Numerex (NMRX) 10-Q 10 May 16 2016 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 03, 2016
Document And Entity Information [Abstract]
Entity Registrant Name	NUMEREX CORP /PA/
Entity Central Index Key	870,753
Trading Symbol	nmrx
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		19,437,322
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1

UNAUDITED CONDENSED CONSOLIDATE

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
CURRENT ASSETS
Cash and cash equivalents	$ 11,220	$ 16,237
Restricted cash	221
Accounts receivable, less allowance for doubtful accounts of $716 and $618	8,794	$ 9,237
Financing receivables, current	1,917	1,780
Inventory, net of reserves	7,995	7,617
Prepaid expenses and other current assets	2,373	1,887
Deferred tax assets, current	603	603
TOTAL CURRENT ASSETS	33,123	37,361
Financing receivables, less current portion	2,457	2,330
Property and equipment, net of accumulated depreciation and amortization of $7,253 and $6,632	4,863	4,795
Software, net of accumulated amortization	7,247	7,146
Other intangible assets, net of accumulated amortization	15,261	15,722
Goodwill	43,424	43,424
Other assets	421	409
TOTAL ASSETS	106,796	111,187
CURRENT LIABILITIES
Accounts payable	10,768	11,390
Accrued expenses and other current liabilities	3,544	2,864
Deferred revenues	1,789	1,942
Current maturities of long-term debt, net of debt issuance costs		3,600
TOTAL CURRENT LIABILITIES	16,101	19,796
Long-term debt, net of debt issuance costs, less current maturities	15,956	15,309
Deferred tax liabilities, noncurrent	1,655	1,595
Other liabilities	1,873	1,891
TOTAL LIABILITIES	$ 35,585	$ 38,591
COMMITMENTS AND CONTINGENCIES (NOTE H)
SHAREHOLDERS' EQUITY
Preferred stock, no par value; 3,000 authorized; none issued
Common stock value
Additional paid-in capital	$ 103,034	$ 102,108
Treasury stock, at cost, 1,316 shares	(5,444)	(5,444)
Accumulated other comprehensive loss	(102)	(117)
Accumulated deficit	(26,277)	(23,951)
TOTAL SHAREHOLDERS' EQUITY	71,211	72,596
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 106,796	$ 111,187
Class A Common Stock
SHAREHOLDERS' EQUITY
Common stock value
Class B Common Stock
SHAREHOLDERS' EQUITY
Common stock value

UNAUDITED CONDENSED CONSOLIDAT3

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 716	$ 618
Accumulated depreciation and amortization	$ 7,253	$ 6,632
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, at cost, shares	1,316	1,316
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	20,752	20,652
Common stock, shares outstanding	19,434	19,177
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

UNAUDITED CONDENSED CONSOLIDAT4

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net revenues:
Subscription and support revenues	$ 14,984	$ 16,529
Embedded devices and hardware	3,066	5,149
Total net revenues	18,050	21,678
Cost of sales, exclusive of a portion of depreciation and amortization shown below:
Subscription and support revenues	5,701	6,719
Embedded devices and hardware	3,118	4,853
Gross profit	9,231	10,106
Operating expenses:
Sales and marketing	2,945	3,064
General and administrative	4,129	3,929
Engineering and development	2,247	2,293
Depreciation and amortization	1,658	1,654
Operating loss	(1,748)	(834)
Interest expense	267	$ 210
Loss on extinguishment of debt	290
Other income, net	(43)	$ (38)
Loss before income taxes	(2,262)	(1,006)
Income tax expense (benefit)	64	(386)
Net loss	(2,326)	(620)
Other items of comprehensive (income) loss, net of income taxes:
Foreign currency translation adjustment	(15)	25
Comprehensive loss	$ (2,311)	$ (645)
Basic and diluted loss per share (in dollars per share)	$ (0.12)	$ (0.03)
Weighted average shares outstanding used in computing basic and diluted loss per share (in shares)	19,377	18,993

