R | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
£ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware
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77-0105228
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer £
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Accelerated filer R
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Non-accelerated filer £ (Do not check if a smaller reporting company)
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Smaller reporting company £
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PART I - FINANCIAL INFORMATION
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Page
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ITEM 1
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Financial Statements (unaudited)
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1
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2
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3
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4
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ITEM 2
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15
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ITEM 3
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28
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ITEM 4
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29
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PART II - OTHER INFORMATION
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||
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ITEM 1
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30
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ITEM 1A
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30
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ITEM 2
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30
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ITEM 3.
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30
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ITEM 4.
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30
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ITEM 5.
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30
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ITEM 6
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30
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31
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||
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EXHIBIT 31.1
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EXHIBIT 31.2
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EXHIBIT 32.1
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|
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July 31,
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January 31,
|
||||||
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2013
|
2013
|
||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and equivalents
|
$
|
69,395
|
$
|
65,009
|
||||
Accounts receivable, net of allowances of $2,298 and $2,510 at July 31, 2013 and January 31, 2013, respectively
|
42,733
|
72,564
|
||||||
Deferred tax assets, net
|
4,289
|
4,414
|
||||||
Other current assets
|
13,786
|
13,806
|
||||||
Total current assets
|
130,203
|
155,793
|
||||||
Property and equipment, net
|
33,280
|
32,526
|
||||||
Capitalized software costs, net
|
3,690
|
4,180
|
||||||
Goodwill
|
11,302
|
11,412
|
||||||
Deferred tax assets, net
|
16,291
|
16,431
|
||||||
Other assets, net
|
5,325
|
5,606
|
||||||
Total assets
|
$
|
200,091
|
$
|
225,948
|
||||
Liabilities and Stockholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Current portion of long-term debt
|
$
|
380
|
$
|
372
|
||||
Accounts payable
|
8,052
|
12,537
|
||||||
Deferred revenue
|
86,031
|
101,193
|
||||||
Other current liabilities
|
26,691
|
31,415
|
||||||
Total current liabilities
|
121,154
|
145,517
|
||||||
Long-term debt
|
15,279
|
15,474
|
||||||
Other liabilities
|
5,891
|
6,759
|
||||||
Commitments and contingencies
|
||||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $0.001 par value. Authorized 5,000,000 shares; none issued or outstanding
|
—
|
—
|
||||||
Common stock:
|
||||||||
Class A, $0.001 par value. Authorized 71,000,000 shares; issued 14,149,675 shares and 14,148,217 shares at July 31, 2013 and January 31, 2013, respectively
|
14
|
14
|
||||||
Class B, $0.001 par value. Authorized 4,000,000 shares; issued 3,536,985 shares and 3,536,822 shares at July 31, 2013 and January 31, 2013, respectively
|
4
|
4
|
||||||
Additional paid-in capital
|
150,519
|
149,777
|
||||||
Treasury stock, at cost (2,023,609 shares and 2,097,497 shares at July 31, 2013 and January 31, 2013, respectively)
|
(29,726
|
)
|
(31,093
|
)
|
||||
Accumulated deficit
|
(55,399
|
)
|
(52,468
|
)
|
||||
Accumulated other comprehensive loss
|
(7,645
|
)
|
(8,036
|
)
|
||||
Total stockholders’ equity
|
57,767
|
58,198
|
||||||
Total liabilities and stockholders’ equity
|
$
|
200,091
|
$
|
225,948
|
|
Three Months Ended
|
Six Months Ended | ||||||||||||||
|
July 31,
|
July 31, | ||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
||||||||||||||||
Revenue:
|
||||||||||||||||
License fees
|
$
|
8,604
|
$
|
6,906
|
$
|
14,822
|
$
|
14,771
|
||||||||
Maintenance and other
|
34,254
|
33,886
|
69,455
|
68,406
|
||||||||||||
Subscription fees
|
4,455
|
3,745
|
8,497
|
6,968
|
||||||||||||
Professional services
|
17,881
|
16,432
|
34,347
|
34,532
|
||||||||||||
Total revenue
|
65,194
|
60,969
|
127,121
|
124,677
|
||||||||||||
|
||||||||||||||||
Costs of revenue:
|
||||||||||||||||
License fees
|
1,058
|
832
|
2,013
|
1,713
|
||||||||||||
Maintenance, subscription and other
|
11,047
|
10,341
|
22,109
|
20,341
|
||||||||||||
Professional services
|
16,672
|
15,846
|
33,280
|
31,584
|
||||||||||||
Total cost of revenue
|
28,777
|
27,019
|
57,402
|
53,638
|
||||||||||||
|
||||||||||||||||
Gross profit
|
36,417
|
33,950
|
69,719
|
71,039
|
||||||||||||
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||
Sales and marketing
|
15,850
|
14,747
|
31,906
|
30,243
|
||||||||||||
Research and development
|
10,469
|
9,210
|
21,314
|
18,744
|
||||||||||||
General and administrative
|
8,431
|
8,378
|
16,377
|
16,483
|
||||||||||||
Amortization of intangibles from acquisitions
|
177
|
57
|
353
|
57
|
||||||||||||
Total operating expenses
|
34,927
|
32,392
|
69,950
|
65,527
|
||||||||||||
|
||||||||||||||||
Operating income (loss)
|
1,490
|
1,558
|
(231
|
)
|
5,512
|
|||||||||||
|
||||||||||||||||
Other (income) expense:
|
||||||||||||||||
Interest income
|
(73
|
)
|
(164
|
)
|
(170
|
)
|
(327
|
)
|
||||||||
Interest expense
|
209
|
330
|
412
|
616
|
||||||||||||
Other (income) expense, net
|
(809
