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Document and Entity Information - USD ($) $ in Millions	9 Months Ended
Document and Entity Information - USD ($) $ in Millions	Sep. 30, 2011	Oct. 28, 2011	Jun. 30, 2010
Document and Entity Information [Abstract]
Entity Registrant Name	SPS COMMERCE INC
Entity Central Index Key	0001092699
Document Type	10-Q
Document Period End Date	Sep. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 68.9
Entity Common Stock, Shares Outstanding		12,072,686

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2011	Dec. 31, 2010
CURRENT ASSETS
Cash and cash equivalents	$ 31,546	$ 40,473
Accounts receivable, less allowance for doubtful accounts of $212 and $209, respectively	7,695	5,574
Deferred costs, current	5,486	4,720
Prepaid expenses and other current assets	1,233	874
Total current assets	45,960	51,641
PROPERTY AND EQUIPMENT, net	3,082	2,760
GOODWILL	5,877	1,166
INTANGIBLE ASSETS, net	6,027	290
OTHER ASSETS
Deferred costs, net of current portion	2,396	1,943
Other non-current assets	80	80
Total assets	63,422	57,880
CURRENT LIABILITIES
Capital lease obligations, current	0	122
Accounts payable	1,387	998
Accrued compensation and benefits	5,189	3,577
Accrued expenses and other current liabilities	1,126	807
Deferred revenue, current	3,806	3,585
Total current liabilities	11,508	9,089
OTHER LIABILITIES
Deferred revenue, less current portion	6,104	5,002
Other non-current liabilities	225	281
Total liabilities	17,837	14,372
COMMITMENTS and CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding
Common stock, $0.001 par value; 55,000,000 shares authorized; 11,980,101 and 11,849,572 shares issued and outstanding, respectively	12	12
Additional paid-in capital	107,781	106,264
Accumulated deficit	(62,208)	(62,768)
Total stockholders' equity	45,585	43,508
Total liabilities and shareholder's equity	$ 63,422	$ 57,880

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2011	Dec. 31, 2010
CURRENT ASSETS
Accounts receivable, less allowance for doubtful accounts of Parenthetical Value 1	$ 212	$ 209
STOCKHOLDERS' EQUITY
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	55,000,000	55,000,000
Common stock, shares issued	11,980,101	11,849,572
Common stock, shares outstanding	11,980,101	11,849,572

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Condensed Consolidated Statements of Operations [Abstract]
Revenues	$ 15,529	$ 11,491	$ 42,115	$ 32,678
Cost of revenues	4,076	3,211	11,147	9,293
Gross profit	11,453	8,280	30,968	23,385
Operating expenses
Sales and marketing	6,404	4,139	17,382	11,768
Research and development	1,605	1,108	4,259	3,218
General and administrative	2,914	2,165	8,208	5,805
Amortization of intangible assets	260		383
Total operating expenses	11,183	7,412	30,232	20,791
Income from operations	270	868	736	2,594
Other income (expense)
Interest expense		(8)		(66)
Interest income	16	104	74	104
Other expense	(28)	(85)	(62)	(93)
Total other income (expense), net	(12)	11	12	(55)
Income before income taxes	258	879	748	2,539
Income tax (expense) benefit	(81)	7	(188)	(96)
Net income	$ 177	$ 886	$ 560	$ 2,443
Net income per share
Basic	$ 0.01	$ 0.08	$ 0.05	$ 0.36
Diluted	$ 0.01	$ 0.07	$ 0.04	$ 0.22
Weighted average common shares used to compute net income per share
Basic	11,970	11,620	11,918	6,796
Diluted	12,735	12,413	12,685	11,275

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Cash flows from operating activities
Net income	$ 560	$ 2,443
Reconciliation of net income to net cash provided by operating activities
Depreciation and amortization of property and equipment	1,436	1,148
Amortization of intangible assets	383
Provision for doubtful accounts	245	225
Stock-based compensation	1,286	458
Change in carrying value of preferred stock warrants		27
Other		1
Changes in assets and liabilities, net of effect of acquisition
Accounts receivable	(2,265)	(975)
Prepaid expenses and other current assets	(264)	450
Other assets		(18)
Deferred costs	(1,219)	(724)
Accounts payable	389	(287)
Deferred revenue	1,323	866
Accrued compensation and benefits	1,612	714
Accrued expenses and other current liabilities	60	(256)
Net cash provided by operating activities	3,546	4,072
Cash flows from investing activities
Acquisition of Direct EDI	(10,865)
Purchases of property and equipment	(1,716)	(1,230)
Net cash used in investing activities	(12,581)	(1,230)
Cash flows from financing activities
Borrowings on line of credit		4,450
Payments on line of credit		(5,950)
Payments on equipment loans		(732)
Payments of capital lease obligations	(122)	(338)
Net proceeds from initial public offering		32,902
Stock offering costs	(108)
Net proceeds from exercise of options to purchase common stock	338	8
Net cash provided by financing activities	108	30,340
Net increase (decrease) in cash and cash equivalents	(8,927)	33,182
Cash and cash equivalents at beginning of period	40,473	5,931
Cash and cash equivalents at end of period	$ 31,546	$ 39,113

