,965 |
Loss from discontinued operations, net of income taxes | 492 | 1,380 | |
Net (loss) income | (19,157) | 1,744 | 585 |
Other items of comprehensive loss, net of income taxes: | |||
Foreign currency translation adjustment | (69) | (24) | (16) |
Comprehensive (loss) income | $ (19,226) | $ 1,720 | $ 569 |
Basic (loss) earnings per share: | |||
(Loss) income from continuing operations (in dollars per share) | $ (1) | $ 0.12 | $ 0.11 |
Loss from discontinued operations (in dollars per share) | (0.03) | (0.08) | |
Net (loss) income (in dollars per share) | (1) | 0.09 | 0.03 |
Diluted (loss) earnings per share: | |||
(Loss) income from continuing operations (in dollars per share) | (1) | 0.12 | 0.10 |
Loss from discontinued operations (in dollars per share) | (0.03) | (0.07) | |
Net (loss) income (in dollars per share) | $ (1) | $ 0.09 | $ 0.03 |
Weighted average shares outstanding used in computing earnings per share: | |||
Basic (in shares) | 19,117 | 18,922 | 18,413 |
Diluted (in shares) | 19,117 | 19,268 | 18,950 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Shares | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Balance at Dec. 31, 2012 | $ 17,171 | $ 68,072 | $ (8,136) | $ (8) | $ (7,123) | $ 52,805 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Sale of shares, net of issuance costs and expenses | 2,662 | 27,731 | 27,731 | |||
Issuance of shares in connection with acquisition | 74 | 925 | 925 | |||
Equity-based compensation expense | 190 | 1,879 | 1,879 | |||
Equity-based compensation plan activity | 201 | 341 | 341 | |||
Value of shares retained to pay employee taxes | (466) | (466) | ||||
Exercise of warrants | 92 | 193 | 193 | |||
Retirement of treasury shares | (321) | $ (2,898) | 2,898 | |||
Translation adjustment | (16) | (16) | ||||
Net (loss) income | 585 | 585 | ||||
Balance at Dec. 31, 2013 | 20,069 | $ 95,777 | (5,238) | (24) | (6,538) | 83,977 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Equity-based compensation expense | 1 | 2,565 | 2,565 | |||
Equity-based compensation plan activity | 214 | 867 | 867 | |||
Value of shares retained to pay employee taxes | (153) | (114) | (267) | |||
Translation adjustment | (24) | (24) | ||||
Net (loss) income | 1,744 | 1,744 | ||||
Balance at Dec. 31, 2014 | 20,284 | 99,056 | (5,352) | (48) | (4,794) | 88,862 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Equity-based compensation expense | 2,673 | 2,673 | ||||
Equity-based compensation plan activity | 326 | 283 | 283 | |||
Value of shares retained to pay employee taxes | (219) | (92) | (311) | |||
Issuance of shares in asset acquisition | 30 | 243 | 243 | |||
Other | 12 | 72 | 72 | |||
Translation adjustment | (69) | (69) | ||||
Net (loss) income | (19,157) | (19,157) | ||||
Balance at Dec. 31, 2015 | $ 20,652 | $ 102,108 | $ (5,444) | $ (117) | $ (23,951) | $ 72,596 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (19,157) | $ 1,744 | $ 585 |
Less loss from discontinued operations, net of income taxes | (492) | (1,380) | |
(Loss) income from continuing operations, net of income taxes | (19,157) | 2,236 | 1,965 |
Adjustments to reconcile net (loss) income from continuing operations to net cash provided by operating activities: | |||
Depreciation and amortization | 8,217 | 6,812 | 5,119 |
Impairment of goodwill, other intangible assets and other assets | 3,987 | ||
Equity-based compensation expense | 2,673 | 2,565 | 1,879 |
Deferred income taxes | 9,956 | 365 | (2,128) |
Bad debt expense | 562 | 392 | 444 |
Inventory reserves | 1,343 | 544 | 807 |
Gain on sale of cost method investment | (1,109) | (328) | |
Other non-cash expense | 128 | 98 | 79 |
Changes in assets and liabilities, net of effects of acquisitions: | |||
Accounts and financing receivables | 3,162 | (1,034) | (3,201) |
Inventory | (1,929) | 233 | (1,625) |
Accounts payable | (818) | 665 | 1,477 |
Deferred revenue | 264 | 154 | 508 |
Other | 489 | (1,465) | 1,092 |
Net cash provided by operating activities | 8,877 | 10,456 | 6,088 |
Cash flows from investing activities: | |||
Net cash paid for acquisition | (37,287) | (2,794) | |
Purchases of property and equipment | (1,150) | (2,209) | (1,004) |
Capitalized software development and purchases of software | (4,150) | (3,237) | (3,430) |
Proceeds from sale of cost basis investment | 1,309 | 650 | |
Proceeds from sale-leaseback of equipment | 716 | ||
Net cash used in investing activities | (5,300) | (41,424) | (5,862) |
Cash flows from financing activities: | |||
Principal payments on debt | (4,252) | (2,508) | (7,186) |
Principal payments on capital lease obligations | (148) | (306) | (263) |
Proceeds from underwritten offering, net of offering costs | 27,731 | ||
Proceeds from long-term debt | 25,000 | ||
Equity-based compensation plan activity, net | 283 | 867 | 338 |
Payment of taxes on equity-based awards | (311) | (267) | (466) |
Proceeds from exercise of warrants | 193 | ||
Deferred financing costs | (182) | (293) | |
Net cash (used in) provided by financing activities | (4,610) | 22,493 | 20,347 |
Net cash provided from discontinued operations | 142 | 82 | |
Net (decrease) increase in cash and cash equivalents | (1,033) | (8,333) | 20,655 |
Cash and cash equivalents at beginning of period | 17,270 | 25,603 | 4,948 |
Cash and cash equivalents at end of period | 16,237 | 17,270 | 25,603 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 673 | 703 | 272 |
Cash paid for income taxes | 58 | 146 | 97 |
Disclosure of non-cash investing and financing activities: | |||
Capital expenditures in accounts payable | 441 | $ 417 | 923 |
Non-monetary consideration for acquisition of assets | 375 | ||
Common stock issued for acquisition of assets | $ 243 | ||
Acquisition of property under capital lease | 716 | ||
Common stock issued in connection with acquisition | 925 | ||
Deferred payment issued in connection with acquisition | $ 200 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Numerex Corp. (NASDAQ: NMRX) is a holding company and, through its subsidiaries, is a single source, leading provider of managed enterprise solutions enabling the Internet of Things (IoT). An IoT solution is generally viewed as a combination of devices, software and services that operate with little or no human interaction. Our managed IoT solutions are simple, innovative, scalable and secure. Our solutions incorporate each of the four key IoT building blocks – Device, Network, Application and Platform. We provide our technology and service solutions through our integrated IoT horizontal platforms, which are generally sold on a subscription basis. We are ISO 27001 information security-certified, highlighting our focus on IoT data security, service reliability and around-the-clock support of our customers’ IoT solutions. Basis of Presentation The consolidated financial statements include the results of operations and financial position of Numerex and its wholly owned subsidiaries in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Intercompany accounts and transactions have been eliminated in consolidation. Discontinued Operations Businesses to be divested are classified in the consolidated financial statements as either discontinued operations or held for sale. For businesses classified as discontinued operations, the balance sheet amounts and results of operations are reclassified from their historical presentation to assets and liabilities of discontinued operations on the consolidated balance sheet and to discontinued operations on the consolidated statements of operations and comprehensive (loss) income and cash flows, respectively, for all periods presented. The gains or losses associated with these divested businesses are also recorded in discontinued operations in the consolidated statements of operations and comprehensive (loss) income. Additionally, the accompanying notes do not include the operating results of businesses classified as discontinued operations for all periods presented. As of June 30, 2014, we completed the divestiture of the businesses classified as discontinued operations. We have not had and do not expect to have any significant continuing involvement with these businesses following their divestiture. See Note C – Discontinued Operations for more information. Estimates and Assumptions The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, warranty costs, doubtful accounts, goodwill and intangible assets, expenses, accruals, equity-based compensation, income taxes, restructuring charges, leases, long-term service contracts, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates. Fair Value of Financial Instruments The fair value of financial instruments classified as current assets or liabilities, including cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximate carrying value, principally because of the short-term, maturity of those items. The fair value of our long-term financing receivables and note payable approximates carrying value based on their effective interest rates compared to current market rates and similar type borrowing arrangements. We measure and report certain financial assets and liabilities at fair value on a recurring basis, including cash equivalents. The major categories of nonfinancial assets and liabilities that we measure at fair value include reporting units measured at fair value in our goodwill impairment test. See Note D – Fair Value Measurements for more information. Concentration of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk are primarily cash investments and accounts and financing receivables. We maintain our cash and overnight investment balances in financial institutions, which typically exceed federally insured limits. We had cash balances in excess of these limits of $16.0 million and $17.0 million at December 31, 2015 and 2014, respectively. We have not experienced any losses in such accounts and believe we are not exposed to any significant credit risk on cash and cash equivalents. Concentration of credit risk with respect to accounts and financing receivables from customers is limited. We perform credit evaluations of prospective customers and we evaluate our trade and financing receivables periodically. Our accounts and financing receivables are at risk to the extent that we may not be able to collect from some of our customers. See Note E – Accounts Receivable, Note F – Financing Receivables and Note Q – Significant Customer, Concentration of Risk and Related Parties for more information. Cash and Cash Equivalents We consider all investments with an original maturity of three months or less at date of purchase to be cash equivalents. Cash equivalents consist of overnight repurchase agreements and amounts on deposit in foreign banks. We held $0.5 million and $0.4 million in foreign bank accounts at December 31, 2015 and 2014, respectively. Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are stated at gross invoiced amounts less discounts, other allowances and provision for uncollectible accounts. Trade accounts receivable include earned but unbilled revenue that results from non-calendar month billing cycles and lag time in billing related to certain of our services. Financing Receivables Financing receivables are due in installments. We evaluate the credit quality of our financing receivables on an ongoing basis utilizing an aging of the accounts and write-offs, customer collection experience, the customer’s financial condition, known risk characteristics impacting the respective customer base, and other available economic conditions, to determine the appropriate allowance. Similar to accounts receivable, we typically do not require collateral. All amounts due at December 31, 2015 and 2014 were deemed fully collectible and an allowance was not necessary. See Note F – Financing Receivables for more information. Inventories and Reserves for Excess, Slow-Moving and Obsolete Inventory Inventories are valued at the lower of cost or market and consist principally of (1) security devices and (2) cellular IoT Modems and Modules and (3) satellite IoT Modems and other accessories. Cost is generally determined on the first-in, first-out (FIFO) basis. Inbound freight costs, including raw material freight costs to contract manufacturers is recorded in inventory and these costs are recognized in cost of sales when the product is sold. Lower of cost or market value of inventory is determined at the product level and evaluated quarterly. Estimated reserves for obsolescence or slow moving inventory are maintained based on current economic conditions, historical sales quantities and patterns and, in some cases, the specific risk of loss on specifically identified inventories. Such inventories are recorded at estimated realizable value net of the costs of disposal. See Note G – Inventory for more information. Property and Equipment Property and equipment are carried at cost net of accumulated depreciation. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives. Property and equipment under capital leases are amortized over the lives of the respective leases or over the service lives of the assets for those leases and leasehold improvements, whichever is shorter. Depreciation and amortization for property and equipment is calculated using the straight-line method over the following estimated lives: · Machinery and equipment 4-10 years · Furniture, fixtures and fittings 3-10 years · Leasehold improvements up to 10 years See Note I – Property and Equipment for more information. Capitalized Software We capitalize software both for internal use and for inclusion in our products. For internal use software, costs incurred in the preliminary project stage of developing or acquiring internal use software are expensed as incurred. After the preliminary project stage is completed, management has approved the project and it is probable that the project will be completed and the software will be used for its intended purpose, we capitalize certain internal and external costs incurred to acquire or create internal use software, principally related to software coding, designing system interfaces and installation and testing of the software. We amortize capitalized internal use software costs using the straight-line method over the estimated useful life of the software, generally for three years. For software embedded in our products, we capitalize software development costs when technological feasibility is established and conclude capitalization when the hardware is ready for release. We amortize capitalized costs for software to be sold using the straight-line method over the estimated useful life based on anticipated revenue streams of the software, generally for three years. Software development costs incurred prior to the establishment of technological feasibility are expensed as incurred as engineering and development. See Note J – Intangible Assets for more information. Intangible Assets, Including Goodwill Intangible assets consist of acquired customer relationships and intellectual property, patents and trademarks, and goodwill. These assets, except for goodwill and trade names, are amortized over their expected useful lives. Acquired customer relationships are amortized using the straight-line method over 4 to 11 years representing the estimated benefit period. Acquired intellectual property and patents are amortized using the straight-line method over 7 to 16 years, representing the shorter of their estimated useful lives or the period until the patent renews. Costs to maintain patents are expensed as incurred while costs to renew patents are capitalized and amortized over the remaining estimated useful lives. Goodwill and trade names are not amortized but are subject to an annual impairment test, and more frequently if events or circumstances occur that would indicate a potential decline in its fair value. An impairment charge will be recognized only when the implied fair value of a reporting unit’s goodwill is less than its carrying amount. The annual assessment of goodwill for impairment includes comparing the fair value of each reporting unit to the carrying value, referred to as Step One. If the fair value of a reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is necessary. If the carrying value of a reporting unit exceeds its fair value, a second test is performed, referred to as Step Two, to measure the amount of impairment to goodwill, if any. To measure the amount of any impairment, we determine the implied fair value of goodwill in the same manner as if we were acquiring the affected reporting unit in a business combination. Specifically, we allocate the fair value of the affected reporting unit to all of the assets and liabilities of that unit, including any unrecognized intangible assets, in a hypothetical calculation that would yield the implied fair value of goodwill. If the implied fair value of goodwill is less than the goodwill recorded on the consolidated balance sheet, an impairment charge for the difference is recorded. We base the impairment analysis of intangible assets, including goodwill on estimated fair values. The fair value of reporting units for assessing goodwill is principally based on discounted cash flow models and using a relief from royalties method for other intangible assets. The assumptions, inputs and judgments used in estimating fair values are inherently subjective and reflect estimates based on known facts and circumstances at the time the valuations are performed. These estimates and assumptions primarily include, but are not limited to, discount rates, terminal growth rates, projected revenues and costs, projected cash flows, capital expenditure forecasts, and royalty rates. We recorded impairment charges of $0.9 million, $0.3 million, and $0.1 million for goodwill, patents and trademarks, and customer relationships, respectively, related to our DIY product line. Additionally, we recorded $0.7 million in impairment charges for each of Omnilink technologies and indefinite-lived trade names during the year ended December 31, 2015. See Note J – Intangible Assets for more information. We elected to change our annual goodwill impairment testing measurement date from December 31 to October 1 effective October 1, 2013, primarily to correspond to our annual strategic, financial planning and budgeting processes. The change in annual testing dates did not affect our financial results for any interim period or the year ended December 31, 2013. See Note J – Intangible Assets for more information. Impairment of Long-lived Assets Long-lived assets, such as property and equipment and other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount which the carrying amount of the asset exceeds the fair value of the asset. During the year ended December 31, 2015, we recorded an impairment charge of $1.3 million for prepaid carrier fees in other assets affecting multiple reporting units. See Note H – Prepaid Expenses and Other Assets for more information. Income Taxes We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates applied to taxable income. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets when it is more likely than not that the asset will not be realized. We conduct business globally and file income tax returns in the United States and in many state and certain foreign jurisdictions. We are subject to state and local income tax examinations for years after and including 1998. These tax years remain open due to the net operating losses generated in these years that have not been utilized as of the year ended December 31, 2015. Likewise, the existence of net operating losses from earlier periods could subject us to United States federal income tax examination for years including and after 2001, since such net operating losses have not been utilized as of the year ended December 31, 2015. See Note K – Income Taxes for more information. Treasury Stock We account for treasury stock under the cost method. When treasury stock is re-issued at a higher price than its cost, the difference is recorded as a component of additional paid-in capital to the extent that there are gains to offset the losses. If there are no treasury stock gains in additional paid-in capital, the losses are recorded as a component of accumulated deficit. Other Comprehensive (Loss) Income and Foreign Currency Translation Other comprehensive (loss) income consists of adjustments, net of tax, related to unrealized gains (losses) on foreign currency translation. These are reported in accumulated other comprehensive (loss) income as a separate component of stockholders’ equity until realized in earnings. The assets and liabilities of our foreign operations are translated into U.S. dollars at the period end spot exchange rates, and revenues and expenses are translated at estimated average exchange rates for each period. Resulting translation adjustments are reflected as other comprehensive loss in the consolidated statements of operations and comprehensive (loss) income and within shareholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Foreign operations are not significant to us for the years ended December 31, 2015, 2014 or 2013. Revenue Recognition Our revenue is generated from two primary sources, subscription fees and the sale of IoT devices and hardware. Revenue is recognized when persuasive evidence of an agreement exists, the hardware or service has been delivered, fees and prices are fixed and determinable, collection is reasonably assured and all other significant obligations have been fulfilled. Revenue is recognized net of sales and any transactional taxes. Subscription fees are based on the number of devices (subscriptions) on our integrated IoT horizontal platform network. Subscription fees are typically invoiced and recognized as revenue as we provide the services or process transactions in accordance with contractual performance standards. Customer contracts are generally recurring or multi-year agreements. Subscription fee revenues for managed service arrangements include all of the key IoT components – device, network, application and platform. Subscription fees also include volume-based excess network usage, messages and other activity that are recognized in revenue as incurred, consistent with contractual terms. We may, under an appropriate agreement, bill subscription fees in advance for the network service to be provided. In these instances, we recognize the advance charge (even if nonrefundable) as deferred revenue and recognize the revenue over future periods in accordance with the contract term as the network service (time, data or minutes) is provided, delivered or performed. Subscription revenue may also include activation fees which are deferred and recognized ratably over the estimated life of the subscription to which the activation fee relates. Direct and incremental costs associated with deferred revenue are also deferred, classified as deferred costs in prepaid expense and other assets in our consolidated balance sheets, and recognized in the period revenue is recognized under managed service arrangements. Cost of embedded devices and hardware are capitalized as fixed assets and depreciated over the estimated life of the hardware. Unbilled revenue consists of earned revenue that results from non-calendar month billing cycles and the one-month