|
)
|
92
|
(1,082
|
)
|
538
|
||||||||||
Total other (income) expense
|
(673
|
)
|
258
|
(840
|
)
|
827
|
||||||||||
|
||||||||||||||||
Income before income taxes
|
2,163
|
1,300
|
609
|
4,685
|
||||||||||||
Income tax expense
|
909
|
341
|
618
|
1,882
|
||||||||||||
|
||||||||||||||||
Net income (loss)
|
$
|
1,254
|
$
|
959
|
$
|
(9
|
)
|
$
|
2,803
|
|||||||
|
||||||||||||||||
Basic net income (loss) per share
|
||||||||||||||||
Class A
|
$
|
0.08
|
$
|
0.06
|
$
|
( 0.00
|
)
|
$
|
0.18
|
|||||||
Class B
|
$
|
0.07
|
$
|
0.05
|
$
|
( 0.00
|
)
|
$
|
0.15
|
|||||||
Diluted net income (loss) per share
|
||||||||||||||||
Class A
|
$
|
0.08
|
$
|
0.06
|
$
|
( 0.00
|
)
|
$
|
0.18
|
|||||||
Class B
|
$
|
0.07
|
$
|
0.05
|
$
|
( 0.00
|
)
|
$
|
0.15
|
|||||||
|
||||||||||||||||
Comprehensive income:
|
||||||||||||||||
Foreign currency translation adjustment, net of tax
|
18
|
(75
|
)
|
391
|
70
|
|||||||||||
Total comprehensive income
|
$
|
1,272
|
$
|
884
|
$
|
382
|
$
|
2,873
|
|
Six Months Ended
|
|||||||
|
July 31,
|
|||||||
|
2013
|
2012
|
||||||
|
||||||||
Cash flows from operating activities:
|
||||||||
Net (loss) income
|
$
|
(9
|
)
|
$
|
2,803
|
|||
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
3,015
|
2,361
|
||||||
Provision for doubtful accounts and sales adjustments
|
331
|
64
|
||||||
Change in fair value of interest rate swap
|
(708
|
)
|
857
|
|||||
Stock compensation expense
|
2,494
|
2,467
|
||||||
Excess tax benefits from share-based payment arrangements
|
(81
|
)
|
(123
|
)
|
||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable
|
28,271
|
28,241
|
||||||
Other assets
|
568
|
267
|
||||||
Accounts payable
|
(4,258
|
)
|
(2,517
|
)
|
||||
Deferred revenue
|
(12,914
|
)
|
(16,058
|
)
|
||||
Other liabilities
|
(3,660
|
)
|
(6,989
|
)
|
||||
Net cash provided by operating activities
|
13,049
|
11,373
|
||||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(3,000
|
)
|
(2,029
|
)
|
||||
Acquisition of business, net of cash acquired
|
—
|
(4,713
|
)
|
|||||
Capitalized software costs
|
(148
|
)
|
(199
|
)
|
||||
Other
|
31
|
2
|
||||||
Net cash used in investing activities
|
(3,117
|
)
|
(6,939
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Repayments of debt
|
(187
|
)
|
(111
|
)
|
||||
Tax payments, net of proceeds, related to stock awards
|
(589
|
)
|
(786
|
)
|
||||
Excess tax benefits from share-based payment arrangements
|
81
|
123
|
||||||
Repurchase of common stock
|
(686
|
)
|
(3,899
|
)
|
||||
Cash dividends paid
|
(3,119
|
)
|
(1,841
|
)
|
||||
Net cash used in financing activities
|
(4,500
|
)
|
(6,514
|
)
|
||||
|
||||||||
Effect of exchange rates on cash and equivalents
|
(1,046
|
)
|
(1,004
|
)
|
||||
|
||||||||
Net increase (decrease) in cash and equivalents
|
4,386
|
(3,084
|
)
|
|||||
|
||||||||
Cash and equivalents at beginning of period
|
65,009
|
76,927
|
||||||
|
||||||||
Cash and equivalents at end of period
|
$
|
69,395
|
$
|
73,843
|
||||
|
||||||||
Supplemental disclosure of non-cash activities:
|
||||||||
Future obligations associated with dividend declaration
|
$
|
—
|
$
|
1,115
|
||||
Dividends paid in stock
|
145
|
334
|
1.
|
BASIS OF PRESENTATION
|
2.
|
COMPUTATION OF NET INCOME (LOSS) PER SHARE
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
July 31,
|
July 31,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
(in thousands)
|
(in thousands)
|
||||||||||||||
Net income (loss)
|
$
|
1,254
|
$
|
959
|
$
|
(9
|
)
|
$
|
2,803
|
|||||||
Less: Dividends declared
|
(1,089
|
)
|
(1,110
|
)
|
(2,177
|
)
|
(2,187
|
)
|
||||||||
Undistributed net income (loss)
|
$
|
165
|
$
|
(151
|
)
|
$
|
(2,186
|
)
|
$
|
616
|
||||||
|
||||||||||||||||
Net income (loss) per share – Class A Common Stock
|
||||||||||||||||
Dividends declared
|
$
|
900
|
$
|
920
|
$
|
1,799
|
$
|
1,810
|
||||||||
Allocation of undistributed net income (loss)
|
136
|
(125
|
)
|
(1,805
|
)
|
509
|
||||||||||
Net income (loss) attributable to Class A common stock
|
$
|
1,036
|
$
|
795
|
$
|
(6
|
)
|
$
|
2,319
|
|||||||
|
||||||||||||||||
Weighted average shares of Class A common stock outstanding—basic
|
12,473
|
12,649
|
12,451
|
12,671
|
||||||||||||
Weighted average potential shares of Class A common stock
|
430
|
433
|
-
|
473
|
||||||||||||
Weighted average shares of Class A common stock and potential common shares outstanding—diluted
|
12,903
|
13,082
|
12,451
|
13,144
|
||||||||||||
|
||||||||||||||||
Basic net income (loss) per Class A common share
|
$
|
0.08
|
$
|
0.06
|
$
|
(0.00
|
)
|
$
|
0.18
|
|||||||
Diluted net income (loss) per Class A common share
|
$
|
0.08
|
$
|
0.06
|
$
|
(0.00
|
)
|
$
|
0.18
|
|||||||
|
||||||||||||||||
Net income (loss) per share – Class B Common Stock
|
||||||||||||||||
Dividends declared
|
$
|
189
|
$
|
190
|
$
|
378
|
$
|
377
|
||||||||
Allocation of undistributed net income (loss)
|
29
|
(26
|
)
|
(381
|
)
|
107
|
||||||||||
Net income (loss) attributable to Class B common stock
|
$
|
218
|
$
|
164
|
$
|
(3
|
)
|
$
|
484
|
|||||||
|
||||||||||||||||
Weighted average shares of Class B common stock outstanding—basic
|
3,145
|
3,164
|
3,145
|
3,166
|
||||||||||||
Weighted average potential shares of Class B common stock
|
86
|
100
|
-
|
108
|
||||||||||||
Weighted average shares of Class B common stock and potential common shares outstanding—diluted
|
3,231
|
3,264
|
3,145
|
3,274
|
||||||||||||
|
||||||||||||||||
Basic net income (loss) per Class B common share
|
$
|
0.07
|
$
|
0.05
|
$
|
(0.00
|
)
|
$
|
0.15
|
|||||||
Diluted net income (loss) per Class B common share
|
$
|
0.07
|
$
|
0.05
|
$
|
(0.00
|
)
|
$
|
0.15
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
July 31,
|
July 31,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
(in thousands)
|
(in thousands)
|
||||||||||||||
Class A
|
2,592
|
2,306
|
2,915
|
2,199
|
||||||||||||
Class B
|
370
|
349
|
456
|
365
|
3.
|
FAIR VALUE MEASUREMENTS
|
|
Fair value measurement at reporting date using
|
|||||||||||
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable Inputs
(Level 3)
|
|||||||||
|
(in thousands)
|
|||||||||||
Money market mutual funds as of July 31, 2013
|
$
|
50,997
|
$
|
—
|
$
|
—
|
||||||
Money market mutual funds as of January 31, 2013
|
$
|
44,871
|
$
|
—
|
$
|
—
|
||||||
Asset related to interest rate swap as of July 31, 2013
|
$
|
—
|
$
|
324
|
$
|
—
|
||||||
Liability related to interest rate swap as of January 31, 2013
|
$
|
—
|
$
|
(384
|
)
|
$
|
—
|
|
Asset/(Liability) Derivative
|
||||||||
|
|
Fair Value
|
|||||||
Balance Sheet Location
|
July 31,
2013
|
January 31,
2013
|
|||||||
Derivative instrument:
|
|
||||||||
Interest rate swap
|
Other assets, net (Other liabilities)
|
$
|
324
|
$
|
(384
|
)
|
|||
Total
|
|
$
|
324
|
$
|
(384
|
)
|
4.
