Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 31, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | IMATION CORP | |
Entity Central Index Key | 1,014,111 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 37,095,668 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Net revenue | $ 129.2 | $ 175 | $ 435.2 | $ 532.5 |
Cost of goods sold | 115.8 | 143.8 | 358.8 | 433.7 |
Gross profit | 13.4 | 31.2 | 76.4 | 98.8 |
Operating expenses: | ||||
Selling, general and administrative | 43.4 | 42.5 | 123 | 130.2 |
Research and development | 4.8 | 4.9 | 14.4 | 13.7 |
Intangible impairment | 37.6 | 0 | 37.6 | 0 |
Goodwill impairment | 36.1 | 35.4 | 36.1 | 35.4 |
Restructuring and other | 40.2 | 4.2 | 42.9 | 11.5 |
Total | 162.1 | 87 | 254 | 190.8 |
Operating loss from continuing operations | (148.7) | (55.8) | (177.6) | (92) |
Other (income) expense: | ||||
Interest income | (0.1) | (0.1) | (0.3) | (0.3) |
Interest expense | 0.6 | 0.7 | 1.8 | 1.9 |
Other, net expense (income) | (0.5) | 1.6 | 1.1 | 2.6 |
Total | 0 | 2.2 | 2.6 | 4.2 |
Loss from continuing operations before income taxes | (148.7) | (58) | (180.2) | (96.2) |
Income tax provision | 3.6 | 3.4 | 3.9 | 1.8 |
Loss from continuing operations | (152.3) | (61.4) | (184.1) | (98) |
Discontinued operations: | ||||
Loss on sale of discontinued businesses, net of income taxes | 0 | 0 | 0 | (1.7) |
Loss from operations of discontinued businesses, net of income taxes | 0 | 0 | 0 | (0.6) |
Loss from discontinued operations, net of income taxes | 0 | 0 | 0 | (2.3) |
Net loss | $ (152.3) | $ (61.4) | $ (184.1) | $ (100.3) |
Loss per common share — basic: | ||||
Continuing operations (in dollars per share) | $ (3.70) | $ (1.49) | $ (4.48) | $ (2.39) |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.06) |
Net loss (in dollars per share) | (3.70) | (1.49) | (4.48) | (2.45) |
Loss per common share — diluted: | ||||
Continuing operations (in dollars per share) | (3.70) | (1.49) | (4.48) | (2.39) |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.06) |
Net loss (dollars per share) | $ (3.70) | $ (1.49) | $ (4.48) | $ (2.45) |
Weighted average shares outstanding - basic (in shares) | 41.2 | 41.2 | 41.1 | 41 |
Weighted average shares outstanding - diluted (in shares) | 41.2 | 41.2 | 41.1 | 41 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (152.3) | $ (61.4) | $ (184.1) | $ (100.3) |
Net unrealized gains (losses) on derivative financial instruments: | ||||
Net holding gains (losses) arising during the period | (2.2) | 2.2 | 0.9 | 0.7 |
Reclassification adjustment for net realized gains recorded in net loss | (3.1) | (0.7) | (6.7) | (1.2) |
Total net unrealized gains (losses) on derivative financial instruments | (5.3) | 1.5 | (5.8) | (0.5) |
Net pension adjustments: | ||||
Liability adjustments for defined benefit plans | (4.4) | (1.6) | (4.4) | (0.8) |
Reclassification adjustment for defined benefit plans recorded in net loss | 1.5 | 0.4 | 1.8 | 1.1 |
Total net pension adjustments | (2.9) | (1.2) | (2.6) | 0.3 |
Unrealized foreign currency translation gains (losses) | (3.1) | (8.5) | (6.6) | (9.7) |
Total other comprehensive income (loss), net of tax | (11.3) | (8.2) | (15) | (9.9) |
Comprehensive loss | $ (163.6) | $ (69.6) | $ (199.1) | $ (110.2) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 94.3 | $ 114.6 |
Accounts receivable, net | 64 | 134.4 |
Inventories | 42 | 57.7 |
Other current assets | 34.2 | 32.7 |
Total current assets | 234.5 | 339.4 |
Property, plant and equipment, net | 5.3 | 45 |
Intangible assets, net | 10.7 | 57.9 |
Goodwill | 0 | 36.1 |
Other assets | 16.8 | 20.8 |
Total assets | 267.3 | 499.2 |
Current liabilities: | ||
Accounts payable | 75.5 | 95.5 |
Short-term debt | 18 | 18.9 |
Other current liabilities | 89 | 98.2 |
Total current liabilities | 182.5 | 212.6 |
Other liabilities | 43.6 | 45.8 |
Total liabilities | $ 226.1 | $ 258.4 |
Commitments and contingencies (Note 15) | ||
Preferred stock, $.01 par value, authorized 25 million shares, none issued and outstanding | $ 0 | $ 0 |
Common stock, $.01 par value, authorized 100 million shares, 42.9 million issued | 0.4 | 0.4 |
Additional paid-in capital | 1,040.1 | 1,034.6 |
Retained deficit | (883.7) | (699.9) |
Accumulated other comprehensive loss | (99.8) | (84.8) |
Treasury stock, at cost | (15.8) | (9.5) |
Total shareholders' equity | 41.2 | 240.8 |
Total liabilities and shareholders’ equity | $ 267.3 | $ 499.2 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 42,900,000 | 42,900,000 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (184.1) | $ (100.3) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 15.7 | 16.4 |
Loss on settlement of pension plan | 25.1 | 0 |
Goodwill impairment | 36.1 | 35.4 |
Intangible impairment | 37.6 | 0 |
Other, net | 32.8 | 11.6 |
Changes in operating assets and liabilities | 47.2 | 23.7 |
Net cash used in operating activities | (14.7) | (13.2) |
Cash Flows from Investing Activities: | ||
Capital expenditures | (2.8) | (5.3) |
Proceeds from sale of disposal group | 1.5 | 2.8 |
Proceeds from sale of assets | 1.2 | 0 |
Net cash used in investing activities | (0.1) | (2.5) |
Cash Flows from Financing Activities: | ||
Purchase of treasury stock | (1.7) | (2.5) |
Exercise of stock options | 0 | 0.4 |
Short-term debt repayment | (17.4) | (29.7) |
Short-term borrowings | 16.4 | 28.9 |
Net cash used in financing activities | (2.7) | (2.9) |
Effect of exchange rate changes on cash and cash equivalents | (2.8) | (3.3) |
Net change in cash and cash equivalents | (20.3) | (21.9) |
Cash and cash equivalents — beginning of period | 114.6 | 132.6 |
Cash and cash equivalents — end of period | $ 94.3 | $ 110.7 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The interim Condensed Consolidated Financial Statements of Imation Corp. (Imation, the Company, we, us or our) are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair statement of financial position, results of operations, comprehensive loss and cash flows for the periods presented. Except as otherwise disclosed herein, these adjustments consist of normal, recurring items. The results of operations for any interim period are not necessarily indicative of full year results. The Condensed Consolidated Financial Statements and Notes are presented in accordance with the requirements for Quarterly Reports on Form 10-Q and do not contain certain information included in our annual Consolidated Financial Statements and Notes. The preparation of the interim Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (U.S. 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 interim Condensed Consolidated Financial Statements and the reported amounts of revenue and expenses for the reporting periods. Despite our intention to establish accurate estimates and use reasonable assumptions, actual results may differ from our estimates. The December 31, 2014 Condensed Consolidated Balance Sheet data was derived from the audited Consolidated Financial Statements but does not include all disclosures required by U.S. GAAP. This Form 10-Q should be read in conjunction with our Consolidated Financial Statements and Notes included in our Annual Report on Form 10-K for the year ended December 31, 2014 . The operating results of our former XtremeMac TM and Memorex TM consumer electronics businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations for all periods presented. See Note 4 - Discontinued Operations for further information on these divestitures. On September 24, 2015, the Company adopted a restructuring plan that will significantly change the business and operations of the Company. See Note 7 - Restructuring and Other Expense for further information on the restructuring plan. |
Recently Issued or Adopted Acco
Recently Issued or Adopted Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Recently Issued or Adopted Accounting Pronouncements | Recently Issued or Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board issued new accounting guidance related to revenue recognition. This new guidance will replace all current U.S. GAAP guidance on revenue recognition and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions include capitalization of certain contract costs, consideration of time value of money in the transaction price and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. In July 2015, the guidance was revised to be effective for interim and annual periods beginning on or after December 15, 2017. The guidance permits the use of either a retrospective or cumulative effect transition method. We have not yet selected a transition method and are currently evaluating the impact of this new guidance on our financial position and results of operations. In April 2015, the Financial Accounting Standards Board issued new accounting guidance related to debt issuance costs. Under this new standard, debt issuance costs reported on the consolidated balance sheet would be reflected as a direct deduction from the related debt liability rather than as an asset. For Imation, this is effective January 1, 2016, with early adoption permitted. Retroactive application to prior periods is required. As this standard impacts only the classification of certain amounts within the consolidated balance sheet, Imation does not expect this new standard to have a material impact on our financial position and results of operations. In May 2015, the Financial Accounting Standards Board issued new accounting guidance related to the disclosures for investments in certain entities that calculate net asset value per share (or its equivalent). This standard modifies existing disclosure requirements such that investments for which the practical expedient is used to measure their fair value at net asset value (NAV) would be removed from the fair value hierarchy disclosures. Instead, an entity would be required to include those investments as a reconciling item such that the total fair value amount of investments in the fair value hierarchy disclosure is consistent with the amount on the balance sheet. Changes were also made to the requirements in a sponsor’s employee benefit plan asset disclosures. For Imation, this standard is effective January 1, 2016, with retrospective application required. Early adoption is permitted. As this standard only impacts certain disclosures, it will not impact the Company’s consolidated results of operations and financial condition. In July 2015, the Financial Accounting Standards Board issued Accounting Standards Updated (ASU) No. 2015-11, Simplifying the Measurement of Inventory, which modifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (NRV), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. For Imation, this standard is effective prospectively beginning January 1, 2017, with early adoption permitted. The Company is currently assessing the impact of this new ASU on Imation’s consolidated results of operations and financial condition. |
