x | 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 (State or other jurisdiction of incorporation or organization) | 7372 (Primary Standard Industrial Classification code number) | 81-1001640 (I.R.S. Employer Identification No.) |
Large accelerated filer | o | Accelerated filer | o | Non-accelerated filer | ý | Smaller reporting company | o |
Series A | Series B | Series C | |||||
CommerceHub, Inc. common stock: | 13,522,640 | 711,992 | 28,615,203 |
September 30, 2016 | December 31, 2015 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 17,608 | $ | 19,337 | |||
Accounts receivable, net of allowances of $500 and $239, respectively | 10,259 | 16,472 | |||||
Prepaid income taxes | 950 | — | |||||
Prepaid expenses and other current assets | 1,990 | 1,048 | |||||
Total current assets | 30,807 | 36,857 | |||||
Note receivable—Parent | — | 36,107 | |||||
Capitalized software, net | 7,460 | 7,189 | |||||
Deferred services costs | 5,157 | 4,956 | |||||
Property and equipment, net | 7,935 | 6,706 | |||||
Intangibles, net | 438 | 1,750 | |||||
Goodwill | 21,410 | 21,410 | |||||
Deferred income taxes | 11,045 | 38,825 | |||||
Other long-term assets | 1,209 | — | |||||
Total assets | $ | 85,461 | $ | 153,800 | |||
Liabilities and Equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 3,631 | $ | 3,982 | |||
Accrued payroll and related expenses | 5,952 | 5,538 | |||||
Due to Parent | — | 9,112 | |||||
Income taxes payable | 1,760 | — | |||||
Deferred revenue | 5,085 | 4,490 | |||||
Share-based compensation liability | — | 94,427 | |||||
Total current liabilities | 16,428 | 117,549 | |||||
Deferred revenue, long-term | 7,521 | 7,532 | |||||
Share-based compensation liability, long-term | — | 1,786 | |||||
Long-term debt | 41,000 | — | |||||
Total liabilities | 64,949 | 126,867 | |||||
Equity: | |||||||
Preferred stock, $0.01 par value. Authorized shares of 50,000,000; 0 shares issued and outstanding at September 30, 2016 | — | — | |||||
Series A common stock, $0.01 par value. Authorized shares 40,000,000; 13,521,949 shares issued and outstanding at September 30, 2016 | 135 | — | |||||
Series B common stock, $0.01 par value. Authorized shares 1,500,000; 711,992 shares issued and outstanding at September 30, 2016 | 7 | — | |||||
Series C common stock, $0.01 par value. Authorized shares 83,000,000; 28,613,837 shares issued and outstanding at September 30, 2016 | 286 | — | |||||
Parent's investment | — | 22,784 | |||||
Additional paid-in capital | 12,791 | — | |||||
Retained earnings | 7,293 | 4,149 | |||||
Total equity | 20,512 | 26,933 | |||||
Total liabilities and equity | $ | 85,461 | $ | 153,800 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue, including related party revenue of $1,165, $1,172, $4,526, and $4,315, respectively (note 8) | $ | 22,478 | $ | 19,695 | $ | 67,671 | $ | 58,343 | |||||||
Cost of revenue | 5,737 | 6,332 | 17,162 | 16,177 | |||||||||||
Gross profit | 16,741 | 13,363 | 50,509 | 42,166 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 5,077 | 3,378 | 13,391 | 11,016 | |||||||||||
Sales and marketing | 3,023 | 2,808 | 9,024 | 7,834 | |||||||||||
General and administrative | 8,008 | 8,475 | 23,207 | 28,501 | |||||||||||
Total operating expenses | 16,108 | 14,661 | 45,622 | 47,351 | |||||||||||
Income (loss) from operations | 633 | (1,298 | ) | 4,887 | (5,185 | ) | |||||||||
Other (expense) income: | |||||||||||||||
Interest expense | (361 | ) | — | (405 | ) | — | |||||||||
Interest income | — | 156 | 273 | 432 | |||||||||||
Total other (expense) income | (361 | ) | 156 | (132 | ) | 432 | |||||||||
Income (loss) before income taxes | 272 | (1,142 | ) | 4,755 | (4,753 | ) | |||||||||
Income tax expense (benefit) | (438 | ) | (521 | ) | 1,611 | (1,647 | ) | ||||||||
Net income (loss) | 710 | (621 | ) | 3,144 | (3,106 | ) | |||||||||
Total comprehensive income (loss) | $ | 710 | $ | (621 | ) | $ | 3,144 | $ | (3,106 | ) | |||||
Earnings (loss) per share: | |||||||||||||||
Basic | $ | 0.02 | $ | (0.01 | ) | $ | 0.07 | $ | (0.07 | ) | |||||
Diluted | $ | 0.02 | $ | (0.01 | ) | $ | 0.07 | $ | (0.07 | ) | |||||
Shares used in computing earnings (loss) per share: | |||||||||||||||
Basic | 42,773 | 42,703 | 42,773 | 42,703 | |||||||||||
Diluted | 43,559 | 42,703 | 43,559 | 42,703 |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 3,144 | $ | (3,106 | ) | ||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||||||
Depreciation and amortization | 7,315 | 5,715 | |||||
Amortization of debt issuance costs | 55 | — | |||||
Share-based compensation expense | 8,753 | 24,332 | |||||
Deferred income taxes | 17,015 | (9,503 | ) | ||||
Bad debt expense | 695 | 240 | |||||
Accrued interest income | (273 | ) | (432 | ) | |||
Loss on disposal of long-term assets | 160 | — | |||||
Change in operating assets and liabilities, net of acquisition: | |||||||
Accounts receivable | 5,667 | 5,577 | |||||
Prepaid expenses and other assets | (956 | ) | (267 | ) | |||
Prepaid income taxes | (950 | ) | — | ||||
Deferred costs | (201 | ) | (841 | ) | |||
Deferred revenue | 266 | 2,058 | |||||
Accounts payable and accrued expenses | 479 | (2,679 | ) | ||||
Accrued payroll and related expenses | 416 | 2,082 | |||||
Income taxes payable | 1,760 | — | |||||
Share-based compensation liability payments | (86,684 | ) | (3,619 | ) | |||
Parent receivables and payables, net | (9,112 | ) | (260 | ) | |||
Net cash (used in) provided by operating activities | (52,451 | ) | 19,297 | ||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (4,513 | ) | (3,555 | ) | |||
Additions to capitalized software | (3,963 | ) | (4,435 | ) | |||
Acquisition of business, net of cash acquired | — | (20,225 | ) | ||||
Collection of note receivable - Parent | 36,380 | — | |||||
Net cash provided by (used in) investing activities | 27,904 | (28,215 | ) | ||||
Cash flows from financing activities: | |||||||
Borrowings on revolver | 50,000 | — | |||||
Payments on revolver | (9,000 | ) | — | ||||
Cash paid for debt issuance costs | (1,100 | ) | — | ||||
Purchase of treasury stock | (3,600 | ) | (164 | ) | |||
Cash received from exercise of stock options | 248 | 26 | |||||
Borrowings on note payable - Parent | 28,664 | — | |||||
Payments on note payable - Parent | (28,664 | ) | — | ||||
Contribution from Parent | 6,000 | — | |||||
Dividends paid to Parent | (19,730 | ) | — | ||||
Net cash provided by (used in) financing activities | 22,818 | (138 | ) | ||||
Currency effect on cash and cash equivalents | — | — | |||||
Net decrease in cash and cash equivalents | (1,729 | ) | (9,056 | ) | |||
Cash and cash equivalents, beginning of period | 19,337 | 26,385 | |||||
Cash and cash equivalents, end of period | $ | 17,608 | $ | 17,329 | |||
Supplemental disclosure of non-cash investing and financing activities: | |||||||
Contractual obligations for acquisition of capitalized software | $ | 58 | $ | — |
Common Stock | |||||||||||||||||||||
Series A | Series B | Series C | Amount | APIC | Parent's Investment | Retained Earnings | Total Equity | ||||||||||||||
Balance at January 1, 2016 | — | — | — | $ | — | $ | — | $ | 22,784 | $ | 4,149 | $ | 26,933 | ||||||||
Net income (loss) | 3,144 | 3,144 | |||||||||||||||||||
Exercise of stock options | 73 | 73 | |||||||||||||||||||
Contribution from Parent | 6,000 | 6,000 | |||||||||||||||||||
Dividends paid to Parent | (19,730 | ) | (19,730 | ) | |||||||||||||||||
Change in capitalization in connection with the Spin-Off | 13,522,288 | 711,992 | 28,468,562 | 427 | 8,700 | (9,127 | ) | — | |||||||||||||
Issuance of minority shares | 109,354 | 1 | (1 | ) | — | ||||||||||||||||
Share-based compensation expense | 2,193 | 2,193 | |||||||||||||||||||
Reclassification of share-based compensation liability | 12,489 | 12,489 | |||||||||||||||||||
Forfeiture of net operating losses to Parent | (10,765 | ) | (10,765 | ) | |||||||||||||||||
Exercise of stock options | 36,503 | — | 175 | 175 | |||||||||||||||||
Issuance of restricted stock units | 2 | 7 | — | — | — | ||||||||||||||||
Cancellation of restricted shares | (341 | ) | (589 | ) | — | — | — | ||||||||||||||
Balance at September 30, 2016 | 13,521,949 | 711,992 | 28,613,837 | $ | 428 | $ | 12,791 | $ | — | $ | 7,293 | $ | 20,512 |
• | Borrowed $50.0 million under our credit facility (see Note 13) to fund cash outflows described below; |
• | Fully repaid our note payable due to Liberty, including accrued interest, of $28.7 million and amounts due for state taxes paid of $1.3 million; |
• | Paid a dividend of $18.9 million to the holders of CTI common stock, including Parent, and $0.9 million to a Parent, as holders of CTI preferred shares on the record date for the Spin-Off; |
• | Collected amounts due from Liberty for federal tax benefits of $8.5 million (see Note 12 for further discussion of tax related transactions that occurred in connection with the Spin-Off); and |
• | Received a contribution from Liberty of $6.0 million to compensate the Company for the dilution associated with Parent equity awards. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income (loss) | $ | 710 | $ | (621 | ) | $ | 3,144 | $ | (3,106 | ) | |||||
Basic - weighted average shares outstanding | 42,773 | 42,703 | 42,773 | 42,703 | |||||||||||
Effect of dilutive potential securities | 786 | — | 786 | — | |||||||||||
Diluted - weighted average shares outstanding | 43,559 | 42,703 | 43,559 | 42,703 | |||||||||||
Anti-dilutive securities | 5,034 | — | 5,034 | — |
Cash | $ | 41 | |
Accounts receivable | 2,559 | ||
Prepaid expenses | 87 | ||
Property and equipment | 336 | ||
Customer relationships | 2,000 | ||
Developed software technology | 1,500 | ||
Deferred tax assets | 3,580 | ||
Goodwill | 12,390 | ||
Accounts payable and accrued expenses | (2,015 | ) | |
Deferred revenue | (212 | ) | |
20,266 |
September 30, 2016 | December 31, 2015 | ||||||
Capitalized software costs | $ | 42,051 | $ | 41,120 | |||
Less accumulated amortization | (34,591 | ) | (33,931 | ) | |||
Capitalized software costs, net | $ | 7,460 | $ | 7,189 |
Remainder of 2016 | $ | 1,262 | |
2017 | 4,290 | ||
2018 | 1,737 | ||
2019 | 171 | ||
2020 and thereafter | — | ||
$ | 7,460 |
September 30, 2016 | Weighted Average Life (Years) | Gross Carrying Amount | Accumulated Amortization | Net Book Value | |||||||||
Developed technology | 2.0 | $ | 1,500 | $ | (1,312 | ) | $ | 188 | |||||
Customer relationships | 2.0 | 2,000 | (1,750 | ) | 250 | ||||||||
Total | $ | 3,500 | $ | (3,062 | ) | $ | 438 |
December 31, 2015 | Weighted Average Life (Years) | Gross Carrying Amount | Accumulated Amortization | Net Book Value | |||||||||
Developed technology | 2.0 | $ | 1,500 | $ | (750 | ) | $ | 750 | |||||
Customer relationships | 2.0 | 2,000 | (1,000 | ) | 1,000 | ||||||||
Total | $ | 3,500 | $ | (1,750 | ) | $ | 1,750 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Cost of revenue | $ | (49 | ) | $ | 806 | $ | (207 | ) | $ | 1,383 | ||
Research and development | 584 | 1,215 | 1,697 | 4,347 | ||||||||
Sales and marketing | 103 | 870 | 704 | 2,411 | ||||||||
General and administrative | 1,555 | 4,623 | 6,559 | 16,191 | ||||||||
$ | 2,193 | $ | 7,514 | $ | 8,753 | $ | 24,332 |
Number of Options | Weighted average exercise price | Weighted average remaining contractual life | Aggregate intrinsic value | |||||||||
(in years) | (in thousands) | |||||||||||
CommerceHub Options and SARs outstanding at Spin-Off | 5,811,150 | $ | 12.81 | |||||||||
Grants | 48,281 | $ | 14.85 | |||||||||
Exercised | (33,738 | ) | $ | 4.81 | ||||||||
Forfeited | (139,628 | ) | $ | 10.17 | ||||||||
Outstanding at September 30, 2016 | 5,686,065 | $ | 12.94 | 8.47 | $ | 18,543 | ||||||
Exercisable at September 30, 2016 | 280,000 | $ | 4.93 | 5.05 | $ | 3,074 |
Number of Options | Weighted average exercise price | Weighted average remaining contractual life | Aggregate intrinsic value | |||||||||
(in years) | (in thousands) | |||||||||||
New Parent option awards outstanding at Spin-Off | 1,032,817 | $ | 8.87 | |||||||||
Grants | — | $ | — | |||||||||
Exercised | (2,765 | ) | $ | 4.62 | ||||||||
Forfeited | — | $ | — | |||||||||
Outstanding at September 30, 2016 | 1,030,052 | $ | 8.88 | 4.26 | $ | 7,242 | ||||||
Exercisable at September 30, 2016 | 549,978 | $ | 6.30 | 2.96 | $ | 5,284 |
Remainder of 2016 | $ | 560 | |
2017 | 2,120 | ||
2018 | 2,132 | ||
2019 | 2,157 | ||
2020 | 2,183 | ||
Thereafter | 2,139 | ||
$ | 11,291 |
• | customer demand for products and services and the ability of our company to adapt to changes in demand; |
• | competitor responses to products and services; |
• | the levels of online traffic to our customer’s websites and their ability to convert visitors into customers; |
• | the growth of the e-commerce industry and the SaaS enterprise application software market in general and particularly in our markets; |
• | the growth of non-traditional e-commerce devices and platforms, including mobile devices and social networking applications; |
• | the achievement of advances in and expansion of our platform and our solutions; |
• | our ability to predict future commerce trends and technology; |
• | the impact of changes in search engine algorithms and dynamics or search engine disintermediation; |
• | changes to technologies used in our platform or new versions or upgrades of operating systems and internet browsers impacting the process by which merchants and customers interface with our platform; |
• | uncertainties inherent in the development and integration of new business lines and business strategies; |
