Pennsylvania
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000-22920
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11-2948749
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(State or other jurisdiction
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(Commission File Number)
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(I.R.S. Employer
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of incorporation)
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Identification No.)
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[ ]
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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99.1
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Press Release, dated December 31, 2015
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NUMEREX CORP.
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Date: March 14, 2016
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/s/ Kenneth L. Gayron
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Kenneth L. Gayron
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Chief Financial Officer
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99.1
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Press Release, dated March 14, 2016
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Net revenues in Q4 of 2015 were $18.8 million compared to $23.3 million in Q3 of 2015 with the decline due to $4.4 million decrease in low margin Hardware revenue.
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Subscription and Support revenues were $15.5 million in Q4 of 2015, compared to $15.6 million in Q3 of 2015.
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Recurring Revenue as a percentage of Total Revenue of 82.5% in Q4 of 2015 compared to 67.0% in Q3 2015.
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Gross Margin of 63.3% on Subscription and Support Revenue in Q4 2015, compared to 58.2% in Q3 of 2015.
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Loss from continuing operations, net of income taxes, was $2.4 million in Q4 2015, including a $1.5 million asset impairment compared to net loss of $16.4 million in Q3 of 2015, including the establishment of a $10.1 million tax valuation allowance and $2.5 million asset impairment.
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Adjusted EBITDA in Q4 of 2015 was $2.0 million compared to $1.7 million in Q3 of 2015.
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Net revenues in Q4 of 2015 were $18.8 million compared to $24.9 million in Q4 of 2014 with the decline mainly due to $4.1 million decrease in Hardware revenue.
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Subscription and Support revenues were $15.5 million in Q4 of 2015, compared to $17.5 million in Q4 of 2014.
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Recurring Revenue as a percentage of Total Revenue of 82.5% in Q4 of 2015 compared to 70.4% in Q4 2014.
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Gross Margin of 63.3% on Subscription and Support Revenue in Q4 2015, compared to 61.6% in Q4 of 2014.
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Loss from continuing operations, net of income taxes, was $2.4 million in Q4 2015, including a $1.5 million asset impairment compared to net income of $601 thousand in Q4 of 2014.
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Adjusted EBITDA in Q4 of 2015 was $2.0 million compared to $3.5 million in Q4 of 2014.
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Net revenues in Fiscal Year 2015 were $89.5 million compared to $93.9 million in 2014 with the decline mainly due to a $3.8 million decrease in Hardware revenue.
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Subscription and Support revenues were $64.4 million in Fiscal Year 2015, compared to $65.0 million in 2014.
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Recurring Revenue as a percentage of Total Revenue of 72.0% in Fiscal Year 2015 compared to 69.3% in 2014.
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Gross Margin of 60.5% on Subscription and Support Revenue in Fiscal Year 2015, compared to 61.0% in 2014.
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Loss from continuing operations, net of income taxes, was $19.2 million in Fiscal Year 2015, including the establishment of a $10.1 million tax valuation allowance and $4.0 million asset impairment, compared to net income of $2.2 million in 2014.
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Adjusted EBITDA was $9.3 million in Fiscal Year 2015 compared to $12.6 million in 2014.
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Unaudited Three Months Ended
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Year Ended
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December 31,
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September 30,
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December 31,
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December 31,
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|||||||||||||||||
2015
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2015
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2014
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2015
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2014
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Subscription and support revenues ($ in millions)
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$ | 15.5 | $ | 15.6 | $ | 17.5 | $ | 64.4 | $ | 65.0 | ||||||||||
Recurring revenue - Subscription and support
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revenues as a percentage of total revenue
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82.5 | % | 67.0 | % | 70.4 | % | 72.0 | % | 69.3 | % | ||||||||||
Gross margin -- subscription and support revenues
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63.3 | % | 58.2 | % | 61.6 | % | 60.5 | % | 61.0 | % | ||||||||||
(Loss) income from continuing operations, net of
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income taxes ($ in millions)
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$ | (2.4 | ) | $ | (16.4 | ) | $ | 0.6 | $ | (19.2 | ) | $ | 2.2 | |||||||
Diluted EPS from continuing operations
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$ | (0.13 | ) | $ | (0.86 | ) | $ | 0.03 | $ | (1.00 | ) | $ | 0.12 | |||||||
Non-GAAP Measures* (Unaudited)
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Adjusted EBITDA ($ in millions)
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$ | 2.0 | $ | 1.7 | $ | 3.5 | $ | 9.3 | $ | 12.6 | ||||||||||
Adjusted EBITDA as a percent of total revenue
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10.5 | % | 7.1 | % | 14.3 | % | 10.4 | % | 13.4 | % | ||||||||||
Adjusted EBITDA per diluted share
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$ | 0.10 | $ | 0.09 | $ | 0.18 | $ | 0.49 | $ | 0.66 | ||||||||||
______________
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* Refer to the section of this press release entitled "Non-GAAP (Adjusted) Financial Measures" for
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a discussion of these non-GAAP items and a reconciliation to the most comparable GAAP measure.