(Loss) Earnings per Common Shar
(Loss) Earnings per Common Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings per Common Share | (Loss) Earnings per Common Share Basic (loss) earnings per common share is calculated using the weighted average number of shares outstanding for the period. Diluted (loss) earnings per common share is computed on the basis of the weighted average shares outstanding plus the dilutive effect of our stock-based compensation plans using the “treasury stock” method. Unvested restricted stock and treasury shares are excluded from the calculation of basic weighted average number of common shares outstanding. Once restricted stock vests, it is included in our common shares outstanding. Potential common shares are excluded from the computation of diluted (loss) earnings per common share when the effect would be anti-dilutive. Stock options are anti-dilutive when the exercise price of these instruments is greater than the average market price of the Company's common stock for the period. All potential common shares are anti-dilutive in periods of net loss available to common shareholders. The following table sets forth the computation of the weighted average basic and diluted (loss) earnings per share: Three Months Ended Nine Months Ended September 30, September 30, (In millions, except for per share amounts) 2015 2014 2015 2014 Numerator: Loss from continuing operations $ (152.3 ) $ (61.4 ) $ (184.1 ) $ (98.0 ) Loss from discontinued operations — — — (2.3 ) Net loss $ (152.3 ) $ (61.4 ) $ (184.1 ) $ (100.3 ) Denominator: Weighted average number of common shares outstanding during the period - basic 41.2 41.2 41.1 41.0 Dilutive effect of stock-based compensation plans — — — — Weighted average number of diluted shares outstanding during the period - diluted 41.2 41.2 41.1 41.0 Loss per common share — basic: Continuing operations $ (3.70 ) $ (1.49 ) $ (4.48 ) $ (2.39 ) Discontinued operations — — — (0.06 ) Net loss (3.70 ) (1.49 ) (4.48 ) (2.45 ) Loss per common share — diluted: Continuing operations $ (3.70 ) $ (1.49 ) $ (4.48 ) $ (2.39 ) Discontinued operations — — — (0.06 ) Net loss (3.70 ) (1.49 ) (4.48 ) (2.45 ) Anti-dilutive shares excluded from calculation 3.5 4.4 3.5 4.5 |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Discontinued Operations | Discontinued Operations On February 13, 2013, we announced our plans to divest our XtremeMac and Memorex consumer electronics businesses. On January 31, 2014, we completed the sale of our XtremeMac consumer electronics business. Total cash consideration was originally estimated at $3.1 million which consisted of $0.3 million of cash consideration, an interest-bearing note receivable of $0.3 million (maturing in December 2015) and $2.5 million to be received based on the proceeds the purchaser was able to achieve from selling the acquired inventory. The sale of this business resulted in a loss of $0.5 million which was recorded in discontinued operations during the first quarter of 2014. During the second quarter of 2014, we revised downward our estimate of the consideration we expected to receive by $1.2 million based on the purchaser's proceeds from selling the acquired inventory and, accordingly, recognized a loss of $1.2 million as a component of discontinued operations for the nine months ended September 30, 2014. The $1.3 million of remaining proceeds due Imation from the purchaser's disposition of acquired inventory were received during the second and third quarters of 2014. There were no results for discontinued operations for XtremeMac for the three and nine months ended September 30, 2015 . On October 15, 2013, we completed the sale of the Memorex consumer electronics business for $9.3 million of total consideration. We received payments of $1.5 million during the nine months ended September 30, 2015 , $1.9 million during 2014 and $0.9 million during 2013. The remaining receivable balance associated with the disposition of this business is recorded at an estimated fair value of $4.4 million as of September 30, 2015. Based on all the evidence available to us, including the payments received to date, we believe the remaining receivable to be collectible and have not provided an allowance. However, the collectability of this amount is not certain and it is reasonably possible that an allowance for a portion of this amount may be provided for in a future period. There were no results for discontinued operations for the Memorex consumer electronics business for the three and nine months ended September 30, 2015 . The operating results for these businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations for all periods presented and reflect revenues and expenses that are directly attributable to these businesses that were eliminated from our ongoing operations. The key components of the results of discontinued operations were as follows: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2015 2014 2015 2014 Net revenue $ — $ — $ — $ 0.5 Loss on sale of discontinued businesses, before income taxes — — — (1.7 ) Loss from operations of discontinued businesses, before income taxes — — — (0.6 ) Income tax provision (benefit) — — — — Loss from discontinued operations, net of income taxes $ — $ — $ — $ (2.3 ) |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 9 Months Ended |
Sep. 30, 2015 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Balance Sheet Information | Supplemental Balance Sheet Information Additional supplemental balance sheet information is provided as follows: September 30, December 31, (In millions) 2015 2014 Accounts Receivable: Accounts receivable $ 78.7 $ 143.5 Less reserves and allowances (1) (14.7 ) (9.1 ) Accounts receivable, net $ 64.0 $ 134.4 Inventories: Finished goods $ 33.2 $ 51.1 Work in process 0.7 0.7 Raw materials and supplies 8.1 5.9 Total inventories $ 42.0 $ 57.7 Property, Plant and Equipment: Property, plant and equipment $ 14.9 $ 184.0 Less accumulated depreciation (9.6 ) (139.0 ) Property, plant and equipment, net (2) $ 5.3 $ 45.0 (1) Accounts receivable reserves and allowances include estimated amounts for customer returns, discounts on payment terms and uncollectible accounts. (2) During the third quarter of 2015, we classified our corporate headquarters facility as an asset held for sale. The amounts transferred out of property, plant and equipment and accumulated depreciation as of September 30, 2015, was $125.5 million and $93.5 million , respectively. The carrying value of $32.0 million was subsequently written down to $10.4 million , which is its estimated fair value based on negotiations with a third party with interest in purchasing our corporate headquarters and is reported in other current assets on our Condensed Consolidated Balance Sheet as of September 30, 2015. See Note 7 - Restructuring and Other Expense for further information on the facility write down. Other current liabilities (included as a separate line in our Condensed Consolidated Balance Sheets) includes rebates payable of $20.4 million and $26.9 million and accrued payroll of $13.0 million and $18.4 million as of September 30, 2015 and December 31, 2014 , respectively. Other liabilities (included as a separate line in our Condensed Consolidated Balance Sheets) includes pension liabilities of $24.3 million and $22.5 million as of September 30, 2015 and December 31, 2014 , respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible Assets Intangible assets consist of the following: (In millions) Trade Names Software Customer Relationships Other Total September 30, 2015 Cost $ 14.9 $ 2.0 $ — $ 2.3 $ 19.2 Accumulated amortization (4.2 ) (2.0 ) — (2.3 ) (8.5 ) Intangible assets, net $ 10.7 $ — $ — $ — $ 10.7 December 31, 2014 Cost $ 34.2 $ 60.1 $ 20.0 $ 26.2 $ 140.5 Accumulated amortization (14.0 ) (55.3 ) (3.7 ) (9.6 ) (82.6 ) Intangible assets, net $ 20.2 $ 4.8 $ 16.3 $ 16.6 $ 57.9 Amortization expense for intangible assets consisted of the following: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2015 2014 2015 2014 Amortization expense $ 3.0 $ 3.2 $ 9.4 $ 9.6 Estimated amortization expense for the remainder of 2015 and each of the next four years is as follows: (In millions) 2015 2016 2017 2018 2019 Amortization expense (1) $ 0.2 $ 0.9 $ 0.9 $ 0.9 $ 0.9 (1) The estimated amortization expense excludes amortization on intellectual property for license agreements with TDK Corporation (TDK) as the license agreements will terminate during the fourth quarter of 2015. See Note 17 - Subsequent Events for further information on the TDK agreement. During the third quarter of 2015, management and the Board of Directors have engaged in a detailed strategic and financial assessment of the Company. As a result of this assessment, we significantly revised our previous business strategy by adjusting our product portfolio to a smaller product offering as well as changing our investment philosophy such that the investment in operating expenses will be significantly reduced. Because of our strategy change, smaller product portfolio and reduced future investment, we revised our forecasts, which we determined to be a triggering event for impairment testing. This required the assessment of the recoverability of the long-lived assets (including definite-lived intangible assets). We compared the carrying value of our asset groups with their estimated undiscounted future cash flows and determined that the carrying value of certain asset groups exceeded the undiscounted cash flows expected to be generated by the asset group. For those asset groups, we then compared the carrying value of the asset group to its estimated fair value to determine the amount by which our long-lived assets (primarily intangible assets) with the asset group were impaired. As a result of these analyses, we recorded an impairment charge of $37.6 million in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2015. In determining the estimated fair value of the asset groups, we used the income approach, a valuation technique under which we estimate future cash flows using the asset group's financial forecasts. Our expected cash flows are affected by various significant assumptions, including the discount rate, revenue, gross margin and EBITA (earnings before interest, taxes and amortization) expectations and the terminal value growth rate. Our analysis utilized discounted forecasted cash flows over a 10 years period with an estimation of residual growth rates thereafter. We use our business plans and projections as the basis for expected future cash flows. The assumptions included utilized discount rates ranging from 15.5 to 16.5 percent and terminal growth rates ranging from