|
BUSINESS COMBINATIONS
|
Tangible assets, including cash acquired of $0.4 million
|
$
|
1,423
|
||
Goodwill
|
2,456
|
|||
Other intangible assets
|
3,450
|
|||
Total assets acquired
|
7,329
|
|||
Liabilities assumed
|
(1,233
|
)
|
||
Deferred tax liability
|
(1,209
|
)
|
||
Net assets acquired
|
$
|
4,887
|
|
Estimated
useful life
(years)
|
Fair
value
|
Estimated
annual
amortization
|
Statement of operations
classification
|
|||||||||
Software technology
|
2 - 5
|
$
|
1,750
|
$
|
320-395
|
Cost of license fees
|
|||||||
Customer relationships
|
5
|
1,500
|
300
|
Amortization of intangibles from acquisitions
|
|||||||||
Trade name
|
5
|
200
|
40
|
Amortization of intangibles from acquisitions
|
|||||||||
|
$
|
3,450
|
|
Tangible assets, including cash acquired of $2.8 million
|
$
|
4,250
|
||
Goodwill
|
2,231
|
|||
Software technology
|
1,800
|
|||
Customer relationships
|
1,400
|
|||
Trade name
|
300
|
|||
Total assets acquired
|
9,981
|
|||
Liabilities assumed
|
(2,032
|
)
|
||
Deferred tax liability
|
(450
|
)
|
||
Net assets acquired
|
$
|
7,499
|
5.
|
CAPITALIZED SOFTWARE COSTS
|
|
July 31,
|
January 31,
|
||||||
|
2013
|
2013
|
||||||
|
(in thousands)
|
|||||||
Capitalized software costs:
|
||||||||
Acquired software technology
|
$
|
3,741
|
$
|
3,741
|
||||
Capitalized software development costs (1)
|
1,114
|
1,253
|
||||||
|
4,855
|
4,994
|
||||||
Less accumulated amortization
|
(1,165
|
)
|
(814
|
)
|
||||
Capitalized software costs, net
|
$
|
$ 3,690
|
$
|
4,180
|
Fiscal Years
|
(in thousands)
|
|||
2014 remaining
|
$
|
573
|
||
2015
|
1,052
|
|||
2016
|
905
|
|||
2017
|
734
|
|||
2018
|
426
|
|||
Total
|
$
|
3,690
|
6.
|
GOODWILL AND INTANGIBLE ASSETS
|
|
Gross Carrying
|
Accumulated
|
||||||||||
|
Amount
|
Impairment
|
Goodwill, Net
|
|||||||||
|
(in thousands)
|
|||||||||||
Balance at January 31, 2013
|
$
|
27,020
|
$
|
(15,608
|
)
|
$
|
11,412
|
|||||
Impact of foreign currency translation
|
(110
|
)
|
—
|
(110
|
)
|
|||||||
Balance at July 31, 2013
|
$
|
26,910
|
$
|
(15,608
|
)
|
$
|
11,302
|
July 31, | January 31, | |||||||
|
2013
|
2013
|
||||||
|
(in thousands)
|
|||||||
Amortizable intangible assets
|
||||||||
Customer relationships (1)
|
$
|
3,014
|
$
|
3,049
|
||||
Trade name
|
532
|
532
|
||||||
|
3,546
|
3,581
|
||||||
Less: accumulated amortization
|
(629
|
)
|
(279
|
)
|
||||
Net amortizable intangible assets
|
$
|
2,917
|
$
|
3,302
|
(1) | Customer relationships include the impact of foreign currency translation. |
Fiscal Years
|
(in thousands)
|
|||
2014 remaining
|
$
|
355
|
||
2015
|
709
|
|||
2016
|
709
|
|||
2017
|
709
|
|||
2018
|
435
|
|||
Total
|
$
|
2,917
|
7.
|
DEBT
|
|
July 31,
|
January 31,
|
||||||
|
2013
|
2013
|
||||||
|
(in thousands)
|
|||||||
Note payable
|
$
|
15,659
|
$
|
15,846
|
||||
Less current maturities
|
(380
|
)
|
(372
|
)
|
||||
Long-term debt
|
$
|
15,279
|
$
|
15,474
|
8.
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
Foreign Currency
Translation
Adjustments
|
Total
|
||||||
|
( in thousands)
|
|||||||
Balance as of January 31, 2013
|
$
|
( 8,036
|
)
|
$
|
(8,036
|
)
|
||
Other comprehensive income before reclassifications
|
391
|
391
|
||||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
—
|
||||||
Net current period other comprehensive income
|
391
|
391
|
||||||
Balance as of July 31, 2013
|
$
|
(7,645
|
)
|
$
|
(7,645
|
)
|
||
|
9.
|
INCOME TAXES
|
10.
|
STOCKHOLDERS’ EQUITY
|
Declaration
Date
|
Record Date
|
Payable
|
Dividend
Class A
|
Dividend
Class B
|
Amount Paid
in Cash
|
Class A
Shares Issued
|
Fair Value of
Shares Issued
|
|||||||||||||||
6/11/2013
|
6/25/2013
|
7/2/2013
|
$
|
0.072
|
$
|
0.06
|
$
|
1,089,000
|
—
|
—
|
||||||||||||
4/24/2013
|
5/8/2013
|
5/15/2013
|
$
|
0.072
|
$
|
0.06
|
$ |
1,083,000
|
—
|
—
|
||||||||||||
12/11/2012
|
12/26/2012
|
2/8/2013
|
$
|
0.072
|
$
|
0.06
|
$ | 947,000 |
10,000
|
$
|
145,000
|
11.
|
STOCK-BASED COMPENSATION
|
|
Three Months Ended
July 31,
|
Six Months Ended
July 31,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
(in thousands)
|
(in thousands)
|
||||||||||||||
Cost of maintenance, subscription and other revenue
|
$
|
65
|
$
|
60
|
$
|
103
|
$
|
108
|
||||||||
Cost of professional services
|
166
|
139
|
264
|
250
|
||||||||||||
Sales and marketing
|
283
|
249
|
451
|
436
|
||||||||||||
Research and development
|
214
|
197
|
352
|
350
|
||||||||||||
General and administrative
|
822
|
783
|
1,324
|
1,323
|
||||||||||||
Total stock-based compensation expense
|
$
|
1,550
|
$
|
1,428
|
$
|
2,494
|
$
|
2,467
|
|
Six Months Ended
July 31,
|
|||||||
|
2013
|
2012
|
||||||
Expected life in years (1)
|
4.59
|
4.62
|
||||||
Risk free interest rate (2)
|
1.00
|
%
|
0.69
|
%
|
||||
Volatility (3)
|
53
|
%
|
61
|
%
|
||||
Dividend rate (4)
|
2.42
|
%
|
2.25
|
%
|
(1) | The expected life of SARs granted under the stock-based compensation plans is based on historical vested stock option and SAR exercise and post-vest forfeiture patterns and includes an estimate of the expected term for stock options and SARs that were fully vested and outstanding. |
(2) | The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of SARs in effect at the time of grant. |
(3) | The Company estimates the volatility of its common stock at the date of grant based on the historical volatility of the Company’s common stock for a period equivalent to the expected life of the SARs, which it believes is representative of the expected volatility over the expected life of the SARs. |
(4) | The Company expects to continue paying quarterly dividends at the same rate as the three months ending on July 31, 2013. |
|
Stock Options/
SARs
(in thousands)
|
Weighted
Average
Exercise
Price per
Share
|
Weighted
Average
Remaining
Contractual
Term (years)
|
Aggregate
Intrinsic Value
(in thousands)
|
||||||||||||
Outstanding at January 31, 2013
|
2,920
|
$
|
11.11
|
|||||||||||||
Granted
|
586
|
11.68
|
||||||||||||||
Exercised
|
(123
|
)
|
8.49
|
|||||||||||||
Expired
|
(226
|
)
|
15.21
|
|||||||||||||
Forfeited
|
(23
|
)
|
10.00
|
|||||||||||||
Outstanding at July 31, 2013
|
3,134
|
$
|
11.03
|
5.2
|
$
|
5,858
|
||||||||||
Vested and expected to vest at July 31, 2013 (1)
|
3,075
|
$
|
11.02
|
5.3
|
$
|
5,790
|
||||||||||
Vested and exercisable at July 31, 2013
|
1,557
|
$
|
10.69
|
3.8
|
$
|
3,765
|
(1) |
The expected-to-vest SARs are the result of applying the pre-vesting forfeiture rate assumptions to total outstanding SARs.