UNAUDITED CONDENSED CONSOLIDAT5

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands	Common Shares	Additional Paid-in Capital	Treasury Stock	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
Balance at Dec. 31, 2015		$ 102,108	$ (5,444)	$ (117)	$ (23,951)	$ 72,596
Balance (in shares) at Dec. 31, 2015	20,652
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation expense		621				621
Equity-based compensation expense (in shares)
Exercises, vesting and other equity- based compensation plan activity, net		300				300
Exercises, vesting and other equity- based compensation plan activity, net (in shares)	99
Other		5				5
Other (in shares)	1
Foreign currency translation adjustment				15		(15)
Net loss					(2,326)	(2,326)
Balance at Mar. 31, 2016		$ 103,034	$ (5,444)	$ (102)	$ (26,277)	$ 71,211
Balance (in shares) at Mar. 31, 2016	20,752

UNAUDITED CONDENSED CONSOLIDAT6

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net loss	$ (2,326)	$ (620)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	1,965	1,881
Equity-based compensation expense	621	$ 784
Loss on extinguishment of debt	289
Deferred income taxes	60	$ (351)
Bad debt expense	120	140
Inventory reserves	27	134
Other non-cash expense	21	21
Changes in assets and liabilities:
Accounts and financing receivables	59	(1,094)
Inventory, net	(953)	185
Accounts payable	(680)	(657)
Deferred revenue	(150)	51
Other	107	(154)
Net cash (used in) provided by operating activities	(840)	320
Cash flows from investing activities:
Purchases of property and equipment	(297)	(554)
Capitalized software development and purchases of software	(983)	(1,119)
Net cash (used in) investing activities	(1,280)	$ (1,673)
Cash flows from financing activities:
Proceeds from long-term debt	17,000
Principal payments on debt	$ (19,349)	$ (1,121)
Principal payments on capital lease obligations		(90)
Exercises, vesting and other equity-based compensation plan activity, net	$ 300	1
Payment of taxes on equity-based awards		$ (2)
Deferred financing costs paid	$ (848)
Net cash (used in) financing activities	(2,897)	$ (1,212)
Net decrease in cash and cash equivalents	(5,017)	(2,565)
Cash and cash equivalents at beginning of period	16,237	17,270
Cash and cash equivalents at end of period	11,220	14,705
Supplemental disclosures of cash flow information:
Cash paid for interest	251	191
Net cash (refunded) paid for income taxes	(350)	28
Disclosure of non-cash investing and financing activities:
Capital expenditures in accounts payable	286	$ 407
Deferred financing costs in accounts payable	$ 213

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Basis of Presentation and Significant Accounting Policies [Text Block]	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. Foreign operations were not significant to us for the three months ended March 31, 2016 or 2015. Basis of Presentation We prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, referred to as GAAP, for interim financial information and the Rules and Regulations issued by the Securities Exchange Commission, or SEC, as applicable. These financial statements include all of our accounts and those of our wholly-owned subsidiaries. We have eliminated intercompany transactions and balances in consolidation. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted, although we believe that the disclosures made are adequate to make the information not misleading. In the opinion of management, the accompanying financial statements reflect all adjustments, which consist of normal recurring adjustments unless otherwise disclosed, considered necessary for a fair presentation of our financial position as of March 31, 2016 and our operating results and cash flows for the interim periods presented. The accompanying condensed consolidated balance sheet as of December 31, 2015 was derived from our audited financial statements, but does not include all disclosures required by GAAP. The financial information presented herein should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2015 which includes information and disclosures not included in this quarterly report. Estimates and Assumptions The preparation of financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Actual results may differ materially from these estimates. Operating results for the three months ended March 31, 2016 may not be indicative of the results that may be expected for the year ending December 31, 2016 or any future periods. Restricted Cash As of March 31, 2016, cash of $0.2 million was held in escrow related to certain vendor obligations as a result of entering into our new loan agreement. See Note E – Debt. There was no restricted cash at December 31, 2015. Reclassifications As a result of the adoption of a recent accounting pronouncement, see Note G – Recent Accounting Pronouncements, the balance sheet as of December 31, 2015 reflects the following reclassifications (dollars in thousands): Historical Reclassi- Presentation fication As Adjusted Prepaid expenses and other current assets $ 2,037 $ (150 ) $ 1,887 Other assets 699 (290 ) 409 Current portion of long-term debt 3,750 (150 ) 3,600 Long-term debt, less current portion 15,599 (290 ) 15,309