zero to 3.0 percent. Goodwill 2015 The goodwill balance was $36.1 million as of December 31, 2014. The goodwill is solely contained within our Storage and Security Solutions reporting units. We test the carrying amount of a reporting unit's goodwill for impairment on an annual basis during the fourth quarter of each year and during an interim period if an event occurs or circumstances change that would warrant impairment testing. During the third quarter of 2015, management and the Board of Directors have engaged in an assessment of the Storage and Security Solutions businesses of the Company. As a result of this assessment, we significantly revised our previous business strategy by adjusting our product portfolio to a smaller product offering as well as changing our investment philosophy associated with these businesses such that the investment in operating expenses will be significantly reduced. Because of our strategy change, smaller product portfolio and reduced future investment, we revised our forecasts, which we determined to be a triggering event requiring us to review our goodwill related to Storage and Security Solutions for impairment. In determining the estimated fair value of the reporting units, we used the income approach, a valuation technique under which we estimate future cash flows using the reporting unit's financial forecasts. Our expected cash flows are affected by various significant assumptions, including the discount rate, revenue, gross margin and EBITA (earnings before interest, taxes and amortization) expectations and the terminal value growth rate. Our analysis utilized discounted forecasted cash flows over a 10 years period with an estimation of residual growth rates thereafter. We use our business plans and projections as the basis for expected future cash flows. The assumptions included utilized discount rates ranging from 15.5 to 16.5 percent and terminal growth rates ranging from zero to 3.0 percent. As a result of this assessment, it was determined that the carrying value of our Storage and Security Solutions reporting units exceeded its estimated fair value. Accordingly, we performed a Step 2 goodwill impairment test which compared the implied value of the goodwill associated with Storage and Security Solutions to the carrying value of such goodwill. Based on this analysis, the carrying value of the Storage and Security Solutions goodwill exceeded its implied value by $36.1 million and, consequently, we recorded an impairment charge of that amount in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2015. After the impairment charge, we do not have any remaining goodwill on our balance sheet as of September 30, 2015. 2014 For our Storage Solutions reporting unit, our actual results for the three months ended September 30, 2014 were lower than planned. Because of our lower than anticipated results for Storage Solutions, we revised our forecast, which we determined to be a triggering event requiring us to review our goodwill related to Storage Solutions for impairment. In determining the estimated fair value of the reporting unit, we used the income approach, a valuation technique under which we estimate future cash flows using the reporting unit's financial forecasts. Our expected cash flows are affected by various significant assumptions, including the discount rate, revenue, gross margin and EBITA (earnings before interest, taxes and amortization) expectations and the terminal value growth rate. Our analysis utilized discounted forecasted cash flows over a 10 years period with an estimation of residual growth rates thereafter. We use our business plans and projections as the basis for expected future cash flows. The assumptions included utilized a discount rate of 16.5 percent and a terminal growth rate of 3.0 percent . Because our Storage Solutions business had not yet been able to achieve its anticipated results, we increased our discount rate by 2.0 percent over the estimated market discount rate of 14.5 percent . As a result of this assessment, it was determined that the carrying value of our Storage Solutions reporting unit exceeded its estimated fair value. Accordingly, we performed a Step 2 goodwill impairment test which compared the implied value of the goodwill associated with Storage Solutions to the carrying value of such goodwill. Based on this analysis, the carrying value of the Storage Solutions goodwill exceeded its implied value by $35.4 million and, consequently, we recorded an impairment charge of that amount in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2014. |
Restructuring and Other Expense
Restructuring and Other Expense | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Expense | Restructuring and Other Expense The components of our restructuring and other expense included in the Condensed Consolidated Statements of Operations were as follows: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2015 2014 2015 2014 Restructuring Expense: Severance and related $ 17.5 $ 0.8 $ 18.4 $ 3.6 Lease termination costs — 0.2 — 0.3 Other 0.2 0.3 0.6 1.2 Total restructuring $ 17.7 $ 1.3 $ 19.0 $ 5.1 Other Expense: Pension settlement/curtailment (Note 9) 1.0 0.2 1.0 0.1 Settlement of UK pension plan — 0.5 — 0.5 Asset disposals / write down (1) 25.1 — 25.1 — Other (2) (3.6 ) 2.2 (2.2 ) 5.8 Total $ 40.2 $ 4.2 $ 42.9 $ 11.5 (1) The $25.1 million of asset disposals / asset write down primarily consists of a write down of our corporate headquarters facility. During the third quarter of 2015, based on the Board of Director's and management's decision to sell this facility in light of the other restructuring activities that were approved in September 2015, we classified our corporate headquarters facility as an asset held for sale. The carrying value of our corporate headquarters facility of $32.0 million was subsequently written down to $10.4 million which is its estimated fair value based on negotiations with a third party with interest in purchasing our corporate headquarters. The $21.6 million write down was charged to restructuring and other expense in the Condensed Consolidated Statement of Operations. (2) For the three and nine months ended September 30, 2015, other consists of a gain on the sale of our RDX TM Storage product line which was partially offset by direct third-party costs associated with our proxy contest and strategic review process. On August 13, 2015, the Company sold its RDX Storage business and recognized a $4.8 million gain in restructuring and other expense in the Condensed Consolidated Statement of Operations. For the three and nine months ended September 30, 2014, other consists of consulting fees and certain employee costs. See Note 12 - Fair Value Measurements for further information on the RDX transaction. Restructuring Plan On September 27, 2015, the Company adopted a restructuring plan pursuant to which it will terminate certain sales and operations of its worldwide Storage Media (magnetic tape) business, terminate certain sales and operations of its worldwide Consumer Storage and Accessories (CSA) business, and further reduce and rationalize its corporate overhead (the Restructuring Plan). As of September 30, 2015, the Company and its Board of Directors had not yet determined that it will restructure its Storage Media and CSA operations in Europe. The Company is currently in the process of negotiations with the European works councils to determine if such a restructuring in Europe would be approved by various European labor laws. Accordingly, no employee severance charges have been incurred associated with the Company's European operations, but it is reasonably possible that severance charges, which could be material, will be incurred in the future pending the outcome of the negotiations. The Company will continue its Nexsan TM and Mobile Security businesses. The Company is entering into the Restructuring Plan as a result of continued losses due to secular declines in its legacy Storage Media and CSA businesses and to reduce the cost structure and streamline the organization in light of these changes. The Company expects that it will incur approximately $140 to $160 million in total charges for the Restructuring Plan and will substantially complete the plan during the first quarter of 2016 with most charges incurred in the third and fourth quarters of 2015. Approximately $30 to $40 million of the total charges will require cash expenditures. In October 2012, the Board of Directors approved our Global Process Improvement (GPI) Program in order to realign our business structure and significantly reduce operating expense over time. This restructuring program addressed product line rationalization and infrastructure and included a planned reduction in our global workforce. The GPI restructuring program is closed and current and future related charges will be reported as part of the Restructuring Plan. During the third quarter of 2015, we incurred $113.9 million of costs under the Restructuring Plan. These costs included $73.7 of impairments and $40.2 million of restructuring and other. See Note 6 - Intangible Assets and Goodwill for further information on the impairments. Activity related to the new and existing restructuring accruals was as follows: (In millions) Severance and Related Lease Termination Costs Other Total Accrued balance at December 31, 2014 0.8 0.3 0.2 1.3 Charges 0.5 — 0.3 0.8 Usage and payments (0.7 ) (0.1 ) (0.2 ) (1.0 ) Accrued balance at March 31, 2015 0.6 0.2 0.3 1.1 Charges 0.4 — 0.1 0.5 Usage and payments (0.4 ) (0.2 ) (0.1 ) (0.7 ) Accrued balance at June 30, 2015 0.6 — 0.3 0.9 Charges 17.5 — 0.2 17.7 Usage and payments (4.7 ) — (0.2 ) (4.9 ) Accrued balance at September 30, 2015 13.4 — 0.3 13.7 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation consisted of the following: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2015 2014 2015 2014 Stock-based compensation expense $ 0.3 $ 1.1 $ 1.7 $ 4.1 We have stock-based compensation awards consisting of stock options, restricted stock and stock appreciation rights under four plans (collectively, the Stock Plans) which are described in detail in our 2014 Annual Report on Form 10-K. As of September 30, 2015 , there were 2,063,929 shares available for grant under the 2011 Incentive Plan. No further shares were available for grant under any other stock incentive plan. Stock Options The following table summarizes our stock option activity: Stock Options Weighted Average Exercise Price Outstanding December 31, 2014 3,897,986 $ 13.07 Granted 24,547 3.94 Exercised (20,000 ) 3.84 Canceled (341,498 ) 24.84 Forfeited (47,307 ) 7.08 Outstanding September 30, 2015 3,513,728 $ 12.00 Exercisable as of September 30, 2015 3,323,969 $ 12.46 The outstanding options are non-qualified and generally