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NUMEREX CORP. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(In thousands, except per share data)
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Unaudited Three Months Ended
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Year Ended
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December 31,
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September 30,
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December 31,
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December 31,
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2015
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2015
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2014
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2015
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2014
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Net revenues:
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Subscription and support revenues
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$ | 15,497 | $ | 15,624 | $ | 17,490 | $ | 64,371 | $ | 65,020 | ||||||||||
Embedded devices and hardware
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3,288 | 7,710 | 7,365 | 25,079 | 28,849 | |||||||||||||||
Total net revenues
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18,785 | 23,334 | 24,855 | 89,450 | 93,869 | |||||||||||||||
Cost of sales, exclusive of a portion of
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depreciation and amortization shown below:
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Subscription and support revenues
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5,682 | 6,538 | 6,724 | 25,410 | 25,371 | |||||||||||||||
Embedded devices and hardware
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3,148 | 6,958 | 6,587 | 22,981 | 24,690 | |||||||||||||||
Inventory reserves
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46 | 1,277 | 129 | 1,343 | 544 | |||||||||||||||
Impairment of other asset
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- | 1,275 | - | 1,275 | - | |||||||||||||||
Gross profit
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9,909 | 7,286 | 11,415 | 38,441 | 43,264 | |||||||||||||||
Operating expenses:
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Sales and marketing
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3,310 | 3,047 | 2,809 | 12,446 | 11,876 | |||||||||||||||
General and administrative
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3,690 | 4,507 | 3,856 | 15,798 | 15,063 | |||||||||||||||
Engineering and development
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2,257 | 2,201 | 2,215 | 8,952 | 8,009 | |||||||||||||||
Depreciation and amortization
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1,703 | 2,100 | 1,632 | 7,116 | 6,201 | |||||||||||||||
Impairment of goodwill and other intangible assets
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1,462 | 1,250 | - | 2,712 | - | |||||||||||||||
Operating (loss) income
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(2,513 | ) | (5,819 | ) | 903 | (8,583 | ) | 2,115 | ||||||||||||
Interest expense
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203 | 188 | 234 | 806 | 798 | |||||||||||||||
Other income, net
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(33 | ) | (31 | ) | (68 | ) | (134 | ) | (1,338 | ) | ||||||||||
(Loss) income from continuing
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operations before income taxes
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(2,683 | ) | (5,976 | ) | 737 | (9,255 | ) | 2,655 | ||||||||||||
Income tax expense
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(257 | ) | 10,404 | 136 | 9,902 | 419 | ||||||||||||||
(Loss) income from continuing
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operations, net of income taxes
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(2,426 | ) | (16,380 | ) | 601 | (19,157 | ) | 2,236 | ||||||||||||
Loss from discontinued
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operations, net of income taxes
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- | - | - | - | (492 | ) | ||||||||||||||
Net (loss) income
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$ | (2,426 | ) | $ | (16,380 | ) | $ | 601 | $ | (19,157 | ) | $ | 1,744 | |||||||
Basic earnings per share:
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(Loss) income from continuing operations
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$ | (0.13 | ) | $ | (0.86 | ) | $ | 0.03 | $ | (1.00 | ) | $ | 0.12 | |||||||
Loss from discontinued operations
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- | - | - | - | (0.03 | ) | ||||||||||||||
Net (loss) income
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$ | (0.13 | ) | $ | (0.86 | ) | $ | 0.03 | $ | (1.00 | ) | $ | 0.09 | |||||||
Diluted earnings per share:
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(Loss) income from continuing operations
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$ | (0.13 | ) | $ | (0.86 | ) | $ | 0.03 | $ | (1.00 | ) | $ | 0.12 | |||||||
Loss from discontinued operations
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- | - | - | - | (0.03 | ) | ||||||||||||||
Net (loss) income
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$ | (0.13 | ) | $ | (0.86 | ) | $ | 0.03 | $ | (1.00 | ) | $ | 0.09 | |||||||
Weighted average shares outstanding used
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in computing earnings per share:
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Basic
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19,305 | 19,137 | 18,987 | 19,117 | 18,922 | |||||||||||||||
Diluted
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19,305 | 19,137 | 19,336 | 19,117 | 19,268 |
NUMEREX CORP. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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(In thousands)
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December 31,
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December 31,
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2015
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2014(1)
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ASSETS
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CURRENT ASSETS
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Cash and cash equivalents
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$ | 16,237 | $ | 17,270 | ||||
Accounts receivable, less allowance for doubtful accounts of $618 and $652
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9,237 | 12,287 | ||||||
Financing receivables, current
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1,780 | 1,595 | ||||||
Inventory, net of reserve for obsolescence of $2,706 and $1,397
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7,617 | 8,410 | ||||||
Prepaid expenses and other current assets
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2,037 | 2,329 | ||||||
Deferred tax assets, current
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603 | 3,161 | ||||||
TOTAL CURRENT ASSETS
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37,511 | 45,052 | ||||||
Financing receivables, less current portion
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2,330 | 2,984 | ||||||
Property and equipment, net of accumulated depreciation
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and amortization of $6,632 and $3,815
