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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2012	Mar. 08, 2013	Jun. 30, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	SPARK NETWORKS INC
Entity Central Index Key	0001314475
Document Type	10-K
Document Period End Date	Dec. 31, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
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			$ 59,805,515
Entity Common Stock, Shares Outstanding		20,958,489

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 10,458	$ 15,106
Restricted cash	1,232	958
Accounts receivable, net of allowance of $0 and $1	1,510	1,146
Deferred tax asset-current	8	44
Prepaid expenses and other	861	1,164
Total current assets	14,069	18,418
Property and equipment, net	3,133	2,839
Goodwill	8,861	8,683
Intangible assets, net	2,143	1,900
Deferred tax asset-non-current	5	5,641
Deposits and other assets	153	455
Total assets	28,364	37,936
Current liabilities:
Accounts payable	1,093	952
Accrued liabilities	5,339	4,046
Deferred revenue	8,128	5,723
Deferred tax liability-current portion	257	203
Total current liabilities	14,817	10,924
Deferred tax liability	1,413	1,219
Other liabilities-non-current	588	1,141
Total liabilities	16,818	13,284
Commitments and contingencies (Note 11)
Stockholders' equity:
Authorized capital stock consists of 10,000,000 shares of Preferred Stock, $0.001 par value, 450,000 of which are designated as Series C Junior Participating Cumulative Preferred Stock, with no shares of Preferred Stock issued or outstanding and 100,000,000 shares of Common Stock, $0.001 par value, with 20,945,364 and 20,594,670 shares of Common Stock issued and outstanding at December 31, 2012 and 2011, respectively, at stated values of:	21	21
Additional paid-in-capital	54,857	53,014
Accumulated other comprehensive income	712	672
Accumulated deficit	(44,044)	(29,055)
Total stockholders' equity	11,546	24,652
Total liabilities and stockholders' equity	$ 28,364	$ 37,936

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2012	Dec. 31, 2011
Accounts receivable allowance	$ 0	$ 1
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	20,945,364	20,594,670
Common stock, shares outstanding	20,945,364	20,594,670
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Designated as Series C Junior Participating Cumulative Preferred Stock
Preferred stock, shares authorized	450,000	450,000

Consolidated Statements of Operations and Comprehensive (loss) income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Consolidated Statements of Operations and Comprehensive (loss) income [Abstract]
Revenue	$ 61,743	$ 48,493	$ 40,851
Cost and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	49,216	28,955	13,749
Sales and marketing	3,991	3,722	3,496
Customer service	2,534	1,980	1,601
Technical operations	1,363	1,367	1,232
Development	3,346	2,710	3,092
General and administrative	8,787	8,068	9,782
Depreciation	1,673	1,320	962
Amortization of intangible assets other than goodwill	13	370	421
Impairment of goodwill, long-lived assets and other assets		1,145	308
Total cost and expenses	70,923	49,637	34,643
Operating loss	(9,180)	(1,144)	6,208
Interest (income) expense and other, net	(238)	162	(54)
(Loss) income before income taxes	(8,942)	(1,306)	6,262
Provision for income taxes	6,047	305	2,558
Net (loss) income	$ (14,989)	$ (1,611)	$ 3,704
Net (loss) income per share - basic and diluted	$ (0.72)	$ (0.08)	$ 0.18
Weighted average shares outstanding-basic	20,781	20,591	20,586
Weighted average shares outstanding-diluted	20,781	20,591	20,590
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	$ 40	$ (101)	$ 135
Total other comprehensive income (loss), net of tax	40	(101)	135
Comprehensive (loss) income	$ (14,949)	$ (1,712)	$ 3,839

Consolidated Statements of Operations and Comprehensive (loss) income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Stock-based compensation:
Stock-based compensation	$ 813	$ 906	$ 1,510
Cost of revenue
Stock-based compensation:
Stock-based compensation	8	8	11
Sales and marketing
Stock-based compensation:
Stock-based compensation	76	80	233
Customer service
Stock-based compensation:
Stock-based compensation	2		1
Technical operations
Stock-based compensation:
Stock-based compensation	118	119	167
Development
Stock-based compensation:
Stock-based compensation	42	42	54
General and administrative
Stock-based compensation:
Stock-based compensation	$ 567	$ 657	$ 1,044

Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Beginning balance at Dec. 31, 2009	$ 18,324	$ 21	$ 48,813	$ 638	$ (31,148)
Beginning balance, Shares at Dec. 31, 2009		20,582
Issuance of common stock upon exercise of stock options	17		17
Issuance of common stock upon exercise of stock options, Shares		5
Excess tax benefits from stock-based compensation	1,680		1,680
Foreign currency translation adjustments, net of tax	135			135
Stock-based compensation	1,510		1,510
Net (loss) income	3,704				3,704
Ending balance at Dec. 31, 2010	25,370	$ 21	52,020	773	(27,444)
Ending balance, Shares at Dec. 31, 2010		20,587
Issuance of common stock upon exercise of stock options	$ 21		21
Issuance of common stock upon exercise of stock options, Shares	8	8
Excess tax benefits from stock-based compensation	$ 67		67
Foreign currency translation adjustments, net of tax	(101)			(101)
Stock-based compensation	906		906
Net (loss) income	(1,611)				(1,611)
Ending balance at Dec. 31, 2011	24,652	$ 21	53,014	672	(29,055)
Ending balance, Shares at Dec. 31, 2011		20,595
Issuance of common stock upon exercise of stock options	$ 1,053		1,053
Issuance of common stock upon exercise of stock options, Shares	350	350
Excess tax benefits from stock-based compensation	$ (23)		(23)
Foreign currency translation adjustments, net of tax	40			40
Stock-based compensation	813		813
Net (loss) income	(14,989)				(14,989)
Ending balance at Dec. 31, 2012	$ 11,546	$ 21	$ 54,857	$ 712	$ (44,044)
Ending balance, Shares at Dec. 31, 2012		20,945

- Definition

This element represents the amount of recognized equity-based compensation during the period, that is, the amount recognized as expense in the income statement (or as asset if compensation is capitalized). Alternate captions include the words "stock-based compensation".

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Cash flows from operating activities:
Net (loss) income	$ (14,989)	$ (1,611)	$ 3,704
Adjustments to reconcile net (loss) income to cash (used in) provided by operating activities:
Depreciation and amortization	1,686	1,690	1,383
Impairment of goodwill, long-lived assets and other assets		1,145	308
Stock-based compensation	813	906	1,510
Non-current taxes payable and other	(534)	96	46
Foreign exchange (gain) loss on intercompany loan	(124)	337	(269)
Income from asset received from legal judgment	(151)	(247)
Excess tax (provisions) benefits from stock-based compensation	23	(67)	(1,680)
Deferred taxes	5,897	(96)	1,843
Changes in operating assets and liabilities:
Accounts receivable, net	(364)	(299)	(163)
Restricted cash	(274)	38	(315)
Prepaid expenses and other assets	336	(128)	(31)
Accounts payable and accrued liabilities	1,414	(100)	(641)
Deferred revenue	2,405	1,392	87
Net cash (used in) provided by operating activities	(3,862)	3,056	5,782
Cash flows from investing activities:
Sales of property and equipment	520		1,560
Purchases of property and equipment	(2,081)	(1,583)	(1,324)
Purchases of businesses and intangible assets	(255)	(356)	(37)
Net cash (used in) provided by investing activities	(1,816)	(1,939)	199
Cash flows from financing activities:
Proceeds from issuance of stock	1,053	21	17
Excess tax (provision) benefit from stock-based compensation	(23)	67	1,680
Net cash provided by financing activities	1,030	88	1,697
Net (decrease) increase in cash	(4,648)	1,205	7,678
Cash and cash equivalents at beginning of year	15,106	13,901	6,223
Cash and cash equivalents at end of year	10,458	15,106	13,901
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$ 45	$ 192	$ 874

The Company and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

The Company and Summary of Significant Accounting Policies [Abstract]

The Company and Summary of Significant Accounting Policies

1. The Company and Summary of Significant Accounting Policies

The Company

The common stock of Spark Networks, Inc., a Delaware corporation (the “Company”), is traded on the NYSE MKT.