INVENTORY

INVENTORY	3 Months Ended
	Mar. 31, 2016
Inventory [Abstract]
INVENTORY	NOTE B – INVENTORY Inventory consisted of the following as of the dates below (in thousands): March 31, December 31, 2016 2015 Raw materials $ 2,032 $ 1,903 Finished goods 8,678 8,420 Inventory reserves (2,715 ) (2,706 ) $ 7,995 $ 7,617

INTANGIBLE ASSETS

INTANGIBLE ASSETS	3 Months Ended
	Mar. 31, 2016
Intangible Assets [Abstract]
INTANGIBLE ASSETS	NOTE C – INTANGIBLE ASSETS Intangible Assets Other Than Goodwill Intangible assets other than goodwill are summarized as follows (dollars in thousands): As of March 31, 2016 As of December 31, 2015 Remaining Gross Accumulated Net Book Gross Accumulated Net Book Purchased and developed software 1.2 $ 16,128 $ (10,369 ) $ 5,759 $ 15,399 $ (9,503 ) $ 5,896 Software in development n/a 1,488 - 1,488 1,250 - 1,250 Total software 17,616 (10,369 ) 7,247 16,649 (9,503 ) 7,146 Licenses 0.4 13,215 (12,259 ) 956 13,215 (12,167 ) 1,048 Customer relationships 7.4 8,167 (2,478 ) 5,689 8,167 (2,285 ) 5,882 Technologies 12.1 4,316 (680 ) 3,636 4,316 (595 ) 3,721 Patents and trademarks 2.8 4,251 (2,243 ) 2,008 4,236 (2,137 ) 2,099 Trade names Indefinite 2,972 - 2,972 2,972 - 2,972 Total other intangible assets 32,921 (17,660 ) 15,261 32,906 (17,184 ) 15,722 $ 50,537 $ (28,029 ) $ 22,508 $ 49,555 $ (26,687 ) $ 22,868 Remaining useful lives in the preceding table were calculated on a weighted average basis as of March 31, 2016. Amortization expense related to intangible assets was $1.3 million and $1.2 million for the three months ended March 31, 2016 and 2015, respectively. Amortization expense recorded in cost of subscription revenues in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss was $0.3 million and $0.2 million for the three months ended March 31, 2016 and 2015, respectively. Additionally, we have capitalized approximately $0.3 million and $0.4 million of internally generated software development costs for the three months ended March 31, 2016 and 2015 respectively.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2016
Income Taxes [Abstract]
INCOME TAXES	NOTE D – INCOME TAXES We calculate our interim income tax provision in accordance with the accounting guidance for income taxes in interim periods. At the end of each interim period, we make our best estimate of the annual expected effective tax rate and apply that rate to our ordinary year-to-date income or loss. In addition, we calculate a year-to-date adjustment to increase or decrease our income tax provision to take into account our current expected effective tax rate. The tax or benefit related to significant, unusual, or extraordinary items that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider projections of future taxable income, tax planning strategies and the reversal of temporary differences in making this assessment. During 2015, we determined that we would not meet the criteria of “more likely than not” that the cumulative federal 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. We will maintain the valuation allowance against the net deferred tax assets until sufficient positive evidence outweighs any negative evidence to support reversal. We recorded deferred income tax expense of less than $0.1 million, representing an effective tax rate of (2.8%), for the three months ended March 31, 2016. The difference in the effective tax rate compared to the federal statutory rate, and the reason we recorded deferred income tax expense while generating a net loss before income taxes, are due primarily to the book and tax basis and accounting differences for certain long and indefinite lived intangible assets. We have also recognized a provision for income tax expense for certain state income taxes that cannot utilize offsetting net operating losses. Income tax expense recorded in the future will be reduced or increased to the extent of offsetting decreases or increases to the valuation allowance. For the three months ended March 31, 2015, we recorded income tax benefit of $0.4 million representing an effective tax rate of 38.4%. The effective tax rate for the three months ended March 31, 2015 differed from the federal statutory rate primarily as a result of (1) the effect of expenses that are not deductible for income tax purposes, (2) state income taxes, including the tax effect of changes in effective state income tax rates, and (3) a partially offsetting benefit from disqualifying dispositions of incentive stock options. We file U.S., state and foreign income tax returns in jurisdictions with varying statutes of limitation. The 2012 through 2015 tax years generally remain subject to examination by federal and most state tax authorities. However, certain returns from years in which net operating losses have arisen are still open for examination by the tax authorities.