General

9 Months Ended

Sep. 30, 2011

General [Abstract]

General

NOTE A – General

Business Description

We are a leading provider of on-demand supply chain management solutions, providing integration, collaboration, connectivity, visibility and data analytics to thousands of customers worldwide. We provide our solutions through SPSCommerce.net, a hosted software suite that improves the way suppliers, retailers, distributors and other customers manage and fulfill orders. We deliver our solutions to our customers over the Internet using a Software-as-a-Service model and derive the majority of our revenues from thousands of monthly recurring subscriptions from businesses that utilize our solutions.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all of the information and footnotes required by GAAP. We have included all normal recurring adjustments considered necessary to give a fair statement of our financial position, results of operations and cash flows 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, 2010 balance sheet data was derived from our audited financial statements at that date. For further information, refer to the consolidated financial statements and accompanying notes for the year ended December 31, 2010 included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 3, 2011.

Use of Estimates

Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Business Combinations

We account for acquisitions of businesses pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. In accordance with ASC Topic 805, we recognize separately from goodwill the fair value of the assets acquired and the liabilities assumed at the acquisition date as defined by FASB ASC Topic 820, Fair Value Measurements and Disclosures. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date amounts of the assets acquired and the liabilities assumed. Assets acquired include tangible and intangible assets. We determine the value and useful lives of purchased intangible assets with the assistance of an independent third-party valuation firm using certain estimates and assumptions.

While we use estimates and assumptions that we believe are reasonable as a part of the purchase price allocation process to accurately value the assets acquired and the liabilities assumed at the acquisition date, they are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of the assets acquired and the liabilities assumed based on new information about facts and circumstances that existed as of the acquisition date. Any such adjustments would be recorded as an offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair values, whichever comes first, any subsequent adjustments would be recorded in our statements of operations.

Significant Accounting Policies

During the nine months ended September 30, 2011, there were no material changes in our significant accounting policies. See Note A to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2010 as filed with the Securities and Exchange Commission on March 3, 2011 for additional information regarding our significant accounting policies.

Recent Accounting Pronouncements

In October 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-13, Revenue Recognition (ASC Topic 605), Multiple-Deliverable Revenue Arrangements, a consensus of the FASB Emerging Issues Task Force. This guidance modifies the fair value requirements of ASC subtopic 605-25, Revenue Recognition-Multiple Element Arrangements, by allowing the use of the “best estimate of selling price” in addition to Vendor Specific Objective Evidence and third-party evidence (or TPE) for determining the selling price of a deliverable. A vendor is now required to use its best estimate of the selling price when Vendor Specific Objective Evidence or TPE of the selling price cannot be determined. In addition, the residual method of allocating arrangement consideration is no longer permitted.

In October 2009, the FASB issued ASU No. 2009-14, Software (ASC Topic 985), Certain Revenue Arrangements That Include Software Elements, a consensus of the FASB Emerging Issues Task Force. This guidance modifies the scope of ASC subtopic 965-605, Software-Revenue Recognition, to exclude from its requirements (a) non-software components of tangible products and (b) software components of tangible products that are sold, licensed or leased with tangible products when the software components and non-software components of the tangible product function together to deliver the tangible product’s essential functionality.

ASU No. 2009-13 and ASU No. 2009-14 both require expanded qualitative and quantitative disclosures and are effective for fiscal years beginning on or after June 15, 2010. We have adopted these updates and they did not have a material impact on our financial statements.

In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (ASC Topic 820), Improving Disclosures about Fair Value Measurements. ASU No. 2010-06 enhances the disclosure requirements to include transfers in and out of Level 1 and 2 and the associated reasons, which was effective for fiscal years beginning on or after December 15, 2009. ASU No. 2010-06 also requires the disclosure of a disaggregated gross reconciliation of Level 3 fair value measurements, which is effective for fiscal years beginning on or after December 15, 2010. We have adopted these updates and they did not have a material impact on our financial statements.