On December 31, 2010, Spark Networks Limited (“SNUK”) distributed its shareholdings in each of HurryDate, LLC; MingleMatch, Inc.; Kizmeet, Inc.; SN Holdco, LLC; SN Events, Inc.; Reseaux Spark Canada Ltd. and Spark SocialNet, Inc. by transferring its shares in those companies to Spark Networks, Inc. Spark Networks, Inc. subsequently transferred all of its shares in the same companies to LOV USA, LLC, a newly formed and wholly owned subsidiary of Spark Networks, Inc. SNUK continues to hold all of the shares of Spark Networks (Israel) Limited, VAP AG and JDate Limited. In addition, SNUK now holds all of the shares of Spark Networks USA, LLC, a newly formed subsidiary into which SNUK has transferred all of its United States based assets.

The Company and its consolidated subsidiaries provide online personals services in the United States and internationally, whereby adults are able to post information about themselves (“profiles”) on the Company’s Web sites and search and contact other individuals who have posted profiles.

Membership to the Company’s online services, which includes the posting of a personal profile and photos, and access to its database of profiles, is free. The Company typically charges a subscription fee for varying subscription lengths (typically, one, three, six and twelve months) to members, allowing them to initiate communication with other members and subscribers utilizing the Company’s onsite communication tools, including anonymous email, instant messenger, chat rooms and message boards. For most of the Company’s services, two-way communications through the Company’s email platform can only take place between paying subscribers.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the parent Company and all of its majority- owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

The financial statements of the Company’s foreign subsidiaries are prepared using the local currency as the subsidiary’s functional currency. The Company translates the assets and liabilities using period-end rates of exchange, and revenue and expenses using average rates of exchange for the year. The resulting translation gain or loss is included in accumulated other comprehensive income (loss) and is excluded from net (loss) income.

The nature of the intercompany loan between the Company and its Israel subsidiary is classified as a loan which the Company expects to be settled. The foreign exchange gains and losses related to this loan are recorded as part of net (loss) income and excluded from accumulated other comprehensive income (loss). For the years ended December 31, 2012 and 2011, the Company recorded a foreign exchange gain of $124,000 and a foreign exchange loss of $337,000, respectively, related to the intercompany loan.

The results of the subsidiaries have been incorporated in the financial results of the consolidated entity since the date of acquisition.

Revenue Recognition and Deferred Revenue

Substantially all of the Company’s revenue is derived from subscription fees. Revenue is presented net of credits and credit card chargebacks. The Company recognizes revenue in accordance with accounting principles generally accepted in the United States. Revenue recognition occurs ratably over the subscription period, beginning when there is persuasive evidence of an arrangement, delivery has occurred (access has been granted), the fees are fixed or determinable, and collection is reasonably assured. Subscribers pay in advance, primarily by using a credit card, and, subject to certain conditions identified in our terms and conditions, all purchases are final and nonrefundable. Fees collected in advance for subscriptions are deferred and recognized as revenue using the straight line method over the term of the subscription.

The Company also earns a small amount of revenue from advertising sales and offline events. The Company records advertising revenue as it is delivered and is included in the total revenue of each segment that generates advertising sales. Revenue and the related expenses associated with offline events are recognized at the conclusion of each event.

Fair Value Measurement

Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, the guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Other inputs that are directly or indirectly observable in the marketplace.

Level 3—Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

As of December 31, 2012 and 2011, the Company had financial assets that consisted of cash and cash equivalents, which were measured at fair value using quoted prices for identical assets in an active market (Level 1 fair value hierarchy) in accordance with the latest guidance.

Cash and Cash Equivalents

All highly liquid instruments with an original maturity of three months or less are considered cash and cash equivalents.

Restricted Cash

The Company’s credit card processors regularly withhold deposits and maintain balances which the Company records as restricted cash. As of December 31, 2012 and 2011, the Company had $1.2 million and $1.0 million in restricted cash, respectively.

Accounts Receivable

Accounts receivable is primarily composed of credit card payments for subscription fees, less amounts withheld and presented as restricted cash, pending collection from the credit card processors and to a much smaller extent, receivables for advertising sales. The Company reviews its accounts receivable from advertisers on a monthly basis to determine if an allowance is necessary. The allowance for doubtful accounts as of December 31, 2011 is $1,000. An allowance was not necessary as of December 31, 2012.

Prepaid Advertising Expenses

In certain circumstances, the Company pays in advance for advertising and expenses the prepaid amounts over the contract periods as the vendors deliver on their commitments. The Company evaluates the realization of prepaid amounts at each reporting period, and expenses prepaid amounts upon delivery of services or if it determines that a vendor will be unable to deliver on its commitment and is not willing or able to repay the undelivered prepaid amount.

Web Site and Software Development Costs

The Company capitalizes costs related to developing or obtaining internal-use software. Capitalization of costs begins after the preliminary project stage has been completed. Product development costs are expensed as incurred or capitalized into property and equipment. Costs incurred in the preliminary project and post-implementation stages of an internal use software project are expensed as incurred and certain costs incurred in the application development stage of a project are capitalized.

In accordance with the “Accounting for Web Site Development Costs” guidance, the Company expenses costs related to the planning and post implementation phases of Web site development efforts. Direct costs incurred in the development phase are capitalized. Costs associated with minor enhancements and maintenance for a Web site are included in expenses in the accompanying Consolidated Statements of Operations And Comprehensive (Loss) Income.

Capitalized Web site and software development costs are included in internal-use software in property and equipment and amortized over the estimated useful life of the products, which is usually three years. The following table summarizes capitalized software development costs for the years ended December 31, (in thousands):


	2012			2011			2010
Capitalized	$	1,641		$	1,250		$	1,100
Expensed		(1,186	)		(850	)		(504	)
Impaired		—			(45	)		(121	)
Unamortized Balance	$	2,431		$	1,976		$	1,621

Property and Equipment

Property and equipment is stated at cost, net of accumulated depreciation, which is provided using the straight-line method over the estimated useful life of the asset. Amortization of leasehold improvements is calculated using the straight-line method over the estimated useful life of the asset or remaining term of the lease, whichever is shorter. Upon the sale or retirement of property or equipment, the cost and related accumulated depreciation and amortization are removed from the Company’s consolidated financial statements with the resulting gain or loss, if any, reflected in the Company’s results of operations.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired resulting from business acquisitions, specifically allocated to reporting units. The Company determines its reporting units and operating segments through the use of the management approach. The management approach considers the internal organizational structure used by the Company’s chief operating decision maker for making operating decisions and assessing performance. Annually, the Company analyzes the fair value of each reporting unit to assess if the fair value exceeds the carrying value. Fair value is determined based on the present value of estimated expected future cash flows using a discount rate commensurate with the risk involved, quoted market prices or appraised values, depending on the nature of the assets. If fair value is below the carrying amount of the reporting unit, the Company assesses what the fair value of the reporting unit is and impairs the excess. The valuation of intangible assets incorporates significant unobservable inputs and requires estimates, including the amount and timing of future cash flows. As of December 31, 2012 and 2011, the Company had unamortized goodwill of approximately $8.9 million and $8.7 million, respectively.

Intangible Assets

Intangible assets resulting from the acquisitions of entities are recorded using the purchase method of accounting and estimated by management based on the fair value of assets received. Identifiable intangible assets are comprised mainly of domain names and acquired technologies. Domain names were determined to have indefinite useful lives, thus, they are not amortized. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives.