lag time in billing related to certain of our services. We recognize revenue from the sale of IoT devices and hardware at the time of shipment and passage of title. Provisions for rebates, promotions, product returns and discounts to customers are recorded as a reduction in revenue in the same period that the revenue is recognized. We offer customers the right to return hardware that does not function properly within a limited time after delivery. We continuously monitor and track such hardware returns and record a provision for the estimated amount of such future returns based on historical experience and any notification received of pending returns. While such returns have historically been within expectations and the provisions established, we cannot guarantee that we will continue to experience the same return rates that we have experienced in the past. Any significant increase in hardware failure rates and the resulting credit returns could have a material adverse impact on operating results for the period or periods in which such returns materialize. Shipping and handling fees received from customers are recorded with embedded device and hardware revenue and associated costs are recorded in cost of embedded devices and hardware. On occasion we sell both hardware and monthly recurring services to the same customer. In such cases, we evaluate such arrangements to determine whether a multiple-element arrangement exists. For multiple-element revenue arrangements, we allocate arrangement consideration at the inception of an arrangement to all elements using the relative selling price method. The hierarchy for determining the selling price of a deliverable includes (a) vendor-specific objective evidence, if available, (b) third-party evidence, if vendor-specific objective evidence is not available and (c) our best estimate of the selling price, if neither vendor-specific nor third-party evidence is available. In most cases, vendor-specific objective evidence is available for us, as we have a history of selling hardware and service on a standalone basis. Certain judgments and estimates are made and used to determine revenue recognized in any accounting period. If estimates are revised, material differences may result in the amount and timing of revenues recognized for a given period. Advertising Expenses Advertising expenses are charged to operations in the period in which they are incurred. For the years ended December 31, 2015, 2014 and 2013, advertising costs were approximately $1.0 million, $0.9 million and $0.7 million, respectively. Equity-Based Compensation Compensation cost is recognized for all equity-based payments granted and is based on the grant-date fair value estimated using the Black-Scholes option pricing model. Our determination of fair value of equity-based payment awards on the date of grant using the option-pricing model is affected by our share price and our valuation assumptions. Certain grants to executives require achievement of market conditions before the grant may be exercised. The fair value of awards with market exercise conditions is estimated on the date of grant using a lattice model with a Monte Carlo simulation. These primary variables include our expected share price volatility over the estimated life of the awards and actual and projected exercise behaviors. As employees vest in their awards, compensation cost is recognized over the requisite service period with an offsetting credit to additional paid-in capital. Equity-based compensation expense is based on awards ultimately expected to vest and has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures are expected to differ from those estimates. See Note O – Equity-Based Compensation for more information. Engineering and Development Engineering and development expenses that are not capitalizable as internally developed software are charged to operations in the period in which they are incurred. Engineering and development costs consist primarily of salaries and other personnel-related costs, bonuses, and third-party services. For the years ended December 31, 2015, 2014 and 2013, engineering and development costs recorded in operations were $9.0 million, $8.0 million and $4.9 million, respectively. Earnings Per Share Basic earnings per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by giving effect to all potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of outstanding stock options and restricted stock units, calculated using the treasury stock method. See Note S – Earnings Per Share for more information. Reclassifications Previously reported other intangible assets have been reclassified to software in development in the consolidated financial statements to conform to the current period presentation. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued guidance that requires lessees to recognize most leases as assets and liabilities on the balance sheet. Qualitative and quantitative disclosures will be enhanced to better understand the amount, timing and uncertainty of cash flows arising from leases. The guidance is effective for annual and interim periods beginning after December 31, 2018. The updated standard mandates a modified retrospective transition method with early adoption permitted. We are currently evaluating the effect that the updated standard will have on our financial statements. In November 2015, the FASB issued guidance requiring all deferred tax assets and liabilities to be classified as non-current on the balance sheet instead of separating deferred taxes into current and non-current amounts. In addition, valuation allowance allocations between current and non-current deferred tax assets are no longer required because those allowances also will be classified as non-current. This standard is effective for public companies for annual periods beginning after December 15, 2016. We do not expect the adoption of this guidance to have a material impact on our financial statements. In September 2015, the FASB issued an accounting standards update to simplify the accounting for measurement-period adjustments for an acquirer in a business combination. The update will require an acquirer to recognize any adjustments to provisional amounts of the initial accounting for a business combination with a corresponding adjustment to goodwill in the reporting period in which the adjustments are determined in the measurement period, as opposed to revising prior periods presented in financial statements. Thus, an acquirer shall adjust its financial statements as needed, including recognizing in its current-period earnings the full effect of changes in depreciation, amortization, or other income effects, by line item, if any, as a result of the change to the provisional amounts calculated as if the accounting had been completed at the acquisition date. This update is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. We do not expect the adoption of this guidance to have a material impact on our financial statements. In July 2015, the FASB issued guidance intended to simplify the presentation of applicable inventory at the lower of cost or net realizable value. The new guidance clarifies that net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The new guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We do not expect the adoption of this guidance to have a material impact on our financial position or results of operations. In March 2015, the FASB issued guidance about simplifying the presentation of debt issuance costs. The guidance is intended to help clarify debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. The amendments are effective for financial stat e In August 2014, the FASB issued guidance about disclosing an entity’s ability to continue as a going concern. The guidance is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The standard will be effective for annual periods ending after December 15, 2016, and for interim and annual periods thereafter, with early application permitted. We do not expect the adoption of this guidance to have a material impact on the company's financial position or results of operations. In June 2014, the FASB issued guidance that applies to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. It requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition and follows existing accounting guidance for the treatment of performance conditions. The standard will be effective for us prospectively for fiscal years, and interim reporting periods within those years, beginning January 1, 2016, with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on our financial position or results of operations. In May 2014, the FASB issued new accounting guidance for revenue recognized from contracts with customers. The core principle of the guidance is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The guidance will become effective for us for fiscal years, and interim reporting periods within those years, beginning January 1, 2018 and will require retrospective application. We are evaluating the effect that this amendment will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting. In April 2014, the FASB issued amendments to guidance for reporting discontinued operations and disposals of components of an entity. The amended guidance requires that a disposal representing a strategic shift that has (or will have) a major effect on an entity’s financial results or a business activity classified as held for sale should be reported as discontinued operations. The amendments also expand the disclosure requirements for discontinued operations. The amendments are effective for us prospectively for fiscal years, and interim reporting periods within those years, beginning January 1, 2015 (early adoption is permitted only for disposals that have not been previously reported). The implementation of the amended guidance is not expected to have a material impact on our consolidated financial position or results of operations. |
MERGER AND ACQUISITIONS
MERGER AND ACQUISITIONS | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
MERGER AND ACQUISITIONS | NOTE B – MERGER AND ACQUISITIONS 2014 Merger On May 5, 2014, in accordance with the terms and conditions of the merger agreement, we merged a wholly-owned subsidiary of Numerex with and into Omnilink Systems Inc. (Omnilink) with Omnilink surviving the merger as a wholly-owned subsidiary of the Company. The purchase price was $37.5 million cash. Omnilink provides tracking and monitoring services for people and valuable assets via Omnilink’s IoT platform that connects hardware, networks, software, and support services. We expect our combination with Omnilink to provide operating synergies and create potential growth opportunities through product enhancement and channel expansion. The assets, liabilities and operating results of Omnilink are reflected in our consolidated financial statements commencing from the merger date. Transaction costs of $1.0 million for the year ended December 31, 2014 have been recorded in general and administrative expense in the accompanying consolidated statement of operations and comprehensive (loss) income. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the closing date of the Omnilink merger (dollars in thousands): Fair Estimated Value Useful Lives Cash $ 195 n/a Accounts receivable 2,677 n/a Inventory 873 n/a Prepaid and other assets 377 n/a Property and equipment 1,613 4 (a) Deferred tax asset 2,600 n/a Customer relationships 6,056 11 Technology 4,998 14 Trade names 3,632 Indefinite Goodwill 17,318 Indefinite Total identifiable assets acquired 40,339 Accounts payable (1,756 ) n/a Accrued expenses (1,037 ) n/a Deferred revenue (64 ) n/a Total liabilities assumed (2,857 ) Net assets acquired $ 37,482 (a) The weighted average remaining useful life for all property and equipment is approximately four years. The total purchase consideration for the merger was allocated to identifiable assets purchased and liabilities assumed based on fair value. The estimated fair value attributed to intangible assets, other than goodwill, was based on common valuation techniques. The fair value of acquired software was estimated using a cost approach based on assumptions of our historical software development costs. The fair value of trade names was based on an income approach with key assumptions including estimated royalty rates to license the trade names from a third party. The valuation of customer relationships utilized an income approach and discounted cash flows taking into consideration the number of customer relationships acquired and estimated customer turnover. The gross amount of accounts receivable in the table above is $2.9 million. Based on the nature and financial strength of the customers on the date of acquisition, we expect to collect amounts due for the accounts receivable of $2.7 million. The value of the deferred tax asset and goodwill as disclosed above reflect a subsequent measurement period adjustment of $0.2 million recorded during the three months ended June 30, 2015 to record the final calculation of acquired deferred tax assets. The residual allocation to goodwill results from such factors as an assembled workforce, expected significant synergies for market growth and profitability as well as Omnilink’s service and product lines contributing to our becoming the market leader in select IoT vertical markets. The total amount of goodwill will not be deductible for income tax purposes. The measurement period adjustment resulted in recasting the December 31, 2014 consolidated balance sheet, as follows (in thousands): December 31, Measurement December 31, 2014 Period 2014 As Reported Adjustment Recast Assets Goodwill $ 44,548 $ (200 ) $ 44,348 Deferred tax assets, less current portion 5,616 200 5,816 $ 50,164 $ - $ 50,164 Unaudited Pro forma Results The consolidated statement of operations and comprehensive (loss) income for the year ended December 31, 2014 includes approximately $8.7 million of revenues contributed by Omnilink products and services for the period from May 5, 2014 through December 31, 2014. Immediately upon closing the merger, we began integrating Omnilink’s operations with our existing operations. As a result, the legacy and acquired businesses are now sharing various selling, general and administrative functions. Any measure of stand-alone profitability for Omnilink in the post-acquisition period is not material and cannot be calculated accurately due to the shared cost structure of the acquired and legacy businesses. The following table presents the unaudited pro forma consolidated net revenues, income (loss) from continuing operations before income taxes and net income (loss) for the year ended December 31, 2014 and 2013, based on the historical statements of operations of Numerex and of Omnilink, giving effect to the Omnilink merger and related financing as if they had occurred on January 1, 2013. The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations actually would have been had the acquisition occurred at the beginning of each year. In addition, the unaudited pro forma financial information does not attempt to project the future results of operations of the combined company (in thousands except per share data). Unaudited Pro Forma Results Years Ended December 31, 2014 2013 Net revenues $ 98,134 $ 90,628 Income (loss) from continuing operations, before income tax 2,719 (2,370 ) Net income (loss) 2,147 (856 ) Basic and diluted income (loss) per common share 0.11 (0.05 ) The unaudited pro forma financial information above gives effect to the following: · Adjust depreciation expense for a 2014 net historical Omnilink reduction of $0.1 million and a 2013 net historical Omnilink reduction of $0.1 million for the effect of recording property and equipment at estimated fair value. · Adjust amortization expense for a 2014 net increase of $0.3 million and a 2013 net increase of $0.9 million for the effect of recording intangible assets at estimated fair value. · Adjust interest expense for a 2014 net increase of $0.1 million and a 2013 net increase of $0.6 million due to the repayment of Omnilink’s debt balances in conjunction with the merger and the merger-related debt incurred by Numerex and related amortization of deferred financing costs. · Adjust expense by $1.0 million to reclassify expense recorded for merger-related costs in the year ended December 31, 2014, to the year ended December 31, 2013, to reflect the expenses as of the pro forma merger date of January 1, 2013. The unaudited pro forma results do not include any revenue or cost reductions that may be achieved through the business combination, or the impact of non-recurring items directly related to the business combination. 2013 Acquisitions On December 2, 2013, we acquired substantially all the assets, products and technologies of a small technology company that provided remote monitoring and management of bulk storage tanks. The acquisition expands the scope and scale of our capabilities in supply chain and remote monitoring markets. Total consideration was $2.8 million in cash (of which $0.2 million was paid on December 2, 2014). The following table sets forth the allocation of the purchase price and a summary of estimated useful lives (dollars in thousands): Fair Useful Value Lives Accounts receivable $ 175 n/a Inventory 78 n/a Fixed assets 5 3 Software 110 3 Customer relationships 265 7 Other intangibles 389 3 Goodwill 1,612 Indefinite Leases receivable 275 n/a Accounts payable (81 ) n/a Other liabilities (11 ) n/a Net assets acquired $ 2,817 The gross amount of leases receivable in the table above was $0.3 million. Based on the nature and financial strength of the lessees, we expect to fully collect all amounts due pursuant to the lease agreements. On February 1, 2013, we acquired substantially all of the assets and business of a small technology company that provided products and services for environmental monitoring, wireless remote control and monitoring, wireless sensor networks, and connected device consulting. We acquired the company’s assets to expand our technical capabilities and the markets we serve. Total consideration was $1.1 million, comprised of $0.2 million in cash and 73,587 shares of our common stock having a fair value at the time of issuance of $0.9 million and the assumption of certain liabilities. The issued shares of common stock are subject to various time-based selling restrictions. The following table sets forth the allocation of the purchase price and a summary of estimated useful lives (dollars in thousands): Fair Useful Value Lives Accounts receivable $ 35 n/a Inventory 55 n/a Fixed assets 25 3-5 Software 967 3.5 Trademarks 32 5 Deferred revenue (12 ) n/a Net assets acquired $ 1,102 The total purchase consideration for each of the 2013 acquisitions was allocated to identifiable assets purchased and liabilities assumed based on fair value. The fair values of intangible assets other than goodwill acquired in the two acquisitions were estimated using common valuation techniques. The fair value of acquired software was estimated using a cost approach based on assumptions of our historical software development costs. The fair value of trademarks was based on an income approach with key assumptions including estimated royalty rates to license the trademarks from a third party. The valuation of customer relationships utilized an income approach and discounted cash flows taking into consideration the number of customer relationships acquired and estimated customer turnover. Amortization expense related to the two acquisitions was less than $0.8 million No portion of the purchase price was allocated to goodwill in the February 2013 acquisition. The $1.6 million excess of the total consideration over the fair value of the net assets acquired in December 2013 was recorded as goodwill. Goodwill represents expected synergies between us and the acquired business and the value that the acquisition provides to support and widen our IoT platform capabilities in the supply chain and remote monitoring markets. Goodwill is expected to be fully deductible for tax purposes. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE C – DISCONTINUED OPERATIONS In June 2014, we completed the sale and disposition of components of our business classified as discontinued operations. These components were classified as discontinued operations in June 2013, when we decided to exit certain businesses and related products that are not core to future business plans. These non-core businesses include BNI Solutions, Inc. (BNI), Digilog, Inc. and DCX Systems, Inc. These businesses were previously reported in our consolidated financial statements as a separate segment, “Other Services”. The related products and services include video conferencing hardware and installation of telecommunications equipment, all of which are unrelated to our core IoT communication products and services. All assets and liabilities of discontinued operations were disposed of during the quarter ended June 30, 2014 as a result of the completed sale of all the capital stock of BNI. All revenue and expense of the discontinued operations were reclassified and presented in the accompanying consolidated statements of operations and comprehensive (loss) income as results of discontinued operations, net of income taxes, after income from continuing operations, net of income tax benefit and before net income. Similarly, all cash flows of the discontinued operations were reclassified and presented in the accompanying consolidated statements of cash flows as cash flows from discontinued operations. On June 30, 2014, we completed the sale of all of the capital stock of BNI and the disposition of the remaining discontinued operations. The following table presents the financial results of the discontinued operations (in thousands): Years Ended December 31, 2014 2013 Revenues from discontinued operations $ 207 $ 1,163 Loss from discontinued operations before income taxes (285 ) (1,567 ) Income tax benefit (127 ) (187 ) Loss from discontinued operations, net of income taxes (158 ) (1,380 ) Loss on disposal of subsidiary included in discontinued operations (309 ) - Loss on dissolution of subsidiaries included in discontinued operations (25 ) - Net loss from discontinued operations $ (492 ) $ (1,380 ) There are no assets or liabilities reported as discontinued operations as of December 31, 2015 and 2014 due to our disposal of all discontinued operations. |
FAIR VALE MEASUREMENTS