|
|
RSUs
(in thousands)
|
Weighted
Average
Grant Date
Fair Value
|
||||||
Restricted stock at January 31, 2013
|
385
|
$
|
10.49
|
|||||
Granted
|
226
|
11.15
|
||||||
Vested (1)
|
(130
|
)
|
10.23
|
|||||
Forfeited
|
(10
|
)
|
10.87
|
|||||
Restricted stock at July 31, 2013
|
471
|
$
|
10.88
|
(1)
|
The number of RSUs vested includes shares withheld on behalf of employees to satisfy statutory tax withholding requirements.
|
12.
|
COMMITMENTS AND CONTINGENCIES
|
|
Three Months Ended
July 31,
|
Six Months Ended
July 31,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
(in thousands)
|
(in thousands)
|
||||||||||||||
Revenue:
|
||||||||||||||||
North America (1)
|
$
|
27,538
|
$
|
26,211
|
$
|
54,104
|
$
|
54,729
|
||||||||
EMEA
|
21,830
|
18,809
|
41,637
|
37,358
|
||||||||||||
Asia Pacific
|
11,489
|
11,851
|
23,143
|
23,610
|
||||||||||||
Latin America
|
4,337
|
4,098
|
8,237
|
8,980
|
||||||||||||
|
$
|
65,194
|
$
|
60,969
|
$
|
127,121
|
$
|
124,677
|
(1)
|
Sales into Canada accounted for 2% and 3% of North America total revenue in the three and six months ended July 31, 2013, respectively and for 3% of North America total revenue for both the three and six months ended July 31, 2012.
|
·
|
Licenses of our integrated suite of software applications;
|
·
|
Maintenance and support, including technical support, training materials, product enhancements and upgrades;
|
·
|
Subscription of our Enterprise Applications through our On Demand offering in a Software as a Service model as well as other hosted Internet applications;
|
·
|
Professional services, including implementations, technical and application consulting, training, migrations and upgrades.
|
|
Increase (Decrease)
|
Increase (Decrease)
|
||||||||||||||||||||||||||||||
|
Three Months
Ended
|
Compared to Prior
Period
|
Three
Months Ended
|
Six Months
Ended
|
Compared to Prior
Period
|
Six Months
Ended
|
||||||||||||||||||||||||||
|
July 31, 2013
|
$
|
|
%
|
July 31, 2012
|
July 31, 2013
|
$
|
%
|
July 31, 2012
|
|||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
Revenue
|
||||||||||||||||||||||||||||||||
License fees
|
$
|
8,604
|
$
|
1,698
|
25
|
%
|
$
|
6,906
|
$
|
14,822
|
$
|
51
|
0
|
%
|
$
|
14,771
|
||||||||||||||||
Percentage of total revenue
|
13
|
%
|
11
|
%
|
12
|
%
|
12
|
%
|
||||||||||||||||||||||||
Maintenance and other
|
34,254
|
368
|
1
|
%
|
33,886
|
69,455
|
1,049
|
2
|
%
|
68,406
|
||||||||||||||||||||||
Percentage of total revenue
|
53
|
%
|
56
|
%
|
55
|
%
|
55
|
%
|
||||||||||||||||||||||||
Subscription fees
|
4,455
|
710
|
19
|
%
|
3,745
|
8,497
|
1,529
|
22
|
%
|
6,968
|
||||||||||||||||||||||
Percentage of total revenue
|
7
|
%
|
6
|
%
|
6
|
%
|
5
|
%
|
||||||||||||||||||||||||
Professional services
|
17,881
|
1,449
|
9
|
%
|
16,432
|
34,347
|
(185
|
)
|
-1
|
%
|
34,532
|
|||||||||||||||||||||
Percentage of total revenue
|
27
|
%
|
27
|
%
|
27
|
%
|
28
|
%
|
||||||||||||||||||||||||
Total revenue
|
$
|
65,194
|
$
|
4,225
|
7
|
%
|
$
|
60,969
|
$
|
127,121
|
$
|
2,444
|
2
|
%
|
$
|
124,677
|
|
Increase (Decrease)
|
Increase (Decrease)
|
||||||||||||||||||||||||||||||
|
Three Months
Ended
|
Compared to Prior
Period
|
Three
Months Ended
|
Six Months
Ended
|
Compared to Prior
Period
|
Six Months
Ended
|
||||||||||||||||||||||||||
|
July 31, 2013
|
$
|
|
%
|
July 31, 2012
|
July 31, 2013
|
$
|
%
|
July 31, 2012
|
|||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
Cost of revenue
|
||||||||||||||||||||||||||||||||
Cost of license fees
|
$
|
1,058
|
$
|
226
|
27
|
%
|
$
|
832
|
$
|
2,013
|
$
|
300
|
18
|
%
|
$
|
1,713
|
||||||||||||||||
Cost of maintenance, subscription and other
|
11,047
|
706
|
7
|
%
|
10,341
|
22,109
|
1,768
|
9
|
%
|
20,341
|
||||||||||||||||||||||
Cost of professional services
|
16,672
|
826
|
5
|
%
|
15,846
|
33,280
|
1,696
|
5
|
%
|
31,584
|
||||||||||||||||||||||
Total cost of revenue
|
$
|
28,777
|
$
|
1,758
|
7
|
%
|
$
|
27,019
|
$
|
57,402
|
$
|
3,764
|
7
|
%
|
$
|
53,638
|
||||||||||||||||
Percentage of revenue
|
44
|
%
|
44
|
%
|
45
|
%
|
43
|
%
|
|
Increase (Decrease)
|
Increase (Decrease)
|
||||||||||||||||||||||||||||||
|
Three Months
Ended
|
Compared to Prior
Period
|
Three Months
Ended
|
Six Months
Ended
|
Compared to Prior
Period
|
Six Months
Ended
|
||||||||||||||||||||||||||
|
July 31, 2013
|
$
|
|
%
|
July 31, 2012
|
July 31, 2013
|
$
|
|
%
|
July 31, 2012
|
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
Sales and marketing
|
$
|
15,850
|
$
|
1,103
|
7
|
%
|
$
|
14,747
|
$
|
31,906
|
$
|
1,663
|
5
|
%
|
$
|
30,243
|
||||||||||||||||
Percentage of revenue
|
25
|
%
|
24
|
%
|
25
|
%
|
25
|
%
|
|
Increase (Decrease)
|
Increase (Decrease)