In 2011, largely based on the valuation of domain names and capitalized software acquired from prior period acquisitions, the Company recorded an impairment charge of approximately $1.1 million for intangible assets it deemed to not have substantial value. In 2012, an impairment charge was not necessary.

Impairment of Long-lived Assets

The Company assesses the impairment of assets, which include property and equipment and identifiable intangible assets, whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable. Events and circumstances that may indicate that an asset is impaired may include significant decreases in the market value of an asset or common stock, a significant decline in actual and projected revenue, a change in the extent or manner in which an asset is used, shifts in technology, loss of key management or personnel, changes in the Company’s operating model or strategy and competitive forces, as well as other factors.

If events and circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. Fair value is determined based on the present value of estimated expected future cash flows using a discount rate commensurate with the risk involved, quoted market prices or appraised values, depending on the nature of the assets. Fair value measurements utilized for assets under non-recurring measurements were measured with Level 3 unobservable inputs.

For the years 2011 and 2010, the Company impaired approximately $45,000 and $121,000, respectively, of capitalized software development costs when management determined that a Web-based product failed to perform to Company standards. In 2012, an impairment charge was not necessary.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Accordingly, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when necessary to reduce deferred taxes to the amount expected to be realized.

In assessing the potential realization of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the Company’s tax loss carry-forwards remain deductible.

The Company operates in multiple taxing jurisdictions, both within the United States and outside the United States. The Company has filed tax returns with positions that may be challenged by Federal and State tax authorities. These positions relate to, among others, transfer pricing, the deductibility of certain expenses, intercompany transactions as well as other matters. Although the outcome of tax audits is uncertain, the Company regularly assesses its tax position for such matters and, in management’s opinion, adequate provisions for income taxes have been made for potential liabilities resulting from such matters. To the extent reserves are recorded, they will be utilized or reversed once the statute of limitations has expired and/or at the conclusion of the tax examination. The Company believes that the ultimate outcome of these matters will not have a material impact on its financial position or liquidity. The Company recognizes the tax effects from an uncertain tax position in our consolidated financial statements, only if the position is more-likely-than-not of being sustained on audit, based on the technical merits of the position. Tax positions that meet the recognition threshold are reported at the largest amount that is more-likely-than-not to be realized.

Cost of Revenue

Cost of revenue consists primarily of direct marketing costs, compensation and other employee-related costs (including stock-based compensation) for personnel dedicated to maintaining our data centers, data center expenses and credit card fees. Direct marketing costs are expensed in the period incurred and primarily represent online marketing, including payments to search engines and affiliates, and offline marketing, including radio, billboards, television and print advertising. For the years ended December 31, 2012, 2011 and 2010, the Company incurred direct marketing costs amounting to approximately $45.7 million, $25.7 million and $10.7 million, respectively.

Sales and Marketing

The Company’s sales and marketing expenses relate primarily to salaries for sales and marketing personnel and other associated costs such as business development, public relations and expenses related to the Company’s travel and events business.

Customer Service

The Company’s customer service expenses consist primarily of personnel costs associated with our customer service centers. The members of our customer service team primarily respond to billing questions, detect fraudulent activity and eliminate suspected fraudulent activity, as well as address site usage and dating questions from our members.

Technical Operations

The Company’s technical operations expenses consist primarily of the personnel and systems necessary to support our corporate technology requirements.

Development

The Company’s development expenses relate primarily to salaries and wages for personnel involved in the development, enhancement and maintenance of its Web sites and services.

General and Administrative

The Company’s general and administrative expenses relate primarily to salaries and wages for corporate personnel, professional fees, occupancy and other overhead costs.

Stock-based Compensation

The Company adopted the “Stock-Based Payment” guidance in 2005 using the modified prospective approach and accordingly periods prior to 2005 have not been restated to reflect the impact of the guidance.

Prior to our adoption of the guidance, the Company did not record tax benefits of deductions resulting from the exercise of share options because of the uncertainty surrounding the timing of realizing the benefits of our deferred tax assets in future tax returns. The guidance requires the cash flows resulting from the tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) to be classified as financing cash flows. In 2012, the Company recognized cash outflows of approximately $23,000 related to a tax provision from the stock-based compensation. In 2011, the Company recognized cash inflows of approximately $67,000 related to a tax benefit from the stock-based compensation.

The following is a chart showing variables which were used in the Black-Scholes option-pricing model for the years of:


	2012	2011	2010
Expected life in years	4.27-5.77	4.56	4.56
Dividend per share	—	—	—
Volatility	35.0%	35.0-45.0%	40.0-45.0%
Risk-free interest rate	1.0-1.75%	1.4-3.0%	1.0-3.0%

The Company used historical and empirical data to assess different forfeiture rates for three different groups of employees. The Company must reassess forfeiture rates when deemed necessary and it must calibrate actual forfeiture behavior to what has already been recorded. For 2012, 2011 and 2010, there were three groups of employees whose behavior was significantly different from each other. Therefore, the Company estimated different forfeiture rates for each group.

The volatility rate was derived by examining historical stock price behavior and assessing management’s expectations of stock price behavior during the term of the option.

Due to the re-pricing of most options in 2009, the Company is using the “simplified method” calculation, to determine the term of the options. The “simplified method” calculation derives the term by averaging the vesting term with the contractual terms. Option awards to date have generally vested and been expensed in equal annual installments over a four-year period.

The risk free interest rates are based on U.S Treasury zero-coupon bonds with similar terms for the periods in which the options were granted.

Comprehensive (Loss) Income

Comprehensive (loss) income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For the Company, comprehensive (loss) income consists of its reported net income (loss) and foreign currency translation adjustments, net of tax, for the years 2012, 2011 and 2010.

Fair Value of Financial Instruments

The Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and other, accounts payable, and accrued liabilities are carried at cost, which approximates their fair value due to the short-term maturity of these instruments.

Net (Loss) Income Per Share

The Company calculates and presents the net (loss) income per share on both a basic and diluted basis. Basic net (loss) income per share is computed by dividing net (loss) income available to common stockholders by the weighted average number of shares of common stock outstanding.


	For the Year Ended December 31
	(in thousands except per share amounts)
	2012			2011			2010
Net (Loss) Income Per Common Share—Basic and Diluted
Net (loss) income applicable to common stock	$	(14,989	)	$	(1,611	)	$	3,704
Weighted average shares outstanding- basic		20,781			20,591			20,586
Weighted average shares outstanding- diluted		20,781			20,591			20,590

Net (Loss) Income Per Share—Basic and Diluted	$	(0.72	)	$	(0.08	)	$	0.18

Options to purchase 3.8 million, 3.5 million and 3.3 million shares for fiscal years 2012, 2011 and 2010, respectively, were not included in the computation of diluted net (loss) income per share because the options were anti-dilutive.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

The Company estimates the amount of chargebacks that will occur in future periods to offset current revenue. The Company’s revenue is collected through online credit card transactions. As such, the Company is subject to revenue reversals or “chargebacks” by consumers generally up to 90 days subsequent to the original sale date. The Company accrues chargebacks based on historical trends relative to sales levels by Web site. Fines are levied by the major credit card companies when chargeback expenses exceed certain thresholds. The Company estimates fines based on discussions with its merchant processing companies combined with standard fine schedules provided by the major credit card companies.

Recent Accounting Developments

In June 2011, the Financial Accounting Standards Board (FASB) issued guidance on presentation of comprehensive income. The new guidance eliminates the option to report other comprehensive income and its components in the statement of changes in equity. Instead, an entity is required to present either a continuous statement of net income and other comprehensive income or in two separate but consecutive statements. In addition, in December 2011, the FASB issued an amendment to an existing accounting standard which defers the requirement to present components of reclassifications of other comprehensive income on the face of the income statement. The new guidance was effective for the Company beginning January 1, 2012 and the impact was limited to the presentation of the consolidated financial statements.