FAIR VALE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALE MEASUREMENTS | NOTE D – FAIR VALUE MEASUREMENTS We account for certain assets at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 Level 2 Level 3 Assets measured at fair value on a recurring basis comprise only investments in short-term US Treasury Funds of $15.5 million and $17.2 million as of December 31, 2015 and 2014, respectively. The investments are classified as available for sale debt securities included in cash and cash equivalents in the consolidated balance sheets and are categorized as Level 1 measurements in the fair value hierarchy. We do not have any liabilities measured at fair value on a recurring basis. The following table summarizes assets measured at fair value on a nonrecurring basis during the year ended December 31, 2015 (in thousands): Fair Value Level 3 Total Losses September 30, 2015: DIY Reporting Unit Amortizing intangible assets $ 825 $ 825 $ 446 Goodwill 1,656 1,656 924 October 1, 2015 Omnilink Reporting Unit Amortizing intangible assets 4,900 4,900 660 Indefinite-lived trade names 2,972 2,972 682 Total nonrecurring fair value measurements $ 10,353 $ 10,353 $ 2,712 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE E – ACCOUNTS RECEIVABLE Accounts receivable and related allowance for doubtful accounts consisted of the following (in thousands): As of December 31, 2015 2014 Accounts receivable $ 9,218 $ 12,543 Unbilled accounts receivable 637 396 Allowance for doubtful accounts (618 ) (652 ) $ 9,237 $ 12,287 |
FINANCING RECEIVABLES
FINANCING RECEIVABLES | 12 Months Ended |
Dec. 31, 2015 | |
Financing Receivable, Net [Abstract] | |
FINANCING RECEIVABLES | NOTE F – FINANCING RECEIVABLES We lease certain hardware devices to a small number of hardware distributors under sales-type leases expiring in various years through 2020. These receivables typically have terms ranging from two to four years and bear interest at 2%. Because the devices are not functional on our network without an active service agreement with us, we can de-activate devices for non-payment, and have therefore established a history of successfully collecting amounts due under the original payment terms without making concessions to customers. In addition, our long-standing relationships with these high credit quality customers support our assertion that revenues are fixed and determinable and probable of collection. The components of lease receivables were as follows (in thousands): As of December 31, 2015 2014 Total minimum lease payments receivable $ 4,266 $ 4,785 Unearned income (156 ) (206 ) Present value of future minimum lease payments receivable 4,110 4,579 Less current portion (1,780 ) (1,595 ) Amounts due after one year $ 2,330 $ 2,984 Future minimum lease payments to be received subsequent to December 31, 2015 are as follows (in thousands): 2016 $ 1,875 2017 1,460 2018 757 2019 173 2020 1 $ 4,266 Our financing receivables are comprised of a single portfolio segment because of the small number of customers and the similar nature of the sales-type leasing arrangements. We evaluate the credit quality of financing receivables based on a combination of factors, including, but not limited to, customer collection experience, economic conditions, the customer’s financial condition and known risk characteristics impacting the respective end users of our customers. We utilize historical collection experience from our population of similar customers to establish any allowance for credit losses. Financing receivables are placed in non-accrual status after 60 days of nonpayment and written off only after we have exhausted all collection efforts. We have been successful collecting financing receivables and consider the credit quality of such arrangements to be good. We have not experienced any material credit losses for any period in the three years ended December 31, 2015. Customer payments are considered past due if a scheduled payment is not received within contractually agreed upon terms. As of December 31, 2015, there were no financing receivables past due more than 30 days. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE G – INVENTORY Inventory consisted of the following (in thousands): As of December 31, 2015 2014 Raw materials $ 1,903 $ 2,228 Finished goods 8,420 7,579 Inventory reserves (2,706 ) (1,397 ) $ 7,617 $ 8,410 |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER ASSETS | NOTE H – PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other current assets consisted of the following (in thousands): As of December 31, 2015 2014 Prepaid expenses $ 902 $ 1,358 Deferred costs 718 578 Other 417 393 $ 2,037 $ 2,329 Other noncurrent assets consisted of the following (in thousands): As of December 31, 2015 2014 Deferred activation fees $ 293 $ 310 Deferred financing fees 289 260 Deposits 117 155 Prepaid carrier fees - 1,860 $ 699 $ 2,585 During 2011, we purchased and installed telecommunication infrastructure equipment and related equipment to improve the capacity and functionality of our devices operating on one of our carrier networks. To comply with the needs of one of our carriers and in exchange for more favorable carrier fees, we transferred the legal right to the equipment to the vendor. Thus, our existing agreement with this vendor was amended to provide for the new carrier fees and the legal transfer of the equipment. We accounted for this transaction as a non-monetary exchange. The $2.2 million cost of the equipment was determined to be its fair value and we recorded this transaction by transferring the equipment cost to prepaid carrier fees. During 2014, we made a prepayment of $0.4 million to the same carrier to license additional network access. Both prepaid expenses were being amortized in cost of sales for subscription and support revenue on a straight-line basis over the term of the agreement, which was to expire in 2021. In September 2015, we entered into a mutual agreement with the vendor to (1) cancel the existing agreement, (2) purchase certain equipment from the vendor and (3) assume certain national carrier and other agreements from the vendor. Total consideration was $1.2 million and included (1) $0.5 million in cash, (2) 30,000 shares of our common stock having a value of $0.3 million and (3) the prepayment above to license additional network access having a carrying value of $0.4 million. Consummation of the transaction, which was contingent upon obtaining consents from certain of our vendor’s carriers, closed in October 2015. During negotiations with the vendor in the third quarter for the fiscal year 2015, a triggering event was identified for purposes of assessing long-lived assets for impairment, as it was more likely than not that the aforementioned assets would be disposed of significantly before the end of their previously estimated useful life. As a result of this transaction and in conjunction with a separate agreement with a mutual national carrier, we determined that the prepaid carrier fees had no continuing value. We recorded a charge of $1.3 million in cost of sales to write-off the carrying value of the prepaid carrier fees as a settlement of a pre-existing relationship with the vendor. The impairment charge affected multiple reporting units. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE I – PROPERTY AND EQUIPMENT Property and equipment consisted of the following (in thousands): As of December 31, 2015 2014 Computer, network and other equipment $ 7,150 $ 5,925 Monitoring equipment 3,015 1,705 Furniture and fixtures 888 746 Leasehold improvements 374 328 Total property and equipment 11,427 8,704 Accumulated depreciation and amortization (6,632 ) (3,815 ) $ 4,795 $ 4,889 Monitoring equipment includes devices and hardware owned by us and used by customers under managed service arrangements. Depreciation expense for monitoring equipment included in cost of sales for subscription and support revenues in the accompanying consolidated statements of operations and comprehensive (loss) income was $0.8 million, $0.3 million and less than $0.1 million for the years ended December 31, 2015, 2014 and 2013, respectively. Depreciation and amortization expense for property and equipment, including assets recorded as capital leases, was $2.0 million, $1.6 million, and $1.1 million for the years ended December 31, 2015, 2014, and 2013 respectively. Assets recorded as capital leases included $0.7 million in computers, network and other equipment and $0.4 million in accumulated depreciation and amortization at December 31, 2014. There were no assets recorded as capital leases at December 31, 2015. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE J – INTANGIBLE ASSETS Impairment Charges We have recorded a total of $2.7 million in impairment charges for goodwill and other intangible assets during the year ended December 31, 2015. Our Do-It-Yourself (DIY) product line and reporting unit has not generated results of operations consistent with our expectations and previous forecasts and management is evaluating different strategic options for the reporting unit. These factors were triggering events that it was more likely than not that the fair value of the DIY reporting unit was less than its carrying amount. As a result, we performed our initial assessment of goodwill for impairment, along with other intangible assets of the DIY reporting unit, in the period ended September 30, 2015. Based on preliminary Step Two calculations, we recorded impairment charges of $0.9 million for goodwill and $0.3 million for patents during the period ending September 30, 2015. We recorded an additional $0.1 million impairment charge for customer relationship intangible assets upon finalizing the Step Two calculation during the three months ended December 31, 2015. As part of our annual assessment of goodwill and other intangible assets for impairment as of October 1, 2015, we determined that technology and indefinite-lived trade names acquired in the merger with Omnilink were each impaired by $0.7 million. The decrease in the fair value of both trade names and technology was principally due to a change in the projected revenues and financial returns on intangible assets from the amounts originally projected at the date of the merger. Changes in carrying values are summarized as follows (in thousands): Goodwill Patents Customer Trade Names Technologies Total January 1, 2015 $ 2,580 $ 748 $ 1,241 $ 3,632 $ 4,998 Impairment (924 ) (325 ) (121 ) (660 ) (682 ) $ (2,712 ) December 31, 2015 $ 1,656 $ 423 $ 1,120 $ 2,972 $ 4,316 Intangible Assets Other Than Goodwill Intangible assets other than goodwill are summarized as follows (dollars in thousands ): As of December 31, 2015 As of December 31, 2014 Remaining Gross Accumulated Net Book Gross Accumulated Net Book Purchased and developed software 1.3 $ 15,399 $ (9,503 ) $ 5,896 $ 11,176 $ (6,409 ) $ 4,767 Software in development n/a 1,250 - 1,250 2,618 - 2,618 Total software 16,649 (9,503 ) 7,146 13,794 (6,409 ) 7,385 Licenses 0.5 13,215 (12,167 ) 1,048 12,763 (11,886 ) 877 Customer relationships 7.6 8,167 (2,285 ) 5,882 8,287 (1,359 ) 6,928 Technologies 12.3 4,316 (595 ) 3,721 4,998 (237 ) 4,761 Patents and trademarks 2.8 4,236 (2,137 ) 2,099 3,343 (1,657 ) 1,686 Trade names Indefinite 2,972 - 2,972 3,632 - 3,632 Total other intangible assets 32,906 (17,184 ) 15,722 33,023 (15,139 ) 17,884 $ 49,555 $ (26,687 ) $ 22,868 $ 46,817 $ (21,548 ) $ 25,269 Remaining useful lives in the preceding table were calculated on a weighted average basis as of December 31, 2015. We did not incur costs to renew or extend the term of acquired intangible assets during the year ended December 31, 2015. Amortization expense for intangible assets for the years ended December 31, 2015, 2014 and 2013 was $5.1 million, $4.6 million, and $3.8 million, respectively. In addition, $0.3 million of amortization expense for intangible assets is recorded in cost of subscription and support revenue in the accompanying consolidated statement of operations and comprehensive (loss) income for the year ended December 31, 2015, and $0.2 million for each of the years ended December 31, 2014 and 2013. During the years ended December 31, 2015 and 2014, we capitalized approximately $2.2 million and $2.0 million, respectively of internally developed software costs. Amortization expense for capitalized internally developed software for the years ended December 31, 2015, 2014 and 2013 was $1.7 million, $1.4 million and $1.1 million, respectively included in total amortization expense disclosed above. Amortization expense for the next five years is summarized as follows based on intangible assets as of December 31, 2015 (in thousands): 2016 $ 5,315 2017 4,117 2018 3,053 2019 1,779 2020 1,582 Thereafter 2,800 $ 18,646 Goodwill and Trade Names The carrying amount of goodwill and trade names for each of the two years for the period ended December 31, 2015 is as follows (in thousands): Goodwill Trade names January 1, 2014 $ 26,941 $ - Measurement period adjustment 89 - Acquisition 17,318 3,632 December 31, 2014 44,348 3,632 Impairment (924 ) (660 ) December 31, 2015 $ 43,424 $ 2,972 Acquisition related goodwill additions were the result of the Omnilink merger. See Note B – Mergers and Acquisitions. The measurement period adjustment is related to lease receivables on the opening balance sheet of our December 2013 acquisition with no effect on the statement of operations and an immaterial effect on the associated balance sheet captions. Our gross goodwill balance as of December 31, 2015 and 2014 was $48.7 million. Accumulated impairment losses were $5.3 million as of December 31, 2015 and $4.4 million as of December 31, 2014. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE K – INCOME TAXES The provision (benefit) for income taxes consisted of the following (in thousands): Years Ended December 31, 2015 2014 2013 Current: Federal $ (31 ) $ 73 $ (183 ) State 13 38 22 Reserve (36 ) (57 ) (80 ) Deferred: Federal 9,142 546 (2,033 ) State 814 (181 ) (95 ) $ 9,902 $ 419 $ (2,369 ) Income taxes recorded by us differ from the amounts computed by applying the statutory U.S. federal income tax rate to income before income taxes. The following schedule reconciles income tax provision (benefit) at the statutory rate and the actual income tax expense as reflected in the consolidated statements of operations and comprehensive (loss) income for the respective periods (in thousands): Years Ended December 31, 2015 2014 2013 Income tax expense (benefit) computed at U.S. corporate tax rate of 34% $ (3,147 ) $ 903 $ (137 ) Adjustments attributable to: Valuation allowance 13,053 1,077 (1,893 ) Income tax payable adjustments - - (71 ) State income tax 13 24 (73 ) Reserve for uncertain tax positions (36 ) (57 ) (80 ) Non-deductible expenses 19 (1,575 ) (97 ) Other - 47 (18 ) $ 9,902 $ 419 $ (2,369 ) During 2015, we determined that we would not meet the criteria of “more likely than not” that the cumulative federal and state net operating losses and certain other deferred tax assets would be recoverable. This determination was based on our cumulative loss over the past three years. Accordingly, we recorded a valuation allowance against these items. The deferred tax assets consist of federal net operating losses, state net operating losses, tax credits, and other deferred tax assets, most of which expire between 2016 and 2036. As a result of recording the valuation allowance, we recognized deferred tax expense of $9.9 million for the year ended December 31, 2015. Income tax expense recorded in the future will be reduced or increased to the extent of offsetting decreases or increases to the valuation allowance. During the year ended December 31, 2014, we determined that it would be more likely than not, that certain additional state net operating losses would also be recoverable. We continued to maintain a valuation allowance against certain other deferred tax assets that we determined we will likely not utilize before expiration. Deferred tax assets that were still subject to a valuation allowance include certain state net operating losses, tax credits, capital loss carryforward and foreign net operating losses. As a result of the release of the valuation allowances we recognized a deferred tax benefit of $0.2 million during the year ended December 31, 2014. Additionally, the valuation allowance increased by $1.3 million due to a capital loss carryforward for the year ended December 31, 2014. During the year ended December 31, 2013, we recorded a deferred income tax benefit of $2.4 million primarily consisting of a tax accounting method change allowing a one-time acceleration and catch-up of depreciation and amortization expense. The tax accounting method change related to our 2003 acquisition of our former joint venture partner’s interest in our Cellemetry LLC subsidiary. The components of our net deferred tax assets and liabilities are as follows (in thousands): As of December 31, 2015 2014 Deferred tax assets: Inventories $ 1,005 $ 549 Accruals 839 417 Other current deferred tax assets 88 495 Equity-based compensation 2,970 2,030 Federal, state and foreign net operating loss carry forwards 13,677 11,074 Tax credit carry forward 1,284 1,323 Deferred revenue 23 - Valuation allowance (16,417 ) (3,108 ) 3,469 12,780 Deferred tax liabilities: Difference between book and tax basis of property (191 ) (305 ) Intangible assets (4,270 ) (3,498 ) (4,461 ) (3,803 ) Net deferred tax (liabilities) assets $ (992 ) 8,977 The decrease in deferred tax assets related to federal and state net operating loss carry forwards is primarily due to increasing the valuation allowance on net operating loss carryforwards. Net operating loss carryforwards available at December 31, 2015 expire as follows (in thousands): Year of Amount Expiration Federal net operating losses $ 28,198 2023-2036 State net operating losses 62,212 2016-2036 Alternative minimum tax credit carryforwards 771 n/a General business credit carryforwards 513 2018-2031 We file U.S., state and foreign income tax returns in jurisdictions with varying statutes of limitation. The 2002 through 2014 tax years generally remain subject to examination by federal and most state tax authorities. However, certain returns from years as early as 1998, in which net operating losses were generated, remain open for examination by the tax authorities. We evaluate liabilities for uncertain tax positions and, as of December 31, 2015, we recorded a net decrease to the liability for unrecognized tax benefits of less than $0.1 million in income tax benefit. This amount is comprised of tax benefits recognized due to expiration of statute of limitations on certain prior period state tax matters and the corresponding accrual of estimated penalties and interest. Our total unrecognized tax benefits as of December 31, 2015 were less than $0.1 million including estimated penalties and interest. We anticipate nominal decreases to the balance of total unrecognized tax benefits within the next 12 months. Our effective tax rate will be affected slightly favorably if we are able to recognize these tax benefits. The following table summarizes the activity related to our unrecognized tax benefits, net of federal benefit, and excludes interest and penalties (in thousands): 2015 2014 Balance at January 1, $ 54 $ 102 Decreases as a result of positions taken during prior periods (29 ) (48 ) Balance at December 31, $ 25 $ 54 |
OTHER LIABILITIES
OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | |
OTHER LIABILITIES | NOTE L – OTHER LIABILITIES Other current liabilities consisted of the following (in thousands): As of December 31, 2015 2014 Payroll related $ 898 $ 696 Accrued expenses 1,966 1,775 $ 2,864 $ 2,471 Other noncurrent liabilities consisted of the following (in thousands): As of December 31, 2015 2014 Deferred revenue $ 993 $ 414 Deferred rent 863 932 Other 35 - $ 1,891 $ 1,346 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE M – DEBT As described in Note U – Subsequent Event, we entered into a new term loan agreement with Crystal Financial LLC as Term Agent on March 9, 2016 (the “Crystal Loan Agreement”). We used the net proceeds from the Crystal Loan Agreement, along with $2.9 million of cash on hand, to repay all of our outstanding debt to SVB and pay related transaction fees. Debt consisted of the following (dollars in thousands): As of December 31, 2015 2014 Note payable to Silicon Valley Bank, with interest at our option of prime rate or LIBOR rate plus margin $ 19,349 $ 23,125 Seller financed note payable, with interest at 4.25%, monthly payments of principal and interest, secured by equipment, due September 2015 - 476 19,349 23,601 Less current portion of long-term debt 3,750 4,251 Noncurrent portion of long-term debt $ 15,599 $ 19,350 On May 5, 2014, we entered into a Second Amended and Restated Loan and Security Agreement (the “SVB Loan Agreement”) with Silicon Valley Bank in order to, among other things, establish a term loan of $25.0 million and a revolving line of credit of up to $5.0 million (collectively, the “Credit Facility”). The proceeds from the term loan were used to finance the Omnilink merger. See Note B – Merger and Acquisitions. The first amendment to the SVB Loan Agreement on November 3, 2015 (the “Amendment”), further described below, eliminated the availability of any subsequent advances under the Credit Facility, however, we maintained $0.2 million in outstanding unused letters of credit. The maturity date of the loan was May 5, 2019 with regular required quarterly principal payments which began June 30, 2014 as set forth in the table below. The remaining principal of $5.0 million would have been due at maturity if not otherwise repaid earlier by way of voluntary Permitted Prepayments or by mandatory Excess Cash Flow Recapture Payments (as defined in the SVB Loan Agreement). The interest rate applicable to amounts drawn pursuant to the SVB Loan Agreement was 2.75% at December 31, 2015 and was, at our option, determined by reference to the prime rate or LIBOR plus a margin established in the SVB Loan Agreement. SVB Loan Agreement Principal Repayment Schedule Quarterly Annually June 2014 - March 2015 $ 625,000 $ 2,500,000 June 2015 - March 2016 937,500 3,750,000 June 2016 - March 2017 937,500 3,750,000 June 2017 - March 2018 1,250,000 5,000,000 June 2018 - March 2019 1,250,000 5,000,000 Outstanding balance due May 2019 - 5,000,000 The future maturities under the SVB Loan Agreement are summarized as follows (in thousands). 2016 $ 3,750 2017 4,687 2018 5,000 2019 5,912 $ 19,349 Future maturities under the Crystal Loan Agreement are included in Note U – Subsequent Event. Our obligations under the Credit Facility were secured by substantially all of our assets and the assets of our subsidiaries. In addition, we were required to meet certain financial and other restrictive covenants customary with this type of facility, including maintaining a senior leverage ratio, a fixed charge coverage ratio and minimum liquidity availability. We were also prohibited from entering into any debt agreements senior to the Credit Facility and paying dividends. The SVB Loan Agreement contained customary events of default. If a default occurred and was not cured within the applicable cure period or was not waived, any outstanding obligations under the Credit Facility may have been accelerated. In connection with our acquisition of a small technology business in October 2012, we entered into a Promissory Note of $1.9 million payable to the sellers of the business. This Promissory Note is subordinate to the Credit Facility, bears interest at the greater of prime plus 1% or 4.25% and is payable in monthly installments. As of December 31, 2015, the Promissory Note was paid in full. |
LEASES, COMMITMENTS AND CONTING