• | our future financial performance, including availability, terms and deployment of capital; |
• | our ability to successfully integrate and recognize anticipated efficiencies and benefits from the businesses we acquire; |
• | the ability of suppliers and vendors to deliver products, equipment, software and services; |
• | availability of qualified personnel; |
• | changes in, or failure or inability to comply with, government regulations, including, without limitation, adverse outcomes from regulatory proceedings; |
• | changes in the nature of key strategic relationships with partners and vendors; |
• | general economic and business conditions and industry trends including the current economic downturn; |
• | consumer spending levels, including the availability and amount of individual consumer debt; |
• | costs related to the maintenance and enhancement of brand awareness by our subsidiaries; |
• | advertising spending levels; |
• | rapid technological changes; |
• | the regulatory and competitive environment of the industries in which our company operates; and |
• | fluctuations in foreign currency exchange rates and threatened terrorist attacks, political and economic unrest in international markets and ongoing military action around the world. |
• | Supply Solutions: enable retailers to expand their product offerings without the economic and logistical limitations or risks typically associated with carrying physical inventory; |
• | Demand Solutions: provide retailers and suppliers with a single platform to gain greater access to shopper demand through a single connection to retail channels, marketplaces, paid search, social and advertising channels; and |
• | Delivery Solutions: facilitate rapid, cost-efficient, on-time delivery with greater control of, and visibility into, the consumer experience by leveraging our solutions to allow our customers to coordinate more effectively with delivery providers. |
(amounts in thousands) | Three Months Ended September 30, | Change | |||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Revenue: | |||||||||||||||
Usage revenue | $ | 14,563 | $ | 13,148 | $ | 1,415 | 11 | % | |||||||
Subscription revenue | 6,420 | 5,435 | 985 | 18 | % | ||||||||||
Set-up and professional services | 1,495 | 1,112 | 383 | 34 | % | ||||||||||
Total revenue | $ | 22,478 | $ | 19,695 | $ | 2,783 | 14 | % |
(amounts in thousands) | Three Months Ended September 30, | Change | |||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Cost of revenue | $ | 5,737 | $ | 6,332 | $ | (595 | ) | (9 | )% | ||||||
Gross profit | $ | 16,741 | $ | 13,363 | $ | 3,378 | 25 | % | |||||||
Gross profit % | 74 | % | 68 | % | 6 | % |
(amounts in thousands) | Three Months Ended September 30, | Change | |||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Operating expenses: | |||||||||||||||
Research and development | $ | 5,077 | $ | 3,378 | $ | 1,699 | 50 | % | |||||||
Sales and marketing | 3,023 | 2,808 | 215 | 8 | % | ||||||||||
General and administrative | 8,008 | 8,475 | (467 | ) | (6 | )% | |||||||||
Total operating expenses | $ | 16,108 | $ | 14,661 | $ | 1,447 | 10 | % |
(amounts in thousands) | Three Months Ended September 30, | Change | |||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Other income (expense): | |||||||||||||||
Interest expense | $ | (361 | ) | $ | — | $ | (361 | ) | 100 | % | |||||
Interest income | — | 156 | (156 | ) | (100 | )% | |||||||||
Total other income (expense) | $ | (361 | ) | $ | 156 | $ | (517 | ) | (331 | )% |
(amounts in thousands) | Three Months Ended September 30, | Change | ||||||||||||
2016 | 2015 | $ | % | |||||||||||
Income tax expense (benefit) | $ | (438 | ) | $ | (521 | ) | $ | 83 | nm | |||||
Effective tax rate | (161 | )% | 46 | % | (207 | )% |
(amounts in thousands) | Three Months Ended September 30, | Change | |||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Adjusted EBITDA: | |||||||||||||||
Net income (loss) | $ | 710 | $ | (621 | ) | $ | 1,331 | nm | |||||||
Depreciation and amortization | 2,453 | 1,992 | 461 | 23 | % | ||||||||||
Interest expense (income) | 361 | (156 | ) | 517 | nm | ||||||||||
Income tax expense (benefit) | (438 | ) | (521 | ) | 83 | (16 | )% | ||||||||
Share-based compensation expense | 2,193 | 7,514 | $ | (5,321 | ) | (71 | )% | ||||||||
Adjusted EBITDA | $ | 5,279 | $ | 8,208 | $ | (2,929 | ) | (36 | )% |
(amounts in thousands) | Nine Months Ended September 30, | Change | |||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Revenue: | |||||||||||||||
Usage revenue | $ | 44,437 | $ | 39,384 | $ | 5,053 | 13 | % | |||||||
Subscription revenue | 18,766 | 15,898 | 2,868 | 18 | % | ||||||||||
Set-up and professional | 4,468 | 3,061 | 1,407 | 46 | % | ||||||||||
Total revenue | $ | 67,671 | $ | 58,343 | $ | 9,328 | 16 | % |
(amounts in thousands) | Nine Months Ended September 30, | Change | |||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Cost of revenue | $ | 17,162 | $ | 16,177 | $ | 985 | 6 | % | |||||||
Gross profit | $ | 50,509 | $ | 42,166 | $ | 8,343 | 20 | % | |||||||
Gross profit % | 75 | % | 72 | % | 3 | % |
(amounts in thousands) | Nine Months Ended September 30, | Change | |||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Operating expenses: | |||||||||||||||
Research and development | $ | 13,391 | $ | 11,016 | $ | 2,375 | 22 | % | |||||||
Sales and marketing | 9,024 | 7,834 | 1,190 | 15 | % | ||||||||||
General and administrative | 23,207 | 28,501 | (5,294 | ) | (19 | )% | |||||||||
Total operating expenses | $ | 45,622 | $ | 47,351 | $ | (1,729 | ) | (4 | )% |
(amounts in thousands) | Nine Months Ended September 30, | Change | |||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Other income (expense): | |||||||||||||||
Interest expense | $ | (405 | ) | $ | — | $ | (405 | ) | 100 | % | |||||
Interest income | 273 | 432 | (159 | ) | (37 | )% | |||||||||
Total other income (expense) | $ | (132 | ) | $ | 432 | $ | (564 | ) | (131 | )% |
(amounts in thousands) | Nine Months Ended September 30, | Change | ||||||||||||
2016 | 2015 | $ | % | |||||||||||
Income tax expense (benefit) | $ | 1,611 | $ | (1,647 | ) | $ | 3,258 | nm | ||||||
Effective tax rate | 34 | % | 35 | % | (1 | )% |
(amounts in thousands) | Nine Months Ended September 30, | Change | |||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Adjusted EBITDA: | |||||||||||||||
Net income (loss) | $ | 3,144 | $ | (3,106 | ) | $ | 6,250 | nm | |||||||
Depreciation and amortization | 7,315 | 5,715 | 1,600 | 28 | % | ||||||||||
Interest expense (income) | 132 | (432 | ) | 564 | (131 | )% | |||||||||
Income tax expense (benefit) | 1,611 | (1,647 | ) | 3,258 | nm | ||||||||||
Share-based compensation expense | 8,753 | 24,332 | (15,579 | ) | (64 | )% | |||||||||
Adjusted EBITDA | $ | 20,955 | $ | 24,862 | $ | (3,907 | ) | (16 | )% |
(amounts in thousands) | Nine Months Ended September 30, | Change | ||||||||||||
2016 | 2015 | $ | % | |||||||||||
Net cash provided by (used in): | ||||||||||||||
Operating activities | $ | (52,451 | ) | $ | 19,297 | $ | (71,748 | ) | nm | |||||
Investing activities | 27,904 | (28,215 | ) | 56,119 | nm | |||||||||
Financing activities | $ | 22,818 | $ | (138 | ) | $ | 22,956 | nm |
Exhibit Number | Exhibit Description |
Ex. 2.1 | Reorganization Agreement, dated as of July 15, 2016, between Liberty Interactive Corporation and CommerceHub, Inc. (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37840), as filed on July 26, 2016 (the “8-K”)). |
Ex. 3.1 | Restated Certificate of Incorporation of CommerceHub, Inc. (incorporated by reference to Exhibit 3.1 to the 8-K). |
Ex. 3.2 | Bylaws of CommerceHub, Inc. (incorporated by reference to Exhibit 3.2 to the 8-K). |
Ex. 4.1 | Joinder Agreement, dated July 22, 2016, between CommerceHub, Inc. and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 4.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (File No. 001-37840) as filed on August 22, 2016). |
Ex. 4.2 | Specimen Certificate for shares of Series A Common Stock, par value $.01 per share, of the Registrant (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-210508), as filed on June 28, 2016 (the “S-1/A No. 2”)). |
Ex. 4.3 | Specimen Certificate for shares of Series B Common Stock, par value $.01 per share, of the Registrant (incorporated by reference to Exhibit 4.2 to the S-1/A No. 2). |
Ex. 4.4 | Specimen Certificate for shares of Series C Common Stock, par value $.01 per share, of the Registrant (incorporated by reference to Exhibit 4.3 to the S-1/A No. 2). |
Ex. 10.1 | Amended and Restated CommerceHub, Inc. 2016 Omnibus Incentive Plan.* |
Ex. 10.2 | Form of Nonqualified Stock Option Agreement for use with the 2016 Omnibus Incentive Plan.* |
Ex. 10.3 | Form of Restricted Stock Unit Agreement for use with the 2016 Omnibus Incentive Plan.* |
Ex. 10.4 | CommerceHub, Inc. Non-Employee Director Deferred Compensation Plan.* |
Ex. 10.5 | Form of Indemnification Agreement by and between the Registrant and its executive officers/directors (incorporated by reference to Exhibit 10.5 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 (File No. 333-210508), as filed on July 14, 2016 (the “S-1/A No. 3”)). |
Ex. 10.6 | Form of Commerce Technologies, Inc. 1999 Stock Option Plan Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.7 to the S-1/A No. 2). |
Ex. 10.7 | Form of Commerce Technologies, Inc. 2010 Stock Appreciation Rights Plan (incorporated by reference to Exhibit 10.8 to the S-1/A No. 2). |
Ex. 10.8 | Form of Commerce Technologies, Inc. 2010 Stock Appreciation Rights Plan Evidence of Stock Appreciation Right (time vesting) (incorporated by reference to Exhibit 10.9 to the S-1/A No. 2). |
Ex. 10.9 | Form of CommerceHub, Inc. Legacy Stock Appreciation Rights Plan Stock Option Agreement (incorporated by reference to Exhibit 10.17 to the S-1/A No. 3). |
Ex. 10.10 | CommerceHub, Inc. Legacy Stock Appreciation Rights Plan (incorporated by reference to Exhibit 10.3 to the 8-K). |
Ex. 10.11 | Form of CommerceHub, Inc. Legacy Stock Appreciation Rights Plan Stock Option Agreement for Francis Poore (Relating to Conversion of Existing SARs) (incorporated by reference to Exhibit 10.18 to the S-1/A No. 3). |
Ex. 10.12 | Form of CommerceHub, Inc. Legacy Stock Appreciation Rights Plan Stock Option Agreement for Francis Poore (Relating to Conversion of New SARs) (incorporated by reference to Exhibit 10.19 to the S-1/A No. 3). |
Ex. 10.13 | CommerceHub, Inc. Legacy Stock Option Plan (incorporated by reference to Exhibit 10.4 to the 8-K). |
Ex. 10.14 | CommerceHub, Inc. 2016 Employee Stock Purchase Plan (incorporated by reference to Exhibit 99.3 to the Registrant’s Registration Statement on Form S-8 (File No. 333-212646), as filed on July 22, 2016). |
Ex. 10.15 | CommerceHub, Inc. Transitional Stock Adjustment Plan (incorporated by reference to Exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 (File No. 333-213115), as filed on August 12, 2016). |
Ex. 10.16 | Tax Sharing Agreement, dated as of July 22, 2016, between Liberty Interactive Corporation and CommerceHub, Inc. (incorporated by reference to Exhibit 10.1 to the 8-K). |
Ex. 10.17 | Services Agreement, dated as of July 22, 2016, by and between Liberty Media Corporation and CommerceHub, Inc. (incorporated by reference to Exhibit 10.2 to the 8-K). |
Ex. 31.1 | Certification pursuant to Rule 13a-14(a) or 15d-14 under the Securities Exchange Act of 1934.* |
Ex. 31.2 | Certification pursuant to Rule 13a-14(a) or 15d-14 under the Securities Exchange Act of 1934.* |
Ex. 32.1 | Certification of Chief Executive Officer pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** |
Ex. 32.2 | Certification of Chief Financial Officer pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** |
Ex. 101.INS | XBRL Instance Document* |
Ex. 101.SCH | XBRL Taxonomy Extension Schema Document* |
Ex. 101.CAL | XBRL Taxonomy Calculation Linkbase Document* |
Ex. 101.LAB | XBRL Taxonomy Label Linkbase Document* |
Ex. 101.PRE | XBRL Taxonomy Presentation Linkbase Document* |
Ex. 101.DEF | XBRL Taxonomy Definition Document* |
COMMERCEHUB, INC. | ||||
(Registrant) | ||||
Date: | November 8, 2016 | / S / FRANCIS POORE | ||
Francis Poore President and Chief Executive Officer (Principal Executive Officer) | ||||
Date: | November 8, 2016 | / S / MARK GREENQUIST | ||
Mark Greenquist Chief Financial Officer (Principal Financial Officer) | ||||
Date: | November 8, 2016 | / S / MICHAEL TRIMARCHI | ||
Michael Trimarchi Chief Accounting Officer (Principal Accounting Officer) |
Exhibit Number | Exhibit Description |
Ex. 2.1 | Reorganization Agreement, dated as of July 15, 2016, between Liberty Interactive Corporation and CommerceHub, Inc. (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37840), as filed on July 26, 2016 (the “8-K”)). |
Ex. 3.1 | Restated Certificate of Incorporation of CommerceHub, Inc. (incorporated by reference to Exhibit 3.1 to the 8-K). |
Ex. 3.2 | Bylaws of CommerceHub, Inc. (incorporated by reference to Exhibit 3.2 to the 8-K). |
Ex. 4.1 | Joinder Agreement, dated July 22, 2016, between CommerceHub, Inc. and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 4.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (File No. 001-37840) as filed on August 22, 2016). |
Ex. 4.2 | Specimen Certificate for shares of Series A Common Stock, par value $.01 per share, of the Registrant (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-210508), as filed on June 28, 2016 (the “S-1/A No. 2”)). |