In September 2011, the FASB issued an amendment to an existing accounting standard, which provides entities an option to perform a qualitative assessment to determine whether further impairment testing on goodwill is necessary. Specifically, an entity has the option to first assess qualitative factors to determine whether it is necessary to perform the current two-step test. 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 quantitative impairment test is required. Otherwise, no further testing is required. This standard was effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The Company adopted this standard in the first quarter of 2012 and the adoption did not have a material impact on our financial statements.

Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Taxes

2. Income Taxes


(Loss) income before income taxes:	Year Ended December 31,
(in thousands)	2012			2011			2010

U.S.	$	(8,984	)	$	(619	)	$	5,986
Foreign		42			(687	)		276

	$	(8,942	)	$	(1,306	)	$	6,262


Income tax expense:	Year Ended December 31,
(in thousands)	2012			2011			2010
Current
Federal	$	(22	)	$	(326	)	$	1,920
State		143			638			518
Foreign		45			69			2

		166			381			2,440

Deferred
Federal		(3,121	)		50			60
State		95			(160	)		35
Foreign		5			477			115

		(3,021	)		367			210

Change in valuation allowance		8,902			(443	)		(92	)

Total income tax expense	$	6,047		$	305		$	2,558


Reconciliation of effective income tax rate:	Year Ended December 31,
	2012			2011			2010

(Benefit) provision on earnings at federal statutory rate		(34.0	)%		(34.0	)%		34.0	%
State tax (benefit) provision, net of federal (benefit) provision		(1.1	)		6.0			4.8
Nondeductible expenses		—			0.3			0.3
Tax reserves		2.2			(1.3	)		0.6
Change in effective tax rates		1.7			18.6			0.3
Foreign tax rate differential		0.3			9.6			(4.3	)
Valuation allowance		100.0			(8.9	)		3.0
Write down of deferred tax asset		—			34.1			—
Other		(1.1	)		(1.1	)		2.2

Total provision for income taxes		68.0	%		23.3	%		40.9	%

The Company’s effective tax rate was also impacted by income taxes incurred in foreign and state jurisdictions. With respect to the income of its foreign subsidiary, the Company takes the position that the earnings of the foreign subsidiary are permanently invested in that jurisdiction. As a result, no additional income taxes have been provided on the possible repatriation of these earnings to the parent company. The Company has not calculated the amount of the deferred tax liability that would result from such repatriation as such determination is not practicable.

The components of the deferred income tax asset (liability) for the periods presented are as follows:


	Year Ended December 31,
(in thousands)	2012			2011			2010
Deferred income tax assets
Net operating loss carry-forward	$	4,506		$	782		$	940
Depreciation and amortization		1,358			1,655			1,383
Compensation accruals		2,236			2,590			2,234
Credits		899			913			905
Other		573			496			534

Total before valuation allowance		9,572			6,436			5,996
Less: Valuation allowance		(9,568	)		(649	)		(805	)

Total deferred income tax asset		4			5,787			5,191


Deferred income tax liabilities
Foreign Intangible assets		(1,401	)		(1,205	)		(814	)
Other		(260	)		(319	)		(277	)

Total deferred income tax liabilities		(1,661	)		(1,524	)		(1,091	)


Total net deferred income tax (liabilities) assets	$	(1,657	)	$	4,263		$	4,100

As of December 31, 2012, the Company has a valuation allowance against its U.S. and foreign deferred tax assets of approximately $9.6 million. Companies are required to assess whether a valuation allowance should be recorded against their deferred tax assets (“DTAs”) based on the consideration of all available evidence, using a “more likely than not” realization standard. The four sources of taxable income that must be considered in determining whether DTAs will be realized are, (1) future reversals of existing taxable temporary differences (i.e. offset of gross deferred tax assets against gross deferred tax liabilities); (2) taxable income in prior carryback years, if carryback is permitted under the tax law; (3) tax planning strategies and (4) future taxable income exclusive of reversing temporary differences and carryforwards.

In assessing whether a valuation allowance is required, significant weight is to be given to evidence that can be objectively verified. The Company has evaluated its DTAs each reporting period, including an assessment of its cumulative income or loss over the prior three-year period, to determine if a valuation allowance was required. A significant negative factor in the assessment was the Company’s three-year cumulative loss history as of December 31, 2012.

After a review of the four sources of taxable income described above and in view of its three-year cumulative loss, the Company was not able to conclude that it is more likely than not that its DTAs will be realized. As a result, the Company recorded an additional valuation allowance on its DTAs, with a corresponding charge to the income tax provision, of approximately $8.9 million as of December 31, 2012.

At December 31, 2012, the Company has gross net operating loss carry-forwards for income tax purposes of approximately $18.6 million and $38.4 million available to reduce future federal and state taxable income, respectively, which expire beginning in the years 2025 for federal purposes and 2018 for state purposes. Under Section 382 of the Internal Revenue Code, the utilization of the net operating loss carry-forwards may be limited based on changes in the percentage ownership of the Company.

At December 31, 2012, the Company also has net operating loss carryovers for Israeli tax purposes of approximately $2.9 million which do not expire.

At December 31, 2012, the Company has federal income tax credit carry-forwards for income tax purposes of approximately $900,000 available to reduce future federal income tax.

The Company recognizes excess tax benefits associated with the exercise of stock options directly to stockholders’ equity only when realized. Accordingly, deferred tax assets are not recognized for net operating losses resulting from excess tax benefits. As of December 31, 2012, deferred tax assets do not include approximately $4.8 million of these excess tax benefits from employee stock option exercises that are a component of the Company’s net operating loss carry forwards. Accordingly, additional paid-in-capital will be increased up to an additional $4.8 million if and when such excess tax benefits are realized. During 2012, approximately $23,000 related to a net excess tax provision was realized.

The Company adopted the accounting guidance for uncertain tax positions on January 1, 2007. The guidance clarifies the accounting for income taxes by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. The guidance also provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. Upon adoption, the Company recognized no adjustment in the amount of unrecognized tax positions. As of the date of adoption, the Company had no unrecognized tax positions.

The following table summarizes the activity related to our unrecognized tax positions:


(in thousands)	2012		2011			2010
Balance at beginning of year	$	975	$	839		$	839
Additions for tax positions of prior years		250		463			—
Reductions for tax positions of prior years		—		(327	)		—

Balance at end of year	$	1,225	$	975		$	839

Included in the unrecognized tax benefits of $1.2 million at December 31, 2012 was $941,000 of tax, if recognized, would reduce our annual effective tax rate.

The Company’s policy is to recognize interest and penalties that would be assessed in relation to the settlement value of unrecognized tax benefits as a component of income tax (benefit) provision.

As of December 31, 2012 and 2011, the Company had recorded a $216,000 and $165,000 accrual for interest and penalties on unrecognized tax benefits, respectively. Interest expense (income) of $51,000, ($31,000) and $58,000 were recognized in the years ended December 31, 2012, 2011 and 2010, respectively. The Company does not expect any significant decreases to its unrecognized tax benefit within the next 12 months.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax in multiple state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal income tax examinations for years before 2009; state and local income tax examinations before 2008; and foreign income tax examinations before 2008. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the net operating loss carry forward amount.