have a term of ten years . The following table summarizes our weighted average assumptions used in the valuation of stock options: Nine Months Ended September 30, 2015 2014 Volatility 46.2 % 46.2 % Risk-free interest rate 1.9 % 1.9 % Expected life (months) 73 73 Dividend yield — — As of September 30, 2015 , there was $0.1 million of total unrecognized compensation expense related to non-vested stock options granted under our Stock Plans. That expense is expected to be recognized over a weighted average period of 1.2 years. Restricted Stock The following table summarizes our restricted stock activity: Restricted Stock Weighted Average Grant Date Fair Value Per Share Nonvested as of December 31, 2014 1,348,917 $ 3.81 Granted 862,706 3.97 Vested (850,077 ) 3.91 Forfeited (931,962 ) 3.82 Nonvested as of September 30, 2015 429,584 $ 3.90 The cost of the awards is determined using the fair value of the Company’s common stock on the date of the grant, and compensation is recognized on a straight-line basis over the requisite vesting period. Effective May 22, 2015, a “Change of Control” occurred under the terms of the Company’s Amended and Restated Severance and Change in Control Agreements and certain incentive award agreements with its executives as a result of the election of three new directors to the Company’s Board of Directors by shareholders at the shareholder meeting on May 20, 2015 (the "May 2015 Change of Control Event"). Upon a change of control, under the terms of the agreements with these executives, the performance-based restricted shares are converted into a right to receive cash, and a portion of such awards vest immediately and are settled in cash. As a result, 225,347 restricted shares covered by such at the time of the May 2015 Change of Control Event vested immediately, and a cash payment of $1.0 million was made to settle such awards. The remaining portion of such awards will only vest and be settled in cash if the executive is involuntarily terminated other than for Cause (as defined in the Agreement) or resigns for Good Reason (as defined in the agreement) within one year of the May 2015 Change of Control Event. The 866,820 restricted shares that were converted into the right to receive cash upon the May 2015 Change of Control Event were treated as forfeited and recorded as treasury shares. The only situation in which the performance-based restricted shares can be settled in cash is pursuant to a change of control. As of September 30, 2015 , there was $0.9 million of total unrecognized compensation expense related to non-vested restricted stock granted under our Stock Plans. That expense is expected to be recognized over a weighted average period of 1.5 years. Stock Appreciation Rights During the nine months ended September 30, 2015 , we granted 2.7 million Stock Appreciation Rights (SARs) to certain employees associated with our Storage Solutions and Mobile Security operations. These awards were issued to incentivize employees to grow revenues. These awards expire on December 31, 2017 and only vest when both stock price and revenue performance conditions specified by the terms of the SARs are met. Additionally, under the terms of the 2015 SARs, any cash payments to an individual under a 2015 vested SAR would reduce any cash payment received under any earlier SAR grant pertaining to that individual, if and when such earlier SAR vests. For the stock price condition, based on the terms of the awards, 50 percent of the SARs could vest if the 30 -day average Imation stock price reaches $8 per share or more by December 31, 2017 and the remaining 50 percent of the SARs could vest if the 30 -day average Imation stock price reaches $12 per share or more by December 31, 2017. Additionally, for the revenue performance condition, as a condition necessary for vesting, the net revenue of Storage Solutions or Mobile Security (depending on the award) must reach certain specified stretch targets by December 31, 2017. If exercised, the SARs require a cash payment to the holder in an amount based on the Imation stock price at the date of exercise as compared to the stock price at the date of grant. As of September 30, 2015 , we had 4.7 million SARs outstanding for which we have not recorded any related compensation expense based on the applicable accounting rules. We will continue to assess these SARs each quarter to determine if any expense should be recorded. |
Retirement Plans
Retirement Plans | 9 Months Ended |
Sep. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Plans | Retirement Plans Pension Plans During the three and nine months ended September 30, 2015 , we contributed $0.6 million and $1.2 million to our worldwide pension plans, respectively. We presently anticipate contributing up to $0.1 million to fund our worldwide pension plans during the remainder of 2015 . In connection with actions taken under our announced restructuring programs, the number of employees accumulating benefits under our pension plan in the United States continues to decline. Participants in our U.S. defined benefit pension plan have the option of receiving cash lump sum payments when exiting the plan, which a number of participants exiting the plan have elected to receive. Lump sum payments for the nine months ended September 30, 2015 have exceeded our expected 2015 interest costs. As a result, a partial settlement event occurred during the three and nine months ended September 30, 2015 and we recognized a settlement loss of $1.0 million . A settlement loss of $0.2 million and $0.8 million were recognized for the three and nine months ended September 30, 2014, respectively. These settlement losses are included in restructuring and other in our Condensed Consolidated Statements of Operations. Additionally, in connection with the settlement and as required by pension accounting, we remeasured the funded status of our U.S. defined benefit pension plan as of September 30, 2015 and have adjusted the funded status on our Condensed Consolidated Balance Sheets as of September 30, 2015 accordingly. During the nine months ended September 30, 2014, we recorded a curtailment gain in the amount of $0.7 million relating to our pension plan in Japan. This amount was recorded to restructuring and other in our Condensed Consolidated Statements of Operations. We had a defined benefit pension plan located in the United Kingdom (UK Plan) for former employees with no current employees in the plan. On September 17, 2013, we settled our obligations under the UK Plan by way of a transaction with Pension Insurance Corporation (PIC) whereby PIC fully assumed the projected benefit obligation and underlying plan assets. It is a standard practice in the United Kingdom for a government review process to occur, entailing a review of the plan obligations and participant data, upon a transaction such as this one involving a transfer of a pension plan. During the third quarter of 2014, we had an additional obligation of $0.5 million associated with a true-up of the transaction that we have recorded in restructuring and other in the Condensed Consolidated Statements of Operations during the three and nine months ended September 30, 2014. Components of net periodic pension (credit) cost included the following: United States International United States International Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2015 2014 2015 2014 2015 2014 2015 2014 Service cost $ — $ — $ 0.1 $ 0.1 $ — $ — $ 0.3 $ 0.3 Interest cost 0.8 0.8 0.2 0.4 2.2 2.4 0.4 0.8 Expected return on plan assets (1.1 ) (1.2 ) (0.2 ) (0.3 ) (3.1 ) (3.6 ) (0.6 ) (0.7 ) Amortization of net actuarial loss 0.3 0.3 — 0.1 0.9 0.9 0.2 0.2 Amortization of prior service credit — — — — — — — (0.1 ) Net periodic pension (credit) cost $ — $ (0.1 ) $ 0.1 $ 0.3 $ — $ (0.3 ) $ 0.3 $ 0.5 Settlement loss 1.0 0.2 — — 1.0 0.8 — — Curtailment gain — — — — — — — (0.7 ) Total pension (credit) cost $ 1.0 $ 0.1 $ 0.1 $ 0.3 $ 1.0 $ 0.5 $ 0.3 $ (0.2 ) |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For interim income tax reporting, we are required to estimate our annual effective tax rate and apply it to year-to-date pre-tax income/loss excluding unusual or infrequently occurring discrete items. Tax jurisdictions with losses for which tax benefits cannot be realized are excluded. For the three and nine months ended September 30, 2015 , we recorded income tax expense of $3.6 million and $3.9 million , respectively. For the three and nine months ended September 30, 2014 , we recorded income tax expense of $3.4 million and $1.8 million , respectively. The change in the income tax expense for the three months ended September 30, 2015 compared to the same period last year is primarily related to lower foreign income tax expense compared to last year, offset by a $3.7 million valuation allowance established during the current quarter as a result of the announced Restructuring Plan, which has changed our ability to generate sufficient future taxable income in certain foreign jurisdictions to recover our net deferred tax assets in such locations. The effective income tax rate for the three and nine months ended September 30, 2015 differs from the U.S. federal statutory rate of 35 percent primarily due to a valuation allowance on various deferred tax assets and the effects of foreign tax rate differential. As disclosed previously, as of September 30, 2015 the Company had not yet determined that it will be restructuring its European operations, pending the outcome of negotiations with European works councils and, accordingly, we have not provided valuation allowances associated with tax jurisdictions within Europe. However, it is reasonably possible that valuation allowances may be necessary in future periods if we reach agreement to restructure our European operations. The total net deferred tax assets as of September 30, 2015 associated with European jurisdictions is approximately $6.0 million . We conduct business globally. As a result, we file income tax returns in multiple jurisdictions and are subject to review by various U.S and foreign taxing authorities. Our U.S. federal income tax returns for 2011 through 2013 are subject to examination by the Internal Revenue Service. With few exceptions, we are no longer subject to examination by foreign tax jurisdictions or state and local tax jurisdictions for years before 2008. In the event that we have determined not to file tax returns with a particular state or city, all years remain subject to examination by the tax jurisdiction. We accrue for the effects of uncertain tax positions and the related potential penalties and interest. Our liability related to uncertain tax positions, which is presented in other liabilities on our Condensed Consolidated Balance Sheets and which includes interest and penalties and excludes certain unrecognized tax benefits that have been netted against deferred tax assets, was $1.6 million and $1.9 million as of September 30, 2015 and December 31, 2014 , respectively. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of our unrecognized tax positions will increase or decrease during the next twelve months; however it is not possible to reasonably estimate the effect at this time. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Debt As of September 30, 2015 , we had short-term borrowings of $18.0 million with interest rates ranging from 0.9 percent to 2.7 percent . The borrowings were primarily from our credit agreements with various banks in the United States, Europe and Japan. As of September 30, 2015 , our remaining borrowing capacity under all credit agreements, after consideration of amounts outstanding, was $12.6 million . We are in compliance with our covenant requirements as of September 30, 2015 except for covenants related to our Japan Credit Agreement. See Note 17 - Subsequent Events for further information on our Japan Credit Agreement. As of September 30, 2015, we maintained a credit agreement entered into in 2006 as amended (the Credit Agreement) and a credit agreement entered into in 2013 with a lender in Japan (the Japan Credit Agreement). Both credit agreements are described in Note 11 - Debt of our Annual Report on Form 10-K for the year ended December 31, 2014. In order to reduce borrowing costs, the maximum amount of borrowings under the Credit Agreement was reduced at the Company's request from $170 million to $100 million on May 28, 2015. The new limit does not impact our borrowing capacity as our borrowing availability under the Credit Agreement is under $100 million . The new sublimits are $80 million in the United States and $20 million in Europe. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Trading Securities On August 13, 2015 the Company entered into an agreement to sell its RDX™ Storage product line, including $1.5 million of associated inventory, to Sphere 3D for approximately $6 million of value. Under terms of the agreement, Imation received approximately 1.5 million shares of Sphere 3D common stock which resulted in a gain of $4.8 million for the three and nine months ended September 30, 2015. The consideration received is subject to certain adjustments if the market value of the Sphere 3D shares change in value. For the three and nine months ended September 30, 2015 the Company recorded a $0.3 million loss on the value of the 1.5 million Sphere 3D shares held. The loss was recorded in other (income) expense in the Condensed Consolidated Statement of Operations as the investments are classified as trading securities under applicable accounting criteria. The estimated fair value of the shares held is $3.3 million and is included in other current assets in our Condensed Consolidated Balance Sheet as of September 30, 2015. Derivative Financial Instruments Cash Flow Hedges We attempt to substantially mitigate the risk that forecasted cash flows denominated in foreign currencies may be adversely affected by changes in the currency exchange rates through the use of option, forward and combination option contracts. Gains and losses related to cash flow hedges are deferred in accumulated other comprehensive loss with a corresponding asset or liability. When the hedged transaction occurs, the gains and losses in accumulated other comprehensive loss are reclassified into the Condensed Consolidated Statements of Operations in the same line as the item being hedged. The following table sets forth our cash flow hedges which are measured at fair value on a recurring basis. September 30, 2015 December 31, 2014 (In millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Derivative assets: Foreign currency forward contracts — 0.1 — — 7.3 — Derivative liabilities: Foreign currency forward contracts — (0.8 ) — — — — Total net derivative (liabilities) assets $ — $ (0.7 ) $ — $ — $ 7.3 $ — Other Derivative Instruments We use foreign currency forward contracts to manage the foreign currency exposure related to our monetary assets and liabilities denominated in foreign currencies. We record the estimated fair value of these forward contracts in other current assets or other current liabilities on our Condensed Consolidated Balance Sheets and, because we do not receive hedge accounting for these derivatives, changes in their value are recognized every reporting period in the Condensed Consolidated Statements of Operations. For the three months ended September 30, 2015 and 2014 , we recorded net foreign currency gains of $0.9 million and losses of $1.5 million , respectively, in other (income) expense in the Condensed Consolidated Statements of Operations. These results reflect changes in foreign exchange rates on foreign denominated assets and liabilities and are net of losses of $0.5 million and $0.7 million from the related foreign currency forward contracts for the three months ended September 30, 2015 and 2014 , respectively. For the nine months ended September 30, 2015 and 2014 , we recorded net foreign currency losses of $0.3 million and $1.9 million , respectively, in other (income) expense in the Condensed Consolidated Statements of Operations. These net losses reflect changes in foreign exchange rates on foreign denominated assets and liabilities and are net of losses of $0.3 million and $1.1 million from the related foreign currency forward contracts for the nine months ended September 30, 2015 and 2014 , respectively. The notional amounts and fair values of our derivative instruments recorded in other current assets and other current liabilities in the Condensed Consolidated Balance Sheets were as follows: September 30, 2015 December 31, 2014 Fair Value Fair Value (In millions) Notional Amount Other Current Assets Other Current Liabilities Notional Amount Other Current Assets Other Current Liabilities Cash flow hedges designated as hedging instruments $ 24.0 $ 0.1 $ (0.8 ) $ 86.7 $ 7.3 $ — Other hedges not receiving hedge accounting 1.1 — — 23.4 — — Total $ 25.1 $ 0.1 $ (0.8 ) $ 110.1 $ 7.3 $ — |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity Treasury Stock On May 2, 2012, our Board of Directors authorized a share repurchase program that allowed for the repurchase of 5.0 million shares of common stock, replacing our previous authorization. We did not repurchase any shares during the three months ended September 30, 2015 . For the nine months ended September 30, 2015, we repurchased 0.4 million shares of common stock for $1.7 million . Since the authorization of this program, we have repurchased 3.0 million shares of common stock for $13.3 million and, as of September 30, 2015 , we had remaining authorization to repurchase up to 2.0 million additional shares. The treasury stock held as of September 30, 2015 was acquired at an average price of $12.74 per share. Following is a summary of treasury share activity: Treasury Shares Balance as of December 31, 2014 627,796 Purchases 382,448 Exercise of stock options (12,656 ) Restricted stock grants (690,662 ) Forfeitures and other 931,058 Balance as of September 30, 2015 1,237,984 Accumulated Other Comprehensive Loss Accumulated other comprehensive loss and related activity consisted of the following: (In millions) Gains (Losses) on Derivative Financial Instruments Defined Benefit Plans Foreign Currency Translation Total Balance as of December 31, 2014 $ 5.1 $ (20.6 ) $ (69.3 ) $ (84.8 ) Other comprehensive income (loss) before reclassifications, net of tax (1) 0.9 (4.4 ) (6.6 ) (10.1 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax (6.7 ) 1.8 — (4.9 ) Net current period other comprehensive (loss) income (5.8 ) (2.6 ) (6.6 ) (15.0 ) Balance as of September 30, 2015 $ (0.7 ) $ (23.2 ) $ (75.9 ) $ (99.8 ) (1) Income tax benefit of $0.9 million was recorded for unrealized gains on derivative financial instruments for the nine months ended September 30, 2015 . The Company's Restructuring Plan will terminate certain sales and operations of its worldwide Storage Media and CSA businesses. See Note 7 - Restructuring and Other Expense for further information on the Company's Restructuring Plan. U.S. GAAP requires accumulated foreign currency translation balances to be reclassified into the Consolidated Statement of Operations once the liquidation of the net assets of a foreign entity is substantially complete. As of September 30, 2015, the Company had $75.9 million of accumulated foreign currency translation losses in other comprehensive loss for which significant balances could be reclassified into the Consolidated Statement of Operations in the future. Details of amounts reclassified from accumulated other comprehensive loss and the line item in the Condensed Consolidated Statement of Operations are as follows: Amounts Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Consolidated Statement of Operations Where (Gain) Loss is Presented Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2015 2014 2015 2014 Gains on cash flow hedges (0.8 ) (1.2 ) (6.1 ) (2.0 ) Cost of goods sold Income tax expense (2.3 ) 0.5 (0.6 ) 0.8 Income tax provision (3.1 ) (0.7 ) (6.7 ) (1.2 ) Amortization of net actuarial loss 0.3 0.3 0.7 0.7 Selling, general and administrative Net pension curtailment/settlement loss 1.0 0.2 1.0 0.2 Restructuring and other Income tax benefit 0.2 — 0.1 0.2 Income tax provision 1.5 0.5 1.8 1.1 Total reclassifications for the period (1.6 ) (0.2 ) (4.9 ) (0.1 ) 382 Rights Agreement On August 6, 2015, the Board of Directors adopted a rights plan intended to avoid an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the Code), and thereby preserve the current ability of the Company to utilize certain net operating loss carryovers and other tax benefits of the Company and its subsidiaries (the Tax Benefits). If the Company experiences an “ownership change,” as defined in Section 382 of Code, the Company’s ability to fully utilize the Tax Benefits on an annual basis will be substantially limited, and the timing of the usage of the Tax Benefits and such other benefits could be substantially delayed, which could therefore significantly impair the value of those assets. The rights plan is intended to act as a deterrent to any person or group acquiring “beneficial ownership” of 4.9% or more of the Company’s outstanding shares of common stock, without the approval of the Board. The description and terms of the Rights (as defined below) applicable to the rights plan are set forth in the 382 Rights Agreement, dated as of August 7, 2015 (the Rights Agreement), by and between the Company and Wells Fargo Bank, N.A., as Rights Agent. As part of the Rights Agreement, the Board authorized and declared a dividend distribution of one right (a