In July 2010, the FASB issued ASU No. 2010-20, Receivables (ASC Topic 310), Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. ASU No. 2010-20 enhances the disclosure requirements about the credit quality and related allowance for credit losses of financing receivables. We will be required to disclose the nature of the inherent risk of receivables, the methodology and analytics that support that assessment, and support any changes to the allowance for doubtful accounts. We will also be required to provide a rollforward of the allowance and disclose the accounts receivable on a disaggregated basis. This update is effective for fiscal years beginning on or after December 15, 2010. We have adopted this update and it did not have a material impact on our financial statements.

In December 2010, the FASB issued ASU No. 2010-29, Business Combinations (ASC Topic 805), Disclosure of Supplementary Pro Forma Information for Business Combinations. ASU No. 2010-29 amends the disclosure requirements for supplementary pro forma information for business combinations. This update addresses the diversity in practice about the interpretation of the pro forma revenue and earnings disclosure requirements for business combinations. The update specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. It also expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. This update is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. We have adopted this update and, with the acquisition of Direct EDI in May 2011, the required supplementary pro forma information is presented in Note B.

In September 2011, the FASB issued ASU No. 2011-08, Intangibles—Goodwill and Other (Topic 350)—Testing Goodwill for Impairment. ASU No. 2011-08 provides an entity with the option to perform a qualitative assessment of goodwill to determine whether further impairment testing is necessary. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the currently prescribed two step quantitative goodwill impairment test is required. Otherwise, no further testing is required. This update is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011 and earlier adoption is permitted. We are currently evaluating the early adoption option. We do not expect the adoption or early adoption of this update to have an impact on our financial statements.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

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-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 2-6
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Name Statement of Position (SOP)
-Publisher AICPA
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-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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+ Details

Acquisition of Direct EDI

9 Months Ended

Sep. 30, 2011

Acquisition of Direct EDI [Abstract]

Acquisition of Direct EDI

NOTE B – Acquisition of Direct EDI

On May 17, 2011, we entered into an asset purchase agreement with Direct EDI LLC, a privately-held provider of cloud-based integration solutions for electronic data interchange, and we completed the asset purchase on May 18, 2011. Under the asset purchase agreement, we purchased and acquired substantially all of the assets of Direct EDI for $10.9 million in cash and assumed certain liabilities of Direct EDI. The acquisition of Direct EDI allows us to expand our base of recurring revenue customers.

Purchase Price Allocation

We accounted for the acquisition as a business combination. We allocated the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. We engaged an independent third-party valuation firm to assist us in the determination of the value of the purchased intangible assets. The excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. Goodwill is attributed to a trained workforce and other buyer-specific value resulting from expected synergies, including long-term cost savings, that are not included in the fair values of assets. Goodwill will not be amortized; however it is deductible for tax purposes. Although we believe the purchase price allocation is substantially complete, it is considered preliminary and the finalization of the valuation of the net tangible and intangible assets acquired and liabilities assumed could result in a future adjustment to the purchase price allocation.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):


Current assets	$	195
Property and equipment		42
Intangible assets		6,120
Goodwill		4,712
Current liabilities		(204	)

Total purchase price	$	10,865

Purchased Intangible Assets

The following table summarizes the estimated fair value of the purchased intangible assets and their estimated useful lives:


Purchased Intangible Assets	Estimated Fair Value (in thousands)		Estimated Life (in years)
Subscriber relationships	$	5,250		7
Non-competition agreements		870		3

Total	$	6,120

The purchased intangible assets are being amortized on a straight-line basis over their estimated useful lives. Amortization expense related to these intangible assets was $260,000 and $383,000 for the three and nine months ended September 30, 2011.

Acquisition-Related Costs and Post-Acquisition Operating Results

Acquisition-related costs were approximately $232,000 and are included in our condensed consolidated statements of operations for the nine months ended September 30, 2011. Acquisition-related costs were recorded as general and administrative expense in accordance with the current accounting guidance for business combinations. The operating results of Direct EDI have been included in our condensed consolidated financial statements from May 18, 2011, the date of the acquisition. For the three and nine months ended September 30, 2011, approximately $1.1 million and $1.6 million of our revenues were derived from Direct EDI customers. The amount of operating income or loss from Direct EDI was not separately identifiable due to our integration.