|
||||||||||||||||||||||||||||||
|
Three Months
Ended
|
Compared to Prior
Period
|
Three Months
Ended
|
Six Months
Ended
|
Compared to Prior
Period
|
Six Months
Ended
|
||||||||||||||||||||||||||
|
July 31, 2013
|
$
|
|
%
|
July 31, 2012
|
July 31, 2013
|
$
|
|
%
|
July 31, 2012
|
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
Research and development
|
$
|
10,469
|
$
|
1,259
|
14
|
%
|
$
|
9,210
|
$
|
21,314
|
$
|
2,570
|
14
|
%
|
$
|
18,744
|
||||||||||||||||
Percentage of revenue
|
16
|
%
|
15
|
%
|
17
|
%
|
15
|
%
|
|
Increase (Decrease)
|
Increase (Decrease)
|
||||||||||||||||||||||||||||||
|
Three Months
Ended
|
Compared to Prior
Period
|
Three Months
Ended
|
Six Months
Ended
|
Compared to Prior
Period
|
Six Months
Ended
|
||||||||||||||||||||||||||
|
July 31, 2013
|
$
|
|
%
|
July 31, 2012
|
July 31, 2013
|
$
|
|
%
|
July 31, 2012
|
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
General and administrative
|
$
|
8,431
|
$
|
53
|
1
|
%
|
$
|
8,378
|
$
|
16,337
|
$
|
(106
|
) |
-1
|
%
|
$
|
16,483
|
|||||||||||||||
Percentage of revenue
|
13
|
%
|
14
|
%
|
13 |
%
|
13
|
%
|
|
Increase (Decrease)
|
Increase (Decrease)
|
||||||||||||||||||||||||||||||
|
Three Months
Ended
|
Compared to Prior
Period
|
Three
Months Ended
|
Six Months
Ended
|
Compared to Prior
Period
|
Six Months
Ended
|
||||||||||||||||||||||||||
|
July 31, 2013
|
$
|
|
%
|
July 31, 2012
|
July 31, 2013
|
$
|
%
|
July 31, 2012
|
|||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
Other (income) expense
|
||||||||||||||||||||||||||||||||
Interest income
|
$
|
(73
|
)
|
$
|
91
|
55
|
%
|
$
|
(164
|
)
|
$
|
(170
|
)
|
$
|
157
|
48
|
%
|
$
|
(327
|
)
|
||||||||||||
Interest expense
|
209
|
(121
|
)
|
-37
|
%
|
330
|
412
|
(204
|
)
|
-33
|
%
|
616
|
||||||||||||||||||||
Other (income) expense, net
|
(809
|
)
|
(901
|
)
|
-979
|
%
|
92
|
(1,082
|
)
|
(1,620
|
)
|
-301
|
%
|
538
|
||||||||||||||||||
Total other (income) expense
|
$
|
(673
|
) |
$
|
(931
|
)
|
-361
|
%
|
$
|
$ 258
|
$
|
(840
|
) |
$
|
(1,667
|
)
|
-202
|
%
|
$
|
827
|
||||||||||||
Percentage of revenue
|
-1
|
%
|
1
|
%
|
-1
|
%
|
1
|
%
|
|
Increase (Decrease)
|
Increase (Decrease)
|
||||||||||||||||||||||||||||||
|
Three Months
Ended
|
Compared to Prior
Period
|
Three Months
Ended
|
Six Months
Ended
|
Compared to Prior
Period
|
Six Months
Ended
|
||||||||||||||||||||||||||
|
July 31, 2013
|
$
|
|
%
|
July 31, 2012
|
July 31, 2013
|
$
|
|
%
|
July 31, 2012
|
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||
Income tax expense
|
$
|
909
|
$
|
568
|
167
|
%
|
$
|
341
|
$
|
618
|
$
|
(1,264
|
)
|
-67
|
%
|
$
|
1,882
|
|||||||||||||||
Percentage of revenue
|
1
|
%
|
1
|
%
|
0
|
%
|
2
|
%
|
||||||||||||||||||||||||
Effective tax rate
|
42
|
%
|
26
|
%
|
101
|
%
|
40
|
%
|
(in thousands)
|
Six Months Ended
July 31, 2013
|
Six Months Ended
July 31, 2012
|
||||||
Net cash provided by operating activities
|
$
|
13,049
|
$
|
11,373
|
||||
Net cash used in investing activities
|
(3,117
|
)
|
(6,939
|
)
|
||||
Net cash used in financing activities
|
(4,500
|
)
|
(6,514
|
)
|
||||
Effect of foreign exchange rates on cash and equivalents
|
(1,046
|
)
|
(1,004
|
)
|
||||
Net increase(decrease) in cash and equivalents
|
$
|
4,386
|
$
|
(3,084
|
)
|
Exhibits
|
|
|
|
Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Certification by the Chief Executive Officer and the Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
QAD Inc.
|
|
|
(Registrant)
|
|
Date: September 6, 2013
|
By:
|
/s/ DANIEL LENDER
|
|
|
Daniel Lender
|
|
|
Executive Vice President, Chief Financial Officer
|
|
|
(on behalf of the Registrant)
|
|
|
|
|
By:
|
/s/ KARA BELLAMY
|
|
|
Kara Bellamy
|
|
|
Senior Vice President, Corporate Controller
|
|
|
(Chief Accounting Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of QAD Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) ) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date: September 6, 2013
|
|
|
|
/s/ KARL F. LOPKER
|
|
Karl F. Lopker
|
|
Chief Executive Officer
|
|
QAD Inc.
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of QAD Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) ) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date: September 6, 2013
|
|
|
|
/s/ DANIEL LENDER
|
|
Daniel Lender
|
|
Chief Financial Officer
|
|
QAD Inc.
|
|
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
Date: September 6, 2013
|
|
|
|
/s/ KARL F. LOPKER
|
|
|
Karl F. Lopker
|
|
|
Chief Executive Officer
|
|
|
QAD Inc.
|
|
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
Date: September 6, 2013
|
|
|
|
/s/ DANIEL LENDER
|
|
|
Daniel Lender
|
|
|
Chief Financial Officer
|
|
|
QAD Inc.