Ex. 4.3 | Specimen Certificate for shares of Series B Common Stock, par value $.01 per share, of the Registrant (incorporated by reference to Exhibit 4.2 to the S-1/A No. 2). |
Ex. 4.4 | Specimen Certificate for shares of Series C Common Stock, par value $.01 per share, of the Registrant (incorporated by reference to Exhibit 4.3 to the S-1/A No. 2). |
Ex. 10.1 | Amended and Restated CommerceHub, Inc. 2016 Omnibus Incentive Plan.* |
Ex. 10.2 | Form of Nonqualified Stock Option Agreement for use with the 2016 Omnibus Incentive Plan.* |
Ex. 10.3 | Form of Restricted Stock Unit Agreement for use with the 2016 Omnibus Incentive Plan.* |
Ex. 10.4 | CommerceHub, Inc. Non-Employee Director Deferred Compensation Plan.* |
Ex. 10.5 | Form of Indemnification Agreement by and between the Registrant and its executive officers/directors (incorporated by reference to Exhibit 10.5 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 (File No. 333-210508), as filed on July 14, 2016 (the “S-1/A No. 3”)). |
Ex. 10.6 | Form of Commerce Technologies, Inc. 1999 Stock Option Plan Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.7 to the S-1/A No. 2). |
Ex. 10.7 | Form of Commerce Technologies, Inc. 2010 Stock Appreciation Rights Plan (incorporated by reference to Exhibit 10.8 to the S-1/A No. 2). |
Ex. 10.8 | Form of Commerce Technologies, Inc. 2010 Stock Appreciation Rights Plan Evidence of Stock Appreciation Right (time vesting) (incorporated by reference to Exhibit 10.9 to the S-1/A No. 2). |
Ex. 10.9 | Form of CommerceHub, Inc. Legacy Stock Appreciation Rights Plan Stock Option Agreement (incorporated by reference to Exhibit 10.17 to the S-1/A No. 3). |
Ex. 10.10 | CommerceHub, Inc. Legacy Stock Appreciation Rights Plan (incorporated by reference to Exhibit 10.3 to the 8-K). |
Ex. 10.11 | Form of CommerceHub, Inc. Legacy Stock Appreciation Rights Plan Stock Option Agreement for Francis Poore (Relating to Conversion of Existing SARs) (incorporated by reference to Exhibit 10.18 to the S-1/A No. 3). |
Ex. 10.12 | Form of CommerceHub, Inc. Legacy Stock Appreciation Rights Plan Stock Option Agreement for Francis Poore (Relating to Conversion of New SARs) (incorporated by reference to Exhibit 10.19 to the S-1/A No. 3). |
Ex. 10.13 | CommerceHub, Inc. Legacy Stock Option Plan (incorporated by reference to Exhibit 10.4 to the 8-K). |
Ex. 10.14 | CommerceHub, Inc. 2016 Employee Stock Purchase Plan (incorporated by reference to Exhibit 99.3 to the Registrant’s Registration Statement on Form S-8 (File No. 333-212646), as filed on July 22, 2016). |
Ex. 10.15 | CommerceHub, Inc. Transitional Stock Adjustment Plan (incorporated by reference to Exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 (File No. 333-213115), as filed on August 12, 2016). |
Ex. 10.16 | Tax Sharing Agreement, dated as of July 22, 2016, between Liberty Interactive Corporation and CommerceHub, Inc. (incorporated by reference to Exhibit 10.1 to the 8-K). |
Ex. 10.17 | Services Agreement, dated as of July 22, 2016, by and between Liberty Media Corporation and CommerceHub, Inc. (incorporated by reference to Exhibit 10.2 to the 8-K). |
Ex. 31.1 | Certification pursuant to Rule 13a-14(a) or 15d-14 under the Securities Exchange Act of 1934.* |
Ex. 31.2 | Certification pursuant to Rule 13a-14(a) or 15d-14 under the Securities Exchange Act of 1934.* |
Ex. 32.1 | Certification of Chief Executive Officer pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** |
Ex. 32.2 | Certification of Chief Financial Officer pursuant to Title 18, United States Code, Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** |
Ex. 101.INS | XBRL Instance Document* |
Ex. 101.SCH | XBRL Taxonomy Extension Schema Document* |
Ex. 101.CAL | XBRL Taxonomy Calculation Linkbase Document* |
Ex. 101.LAB | XBRL Taxonomy Label Linkbase Document* |
Ex. 101.PRE | XBRL Taxonomy Presentation Linkbase Document* |
Ex. 101.DEF | XBRL Taxonomy Definition Document* |
Grantee | [●] |
Number of Options | [●] |
Grant Date | [●] |
Issuer/Company | CommerceHub, Inc., a Delaware corporation |
Common Stock | Series C common stock |
Plan | CommerceHub, Inc. 2016 Omnibus Incentive Plan |
Plan Administrator | [The Compensation Committee of the Board of Directors of the Company appointed by the Board of Directors of the Company pursuant to Section 3.1 of the Plan to administer the Plan] [NTD: Insert for grants to employees] [The Board of Directors of the Company] [NTD: Insert for grants to Nonemployee Directors] |
Option Termination Date | [●] |
Base Price | $[●] |
Vesting Schedule | [●] |
Other Terms and Conditions | [NTD: Include the following provisions on Schedule I to Option Agreements for UK Grantees: Section 5 of the Agreement shall be replaced in its entirety with the following: “5. Withholding for Taxes. (a) The Grantee acknowledges and agrees that the Company will either deduct from the shares of Common Stock otherwise payable or deliverable upon exercise of any Options that number of shares of Common Stock (valued at the Fair Market Value of such Common Stock on the date of exercise) that is equal to the amount of the Tax Liability, as determined by the Committee (the “Required Withholding Amount”), or require the Grantee to enter into arrangements to the satisfaction of the Company, his employer or former employer (as appropriate) for payment of any Tax Liability and the Grantee irrevocably agrees to enter into such arrangements if so required. (b) The Grantee irrevocably acknowledges and agrees that (i) the Company or any employing Subsidiary may recover the whole or any part of any secondary class 1 (employer) national insurance contributions that the Company or the employing Subsidiary is liable to account for as a consequence of the exercise of Options; and (ii) at the request of the Company or any employing Subsidiary, the Grantee shall immediately join that person in making a joint election (in a form approved by HM Revenue & Customs) to transfer to the Grantee the whole or any part of the liability for secondary class 1 (employer) national insurance contributions. (c) If the Grantee elects to make payment of the purchase price by delivery of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds required to pay the purchase price, such instructions may also include instructions to deliver the Required Withholding Amount to the Company. In such case, the Company will notify the broker promptly of the Committee’s determination of the Required Withholding Amount. (d) The Grantee irrevocably agrees to enter into a joint election in respect of the Common Stock deliverable upon exercise of his Options under section 431(1) or section 431(2) of the United Kingdom Income Tax (Earnings and Pensions) Act 2003, if required to do so by the Company, his employer or former employer on or before the date of exercise of the Options. “Tax Liability” means all income tax and social security contributions that the Company or any employing Subsidiary is liable to account for as a consequence of the exercise of Options including PAYE income tax and primary class 1 (employee) national insurance contributions and any secondary class 1 (employer) national insurance contributions to the extent that these can be lawfully recovered from the Holder. A new Section 23 is hereby added to the Agreement as follows: “23. Data Privacy. (a) The Grantee’s acceptance hereof shall evidence the Grantee’s explicit and unambiguous consent to the collection, holding, processing, use and transfer, in electronic or other form, of the Grantee’s personal data by and among, as applicable, the Grantee’s employer (the “Employer”) and the Company and its Subsidiaries and Affiliates for the exclusive purposes of implementing, administering and managing the Grantee’s participation in the Plan and for all purposes connected with the Options, including: (i) the holding and maintenance of details of the Options; (ii) the transfer of the Grantee’s personal data to the trustee of an employee benefit trust, the Company's registrars or brokers or any administrators of the Company's share incentive arrangements; and (iii) the transfer of the Grantee’s personal data to a prospective buyer of the Company or any Subsidiary or business unit that employs the Grantee, and the prospective buyer’s professional advisers. (b) The Grantee understands that the Company and its Subsidiaries and the Employer may hold certain personal data about the Grantee, including, but not limited to, the Grantee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, bonus and employee benefits, nationality, job title and description, any shares of stock or directorships or other positions held in the Company, its Subsidiaries and Affiliates, details of all options, stock appreciation rights, restricted stock, restricted stock units or any other entitlement to shares of stock or other Awards granted, canceled, exercised, vested, unvested or outstanding in the Grantee’s favor, annual performance objectives, performance reviews and performance ratings, for the purpose of implementing, administering and managing Awards under the Plan. The terms “personal data,” “data subject” and “processing,” as used in this Agreement, shall have the same meanings as they are given in the United Kingdom Data Protection Act 1998. (c) The Grantee understands and consents to the collection, holding, processing and transfer of the Grantee’s personal data being transferred to any third parties assisting in the implementation, administration and management of the Plan that is a resident of or located in a country or territory outside the European Economic Area (including the United States) that may have different data privacy laws and protections than the Grantee’s country. The Grantee understands that the Grantee may request a list with the names and addresses of any potential recipients of the personal data by contacting the Grantee’s local human resources representative. The Grantee authorizes the recipients to receive, possess, use, retain and transfer the personal data, in electronic or other form, for the sole purpose of implementing, administering and managing the Grantee’s participation in the Plan, including any requisite transfer of such personal data as may be required to a broker or other third party with whom the Grantee may elect to deposit any shares of stock acquired with respect to an Award. (d) The Grantee consents to and understands that personal data will be held only as long as is necessary to implement, administer and manage the Grantee’s participation in the Plan. The Grantee may, by contacting in writing the Grantee’s local human resources representative, request access to their personal data. The Grantee understands, however, that refusing or withdrawing the Grantee’s consent may affect the Grantee’s ability to participate in the Plan. For more information on the consequences of a refusal to consent or withdrawal of consent, the Grantee may contact the Grantee’s local human resources representative.”] |
Company Notice Address | CommerceHub, Inc. 201 Fuller Rd, 6th Floor Albany NY 12203 Attn: General Counsel |
Grantee | [●] |
Number of Restricted Stock Units | [●] |
Grant Date | [●] |
Issuer/Company | CommerceHub, Inc., a Delaware corporation |
Common Stock represented by Restricted Stock Units | Series C common stock |
Plan | CommerceHub, Inc. 2016 Omnibus Incentive Plan |
Plan Administrator | [The Compensation Committee of the Board of Directors of the Company appointed by the Board of Directors of the Company pursuant to Section 3.1 of the Plan to administer the Plan] [NTD: Insert for grants to employees] [The Board of Directors of the Company] [NTD: Insert for grants to Nonemployee Directors] |
Vesting Schedule (Specify Vesting Percentage and Vesting Dates) | [NTD: Insert for grants to employees: Vesting Percentage: [●] Vesting Date(s): [●]] [NTD: Insert for grants to Nonemployee Directors: Vesting Percentage: 100% Vesting Date: The earlier of (i) [NTD: Insert one-year anniversary of Grant Date] or (ii) the date of the next annual meeting of stockholders held after the Grant Date for the purpose of electing directors of the Company.] |