Unaudited Pro Forma Financial Information

The unaudited pro forma financial information in the table below presents the combined operating results of SPS Commerce and Direct EDI as if the acquisition had occurred on January 1, 2010. The unaudited pro forma information includes the historical operating results of each company and certain pro forma adjustments, including annual amortization expense for purchased intangible assets of approximately $1.0 million and additional annual compensation expense of approximately $280,000 related to employment arrangements entered into as part of the acquisition.


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	2011		2010		2011		2010
Pro forma total revenue	$	15,529	$	12,553	$	43,961	$	35,593
Pro forma net income	$	177	$	748	$	433	$	1,945
Pro forma net income per share
Basic	$	0.01	$	0.06	$	0.04	$	0.29
Diluted	$	0.01	$	0.06	$	0.03	$	0.17

The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have actually been reported had the acquisition occurred on January 1, 2010, nor is it necessarily indicative of our results of operations for any future periods.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

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Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1486-128463

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1383-128463

+ Details

Intangible Assets

9 Months Ended

Sep. 30, 2011

Intangible Assets [Abstract]

Intangible Assets

NOTE C – Intangible Assets

Intangible assets included the following (in thousands):


	September 30, 2011							December 31, 2010
	Carrying Amount		Accumulated Amortization			Net		Carrying Amount		Accumulated Amortization			Net
Subscriber relationships	$	7,180	$	(2,206	)	$	4,974	$	1,930	$	(1,930	)	$	—
Covenants not-to-compete		1,450		(397	)		1,053		580		(290	)		290

	$	8,630	$	(2,603	)	$	6,027	$	2,510	$	(2,220	)	$	290

Amortization expense for intangible assets was $260,000 and $383,000 for the three and nine months ended September 30, 2011. There was no amortization expense for intangible assets for the three or nine months ended September 30, 2010.

At September 30, 2011, future amortization expense for intangible assets was as follows (in thousands):


Remainder of 2011	$	260
2012		1,040
2013		1,040
2014		861
2015		750
Thereafter		2,076

	$	6,027

Line of Credit

9 Months Ended

Sep. 30, 2011

Line of Credit [Abstract]

Line of Credit

NOTE D – Line of Credit

On September 30, 2011, we entered into a revolving credit agreement with JPMorgan Chase Bank, N.A. The revolving credit agreement provides for a $20 million revolving credit facility that we may draw upon from time to time, subject to certain terms and conditions, and will mature on September 30, 2016. Proceeds from the credit facility are anticipated to be used for acquisitions and our capital needs.

Interest on amounts borrowed under the credit facility is based on (i) an Adjusted LIBO Rate (as defined in the revolving credit agreement) plus an applicable margin of 175 to 225 basis points based on our net working capital, or (ii) JPMorgan’s prime rate (provided it is not less than the Adjusted One Month LIBO Rate (as defined in the revolving credit agreement)) plus an applicable margin of -25 to 25 basis points based on our net working capital. Interest is payable monthly in arrears. Availability under the credit facility is subject to a borrowing base equal to the sum of 250% of our eligible monthly recurring revenue (as defined in the revolving credit agreement) and all borrowings are due in full no later than the maturity date of the agreement.

The revolving credit agreement contains customary representations, warranties, covenants and events of default, including, but not limited to financial covenants requiring us to maintain a fixed charge coverage ratio of not less than 1.20 to 1.00, cash and cash equivalents of not less than $10 million and a minimum number of recurring revenue customers. If an event of default occurs, among other things, the applicable interest rate is subject to an increase of 2% and all outstanding obligations may become immediately due and payable.

There were no borrowings outstanding at September 30, 2011 and we were in compliance with all covenants under the revolving credit agreement as of that date.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation

NOTE E – Stock-Based Compensation

Our equity compensation plans provide for the grant of incentive and nonqualified stock options, as well as other stock-based awards, to employees, non-employee directors and other consultants who provide services to us. Stock options generally vest over three to four years and have a contractual term of ten years from the date of grant. At September 30, 2011, there were approximately 667,000 shares available for grant under approved equity compensation plans.

We recorded stock-based compensation expense of $487,000 and $232,000 for the three months ended September 30, 2011 and 2010, respectively. We recorded stock-based compensation expense of $1.3 million and $458,000 for the nine months ended September 30, 2011 and 2010, respectively. This expense was allocated as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Cost of revenues	$	68	$	31	$	186	$	65
Operating expenses:
Sales and marketing		121		64		347		129
Research and development		18		7		41		12
General and administrative		280		130		712		252

Total stock-based compensation expense	$	487	$	232	$	1,286	$	458

As of September 30, 2011, there was approximately $4.7 million of unrecognized stock-based compensation expense under our equity compensation plans, which is expected to be recognized on a straight line basis over a weighted average period of approximately two years.