LEASES, COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEASES, COMMITMENTS AND CONTINGENCIES | NOTE N – LEASES, COMMITMENTS AND CONTINGENCIES Operating Leases We lease certain property and equipment under non-cancelable operating leases. The leases expire at various dates through 2022. Certain of our leases for office space have annual periods of free rent and escalation clauses of up to 2.5% or $1.00 per square foot. The leases also have options to renew for 60-65 months at the end of their terms. Rent expense, including short-term leases, amounted to approximately $1.7 million, $1.6 million and $1.3 million for the years ended December 31, 2015, 2014 and 2013, respectively. Future minimum lease payments under such non-cancelable operating leases subsequent to December 31, 2015, are as follows (in thousands): Year Ending December 31, 2016 $ 1,763 2017 1,635 2018 1,489 2019 1,233 2020 1,173 Thereafter 2,031 $ 9,324 We sublease certain office space under non-cancelable operating leases. The leases expire at various dates through 2022. One of our subleases has an escalation clause of 3% annually. For the year ended December 31, 2015, we recognized a loss of $0.1 million related to our subleases recorded in general and administrative expense. Future minimum sublease payments under such non-cancelable operating leases subsequent to December 31, 2015, are as follows (in thousands): Year Ending December 31, 2016 $ 183 2017 225 2018 231 2019 238 2020 245 Thereafter 448 $ 1,570 Purchase Commitments We utilize several third-party contract manufacturers to manufacture our products and perform testing of finished products. These contract manufacturers acquire components and build products based on non- cancellable purchase commitments, which typically cover periods less than 12 months. Consistent with industry practice, we acquire components through purchase orders based on projected demand. As of December 31, 2015, we had $3.4 million in open purchase commitments. Product Warranties We typically provide a limited, one-year repair or replacement warranty on purchased hardware-based products. We provide limited repair or replacement warranty on managed service hardware-based products over the term of the managed service agreement ranging from three to five years. To date, warranty costs and the cost of maintaining our warranty programs have not been material to our business. Capital Leases We record leases in which we have substantially all of the benefits and risks of ownership as capital leases and all other leases as operating leases. For leases determined to be capital leases, we record the assets held under capital lease and related obligations at lesser of the present value of aggregate future minimum lease payments or the fair value of the assets held under capital lease. We amortize the underlying assets over the expected life of the assets if we expect to retain title to the assets at the end of the lease term; otherwise we amortize the asset over the term of the lease. During 2013, we entered into a sale leaseback arrangement for computer and network equipment having a value of $0.7 million and expiring in 2015. The arrangement was recorded as a capital lease because we retained the risks and benefits of the underlying assets. As of December 31, 2015, all capital leases have been paid in full. |
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EQUITY-BASED COMPENSATION | NOTE O – EQUITY-BASED COMPENSATION For the years ended December 31, 2015, 2014 and 2013, equity-based compensation expense was $2.7 million, $2.6 million and $1.9 million, respectively. We have outstanding awards granted pursuant to three shareholder approved equity-based compensation plans: the Long Term Incentive Plan (1999 Plan) the 2006 Long Term Incentive Plan (2006 Plan) and the 2014 Stock and Incentive Plan (2014 Plan). The 1999 Plan was terminated and replaced by the 2006 Plan. The 2006 Plan was terminated and replaced by the 2014 Plan. Equity-based awards outstanding under the 1999 and 2006 Plan remain in effect, but no new awards may be granted under those plans. A total of 6.3 million shares of our common stock have been reserved for issuance through the plans. Stock options and stock-settled stock appreciation rights (SARs) are generally granted with an exercise price equal to the market price of our common stock on the date of grant; the awards generally vest over four years of continuous service and have a contractual term of ten years. Grants of non-vested restricted stock awards to employees generally vest over four years of continuous service and grants to non-employee directors generally vest over one year. Certain awards provide for accelerated vesting if there is a change in control (as defined in the plans). The recipient of a SAR is generally entitled to receive, upon exercise and without payment to us (but subject to required tax withholdings), that number of shares having an aggregate fair market value as of the date of exercise multiplied by an amount equal to the excess of the fair market value per share on the date of exercise over the fair market value per share at the date of the grant. The fair value of stock options and SARs is estimated on the date of grant using the Black-Scholes option pricing model. Certain grants to executives require achievement of market conditions before the grant may be exercised. The fair value of awards with market exercise conditions is estimated on the date of grant using a lattice model with a Monte Carlo simulation. The fair value of all awards is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period of four years. Use of a valuation model requires us to make certain assumptions with respect to selected model inputs. Changes in these input variables would affect the amount of expense associated with equity-based compensation. Expected volatility is based on the historical volatility of our common shares over the expected term of the stock option or SAR. Expected term is based on historical exercise and employee termination data and represents the period of time that options and SARs are expected to be outstanding. The risk-free interest rate is based on U.S. Treasury Daily Treasury Yield Curve Rates corresponding to the expected life assumed at the date of grant. Dividend yield is zero as there are no payments of dividends made or expected. The fair value of non-vested restricted stock awards is based on the fair market value of the shares awarded at the date of grant multiplied by the number of shares awarded. The weighted average assumptions to estimate the grant date fair value of stock options and SARs, including those with market conditions, are summarized as follows: Years Ended December 31, 2015 2014 2013 Volatility 43.0 % 57.8 % 67.5 % Expected term (in years) 5.5 6.2 6.3 Risk-free rate 1.65 % 1.88 % 1.52 % Dividend yield 0 % 0 % 0 % A summary of stock option and SAR activity as of and for the year ended December 31, 2015 follows (shares in thousands): Weighted Average Shares Exercise Price Outstanding, January 1, 2015 1,332 $ 8.93 Granted 688 8.35 Exercised (56 ) 5.37 Forfeited or expired (435 ) 9.31 Outstanding, at December 31, 2015 1,529 8.69 Exercisable at December 31, 2015 819 7.95 As of December 31, 2015, stock options and SARs are further summarized as follows (shares and dollars in thousands): Outstanding Exercisable Total shares 1,529 819 Aggregate intrinsic value $ 670 $ 670 Weighted-average remaining contractual term (years) 6.6 4.5 As of December 31, 2015, a total of 352,500 stock options and SARs with market-based exercise conditions are outstanding, of which 93,750 are vested and exercisable subject to the market conditions. The weighted average grant-date fair value of stock options and SARs granted during the years ended December 31, 2015, 2014 and 2013 was $3.04, $6.45 and $6.28, respectively. Stock option and SAR exercise data is summarized as follows (in thousands): Years Ended December 31, 2015 2014 2013 Options and SARs exercised 56 270 433 Net shares issued 51 214 199 Total intrinsic value exercised $ 195 $ 1,533 $ 2,552 Cash received 254 931 338 Recognized tax benefit 96 1,300 2,208 Non-vested restricted stock award activity for the year ended December 31, 2015 is summarized as follows (shares in thousands): Shares Weighted Outstanding, as of January 1, 2015 488 $ 11.19 Granted 439 8.75 Vested (192 ) 10.51 Forfeited (197 ) 10.78 Outstanding, as of December 31, 2015 538 9.59 The total fair value of non-vested restricted shares that vested during the years ended December 31, 2015, 2014 and 2013 was $2.0 million, $1.1 million and $0.5 million, respectively. As of December 31, 2015, 2.3 million shares remain available for grant under the 2014 Plan. Shares available from prior plans were transferred to the successor plan. No shares remain available under any prior plans. Total unrecognized compensation costs related to all non-vested equity-based compensation arrangements was $5.8 million as of December 31, 2015 and is expected to be recognized over a weighted-average period of 1.7 years. |
OTHER (INCOME) EXPENSE, NET
OTHER (INCOME) EXPENSE, NET | 12 Months Ended |
Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |
OTHER (INCOME) EXPENSE, NET | NOTE P – OTHER (INCOME) EXPENSE, NET Other (income) expense, net includes $0.1 million in interest on finance receivables for the year ended December 31, 2015. See Note F – Financing Receivables. Other (income) expense, net includes $1.1 million for the year ended December 31, 2014 for a pre-tax gain on the sale of a cost method investment in a privately-held business. The carrying value of our investment was $0.2 million and we sold it for proceeds of $1.3 million. See Note H – Prepaid Expenses and Other Assets. In 2013, we completed the sale of a cost method investment in a privately-held business based in the United Kingdom. The carrying value of our investment was $0.3 million and we sold it for net proceeds of $0.6 million resulting in a gain of $0.3 million. See Note H – Prepaid Expenses and Other Assets. |
SIGNIFICANT CUSTOMER, CONCENTRA
SIGNIFICANT CUSTOMER, CONCENTRATION OF CREDIT RISK AND RELATED PARTIES | 12 Months Ended |
Dec. 31, 2015 | |
Significant Customer Concentration Of Credit Risk And Related Parties [Abstract] | |
SIGNIFICANT CUSTOMER, CONCENTRATION OF CREDIT RISK AND RELATED PARTIES | NOTE Q – SIGNIFICANT CUSTOMER, CONCENTRATION OF CREDIT RISK AND RELATED PARTIES We have a hardware customer who accounted for 14.3%, 14.4% and 11.1%, or $12.8 million, $13.5 million and $8.7 million, of our consolidated revenue for the years ended December 31, 2015, 2014 and 2013, respectively. Accounts receivable from this customer was $0.4 million and $1.6 million for the years ended December 31, 2015 and 2014, respectively. We had four suppliers from which our purchases were 82% of our hardware cost of sales, and four suppliers from which our purchases were 70% of our service cost of sales for the year ended December 31, 2015. Our accounts payable to these suppliers totaled $4.2 million at December 31, 2015. We had four suppliers from which our purchases were 72% of our hardware cost of sales, and four suppliers from which our purchases were 68% of our service cost of sales for the year ended December 31, 2014. Our accounts payable to these suppliers totaled $5.3 million at December 31, 2014. We had three suppliers from which our purchases were 72% of our hardware cost of sales and two suppliers from which our purchases were 55% of our service cost of sales for the year ended December 31, 2013. The Ryan Law Group is a related party. Mr. Andrew Ryan is a member of our Board of Directors and principal partner of The Ryan Law Group. During the years ended December 31, 2015, 2014 and 2013, The Ryan Law Group and another law firm in which Mr. Ryan was formerly a partner invoiced us for legal fees of $429,000, $290,000 and $224,000, respectively. Our accounts payable to these law firms was $7,000 and $41,000 at December 31, 2015 and 2014, respectively. In addition, a firm affiliated with a family member of our chairman of the board of directors and former chief executive officer has provided marketing services to us. Total fees invoiced were $58,000, $80,000 and $80,000 annually for each of the years ended December 31, 2015, 2014 and 2013. |
BENEFIT PLAN
BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
BENEFIT PLAN | NOTE R – BENEFIT PLAN We sponsor a 401(k) savings and investment plan that covers all eligible employees of the Company and our subsidiaries. Employees are eligible for participation beginning on their first day of employment. We contribute an amount equal to 50% of the portion of the employee’s elective deferral contribution that do not exceed 6% of the employee’s total compensation for each payroll period in which an elective deferral is made. Our contributions are made in cash on a monthly basis. Our matching contributions are vested over a three year period at a rate of 33% per year. For the years ended December 31, 2015, 2014, and 2013, we recorded expense of $0.4 million, $0.3 million, and $0.3 million, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE S – EARNINGS PER SHARE Basic earnings per common share available to common shareholders is based on the weighted-average number of common shares outstanding excluding the dilutive impact of common stock equivalents. We compute diluted net earnings per share on the weighted-average number of common shares outstanding and dilutive potential common shares, such as dilutive outstanding equity-based compensation. The numerator in calculating both basic and diluted income per common share for each period is the same as net income. The denominator is based on the number of common shares as shown in the following table (in thousands, except per share data): Years Ended December 31, 2015 2014 2013 (Loss) income from continuing operations $ (19,157 ) $ 2,236 $ 1,965 Loss from discontinued operations - (492 ) (1,380 ) $ (19,157 ) $ 1,744 $ 585 Common Shares: Weighted average common shares outstanding 19,117 18,922 18,413 Dilutive effect of common stock equivalents - 346 537 Total 19,117 19,268 18,950 Basic earnings per share: (Loss) income from continuing operations $ (1.00 ) $ 0.12 $ 0.11 Loss from discontinued operations - (0.03 ) (0.08 ) Net (loss) income $ (1.00 ) $ 0.09 $ 0.03 Diluted earnings per share: (Loss) income from continuing operations $ (1.00 ) $ 0.12 $ 0.10 Loss from discontinued operations - (0.03 ) (0.07 ) Net (loss) income $ (1.00 ) $ 0.09 $ 0.03 As of December 31, 2015, 2014 and 2013, 1.5 million, 0.8 million and 0.5 million, respectively of stock options, SARs and warrants were excluded from the computation of diluted earnings per share as their effect was anti-dilutive. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE T – SEGMENT INFORMATION Revenue generated from customers based outside of the U.S. is summarized as follows: Years Ended December 31, 2015 2014 2013 U.S. 96 % 94 % 94 % Canada 3 % 4 % 4 % Others 1 % 2 % 2 % 100 % 100 % 100 % Substantially all revenue generated from outside the U.S. and Canada is invoiced and collected in U.S. dollars. As of December 31, 2015 and 2014, long-lived assets located outside of the U.S. were less than 1% of total assets. Following our decision to exit non-core businesses and their subsequent reclassification to discontinued operations in 2013, we reevaluated our reportable operating segments. Based on the financial data reviewed by the chief operating decision maker, our chief executive officer, we have concluded that all of our continuing operations are and continue to be a single reportable segment. All resources and operations are consolidated into a single reporting segment. See Note C – Discontinued Operations. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE U – SUBSEQUENT EVENTS Debt Refinancing On March 9, 2016, we and certain of our subsidiaries entered into a new term loan agreement with Crystal Financial LLC as Term Agent, and the term lenders party thereto (the “Crystal Loan Agreement”) pursuant to which the term lenders made a term loan to us in the amount of $17.0 million . The maturity date of the term loan is March 9, 2020. We are required to make regular quarterly principal payments of $637,500 beginning September 1, 2017 with the balance due on the maturity date if not otherwise repaid earlier by way of voluntary prepayments or upon the occurrence of certain Prepayment Events or Excess Cash Flow (as defined in the Crystal Loan Agreement), or as a result of acceleration of the loan as a result of an event of default. Prepayments of the loan are subject to a prepayment penalty of 3% of the amount prepaid if prepayment occurs prior to the first anniversary of the closing date and 2% of the amount prepaid if the prepayment occurs on or after the first anniversary of the closing date but prior to the second anniversary date of the closing date. There is not prepayment penalty for prepayments that occur on or after the second anniversary of the closing date. The interest rate payable on the outstanding loan amount is determined by reference to LIBOR plus a margin established in the agreement. At December 31, 2015, the applicable interest rate would have been 9.1%. Our obligations under the Crystal Loan Agreement are secured by a first priority security interest in substantially all of our assets and the assets of our subsidiaries. In addition, we are required to meet certain financial and other restrictive covenants customary with this type of facility, including maintaining a minimum Adjusted EBITDA, minimum Consolidated Fixed Charge Coverage Ratio, maximum Consolidated Total Net Leverage, maximum subscriber Churn, and minimum Liquidity, all of which are defined in the Crystal Loan Agreement. We are also prohibited from incurring indebtedness, disposing of or permitting liens on our assets and making restricted payments, including cash dividends on shares of our common stock, except as expressly permitted under the Crystal Loan Agreement. The agreement contains customary events of default. If a default occurs and is not cured within the applicable cure period or is not waived, any outstanding obligations under the agreement may be accelerated. The future maturities under the Crystal Loan Agreement are summarized as follows (in thousands). 2017 $ 1,275 2018 2,550 2019 2,550 2020 10,625 $ 17,000 Operating Leases As discussed in Note N –Leases, Commitments and Contingencies, we entered into a non-cancelable operating sublease on March 1, 2016 for office space at the Atlanta corporate headquarters. The lease expires in 2022 and has an escalation clause of 3% annually. |
UNAUDITED SELECTED QUARTERLY DA
UNAUDITED SELECTED QUARTERLY DATA | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
UNAUDITED SELECTED QUARTERLY DATA | NOTE V – UNAUDITED SELECTED QUARTERLY DATA The following tables summarize selected unaudited financial data for each quarter of the years ended December 31, 2015 and 2014 (in thousands except share data): Quarter Ended March 31, June 30, September 30, December 31, 2015 2015 2015 2015 Net revenues $ 21,678 $ 25,653 $ 23,334 $ 18,785 Gross profit 10,106 11,140 7,286 9,909 Operating (loss) income (834 ) 583 (5,819 ) (2,513 ) (Loss) income before income taxes (1,006 ) 410 (5,976 ) (2,683 ) Income tax (benefit) expense (386 ) 141 10,404 (257 ) Net (loss) income (620 ) 269 (16,380 ) (2,426 ) Basic (loss) earnings per share $ (0.03 ) $ 0.01 $ (0.86 ) $ (0.13 ) Diluted (loss) earnings per share (0.03 ) 0.01 (0.86 ) (0.13 ) Quarter Ended March 31, June 30, September 30, December 31, 2014 2014 2014 2014 Net revenues $ 20,773 $ 22,578 $ 25,663 $ 24,855 Gross profit 9,840 10,722 11,287 11,415 Operating income (loss) 662 (252 ) 802 903 Income (loss) from continuing operations before income taxes 1,741 (444 ) 621 737 Income tax expense (benefit) 595 (670 ) 358 136 Income from continuing operations, net of income taxes 1,146 226 263 601 Loss from discontinued operations, net of income taxes (56 ) (436 ) - - Net income (loss) 1,090 (210 ) 263 601 Basic earnings (loss) per share: Income from continuing operations $ 0.06 $ 0.01 $ 0.01 $ 0.03 Loss from discontinued operations - (0.02 ) - - Net income (loss) $ 0.06 $ (0.01 ) $ 0.01 $ 0.03 Diluted earnings (loss) per share Income from continuing operations $ 0.06 $ 0.01 $ 0.01 $ 0.03 Loss from discontinued operations - (0.02 ) - - Net income (loss) $ 0.06 $ (0.01 ) $ 0.01 $ 0.03 As described in Note B – Merger and Acquisitions, we completed a business combination 2014 affecting results of operations. During the quarter ended September 30, 2015, we recorded noncash impairment charges of $1.3 million for other assets affecting gross profit and $1.3 million for goodwill and other intangible assets affecting operating (loss) income. During the quarter ended December 31, 2015, we recorded additional noncash impairment charges of $1.4 million for goodwill and other intangible assets affecting operating (loss) income. See Note H – Prepaid Expenses and Other Assets and Note J – Intangible Assets. As described in Note K – Income Taxes, we recognized $9.9 million in deferred income tax expense to record a valuation allowance against certain deferred tax assets. The sum of earnings per share for the four quarters may differ from the annual amounts due to the required method for calculating the weighted average shares for the respective periods. |
VALUATION AND QUALIFYING ACCOUN
VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
VALUATION AND QUALIFYING ACCOUNTS | VALUATION AND QUALIFYING ACCOUNTS Years ended December 31, 2015, 2014, 2013 (in thousands) Balance at Additions beginning of charged to Balance at Description Period expense Deductions end of Period Year ended December 31, 2015: Accounts and financing receivables Allowance for uncollectible accounts, continuing operations $ 652 $ 562 (596 ) (a) $ 618 Inventory Reserve for obsolescence, continuing operations 1,397 1,343 (34 ) 2,706 Deferred tax assets Valuation allowance, continuing operations 3,108 13,309 - 16,417 Year ended December 31, 2014: Accounts and financing receivables Allowance for uncollectible accounts, continuing operations 380 392 (120 ) (a) 652 Allowance for uncollectible accounts, discontinued operations 600 - (600 ) (b) - Inventory Reserve for obsolescence, continuing operations 1,110 544 (257 ) 1,397 Reserve for obsolescence, discontinued operations 30 - (30 ) - Deferred tax assets Valuation allowance, continuing operations 1,545 1,563 - 3,108 Valuation allowance, discontinued operations 462 - (462 ) - Year ended December 31, 2013: Accounts and financing receivables Allowance for uncollectible accounts, continuing operations 344 444 (408 ) (a) 380 Allowance for uncollectible accounts, discontinued operations 16 602 (18 ) (b) 600 Inventory Reserve for obsolescence, continuing operations 332 807 (29 ) 1,110 Reserve for obsolescence, discontinued operations 30 - - 30 Deferred tax assets Valuation allowance, continuing operations 1,650 - (105 ) 1,545 Valuation allowance, discontinued operations 460 2 - 462 (a) (b) |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the results of operations and financial position of Numerex and its wholly owned subsidiaries in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Intercompany accounts and transactions have been eliminated in consolidation. |