Other Terms and Conditions | [NTD: Include the following paragraph on Schedule I to RSU Agreements for Non-Employee Directors: Notwithstanding anything to the contrary in the Agreement, including Sections 4 and 6 thereof, the Grantee may elect in accordance with the terms of the CommerceHub, Inc. Non-Employee Director Deferred Compensation Plan (the “Deferred Compensation Plan”), to defer payment, settlement and delivery of the Restricted Stock Units and any related Unpaid Dividend Equivalents following vesting to such time as is specified in an election that is duly executed by the Grantee and delivered to the Company in accordance with the Deferred Compensation Plan.] [NTD: Include the following provisions on Schedule I to RSU Agreements for Section 16 officers: Section 5 of the Agreement shall be amended by adding the following clause at the end of the second sentence thereof: ; provided that, if the Grantee has made an acquisition of securities of the Company during the six-month period prior to the applicable Vesting Date such that a Sell-to-Cover could be matchable against such acquisition for purposes of Section 16(b) of the Exchange Act, the Grantee shall remit the Required Withholding Amount to the Company or its designee in cash in such form and by such time as the Company may require, unless the Company determines, in its sole discretion, to withhold from the shares of Common Stock represented by vested Restricted Stock Units and otherwise deliverable to the Grantee a number of shares of Common Stock that the Company determines has at least the Fair Market Value sufficient to satisfy the Required Withholding Amount, plus additional shares of Common Stock to account for rounding and market fluctuations.] [NTD: Include the following provisions on Schedule I to RSU Agreements for UK Grantees: Section 5 of the Agreement shall be replaced in its entirety with the following: “5. Withholding for Taxes. (a) As a condition of receiving the benefits of this Agreement, the Grantee acknowledges and agrees that the Grantee shall, on each Vesting Date (or the first business day thereafter if the Vesting Date is not a trading day), in compliance with the Company’s Insider Trading Policy and using the broker-assisted sale program arranged by the Company, sell from the shares of Common Stock represented by vested Restricted Stock Units and otherwise deliverable to the Grantee a number of shares of Common Stock that the Company determines has at least the Fair Market Value sufficient to satisfy the Tax Liability, as determined by the Committee (the “Required Withholding Amount”), plus additional shares of Common Stock to account for rounding and market fluctuations, and the proceeds from such sale shall be remitted to the Company and used to satisfy the Required Withholding Amount (collectively, a “Sell-to-Cover”), unless the Grantee instead remits the Required Withholding Amount to the Company or its designee in cash in such form and by such time as the Company may require [NTD: include the following clause only if the Grantee is a Section 16 officer: ; provided that, if the Grantee has made an acquisition of securities of the Company during the six-month period prior to the applicable Vesting Date such that a Sell-to-Cover could be matchable against such acquisition for purposes of Section 16(b) of the Exchange Act, the Grantee shall remit the Required Withholding Amount to the Company or its designee in cash in such form and by such time as the Company may require, unless the Company determines, in its sole discretion, to withhold from the shares of Common Stock represented by vested Restricted Stock Units and otherwise deliverable to the Grantee a number of shares of Common Stock that the Company determines has at least the Fair Market Value sufficient to satisfy the Required Withholding Amount, plus additional shares of Common Stock to account for rounding and market fluctuations]. As of the date hereof, the Grantee certifies that (a) the Grantee is currently unaware of any material, non-public information with respect to the Company and (b) this Agreement is entered into in good faith and not as a part of a scheme to evade the prohibitions of Rule 10b-5 of the Exchange Act or any other securities laws. (b) The Grantee irrevocably acknowledges and agrees that (i) the Company or any employing Subsidiary may recover the whole or any part of any secondary class 1 (employer) national insurance contributions that the Company or the employing Subsidiary is liable to account for as a consequence of the exercise of the grant or vesting of the Restricted Stock Units; and (ii) at the request of the Company or any employing Subsidiary the Grantee shall immediately join that person in making a joint election (in a form approved by HM Revenue & Customs) to transfer to the Grantee the whole or any part of the liability for secondary class 1 (employer) national insurance contributions. (c) The Grantee irrevocably agrees to enter into a joint election in respect of the Common Stock deliverable to the Grantee in consequence of the vesting of the Restricted Stock Units under section 431(1) or section 431(2) of the United Kingdom Income Tax (Earnings and Pensions) Act 2003, if required to do so by the Company, his employer or former employer on or before the applicable Vesting Date of the Restricted Stock Units. “Tax Liability” means all income tax and social security contributions that the Company or any employing Subsidiary is liable to account for as a consequence of the grant or vesting of Restricted Stock Units and/or Dividend Equivalents including PAYE income tax and primary class 1 (employee) national insurance contributions and any secondary class 1 (employer) national insurance contributions to the extent that these can be lawfully recovered from the Grantee. A new Section 23 is hereby added to the Agreement as follows: “23. Data Privacy. (a) The Grantee’s acceptance hereof shall evidence the Grantee’s explicit and unambiguous consent to the collection, holding, processing, use and transfer, in electronic or other form, of the Grantee’s personal data by and among, as applicable, the Grantee’s employer (the “Employer”) and the Company and its Subsidiaries and Affiliates for the exclusive purposes of implementing, administering and managing the Grantee’s participation in the Plan and for all purposes connected with the Restricted Stock Units and/or the Dividend Equivalents, including: (i) the holding and maintenance of details of the Restricted Stock Units and/or the Dividend Equivalents; (ii) the transfer of the Grantee’s personal data to the trustee of an employee benefit trust, the Company's registrars or brokers or any administrators of the Company's share incentive arrangements; and (iii) the transfer of the Grantee’s personal data to a prospective buyer of the Company or any Subsidiary or business unit that employs the Grantee, and the prospective buyer’s professional advisers. (b) The Grantee understands that the Company and its Subsidiaries and the Employer may hold certain personal data about the Grantee, including, but not limited to, the Grantee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, bonus and employee benefits, nationality, job title and description, any shares of stock or directorships or other positions held in the Company, its Subsidiaries and Affiliates, details of all options, stock appreciation rights, restricted stock, restricted stock units or any other entitlement to shares of stock or other Awards granted, canceled, exercised, vested, unvested or outstanding in the Grantee’s favor, annual performance objectives, performance reviews and performance ratings, for the purpose of implementing, administering and managing Awards under the Plan. The terms “personal data,” “data subject” and “processing,” as used in this Agreement, shall have the same meanings as they are given in the United Kingdom Data Protection Act 1998. (c) The Grantee understands and consents to the collection, holding, processing and transfer of the Grantee’s personal data being transferred to any third parties assisting in the implementation, administration and management of the Plan that is a resident of or located in a country or territory outside the European Economic Area (including the United States) that may have different data privacy laws and protections than the Grantee’s country. The Grantee understands that the Grantee may request a list with the names and addresses of any potential recipients of the personal data by contacting the Grantee’s local human resources representative. The Grantee authorizes the recipients to receive, possess, use, retain and transfer the personal data, in electronic or other form, for the sole purpose of implementing, administering and managing the Grantee’s participation in the Plan, including any requisite transfer of such personal data as may be required to a broker or other third party with whom the Grantee may elect to deposit any shares of stock acquired with respect to an Award. (d) The Grantee consents to and understands that personal data will be held only as long as is necessary to implement, administer and manage the Grantee’s participation in the Plan. The Grantee may, by contacting in writing the Grantee’s local human resources representative, request access to their personal data. The Grantee understands, however, that refusing or withdrawing the Grantee’s consent may affect the Grantee’s ability to participate in the Plan. For more information on the consequences of a refusal to consent or withdrawal of consent, the Grantee may contact the Grantee’s local human resources representative.”] |
Company Notice Address | CommerceHub, Inc. 201 Fuller Rd, 6th Floor Albany NY 12203 Attn: General Counsel |
1. | I have reviewed this Quarterly Report on Form 10-Q of CommerceHub, 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 the 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: | November 8, 2016 | By: | /S/ FRANCIS POORE |
Francis Poore | |||
President and Chief Executive Officer | |||
(Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of CommerceHub, 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 the 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: | November 8, 2016 | By: | /S/ MARK GREENQUIST |
Mark Greenquist | |||
Chief Financial Officer | |||
(Principal Financial Officer) |
Date: | November 8, 2016 | By: | /S/ FRANCIS POORE |
Francis Poore | |||
President and Chief Executive Officer | |||
(Principal Executive Officer) |
Date: | November 8, 2016 | By: | /S/ MARK GREENQUEST |
Mark Greenquist | |||
Chief Financial Officer | |||
(Principal Financial Officer) |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Nov. 01, 2016 |
|
Entity Information [Line Items] | ||
Entity Registrant Name | COMMERCEHUB, INC. | |
Entity Central Index Key | 0001665658 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Amendment Flag | false | |
Common Series A | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 13,522,640 | |
Common Series B | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 711,992 | |
Common Series C | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 28,615,203 |
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
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Statement of Comprehensive Income [Abstract] | ||||
Revenue, including related party revenue of $1,165, $1,172, $4,526, and $4,315, respectively | $ 22,478 | $ 19,695 | $ 67,671 | $ 58,343 |
Cost of revenue | 5,737 | 6,332 | 17,162 | 16,177 |
Gross profit | 16,741 | 13,363 | 50,509 | 42,166 |
Operating expenses: | ||||
Research and development | 5,077 | 3,378 | 13,391 | 11,016 |
Sales and marketing | 3,023 | 2,808 | 9,024 | 7,834 |
General and administrative | 8,008 | 8,475 | 23,207 | 28,501 |
Total operating expenses | 16,108 | 14,661 | 45,622 | 47,351 |
Total operating expenses | 633 | (1,298) | 4,887 | (5,185) |
Other (expense) income: | ||||
Interest expense | (361) | 0 | (405) | 0 |
Interest income | 0 | 156 | 273 | 432 |
Total other (expense) income | (361) | 156 | (132) | 432 |
Income (loss) before income taxes | 272 | (1,142) | 4,755 | (4,753) |
Income tax expense (benefit) | (438) | (521) | 1,611 | (1,647) |
Net income (loss) | 710 | (621) | 3,144 | (3,106) |
Total comprehensive income (loss) | $ 710 | $ (621) | $ 3,144 | $ (3,106) |
Earnings (loss) per share: | ||||
Basic (in dollars per share) | $ 0.02 | $ (0.01) | $ 0.07 | $ (0.07) |
Diluted (in dollars per share) | $ 0.02 | $ (0.01) | $ 0.07 | $ (0.07) |
Shares used in computing earnings (loss) per share: | ||||
Basic (in shares) | 42,773 | 42,703 | 42,773 | 42,703 |
Diluted (in shares) | 43,559 | 42,703 | 43,559 | 42,703 |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands |
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Statement of Comprehensive Income [Abstract] | ||||
Related party revenue | $ 1,165 | $ 1,172 | $ 4,526 | $ 4,315 |
Description of Business |
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Sep. 30, 2016 | |||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||
Description of Business | Description of Business CommerceHub, Inc. ("CommerceHub", the "Company", "us", "we", and "our") was founded in 1997 and is headquartered in Albany, New York. The Company operates as a single segment and specializes in the electronic integration of supply chains for e-commerce fulfillment. CommerceHub's platform includes supply, demand, and delivery solutions which provide our customers with a single platform to source and market the products consumers desire and to have those products delivered more rapidly to the consumer's doorstep. Recent Events Spin-Off from Liberty Interactive Corporation During November 2015, the board of directors of Liberty Interactive Corporation, our former parent company ("Liberty" or "Parent"), authorized a plan to distribute to the holders of Liberty's Series A and Series B Liberty Ventures common stock, shares of CommerceHub, Inc. (the "Spin-Off"), a newly formed Delaware corporation that, pursuant to an internal restructuring, effective July 21, 2016 became the parent of Commerce Technologies, LLC, a Delaware limited liability company that, as a result of the restructuring, is the successor to Commerce Technologies, Inc. ("CTI"), the entity through which CommerceHub transacted prior to the Spin-Off. The Spin-Off was completed on July 22, 2016 and was effected as a pro rata dividend of shares of CommerceHub to the stockholders of Series A and Series B Liberty Ventures common stock of Liberty. The Spin-Off was structured to be tax-free. Following the Spin-Off, CommerceHub now operates as a stand-alone publicly traded company, and neither Liberty nor CommerceHub has any stock ownership, beneficial or otherwise, in the other. In connection with the Spin-Off, CommerceHub entered into certain agreements (effective the date of the Spin-Off) with Liberty and/or Liberty Media Corporation ("Liberty Media"), which are further discussed in Note 8 to these condensed consolidated financial statements. In July 2016, the Company had cash inflows and outflows in conjunction with the Spin-Off, which include:
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Basis of Presentation |
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Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of CommerceHub, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements, which have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") for interim financial information. Accordingly, these condensed consolidated financial statements do not include all of the information and notes required by GAAP. We have included all normal recurring adjustments considered necessary to give a fair presentation of our financial position, results of comprehensive income (loss) and cash flows, and changes in equity for the interim periods shown. Operating results for these interim periods are not necessarily indicative of the results to be expected for the full year. The December 31, 2015 consolidated balance sheet data was derived from our audited financial statements at that date. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained within Amendment No. 3 to the Company's Registration Statement on Form S-1 (File No. 333-210508) filed with the Securities and Exchange Commission (the "SEC") on July 14, 2016 and declared effective on July 15, 2016 (the "Registration Statement"). Use of Estimates Preparing these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and assumptions. Reclassifications We made certain reclassifications to our condensed consolidated financial statements which include reclassifying certain sales taxes, in the amounts of $26 thousand and $492 thousand for the three- and nine-month periods ended September 30, 2015, respectively, from cost of revenue to sales and marketing to comply with our current policy for presenting such costs. |
Significant Accounting Policies |
9 Months Ended |
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Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies During the nine months ended September 30, 2016, there were no material changes in our significant accounting policies. Please see Note 3 to our consolidated financial statements included in the Registration Statement, for additional information regarding our significant accounting policies. |
Recent Accounting Pronouncements |
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Sep. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers" (Topic 606) ("ASU 2014-09"). This topic provides for five principles which should be followed to determine the appropriate amount and timing of revenue recognition for the transfer of goods and services to customers. The principles in ASU 2014-09 should be applied to all contracts with customers regardless of industry. The amendments in ASU 2014-09 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, with two transition methods of adoption allowed. Early adoption for reporting periods prior to December 15, 2016 is not permitted. In March 2015, the FASB voted to defer the effective date by one year, but to allow adoption as of the original adoption date. In May 2016, FASB issued ASU No. 2016-08, "Revenue from Contracts with Customers" (Topic 606) Principal versus Agent Considerations, (Reporting Revenue Gross versus Net). This update was to further clarify the implementation guidance on principal versus agent considerations in the previously issued ASU No. 2014-09. ASU No. 2016-08 has no impact on the adoption date of the previously issued update. We are evaluating the financial statement impacts of the guidance in ASU 2014-09 and determining which transition method we will utilize. In February 2016, the FASB issued ASU No. 2016-02 "Leases" (Topic 842) ("ASU No. 2016-02"). This topic provides that a lessee should recognize the assets and liabilities that arise from leases. Topic 842 requires an entity to separate the lease components from the nonlease components in a contract. This ASU intended to improve financial reporting about leasing transactions. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018. We are evaluating the financial statement impact this update will have on the consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU No. 2016-09"), which is intended to improve the accounting for share-based payment transactions as part of the FASB's simplification initiative. ASU No. 2016-09 changed the aspects of the accounting for share-based payment award transactions, including: (1) accounting for income taxes; (2) classification of excess tax benefits on the statement of cash flows; (3) forfeitures; (4) minimum statutory tax withholding requirements; and (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. This ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those years. Early adoption is permitted in any interim or annual period provided that the entire ASU is adopted. We are evaluating the financial statement impact this update will have on the consolidated financial statements. |
Earnings (Loss) Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share | Earnings (Loss) Per Share For all periods prior to the Spin-Off, basic and diluted earnings (loss) per common share is computed by dividing net income (loss) for the respective period by 42,702,842 common shares, which is the aggregate number of 13,522,288 shares of Series A common stock, 711,992 shares Series B common stock, and 28,468,562 shares of Series C common stock issued upon completion of the Spin-Off on July 22, 2016. The shares used in the calculation of diluted earnings per share for periods prior to the Spin-Off exclude the following issuances, which occurred following the Spin-Off and subsequent to such periods (a) 109,354 shares of common stock issued to pre-Spin-Off minority shareholders of CTI; and (b) 7,362,933 outstanding awards to purchase shares of our common stock. For all periods occurring after the Spin-Off, basic earnings (loss) per common share is computed by dividing net income (loss) for the respective period by the weighted average number of common shares outstanding for the period beginning at the Spin-Off through the last day of the reporting period. Diluted earnings (loss) per share gives effect to all dilutive potential shares outstanding resulting from employee stock options, restricted stock units, and performance share units during that period. The following table sets forth net income (loss) and the basic and diluted shares used to calculate earnings per share for the three and nine months ended September 30, 2016 and 2015 (in thousands):
The shares used in the calculation of diluted earnings per share for periods following the Spin-Off exclude (a) options to purchase shares where the exercise price was greater than the average market price of common shares for the period, using the treasury-stock method, and therefore the effect of the inclusion would be anti-dilutive and (b) performance share units where the performance criteria has not been met as of the reporting date. |
Acquisition of Mercent Corporation |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of Mercent Corporation | Acquisition of Mercent Corporation On January 8, 2015, the Company acquired 100% of the shares of Mercent Corporation ("Mercent"), an online marketing technology and service company that helps merchants optimize performance across online channels, for total cash consideration of approximately $20.2 million, net of cash acquired. During the nine-month period ended September 30, 2015, the Company incurred transaction-related costs of approximately $166 thousand, which are included in general and administrative expenses. No additional transaction-related costs were incurred in the nine-month period ended September 30, 2016. Under the acquisition method of accounting, the Company allocated the purchase price to the identifiable assets and liabilities based on their estimated fair value, as follows (in thousands):
Methodologies used in valuing the intangible assets included, but were not limited to, the multiple period excess earnings method for developed software technology and customer relationships. The excess of the purchase price over the total net identifiable assets has been recorded as goodwill, which includes synergies expected from the expanded service capabilities and the value of the assembled work force. For federal income tax purposes, the transaction is treated as a stock acquisition and the goodwill is not deductible. |
Concentrations of Significant Customers and Credit Risk |
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Sep. 30, 2016 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Significant Customers and Credit Risk | Concentrations of Significant Customers and Credit Risk Our revenue model, in large part, is based on retailer and supplier program relationships whereby many supplier transactions may be attributable to a single retailer. Significant customer concentrations contemplate the total program revenues (retailers and related suppliers) and receivables generated by these customers. In each of the nine-month periods ended September 30, 2016 and September 30, 2015, one customer's total program revenues accounted for more than 10% of total revenue. No customer represented more than 10% of accounts receivable at September 30, 2016. |
Related Party Transactions |
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Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions (a) Transactions with QVC We provide our solutions to QVC, Inc. (“QVC”), which is a wholly owned subsidiary of Liberty. For future reporting on periods that do not include pre-Spin-Off periods, we do not expect QVC to be a related person of CommerceHub because neither Liberty nor CommerceHub has any stock ownership, beneficial or otherwise, in the other following the Spin-Off. For each of the nine-month periods ended September 30, 2016 and 2015, total program revenues with QVC (including QVC and suppliers transacting with QVC on our platform) accounted for approximately 7% of total revenue. We had receivables relating to ordinary business with QVC of approximately $248 thousand and $511 thousand at September 30, 2016 and December 31, 2015, respectively. (b) Transactions with Liberty In previous periods, we had outstanding a promissory note as a lender to Liberty, presented as note receivable - Parent on the condensed consolidated balance sheets. This note carried an interest rate based on one-year LIBOR plus 100 basis points. In the three months ended June 30, 2016, Liberty fully repaid amounts outstanding of $36.4 million pursuant to this promissory note, including accumulated interest of $2.4 million. During June 2016, to assist the Company in meeting its financial obligations under the SAR Plan and Liquidity Program (see Note 11), the Company entered into a funding arrangement with Liberty pursuant to a previously established intercompany funding agreement, under which Liberty agreed to loan the Company cash at current market interest rates, or make additional equity investments in common stock. During the three-months ended September 30, 2016, amounts outstanding pursuant to this arrangement, including accumulated interest, were repaid to Liberty by the Company using borrowings under our credit facility (see Note 13). The funding agreement between the Company and Liberty was terminated as of the Spin-Off. CommerceHub entered into certain agreements (effective July 22, 2016) with Liberty and/or Liberty Media, including a reorganization agreement, a services agreement and a tax sharing agreement. The reorganization agreement provides for, among other things, the principal corporate transactions (including the internal restructuring) required to effect the Spin-Off, certain conditions to the Spin-Off and provisions governing the relationship between CommerceHub and Liberty with respect to and resulting from the Spin-Off. The tax sharing agreement provides for the allocation and indemnification of tax liabilities and benefits between Liberty and CommerceHub and other agreements related to tax matters. Pursuant to the services agreement, Liberty Media provides CommerceHub with general and administrative services including legal, tax, accounting, treasury and investor relations support related to necessary public-company functions. CommerceHub must reimburse Liberty Media for direct, out-of-pocket expenses incurred by Liberty Media in providing these services, and CommerceHub will pay a services fee to Liberty Media under the services agreement. Liberty Media and CommerceHub will evaluate all charges under the services agreement for reasonableness on a quarterly basis and make such adjustments to these charges as the parties mutually agree. Amounts owed to Liberty at September 30, 2016 of $446 thousand in connection with these agreements is included in accounts payable and accrued expenses on the condensed consolidated balance sheet. |
Capitalized Software Costs |