- 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

+ Details

Property and Equipment

12 Months Ended

Dec. 31, 2012

Property and Equipment [Abstract]

Property and Equipment

3. Property and Equipment

Property and equipment consists of the following:


	As of December 31,
(in thousands)	2012			2011
Computer equipment	$	2,083		$	1,868
Computer software		6,060			4,831
Furniture, fixtures and equipment		694			592
Leasehold improvements		667			691

		9,504			7,982
Less: Accumulated depreciation		(6,371	)		(5,143	)

	$	3,133		$	2,839

Depreciation expense, for the years ended December 31, 2012 and 2011, was $1.7 million and $1.3 million, respectively, and is calculated on the straight-line basis over three years.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2012

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Other Intangible Assets

4. Goodwill and Other Intangible Assets

Goodwill

Goodwill as of December 31, 2012 and 2011 is related to the purchase of Pointmatch in January 2004, MingleMatch, Inc. in May 2005, and LDSSingles in May 2006. Jewish Networks, Christian Networks, and Other Networks are the reporting units with goodwill balances. Jewish Networks goodwill balance at December 31, 2012 and 2011 was $6.9 million and $6.8 million, respectively. Christian Networks goodwill balance at December 31, 2012 and 2011 was $1.7 million. Other Networks goodwill balance at December 31, 2012 and 2011 was $232,000. The following table shows the activity and balances related to goodwill from January 1, 2011 to December 31, 2012:


(in thousands)	Gross Goodwill			Accumulated Impairments			Net Goodwill
Balance at January 1, 2011	$	22,890		$	(13,734	)	$	9,156
Foreign currency translation adjustments		(473	)⁽¹⁾		—			(473	)⁽¹⁾

Balance at December 31, 2011		22,417			(13,734	)		8,683
Foreign currency translation adjustments		178	⁽¹⁾		—			178	⁽¹⁾

Balance at December 31, 2012	$	22,595		$	(13,734	)	$	8,861

⁽¹⁾	Foreign currency translation adjustments related to the Jewish Networks reporting unit.

In 2012, the Company performed its annual impairment analysis utilizing the qualitative assessment option. Qualitative factors were assessed to determine whether it was necessary to perform the two-step test (quantitative assessment). The analysis concluded that it is more-likely-than-not that the fair values of the Jewish Networks, Christian Networks and Other Networks exceeded their carrying values. At the conclusion of the analysis, it was determined that impairment was not warranted.

In 2011, the Company performed its annual impairment analysis utilizing a quantitative assessment. The fair value of the reporting units based on the market approach and income approach. The income approach relies upon discounted future cash flows which are derived from various assumptions including: projected cash flows, discount rates, projected long-term growth rates and terminal values. The Company used a discount rate which reflects the risks and uncertainty related to each reporting unit. The analysis concluded that the estimated reporting units’ fair values exceeded their carrying values. At the conclusion of the analysis, it was determined that impairment was not warranted.

Other Intangibles

Finite-lived intangible assets consist of purchased technologies and are amortized over the expected periods of benefits (five years). Indefinite-lived intangible asset, consist of purchased domain names and are not amortized. Other intangible assets consist of the following:


	As of December 31, 2012					As of December 31, 2011
(in thousands)	Gross Amount		Accumulated Amortization			Gross Amount		Accumulated Amortization
Purchased technologies	$	1,200	$	(1,200	)	$	1,200	$	(1,187	)
Domain names		2,143		—			1,887		—

	$	3,343	$	(1,200	)	$	3,087	$	(1,187	)

Amortization expense for finite-lived intangible assets for the years ended December 31, 2012 and 2011 was $13,000 and $370,000, respectively. In 2011, the Company determined that certain domain names and computer software acquired from prior period acquisitions had no value based upon the expected future cash flows generated from the businesses associated with these assets, resulting in an impairment charge of approximately $1.1 million.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Accrued Liabilities

12 Months Ended

Dec. 31, 2012

Accrued Liabilities [Abstract]

Accrued Liabilities

5. Accrued Liabilities

Accrued liabilities consist of the following:


	December 31,
	2012		2011
	(in thousands)
Advertising	$	1,789	$	1,452
Compensation		1,882		1,905
Other		1,668		689

Total	$	5,339	$	4,046

Income on Possession of Assets

12 Months Ended

Dec. 31, 2012

Income on Possession of Assets [Abstract]

Income on Possession of Assets

6. Income on Possession of Assets

In 2011, the Company became the record title owner of real property purchased in a sheriff’s sale to partially satisfy the Company’s outstanding judgment against Will Knedlik.

On June 15, 2012, the Company sold the real property. Based upon the net proceeds of the transaction, the Company realized a total gain of $398,000, with $247,000 of the gain being recognized in 2011 and $151,000 upon the sale of the real property in 2012.

Revolving Credit Facility

12 Months Ended

Dec. 31, 2012

Revolving Credit Facility [Abstract]

Revolving Credit Facility

7. Revolving Credit Facility

The Company and its wholly-owned subsidiary, Spark Networks USA, LLC have a $15.0 million revolving credit facility with Bank of America, which was entered into on February 14, 2008 with subsequent amendments (the “Credit Agreement”). The Credit Agreement matures on February 14, 2014.

On May 7, 2012, the parties executed a Fourth Amendment to the Credit Agreement (the “Amendment”). The Amendment, among other things, changes the per annum interest rate under the Credit Agreement. Pursuant to the Amendment, the per annum interest rate under the Credit Agreement is LIBOR, or the Eurodollar Rate (as defined in the Credit Agreement) under certain circumstances, plus 2.00%. In the event the Company elects to borrow under a base rate loan, the interest rate is increased to the prime rate plus 1.00%. Under the Amendment, the Company pays a 0.25% per annum commitment fee on all funds not utilized under the facility, measured on a daily basis.

The Amendment removed the requirement that the Company maintain a certain consolidated leverage ratio and consolidated fixed charge coverage ratio. The Amendment also updated the financial covenants regarding the requirement to maintain a minimum consolidated adjusted EBITDA, Jewish Networks minimum contribution, minimum consolidated net liquidity and minimum consolidated revenue during different periods. The Amendment permits the Company to repurchase or redeem equity interests or issue dividends of up to $4.5 million during the term of the Credit Agreement. The Credit Agreement also contains other covenants, with exceptions, including restrictions on debt, liens and investments. A default could cause any outstanding amounts to become immediately due and payable and prohibit the Company from obtaining further credit under the Credit Agreement.

The Company was compliant with the Credit Agreement’s customary affirmative and negative covenants, as of December 31, 2012.

As of December 31, 2012, there was no outstanding amount under the Credit Agreement. In connection with the original Credit Agreement and the first four amendments thereto, the Company paid deferred financing costs of approximately $446,000 and $105,000, respectively. Costs associated with both the original Credit Agreement and the first four amendments thereto were included in prepaid expenses and other, and deposits and other assets. The deferred financing costs are amortized to interest expense in the Consolidated Statements of Operations and Comprehensive (Loss) Income over the full term of the Credit Agreement. Amortization expense for the deferred financing costs for the years ended December 31, 2012 and 2011 were $25,000 and $56,000, respectively.

- 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

Stockholders' Equity

12 Months Ended

Dec. 31, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

8. Stockholders’ Equity

Employee Stock Option Plans

On July 9, 2007, pursuant to the completion of the Scheme of Arrangement, the Company adopted the Spark Networks, Inc. 2007 Omnibus Incentive Plan (the “2007 Plan”) authorizing and reserving 2.5 million options. In connection with the Company’s Scheme of Arrangement, the 2004 Share Option Plan was frozen; however, all outstanding options previously granted thereunder continue in full force and effect.

Awards under the 2007 Plan may include incentive stock options, nonqualified stock options, stock appreciation rights (“SARs”), restricted shares of common stock, restricted stock units, performance stock or unit awards, other stock-based awards and cash-based incentive awards.

The Compensation Committee may grant an award to a participant. The terms and conditions of the award, including the quantity, price, vesting periods and other conditions on exercise will be determined by the Compensation Committee.

The exercise price for stock options will be determined by the Compensation Committee in its discretion, but may not be less than 100% of the closing sale price of one share of the Company’s common stock on the NYSE MKT (or any other applicable exchange on which the stock is listed) on the date when the stock option is granted. Additionally, in the case of incentive stock options granted to a holder of more than 10% of the total combined voting power of all classes of stock of the Company on the date of grant, the exercise price may not be less than 110% of the closing sale price of one share of common stock on the date the stock option is granted.