Right) for each outstanding share of the Company’s common stock, to stockholders of record at the close of business on September 10, 2015. Each Right entitles the holder to purchase from the Company a unit consisting of one one-hundredth of a share (a Unit) of Series A Participating Preferred Stock, par value $0.01 per share, of the Company (the Preferred Stock) at a purchase price of $15.00 per Unit, subject to adjustment (the Purchase Price). Until a Right is exercised, the holder thereof, as such, will have no separate rights as a stockholder of the Company, including the right to vote or to receive dividends in respect of Rights. Under the Rights Agreement, an Acquiring Person is any person or group of affiliated or associated persons (a Person) who is or becomes the beneficial owner of 4.9% or more of the outstanding shares of the Company’s common stock other than as a result of repurchases of stock by the Company, dividends or distribution by the Company, stock issued under certain benefit plans or certain inadvertent actions by stockholders. For purposes of calculating percentage ownership under the Rights Agreement, outstanding shares of the Company’s common stock include all of the shares of common stock actually issued and outstanding. Beneficial ownership is determined as provided in the Rights Agreement and generally includes, without limitation, any ownership of securities a Person would be deemed to actually or constructively own for purposes of Section 382 of the Code or the Treasury Regulations promulgated thereunder. The Rights Agreement provides that the following shall not be deemed an Acquiring Person for purposes of the Rights Agreement: (i) the Company or any subsidiary of the Company and any employee benefit plan of the Company, or of any subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan or (ii) any Person that, as of August 7, 2015, is the beneficial owner of 4.9% or more of the shares of Common Stock outstanding (such Person, an Existing Holder) unless and until such Existing Holder acquires beneficial ownership of additional shares of common stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding shares of common stock or pursuant to a split or subdivision of the outstanding shares of common stock) in an amount in excess of 0.5% of the outstanding shares of common stock. The Rights Agreement provides that a Person shall not become an Acquiring Person for purpose of the Rights Agreement in a transaction that the Board determines is exempt from the Rights Agreement, which determination shall be made in the sole and absolute discretion of the Board, upon request by any Person prior to the date upon which such Person would otherwise become an Acquiring Person, including, without limitation, if the Board determines that (i) neither the beneficial ownership of shares of common stock by such Person, directly or indirectly, as a result of such transaction nor any other aspect of such transaction would jeopardize or endanger the availability to the Company of the Tax Benefits or (ii) such transaction is otherwise in the best interests of the Company. Initially, the Rights will not be exercisable and will be attached to all common stock representing shares then outstanding, and no separate Rights certificates will be distributed. Subject to certain exceptions specified in the Rights Agreement, the Rights will separate from the common stock and become exercisable and a distribution date (a Distribution Date) will occur upon the earlier of (i) 10 business days (or such later date as the Board shall determine) following a public announcement that a Person has become an Acquiring Person or (ii) 10 business days (or such later date as the Board shall determine) following the commencement of a tender offer, exchange offer or other transaction that, upon consummation thereof, would result in a Person becoming an Acquiring Person. Until the Distribution Date, common stock held in book-entry form, or in the case of certificated shares, common stock certificates, will evidence the Rights and will contain a notation to that effect. Any transfer of shares of common stock prior to the Distribution Date will constitute a transfer of the associated Rights. After the Distribution Date, the Rights may be transferred on the books and records of the Rights Agent as provided in the Rights Agreement. If on or after the Distribution Date, a Person is or becomes an Acquiring Person, each holder of a Right, other than certain Rights including those beneficially owned by the Acquiring Person (which will have become void), will have the right to receive upon exercise common stock (or, in certain circumstances, cash, property or other securities of the Company) having a value equal to two times the Purchase Price. In the event that, at any time following the first date of a public announcement that a Person has become an Acquiring Person or that discloses information which reveals the existence of an Acquiring Person or such earlier date as a majority of the Board becomes aware of the existence of an Acquiring Person (any such date, the Stock Acquisition Date), (i) the Company engages in a merger or other business combination transaction in which the Company is not the surviving corporation, (ii) the Company engages in a merger or other business combination transaction in which the Company is the surviving corporation and the common stock of the Company is changed or exchanged or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold or transferred, each holder of a Right (except Rights which have previously been voided as set forth above) shall thereafter have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the Purchase Price. At any time following the Stock Acquisition Date and prior to the acquisition by the Acquiring Person of 50% or more of the outstanding common stock, the Board may exchange the Rights (other than Rights owned by such Person which have become void), in whole or in part, for common stock or Preferred Stock at an exchange ratio of one share of common stock, or one one-hundredth of a share of Preferred Stock (or of a share of a class or series of the Company’s preferred stock having equivalent rights, preferences and privileges), per Right, subject to adjustment. The Rights and the Rights Agreement will expire on the earliest of (i) 5:00 P.M. New York City time on August 7, 2018, (ii) the time at which the Rights are redeemed or exchanged pursuant to the Rights Agreement, (iii) the date on which the Board determines that the Rights Agreement is no longer necessary for the preservation of material valuable Tax Benefits or is no longer in the best interest of the Company and its stockholders, (iv) the beginning of a taxable year to which the Board determines that no Tax Benefits may be carried forward and (v) the first anniversary of the adoption of the Agreement if stockholder approval has not been received by or on such date. At any time until the earlier of the Distribution Date or the expiration date of the Rights, the Company may redeem the Rights in whole, but not in part, at a price of $0.001 per Right. Immediately upon the action of the Board ordering redemption of the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the $0.001 redemption price. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We manage our business through two reporting segments, Consumer Storage and Accessories (CSA) and Tiered Storage and Security Solutions (TSS). Our reporting segments are generally aligned with our key consumer and commercial channels. On September 27, 2015, the Company adopted a restructuring plan that will significantly change the business and operations of our segments. See Note 7 - Restructuring and Other Expense for further information. We have two major product categories under our CSA segment: Consumer Storage Media and Audio and Accessories. Consumer Storage Media products include primarily optical products such as DVDs, CDs and Blu-ray TM disc recordable media as well as flash media. Audio and Accessories includes primarily headphones, audio electronics and accessories. Consumer storage media and audio products and accessories are sold under the Imation TM , Memorex TM , TREK TM and TDK Life on Record brands. We have two major product categories under our TSS segment: Commercial Storage Media and Storage and Security Solutions. Commercial Storage Media products consist mainly of magnetic data storage tape media and RDX ® media. Storage and Security Solutions includes storage hardware products, services and software for backup and archiving as well as primary storage; encrypted and biometric flash drives and hard disk drives; secure portable desktop solutions; and software solutions, including products which contain various security features such as password authentication, encryption and remote manageability. Imation’s storage and security solutions portfolio includes Nexsan TM hybrid storage solutions and IronKey TM mobile security solutions that address the needs of professionals for storage and archiving, secure data transport and mobile workspaces. We evaluate segment performance based on revenue and operating income (loss). The operating income (loss) reported in our segments excludes corporate and other unallocated amounts. Although such amounts are excluded from the business segment results, they are included in reported consolidated results. Corporate and unallocated amounts may include depreciation and amortization, litigation settlement expense, goodwill impairment, intangible impairments, corporate expense, inventory write-offs related to our restructuring programs and restructuring and other expenses which are not allocated to the segments. The operating results of our former XtremeMac and Memorex consumer electronics businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations and are not included in segment results for all periods presented. See Note 4 - Discontinued Operations for further information on these divestitures. Net revenue and operating income (loss) from continuing operations by segment were as follows: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2015 2014 2015 2014 Net revenue Consumer Storage and Accessories: Consumer Storage Media $ 59.0 $ 79.4 $ 191.6 $ 253.4 Audio and Accessories 8.8 12.6 27.7 33.7 Total Consumer Storage and Accessories 67.8 92.0 219.3 287.1 Tiered Storage and Security Solutions: Commercial Storage Media 36.6 54.3 129.8 159.7 Storage and Security Solutions 24.8 28.7 86.1 85.7 Total Tiered Storage and Security Solutions 61.4 83.0 215.9 245.4 Total net revenue $ 129.2 $ 175.0 $ 435.2 $ 532.5 Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2015 2014 2015 2014 Operating income (loss) from continuing operations Consumer Storage and Accessories $ (15.8 ) $ 5.4 $ (11.2 ) $ 12.7 Tiered Storage and Security Solutions (10.1 ) (8.1 ) (22.8 ) (25.4 ) Total segment operating loss (25.9 ) (2.7 ) (34.0 ) (12.7 ) Corporate and unallocated (122.8 ) (53.1 ) (143.6 ) (79.3 ) Total operating loss (148.7 ) (55.8 ) (177.6 ) (92.0 ) Interest income (0.1 ) (0.1 ) (0.3 ) (0.3 ) Interest expense 0.6 0.7 1.8 1.9 Other, net expense (0.5 ) 1.6 1.1 2.6 Loss from continuing operations before income taxes $ (148.7 ) $ (58.0 ) $ (180.2 ) $ (96.2 ) |
