Support.com 2014 Annual Report Download - page 30

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Table of Contents
Interest income and other, net. Interest income and other, net consists primarily of interest income on our cash, cash equivalents and short-term investments. The decrease in interest income and other, net of
$75,000 for the year ended December 31, 2014 compared to 2013 and the increase in interest income and other, net of $72,000 for the year ended December 31, 2013 compared to 2012 was primarily due to a
reversal of a previous legal accrual of $57,000 associated with a class-action lawsuit that was concluded in August 2013.
Income tax provision
($ in thousands) 2014
% Change
2013 to 2014 2013
% Change
2012 to 2013 2012
Income tax provision $ 740 (4)% $ 772 271% $ 208
Income tax provision. The income tax provision is comprised of estimates of current taxes due in domestic and foreign jurisdictions. For the year ended December 31, 2014, the income tax provision primarily
consisted of state income tax, foreign taxes, and tax expense related to the recording of a deferred tax liability that results from the amortization for income tax purposes of acquisition-related goodwill. For the year
ended December 31, 2014, the income tax provision consisted of $422,000 for foreign taxes, $265,000 for amortization for income tax purposes of acquisition-related goodwill and $53,000 for state income tax. For the
year ended December 31, 2013, the income tax provision consisted of $351,000 for foreign taxes, $265,000 for amortization for income tax purposes of acquisition-related goodwill and $156,000 for state income tax.
For the year ended December 31, 2012, the income tax provision consisted of $140,000 for foreign tax benefits, $265,000 for amortization for income tax purposes of acquisition-related goodwill and $83,000 for state
income tax.
Liquidity and Capital Resources
Total cash, cash equivalents and short-term investments at December 31, 2014 and 2013 was $73.8 million and $72.4 million, respectively. Cash equivalents and short-term investments are comprised of
money market funds, certificate of deposits, corporate notes and bonds, and U.S. government agency securities. The increase in cash, cash equivalents and short-term investments in fiscal year 2014 was primarily
due to cash generated from operating activities and proceeds from exercises of employee stock options.
Operating Activities
Net cash provided by operating activities was $1.5 million for the year ended December 31, 2014, $10.2 million for the year ended December 31, 2013, and $2.0 million for the year ended December 31, 2012.
Net cash provided by operating activities primarily reflect the net income (loss) for the period, adjusted for non-cash items such as stock-based compensation expense, amortization of intangible assets and other,
amortization of premiums and discounts on investments, depreciation, warrant-related charges, and changes in operating assets and liabilities.
Net cash provided by operating activities during 2014 was the result of net loss for the period of $3.5 million, adjusted for non-cash items totaling $5.0 million and changes in operating assets and liabilities of
$25,000. Adjustment for non-cash items primarily consisted of stock-based compensation expense of $2.9 million, amortization of intangible assets and other of $1.1 million, and amortization of premiums and
discounts on investments of $726,000. The changes in operating assets and liabilities primarily consisted of an increase in accounts receivable, net of $634,000 due to an increase in revenues, a decrease in
deferred revenue of $632,000 due to a decrease in sales of services for which revenues are recognized ratably, offset by net increase in accounts payable, accrued compensation, other accrued liabilities and other
long-term liabilities of $1.4 million due to the timing of payments.
Net cash provided by operating activities during 2013 was the result of net income for the period of $10.4 million, adjusted for non-cash items totaling $6.7 million and changes in operating assets and liabilities
of ($6.8) million. Adjustment for non-cash items primarily consisted of stock-based compensation expense of $3.5 million, amortization of intangible assets and other of $1.3 million, warrant-related charges of
$777,000, and amortization of premiums and discounts on investments of $646,000. The changes in operating assets and liabilities primarily consisted of an increase in accounts receivable, net of $4.3 million due to
an increase in revenues and a decrease in deferred revenue of $3.3 million due to a decrease in sales of services for which revenues are recognized ratably, offset by net increase in accounts payable, accrued
compensation, other accrued liabilities and other long-term liabilities of $646,000 due to the timing of payments.
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