|
|
COMMITMENTS AND CONTINGENCIES
|
6 Months Ended |
---|---|
Jul. 31, 2013
|
|
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES Indemnifications The Company sells software licenses and services to its customers under written agreements. Each agreement contains the relevant terms of the contractual arrangement with the customer and generally includes certain provisions for indemnifying the customer against losses, expenses and liabilities from damages that may be awarded against the customer in the event the Company's software is found to infringe upon certain intellectual property rights of a third party. The agreements generally limit the scope of and remedies for such indemnification obligations in a variety of industry-standard respects. The Company believes its internal development processes and other policies and practices limit its exposure related to the indemnification provisions of the agreements. For several reasons, including the lack of prior indemnification claims and the lack of a monetary liability limit for certain infringement cases under the agreements, the Company cannot determine the maximum amount of potential future payments, if any, related to such indemnification provisions. Legal Actions The Company is subject to various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. While the outcome of these claims cannot be predicted with certainty, management does not believe that the outcome of any of these legal matters will have a material adverse effect on the Company's consolidated results of operations, financial position or liquidity. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2013
|
Jul. 31, 2012
|
|
Revenue: | ||||
License fees | $ 8,604 | $ 6,906 | $ 14,822 | $ 14,771 |
Maintenance and other | 34,254 | 33,886 | 69,455 | 68,406 |
Subscription fees | 4,455 | 3,745 | 8,497 | 6,968 |
Professional services | 17,881 | 16,432 | 34,347 | 34,532 |
Total revenue | 65,194 | 60,969 | 127,121 | 124,677 |
Costs of revenue: | ||||
License fees | 1,058 | 832 | 2,013 | 1,713 |
Maintenance, subscription and other | 11,047 | 10,341 | 22,109 | 20,341 |
Professional services | 16,672 | 15,846 | 33,280 | 31,584 |
Total cost of revenue | 28,777 | 27,019 | 57,402 | 53,638 |
Gross profit | 36,417 | 33,950 | 69,719 | 71,039 |
Operating expenses: | ||||
Sales and marketing | 15,850 | 14,747 | 31,906 | 30,243 |
Research and development | 10,469 | 9,210 | 21,314 | 18,744 |
General and administrative | 8,431 | 8,378 | 16,377 | 16,483 |
Amortization of intangibles from acquisitions | 177 | 57 | 353 | 57 |
Total operating expenses | 34,927 | 32,392 | 69,950 | 65,527 |
Operating income (loss) | 1,490 | 1,558 | (231) | 5,512 |
Other (income) expense: | ||||
Interest income | (73) | (164) | (170) | (327) |
Interest expense | 209 | 330 | 412 | 616 |
Other (income) expense, net | (809) | 92 | (1,082) | 538 |
Total other (income) expense | (673) | 258 | (840) | 827 |
Income before income taxes | 2,163 | 1,300 | 609 | 4,685 |
Income tax expense | 909 | 341 | 618 | 1,882 |
Net income (loss) | 1,254 | 959 | (9) | 2,803 |
Comprehensive income: | ||||
Foreign currency translation adjustment, net of tax | 18 | (75) | 391 | 70 |
Total comprehensive (loss) income | 1,272 | 884 | 382 | 2,873 |
Common Class A [Member]
|
||||
Other (income) expense: | ||||
Net income (loss) | 1,036 | 795 | (6) | 2,319 |
Basic net income (loss) per share | ||||
Earnings per share (in dollars per share) | $ 0.08 | $ 0.06 | $ 0 | $ 0.18 |
Diluted net income (loss) per share | ||||
Earnings per share (in dollars per share) | $ 0.08 | $ 0.06 | $ 0 | $ 0.18 |
Common Class B [Member]
|
||||
Other (income) expense: | ||||
Net income (loss) | $ 218 | $ 164 | $ (3) | $ 484 |
Basic net income (loss) per share | ||||
Earnings per share (in dollars per share) | $ 0.07 | $ 0.05 | $ 0 | $ 0.15 |
Diluted net income (loss) per share | ||||
Earnings per share (in dollars per share) | $ 0.07 | $ 0.05 | $ 0 | $ 0.15 |
CAPITALIZED SOFTWARE COSTS
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CAPITALIZED SOFTWARE COSTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CAPITALIZED SOFTWARE COSTS | 5. CAPITALIZED SOFTWARE COSTS Capitalized software costs and accumulated amortization at July 31, 2013 and January 31, 2013 were as follows:
___________________________________ (1) Capitalized software development costs include the impact of foreign currency translation. Acquired software technology costs relate to technology purchased as a result of the Company's fiscal 2013 acquisitions of DynaSys and CEBOS, as described in Note 4 "Business Combinations" within these Notes to Condensed Consolidated Financial Statements. In addition to the acquired software technology, the Company has capitalized costs related to translations and localizations of QAD Enterprise Applications. It is the Company's policy to write off capitalized software development costs once fully amortized. Accordingly, during the first six months of fiscal 2014, $0.2 million of costs and accumulated amortization were removed from the balance sheet. Amortization of capitalized software costs was $0.3 million and $0.6 million for the three and six months ended July 31, 2013, respectively. For the three and six months ended July 31, 2012, amortization of capitalized software costs was $0.1 million and $0.2 million, respectively. Amortization of capitalized software costs is included in "Cost of license fees" in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. The following table summarizes the estimated amortization expense relating to the Company's capitalized software costs as of July 31, 2013:
|
DEBT (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | 7. DEBT
|
BUSINESS SEGMENT INFORMATION
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS SEGMENT INFORMATION [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS SEGMENT INFORMATION | 13. BUSINESS SEGMENT INFORMATION The Company markets its products and services worldwide, primarily to companies in the manufacturing industry, including automotive, consumer products, food and beverage, high technology, industrial products and life sciences industries. The Company sells and licenses its products through its direct sales force in four geographic regions: North America, EMEA, Asia Pacific and Latin America and through distributors where third parties can extend sales reach more effectively or efficiently. The North America region includes the United States and Canada. The EMEA region includes Europe, the Middle East and Africa. The Asia Pacific region includes Asia and Australia. The Latin America region includes South America, Central America and Mexico. The Company's Chief Operating Decision Maker, the Chief Executive Officer, reviews the consolidated results within one operating segment. License revenue is assigned to the geographic regions based on delivery of the licenses to each region and sales effort. Maintenance and subscription revenues are allocated to the region where the end user customer is located. Services revenue is assigned based on the region where the services are performed.
___________________________________
|
STOCKHOLDERS' EQUITY (Details) (USD $)
|
6 Months Ended | 23 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2013
|
Sep. 30, 2011
|
|
Dividends [Abstract] | ||||
Fair value of shares issued | $ 145,000 | $ 334,000 | ||
Stock Repurchase Activity [Abstract] | ||||
Number of shares authorized for repurchase (in shares) | 1,000,000 | |||
Cash consideration for repurchase of common stock | 686,000 | 3,899,000 | 12,500,000 | |
Dividends Declaration Date One [Member]
|
||||
Dividends [Abstract] | ||||
Declaration date | Jun. 11, 2013 | |||
Record date | Jun. 25, 2013 | |||
Payable | Jul. 02, 2013 | |||
Amount Paid in Cash | 1,089,000 | |||
Class A shares issued (in shares) | 0 | |||
Fair value of shares issued | 0 | |||
Dividends Declaration Date Two [Member]
|
||||
Dividends [Abstract] | ||||
Declaration date | Apr. 24, 2013 | |||
Record date | May 08, 2013 | |||
Payable | May 15, 2013 | |||
Amount Paid in Cash | 1,083,000 | |||
Class A shares issued (in shares) | 0 | |||
Fair value of shares issued | 0 | |||
Dividends Declaration Date Three [Member]
|
||||
Dividends [Abstract] | ||||
Declaration date | Dec. 11, 2012 | |||
Record date | Dec. 26, 2012 | |||
Payable | Feb. 08, 2013 | |||
Amount Paid in Cash | 947,000 | |||
Class A shares issued (in shares) | 10,000 | |||
Fair value of shares issued | $ 145,000 | |||
Common Class A [Member]
|
||||
Stock Repurchase Activity [Abstract] | ||||
Shares repurchased (in shares) | 897,000 | |||
Common Class A [Member] | Dividends Declaration Date One [Member]
|
||||
Dividends [Abstract] | ||||
Dividend (in dollars per share) | $ 0.072 | $ 0.072 | ||
Common Class A [Member] | Dividends Declaration Date Two [Member]
|
||||
Dividends [Abstract] | ||||
Dividend (in dollars per share) | $ 0.072 | $ 0.072 | ||
Common Class A [Member] | Dividends Declaration Date Three [Member]
|
||||
Dividends [Abstract] | ||||
Dividend (in dollars per share) | $ 0.072 | $ 0.072 | ||