DEBT

DEBT	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
DEBT	NOTE E – DEBT Debt consisted of the following (dollars in thousands): March 31, December 31, 2016 2015 Note payable to Crystal Financial LLC, with interest at LIBOR plus margin $ 17,000 $ - Note payable to Silicon Valley Bank, repaid in 2016 - 19,349 Less long-term deferred financing costs (1,044 ) (440 ) 15,956 18,909 Less current portion of long-term debt - (3,600 ) Noncurrent portion of long-term debt $ 15,956 $ 15,309 On March 9, 2016, we and certain of our wholly-owned, consolidated 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 net proceeds from the term loan (after payment of the fees and expenses of the Term Agent), along with $2.9 million of cash on hand, were used to repay the $19.4 million outstanding debt under the Silicon Valley Bank (SVB) Loan Agreement and pay related transaction fees. We recorded a charge of $0.3 million to loss on extinguishment of debt for unamortized deferred financing costs related to the SVB Loan Agreement during the three months ended March 31, 2016. 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 no 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 March 31, 2016, the applicable interest rate was 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. As of March 31, 2016, we were in compliance with all covenants.

NET LOSS PER SHARE

NET LOSS PER SHARE	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
NET LOSS PER SHARE	NOTE F – NET LOSS PER SHARE Basic net loss per share attributable to common shareholders is based on the weighted-average number of common shares outstanding excluding the dilutive impact of common stock equivalents. Diluted net loss per share is not presented separately because there are no adjustments to the numerator in calculating dilutive net loss per share and all potentially dilutive common stock equivalents would be antidilutive. Potentially dilutive common stock equivalents included 1.8 million shares as of both March 31, 2016 and 2015 for outstanding equity-based compensation.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	3 Months Ended
	Mar. 31, 2016
Recent Accounting Pronouncements [Abstract]
RECENT ACCOUNTING PRONOUNCEMENTS	NOTE G – RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Guidance In March 2015, the Financial Accounting Standards Board (FASB) issued guidance about simplifying the presentation of deferred financing costs. The guidance was intended to help clarify deferred financing 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 deferred financing costs were not affected. The guidance was effective January 1, 2016 and, in accordance with the guidance, $1.0 million of deferred financing costs is included in long-term debt as of March 31, 2016 and $0.4 million of deferred financing costs was reclassified from current and noncurrent other assets to the current and noncurrent portions long-term debt as of December 31, 2015. In September 2015, the FASB issued guidance to simplify the accounting for measurement-period adjustments for an acquirer in a business combination. The update requires 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 was effective January 1, 2016 and the adoption of this guidance did not have a material impact on our financial statements. Recently Issued Accounting Guidance In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payments transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for annual and interim periods beginning after December 31, 2016. Early adoption is permitted for any entity in any interim or annual period. We are currently evaluating the effect that the updated standard will have on our financial statements, but expect the guidance will add modest volatility in our equity-based compensation expense, provision for income taxes, and net income (loss). In February 2016, the 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 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 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.