Discontinued Operations | Discontinued Operations Businesses to be divested are classified in the consolidated financial statements as either discontinued operations or held for sale. For businesses classified as discontinued operations, the balance sheet amounts and results of operations are reclassified from their historical presentation to assets and liabilities of discontinued operations on the consolidated balance sheet and to discontinued operations on the consolidated statements of operations and comprehensive (loss) income and cash flows, respectively, for all periods presented. The gains or losses associated with these divested businesses are also recorded in discontinued operations in the consolidated statements of operations and comprehensive (loss) income. Additionally, the accompanying notes do not include the operating results of businesses classified as discontinued operations for all periods presented. As of June 30, 2014, we completed the divestiture of the businesses classified as discontinued operations. We have not had and do not expect to have any significant continuing involvement with these businesses following their divestiture. See Note C – Discontinued Operations for more information. |
Estimates and Assumptions | Estimates and Assumptions The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, warranty costs, doubtful accounts, goodwill and intangible assets, expenses, accruals, equity-based compensation, income taxes, restructuring charges, leases, long-term service contracts, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of financial instruments classified as current assets or liabilities, including cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximate carrying value, principally because of the short-term, maturity of those items. The fair value of our long-term financing receivables and note payable approximates carrying value based on their effective interest rates compared to current market rates and similar type borrowing arrangements. We measure and report certain financial assets and liabilities at fair value on a recurring basis, including cash equivalents. The major categories of nonfinancial assets and liabilities that we measure at fair value include reporting units measured at fair value in our goodwill impairment test. See Note D – Fair Value Measurements for more information. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk are primarily cash investments and accounts and financing receivables. We maintain our cash and overnight investment balances in financial institutions, which typically exceed federally insured limits. We had cash balances in excess of these limits of $16.0 million and $17.0 million at December 31, 2015 and 2014, respectively. We have not experienced any losses in such accounts and believe we are not exposed to any significant credit risk on cash and cash equivalents. Concentration of credit risk with respect to accounts and financing receivables from customers is limited. We perform credit evaluations of prospective customers and we evaluate our trade and financing receivables periodically. Our accounts and financing receivables are at risk to the extent that we may not be able to collect from some of our customers. See Note E – Accounts Receivable, Note F – Financing Receivables and Note Q – Significant Customer, Concentration of Risk and Related Parties for more information. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all investments with an original maturity of three months or less at date of purchase to be cash equivalents. Cash equivalents consist of overnight repurchase agreements and amounts on deposit in foreign banks. We held $0.5 million and $0.4 million in foreign bank accounts at December 31, 2015 and 2014, respectively. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are stated at gross invoiced amounts less discounts, other allowances and provision for uncollectible accounts. Trade accounts receivable include earned but unbilled revenue that results from non-calendar month billing cycles and lag time in billing related to certain of our services. |
Financing Receivables | Financing Receivables Financing receivables are due in installments. We evaluate the credit quality of our financing receivables on an ongoing basis utilizing an aging of the accounts and write-offs, customer collection experience, the customer’s financial condition, known risk characteristics impacting the respective customer base, and other available economic conditions, to determine the appropriate allowance. Similar to accounts receivable, we typically do not require collateral. All amounts due at December 31, 2015 and 2014 were deemed fully collectible and an allowance was not necessary. See Note F – Financing Receivables for more information. |
Inventories and Reserves for Excess, Slow-Moving and Obsolete Inventory | Inventories and Reserves for Excess, Slow-Moving and Obsolete Inventory Inventories are valued at the lower of cost or market and consist principally of (1) security devices and (2) cellular IoT Modems and Modules and (3) satellite IoT Modems and other accessories. Cost is generally determined on the first-in, first-out (FIFO) basis. Inbound freight costs, including raw material freight costs to contract manufacturers is recorded in inventory and these costs are recognized in cost of sales when the product is sold. Lower of cost or market value of inventory is determined at the product level and evaluated quarterly. Estimated reserves for obsolescence or slow moving inventory are maintained based on current economic conditions, historical sales quantities and patterns and, in some cases, the specific risk of loss on specifically identified inventories. Such inventories are recorded at estimated realizable value net of the costs of disposal. See Note G – Inventory for more information. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost net of accumulated depreciation. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives. Property and equipment under capital leases are amortized over the lives of the respective leases or over the service lives of the assets for those leases and leasehold improvements, whichever is shorter. Depreciation and amortization for property and equipment is calculated using the straight-line method over the following estimated lives: · Machinery and equipment 4-10 years · Furniture, fixtures and fittings 3-10 years · Leasehold improvements up to 10 years See Note I – Property and Equipment for more information. |
Capitalized Software | Capitalized Software We capitalize software both for internal use and for inclusion in our products. For internal use software, costs incurred in the preliminary project stage of developing or acquiring internal use software are expensed as incurred. After the preliminary project stage is completed, management has approved the project and it is probable that the project will be completed and the software will be used for its intended purpose, we capitalize certain internal and external costs incurred to acquire or create internal use software, principally related to software coding, designing system interfaces and installation and testing of the software. We amortize capitalized internal use software costs using the straight-line method over the estimated useful life of the software, generally for three years. For software embedded in our products, we capitalize software development costs when technological feasibility is established and conclude capitalization when the hardware is ready for release. We amortize capitalized costs for software to be sold using the straight-line method over the estimated useful life based on anticipated revenue streams of the software, generally for three years. Software development costs incurred prior to the establishment of technological feasibility are expensed as incurred as engineering and development. See Note J – Intangible Assets for more information. |
Intangible Assets, Including Goodwill | Intangible Assets, Including Goodwill Intangible assets consist of acquired customer relationships and intellectual property, patents and trademarks, and goodwill. These assets, except for goodwill and trade names, are amortized over their expected useful lives. Acquired customer relationships are amortized using the straight-line method over 4 to 11 years representing the estimated benefit period. Acquired intellectual property and patents are amortized using the straight-line method over 7 to 16 years, representing the shorter of their estimated useful lives or the period until the patent renews. Costs to maintain patents are expensed as incurred while costs to renew patents are capitalized and amortized over the remaining estimated useful lives. Goodwill and trade names are not amortized but are subject to an annual impairment test, and more frequently if events or circumstances occur that would indicate a potential decline in its fair value. An impairment charge will be recognized only when the implied fair value of a reporting unit’s goodwill is less than its carrying amount. The annual assessment of goodwill for impairment includes comparing the fair value of each reporting unit to the carrying value, referred to as Step One. If the fair value of a reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is necessary. If the carrying value of a reporting unit exceeds its fair value, a second test is performed, referred to as Step Two, to measure the amount of impairment to goodwill, if any. To measure the amount of any impairment, we determine the implied fair value of goodwill in the same manner as if we were acquiring the affected reporting unit in a business combination. Specifically, we allocate the fair value of the affected reporting unit to all of the assets and liabilities of that unit, including any unrecognized intangible assets, in a hypothetical calculation that would yield the implied fair value of goodwill. If the implied fair value of goodwill is less than the goodwill recorded on the consolidated balance sheet, an impairment charge for the difference is recorded. We base the impairment analysis of intangible assets, including goodwill on estimated fair values. The fair value of reporting units for assessing goodwill is principally based on discounted cash flow models and using a relief from royalties method for other intangible assets. The assumptions, inputs and judgments used in estimating fair values are inherently subjective and reflect estimates based on known facts and circumstances at the time the valuations are performed. These estimates and assumptions primarily include, but are not limited to, discount rates, terminal growth rates, projected revenues and costs, projected cash flows, capital expenditure forecasts, and royalty rates. We recorded impairment charges of $0.9 million, $0.3 million, and $0.1 million for goodwill, patents and trademarks, and customer relationships, respectively, related to our DIY product line. Additionally, we recorded $0.7 million in impairment charges for each of Omnilink technologies and indefinite-lived trade names during the year ended December 31, 2015. See Note J – Intangible Assets for more information. We elected to change our annual goodwill impairment testing measurement date from December 31 to October 1 effective October 1, 2013, primarily to correspond to our annual strategic, financial planning and budgeting processes. The change in annual testing dates did not affect our financial results for any interim period or the year ended December 31, 2013. See Note J – Intangible Assets for more information. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Long-lived assets, such as property and equipment and other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount which the carrying amount of the asset exceeds the fair value of the asset. During the year ended December 31, 2015, we recorded an impairment charge of $1.3 million for prepaid carrier fees in other assets affecting multiple reporting units. See Note H – Prepaid Expenses and Other Assets for more information. |
Income Taxes | Income Taxes We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates applied to taxable income. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets when it is more likely than not that the asset will not be realized. We conduct business globally and file income tax returns in the United States and in many state and certain foreign jurisdictions. We are subject to state and local income tax examinations for years after and including 1998. These tax years remain open due to the net operating losses generated in these years that have not been utilized as of the year ended December 31, 2015. Likewise, the existence of net operating losses from earlier periods could subject us to United States federal income tax examination for years including and after 2001, since such net operating losses have not been utilized as of the year ended December 31, 2015. See Note K – Income Taxes for more information. |
Treasury Stock | Treasury Stock We account for treasury stock under the cost method. When treasury stock is re-issued at a higher price than its cost, the difference is recorded as a component of additional paid-in capital to the extent that there are gains to offset the losses. If there are no treasury stock gains in additional paid-in capital, the losses are recorded as a component of accumulated deficit. |
Other Comprehensive (Loss) Income and Foreign Currency Translation | Other Comprehensive (Loss) Income and Foreign Currency Translation Other comprehensive (loss) income consists of adjustments, net of tax, related to unrealized gains (losses) on foreign currency translation. These are reported in accumulated other comprehensive (loss) income as a separate component of stockholders’ equity until realized in earnings. The assets and liabilities of our foreign operations are translated into U.S. dollars at the period end spot exchange rates, and revenues and expenses are translated at estimated average exchange rates for each period. Resulting translation adjustments are reflected as other comprehensive loss in the consolidated statements of operations and comprehensive (loss) income and within shareholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Foreign operations are not significant to us for the years ended December 31, 2015, 2014 or 2013. |
Revenue Recognition | Revenue Recognition Our revenue is generated from two primary sources, subscription fees and the sale of IoT devices and hardware. Revenue is recognized when persuasive evidence of an agreement exists, the hardware or service has been delivered, fees and prices are fixed and determinable, collection is reasonably assured and all other significant obligations have been fulfilled. Revenue is recognized net of sales and any transactional taxes. Subscription fees are based on the number of devices (subscriptions) on our integrated IoT horizontal platform network. Subscription fees are typically invoiced and recognized as revenue as we provide the services or process transactions in accordance with contractual performance standards. Customer contracts are generally recurring or multi-year agreements. Subscription fee revenues for managed service arrangements include all of the key IoT components – device, network, application and platform. Subscription fees also include volume-based excess network usage, messages and other activity that are recognized in revenue as incurred, consistent with contractual terms. We may, under an appropriate agreement, bill subscription fees in advance for the network service to be provided. In these instances, we recognize the advance charge (even if nonrefundable) as deferred revenue and recognize the revenue over future periods in accordance with the contract term as the network service (time, data or minutes) is provided, delivered or performed. Subscription revenue may also include activation fees which are deferred and recognized ratably over the estimated life of the subscription to which the activation fee relates. Direct and incremental costs associated with deferred revenue are also deferred, classified as deferred costs in prepaid expense and other assets in our consolidated balance sheets, and recognized in the period revenue is recognized under managed service arrangements. Cost of embedded devices and hardware are capitalized as fixed assets and depreciated over the estimated life of the hardware. Unbilled revenue consists of earned revenue that results from non-calendar month billing cycles and the one-month lag time in billing related to certain of our services. We recognize revenue from the sale of IoT devices and hardware at the time of shipment and passage of title. Provisions for rebates, promotions, product returns and discounts to customers are recorded as a reduction in revenue in the same period that the revenue is recognized. We offer customers the right to return hardware that does not function properly within a limited time after delivery. We continuously monitor and track such hardware returns and record a provision for the estimated amount of such future returns based on historical experience and any notification received of pending returns. While such returns have historically been within expectations and the provisions established, we cannot guarantee that we will continue to experience the same return rates that we have experienced in the past. Any significant increase in hardware failure rates and the resulting credit returns could have a material adverse impact on operating results for the period or periods in which such returns materialize. Shipping and handling fees received from customers are recorded with embedded device and hardware revenue and associated costs are recorded in cost of embedded devices and hardware. On occasion we sell both hardware and monthly recurring services to the same customer. In such cases, we evaluate such arrangements to determine whether a multiple-element arrangement exists. For multiple-element revenue arrangements, we allocate arrangement consideration at the inception of an arrangement to all elements using the relative selling price method. The hierarchy for determining the selling price of a deliverable includes (a) vendor-specific objective evidence, if available, (b) third-party evidence, if vendor-specific objective evidence is not available and (c) our best estimate of the selling price, if neither vendor-specific nor third-party evidence is available. In most cases, vendor-specific objective evidence is available for us, as we have a history of selling hardware and service on a standalone basis. Certain judgments and estimates are made and used to determine revenue recognized in any accounting period. If estimates are revised, material differences may result in the amount and timing of revenues recognized for a given period. |
Advertising Expenses | Advertising Expenses Advertising expenses are charged to operations in the period in which they are incurred. For the years ended December 31, 2015, 2014 and 2013, advertising costs were approximately $1.0 million, $0.9 million and $0.7 million, respectively. |
Equity-Based Compensation | Equity-Based Compensation Compensation cost is recognized for all equity-based payments granted and is based on the grant-date fair value estimated using the Black-Scholes option pricing model. Our determination of fair value of equity-based payment awards on the date of grant using the option-pricing model is affected by our share price and our valuation assumptions. Certain grants to executives require achievement of market conditions before the grant may be exercised. The fair value of awards with market exercise conditions is estimated on the date of grant using a lattice model with a Monte Carlo simulation. These primary variables include our expected share price volatility over the estimated life of the awards and actual and projected exercise behaviors. As employees vest in their awards, compensation cost is recognized over the requisite service period with an offsetting credit to additional paid-in capital. Equity-based compensation expense is based on awards ultimately expected to vest and has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures are expected to differ from those estimates. See Note O – Equity-Based Compensation for more information. |
Engineering and Development | Engineering and Development Engineering and development expenses that are not capitalizable as internally developed software are charged to operations in the period in which they are incurred. Engineering and development costs consist primarily of salaries and other personnel-related costs, bonuses, and third-party services. For the years ended December 31, 2015, 2014 and 2013, engineering and development costs recorded in operations were $9.0 million, $8.0 million and $4.9 million, respectively. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by giving effect to all potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of outstanding stock options and restricted stock units, calculated using the treasury stock method. See Note S – Earnings Per Share for more information. |