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Capitalized Software Costs | Capitalized Software Costs Capitalized software costs, net is comprised of the following (in thousands):
Amortization expense related to capitalized software costs is included in cost of revenue and was approximately $3.8 million and $2.4 million for the nine-month periods ended September 30, 2016 and 2015, respectively. Future amortization expense of existing capitalized software costs as of September 30, 2016 is expected to be as follows for the years ending December 31, (in thousands):
Intangible Assets Intangibles assets acquired as of September 30, 2016 and December 31, 2015, respectively, are as follows (in thousands):
Amortization expense related to intangible assets was $1.3 million for the nine-month periods ended September 30, 2016 and 2015. Future amortization expense for intangible assets as of September 30, 2016 is $438 thousand, and is expected to be recognized during the remainder of 2016. |
Intangible Assets |
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Intangible Assets | Capitalized Software Costs Capitalized software costs, net is comprised of the following (in thousands):
Amortization expense related to capitalized software costs is included in cost of revenue and was approximately $3.8 million and $2.4 million for the nine-month periods ended September 30, 2016 and 2015, respectively. Future amortization expense of existing capitalized software costs as of September 30, 2016 is expected to be as follows for the years ending December 31, (in thousands):
Intangible Assets Intangibles assets acquired as of September 30, 2016 and December 31, 2015, respectively, are as follows (in thousands):
Amortization expense related to intangible assets was $1.3 million for the nine-month periods ended September 30, 2016 and 2015. Future amortization expense for intangible assets as of September 30, 2016 is $438 thousand, and is expected to be recognized during the remainder of 2016. |
Share-Based Awards |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Awards | Share-Based Awards The Company grants, to certain of its employees, board members and consultants, awards to purchase shares of its common stock. Prior to the Spin-Off, the Company's share-based awards consisted of stock options and stock appreciation rights ("SARs") (collectively, "CommerceHub Options and SARs"). Some of these awards contain service conditions (typically 4 years) and some of these awards contain both service- and milestone-based conditions. Included in the condensed consolidated statements of comprehensive income (loss) are the following amounts of share-based compensation (amounts in thousands):
The Company estimates the fair value of the stock options and SARs granted using a Black-Scholes pricing model. The estimation of stock awards that will ultimately vest requires judgment, and to the extent actual results differ from the Company's estimates, such amounts are recorded as an adjustment in the period estimates are revised. In valuing share-based awards, significant judgment is required in determining the fair value of the Company's share price, the expected volatility of common stock, and the expected term individuals will hold their share-based awards prior to exercise. With the assistance of an independent third-party advisory firm, for the three and nine months ended September 30, 2015 and the three months ended March 31, 2016, we estimated share-price based on an internal valuation using income and market based approaches. For the three months ended June 30, 2016, the estimated share-price input was based on the fair market value of CommerceHub's Series C common stock traded immediately following the Spin-Off. For awards granted subsequent to the Spin-Off, the share-price input is based on the closing price of our Series C common stock on the date of grant. Expected volatility of the stock is based on the Company's peer group in the industry in which the Company does business because the Company does not have sufficient historical volatility data for its own stock. The expected term of the options is based on evaluations of historical and expected future employee exercise behavior. Additionally, the Black-Scholes pricing model requires the input of other assumptions, including the risk-free interest rate and dividend yield. The risk-free interest rate assumption is based upon observed interest rates for constant maturity U.S. Treasury securities consistent with the expected term of the Company's share-based awards. The Company assumed a zero dividend yield as, following the Spin-Off, we do not expect to pay any cash dividends in the foreseeable future. Prior to the Spin-Off all of the Company's share-based awards were classified as liability awards as the SARs could have been settled in cash and the stock options could have been settled in cash at the option of the holder under the Liquidity Program as discussed below. The Company measured the cost of services received in exchange for a liability classified award based on the current fair value of the award, and remeasured the fair value of the award at each reporting date. In connection with the Spin-Off, the outstanding CTI equity incentive awards were adjusted, such that each holder of an option award or a SAR with respect to shares of CTI common stock received an option award to purchase shares of our Series C common stock, with the exercise price and number of shares subject to such new option awards based on the exercise price of and number of shares subject to the original CTI option or original SAR and the exchange ratio used in the internal restructuring with respect to the CTI minority holders. On July 22, 2016, 45,450 options and 2,042,220 SARs then-outstanding were converted to 99,151 options and 4,455,460 options to purchase shares of our Series C common stock, respectively. Unlike the original CommerceHub Options and SARs, which were able to be settled in cash prior to completion of the Spin-Off, the new option awards resulting from the conversion of the original CommerceHub Options and SARs may only be settled in shares of CommerceHub's Series C common stock. Except as described above, the terms of these new option awards (including, for example, the vesting terms thereof) are, in all material respects, the same as those of the corresponding original option or SAR award. Additionally, our internal restructuring in connection with the Spin-Off resulted in a modification of the terms and conditions of the outstanding equity awards upon the Spin-Off, and the classification of the awards from liability to equity awards. As of the July 21, 2016 modification date, the Company performed a fair value analysis of the awards immediately before and immediately after the restructuring. As the Company’s pre-Spin-Off share-based award plans (further described below) contained antidilution provisions, there was no incremental fair value or compensation expense as a result of the restructuring. The fair value of these awards immediately before and immediately after the Spin-Off was approximately $12.5 million. The value of these awards at the time of the restructuring was reclassified from share-based compensation liability to additional paid in capital. The remaining unvested compensation expense is recognized over the remaining service period or, for those awards with milestone-based conditions, the period in which such milestones are expected to be achieved. There were 344,456 new Parent option awards (as defined below) to purchase shares of our Series A common stock, with a weighted average exercise price of $7.42, outstanding at September 30, 2016. There was no other activity subsequent to the Spin-Off related to these awards and there is no unrecognized compensation cost related to awards to purchase shares of our Series A common stock as these awards are held by employees of Liberty and any related compensation expense is incurred by Liberty. There were 172,882 new Parent option awards to purchase shares of our Series B common stock, with a weighted average exercise price of $11.89, outstanding at September 30, 2016. There was no other activity subsequent to the Spin-Off related to these awards and there is no unrecognized compensation cost related to awards to purchase shares of our Series B common stock as these awards are held by an employee of Liberty and any related compensation expense is incurred by Liberty. The following table summarizes the share-based award activity of options to purchase shares of our Series C under the Legacy Stock Appreciation Rights Plan and Legacy Stock Option Plans (as further described below) from the time of Spin-Off through the last day of the reporting period:
As of September 30, 2016, unrecognized compensation cost related to options to purchase shares of Series C common stock was approximately $18.5 million, including $0.6 million related to milestone-based awards, and is expected to be recognized over a weighted average remaining vesting period of approximately 2.81 years. The following table summarizes the share-based award activity of options to purchase shares of our Series C under the Transitional Stock Adjustment Plan (as further described below) from the time of Spin-Off through the last day of the reporting period:
The new Parent option awards outstanding do not carry unrecognized compensation cost, as any related compensation expense is incurred by Liberty. The activity of the new Parent RSUs and new Parent restricted stock awards under the Transitional Stock Adjustment Plan from the time of Spin-Off through the last day of the reporting period was not material during the period. Share-based award plans pre-Spin-Off 1999 Plan During 1999, the Company adopted an incentive and nonqualified stock option plan (the "1999 Plan"). The 1999 Plan authorized grants of options to purchase up to 4,000,000 shares of authorized but unissued common stock. Options granted under the 1999 Plan were to vest over a period of four years and expire ten years from the date of grant. No shares of common stock are available for grants, or have been available for grants under the 1999 Plan, since September 2009 when the 1999 Plan expired. Liquidity Program During 2006, the Compensation Committee of CTI adopted a stock option liquidity program (the "Liquidity Program") for eligible holders of stock options and certain eligible common shares (shares issued as a result of an option exercise). The Liquidity Program provided eligible option holders and stockholders the ability to tender their vested options or sell their eligible common shares in exchange for cash payment. Eligible option holders and stockholders had the opportunity to tender eligible options or shares at any time except for when valuations were being performed. Cash consideration for the purchase and exercises of tendered stock options was based on the fair value of the Company's underlying common stock less the option exercise price. Cash consideration for tendered eligible common shares was based upon the fair value of the common shares. The Company made total cash payments of approximately $13.5 million and $1.5 million in exchange for the exercise of vested stock options, and $3.6 million and $0.2 million to repurchase shares outstanding from minority shareholders, under this program during the nine-month periods ended September 30, 2016 and 2015, respectively. The Liquidity Program terminated effective as of the completion of the Spin-Off. SAR Plan During 2010, the Company instituted the 2010 Stock Appreciation Rights Plan (the "SAR Plan"). Pursuant to the SAR Plan, a committee appointed by the Company's Board of Directors (or in the absence of such a committee, the Board of Directors acting in the capacity of such committee) was authorized to grant stock appreciation rights ("SARs") to employees, board members and consultants of the Company. The SAR Plan authorized grants of up to 6 million SARs, which included and was not in addition to shares previously issued, or shares issuable in respect of awards previously issued, under the 1999 Plan. The SARs issued under the SAR Plan typically vested over a period of four years and expired 10 years from the date of grant for service-based awards. SARs that included both service and milestone-based conditions vested based on the satisfaction of service requirements and achievement of performance milestones over the period specified in the applicable award agreement, which ranged from 1 to 4 years at the time of the Spin-Off. We make certain assumptions regarding the probability of achieving these milestones each period and adjust the value of the awards in the period our estimates are revised. Actual results can vary from expected results. The Company made total cash payments of approximately $73.2 million and $2.1 million during the nine-month periods ended September 30, 2016 and 2015, respectively, to settle exercised SARs. The SAR Plan was terminated and replaced with the CommerceHub, Inc. Legacy Stock Appreciation Rights Plan (the "Legacy SAR Plan") in connection with the completion of the Spin-Off. Future grants under the Legacy SAR Plan are not permitted following the Spin-Off. Share-based award plans post-Spin-Off CommerceHub, Inc. 2016 Omnibus Incentive Plan In connection with the Spin-Off, we adopted the CommerceHub, Inc. 2016 Omnibus Incentive Plan (as amended, amended and restated or otherwise