Common Class B [Member]
|
||||
Stock Repurchase Activity [Abstract] | ||||
Shares repurchased (in shares) | 103,000 | |||
Common Class B [Member] | Dividends Declaration Date One [Member]
|
||||
Dividends [Abstract] | ||||
Dividend (in dollars per share) | $ 0.06 | $ 0.06 | ||
Common Class B [Member] | Dividends Declaration Date Two [Member]
|
||||
Dividends [Abstract] | ||||
Dividend (in dollars per share) | $ 0.06 | $ 0.06 | ||
Common Class B [Member] | Dividends Declaration Date Three [Member]
|
||||
Dividends [Abstract] | ||||
Dividend (in dollars per share) | $ 0.06 | $ 0.06 |
STOCK-BASED COMPENSATION (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allocation of stock-based compensation expense | The following table sets forth reported stock-based compensation expense for the three and six months ended July 31, 2013 and 2012:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average assumptions used to value SARs | The weighted average assumptions used to value SARs granted in the six months ended July 31, 2013 and 2012 are shown in the following table:
_____________________________________
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity for outstanding stock options and SARs | The following table summarizes the activity for outstanding stock options and SARs for the six months ended July 31, 2013:
___________________________________
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of activity for RSUs | The following table summarizes the activity for RSUs for the six months ended July 31, 2013:
____________________________________
|
STOCKHOLDERS' EQUITY (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared and/or paid | The following table sets forth the dividends declared and/or paid by the Company during fiscal 2014:
|
BUSINESS SEGMENT INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2013
GeographicRegion
Segment
|
Jul. 31, 2012
|
|||||||
BUSINESS SEGMENT INFORMATION [Abstract] | ||||||||||
Number of geographic regions | 4 | |||||||||
Number of operating segments | 1 | |||||||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||||||||
Revenue | $ 65,194 | $ 60,969 | $ 127,121 | $ 124,677 | ||||||
Percentage of sales into Canada to North America total revenue (in hundredths) | 2.00% | 3.00% | 3.00% | 3.00% | ||||||
North America [Member]
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Revenues From External Customers And Long Lived Assets [Line Items] | ||||||||||
Revenue | 27,538 | [1] | 26,211 | [1] | 54,104 | [1] | 54,729 | [1] | ||
EMEA [Member]
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Revenues From External Customers And Long Lived Assets [Line Items] | ||||||||||
Revenue | 21,830 | 18,809 | 41,637 | 37,358 | ||||||
Asia Pacific [Member]
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Revenues From External Customers And Long Lived Assets [Line Items] | ||||||||||
Revenue | 11,489 | 11,851 | 23,143 | 23,610 | ||||||
Latin America [Member]
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Revenues From External Customers And Long Lived Assets [Line Items] | ||||||||||
Revenue | $ 4,337 | $ 4,098 | $ 8,237 | $ 8,980 | ||||||
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BUSINESS COMBINATIONS (Details) (USD $)
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0 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Apr. 30, 2013
Minimum [Member]
|
Apr. 30, 2013
Maximum [Member]
|
Dec. 28, 2012
CEBOS [Member]
Payment
|
Jun. 06, 2012
DynaSys [Member]
|
Jun. 06, 2012
Software Technology [Member]
DynaSys [Member]
|
Jun. 06, 2012
Customer Relationships [Member]
DynaSys [Member]
|
Jun. 06, 2012
Trade Name [Member]
DynaSys [Member]
|
|
Business Acquisition [Line Items] | |||||||
Total purchase price of acquisition | $ 3,500,000 | $ 7,500,000 | |||||
Number of separate contingent payments on acquisition on achievement of milestone | 2 | ||||||
Future payments required under business acquisition | 750,000 | ||||||
Guaranteed future cash payment | 250,000 | ||||||
Contingent payments | 500,000 | 1,500,000 | 500,000 | ||||
Fair Values of Assets Acquired and Liabilities Assumed [Abstract] | |||||||
Tangible assets, including cash acquired | 1,423,000 | 4,250,000 | |||||
Goodwill | 2,456,000 | 2,231,000 | |||||
Other intangible assets | 3,450,000 | 1,800,000 | 1,400,000 | 300,000 | |||
Total assets acquired | 7,329,000 | 9,981,000 | |||||
Liabilities assumed | (1,233,000) | (2,032,000) | |||||
Deferred tax liability | (1,209,000) | (450,000) | |||||
Net assets acquired | 4,887,000 | 7,499,000 | |||||
Cash acquired from acquisition | $ 400,000 | $ 2,800,000 |
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2013
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Accumulated Other Comprehensive Income (Loss) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Loss, Net of Taxes | The components of accumulated other comprehensive loss, net of taxes, were as follows:
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BASIS OF PRESENTATION
|
6 Months Ended |
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Jul. 31, 2013
|
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BASIS OF PRESENTATION [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements fairly present the financial information contained therein. These statements have been prepared in accordance with generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In management's opinion, all necessary adjustments, consisting of normal, recurring and non-recurring adjustments, have been included in the accompanying Condensed Consolidated Financial Statements to present fairly the financial position and operating results of QAD Inc. ("QAD" or the "Company"). The Condensed Consolidated Financial Statements do not include all disclosures required by accounting principles generally accepted in the United States of America for annual financial statements and should be read in conjunction with the audited financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended January 31, 2013. The Condensed Consolidated Financial Statements include the results of the Company and its wholly owned subsidiaries. The results of operations for the three and six months ended July 31, 2013 are not necessarily indicative of the results to be expected for the year ending January 31, 2014. |
FAIR VALUE MEASUREMENTS
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2013
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FAIR VALUE MEASUREMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | 3. FAIR VALUE MEASUREMENTS When determining fair value, the Company uses a three-tier value hierarchy which prioritizes the inputs used in measuring fair value. Whenever possible, the Company uses observable market data. The Company relies on unobservable inputs only when observable market data is not available. Classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. Money market mutual funds are recorded at fair value based upon quoted market prices and are therefore included in Level 1. The asset or liability related to the interest rate swap is recorded at fair value based upon a valuation model that uses relevant observable market inputs at quoted intervals, such as forward yield curves, and is therefore included in Level 2. The following table sets forth the financial assets and liabilities, measured at fair value, as of July 31, 2013 and January 31, 2013:
Money market mutual funds are classified as part of "Cash and equivalents" in the accompanying Condensed Consolidated Balance Sheets. In addition, the amount of cash and equivalents included cash deposited with commercial banks of $ 18.4 million and $20.1 million as of July 31, 2013 and January 31, 2013, respectively. The Company's line of credit and note payable both bear a variable market interest rate commensurate with the Company's credit standing. Therefore, the carrying amounts outstanding under the line of credit and note payable reasonably approximate fair value based on Level 2 inputs. There have been no transfers between fair value measurements levels during the three months ended July 31, 2013. Derivative Instruments The Company entered into an interest rate swap in May 2012 to mitigate its exposure to the variability of one month LIBOR for its floating rate debt described in Note 7 "Debt" within these Notes to Condensed Consolidated Financial Statements. The fair value of the interest rate swap is reflected as an asset or liability in the Condensed Consolidated Balance Sheets and the change in fair value is reported in "Other (income) expense" in the Condensed Consolidated Statements of Operations and Comprehensive Income. The fair value of the interest rate swap is estimated as the net present value of projected cash flows based upon forward interest rates at the balance sheet date. The fair values of the derivative instrument at July 31, 2013 and January 31, 2013 were as follows (in thousands):
The change in fair value of the interest rate swap recognized in the Condensed Consolidated Statement of Operations and Comprehensive Income for the six months ended July 31, 2013 was $0.7 million. |