As of December 31, 2012, total unrecognized compensation cost related to non-vested stock options was $2.3 million. This cost is expected to be recognized over a weighted-average period of 3 years. The following table describes option activity for the years ended December 31, 2012, 2011 and 2010:


	Years Ended December 31,
	2012		2011		2010
Granted, weighted average fair value per share	$	2.02	$	1.02	$	1.07
Exercised, weighted average intrinsic value per share	$	2.89	$	0.32	$	0.46
Aggregate intrinsic value of options outstanding and exercisable (in thousands)	$	12,614	$	1,571	$	371

Information relating to outstanding stock options is as follows (in thousands, except Weighted Average Price per Share):


	Number of Shares			Weighted Average Price per Share
Outstanding at December 31, 2010		3,364		$	3.12
Granted		700			3.19
Exercised		(8	)		2.96
Expired		(10	)		3.30
Forfeited		(463	)		2.99

Outstanding at December 31, 2011		3,583			3.14
Granted		665			7.36
Exercised		(350	)		3.00
Expired		(12	)		4.38
Forfeited		(57	)		3.15

Outstanding at December 31, 2012		3,829		$	3.88

Option Range Summary

As of December 31, 2012


	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number of Shares		Weighted Average Remaining Life		Weighted Average Exercise Price		Number of Shares		Weighted Average Remaining Life		Weighted Average Exercise Price
$3.18 - $10.00		1,507		7	$	5.27		550		5	$	3.88
$3.00		2,202		4	$	3.00		2,071		4	$	3.00
$2.18 - $2.99		120		3	$	2.54		99		3	$	2.57

		3,829		5	$	3.88		2,720		5	$	3.16

Re-Pricing of Employees Options

In 2009, the Company offered to re-price options for certain employees. These employees could surrender their existing options in exchange for a like number of options with a new grant date, a lower exercise price, a lower number of vested options and a modified vesting schedule. The exchange of options was treated as a synthetic re-pricing, which includes a cancellation and replacement of equity instruments. The incremental expense was approximately $1.0 million and is being recognized over the four year vesting term of the newly issued options. The incremental expenses recognized for the years ended December 31, 2012, 2011 and 2010 were $172,000, $172,000 and $339,000, respectively.

Stockholder Rights Plan

In July 2007, the Company adopted a stockholder rights plan. The rights accompany each share of common stock of the Company and are evidenced by ownership of common stock. The rights are not exercisable except upon the occurrence of certain takeover-related events. Once triggered, the rights would entitle the stockholders, other than a person qualifying as an “Acquiring Person” pursuant to the rights plan, to purchase additional common stock at a 50% discount to their fair market value. The rights issued under the Rights Plan may be redeemed by the board of directors at a nominal redemption price of $0.001 per right, and the board of directors may amend the rights in any respect until the rights are triggered.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

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Reference 23: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Employee Benefit Plan

12 Months Ended

Dec. 31, 2012

Employee Benefit Plan [Abstract]

Employee Benefit Plan

9. Employee Benefit Plan

The Company has a defined contribution plan under Section 401(k) of the Internal Revenue Code covering all full-time employees, and providing for matching contributions by the Company, as defined in the plan. Participants in the plan may direct the investment of their personal accounts to a choice of mutual funds consisting of various portfolios of stocks, bonds or cash instruments. Contributions made by the Company to the plan for the years ended December 31, 2012, 2011 and 2010 were approximately $349,000, $338,000 and $333,000, respectively.

- Definition

The entire disclosure for compensation costs, including compensated absences accruals, compensated absences liability, deferred compensation arrangements and income statement compensation items. Deferred compensation arrangements may include a description of an arrangement with an individual employee, which is generally an employment contract between the entity and a selected officer or key employee containing a promise by the employer to pay certain amounts at designated future dates, usually including a period after retirement, upon compliance with stipulated requirements. This type of arrangement is distinguished from broader based employee benefit plans as it is usually tailored to the employee. Disclosure also typically includes the amount of related compensation expense recognized during the reporting period, the number of shares (units) issued during the period under such arrangements, and the carrying amount as of the balance sheet date of the related liability.

+ References + Details

Segment Information

12 Months Ended

Dec. 31, 2012

Segment Information [Abstract]

Segment Information

10. Segment Information

Segment reporting requires the use of the management approach in determining the reportable operating segments. The management approach considers the internal organization and reporting used by our chief operating decision maker for making operating decisions and assessing performance. The Company’s financial reporting includes detailed data on four separate reportable segments which were principally determined based on similarity of economic characteristics. During the first quarter of 2012, the Company’s management modified the internal reporting of its operating segments to: (1) Jewish Networks, which consists of JDate.com, JDate.co.uk, JDate.fr, JDate.co.il, Cupid.co.il, and their respective co-branded Web sites; (2) Christian Networks, which now consists of ChristianMingle.com, ChristianMingle.co.uk, ChristianMingle.com.au, Believe.com, ChristianCards.net, DailyBibleVerse.com and Faith.com; (3) Other Networks, which consists of Spark.com and related other general market Web sites as well as other properties which are primarily composed of sites targeted towards various religious, ethnic, geographic and special interest groups; and (4) Offline & Other Businesses, which consists of revenue generated from offline activities and HurryDate events and subscriptions. The Company believes the new segments provide investors with greater transparency into the performance of the business. Prior period amounts presented in this Annual Report on Form 10-K have been reclassified to conform to the current period presentation.


	Years Ended December 31
(in thousands)	2012			2011			2010
Revenue
Jewish Networks	$	26,034		$	27,054		$	27,440
Christian Networks		31,574			15,742			5,828
Other Networks		3,765			4,925			6,619
Offline and Other Businesses		370			772			964

Total Revenue	$	61,743		$	48,493		$	40,851


Direct Marketing Expenses
Jewish Networks	$	3,111		$	3,389		$	2,321
Christian Networks		41,400			19,356			4,953
Other Networks		977			2,467			2,921
Offline and Other Businesses		165			512			535

Total Direct Marketing Expenses	$	45,653		$	25,724		$	10,730


Unallocated Operating Expense		25,270			23,913			23,913

Operating (Loss) Income	$	(9,180	)	$	(1,144	)	$	6,208

Due to the Company’s integrated business structure, cost and expenses, other than direct marketing expenses, are not allocated to the individual reporting segments. As such, the Company does not measure operating profit or loss by segment for internal reporting purposes. Assets are not allocated to the different business segments for internal reporting purposes.

The Company operates several international Web sites; however, many of them are operated and managed by the Company’s U.S. operations. Foreign revenue represents sales generated outside the U.S. where the Company has its principal operations. Revenue and identifiable long-lived assets (excluding deferred tax assets, goodwill and intangibles) by geographical area are as follows:


	Years Ended December 31
(in thousands)	2012		2011		2010
Revenue
United States	$	57,734	$	44,358	$	36,849
Israel		4,009		4,135		4,002

Total Revenue	$	61,743	$	48,493	$	40,851


	As of December 31,
	2012		2011
Long-Lived Assets
United States	$	3,144	$	3,117
Israel		142		177

Total Long-Lived Assets	$	3,286	$	3,294

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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+ Details

Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

11. Commitments and Contingencies

Operating Leases

The Company leases its office and data center facilities under operating lease agreements, providing for annual minimum lease payments as follows:


Year Ending (amounts in thousands)
2013	$	773
2014		584
2015		240
2016		204
2017		122

Total	$	1,923

Rental expense under non-cancelable operating leases with scheduled rent increases or free rent is accounted for on a straight-line basis over the lease term. Leasehold improvement incentives are recorded as deferred credits and are amortized on a straight-line basis as a reduction of rent expense over the lease term.

The Company recognized rent expense under operating leases of $1.0 million, $1.0 million and $1.3 million for the years ended December 31, 2012, 2011 and 2010, respectively.