modified from time to time, the “Omnibus Plan”). We amended and restated the Omnibus Plan on October 13, 2016 in order to permit the compensation committee of the Company’s board of directors to delegate award granting authority under the Omnibus Plan. The Omnibus Plan is designed to provide additional remuneration to officers, employees, nonemployee directors and independent contractors for service to CommerceHub and to encourage each plan participant’s investment in CommerceHub. Stock options, SARs, restricted shares, restricted stock units, cash awards, performance awards or any combination of the foregoing may be granted under the Omnibus Plan (collectively, "awards"). The maximum number of shares of our common stock with respect to which awards may be granted under the Omnibus Plan is 13,200,000 shares of Series C common stock, subject to anti-dilution and other adjustment provisions of the Omnibus Plan. The Omnibus Plan is administered by the compensation committee of the Company’s board of directors with regard to awards granted under the Omnibus Plan other than awards granted to the nonemployee directors which are administered by the full board of directors, and the compensation committee and its designees (and the board with respect to awards granted to non-employee directors) have full power and authority to determine the terms and conditions of such awards. Legacy Stock Appreciation Rights Plan and Legacy Stock Option Plan In connection with the Spin-Off, all of the new option awards with respect to our Series C common stock that were issued as a result of the Spin-Off to holders of SARs and options outstanding immediately prior to the Spin-Off were issued pursuant to the Legacy SAR Plan and the Legacy Stock Option Plan, respectively. The Legacy SAR Plan and the Legacy Stock Option Plan govern the terms and conditions of these new option awards but will not be used to make any new grants following the Spin-Off. Employee Stock Purchase Plan We have adopted an Employee Stock Purchase Plan (“ESPP”) that was approved by our shareholders prior to the Spin-Off, under which we have reserved 900,000 shares of our Series C common stock for issuance to our employees. Subject to certain restrictions, the ESPP provides employees with the opportunity to invest a portion of their annual eligible compensation to purchase shares of our Series C common stock at a purchase price equal to 85% of the lower of (a) the fair market value of the common stock at the beginning of the six-month offering period, and (b) the fair market value of the common stock at the end of the six-month offering period. Transitional Stock Adjustment Plan All of the new Parent option awards, new Parent restricted stock units and new Parent restricted stock awards (each as defined below) were issued pursuant to the CommerceHub, Inc. Transitional Stock Adjustment Plan (the “Transitional Plan”). The Transitional Plan governs the terms and conditions of the Parent incentive awards described below but will not be used to make any grants following the Spin-Off. New Parent options Liberty has granted to certain directors, officers, employees and consultants of Liberty stock options to purchase shares of Liberty Ventures common stock pursuant to applicable incentive plans in place at Liberty. Each holder of an outstanding option to purchase shares of Liberty Ventures common stock (an "original Ventures option award") on the record date for the Spin-Off (the "record date") who was a member of the Liberty board of directors or an officer of Liberty holding the position of Vice President or above received (i) an option to purchase shares of the corresponding series of our common stock and an option to purchase shares of our Series C common stock (such new option awards, "new Parent option awards") and (ii) an adjustment to the exercise price of and the number of shares subject to the original Ventures option award (as so adjusted, an "adjusted Ventures option award"). The exercise prices of and the number of shares subject to the new Parent option awards and the related adjusted Ventures option award were determined based on the exercise price of and the number of shares subject to the original Ventures option award, the distribution ratios used in the Spin-Off, the pre-Spin-Off trading price of Liberty Ventures common stock (determined using the volume weighted average price of the applicable series of Liberty Ventures common stock over the three-consecutive trading days immediately preceding the Spin-Off) and the relative post-Spin-Off trading prices of Liberty Ventures common stock and our common stock (determined using the volume weighted average price of the applicable series of common stock over the three-consecutive trading days beginning on the first trading day following the Spin-Off on which both the Liberty Ventures common stock and our common stock traded in the "regular way" (meaning once the common stock trades using a standard settlement cycle)), such that the pre-Spin-Off intrinsic value of the original Ventures option award was allocated between the new Parent option awards and the adjusted Ventures option award. All other holders of original Ventures option awards did not receive any new Parent option awards as a result of the distribution. Rather, the holders' original Ventures option awards were adjusted so as to preserve the pre-Spin-Off intrinsic value of the original Ventures option award based on the exercise price of and number of shares subject to such original Ventures option award, the distribution ratios used in the Spin-Off, the pre-Spin-Off trading price of Liberty Ventures common stock and the post-Spin-Off trading price of Liberty Ventures common stock (determined as described above). Except as described above, all other terms of an adjusted Ventures option award and the new Parent option awards (including, for example, the vesting terms thereof) are, in all material respects, the same as those of the corresponding original Ventures option award. New Parent restricted stock units Each holder of a restricted stock unit with respect to shares of Series A or Series B Liberty Ventures common stock (an “original Ventures RSU”) on the record date received in the distribution 0.1 of a restricted stock unit with respect to shares of the corresponding series of CommerceHub common stock and 0.2 of a restricted stock unit with respect to shares of CommerceHub Series C common stock (such new restricted stock unit awards, new “Parent RSUs”) for each original Ventures RSU held by them as of the record date, with cash paid in lieu of fractional new Parent RSUs. Except as described herein, the terms of all of the new Parent RSUs (including, for example, the vesting terms thereof) are, in all material respects, the same as those of the corresponding original Ventures RSU. New Parent restricted stock awards Each holder of a restricted stock award with respect to shares of Series A or Series B Liberty Ventures common stock (an “original Ventures RSA” and, together with the original Ventures option awards and the original Ventures RSUs, the "original Ventures equity awards") received in the distribution (i) 0.1 of a restricted share of the corresponding series of CommerceHub common stock and (ii) 0.2 of a restricted share of CommerceHub Series C common stock (such new restricted stock awards, new “Parent restricted stock awards”) for each restricted share of Liberty Ventures common stock held by them as of the record date, with cash paid in lieu of fractional new Parent restricted stock awards. Except as described herein, all new Parent restricted stock awards (including, for example, the vesting terms thereof) are, in all material respects, the same as those of the corresponding original Ventures RSA. As of July 22, 2016, following the Spin-Off, there were 13,447 new Parent restricted stock awards, 534 new Parent RSUs and 344,456 new Parent option awards, with a weighted average exercise price of $7.42, to purchase shares of our Series A common stock, 172,882 new Parent option awards, with a weighted average exercise price of $11.89, to purchase shares of our Series B common stock, and 30,409 new Parent restricted stock awards, 1,094 new Parent RSUs and 1,032,817 new Parent option awards, with a weighted average exercise price of $8.87, to purchase shares of our Series C common stock, issued to holders of original Ventures equity awards. Substantially all of Liberty's outstanding and exercisable options relate to employees of Liberty who received CommerceHub options on the Spin-Off. The compensation expense relating to these employees of Liberty will continue to be recorded at Liberty. |
Income Taxes |
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Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes During the three months ended September 30, 2016 the Company recorded an income tax benefit of $(0.4) million on income before taxes of $0.3 million. The benefit recorded, despite the pre-tax income, was primarily from federal tax research credits. The credits created both a discrete benefit from finalizing 2015 tax returns during the quarter and a benefit from a favorable adjustment to the estimated 2016 annual effective rate. The estimated annual effective tax rate for the three- and nine-month periods ended September 30, 2016 was lower than the federal tax rate of 35% due to the federal tax research credits, partially offset by the effect of state and local income taxes. The annual effective tax rate for the three and nine months ended September 30, 2015, was higher than the federal tax rate of 35% due to the effect of state and local income taxes. As of December 31, 2015, the Company's net deferred tax asset was primarily attributed to temporary differences related to share-based compensation awards. The exercise of a significant portion of share-based compensation awards during the nine months ended September 30, 2016 created a tax deductible expense, and reduced the deferred tax asset by $32.4 million. The deductions generated an estimated gross federal net operating loss (“NOL”) of approximately $79.8 million, primarily attributed to the exercise of share-based compensation awards. As allowed under the tax sharing agreement between the Company and Liberty entered into prior to the Spin-Off, $49.1 million of this NOL was utilized to refund federal income taxes paid to Liberty in the prior two tax years. In accordance with the same tax sharing agreement, the remaining federal NOLs of $30.7 million, subject to finalizing our 2016 pre-spin federal tax return, were forfeited and recorded as an equity distribution to Liberty upon the Spin-Off. State NOLs were also created and the Company intends to file amended state income tax returns for prior years in 2017 to request a refund of approximately $3.0 million of state taxes previously paid in states which allow a carryback claim. The remaining state NOLs generated of $0.3 million (tax-effected) are available to offset state income for 2016 and in future periods. |
Long-Term Debt |
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Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt On June 28, 2016, we entered into a credit agreement governing a $125.0 million revolving credit facility which expires on June 28, 2021. At September 30, 2016 we had $41.0 million in borrowings and no letters of credit outstanding under the facility, and our available borrowings under the facility were $84.0 million. Subsequent to September 30, 2016 we repaid an additional $10.0 million in borrowings under the facility. At September 30, 2016 the fair value of our debt, which is based on Level 2 valuation inputs, approximated cost. The interest rate applicable to our initial borrowings is LIBOR plus a yield of 1.75%. Interest on the revolving credit facility is based on a base rate or Eurodollar rate plus an applicable margin that increases as our total leverage ratio increases, with the base rate margin ranging from 0.75% to 1.25% and the Eurodollar rate margin ranging from 1.75% to 2.25% respectively. The revolving credit facility also carries a commitment fee of 0.25% to 0.50% per annum on the unused portion. In conjunction with entering into this agreement, we incurred charges totaling $1.1 million. These charges are included in other long-term assets on the condensed consolidated balance sheet and will be recognized over the term of the credit facility. Borrowings under the credit facility are collateralized by substantially all of our assets. The credit agreement contains covenants and restrictions which, among other things, require the maintenance of certain financial ratios, including a total leverage ratio and an interest coverage ratio, and restrict dividend payments and the incurrence of certain indebtedness and other activities, including acquisitions and dispositions. We were in compliance with these covenants and restrictions as of September 30, 2016. |
Commitments and Contingencies |
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Commitments and Contingencies | Commitments and Contingencies Legal Proceedings From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. Leases Amounts accrued for deferred rent of $850 thousand and $0 at September 30, 2016 and December 31, 2015, respectively, are included in accounts payable and accrued expenses on the condensed consolidated balance sheet. At September 30, 2016, future minimum payments under operating leases were as follows (in thousands):