Reclassifications | Reclassifications Previously reported other intangible assets have been reclassified to software in development in the consolidated financial statements to conform to the current period presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued guidance that requires lessees to recognize most leases as assets and liabilities on the balance sheet. Qualitative and quantitative disclosures will be enhanced to better understand the amount, timing and uncertainty of cash flows arising from leases. The guidance is effective for annual and interim periods beginning after December 31, 2018. The updated standard mandates a modified retrospective transition method with early adoption permitted. We are currently evaluating the effect that the updated standard will have on our financial statements. In November 2015, the FASB issued guidance requiring all deferred tax assets and liabilities to be classified as non-current on the balance sheet instead of separating deferred taxes into current and non-current amounts. In addition, valuation allowance allocations between current and non-current deferred tax assets are no longer required because those allowances also will be classified as non-current. This standard is effective for public companies for annual periods beginning after December 15, 2016. We do not expect the adoption of this guidance to have a material impact on our financial statements. In September 2015, the FASB issued an accounting standards update to simplify the accounting for measurement-period adjustments for an acquirer in a business combination. The update will require an acquirer to recognize any adjustments to provisional amounts of the initial accounting for a business combination with a corresponding adjustment to goodwill in the reporting period in which the adjustments are determined in the measurement period, as opposed to revising prior periods presented in financial statements. Thus, an acquirer shall adjust its financial statements as needed, including recognizing in its current-period earnings the full effect of changes in depreciation, amortization, or other income effects, by line item, if any, as a result of the change to the provisional amounts calculated as if the accounting had been completed at the acquisition date. This update is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. We do not expect the adoption of this guidance to have a material impact on our financial statements. In July 2015, the FASB issued guidance intended to simplify the presentation of applicable inventory at the lower of cost or net realizable value. The new guidance clarifies that net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The new guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We do not expect the adoption of this guidance to have a material impact on our financial position or results of operations. In March 2015, the FASB issued guidance about simplifying the presentation of debt issuance costs. The guidance is intended to help clarify debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. The amendments are effective for financial stat e In August 2014, the FASB issued guidance about disclosing an entity’s ability to continue as a going concern. The guidance is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The standard will be effective for annual periods ending after December 15, 2016, and for interim and annual periods thereafter, with early application permitted. We do not expect the adoption of this guidance to have a material impact on the company's financial position or results of operations. In June 2014, the FASB issued guidance that applies to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. It requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition and follows existing accounting guidance for the treatment of performance conditions. The standard will be effective for us prospectively for fiscal years, and interim reporting periods within those years, beginning January 1, 2016, with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on our financial position or results of operations. In May 2014, the FASB issued new accounting guidance for revenue recognized from contracts with customers. The core principle of the guidance is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The guidance will become effective for us for fiscal years, and interim reporting periods within those years, beginning January 1, 2018 and will require retrospective application. We are evaluating the effect that this amendment will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting. In April 2014, the FASB issued amendments to guidance for reporting discontinued operations and disposals of components of an entity. The amended guidance requires that a disposal representing a strategic shift that has (or will have) a major effect on an entity’s financial results or a business activity classified as held for sale should be reported as discontinued operations. The amendments also expand the disclosure requirements for discontinued operations. The amendments are effective for us prospectively for fiscal years, and interim reporting periods within those years, beginning January 1, 2015 (early adoption is permitted only for disposals that have not been previously reported). The implementation of the amended guidance is not expected to have a material impact on our consolidated financial position or results of operations. |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful life of property and equipment | · Machinery and equipment 4-10 years · Furniture, fixtures and fittings 3-10 years · Leasehold improvements up to 10 years |
MERGER AND ACQUISITIONS (Tables
MERGER AND ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Acquisition [Line Items] | |
Schedule Of Measurement Period Adjustments Related To Merger | December 31, Measurement December 31, 2014 Period 2014 As Reported Adjustment Recast Assets Goodwill $ 44,548 $ (200 ) $ 44,348 Deferred tax assets, less current portion 5,616 200 5,816 $ 50,164 $ - $ 50,164 |
Omnilink Systems, Inc. | 2014 Merger | |
Business Acquisition [Line Items] | |
Schedule of allocation of the purchase price | Fair Estimated Value Useful Lives Cash $ 195 n/a Accounts receivable 2,677 n/a Inventory 873 n/a Prepaid and other assets 377 n/a Property and equipment 1,613 4 (a) Deferred tax asset 2,600 n/a Customer relationships 6,056 11 Technology 4,998 14 Trade names 3,632 Indefinite Goodwill 17,318 Indefinite Total identifiable assets acquired 40,339 Accounts payable (1,756 ) n/a Accrued expenses (1,037 ) n/a Deferred revenue (64 ) n/a Total liabilities assumed (2,857 ) Net assets acquired $ 37,482 _______________ (a) The weighted average remaining useful life for all property and equipment is approximately four years. |
Schedule of unaudited pro forma results | Unaudited Pro Forma Results Years Ended December 31, 2014 2013 Net revenues $ 98,134 $ 90,628 Income (loss) from continuing operations, before income tax 2,719 (2,370 ) Net income (loss) 2,147 (856 ) Basic and diluted income (loss) per common share 0.11 (0.05 ) |
Small technology company | 2013 Acquisition | |
Business Acquisition [Line Items] | |
Schedule of allocation of the purchase price | Fair Useful Value Lives Accounts receivable $ 175 n/a Inventory 78 n/a Fixed assets 5 3 Software 110 3 Customer relationships 265 7 Other intangibles 389 3 Goodwill 1,612 Indefinite Leases receivable 275 n/a Accounts payable (81 ) n/a Other liabilities (11 ) n/a Net assets acquired $ 2,817 |
Schedule of unaudited pro forma results | Fair Useful Value Lives Accounts receivable $ 35 n/a Inventory 55 n/a Fixed assets 25 3-5 Software 967 3.5 Trademarks 32 5 Deferred revenue (12 ) n/a Net assets acquired $ 1,102 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of financial results of the discontinued operations | Years Ended December 31, 2014 2013 Revenues from discontinued operations $ 207 $ 1,163 Loss from discontinued operations before income taxes (285 ) (1,567 ) Income tax benefit (127 ) (187 ) Loss from discontinued operations, net of income taxes (158 ) (1,380 ) Loss on disposal of subsidiary included in discontinued operations (309 ) - Loss on dissolution of subsidiaries included in discontinued operations (25 ) - Net loss from discontinued operations $ (492 ) $ (1,380 ) |
FAIR VALE MEASUREMENTS (Tables)
FAIR VALE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value on a nonrecurring basis | Fair Value Level 3 Total Losses September 30, 2015: DIY Reporting Unit Amortizing intangible assets $ 825 $ 825 $ 446 Goodwill 1,656 1,656 924 October 1, 2015 Omnilink Reporting Unit Amortizing intangible assets 4,900 4,900 660 Indefinite-lived trade names 2,972 2,972 682 Total nonrecurring fair value measurements $ 10,353 $ 10,353 $ 2,712 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Schedule of components of accounts receivables and related allowance for doubtful accounts | As of December 31, 2015 2014 Accounts receivable $ 9,218 $ 12,543 Unbilled accounts receivable 637 396 Allowance for doubtful accounts (618 ) (652 ) $ 9,237 $ 12,287 |
FINANCING RECEIVABLES (Tables)
FINANCING RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Financing Receivable, Net [Abstract] | |
Schedule of components of lease receivables | As of December 31, 2015 2014 Total minimum lease payments receivable $ 4,266 $ 4,785 Unearned income (156 ) (206 ) Present value of future minimum lease payments receivable 4,110 4,579 Less current portion (1,780 ) (1,595 ) Amounts due after one year $ 2,330 $ 2,984 |
Schedule of future minimum lease payments | 2016 $ 1,875 2017 1,460 2018 757 2019 173 2020 1 $ 4,266 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of components of inventory | As of December 31, 2015 2014 Raw materials $ 1,903 $ 2,228 Finished goods 8,420 7,579 Inventory reserves (2,706 ) (1,397 ) $ 7,617 $ 8,410 |
PREPAID EXPENSES AND OTHER AS38
PREPAID EXPENSES AND OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of components of prepaid expenses and other current assets | As of December 31, 2015 2014 Prepaid expenses $ 902 $ 1,358 Deferred costs 718 578 Other 417 393 $ 2,037 $ 2,329 |
Schedule of components of other noncurrent assets | As of December 31, 2015 2014 Deferred activation fees $ 293 $ 310 Deferred financing fees 289 260 Deposits 117 155 Prepaid carrier fees - 1,860 $ 699 $ 2,585 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of components of property and equipment | As of December 31, 2015 2014 Computer, network and other equipment $ 7,150 $ 5,925 Monitoring equipment 3,015 1,705 Furniture and fixtures 888 746 Leasehold improvements 374 328 Total property and equipment 11,427 8,704 Accumulated depreciation and amortization (6,632 ) (3,815 ) $ 4,795 $ 4,889 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in carrying values as acquired in merger | Goodwill Patents Customer Trade Names Technologies Total January 1, 2015 $ 2,580 $ 748 $ 1,241 $ 3,632 $ 4,998 Impairment (924 ) (325 ) (121 ) (660 ) (682 ) $ (2,712 ) December 31, 2015 $ 1,656 $ 423 $ 1,120 $ 2,972 $ 4,316 |
Schedule of summary of intangible assets other than goodwill | As of December 31, 2015 As of December 31, 2014 Remaining Gross Accumulated Net Book Gross Accumulated Net Book Purchased and developed software 1.3 $ 15,399 $ (9,503 ) $ 5,896 $ 11,176 $ (6,409 ) $ 4,767 Software in development n/a 1,250 - 1,250 2,618 - 2,618 Total software 16,649 (9,503 ) 7,146 13,794 (6,409 ) 7,385 Licenses 0.5 13,215 (12,167 ) 1,048 12,763 (11,886 ) 877 Customer relationships 7.6 8,167 (2,285 ) 5,882 8,287 (1,359 ) 6,928 Technologies 12.3 4,316 (595 ) 3,721 4,998 (237 ) 4,761 Patents and trademarks 2.8 4,236 (2,137 ) 2,099 3,343 (1,657 ) 1,686 Trade names Indefinite 2,972 - 2,972 3,632 - 3,632 Total other intangible assets 32,906 (17,184 ) 15,722 33,023 (15,139 ) 17,884 $ 49,555 $ (26,687 ) $ 22,868 $ 46,817 $ (21,548 ) $ 25,269 |
Schedule of future amortization expenses | 2016 $ 5,315 2017 4,117 2018 3,053 2019 1,779 2020 1,582 Thereafter 2,800 $ 18,646 |
Schedule of carrying amount of goodwill | Goodwill Trade names January 1, 2014 $ 26,941 $ - Measurement period adjustment 89 - Acquisition 17,318 3,632 December 31, 2014 44,348 3,632 Impairment (924 ) (660 ) December 31, 2015 $ 43,424 $ 2,972 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of (benefit) provision for income taxes | Years Ended December 31, 2015 2014 2013 Current: Federal $ (31 ) $ 73 $ (183 ) State 13 38 22 Reserve (36 ) (57 ) (80 ) Deferred: Federal 9,142 546 (2,033 ) State 814 (181 ) (95 ) $ 9,902 $ 419 $ (2,369 ) |
Schedule of reconciliation of income tax (benefit) provision at the statutory rate | Years Ended December 31, 2015 2014 2013 Income tax expense (benefit) computed at U.S. corporate tax rate of 34% $ (3,147 ) $ 903 $ (137 ) Adjustments attributable to: Valuation allowance 13,053 1,077 (1,893 ) Income tax payable adjustments - - (71 ) State income tax 13 24 (73 ) Reserve for uncertain tax positions (36 ) (57 ) (80 ) Non-deductible expenses 19 (1,575 ) (97 ) Other - 47 (18 ) $ 9,902 $ 419 $ (2,369 ) |
Schedule of components of deferred tax assets and liabilities | As of December 31, 2015 2014 Deferred tax assets: Inventories $ 1,005 $ 549 Accruals 839 417 Other current deferred tax assets 88 495 Equity-based compensation 2,970 2,030 Federal, state and foreign net operating loss carry forwards 13,677 11,074 Tax credit carry forward 1,284 1,323 Deferred revenue 23 - Valuation allowance (16,417 ) (3,108 ) 3,469 12,780 Deferred tax liabilities: Difference between book and tax basis of property (191 ) (305 ) Intangible assets (4,270 ) (3,498 ) (4,461 ) (3,803 ) Net deferred tax (liabilities) assets $ (992 ) 8,977 |
Schedule of net operating loss carry forwards | Year of Amount Expiration Federal net operating losses $ 28,198 2023-2036 State net operating losses 62,212 2016-2036 Alternative minimum tax credit carryforwards 771 n/a General business credit carryforwards 513 2018-2031 |
Schedule of summary of the activity related to our unrecognized tax benefit | 2015 2014 Balance at January 1, $ 54 $ 102 Decreases as a result of positions taken during prior periods (29 ) (48 ) Balance at December 31, $ 25 $ 54 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other current liabilities | As of December 31, 2015 2014 Payroll related $ 898 $ 696 Accrued expenses 1,966 1,775 $ 2,864 $ 2,471 |
Schedule of other noncurrent liabilities | As of December 31, 2015 2014 Deferred revenue $ 993 $ 414 Deferred rent 863 932 Other 35 - $ 1,891 $ 1,346 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of debt | As of December 31, 2015 2014 Note payable to Silicon Valley Bank, with interest at our option of prime rate or LIBOR rate plus margin $ 19,349 $ 23,125 Seller financed note payable, with interest at 4.25%, monthly payments of principal and interest, secured by equipment, due September 2015 - 476 19,349 23,601 Less current portion of long-term debt 3,750 4,251 Noncurrent portion of long-term debt $ 15,599 $ 19,350 |
Schedule of loan agreement principal repayment | SVB Loan Agreement Principal Repayment Schedule Quarterly Annually June 2014 - March 2015 $ 625,000 $ 2,500,000 June 2015 - March 2016 937,500 3,750,000 June 2016 - March 2017 937,500 3,750,000 June 2017 - March 2018 1,250,000 5,000,000 June 2018 - March 2019 1,250,000 5,000,000 Outstanding balance due May 2019 - 5,000,000 |
Schedule of summary of future maturities | 2016 $ 3,750 2017 4,687 2018 5,000 2019 5,912 $ 19,349 |
LEASES, COMMITMENTS AND CONTI44
LEASES, COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum lease payments capital lease | Year Ending December 31, 2016 $ 1,763 2017 1,635 2018 1,489 2019 1,233 2020 1,173 Thereafter 2,031 $ 9,324 |
Schedule of future minimum lease payments under such non-cancelable operating leases | Year Ending December 31, 2016 $ 183 2017 225 2018 231 2019 238 2020 245 Thereafter 448 $ 1,570 |
EQUITY-BASED COMPENSATION (Tabl
EQUITY-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of assumptions to estimate the grant date fair value of stock options and SARs | Years Ended December 31, 2015 2014 2013 Volatility 43.0 % 57.8 % 67.5 % Expected term (in years) 5.5 6.2 6.3 Risk-free rate 1.65 % 1.88 % 1.52 % Dividend yield 0 % 0 % 0 % |
Schedule of summary of stock option and SAR activity outstanding | Weighted Average Shares Exercise Price Outstanding, January 1, 2015 1,332 $ 8.93 Granted 688 8.35 Exercised (56 ) 5.37 Forfeited or expired (435 ) 9.31 Outstanding, at December 31, 2015 1,529 8.69 Exercisable at December 31, 2015 819 7.95 |
Schedule of summary of stock option and SAR | Outstanding Exercisable Total shares 1,529 819 Aggregate intrinsic value $ 670 $ 670 Weighted-average remaining contractual term (years) 6.6 4.5 |
Schedule of summary of stock option and SAR exercise data | Years Ended December 31, 2015 2014 2013 Options and SARs exercised 56 270 433 Net shares issued 51 214 199 Total intrinsic value exercised $ 195 $ 1,533 $ 2,552 Cash received 254 931 338 Recognized tax benefit 96 1,300 2,208 |
Schedule of summary of non-vested share restricted stock award activity | Shares Weighted Outstanding, as of January 1, 2015 488 $ 11.19 Granted 439 8.75 Vested (192 ) 10.51 Forfeited (197 ) 10.78 Outstanding, as of December 31, 2015 538 9.59 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | Years Ended December 31, 2015 2014 2013 (Loss) income from continuing operations $ (19,157 ) $ 2,236 $ 1,965 Loss from discontinued operations - (492 ) (1,380 ) $ (19,157 ) $ 1,744 $ 585 Common Shares: Weighted average common shares outstanding 19,117 18,922 18,413 Dilutive effect of common stock equivalents - 346 537 Total 19,117 19,268 18,950 Basic earnings per share: (Loss) income from continuing operations $ (1.00 ) $ 0.12 $ 0.11 Loss from discontinued operations - (0.03 ) (0.08 ) Net (loss) income $ (1.00 ) $ 0.09 $ 0.03 Diluted earnings per share: (Loss) income from continuing operations $ (1.00 ) $ 0.12 $ 0.10 Loss from discontinued operations - (0.03 ) (0.07 ) Net (loss) income $ (1.00 ) $ 0.09 $ 0.03 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of revenue generated from customers based outside of the U.S. | Years Ended December 31, 2015 2014 2013 U.S. 96 % 94 % 94 % Canada 3 % 4 % 4 % Others 1 % 2 % 2 % 100 % 100 % 100 % |
SUBSEQUENT EVENTS (Tables)
SUBSEQUENT EVENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Schedule of future maturities under crystal loan agreement | 2017 $ 1,275 2018 2,550 2019 2,550 2020 10,625 $ 17,000 |
UNAUDITED SELECTED QUARTERLY 49
UNAUDITED SELECTED QUARTERLY DATA (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of summary of unaudited financial data | Quarter Ended March 31, June 30, September 30, December 31, 2015 2015 2015 2015 Net revenues $ 21,678 $ 25,653 $ 23,334 $ 18,785 Gross profit 10,106 11,140 7,286 9,909 Operating (loss) income (834 ) 583 (5,819 ) (2,513 ) (Loss) income before income taxes (1,006 ) 410 (5,976 ) (2,683 ) Income tax (benefit) expense (386 ) 141 10,404 (257 ) Net (loss) income (620 ) 269 (16,380 ) (2,426 ) Basic (loss) earnings per share $ (0.03 ) $ 0.01 $ (0.86 ) $ (0.13 ) Diluted (loss) earnings per share (0.03 ) 0.01 (0.86 ) (0.13 ) Quarter Ended March 31, June 30, September 30, December 31, 2014 2014 2014 2014 Net revenues $ 20,773 $ 22,578 $ 25,663 $ 24,855 Gross profit 9,840 10,722 11,287 11,415 Operating income (loss) 662 (252 ) 802 903 Income (loss) from continuing operations before income taxes 1,741 (444 ) 621 737 Income tax expense (benefit) 595 (670 ) 358 136 Income from continuing operations, net of income taxes 1,146 226 263 601 Loss from discontinued operations, net of income taxes (56 ) (436 ) - - Net income (loss) 1,090 (210 ) 263 601 Basic earnings (loss) per share: Income from continuing operations $ 0.06 $ 0.01 $ 0.01 $ 0.03 Loss from discontinued operations - (0.02 ) - - Net income (loss) $ 0.06 $ (0.01 ) $ 0.01 $ 0.03 Diluted earnings (loss) per share Income from continuing operations $ 0.06 $ 0.01 $ 0.01 $ 0.03 Loss from discontinued operations - (0.02 ) - - Net income (loss) $ 0.06 $ (0.01 ) $ 0.01 $ 0.03 |
SUMMARY OF SIGNIFICANT ACCOUN50
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals) $ in Thousands | May. 05, 2014 | Dec. 31, 2015USD ($)Source | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Summary Of Significant Account Policies [Line Items] | ||||
Cash balance in excess of federally insured limits | $ 16,000 | $ 17,000 | ||
Cash held in foreign bank accounts | $ 500 | 400 | ||
Property and equipment, depreciation methods | straight-line method | |||
Intangible assets, amortized method | straight-line method | |||
Number of sources for revenue generation | Source | 2 | |||
Impairment charge for prepaid carrier fees | $ 1,300 | |||
Advertising expenses | 1,000 | 900 | $ 700 | |
Engineering and development expenses | 8,952 | $ 8,009 | $ 4,915 | |
DIY | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Goodwill, Impairment Loss | 924 | |||
Omnilink Systems, Inc. | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Property and equipment, lives in years | 4 years | |||
Patents and trademarks | DIY | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 300 | |||
Customer relationships | DIY | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 100 | |||
Technology | Omnilink Systems, Inc. | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 700 | |||
Trade names | Omnilink Systems, Inc. | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 682 | |||
Purchased and developed software | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Property and equipment, lives in years | 3 years | |||
Customer relationships | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Useful lives of intangible assets | 7 years 6 months 22 days | |||
Minimum | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Accounts receivable, period due | 30 days | |||
Minimum | Patents and acquired intellectual property | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Useful lives of intangible assets | 7 years | |||
Minimum | Customer relationships | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Useful lives of intangible assets | 4 years | |||
Minimum | Machinery And Equipment | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Property and equipment, lives in years | 4 years | |||
Minimum | Furniture, fixtures and fittings | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Property and equipment, lives in years | 3 years | |||
Maximum | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Accounts receivable, period due | 90 days | |||
Maximum | Patents and acquired intellectual property | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Useful lives of intangible assets | 16 years | |||
Maximum | Customer relationships | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Useful lives of intangible assets | 11 years | |||
Maximum | Machinery And Equipment | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Property and equipment, lives in years | 10 years | |||
Maximum | Furniture, fixtures and fittings | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Property and equipment, lives in years | 10 years | |||
Maximum | Leasehold improvements | ||||
Summary Of Significant Account Policies [Line Items] | ||||
Property and equipment, lives in years | 10 years |
MERGER AND ACQUISITIONS - Alloc
MERGER AND ACQUISITIONS - Allocation of purchase price and summary of estimated useful lives for Omnilink (Details) - USD ($) $ in Thousands | May. 05, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | ||||
Deferred tax asset | $ 5,816 | |||
Goodwill | $ 43,424 | 44,348 | ||
Software | ||||
Business Acquisition [Line Items] | ||||
Property and equipment, lives in years | 3 years | |||
Trade names | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,972 | $ 3,632 | ||
Omnilink Systems, Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 195 | |||
Accounts receivable | 2,677 | |||
Inventory | 873 | |||
Prepaid and other assets | 377 | |||
Property and equipment | 1,613 | |||
Deferred tax asset | 2,600 | |||
Goodwill | 17,518 | |||
Total identifiable assets acquired | 40,339 | |||
Accounts payable | (1,756) | |||
Accrued expenses | (1,037) | |||
Deferred revenue | (64) | |||
Total liabilities assumed | (2,857) | |||
Net assets acquired | $ 37,482 | |||
Property and equipment, lives in years | [1] | 4 years | ||
Goodwill, lives in years | Indefinite | |||
Omnilink Systems, Inc. | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets other than goodwill | $ 6,056 | |||
Useful lives of intangible assets | 11 years | |||
Omnilink Systems, Inc. | Technology | ||||
Business Acquisition [Line Items] | ||||
Intangible assets other than goodwill | $ 4,998 | |||
Useful lives of intangible assets | 14 years | |||
Omnilink Systems, Inc. | Trade names | ||||
Business Acquisition [Line Items] | ||||
Intangible assets other than goodwill | $ 3,632 | |||
Estimated useful lives of acquired indefinite lived intangible assets | Indefinite | |||
[1] | The weighted average remaining useful life for all property and equipment is approximately four years. |
MERGER AND ACQUISITIONS - Measu
MERGER AND ACQUISITIONS - Measurement period adjustment resulted in recasting consolidated balancesheet (Details 1) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | ||
Goodwill | $ 43,424 | $ 44,348 |
Deferred tax assets, less current portion | 5,816 | |
Total Assets | 50,164 | |
As Reported | ||
Business Acquisition [Line Items] | ||
Goodwill | 44,548 | |
Deferred tax assets, less current portion | 5,616 | |
Total Assets | 50,164 | |
Adjustment | ||
Business Acquisition [Line Items] | ||
Goodwill | (200) | |