Other Commitments and Obligations

The Company has other non-cancelable commitments and obligations consisting of contracts with software licensing, communications and marketing service providers. These amounts totaled $355,000 for less than one year and $710,000 between one and three years. Contracts with other service providers are for terms less than one year.


Year Ending (amounts in thousands)
2013	$	355
2014		355
2015		355

Total	$	1,065

Legal Proceedings

ISYSTEMS v. Spark Networks, Inc. et al.

On July 11, 2008, ISYSTEMS initiated a lawsuit against Spark Networks, Inc. and Spark Networks Limited (collectively, “Spark Networks”) and other parties in the United States District Court, Northern District of Texas, Dallas Division. The lawsuit was filed in response to an arbitration award ordering the transfer of the domain name, JDATE.NET, to Spark Networks Limited from ISYSTEMS. Spark Networks was apprised of the lawsuit after ISYSTEMS unsuccessfully attempted to utilize the filing of the lawsuit to prevent the domain transfer to Spark Networks Limited. On December 1, 2008, Spark Networks filed a Motion to Dismiss the Complaint, or, Alternatively, for Summary Judgment. On September 10, 2009, the Court granted Spark Networks’ motion and dismissed the case with prejudice. On September 22, 2009, ISYSTEMS filed a motion to vacate the order dismissing the action and requesting leave to amend its complaint. On October 26, 2009, the Court granted ISYSTEMS’ motion and ISYSTEMS filed its Amended Complaint on November 25, 2009. On January 19, 2010, Spark Networks filed a Motion to Dismiss the Amended Complaint, or Alternatively, for Summary Judgment. The Court granted Spark Networks’ Motion to Dismiss on June 28, 2010 and entered a judgment in favor of Spark Networks. On July 25, 2010, ISYSTEMS filed a motion to vacate the order granting the motion to dismiss, which was denied by the Court on August 11, 2010. On September 10, 2010, ISYSTEMS filed a notice of appeal of the district court’s order and judgment to the United States Court of Appeals for the Fifth Circuit. On June 13, 2011, the United States Court of Appeals for the Fifth Circuit issued its opinion affirming the District Court’s judgment. On June 29, 2011, ISYSTEMS filed a Petition for Rehearing with the United States Court of Appeals for the Fifth Circuit, which was granted. Oral argument was held on December 8, 2011. Per the Fifth Circuit’s request, the parties submitted supplemental briefs on December 16, 2011. On March 21, 2012, the Fifth Circuit issued its opinion affirming the District Court’s dismissal of certain claims and reversing the dismissal of certain other claims. On April 19, 2012, the matter was remanded back to the District Court. On September 4, 2012, Spark Networks filed its Answer to the Complaint. By written order dated August 30, 2012, the Court set the action for trial on February 24, 2014.

B.E. Technology, L.L.C. v. Spark Networks, Inc.

On September 22, 2012, B.E. Technology, L.L.C. commenced a lawsuit against Spark Networks, Inc. in the Western District of Tennessee, B.E. Technology, L.L.C. v. Spark Networks, Inc., Civil Action No. 2:12-cv-02832-cgc, for alleged infringement of U.S. Patent No. 6,628,314. The patent is entitled “Computer Interface Method And Apparatus With Targeted Advertising.” The Complaint alleges that “Spark Networks has infringed at least claim 11 of the ‘314 patent by using a method of providing demographically targeted advertising,” and seeks damages and an injunction. On December 31, 2012, Spark filed an Answer to the Complaint denying that the ‘314 patent was infringed by Spark and alleging, among other things, that the patent was invalid. On January 7, 2013, B.E. Technology served its Initial Infringement Contentions asserting that Spark had infringed claims 11, 12, 13, 15, 18, 19 and 20. The Company has made a motion to transfer the case to California.

Kirby, et al. v. Spark Networks USA, LLC

On October 16, 2012, Kristina Kirby, Christopher Wagner and Jamie Carper (collectively referred to as “Plaintiffs”), on behalf of themselves and all other similarly situated, filed a putative class action Complaint in the Superior Court for the State of California, County of Los Angeles (Case No. BC493892) alleging claims against Spark Networks USA, LLC for violations of California Business & Professions Code section 17529.5. Plaintiffs allege that certain e-mail communications advertising Web sites of Spark Networks USA, LLC and received by Plaintiffs violate a California statute prohibiting false and deceptive e-mail communications (namely, California Business & Professions Code section 17529.5). Plaintiffs generally allege that they seek damages in excess of $25,000.

The Company strongly disputes the merits of the claims asserted against it in each of these lawsuits and shall vigorously defend against them.

The Company has additional existing legal claims and may encounter future legal claims in the normal course of business. In the Company’s opinion, the resolutions of the existing legal claims are not expected to have a material impact on its financial position or results of operations. The Company believes it has accrued appropriate amounts where necessary in connection with the above litigation.

- Definition

The entire disclosure for commitments and contingencies.

+ References

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+ Details

Related Party Transaction

12 Months Ended

Dec. 31, 2012

Related Party Transactions

12. Related Party Transactions

In December 2011, the Company entered into a three year operating lease with Latisys-Irvine, Inc., a colocation and data center operator to provide colocation, cages, connectivity and other related equipment and services. Great Hill Partners, an owner of more than 5% of the Company’s stock, has informed the Company that it has an ownership position in Latisys-Irvine, Inc. The Company paid $189,000 for services rendered by Latisys-Irvine, Inc. in 2012.

In January 2012, the Company entered into an agreement with Ultra Unlimited Corp., a software development firm, to develop and initially operate a Web site for the Company and to provide the Company with certain software. The Chief Executive Officer of Ultra Unlimited Corp. is the brother of Michael Kumin, a director of the Company. Michael Kumin and Jonathan Bulkeley, also a director of the Company, have informed the Company that they are individual investors in Ultra Unlimited Corp. The Company paid Ultra Unlimited Corp. $159,000 for services rendered in 2012.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39603-107864

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39622-107864

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39678-107864

Reference 5: 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.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39691-107864

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph b
-Article 3A

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph k
-Article 4

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 1-4
-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.

+ Details

Quarterly Results of Operations

12 Months Ended

Dec. 31, 2012

Quarterly Results of Operations [Abstract]

Quarterly Results of Operations

13. Quarterly Results of Operations

The following tables present the Company’s quarterly results of operations and should be read in conjunction with the consolidated financial statements and related notes. The Company has prepared the unaudited information on substantially the same basis as our audited consolidated financial statements which, in the opinion of management, includes all adjustments, consisting only of normal recurring adjustments, except as otherwise indicated, necessary for the presentation of the results of operations for such periods. Operating results for any quarter are not necessarily indicative of results for any future quarters or for a full year.