Litigation, Commitments and Con
Litigation, Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation, Commitments and Contingencies | Litigation, Commitments and Contingencies Litigation We are the subject of various pending or threatened legal actions in the ordinary course of our business. All such matters are subject to many uncertainties and outcomes that are not predictable with assurance. Additionally, our businesses are subject to allegations of patent infringement by our competitors as well as by non-practicing entities (NPEs), sometimes referred to as “patent trolls,” who may seek monetary settlements from us, our competitors, suppliers and resellers, including the One-Blue litigation described below. Consequently, as of September 30, 2015 , we are unable to reasonably estimate the ultimate aggregate amount of any monetary liability or financial impact that we may incur with respect to these matters. It is reasonably possible that the ultimate resolution of these matters could materially affect our financial condition, results of operations and cash flows. On May 22, 2013, Imation was sued in U.S. District Court for the District of Delaware by five entities: One-Blue, LLC (One-Blue), which is an entity with licensing authority for a pool of patents relating to Blu-ray discs, and four members of One-Blue, Koninklijke Philips N.V., Panasonic Corporation, Pioneer Corporation and Sony Corporation. The plaintiffs allege that Imation's sales of certain Blu-ray discs infringe six patents and seek unspecified damages, treble damages and attorney's fees. On June 13, 2013, Imation filed an Answer, Affirmative Defenses, and Counterclaims, naming various defenses including that plaintiffs are barred, in whole or in part, from any recovery or relief by their refusal to license the patents-in-suit under fair, reasonable and nondiscriminatory terms. Imation intends to vigorously defend the case. Proceedings in the case have been bifurcated, and a trial limited to the issues presented by Imation’s Counterclaim is scheduled to begin on November 16, 2015. Imation has notified its manufacturers of their indemnity obligations that it believes cover a portion of its liability, if any, to One-Blue and the other plaintiffs. In addition, Imation has a dispute with One-Blue regarding One-Blue's refusal to license its Japanese Blu-ray patents under fair, reasonable and nondiscriminatory terms in Japan, where Imation's sales of Blu-ray discs are substantially greater than in the U.S. Imation Corporation Japan, Imation's Japanese subsidiary, sued One-Blue in Japan regarding its unlawful interference with certain of our customer relationships. On February 18, 2015, the Tokyo District Court rendered a decision in favor of Imation that held One-Blue's sending of warning letters to Imation customers that threatened those customers with certain patent-related actions constituted an illegal "unfair competition practice" and issued a permanent injunction prohibiting One-Blue from sending any such warning letters in the future. One-Blue did not appeal that decision. SpearPoint Capital Fund LP et al. v. Mark E. Lucas, et al. This shareholder derivative action was filed in Delaware Chancery Court on February 9, 2015. It names as defendants the Company and the members of its Board of Directors. Plaintiffs contend that the defendants paid excessive compensation to the directors. They seek damages for breaches of fiduciary duties, waste of corporate assets and unjust enrichment. They also seek corporate governance reforms related to the Company’s compensation practices. The Directors have responded to the complaint denying all the allegations; the Company, as the nominal defendant, has responded denying the allegations as well. The parties are now engaged in discovery. Trial, should it be necessary, has been scheduled for June 2016. Copyright Levies Background and historical developments associated with our copyright levies are discussed in Note 15 - Litigation, Commitments and Contingencies in our Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2014. As of September 30, 2015 and December 31, 2014 , we had accrued liabilities of $5.8 million and $9.3 million , respectively, associated with levies for which we are withholding payment. In the first quarter of 2015, we reversed a $2.8 million accrual for copyright levies on optical products as the result of a favorable German court decision retroactively setting levy rates at a level much lower than the rates sought by the German collecting society. We are subject to several pending or threatened legal actions by the individual European national levy collecting societies in relation to private copyright levies under the Directive. Those actions generally seek payment of the commercial and consumer optical levies withheld by Imation. For example, in the first quarter of 2015, the French levy society, Copie France, filed a new summary proceeding, seeking $8.7 million in withheld levies. Imation believed this claim was without merit, and Copie France voluntarily dismissed the claim in the second quarter of 2015. Imation has corresponding claims in those actions seeking reimbursement of levies improperly collected by those collecting societies. A hearing has been scheduled on December 8, 2016, in the High Court of Justice (Tribunal de Grande Instance de Paris) on Imation’s claim against Copie France for reimbursement of commercial optical levies previously paid by Imation, and Copie France’s counterclaim against Imation seeking payment of withheld levy payments; a decision in that case is not expected until several months after that hearing is completed. We are subject to threatened actions by certain customers of Imation seeking reimbursement of funds they allege relate to commercial levies that they claim they should not have paid. Although these actions are subject to the uncertainties inherent in the litigation process, based on the information presently available to us, management does not expect that the ultimate resolution of these actions will have a material adverse effect on our financial condition, results of operations or cash flows. Additional court decisions may be rendered in 2015 that may directly or indirectly impact our levy exposure in specific European countries which could trigger a review of our levy exposure in those countries. |
Related Party Transaction
Related Party Transaction | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Related Party Transactions | Related Party Transactions Clinton Relational Opportunity Master Fund, L.P. (the "Clinton Group") nominated 3 persons for election to Imation’s Board of Directors (the “Board”) at the Company's Annual Meeting of Shareholders on May 20, 2015. Shareholders elected Clinton Group’s three nominees, Joseph A. De Perio, Robert B. Fernander and Barry L. Kasoff, replacing three incumbent directors who were standing for reelection. Mr. De Perio currently serves as Senior Portfolio Manager of the Clinton Group. During the third quarter of 2015, the Board authorized reimbursement to the Clinton Group for its documented expenses related to proxy contest fees for 2015 for $0.6 million . The fees are recorded in restructuring and other charges for the three months ended September 30, 2015 and are accrued in other current liabilities on our Condensed Consolidated Balance Sheet as of September 30, 2015. On August 17, 2015, Imation entered into a consulting agreement with Mr. Fernander to perform certain services including assisting the Company with a review and assessment of the Nexsan and Mobile Security businesses of the Company, for which he received consulting fees of $25,000 per week, subject to termination by the Company on a one week's notice. For the three months ended September 30, 2015, the Company paid $0.2 million to Mr. Fernander for these services, which is recorded in restructuring and other charges. On September 27, 2015, the Board of Directors appointed Mr. Fernander to serve as Interim Group President, Tiered Storage and Security Solutions, effective September 28, 2015, and terminated the consulting agreement with Mr. Fernander. For his service as Interim Group President, Tiered Storage and Security Solutions, Mr. Fernander received $35,000 per week in salary. Effective October 14, 2015, the Board appointed Mr. Fernander to serve as the Interim Chief Executive Officer of the Company. Pursuant to an employment agreement, Mr. Fernander will serve an initial 1 -year term, receive base compensation of $600,000 and a performance-based restricted stock award of 574,000 shares and receive up to one year's base salary if his employment agreement with the Company is terminated other than for Cause (as define in the employment agreement), or by reason of his death or disability. On August 17, 2015, the Board appointed Mr. Kasoff to serve as Interim President of the Company effective August 19, 2015. Mr. Kasoff received compensation of $35,000 per week for his services as Interim President. Effective October 14, 2015, in connection with the appointment of Mr. Fernander to the position of Interim Chief Executive Officer, the Board appointed Mr. Kasoff as Chief Restructuring Officer at the same level of compensation he received as Interim President. Mr. Kasoff also serves as president of Realization Services, Inc. (RSI), a management consulting firm specializing in assisting companies and capital stakeholders in troubled business environments. Pursuant to a consulting agreement between the Company and RSI dated August 17, 2015 and subsequent amendment, RSI is performing consulting services for the Company for the period from August 8, 2015 up to February 29, 2016, unless terminated earlier by the Company, including assisting the Company with a review and assessment of the Company’s business and the formulation of a business plan to enhance shareholder value going forward. Prior to being appointed as Interim President of the Company, RSI received consulting fees of $85,000 per week from the Company under the terms of the Agreement plus up to an additional $225,000 for enhanced services for the period from August 26, 2015 through September 18, 2015. Effective September 19, 2015, RSI will receive consulting fees up to $125,000 per week for the remaining term of the agreement. For the