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Significant Accounting Policies (Policies) |
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Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of CommerceHub, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements, which have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") for interim financial information. Accordingly, these condensed consolidated financial statements do not include all of the information and notes required by GAAP. We have included all normal recurring adjustments considered necessary to give a fair presentation of our financial position, results of comprehensive income (loss) and cash flows, and changes in equity for the interim periods shown. Operating results for these interim periods are not necessarily indicative of the results to be expected for the full year. The December 31, 2015 consolidated balance sheet data was derived from our audited financial statements at that date. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained within Amendment No. 3 to the Company's Registration Statement on Form S-1 (File No. 333-210508) filed with the Securities and Exchange Commission (the "SEC") on July 14, 2016 and declared effective on July 15, 2016 (the "Registration Statement"). |
Use of Estimates | Use of Estimates Preparing these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and assumptions. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers" (Topic 606) ("ASU 2014-09"). This topic provides for five principles which should be followed to determine the appropriate amount and timing of revenue recognition for the transfer of goods and services to customers. The principles in ASU 2014-09 should be applied to all contracts with customers regardless of industry. The amendments in ASU 2014-09 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, with two transition methods of adoption allowed. Early adoption for reporting periods prior to December 15, 2016 is not permitted. In March 2015, the FASB voted to defer the effective date by one year, but to allow adoption as of the original adoption date. In May 2016, FASB issued ASU No. 2016-08, "Revenue from Contracts with Customers" (Topic 606) Principal versus Agent Considerations, (Reporting Revenue Gross versus Net). This update was to further clarify the implementation guidance on principal versus agent considerations in the previously issued ASU No. 2014-09. ASU No. 2016-08 has no impact on the adoption date of the previously issued update. We are evaluating the financial statement impacts of the guidance in ASU 2014-09 and determining which transition method we will utilize. In February 2016, the FASB issued ASU No. 2016-02 "Leases" (Topic 842) ("ASU No. 2016-02"). This topic provides that a lessee should recognize the assets and liabilities that arise from leases. Topic 842 requires an entity to separate the lease components from the nonlease components in a contract. This ASU intended to improve financial reporting about leasing transactions. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018. We are evaluating the financial statement impact this update will have on the consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU No. 2016-09"), which is intended to improve the accounting for share-based payment transactions as part of the FASB's simplification initiative. ASU No. 2016-09 changed the aspects of the accounting for share-based payment award transactions, including: (1) accounting for income taxes; (2) classification of excess tax benefits on the statement of cash flows; (3) forfeitures; (4) minimum statutory tax withholding requirements; and (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. This ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those years. Early adoption is permitted in any interim or annual period provided that the entire ASU is adopted. We are evaluating the financial statement impact this update will have on the consolidated financial statements. |
Earnings (Loss) Per Share (Tables) |
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Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth net income (loss) and the basic and diluted shares used to calculate earnings per share for the three and nine months ended September 30, 2016 and 2015 (in thousands):
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Acquisition of Mercent Corporation (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of allocation of purchase consideration to the assets acquired and liabilities assumed | Under the acquisition method of accounting, the Company allocated the purchase price to the identifiable assets and liabilities based on their estimated fair value, as follows (in thousands):
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Capitalized Software Costs (Tables) |
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Research and Development [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of capitalized software costs | Capitalized software costs, net is comprised of the following (in thousands):
Intangibles assets acquired as of September 30, 2016 and December 31, 2015, respectively, are as follows (in thousands):
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Schedule of future amortization expense | Future amortization expense of existing capitalized software costs as of September 30, 2016 is expected to be as follows for the years ending December 31, (in thousands):
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Intangible Assets (Tables) |
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Schedule of intangible assets | Capitalized software costs, net is comprised of the following (in thousands):
Intangibles assets acquired as of September 30, 2016 and December 31, 2015, respectively, are as follows (in thousands):
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Share-Based Awards (Tables) |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation Allocation | Included in the condensed consolidated statements of comprehensive income (loss) are the following amounts of share-based compensation (amounts in thousands):
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Options and SARs Activity | The following table summarizes the share-based award activity of options to purchase shares of our Series C under the Legacy Stock Appreciation Rights Plan and Legacy Stock Option Plans (as further described below) from the time of Spin-Off through the last day of the reporting period:
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Stock Option Activity | The following table summarizes the share-based award activity of options to purchase shares of our Series C under the Transitional Stock Adjustment Plan (as further described below) from the time of Spin-Off through the last day of the reporting period:
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Commitments and Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of future minimum payments under operating leases | At September 30, 2016, future minimum payments under operating leases were as follows (in thousands):
|
Description of Business (Details) - USD ($) $ in Thousands |
1 Months Ended | 9 Months Ended | |
---|---|---|---|
Jul. 31, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Related Party Transaction [Line Items] | |||
Borrowings on revolver | $ 50,000 | $ 0 | |
Repayments of note payable | $ 28,664 | $ 0 | |
Payments of common stock dividends | $ 18,900 | ||
Payments of preferred dividends | 900 | ||
Liberty | Parent | |||
Related Party Transaction [Line Items] | |||
Repayments of note payable | 28,700 | ||
Income taxes paid | 1,300 | ||
Taxes amounts due for tax benefits | 8,500 | ||
Proceeds from contributed capital | 6,000 | ||
Revolving Credit Facility | Credit Agreement, June 2016 | |||
Related Party Transaction [Line Items] | |||
Borrowings on revolver | $ 50,000 |
Basis of Presentation (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cost of revenue | $ (5,737) | $ (6,332) | $ (17,162) | $ (16,177) |
Sales and marketing | $ 3,023 | 2,808 | $ 9,024 | 7,834 |
Reclassification of certain sales taxes | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cost of revenue | 520 | 466 | ||
Sales and marketing | $ 26 | $ 492 |
Earnings (Loss) Per Share - Schedule Of Earnings Per Share (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ 710 | $ (621) | $ 3,144 | $ (3,106) |
Basic - weighted average shares outstanding (in shares) | 42,773,000 | 42,703,000 | 42,773,000 | 42,703,000 |
Effect of dilutive potential securities (in shares) | 786,000 | 0 | 786,000 | 0 |
Diluted - weighted average shares outstanding (in shares) | 43,559,000 | 42,703,000 | 43,559,000 | 42,703,000 |
Anti-dilutive securities (in shares) | 5,034,000 | 0 | 5,034,000 | 0 |
Acquisition of Mercent Corporation (Details) - USD ($) |
9 Months Ended | ||
---|---|---|---|
Jan. 08, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Business Acquisition [Line Items] | |||
Cash consideration | $ 0 | $ 20,225,000 | |
Mercent | |||
Business Acquisition [Line Items] | |||
Percentage of voting interests acquired | 100.00% | ||
Cash consideration | $ 20,200,000 | ||
Transaction related costs | $ 0 | $ 166,000 | |
Goodwill not deductible for tax purposes | $ 0 |
Acquisition of Mercent Corporation - Summary of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
Jan. 08, 2015 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 21,410 | $ 21,410 | |
Mercent | |||
Business Acquisition [Line Items] | |||
Cash | $ 41 | ||
Accounts receivable | 2,559 | ||
Prepaid expenses | 87 | ||
Property and equipment | 336 | ||
Deferred tax assets | 3,580 | ||
Goodwill | 12,390 | ||
Accounts payable and accrued expenses | (2,015) | ||
Deferred revenue | (212) | ||
Recognized assets and liabilities acquired | 20,266 | ||
Mercent | Customer relationships | |||
Business Acquisition [Line Items] | |||
Finite-lived intangibles | 2,000 | ||
Mercent | Developed software technology | |||
Business Acquisition [Line Items] | |||
Finite-lived intangibles | $ 1,500 |
Concentrations of Significant Customers and Credit Risk (Details) - Customer concentration risk - customer |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Total revenue | ||
Concentration Risk [Line Items] | ||
Number of major customers (in customers) | 1 | 1 |
Receivables | ||
Concentration Risk [Line Items] | ||
Number of major customers (in customers) | 0 |
Related Party Transactions (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|
Related Party Transaction [Line Items] | ||||
Accounts receivable, net of allowances | $ 10,259 | $ 10,259 | $ 16,472 | |
Collection of note receivable - Parent | 36,380 | $ 0 | ||
Subsidiary of common parent | QVC | ||||
Related Party Transaction [Line Items] | ||||
Accounts receivable, net of allowances | 248 | $ 248 | $ 511 | |
Subsidiary of common parent | QVC | Total revenue | Customer concentration risk | ||||
Related Party Transaction [Line Items] | ||||
Concentration risk, percentage | 7.00% | 7.00% | ||
Parent | Liberty | ||||
Related Party Transaction [Line Items] | ||||
Collection of note receivable - Parent | 36,400 | |||
Interest paid | 2,400 | |||
Due to related parties | $ 446 | $ 446 | ||
Parent | Liberty | LIBOR | ||||
Related Party Transaction [Line Items] | ||||
Loans receivable, basis spread on variable rate | 1.00% | 1.00% |
Capitalized Software Costs - Summary of Capitalized Software Costs (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Research and Development [Abstract] | ||
Capitalized software costs | $ 42,051 | $ 41,120 |
Less accumulated amortization | (34,591) | (33,931) |
Capitalized software costs, net | $ 7,460 | $ 7,189 |
Capitalized Software Costs - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Capitalized software amortization expense | $ 3.8 | $ 2.4 |
Capitalized Software Costs - Future Amortization (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Remainder of 2016 | $ 438 | |
Capitalized software costs, net | 7,460 | $ 7,189 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remainder of 2016 | 1,262 | |
2017 | 4,290 | |
2018 | 1,737 | |
2019 | 171 | |
2020 and thereafter | 0 | |
Capitalized software costs, net | $ 7,460 |
Intangible Assets (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,500 | $ 3,500 |
Accumulated Amortization | (3,062) | (1,750) |
Net Book Value | $ 438 | $ 1,750 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life (Years) | 2 years | 2 years |
Gross Carrying Amount | $ 1,500 | $ 1,500 |
Accumulated Amortization | (1,312) | (750) |
Net Book Value | $ 188 | $ 750 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life (Years) | 2 years | 2 years |
Gross Carrying Amount | $ 2,000 | $ 2,000 |
Accumulated Amortization | (1,750) | (1,000) |
Net Book Value | $ 250 | $ 1,000 |
Intangible Assets - Narrative (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense related to intangible assets | $ 1,300 | $ 1,300 |
Future amortization expense for intangible assets | $ 438 |
Commitments and Contingencies (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Deferred rent | $ 850 | $ 0 |
Remainder of 2016 | 560 | |
2017 | 2,120 | |
2018 | 2,132 | |
2019 | 2,157 | |
2020 | 2,183 | |
Thereafter | 2,139 | |
Future minimum payments due under operating leases | $ 11,291 |
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