	Three Months Ended
(in thousands, except per share amount)	Dec. 31, 2012			Sept. 30, 2012			June 30, 2012			March 31, 2012			Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			March 31, 2011
Consolidated Statement of Operations Data:
Revenue	$	16,271		$	15,871		$	15,046		$	14,555		$	12,861		$	12,677		$	11,995		$	10,960
Cost of revenue		13,491			12,901			10,976			11,848			8,420			7,373			7,347			5,815
Sales and marketing		1,015			1,020			983			973			1,062			923			837			900
Customer service		647			652			622			613			539			531			449			461
Technical operations		296			362			355			350			281			336			336			414
Development		797			859			844			846			643			643			679			745
General and administrative		2,237			2,260			2,052			2,238			1,071			2,435			2,199			2,363
Depreciation		431			426			413			403			343			341			346			290
Amortization		—			—			—			13			89			90			93			98
Impairment of goodwill and other assets		—			—			—			—			1,100			45			—			—

Total cost and expenses		18,914			18,480			16,245			17,284			13,548			12,717			12,286			11,086

Loss from operations		(2,643	)		(2,609	)		(1,199	)		(2,729	)		(687	)		(40	)		(291	)		(126	)

Interest expense (income) and other, net		(188	)		(36	)		113			(127	)		144			120			(45	)		(57	)
Loss before income taxes		(2,455	)		(2,573	)		(1,312	)		(2,602	)		(831	)		(160	)		(246	)		(69	)

Provision (benefit) for income taxes		8,083			(836	)		(311	)		(889	)		277			78			(165	)		115

Net loss	$	(10,538	)	$	(1,737	)	$	(1,001	)	$	(1,713	)	$	(1,108	)	$	(238	)	$	(81	)	$	(184	)

Net loss per share–basic and diluted	$	(0.51	)	$	(0.08	)	$	(0.05	)	$	(0.08	)	$	(0.05	)	$	(0.01	)	$	(0.00	)	$	(0.01	)
Shares used in computation of basic and diluted net loss per share		20,816			20,699			20,625			20,596			20,595			20,595			20,589			20,587

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References + Details

Subsequent Events (unaudited)

12 Months Ended

Dec. 31, 2012

Subsequent Events (unaudited) [Abstract]

Subsequent Events (unaudited)

14. Subsequent Events (unaudited)

The Company evaluated subsequent events through the date this Annual Report on Form 10-K was filed with the Securities and Exchange Commission.

Subsequent to the balance sheet date, on February 1, 2013 the Company entered into a new office space lease for approximately 16,000 square feet of office space in Los Angeles, California. The current office space lease in Beverly Hills, California expires on July 31, 2013 and the Company will relocate the corporate, administrative, technology and development personnel, to the new office space prior to its expiration.

The Company and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2012

The Company and Summary of Significant Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The results of the subsidiaries have been incorporated in the financial results of the consolidated entity since the date of acquisition.

Revenue Recognition and Deferred Revenue

Revenue Recognition and Deferred Revenue

Fair Value Measurement

Fair Value Measurement

Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Other inputs that are directly or indirectly observable in the marketplace.

Level 3—Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Cash and Cash Equivalents

Cash and Cash Equivalents

All highly liquid instruments with an original maturity of three months or less are considered cash and cash equivalents.

Restricted Cash

Restricted Cash

Accounts Receivable

Accounts Receivable

Prepaid Advertising Expenses

Prepaid Advertising Expenses

Web Site and Software Development Costs

Web Site and Software Development Costs

Property and Equipment

Property and Equipment

Goodwill

Goodwill

Intangible Assets

Intangible Assets

Impairment of Long-lived Assets

Impairment of Long-lived Assets

Income Taxes

Income Taxes

Cost of Revenue

Cost of Revenue

Sales and Marketing

Sales and Marketing

Customer Service

Customer Service

Technical Operations

Technical Operations

The Company’s technical operations expenses consist primarily of the personnel and systems necessary to support our corporate technology requirements.

Development

Development

The Company’s development expenses relate primarily to salaries and wages for personnel involved in the development, enhancement and maintenance of its Web sites and services.

General and Administrative

General and Administrative

The Company’s general and administrative expenses relate primarily to salaries and wages for corporate personnel, professional fees, occupancy and other overhead costs.

Stock-based Compensation

Stock-based Compensation

The following is a chart showing variables which were used in the Black-Scholes option-pricing model for the years of:


	2012	2011	2010
Expected life in years	4.27-5.77	4.56	4.56
Dividend per share	—	—	—
Volatility	35.0%	35.0-45.0%	40.0-45.0%
Risk-free interest rate	1.0-1.75%	1.4-3.0%	1.0-3.0%

The volatility rate was derived by examining historical stock price behavior and assessing management’s expectations of stock price behavior during the term of the option.

The risk free interest rates are based on U.S Treasury zero-coupon bonds with similar terms for the periods in which the options were granted.

Comprehensive (Loss) Income

Comprehensive (Loss) Income

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Net (Loss) Income Per Share

Net (Loss) Income Per Share


	For the Year Ended December 31
	(in thousands except per share amounts)
	2012			2011			2010
Net (Loss) Income Per Common Share—Basic and Diluted
Net (loss) income applicable to common stock	$	(14,989	)	$	(1,611	)	$	3,704
Weighted average shares outstanding- basic		20,781			20,591			20,586
Weighted average shares outstanding- diluted		20,781			20,591			20,590

Net (Loss) Income Per Share—Basic and Diluted	$	(0.72	)	$	(0.08	)	$	0.18

Use of Estimates

Use of Estimates

Recent Accounting Developments

Recent Accounting Developments

The Company and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2012

The Company and Summary of Significant Accounting Policies [Abstract]

Summary of capitalized software development costs

The following table summarizes capitalized software development costs for the years ended December 31, (in thousands):


	2012			2011			2010
Capitalized	$	1,641		$	1,250		$	1,100
Expensed		(1,186	)		(850	)		(504	)
Impaired		—			(45	)		(121	)
Unamortized Balance	$	2,431		$	1,976		$	1,621

Summary of variables used in Black-Scholes option-pricing model

The following is a chart showing variables which were used in the Black-Scholes option-pricing model for the years of:


	2012	2011	2010
Expected life in years	4.27-5.77	4.56	4.56
Dividend per share	—	—	—
Volatility	35.0%	35.0-45.0%	40.0-45.0%
Risk-free interest rate	1.0-1.75%	1.4-3.0%	1.0-3.0%

Summary of net (loss) income per share on both basic and diluted


	For the Year Ended December 31
	(in thousands except per share amounts)
	2012			2011			2010
Net (Loss) Income Per Common Share—Basic and Diluted
Net (loss) income applicable to common stock	$	(14,989	)	$	(1,611	)	$	3,704
Weighted average shares outstanding- basic		20,781			20,591			20,586
Weighted average shares outstanding- diluted		20,781			20,591			20,590

Net (Loss) Income Per Share—Basic and Diluted	$	(0.72	)	$	(0.08	)	$	0.18

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Summary of (loss) income before income taxes


(Loss) income before income taxes:	Year Ended December 31,
(in thousands)	2012			2011			2010

U.S.	$	(8,984	)	$	(619	)	$	5,986
Foreign		42			(687	)		276

	$	(8,942	)	$	(1,306	)	$	6,262

Summary of provision for income taxes


Income tax expense:	Year Ended December 31,
(in thousands)	2012			2011			2010
Current
Federal	$	(22	)	$	(326	)	$	1,920
State		143			638			518
Foreign		45			69			2

		166			381			2,440

Deferred
Federal		(3,121	)		50			60
State		95			(160	)		35
Foreign		5			477			115

		(3,021	)		367			210

Change in valuation allowance		8,902			(443	)		(92	)

Total income tax expense	$	6,047		$	305		$	2,558

Schedule of reconciliation of effective income tax rate


Reconciliation of effective income tax rate:	Year Ended December 31,
	2012			2011			2010

(Benefit) provision on earnings at federal statutory rate		(34.0	)%		(34.0	)%		34.0	%
State tax (benefit) provision, net of federal (benefit) provision		(1.1	)		6.0			4.8
Nondeductible expenses		—			0.3			0.3
Tax reserves		2.2			(1.3	)		0.6
Change in effective tax rates		1.7			18.6			0.3
Foreign tax rate differential		0.3			9.6			(4.3	)
Valuation allowance		100.0			(8.9	)		3.0
Write down of deferred tax asset		—			34.1			—
Other		(1.1	)		(1.1	)		2.2

Total provision for income taxes		68.0	%		23.3	%		40.9	%

Summary of components of the deferred income tax asset (liability)

The components of the deferred income tax asset (liability) for the periods presented are as follows:


	Year Ended December 31,
(in thousands)	2012		2011		2010
Deferred income tax assets
Net operating loss carry-forward	$	4,506	$	782	$	940
Depreciation and amortization		1,358		1,655		1,383
Compensation accruals		2,236		2,590		2,234
Credits		899		913