GOODWILL AND INTANGIBLE ASSETS
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Jul. 31, 2013
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GOODWILL AND INTANGIBLE ASSETS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | 6. GOODWILL AND INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill for the six months ended July 31, 2013, were as follows:
The Company performed its annual goodwill impairment review during the fourth quarter of fiscal 2013. The analysis compared the Company's market capitalization to its net assets as of the test date, November 30, 2012. As the market capitalization significantly exceeded the Company's net assets, there was no indication of goodwill impairment for fiscal 2013. The Company monitors the indicators for goodwill impairment testing between annual tests. No adverse events occurred during the six months ended July 31, 2013, that would cause the Company to test goodwill for impairment. Intangible Assets
___________________________________
The Company's intangible assets are related to the DynaSys and CEBOS acquisitions completed in fiscal 2013. Intangible assets are included in "Other assets, net" in the accompanying Condensed Consolidated Balance Sheets. As of July 31, 2013, all of the Company's intangible assets were determined to have finite useful lives, and therefore were subject to amortization. Amortization of intangible assets was $177,000 and $353,000 for the three and six months ended July 31, 2013, respectively. Amortization of intangible assets was $57,000 for both the three and six months ended July 31, 2012. The following table summarizes the estimated amortization expense relating to the Company's intangible assets as of July 31, 2013:
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BUSINESS COMBINATIONS
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2013
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BUSINESS COMBINATIONS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS COMBINATIONS | 4. BUSINESS COMBINATIONS CEBOS On December 28, 2012, the Company acquired all of the outstanding stock of CEBOS, Ltd. ("CEBOS"), a provider of quality management and regulatory compliance software solutions, in a nontaxable transaction. CEBOS was founded in 1998 and is headquartered in Michigan, USA. The Company completed the acquisition for the purpose of expanding its product offerings and driving revenue growth. The purchase price consisted of $3.5 million in cash and two future payments of $750,000 each, due April 2014 and April 2015, respectively. Each future payment consists of $250,000 guaranteed and $500,000 contingent upon achievement of certain development and sales-based milestones. The contingent liability was estimated by assessing the probability of achieving each milestone and discounting the amount of each potential payment based on expected timing of the payment. The fair value of the liability-classified contingent consideration is remeasured at each reporting period with any changes in the fair value recorded as income or expense. The potential undiscounted amount of all future cash payments that the Company could be required to make for contingent consideration is between $0.5 million and $1.5 million as of July 31, 2013. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):
The Company believes the amount of goodwill resulting from the purchase price allocation is attributable to the workforce of the acquired business and the expected synergistic benefits of being able to leverage CEBOS's software with the Company's existing software to provide an integrated suite to the customer bases of both the Company and CEBOS. The acquired goodwill and intangible assets are not deductible for tax purposes. Identified intangible assets will be amortized to cost of license fees and operating expense based upon the nature of the asset ratably over the estimated useful life, as detailed in the table below (in thousands, except year amounts):
The Company has evaluated and continues to reevaluate pre-acquisition contingencies relating to CEBOS that existed as of the acquisition date. The Company has preliminarily determined that certain of these pre-acquisition contingencies are probable in nature and estimable as of the acquisition date and, accordingly, has recorded its best estimates for these contingencies as a part of the purchase price allocation. Although the Company believes the assumptions and estimates made in the past have been reasonable and appropriate, they are based in part on historical experience and are inherently uncertain. The purchase price allocation process requires the Company to use significant estimates and assumptions as of the business combination date, including the estimated fair value of accounts receivable acquired. The Company continues to gather information and evaluate pre-acquisition contingencies that it has assumed. If the Company makes changes to the amounts recorded or identifies additional pre-acquisition contingencies during the remainder of the measurement period, such amounts recorded will be included in the purchase price allocation. DynaSys On June 6, 2012, the Company acquired France-based DynaSys S.A. ("DynaSys"), a provider of demand and supply chain planning software solutions, for $7.5 million. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):
The results of operations of DynaSys and CEBOS are included in the Condensed Consolidated Financial Statements from the date of acquisition. The acquisitions were not deemed material, thus pro forma supplemental information has not been provided. |
BUSINESS SEGMENT INFORMATION (Tables)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2013
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BUSINESS SEGMENT INFORMATION [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
License and subscription revenues assigned to geographic regions | License revenue is assigned to the geographic regions based on delivery of the licenses to each region and sales effort. Maintenance and subscription revenues are allocated to the region where the end user customer is located. Services revenue is assigned based on the region where the services are performed.
___________________________________
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BUSINESS COMBINATIONS, 2 (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
Jan. 31, 2013
|
Jul. 31, 2013
Customer Relationships [Member]
|
Jan. 31, 2013
Customer Relationships [Member]
|
Jul. 31, 2013
Trade Name [Member]
|
Jan. 31, 2013
Trade Name [Member]
|
Jun. 06, 2012
DynaSys [Member]
Software Technology [Member]
|
Jun. 06, 2012
DynaSys [Member]
Customer Relationships [Member]
|
Jun. 06, 2012
DynaSys [Member]
Trade Name [Member]
|
Jul. 31, 2013
CEBOS [Member]
|
Dec. 28, 2012
CEBOS [Member]
|
Jul. 31, 2013
CEBOS [Member]
Software Technology [Member]
|
Jul. 31, 2013
CEBOS [Member]
Software Technology [Member]
Minimum [Member]
|
Jul. 31, 2013
CEBOS [Member]
Software Technology [Member]
Maximum [Member]
|
Jul. 31, 2013
CEBOS [Member]
Customer Relationships [Member]
|
Jul. 31, 2013
CEBOS [Member]
Trade Name [Member]
|
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Acquired Finite-Lived Intangible Assets [Line Items] | ||||||||||||||||||||
Estimated useful life | 2 years | 5 years | 5 years | 5 years | ||||||||||||||||
Fair value | $ 3,546 | $ 3,581 | $ 3,014 | [1] | $ 3,049 | [1] | $ 532 | $ 532 | $ 3,450 | $ 1,750 | $ 1,500 | $ 200 | ||||||||
Other intangible assets | 1,800 | 1,400 | 300 | 3,450 | ||||||||||||||||
Estimated annual amortization | $ 320 | $ 395 | $ 300 | $ 40 | ||||||||||||||||
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INCOME TAXES (Details) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2013
|
Jul. 31, 2012
|
|
Income Tax Contingency [Line Items] | ||||
Income tax expense | $ 909,000 | $ 341,000 | $ 618,000 | $ 1,882,000 |
Effective income tax rate (in hundredths) | 42.00% | 26.00% | 101.00% | 40.00% |
Unrecognized tax benefits that will impact effective tax rate | 2,600,000 | 2,600,000 | ||
Unrecognized tax benefits recognized in next twelve months | 200,000 | 200,000 | ||
Unrecognized tax benefits, income tax penalties and interest accrued | 200,000 | 200,000 | ||
Potential non-cash charge to income tax expense | $ 2,600,000 | |||
California [Member]
|
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Income Tax Contingency [Line Items] | ||||
Years in which the company is currently under audit | 2004 and 2005 | 2004 and 2005 | ||
India [Member]
|
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Income Tax Contingency [Line Items] | ||||
Years in which the company is currently under audit | March 31, 1998, 1999, 2006, 2008, 2009, 2010 and 2011 | March 31, 1998, 1999, 2006, 2008, 2009, 2010 and 2011 | ||
South Africa and Thailand [Member]
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Income Tax Contingency [Line Items] | ||||
Years in which the company is currently under audit | 2012 | 2012 |