Deferred tax assets, less current portion | $ 200 | |
Total Assets |
MERGER AND ACQUISITIONS - Unaud
MERGER AND ACQUISITIONS - Unaudited proforma results (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Business Combinations [Abstract] | ||
Net revenues | $ 98,134 | $ 90,628 |
Income (loss) from continuing operations, before income tax | 2,719 | (2,370) |
Net income (loss) | $ 2,147 | $ (856) |
Basic and diluted income (loss) per common share | $ 0.11 | $ (0.05) |
MERGER AND ACQUISITIONS - All54
MERGER AND ACQUISITIONS - Allocation of purchase price and summary of estimated useful lives for small technology company that provided remote monitoring and management of bulk storage tanks (Details 3) - USD ($) $ in Thousands | Dec. 02, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 43,424 | $ 44,348 | ||
Software | ||||
Business Acquisition [Line Items] | ||||
Property and equipment, lives in years | 3 years | |||
Trade names | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,972 | $ 3,632 | ||
Small Technology Company Of Bulk Storage Tanks | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | $ 175 | |||
Inventory | 78 | |||
Fixed assets | 5 | |||
Goodwill | 1,612 | $ 1,600 | ||
Lease receivable | 275 | |||
Accounts payable | (81) | |||
Other liabilities | (11) | |||
Net assets acquired | $ 2,817 | |||
Property and equipment, lives in years | 3 years | |||
Goodwill, lives in years | Indefinite | |||
Small Technology Company Of Bulk Storage Tanks | Software | ||||
Business Acquisition [Line Items] | ||||
Software, trademarks, customer relationships and intangible assets | $ 110 | |||
Useful lives of intangible assets | 3 years | |||
Small Technology Company Of Bulk Storage Tanks | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Software, trademarks, customer relationships and intangible assets | $ 265 | |||
Useful lives of intangible assets | 7 years | |||
Small Technology Company Of Bulk Storage Tanks | Other intangibles | ||||
Business Acquisition [Line Items] | ||||
Software, trademarks, customer relationships and intangible assets | $ 389 | |||
Useful lives of intangible assets | 3 years |
MERGER AND ACQUISITIONS - All55
MERGER AND ACQUISITIONS - Allocation of purchase price and summary of estimated useful lives for small technology company that provided products and services (Details 4) - USD ($) $ in Thousands | Feb. 01, 2013 | Dec. 31, 2015 |
Software | ||
Business Acquisition [Line Items] | ||
Property and equipment, lives in years | 3 years | |
Small Technology Company Of Products And Services | ||
Business Acquisition [Line Items] | ||
Accounts receivable | $ 35 | |
Inventory | 55 | |
Fixed assets | 25 | |
Deferred revenue | (12) | |
Net assets acquired | $ 1,102 | |
Property and equipment, lives in years | 3 years 6 months | |
Small Technology Company Of Products And Services | Software | ||
Business Acquisition [Line Items] | ||
Software, trademarks, customer relationships and intangible assets | $ 967 | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years 6 months | |
Small Technology Company Of Products And Services | Trademarks | ||
Business Acquisition [Line Items] | ||
Software, trademarks, customer relationships and intangible assets | $ 32 | |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years |
MERGER AND ACQUISITIONS (Detail
MERGER AND ACQUISITIONS (Detail Textuals) - Omnilink Systems, Inc. - Merger agreement - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2014 | May. 05, 2014 | |
Business Acquisition [Line Items] | ||
Purchase price | $ 37.5 | |
General and administrative expense | ||
Business Acquisition [Line Items] | ||
Transaction costs | $ 1 |
MERGER AND ACQUISITIONS (Deta57
MERGER AND ACQUISITIONS (Detail Textuals 1) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | May. 05, 2014 | |
Business Acquisition [Line Items] | ||
Deferred tax asset and goodwill subject to subsequent measurement period adjustment | $ 200 | |
Omnilink Systems, Inc. | ||
Business Acquisition [Line Items] | ||
Accounts receivable, gross | $ 2,900 | |
Accounts receivable, net | $ 2,677 |
MERGER AND ACQUISITIONS (Deta58
MERGER AND ACQUISITIONS (Detail Textuals 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Acquisition [Line Items] | |||||||||||
Net sales contributed by Omnilink | $ 18,785 | $ 23,334 | $ 25,653 | $ 21,678 | $ 24,855 | $ 25,663 | $ 22,578 | $ 20,773 | $ 89,450 | $ 93,869 | $ 77,832 |
Omnilink Systems, Inc. | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Net sales contributed by Omnilink | 8,700 | ||||||||||
Adjustment for depreciation expense | (100) | (100) | |||||||||
Adjustment for amortization expense | 300 | 900 | |||||||||
Adjustment for interest expense | 100 | 600 | |||||||||
Adjustment for acquisition related costs | $ 1,000 | $ 1,000 |
MERGER AND ACQUISITIONS (Deta59
MERGER AND ACQUISITIONS (Detail Textuals 3) - USD ($) $ in Thousands | Dec. 02, 2013 | Feb. 01, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 02, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||||
Goodwill in connection with acquisition | $ 43,424 | $ 44,348 | ||||
Small Technology Company Of Bulk Storage Tanks | ||||||
Business Acquisition [Line Items] | ||||||
Total consideration | $ 2,800 | |||||
Cash paid | $ 200 | |||||
Gross amount of leases receivable | $ 275 | |||||
Amortization expense | less than $0.8 million | |||||
Goodwill in connection with acquisition | $ 1,612 | $ 1,600 | ||||
Small Technology Company Of Products And Services | ||||||
Business Acquisition [Line Items] | ||||||
Total consideration | $ 1,100 | |||||
Cash paid | $ 200 | |||||
Number of shares issuable upon acquisition | 73,587 | |||||
Fair value of shares issuable | $ 900 | |||||
Amortization expense | less than $0.8 million |
DISCONTINUED OPERATIONS - Summa
DISCONTINUED OPERATIONS - Summary of financial results of discontinued operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net loss from discontinued operations | $ 492 | $ 1,380 |
Discontinued operation | BNI Solutions, Inc. Digilog, Inc. and DCX Systems, Inc | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenues from discontinued operations | 207 | 1,163 |
Loss from discontinued operations before income taxes | (285) | (1,567) |
Income tax benefit | (127) | (187) |
Loss from discontinued operations, net of income taxes | (158) | $ (1,380) |
Loss on disposal of subsidiary included in discontinued operations | (309) | |
Loss on dissolution of subsidiaries included in discontinued operations | (25) | |
Net loss from discontinued operations | $ (492) | $ (1,380) |
FAIR VALE MEASUREMENTS - Assets
FAIR VALE MEASUREMENTS - Assets measured at fair value on nonrecurring basis (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Amortizing intangible assets | $ 22,868 | $ 22,868 | $ 25,269 | |
Goodwill and Intangible Asset Impairment | 1,400 | $ 1,200 | 2,712 | |
DIY | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Amortizing intangible assets | 446 | 446 | ||
Goodwill, Impairment Loss | 924 | |||
Omnilink Systems, Inc. | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Amortizing intangible assets | 660 | 660 | ||
Trade names | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill and Intangible Asset Impairment | 660 | |||
Trade names | Omnilink Systems, Inc. | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 682 | |||
Nonrecurring basis | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total nonrecurring fair value measurements | 10,353 | 10,353 | ||
Nonrecurring basis | DIY | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill | 1,656 | 1,656 | ||
Amortizing intangible assets | 825 | 825 | ||
Nonrecurring basis | Omnilink Systems, Inc. | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Indefinite-lived trade names | 2,972 | 2,972 | ||
Amortizing intangible assets | 4,900 | 4,900 | ||
Nonrecurring basis | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total nonrecurring fair value measurements | 10,353 | 10,353 | ||
Nonrecurring basis | Level 3 | DIY | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill | 1,656 | 1,656 | ||
Amortizing intangible assets | 825 | 825 | ||
Nonrecurring basis | Level 3 | Omnilink Systems, Inc. | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Indefinite-lived trade names | 2,972 | 2,972 | ||
Amortizing intangible assets | $ 4,900 | $ 4,900 |
FAIR VALE MEASUREMENTS (Detail
FAIR VALE MEASUREMENTS (Detail Textuals) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value Disclosures [Abstract] | ||
Assets measured at fair value on a recurring basis for investments in short-term US Treasury Funds | $ 15.5 | $ 17.2 |
ACCOUNTS RECEIVABLE - Accounts
ACCOUNTS RECEIVABLE - Accounts receivable and related allowance for doubtful accounts (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Receivables [Abstract] | ||
Accounts receivable | $ 9,218 | $ 12,543 |
Unbilled accounts receivable | 637 | 396 |
Allowance for doubtful accounts | (618) | (652) |
Accounts receivable, net | $ 9,237 | $ 12,287 |
FINANCING RECEIVABLES - Summary
FINANCING RECEIVABLES - Summary of components of lease receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Financing Receivable, Net [Abstract] | ||
Total minimum lease payments receivable | $ 4,266 | $ 4,785 |
Unearned income | (156) | (206) |
Present value of future minimum lease payments receivable | 4,110 | 4,579 |
Less current portion | (1,780) | (1,595) |
Amounts due after one year | $ 2,330 | $ 2,984 |
FINANCING RECEIVABLES - Summa65
FINANCING RECEIVABLES - Summary of future minimum lease payments (Details 1) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Financing Receivable, Net [Abstract] | ||
2,016 | $ 1,875 | |
2,017 | 1,460 | |
2,018 | 757 | |
2,019 | 173 | |
2,020 | 1 | |
Total future minimum lease payments | $ 4,266 | $ 4,785 |
FINANCING RECEIVABLES (Detail T
FINANCING RECEIVABLES (Detail Textuals) | 12 Months Ended |
Dec. 31, 2015 | |
Financing Receivable [Line Items] | |
Interest rate on receivables | 2.00% |
Period of nonpayment of financing receivable before it's placed in non-accrual status | 60 days |
Minimum | |
Financing Receivable [Line Items] | |
Sales lease term | 2 years |
Maximum | |
Financing Receivable [Line Items] | |
Sales lease term | 4 years |
INVENTORY - Summary of inventor
INVENTORY - Summary of inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,903 | $ 2,228 |
Finished goods | 8,420 | 7,579 |
Reserve for obsolescence | (2,706) | (1,397) |
Inventory, net | $ 7,617 | $ 8,410 |
PREPAID EXPENSES AND OTHER AS68
PREPAID EXPENSES AND OTHER ASSETS - Summary of prepaid expenses and other current assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 902 | $ 1,358 |
Deferred costs | 718 | 578 |
Other | 417 | 393 |
Prepaid expenses and other assets | $ 2,037 | $ 2,329 |
PREPAID EXPENSES AND OTHER AS69
PREPAID EXPENSES AND OTHER ASSETS - Summary of other noncurrent assets (Details 1) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Other Assets, Noncurrent Disclosure [Abstract] | ||
Deferred activation fees | $ 293 | $ 310 |
Deferred financing fees | 289 | 260 |
Deposits | 117 | 155 |
Prepaid carrier fees | 1,860 | |
Total other noncurrent assets | $ 699 | $ 2,585 |
PREPAID EXPENSES AND OTHER AS70
PREPAID EXPENSES AND OTHER ASSETS (Detail Textuals) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | |
Other Assets, Noncurrent Disclosure [Abstract] | |||
Fair value of equipment | $ 2,200 | ||
Total consideration from agreement with vendor | $ 1,200 | ||
cash consideration from agreement with vendor | $ 500 | ||
Share issued in agreement with vendor | 30,000 | ||
Share issued in transaction with vendor, amount | $ 300 | ||
Prepayment to license additional network access | 400 | ||
Written off in cost of sales | $ 1,300 | $ 1,300 | $ 1,275 |
PROPERTY AND EQUIPMENT - Summar
PROPERTY AND EQUIPMENT - Summary of property and equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 11,427 | $ 8,704 |
Accumulated depreciation and amortization | (6,632) | (3,815) |
Property and equipment, net | 4,795 | 4,889 |
Computer, network and other equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 7,150 | 5,925 |
Accumulated depreciation and amortization | (400) | |
Monitoring equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 3,015 | 1,705 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 888 | 746 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 374 | $ 328 |
PROPERTY AND EQUIPMENT (Detail
PROPERTY AND EQUIPMENT (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $ 8,217 | $ 6,812 | $ 5,119 |
Accumulated depreciation and amortization | 6,632 | 3,815 | |
Monitoring equipment | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | 800 | 300 | 100 |
Property and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $ 2,000 | 1,600 | $ 1,100 |
Computer, network and other equipment | |||
Property, Plant and Equipment [Line Items] | |||
Capital leases | 700 | ||
Accumulated depreciation and amortization | $ 400 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | |||
Impairment | $ (1,400) | $ (1,200) | $ (2,712) |
Patents | |||
Business Acquisition [Line Items] | |||
January 1, 2015 | 748 | ||
Impairment | (325) | ||
December 31, 2015 | 423 | 423 | |
Patents | DIY | |||
Business Acquisition [Line Items] | |||
Impairment | (325) | ||
Customer relationships | |||
Business Acquisition [Line Items] | |||
January 1, 2015 | 1,241 | ||
Impairment | (121) | ||
December 31, 2015 | 1,120 | 1,120 | |
Customer relationships | DIY | |||
Business Acquisition [Line Items] | |||
Impairment | (121) | ||
Technologies | |||
Business Acquisition [Line Items] | |||
January 1, 2015 | 4,998 | ||
Impairment | (682) | ||
December 31, 2015 | 4,316 | 4,316 | |
Goodwill | |||
Business Acquisition [Line Items] | |||
January 1, 2015 | 2,580 | ||
Impairment | (924) | ||
December 31, 2015 | 1,656 | 1,656 | |
Goodwill | DIY | |||
Business Acquisition [Line Items] | |||
Impairment | $ (924) | ||
Trade names | |||
Business Acquisition [Line Items] | |||
January 1, 2015 | 3,632 | ||
Impairment | (660) | ||
December 31, 2015 | $ 2,972 | $ 2,972 |
INTANGIBLE ASSETS - Summary of
INTANGIBLE ASSETS - Summary of Intangible assets other than goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Intangible Assets Other Than Goodwill [Line Items] | ||
Gross Carrying Amount | $ 49,555 | $ 46,817 |
Accumulated Amortization | (26,687) | (21,548) |
Net Book Value | $ 22,868 | 25,269 |
Purchased and developed software | ||
Intangible Assets Other Than Goodwill [Line Items] | ||
Remaining Useful Lives | 1 year 3 months 18 days | |
Gross Carrying Amount | $ 15,399 | 11,176 |
Accumulated Amortization | (9,503) | (6,409) |
Net Book Value | 5,896 | 4,767 |
Software in development | ||
Intangible Assets Other Than Goodwill [Line Items] | ||
Gross Carrying Amount | $ 1,250 | 2,618 |
Accumulated Amortization | ||
Net Book Value | $ 1,250 | 2,618 |
Software | ||
Intangible Assets Other Than Goodwill [Line Items] | ||
Gross Carrying Amount | 16,649 | 13,794 |
Accumulated Amortization | (9,503) | (6,409) |
Net Book Value | $ 7,146 | 7,385 |
Licenses | ||
Intangible Assets Other Than Goodwill [Line Items] | ||
Remaining Useful Lives | 5 months 19 days | |
Gross Carrying Amount | $ 13,215 | 12,763 |
Accumulated Amortization | (12,167) | (11,886) |
Net Book Value | $ 1,048 | 877 |
Customer relationships | ||
Intangible Assets Other Than Goodwill [Line Items] | ||
Remaining Useful Lives | 7 years 6 months 22 days | |
Gross Carrying Amount | $ 8,167 | 8,287 |
Accumulated Amortization | (2,285) | (1,359) |
Net Book Value | $ 5,882 | 6,928 |
Technologies | ||
Intangible Assets Other Than Goodwill [Line Items] | ||
Remaining Useful Lives | 12 years 4 months 2 days | |
Gross Carrying Amount | $ 4,316 | 4,998 |
Accumulated Amortization | (595) | (237) |
Net Book Value | $ 3,721 | 4,761 |
Patents and trademarks | ||
Intangible Assets Other Than Goodwill [Line Items] | ||
Remaining Useful Lives | 2 years 9 months 22 days | |
Gross Carrying Amount | $ 4,236 | 3,343 |
Accumulated Amortization | (2,137) | (1,657) |
Net Book Value | $ 2,099 | 1,686 |
Trade names | ||
Intangible Assets Other Than Goodwill [Line Items] | ||
Remaining Useful Lives | Indefinite | |
Gross Carrying Amount | $ 2,972 | 3,632 |
Accumulated Amortization | ||
Net Book Value | $ 2,972 | 3,632 |
Total other intangibles assets | ||
Intangible Assets Other Than Goodwill [Line Items] | ||
Gross Carrying Amount | 32,906 | 33,023 |
Accumulated Amortization | (17,184) | (15,139) |
Net Book Value | $ 15,722 | $ 17,884 |
INTANGIBLE ASSETS - Summary o75
INTANGIBLE ASSETS - Summary of amortization expense for next five year (Details 1) $ in Thousands | Dec. 31, 2015USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,016 | $ 5,315 |
2,017 | 4,117 |
2,018 | 3,053 |
2,019 | 1,779 |
2,020 | 1,582 |
Thereafter | 2,800 |
Total amortization expense | $ 18,646 |
INTANGIBLE ASSETS - Summary o76
INTANGIBLE ASSETS - Summary of carrying amount of goodwill (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | ||||
Beginning year | $ 44,348 | |||
Impairment | $ (1,400) | $ (1,200) | (2,712) | |
Ending year | 43,424 | 43,424 | $ 44,348 | |
Goodwill | ||||
Goodwill [Roll Forward] | ||||
Beginning year | 44,548 | 26,941 | ||
Measurement period adjustment | 89 | |||
Acquisition | 17,318 | |||
Impairment | (924) | |||
Ending year | 43,424 | 43,424 | 44,548 | |
Trade names | ||||
Goodwill [Roll Forward] | ||||
Beginning year | 3,632 | |||
Acquisition | 3,632 | |||
Impairment | (660) | |||
Ending year | $ 2,972 | $ 2,972 | $ 3,632 |
INTANGIBLE ASSETS (Detail Textu
INTANGIBLE ASSETS (Detail Textuals) - USD ($) $ in Thousands | Oct. 01, 2015 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||||
Impairment charges for goodwill and other intangible assets | $ 1,400 | $ 1,200 | $ 2,712 | |||
Amortization of intangible assets and software | 5,100 | $ 4,600 | $ 3,800 | |||
Amortization of intangible assets recorded in cost of subscription revenue | 300 | 200 | 200 | |||
Capitalized internal software development costs | 2,200 | 2,200 | 2,000 | |||
Amortization of capitalized software development costs | 1,700 | 1,400 | $ 1,100 | |||
Goodwill gross | 48,700 | 48,700 | 48,700 | |||
Accumulated impairment losses | 5,300 | 5,300 | $ 4,400 | |||
Patents | ||||||
Business Acquisition [Line Items] | ||||||
Impairment charges for goodwill and other intangible assets | 325 | |||||
Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Impairment charges for goodwill and other intangible assets | 121 | |||||
Technologies | ||||||
Business Acquisition [Line Items] | ||||||
Impairment charges for goodwill and other intangible assets | 682 | |||||
Goodwill | ||||||
Business Acquisition [Line Items] | ||||||
Impairment charges for goodwill and other intangible assets | 924 | |||||
Trade names | ||||||
Business Acquisition [Line Items] | ||||||
Impairment charges for goodwill and other intangible assets | 660 | |||||
DIY | ||||||
Business Acquisition [Line Items] | ||||||
Amortization of intangible assets and software | 446 | |||||
DIY | Patents | ||||||
Business Acquisition [Line Items] | ||||||
Impairment charges for goodwill and other intangible assets | 300 | 325 | ||||
DIY | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Impairment charges for goodwill and other intangible assets | $ 100 | 121 | ||||
DIY | Goodwill | ||||||
Business Acquisition [Line Items] | ||||||
Impairment charges for goodwill and other intangible assets | $ 900 | 924 | ||||
Omnilink Systems, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Amortization of intangible assets and software | 660 | |||||
Omnilink Systems, Inc. | Technologies | ||||||
Business Acquisition [Line Items] | ||||||
Impairment charges for goodwill and other intangible assets | $ 700 | 682 | ||||
Omnilink Systems, Inc. | Trade names | ||||||
Business Acquisition [Line Items] | ||||||
Impairment charges for goodwill and other intangible assets | $ 700 | $ 660 |
INCOME TAXES - Summary of compo
INCOME TAXES - Summary of components of (benefit) provision for income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||||||||||
Federal | $ (31) | $ 73 | $ (183) | ||||||||
State | 13 | 38 | 22 | ||||||||
Reserve | (36) | (57) | (80) | ||||||||
Deferred: | |||||||||||
Federal | 9,142 | 546 | (2,033) | ||||||||
State | 814 | (181) | (95) | ||||||||
Income tax benefit | $ (257) | $ 10,404 | $ 141 | $ (386) | $ 136 | $ 358 | $ (670) | $ 595 | $ 9,902 | $ 419 | $ (2,369) |
INCOME TAXES - Summary of recon
INCOME TAXES - Summary of reconciliation of income tax (benefit) provision (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||||||||||
Income tax expense (benefit) computed at U.S. corporate tax rate of 34% | $ (3,147) | $ 903 | $ (137) | ||||||||
Adjustments attributable to: | |||||||||||
Valuation allowance | 13,053 | 1,077 | (1,893) | ||||||||
Income tax payable adjustments | (71) | ||||||||||
State income tax | 13 | 24 | (73) | ||||||||
Reserve for uncertain tax positions | (36) | (57) | (80) | ||||||||
Non-deductible expenses | 19 | (1,575) | (97) | ||||||||
Other | 47 | (18) | |||||||||
Income tax benefit | $ (257) | $ 10,404 | $ 141 | $ (386) | $ 136 | $ 358 | $ (670) | $ 595 | $ 9,902 | $ 419 | $ (2,369) |
INCOME TAXES - Summary of rec80
INCOME TAXES - Summary of reconciliation of income tax (benefit) provision (Parentheticals) (Details 1) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
U.S. corporate tax rate | 34.00% |
INCOME TAXES - Summary of com81
INCOME TAXES - Summary of components of our net deferred tax assets and liabilities (Details 2) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Inventories | $ 1,005 | $ 549 |
Accruals | 839 | 417 |
Other current deferred tax assets | 88 | 495 |
Equity-based compensation | 2,970 | 2,030 |
Federal, state and foreign net operating loss carry forwards | 13,677 | 11,074 |
Tax credit carry forward | 1,284 | 1,323 |
Deferred Revenue | 23 | |
Valuation allowance | (16,417) | (3,108) |
Net deferred tax assets | 3,469 | 12,780 |
Deferred tax liabilities: | ||
Difference between book and tax basis of property | (191) | (305) |
Intangible assets | (4,270) | (3,498) |
Deferred tax liabilities, net | (4,461) | (3,803) |
Net deferred tax (liabilities) assets | $ (992) | $ 8,977 |
INCOME TAXES - Summary of net o
INCOME TAXES - Summary of net operating loss carry forwards (Details 3) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Alternative Minimum Tax | |
Operating Loss Carryforwards [Line Items] | |
Credit carry forward - Amount | $ 771 |
General Business | |
Operating Loss Carryforwards [Line Items] | |
Credit carry forward - Amount | $ 513 |
General Business | Minimum | |
Operating Loss Carryforwards [Line Items] | |
Credit carry forward - Year of Expiration | 2,018 |
General Business | Maximum | |
Operating Loss Carryforwards [Line Items] | |
Credit carry forward - Year of Expiration | 2,031 |
Federal | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses - Amount | $ 28,198 |
Federal | Minimum | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses - Year of Expiration | 2,023 |
Federal | Maximum | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses - Year of Expiration | 2,036 |
State | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses - Amount | $ 62,212 |
State | Minimum | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses - Year of Expiration | 2,016 |