Our stock option activity was as follows:


	Options (#)			Weighted Average Exercise Price ($/share)
Outstanding at December 31, 2010		1,549,344		$	4.59
Granted		420,843			16.97
Exercised		(130,529	)		2.60
Forfeited		(19,129	)		10.80

Outstanding at September 30, 2011		1,820,529			7.53

The weighted average fair value per share of options granted during the first nine months of 2011 was $8.11 and this was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:


Weighted-average volatility			45.0%
Expected dividend yield			0%
Expected life (in years)			6.25
Weighted-average risk-free interest rate			2.05%- 3.05%

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

+ Details

Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes [Abstract]

Income Taxes

NOTE F – Income Taxes

We recorded a provision for income taxes of $81,000 for the three months ended September 30, 2011 and a benefit for income taxes of $7,000 for the three months ended September 30, 2010. We recorded a provision for income taxes of $188,000 and $96,000 for the nine months ended September 30, 2011 and 2010, respectively. We record our interim provision for income taxes based on our estimated annual effective tax rate for the year. Our provision for income taxes includes estimated federal alternative minimum taxes and state income taxes, as well as deferred tax expense resulting from the book and tax basis difference in goodwill from asset acquisitions.

As of December 31, 2010, and updated for the filing of our tax returns in September 2011, we had net operating loss carryforwards of $50.8 million for U.S. federal tax purposes and $30.2 million for state tax purposes. These loss carryforwards expire between 2011 and 2029. Section 382 of the U.S. Internal Revenue Code generally imposes an annual limitation on the amount of net operating loss carryforwards that might be used to offset taxable income when a corporation has undergone significant changes in stock ownership. We have performed a Section 382 analysis for the time period from our inception through December 8, 2010. During this time period it was determined that we had six separate ownership changes under Section 382. We believe that approximately $17.6 million of federal losses and $15.4 million of state losses will expire unused due to Section 382 limitations. This limitation could be further restricted if ownership changes occur in future years. In addition, the state limitation will vary depending on future apportionment factors. Our deferred tax asset is reported net of this limitation.

Realization of our net operating loss carryforwards and other deferred tax temporary differences are contingent upon future taxable earnings. Our net deferred tax assets have been reduced fully by a valuation allowance, as realization is not considered to be likely based on an assessment of the history of losses and the likelihood of sufficient future taxable income. Our deferred tax liability relates to goodwill created in a prior asset acquisition which is deductible for tax purposes.

We are subject to income taxes in the U.S. federal jurisdiction and various state jurisdictions. As of September 30, 2011, we are generally subject to U.S. federal and state tax examinations for all tax years 2010 and prior due to net operating loss carryforwards.

As of September 30, 2011, we do not have any unrecognized tax benefits. It is our practice to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We do not expect any material changes in our unrecognized tax positions over the next 12 months.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Net Income Per Share

9 Months Ended

Sep. 30, 2011

Earnings Per Share [Abstract]

Net Income Per Share

NOTE G – Net Income Per Share

Basic net income per share has been computed using the weighted average number of shares of common stock outstanding during each period. Diluted net income per share also includes the impact of our outstanding potential common shares, such as options, warrants and redeemable convertible preferred stock. Potential common shares that are anti-dilutive are excluded from the calculation of diluted net income per share.

The following table presents the components of the computation of basic and diluted net income per share for the periods indicated (in thousands, except per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Numerator:
Net income	$	177	$	886	$	560	$	2,443

Denominator:
Weighted average common shares outstanding, basic		11,970		11,620		11,918		6,796
Options and warrants to purchase common andpreferred stock		765		793		767		1,023
Redeemable convertible preferred stock		—		—		—		3,456

Weighted average common shares outstanding, diluted		12,735		12,413		12,685		11,275

Net income per share:
Basic	$	0.01	$	0.08	$	0.05	$	0.36

Diluted	$	0.01	$	0.07	$	0.04	$	0.22

For the three and nine months ended September 30, 2011, approximately 1,000 outstanding options to purchase common stock were excluded from the calculation of diluted net income per share because they were anti-dilutive. For the three and nine months ended September 30, 2010, approximately 417,000 outstanding options to purchase common stock were excluded from the calculation of diluted net income per share because they were anti-dilutive.