COMMITMENTS, CONTINGENCIES AND

COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENT	3 Months Ended
	Mar. 31, 2016
Commitments Contingencies And Subsequent Event [Abstract]
COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENT	NOTE H – COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENT In March 2016, we entered into a commitment for a 60 month lease arrangement for computer and network equipment, software and related costs having a value of $1.2 million. The lease commenced in April 2016 and will be accounted for as a capital lease, reflecting the corresponding assets and related obligations in the subsequent balance sheet.

SUMMARY OF SIGNIFICANT ACCOUN15

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation We prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, referred to as GAAP, for interim financial information and the Rules and Regulations issued by the Securities Exchange Commission, or SEC, as applicable. These financial statements include all of our accounts and those of our wholly-owned subsidiaries. We have eliminated intercompany transactions and balances in consolidation. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted, although we believe that the disclosures made are adequate to make the information not misleading. In the opinion of management, the accompanying financial statements reflect all adjustments, which consist of normal recurring adjustments unless otherwise disclosed, considered necessary for a fair presentation of our financial position as of March 31, 2016 and our operating results and cash flows for the interim periods presented. The accompanying condensed consolidated balance sheet as of December 31, 2015 was derived from our audited financial statements, but does not include all disclosures required by GAAP. The financial information presented herein should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2015 which includes information and disclosures not included in this quarterly report.
Estimates and Assumptions	Estimates and Assumptions The preparation of financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Actual results may differ materially from these estimates. Operating results for the three months ended March 31, 2016 may not be indicative of the results that may be expected for the year ending December 31, 2016 or any future periods.
Restricted Cash	Restricted Cash As of March 31, 2016, cash of $0.2 million was held in escrow related to certain vendor obligations as a result of entering into our new loan agreement. See Note E – Debt. There was no restricted cash at December 31, 2015.
Reclassifications	Reclassifications As a result of the adoption of a recent accounting pronouncement, see Note G – Recent Accounting Pronouncements, the balance sheet as of December 31, 2015 reflects the following reclassifications (dollars in thousands): Historical Reclassi- Presentation fication As Adjusted Prepaid expenses and other current assets $ 2,037 $ (150 ) $ 1,887 Other assets 699 (290 ) 409 Current portion of long-term debt 3,750 (150 ) 3,600 Long-term debt, less current portion 15,599 (290 ) 15,309

SUMMARY OF SIGNIFICANT ACCOUN16

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Schedule of reclassifications	Historical Reclassi- Presentation fication As Adjusted Prepaid expenses and other current assets $ 2,037 $ (150 ) $ 1,887 Other assets 699 (290 ) 409 Current portion of long-term debt 3,750 (150 ) 3,600 Long-term debt, less current portion 15,599 (290 ) 15,309

INVENTORY (Tables)

INVENTORY (Tables)	3 Months Ended
	Mar. 31, 2016
Inventory [Abstract]
Schedule of inventory	March 31, December 31, 2016 2015 Raw materials $ 2,032 $ 1,903 Finished goods 8,678 8,420 Inventory reserves (2,715 ) (2,706 ) $ 7,995 $ 7,617