State | Maximum | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses - Year of Expiration | 2,036 |
INCOME TAXES - Activity related
INCOME TAXES - Activity related to unrecognized tax benefits, net of federal benefit, and excludes interest and penalties (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at January 1 | $ 54 | $ 102 |
Decreases as a result of positions taken during prior periods | (29) | (48) |
Balance at December 31 | $ 25 | $ 54 |
INCOME TAXES (Detail textuals)
INCOME TAXES (Detail textuals) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||||||||||
Income tax expense (benefit) | $ (257) | $ 10,404 | $ 141 | $ (386) | $ 136 | $ 358 | $ (670) | $ 595 | $ 9,902 | $ 419 | $ (2,369) |
Deferred tax benefit | 9,956 | 365 | $ (2,128) | ||||||||
Valuation allowance increased due to a capital loss carryforward | $ 1,300 | $ 1,300 | |||||||||
Net decrease to liability for unrecognized tax benefits | (100) | ||||||||||
Total unrecognized tax benefits including estimated penalties and interest | $ 100 | $ 100 |
OTHER LIABILITIES - Summary of
OTHER LIABILITIES - Summary of other current liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Other Liabilities Disclosure [Abstract] | ||
Payroll related | $ 898 | $ 696 |
Accrued expenses | 1,966 | 1,775 |
Other current liabilities, total | $ 2,864 | $ 2,471 |
OTHER LIABILITIES - Summary o86
OTHER LIABILITIES - Summary of other noncurrent liabilities (Details 1) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Other Liabilities Disclosure [Abstract] | ||
Deferred revenue | $ 993 | $ 414 |
Deferred rent | 863 | 932 |
Other | 35 | |
Other noncurrent liabilities, total | $ 1,891 | $ 1,346 |
DEBT - Summary of debt (Details
DEBT - Summary of debt (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Term loan | $ 19,349 | $ 23,601 |
Less current portion of long-term debt | 3,750 | 4,251 |
Noncurrent portion of long-term debt | 15,599 | 19,350 |
Note payable to Silicon Valley Bank, with interest at our option of prime rate or LIBOR rate plus margin | ||
Debt Instrument [Line Items] | ||
Term loan | $ 19,349 | 23,125 |
Seller financed note payable, with interest at 4.25%, monthly payments of principal and interest, secured by equipment, due September 2015 | ||
Debt Instrument [Line Items] | ||
Term loan | $ 476 |
DEBT - Summary of debt (Parenth
DEBT - Summary of debt (Parentheticals) (Details) | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
Interest rate of seller financed note payable | 4.25% |
DEBT - Summary of loan agreemen
DEBT - Summary of loan agreement principal repayment (Details 1) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
June 2014 - March 2015 | |
Debt Instrument [Line Items] | |
Quarterly | $ 625,000 |
Annually | 2,500,000 |
June 2015 - March 2016 | |
Debt Instrument [Line Items] | |
Quarterly | 937,500 |
Annually | 3,750,000 |
June 2016 - March 2017 | |
Debt Instrument [Line Items] | |
Quarterly | 937,500 |
Annually | 3,750,000 |
June 2017 - March 2018 | |
Debt Instrument [Line Items] | |
Quarterly | 1,250,000 |
Annually | 5,000,000 |
June 2018 - March 2019 | |
Debt Instrument [Line Items] | |
Quarterly | 1,250,000 |
Annually | $ 5,000,000 |
Outstanding balance due May 2019 | |
Debt Instrument [Line Items] | |
Quarterly | |
Annually | $ 5,000,000 |
DEBT - Summary of future maturi
DEBT - Summary of future maturities (Details 2) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
2,016 | $ 3,750 | |
2,017 | 4,687 | |
2,018 | 5,000 | |
2,019 | 5,912 | |
Long-term debt, total | $ 19,349 | $ 23,601 |
DEBT (Detail Textuals)
DEBT (Detail Textuals) - USD ($) | Mar. 09, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Outstanding unused letters of credit | $ 200,000 | |
Outstanding balance due May 2019 | ||
Debt Instrument [Line Items] | ||
Amount of remaining principal | 5,000,000 | |
Silicon Valley Bank | Term Loan | ||
Debt Instrument [Line Items] | ||
Original loan amount | $ 25,000,000 | |
Maturity debt description | The maturity date of the loan was May 5, 2019 with regular required quarterly principal payments which began June 30, 2014 | |
Interest rate applicable to amounts drawn | 2.75% | |
Silicon Valley Bank | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Original loan amount | $ 5,000,000 | |
Silicon Valley Bank | Subsequent event | Term Loan | ||
Debt Instrument [Line Items] | ||
Cash used in repayment of outstanding debt | $ 2,900,000 |
DEBT (Detail Textuals 1)
DEBT (Detail Textuals 1) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Oct. 31, 2012 | Dec. 31, 2015 | |
Promissory Note | ||
Debt Instrument [Line Items] | ||
Outstanding amount of promissory note | ||
Small technology company | ||
Debt Instrument [Line Items] | ||
Promissory note payable | $ 1.9 | |
Interest rate spread over prime rate | 1.00% | |
Interest rate minimum percentage | 4.25% |
LEASES, COMMITMENTS AND CONTI93
LEASES, COMMITMENTS AND CONTINGENCIES - Summary of future minimum lease payments under such non-cancelable operating leases (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Lease contract | Property and equipment | |
Operating Leased Assets [Line Items] | |
2,016 | $ 1,763 |
2,017 | 1,635 |
2,018 | 1,489 |
2,019 | 1,233 |
2,020 | 1,173 |
Thereafter | 2,031 |
Future minimum lease payments | 9,324 |
Sub lease contract | Office space | |
Operating Leased Assets [Line Items] | |
2,016 | 183 |
2,017 | 225 |
2,018 | 231 |
2,019 | 238 |
2,020 | 245 |
Thereafter | 448 |
Future minimum lease payments | $ 1,570 |
LEASES, COMMITMENTS AND CONTI94
LEASES, COMMITMENTS AND CONTINGENCIES (Detail Textuals) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Leased Assets [Line Items] | |||
Open purchase commitments | $ 3.4 | ||
Office space | Sub lease contract | |||
Operating Leased Assets [Line Items] | |||
Lease expiration date | Dec. 31, 2022 | ||
Threshold limit of escalation clause | 3.00% | ||
Description of lease terms | One of our subleases has an escalation clause of 3% annually. | ||
Office space | Sub lease contract | General and Administrative Expense [Member] | |||
Operating Leased Assets [Line Items] | |||
Losses on sublease contract | $ 0.1 | ||
Property and equipment | Lease contract | |||
Operating Leased Assets [Line Items] | |||
Lease expiration date | Dec. 31, 2022 | ||
Threshold limit of escalation clause | 2.50% | ||
Description of lease terms | our leases for office space have annual periods of free rent and escalation clauses of up to 2.5% or $1.00 per square foot. The leases also have options to renew for 60-65 months at the end of their terms. | ||
Rent expense | $ 1.7 | $ 1.6 | $ 1.3 |
Property and equipment | Minimum | Lease contract | |||
Operating Leased Assets [Line Items] | |||
Lease renew period | 60 months | ||
Property and equipment | Maximum | Lease contract | |||
Operating Leased Assets [Line Items] | |||
Lease renew period | 65 months | ||
Computer and network equipment | |||
Operating Leased Assets [Line Items] | |||
Lease expiration date | Dec. 31, 2015 | ||
Value of sale leaseback asset | $ 0.7 |
EQUITY-BASED COMPENSATION - Sum
EQUITY-BASED COMPENSATION - Summary of assumptions to estimate the grant date fair value of stock options and SARs (Details) - Stock Option And Stock Appreciation Rights | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 43.00% | 57.80% | 67.50% |
Expected term (in years) | 5 years 6 months | 6 years 2 months 12 days | 6 years 3 months 18 days |
Risk-free rate | 1.65% | 1.88% | 1.52% |
Dividend yield | 0.00% | 0.00% | 0.00% |
EQUITY-BASED COMPENSATION - S96
EQUITY-BASED COMPENSATION - Summary of stock option and SAR activity (Details 1) - Stock Option And Stock Appreciation Rights - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Shares | |||
Outstanding, January 1, 2015 | 1,332 | ||
Granted | 688 | ||
Exercised | (56) | (270) | (433) |
Forfeited or expired | (435) | ||
Outstanding, at December 31, 2015 | 1,529 | 1,332 | |
Exercisable at December 31, 2015 | 819 | ||
Weighted Average Exercise Price | |||
Outstanding, January 1, 2015 | $ 8.93 | ||
Granted | 8.35 | ||
Exercised | 5.37 | ||
Forfeited or expired | 9.31 | ||
Outstanding, at December 31, 2015 | 8.69 | $ 8.93 | |
Exercisable at December 31, 2015 | $ 7.95 |
EQUITY-BASED COMPENSATION - S97
EQUITY-BASED COMPENSATION - Summary of stock options and SARs (Details 2) - Stock Option And Stock Appreciation Rights - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total shares, Outstanding | 1,529 | 1,332 |
Aggregate intrinsic value, Outstanding | $ 670 | |
Weighted-average remaining contractual term (years), Outstanding | 6 years 7 months 2 days | |
Total shares, Exercisable | 819 | |
Aggregate intrinsic value, Exercisable | $ 670 | |
Weighted-average remaining contractual term (years), Exercisable | 4 years 6 months |
EQUITY-BASED COMPENSATION - S98
EQUITY-BASED COMPENSATION - Summary of Stock option and SAR exercise data (Details 3) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cash received | $ 283 | $ 867 | $ 338 |
Stock Option And Stock Appreciation Rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options and SARs exercised | 56 | 270 | 433 |
Net shares issued | 51 | 214 | 199 |
Total intrinsic value exercised | $ 195 | $ 1,533 | $ 2,552 |
Cash received | 254 | 931 | 338 |
Recognized tax benefit | $ 96 | $ 1,300 | $ 2,208 |
EQUITY-BASED COMPENSATION - S99
EQUITY-BASED COMPENSATION - Summary of Non-vested restricted stock award activity (Details 4) - Non-vested restricted stock shares in Thousands | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Shares | |
Outstanding, as of January 1, 2015 | shares | 488 |
Granted | shares | 439 |
Vested | shares | (192) |
Forfeited | shares | (197) |
Outstanding, as of December 31, 2015 | shares | 538 |
Weighted Average Grant Date Fair Value | |
Outstanding, as of January 1, 2015 | $ / shares | $ 11.19 |
Granted | $ / shares | 8.75 |
Vested | $ / shares | 10.51 |
Forfeited | $ / shares | 10.78 |
Outstanding, as of December 31, 2015 | $ / shares | $ 9.59 |
EQUITY-BASED COMPENSATION (Deta
EQUITY-BASED COMPENSATION (Detail Textuals) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)Planshares | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | $ | $ 2.7 | $ 2.6 | $ 1.9 |
Number of shareholder approved plans | Plan | 3 | ||
2014 Stock and Incentive Plan (2014 Plan) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares reserved for issuance | shares | 6.3 | ||
2014 Stock and Incentive Plan (2014 Plan) | Non-vested restricted stock | Employee | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
2014 Stock and Incentive Plan (2014 Plan) | Non-vested restricted stock | Non-employee director | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
2014 Stock and Incentive Plan (2014 Plan) | Stock Option And Stock Appreciation Rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Continuous service contractual term | 10 years | ||
Method used for estimation of fair value of stock options and SARs | Black-Scholes option pricing model |
EQUITY-BASED COMPENSATION (D101
EQUITY-BASED COMPENSATION (Detail Textuals 1) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of options | 4 years | ||
Stock Option And Stock Appreciation Rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of stock options and SARs outstanding | 352,500 | ||
Number of stock options and SARs outstanding and exercisable | 93,750 | ||
Weighted average grant-date fair value | $ 3.04 | $ 6.45 | $ 6.28 |
EQUITY-BASED COMPENSATION (D102
EQUITY-BASED COMPENSATION (Detail Textuals 2) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
2014 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares remain available for grant | 2.3 | ||
Total unrecognized compensation costs | $ 5.8 | ||
Weighted-average recognition period | 1 year 8 months 12 days | ||
Non-vested restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of non-vested restricted shares vested in period | $ 2 | $ 1.1 | $ 0.5 |
OTHER (INCOME) EXPENSE, NET (De
OTHER (INCOME) EXPENSE, NET (Detail Textuals) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Cost-method Investments [Line Items] | |||
Interest on finance receivables | $ 0.1 | ||
UK based privately held businesses | |||
Schedule of Cost-method Investments [Line Items] | |||
Pre-tax gain on sale of cost method investment | $ 1.1 | $ 0.3 | |
Carrying value of investment | 0.2 | 0.3 | |
Proceeds from sale of cost basis investment | $ 1.3 | $ 0.6 |
SIGNIFICANT CUSTOMER, CONCEN104
SIGNIFICANT CUSTOMER, CONCENTRATION OF CREDIT RISK AND RELATED PARTIES (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Concentration Risk [Line Items] | |||
Accounts receivable from customer | $ 9,237 | $ 12,287 | |
Revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 100.00% | 100.00% | 100.00% |
Customer Concentration Risk | Revenue | Customer one | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 14.30% | 14.40% | 11.10% |
Revenue accounted by customer | $ 12,800 | $ 13,500 | $ 8,700 |
Customer Concentration Risk | Accounts receivable | Customer one | |||
Concentration Risk [Line Items] | |||
Accounts receivable from customer | $ 400 | $ 1,600 |
SIGNIFICANT CUSTOMER, CONCEN105
SIGNIFICANT CUSTOMER, CONCENTRATION OF CREDIT RISK AND RELATED PARTIES (Detail Textuals 1) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)Suppliers | Dec. 31, 2014USD ($)Suppliers | Dec. 31, 2013Suppliers | |
Concentration Risk [Line Items] | |||
Accounts payable | $ | $ 11,390 | $ 12,257 | |
Supplier Concentration Risk | Hardware cost of sales | |||
Concentration Risk [Line Items] | |||
Number of suppliers | Suppliers | 4 | 4 | 3 |
Cost of sales percentage | 82.00% | 72.00% | 72.00% |
Supplier Concentration Risk | Service cost of sales | |||
Concentration Risk [Line Items] | |||
Number of suppliers | Suppliers | 4 | 4 | 2 |
Cost of sales percentage | 70.00% | 68.00% | 55.00% |
Supplier Concentration Risk | Accounts Payable | |||
Concentration Risk [Line Items] | |||
Accounts payable | $ | $ 4,200 | $ 5,300 |
SIGNIFICANT CUSTOMER, CONCEN106
SIGNIFICANT CUSTOMER, CONCENTRATION OF CREDIT RISK AND RELATED PARTIES (Detail Textuals 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | |||
Accounts payable | $ 11,390,000 | $ 12,257,000 | |
Salisbury & Ryan LLP | |||
Related Party Transaction [Line Items] | |||
Legal fees | 429,000 | 290,000 | $ 224,000 |
Accounts payable | 7,000 | 41,000 | |
Family member of chairman and CEO | |||
Related Party Transaction [Line Items] | |||
Fees invoiced for marketing services | $ 58,000 | $ 80,000 | $ 80,000 |
BENEFIT PLAN (Detail Textuals)
BENEFIT PLAN (Detail Textuals) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Compensation and Retirement Disclosure [Abstract] | |||
Employer contribution percentage | 50.00% | ||
Contribution percentage of employee's total compensation | 6.00% | ||
Contributions vesting period | 3 years | ||
Contributions vesting percentage | 33.00% | ||
Expense recognized | $ 0.4 | $ 0.3 | $ 0.3 |
EARNINGS PER SHARE - Number Of
EARNINGS PER SHARE - Number Of Common Shares Used As Denominator (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share [Abstract] | |||||||||||
(Loss) income from continuing operations | $ (2,426) | $ (16,380) | $ 269 | $ (620) | $ 601 | $ 263 | $ 226 | $ 1,146 | $ (19,157) | $ 2,236 | $ 1,965 |
(Loss) income from discontinued operations | (436) | (56) | (492) | (1,380) | |||||||
Net (loss) income | $ (2,426) | $ (16,380) | $ 269 | $ (620) | $ 601 | $ 263 | $ (210) | $ 1,090 | $ (19,157) | $ 1,744 | $ 585 |
Common Shares: | |||||||||||
Weighted average common shares outstanding (in shares) | 19,117 | 18,922 | 18,413 | ||||||||
Dilutive effect of common stock equivalents | 346 | 537 | |||||||||
Total | 19,117 | 19,268 | 18,950 | ||||||||
Basic (loss) earnings per share: | |||||||||||
(Loss) income from continuing operations | $ 0.03 | $ 0.01 | $ 0.01 | $ 0.06 | $ (1) | $ 0.12 | $ 0.11 | ||||
Loss from discontinued operations (in dollars per share) | (0.02) | (0.03) | (0.08) | ||||||||
Net income (in dollars per share) | $ (0.13) | $ (0.86) | $ 0.01 | $ (0.03) | $ 0.03 | $ 0.01 | (0.01) | $ 0.06 | (1) | 0.09 | 0.03 |
Diluted (loss) earnings per share: | |||||||||||
(Loss) income from continuing operations | $ 0.03 | $ 0.01 | 0.01 | $ 0.06 | (1) | 0.12 | 0.10 | ||||
Loss from discontinued operations (in dollars per share) | (0.02) | (0.03) | (0.07) | ||||||||
Net (loss) income (in dollars per share) | $ (0.13) | $ (0.86) | $ 0.01 | $ (0.03) | $ 0.03 | $ 0.01 | $ (0.01) | $ 0.06 | $ (1) | $ 0.09 | $ 0.03 |
EARNINGS PER SHARE (Detail Text
EARNINGS PER SHARE (Detail Textuals) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share [Abstract] | |||
Anti-dilutive shares excluded from diluted earning per share | 1.5 | 0.8 | 0.5 |
SEGMENT INFORMATION - Revenue G
SEGMENT INFORMATION - Revenue Generated From Customers Based Outside Of The U.S (Details) - Revenue | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue generated by external customers in foreign countries, percentage | 100.00% | 100.00% | 100.00% |
U.S. | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue generated by external customers in foreign countries, percentage | 96.00% | 94.00% | 94.00% |
Canada | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue generated by external customers in foreign countries, percentage | 3.00% | 4.00% | 4.00% |
Others | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue generated by external customers in foreign countries, percentage | 1.00% | 2.00% | 2.00% |
SEGMENT INFORMATION (Detail Tex
SEGMENT INFORMATION (Detail Textuals) | Dec. 31, 2015 | Dec. 31, 2014 |
Segment Reporting [Abstract] | ||
Long-lived assets located outside of the U.S. | 1.00% | 1.00% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event - Crystal Loan Agreement $ in Thousands | Mar. 11, 2016USD ($) |
Subsequent Event [Line Items] | |
2,017 | $ 1,275 |
2,018 | 2,550 |
2,019 | 2,550 |
2,020 | 10,625 |
Total | $ 17,000 |
SUBSEQUENT EVENTS (Detail Textu
SUBSEQUENT EVENTS (Detail Textuals 1) - USD ($) | Mar. 09, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Subsequent Event [Line Items] | |||
Term loan | $ 19,349,000 | $ 23,601,000 | |
Silicon Valley Bank | Term Loan | Subsequent event | |||
Subsequent Event [Line Items] | |||
Term loan | $ 17,000,000 | ||
Repayments of Long-term Debt | 2,900,000 | ||
Proceeds from loan | 17,000,000 | ||
Loan outstanding amount | 19,400,000 | ||
Amortization of financing costs | $ 300,000 | ||
Maturity date | Mar. 9, 2020 | ||
Regular principal payment obligation | $ 637,500 | ||
Prepayment penalty if prepayment occurs prior to first anniversary | 3.00% | ||
Prepayment penalty if prepayment occurs after to first anniversary | 2.00% | ||
Frequency for loan payment | quarterly | ||
Variable rate applied to loan | LIBOR plus a margin established in the agreement | ||
Calculated variable rate for the period | 9.10% |
SUBSEQUENT EVENTS (Detail Te114
SUBSEQUENT EVENTS (Detail Textuals 2) - Sub lease contract - Office Building [Member] | 12 Months Ended |
Dec. 31, 2015 | |
Debt Instrument [Line Items] | |
Lease Expiration Date | Dec. 31, 2022 |
Threshold limit of escalation clause | 3.00% |
UNAUDITED SELECTED QUARTERLY115
UNAUDITED SELECTED QUARTERLY DATA - Summarize selected unaudited financial data for each quarter of years (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net revenues | $ 18,785 | $ 23,334 | $ 25,653 | $ 21,678 | $ 24,855 | $ 25,663 | $ 22,578 | $ 20,773 | $ 89,450 | $ 93,869 | $ 77,832 |
Gross profit | 9,909 | 7,286 | 11,140 | 10,106 | 11,415 | 11,287 | 10,722 | 9,840 | 38,441 | 43,264 | 32,140 |
Operating earnings (loss) | (2,513) | (5,819) | 583 | (834) | 903 | 802 | (252) | 662 | (8,583) | 2,115 | (419) |
(Loss) income before income taxes | (2,683) | (5,976) | 410 | (1,006) | 737 | 621 | (444) | 1,741 | |||
Income tax expense (benefit) | (257) | 10,404 | 141 | (386) | 136 | 358 | (670) | 595 | 9,902 | 419 | (2,369) |
Income from continuing operations, net of income taxes | (2,426) | (16,380) | 269 | (620) | $ 601 | $ 263 | 226 | 1,146 | (19,157) | 2,236 | 1,965 |
(Loss) income from discontinued operations | (436) | (56) | (492) | (1,380) | |||||||
Net income (loss) | $ (2,426) | $ (16,380) | $ 269 | $ (620) | $ 601 | $ 263 | $ (210) | $ 1,090 | $ (19,157) | $ 1,744 | $ 585 |
Basic earnings (loss) per share: | |||||||||||
(Loss) income from continuing operations (in dollars per share) | $ 0.03 | $ 0.01 | $ 0.01 | $ 0.06 | $ (1) | $ 0.12 | $ 0.11 | ||||
Income (loss) from discontinued operations (in dollars per share) | (0.02) | (0.03) | (0.08) | ||||||||
Net income (in dollars per share) | $ (0.13) | $ (0.86) | $ 0.01 | $ (0.03) | $ 0.03 | $ 0.01 | (0.01) | $ 0.06 | (1) | 0.09 | 0.03 |
Diluted earnings (loss) per share | |||||||||||
(Loss) income from continuing operations (in dollars per share) | $ 0.03 | $ 0.01 | 0.01 | $ 0.06 | (1) | 0.12 | 0.10 | ||||
Income (loss) from discontinued operations (in dollars per share) | (0.02) | (0.03) | (0.07) | ||||||||
Net income (loss) (in dollars per share) | $ (0.13) | $ (0.86) | $ 0.01 | $ (0.03) | $ 0.03 | $ 0.01 | $ (0.01) | $ 0.06 | $ (1) | $ 0.09 | $ 0.03 |
UNAUDITED SELECTED QUARTERLY116
UNAUDITED SELECTED QUARTERLY DATA (Detail Textuals) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||
Noncash impairment charges for other assets | $ 1,300 | $ 1,300 | $ 1,275 | |||
Impairment charges for goodwill and other intangible assets | $ 1,400 | $ 1,200 | 2,712 | |||
Deferred income taxes | $ 9,956 | $ 365 | $ (2,128) |
VALUATION AND QUALIFYING ACC117
VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Accounts and financing receivables Allowance for uncollectible accounts | Continuing operations | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of Period | $ 652 | $ 380 | $ 344 | |
Additions charged to expense | 562 | 392 | 444 | |
Deductions | [1] | (596) | (120) | (408) |
Balance at end of Period | $ 618 | 652 | 380 | |
Accounts and financing receivables Allowance for uncollectible accounts | Discontinued operation | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of Period | $ 600 | 16 | ||
Additions charged to expense | 602 | |||
Deductions | [2] | $ (600) | (18) | |
Balance at end of Period | 600 | |||
Inventory Reserve for obsolescence | Continuing operations | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of Period | $ 1,397 | $ 1,110 | 332 | |
Additions charged to expense | 1,343 | 544 | 807 | |
Deductions | (34) | (257) | (29) | |
Balance at end of Period | $ 2,706 | 1,397 | 1,110 | |
Inventory Reserve for obsolescence | Discontinued operation | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of Period | $ 30 | $ 30 | ||
Additions charged to expense | ||||
Deductions | $ (30) | |||
Balance at end of Period | $ 30 | |||
Deferred tax assets Valuation allowance | Continuing operations | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of Period | $ 3,108 | $ 1,545 | $ 1,650 | |
Additions charged to expense | $ 13,309 | $ 1,563 | ||
Deductions | $ (105) | |||
Balance at end of Period | $ 16,417 | $ 3,108 | 1,545 | |
Deferred tax assets Valuation allowance | Discontinued operation | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of Period | $ 462 | 460 | ||
Additions charged to expense | 2 | |||
Deductions | $ (462) | |||
Balance at end of Period | $ 462 | |||
[1] | Amounts written off as uncollectible, net of recoveries | |||
[2] | Amounts written off as uncollectible, net of recoveries and reclassification to discontinued operations |