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4,795 | 4,889 | ||||||
Software, net of accumulated amortization of $9,503 and $6,409
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7,146 | 6,106 | ||||||
Other intangible assets, net of accumulated amortization of $17,184 and $15,139
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15,722 | 19,163 | ||||||
Goodwill
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43,424 | 44,348 | ||||||
Deferred tax assets, less current portion
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- | 5,816 | ||||||
Other assets
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699 | 2,585 | ||||||
TOTAL ASSETS
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$ | 111,627 | $ | 130,943 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
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CURRENT LIABILITIES
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Accounts payable
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$ | 11,390 | $ | 12,257 | ||||
Accrued expenses and other current liabilities
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2,864 | 2,471 | ||||||
Deferred revenues
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1,942 | 2,258 | ||||||
Current portion of long-term debt
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3,750 | 4,251 | ||||||
Obligations under capital lease
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- | 148 | ||||||
TOTAL CURRENT LIABILITIES
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19,946 | 21,385 | ||||||
Long-term debt, less current portion
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15,599 | 19,350 | ||||||
Deferred tax liabilities, noncurrent
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1,595 | - | ||||||
Other liabilities
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1,891 | 1,346 | ||||||
TOTAL LIABILITIES
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39,031 | 42,081 | ||||||
COMMITMENTS AND CONTINGENCIES
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SHAREHOLDERS’ EQUITY
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Preferred stock, no par value; 3,000 authorized; none issued
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- | - | ||||||
Class A common stock, no par value; 30,000 authorized;
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20,652 and 20,284 issued; 19,177 and 18,992 outstanding
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- | - | ||||||
Class B common stock, no par value; 5,000 authorized; none issued
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- | - | ||||||
Additional paid-in capital
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102,108 | 99,056 | ||||||
Treasury stock, at cost; 1,316 and 1,292 shares
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(5,444 | ) | (5,352 | ) | ||||
Accumulated other comprehensive loss
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(117 | ) | (48 | ) | ||||
Accumulated deficit
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(23,951 | ) | (4,794 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY
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72,596 | 88,862 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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$ | 111,627 | $ | 130,943 | ||||
_______________________
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(1) The balance sheet as of December 31, 2014 has been recast to reflect a $200 measurement period adjustment
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between goodwill and non-current deferred tax assets. The adjustment had no effect on the statement of operations.
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EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest, income tax, and depreciation and amortization expenses, which can vary substantially from company-to-company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired; and
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Investors commonly adjust EBITDA information to eliminate the effect of equity-based compensation and other unusual or infrequently occurring items which vary widely from company-to-company and impair comparability.
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as a measure of operating performance to assist in comparing performance from period-to-period on a consistent basis
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as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations; and
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in communications with the board of directors, analysts and investors concerning our financial performance.
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Three Months Ended
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Year Ended
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December 31,
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September 30,
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December 31,
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December 31,
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2015
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2015
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2014
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2015
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2014
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EBITDA and Adjusted EBITDA (non-GAAP) (Unaudited)
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(Loss) income from continuing operations, net of income taxes (GAAP)
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$ | (2,426 | ) | $ | (16,380 | ) | $ | 601 | $ | (19,157 | ) | $ | 2,236 | |||||||
Depreciation and amortization expense
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2,054 | 2,381 | 1,843 | 8,217 | 6,812 | |||||||||||||||
Interest expense and other non-operating expense (income), net
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170 | 157 | 166 | 672 | (540 | ) | ||||||||||||||
Income tax (benefit) expense
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(257 | ) | 10,404 | 136 | 9,902 | 419 | ||||||||||||||
EBITDA (non-GAAP)
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(459 | ) | (3,438 | ) | 2,746 | (366 | ) | 8,927 | ||||||||||||
Equity-based compensation expense
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354 | 738 | 732 | 2,673 | 2,565 | |||||||||||||||
Non-cash and other items
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2,070 | 4,360 | 65 | 7,014 | 1,129 | |||||||||||||||
Adjusted EBITDA (non-GAAP)
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$ | 1,965 | $ | 1,660 | $ | 3,543 | $ | 9,321 | $ | 12,621 | ||||||||||
(Loss) income from continuing operations, net of income
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taxes, per diluted share (GAAP)
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$ | (0.13 | ) | $ | (0.86 | ) | $ | 0.03 | $ | (1.00 | ) | $ | 0.12 | |||||||
EDITDA per diluted share (non-GAAP)
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(0.02 | ) | (0.18 | ) | 0.14 | (0.02 | ) | 0.46 | ||||||||||||
Adjusted EBITDA per diluted share (non-GAAP)
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0.10 | 0.09 | 0.18 | 0.49 | 0.66 | |||||||||||||||
Weighted average shares outstanding used in
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computing diluted per share amounts
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19,305 | 19,137 | 19,336 | 19,117 | 19,268 |