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	3 Months Ended
	Mar. 31, 2016
Intangible Assets [Abstract]
Schedule of intangible assets other than goodwill	As of March 31, 2016 As of December 31, 2015 Remaining Gross Accumulated Net Book Gross Accumulated Net Book Purchased and developed software 1.2 $ 16,128 $ (10,369 ) $ 5,759 $ 15,399 $ (9,503 ) $ 5,896 Software in development n/a 1,488 - 1,488 1,250 - 1,250 Total software 17,616 (10,369 ) 7,247 16,649 (9,503 ) 7,146 Licenses 0.4 13,215 (12,259 ) 956 13,215 (12,167 ) 1,048 Customer relationships 7.4 8,167 (2,478 ) 5,689 8,167 (2,285 ) 5,882 Technologies 12.1 4,316 (680 ) 3,636 4,316 (595 ) 3,721 Patents and trademarks 2.8 4,251 (2,243 ) 2,008 4,236 (2,137 ) 2,099 Trade names Indefinite 2,972 - 2,972 2,972 - 2,972 Total other intangible assets 32,921 (17,660 ) 15,261 32,906 (17,184 ) 15,722 $ 50,537 $ (28,029 ) $ 22,508 $ 49,555 $ (26,687 ) $ 22,868

DEBT (Tables)

DEBT (Tables)	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
Schedule of debt	March 31, December 31, 2016 2015 Note payable to Crystal Financial LLC, with interest at LIBOR plus margin $ 17,000 $ - Note payable to Silicon Valley Bank, repaid in 2016 - 19,349 Less long-term deferred financing costs (1,044 ) (440 ) 15,956 18,909 Less current portion of long-term debt - (3,600 ) Noncurrent portion of long-term debt $ 15,956 $ 15,309

SUMMARY OF SIGNIFICANT ACCOUN20

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Summary Of Significant Accounting Policies [Line Items]
Prepaid expenses and other current assets	$ 2,373	$ 1,887
Other assets	421	409
Current portion of long-term debt		3,600
Long-term debt, less current portion	$ 15,956	15,309
Historical presentation
Summary Of Significant Accounting Policies [Line Items]
Prepaid expenses and other current assets		2,037
Other assets		699
Current portion of long-term debt		3,750
Long-term debt, less current portion		15,599
Reclassification
Summary Of Significant Accounting Policies [Line Items]
Prepaid expenses and other current assets		(150)
Other assets		(290)
Current portion of long-term debt		(150)
Long-term debt, less current portion		$ (290)

INVENTORY - Summary of inventor

INVENTORY - Summary of inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory [Abstract]
Raw materials	$ 2,032	$ 1,903
Finished goods	8,678	8,420
Inventory reserves	(2,715)	(2,706)
Inventory, net	$ 7,995	$ 7,617

INTANGIBLE ASSETS - Summary of

INTANGIBLE ASSETS - Summary of intangible assets other than goodwill (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 50,537	$ 49,555
Accumulated Amortization	(28,029)	(26,687)
Net Book Value	$ 22,508	22,868
Purchased and developed software
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Remaining Useful Lives	1 year 2 months 12 days
Gross Carrying Amount	$ 16,128	15,399
Accumulated Amortization	(10,369)	(9,503)
Net Book Value	5,759	5,896
Software in development
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 1,488	$ 1,250
Accumulated Amortization
Net Book Value	$ 1,488	$ 1,250
Total software
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Gross Carrying Amount	17,616	16,649
Accumulated Amortization	(10,369)	(9,503)
Net Book Value	$ 7,247	7,146
Licenses
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Remaining Useful Lives	4 months 24 days
Gross Carrying Amount	$ 13,215	13,215
Accumulated Amortization	(12,259)	(12,167)
Net Book Value	$ 956	1,048
Customer relationships
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Remaining Useful Lives	7 years 4 months 24 days
Gross Carrying Amount	$ 8,167	8,167
Accumulated Amortization	(2,478)	(2,285)
Net Book Value	$ 5,689	5,882
Technologies
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Remaining Useful Lives	12 years 1 month 6 days
Gross Carrying Amount	$ 4,316	4,316
Accumulated Amortization	(680)	(595)
Net Book Value	$ 3,636	3,721
Patents and trademarks
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Remaining Useful Lives	2 years 9 months 18 days
Gross Carrying Amount	$ 4,251	4,236
Accumulated Amortization	(2,243)	(2,137)
Net Book Value	$ 2,008	2,099
Trade names
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Weighted Remaining Average Useful Lives	Indefinite
Gross Carrying Amount	$ 2,972	2,972
Net Book Value	2,972	2,972
Total Other Intangibles
Finite Lived And Indefinite Lived Intangible Assets [Line Items]
Gross Carrying Amount	32,921	32,906
Accumulated Amortization	(17,660)	(17,184)
Net Book Value	$ 15,261	$ 15,722

INTANGIBLE ASSETS (Detail Textu

INTANGIBLE ASSETS (Detail Textuals) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Intangible Assets [Abstract]
Amortization expense of intangible assets	$ 1.3	$ 1.2
Amortization of intangible assets recorded in cost of subscription revenue	0.3	0.2
Internally generated software development costs	$ 0.3	$ 0.4

INCOME TAXES (Detail Textuals)

INCOME TAXES (Detail Textuals) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Taxes [Abstract]
Deferred tax expense	$ 60	$ (351)
Percentage of tax expense effective tax rate	2.80%	38.40%

DEBT - Summary of debt (Details

DEBT - Summary of debt (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Less long-term deferred financing costs	$ 1,044	$ 440
Long-term debt, total	15,956	18,909
Less current portion of long-term debt		(3,600)
Noncurrent portion of long-term debt	15,956	15,309
Note payable to Crystal Financial LLC, with interest at LIBOR plus margin
Debt Instrument [Line Items]
Long-term debt, gross	$ 17,000
Note payable to Silicon Valley Bank, repaid in 2016
Debt Instrument [Line Items]
Long-term debt, gross		$ 19,349

DEBT (Detail Textuals)

DEBT (Detail Textuals) - USD ($) $ in Thousands	Mar. 09, 2016	Mar. 31, 2016	Mar. 31, 2015
Debt Instrument [Line Items]
Loss on extinguishment of debt		$ (290)
Note payable to Crystal Financial LLC, with interest at LIBOR plus margin
Debt Instrument [Line Items]
Long-term debt, gross		17,000
Note payable to Crystal Financial LLC, with interest at LIBOR plus margin | Term loan
Debt Instrument [Line Items]
Long-term debt, gross		17,000
Debt Instrument, Periodic Payment, Principal	$ 637,500
Prepayment penalty percentage Prior to First anniversary	3.00%
Prepayment penalty percentage after First anniversary and before second anniversary	2.00%
Interest rate applicable to amounts drawn	9.10%
Note payable to Crystal Financial LLC, with interest at LIBOR plus margin | Silicon Valley Bank | Term loan
Debt Instrument [Line Items]
Repayment of long-term debt from cash on hand	$ 2,900
Repayments of Long-term Debt	$ 19,400
Loss on extinguishment of debt		$ 290

NET LOSS PER SHARE (Detail Text

NET LOSS PER SHARE (Detail Textuals) - shares shares in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Earnings Per Share [Abstract]
Potentially dilutive common stock equivalents for outstanding equity-based compensation	1.8	1.8

RECENT ACCOUNTING PRONOUNCEME28

RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Recent Accounting Pronouncements [Line Items]
Deferred financing costs	$ 1,044	$ 440
Deferred financing costs reclassified from assets to liabilities	440
Long-term debt
Recent Accounting Pronouncements [Line Items]
Deferred financing costs	$ 1,044

COMMITMENTS, CONTINGENCIES AN29

COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENT (Details) - Subsequent Event - Computer And Network Equipment Software - Capital Lease Obligations $ in Millions	3 Months Ended
	Apr. 30, 2016USD ($)
Commitments, Contingencies And Subsequent Event [Line Items]
Lease amount	$ 1.2
Lease term	60 months