three months ended September 30, 2015, the Company paid $0.8 million to RSI which is recorded in restructuring and other charges. On August 31, 2015, Imation entered into a consulting agreement with Geoff Barrall, a member of the Board pursuant to which Mr. Barrall will perform certain services including formulating a business plan and budget for the Company which is subject to termination by the Company on a one week's notice. For the three months ended September 30, 2015, the Company paid $0.2 million to Mr. Barrall which is recorded in restructuring and other charges. On October 14, 2015, Imation acquired substantially all of the equity of Connected Data, Inc. (CD) for approximately $7.5 million in cash (subject to adjustment), shares of Imation common stock and repayment of debt. Mr. Barrall is the founder and Chief Executive Officer of CD. In consideration for his CD common shares and options to purchase CD common shares, Mr. Barrall received approximately $184,000 at the time of the acquisition and he will be eligible to receive up to an additional $260,000 to the extent certain CD revenue targets are achieved for the 3 consecutive six-month periods commencing January 1, 2016. The accounting for the CD acquisition will be recorded in the fourth quarter of 2015. See Note 17 - Subsequent Events for further information on the CD acquisition. In connection with the CD acquisition, Imation appointed Mr. Barrall as Imation’s Chief Technology Officer on October 14, 2015 and entered into a related employment agreement on October 27, 2015. The employment agreement provides that Mr. Barrall will receive (i) a base salary of $600,000 per year, (ii) if he remains employed with the Company through December 31, 2015, a retention bonus of $116,732 in cash (which will be forfeited on a pro rata basis if he does not remain employed with the Company through December 31, 2016), and restricted stock units valued at $116,732 (which will vest pro rata on a monthly basis through December 31, 2016), (iii) subject to approval of the Board or the Compensation Committee of the Board, an option to purchase 300,000 shares of Imation common stock, which will vest in equal monthly installments over 36 months of continued employment with the Company and (iv) if his employment with the Company is terminated other than for Cause or by Mr. Barrall for Good Reason (as such terms are defined in the employment agreement), one year’s base salary and, if such termination occurs either thirty days before or one year following a change of control (as defined in the employment agreement) the retention bonus described in clause (ii) above and in the stock options described in clause (iii) above will immediately vest in full. The consulting agreement with Mr. Barrall was terminated on October 12, 2015. TDK owned approximately 18 percent of the Company’s common stock as of September 30, 2015. On September 28, 2015, the Company entered into an agreement with TDK providing for the transfer of 6,675,764 shares of Imation common stock, subject to adjustment, from TDK to Imation, the termination of the Company's license agreement with TDK and the termination of certain rights of TDK under its Investor Rights Agreement with the Company. The TDK shares will be transferred back to the Company during the fourth quarter of 2015 and the corresponding accounting entries will be recorded at that time. See Note 17 - Subsequent Events for further information on the TDK agreement. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 30, 2015, Imation terminated its Japan Credit Agreement entered into on July 16, 2013. At the time of termination, the Company paid down its short-term borrowings of $7.6 million . Additionally, during the fourth quarter of 2015, capitalized costs for the credit facility of $0.1 million will be charged to interest expense. On October 14, 2015, Imation acquired substantially all of the equity of Connected Data, an emerging enterprise-class, private cloud sync and share company, in a transaction valued at $7.5 million at closing. The acquisition of CD augments Imation’s vision in delivering a comprehensive and secure storage, backup and collaboration ecosystem. The Company intends to complete the acquisition of Connected Data through a short-form merger as soon as practicable. The purchase price consists of approximately $0.9 million in cash, 1,511,151 shares of Imation common stock valued at approximately $4.0 million and approximately $2.6 million in repayment of debt. Up to $5.0 million in cash and shares in earn outs are possible based upon Connected Data’s performance through 2016 and the first half of 2017. The accounting for the CD acquisition will take place during the fourth quarter of 2015. See Note 16 - Related Party Transactions for additional information on the CD acquisition. On September 28, 2015, Imation entered into an agreement with TDK providing for the transfer of 6,675,764 shares of Imation common stock, subject to adjustment, from TDK to Imation, the termination of the Company's license agreements with TDK and the termination of certain rights of TDK under its Investor Rights Agreement with the Company. After termination of the rights agreement, Imation will no longer have the right to use the licensed intellectual property except as required through December 31, 2015 to fulfill already existing obligations. TDK will no longer have rights to designate one employee or director of TDK as a nominee to stand for election as a director of the Company, information rights, preemptive rights, and demand registration rights. The Imation shares will be transferred back to the Company during the fourth quarter of 2015 and the corresponding accounting will be recorded at that time. |
Recently Issued or Adopted Ac24
Recently Issued or Adopted Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Recently Issued or Adopted Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board issued new accounting guidance related to revenue recognition. This new guidance will replace all current U.S. GAAP guidance on revenue recognition and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions include capitalization of certain contract costs, consideration of time value of money in the transaction price and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. In July 2015, the guidance was revised to be effective for interim and annual periods beginning on or after December 15, 2017. The guidance permits the use of either a retrospective or cumulative effect transition method. We have not yet selected a transition method and are currently evaluating the impact of this new guidance on our financial position and results of operations. In April 2015, the Financial Accounting Standards Board issued new accounting guidance related to debt issuance costs. Under this new standard, debt issuance costs reported on the consolidated balance sheet would be reflected as a direct deduction from the related debt liability rather than as an asset. For Imation, this is effective January 1, 2016, with early adoption permitted. Retroactive application to prior periods is required. As this standard impacts only the classification of certain amounts within the consolidated balance sheet, Imation does not expect this new standard to have a material impact on our financial position and results of operations. In May 2015, the Financial Accounting Standards Board issued new accounting guidance related to the disclosures for investments in certain entities that calculate net asset value per share (or its equivalent). This standard modifies existing disclosure requirements such that investments for which the practical expedient is used to measure their fair value at net asset value (NAV) would be removed from the fair value hierarchy disclosures. Instead, an entity would be required to include those investments as a reconciling item such that the total fair value amount of investments in the fair value hierarchy disclosure is consistent with the amount on the balance sheet. Changes were also made to the requirements in a sponsor’s employee benefit plan asset disclosures. For Imation, this standard is effective January 1, 2016, with retrospective application required. Early adoption is permitted. As this standard only impacts certain disclosures, it will not impact the Company’s consolidated results of operations and financial condition. In July 2015, the Financial Accounting Standards Board issued Accounting Standards Updated (ASU) No. 2015-11, Simplifying the Measurement of Inventory, which modifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (NRV), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. For Imation, this standard is effective prospectively beginning January 1, 2017, with early adoption permitted. The Company is currently assessing the impact of this new ASU on Imation’s consolidated results of operations and financial condition. |
(Loss) Earnings per Common Sh25
(Loss) Earnings per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of the weighted average basic and diluted (loss) earnings per share: Three Months Ended Nine Months Ended September 30, September 30, (In millions, except for per share amounts) 2015 2014 2015 2014 Numerator: Loss from continuing operations $ (152.3 ) $ (61.4 ) $ (184.1 ) $ (98.0 ) Loss from discontinued operations — — — (2.3 ) Net loss $ (152.3 ) $ (61.4 ) $ (184.1 ) $ (100.3 ) Denominator: Weighted average number of common shares outstanding during the period - basic 41.2 41.2 41.1 41.0 Dilutive effect of stock-based compensation plans — — — — Weighted average number of diluted shares outstanding during the period - diluted 41.2 41.2 41.1 41.0 Loss per common share — basic: Continuing operations $ (3.70 ) $ (1.49 ) $ (4.48 ) $ (2.39 ) Discontinued operations — — — (0.06 ) Net loss (3.70 ) (1.49 ) (4.48 ) (2.45 ) Loss per common share — diluted: Continuing operations $ (3.70 ) $ (1.49 ) $ (4.48 ) $ (2.39 ) Discontinued operations — — — (0.06 ) Net loss (3.70 ) (1.49 ) (4.48 ) (2.45 ) Anti-dilutive shares excluded from calculation 3.5 4.4 3.5 4.5 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Key Components of Discontinued Operations | The key components of the results of discontinued operations were as follows: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2015 2014 2015 2014 Net revenue $ — $ — $ — $ 0.5 Loss on sale of discontinued businesses, before income taxes — — — (1.7 ) Loss from operations of discontinued businesses, before income taxes — — — (0.6 ) Income tax provision (benefit) — — — — Loss from discontinued operations, net of income taxes $ — $ — $ — $ (2.3 ) |
Supplemental Balance Sheet In27
Supplemental Balance Sheet Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Supplemental Balance Sheet Information | Additional supplemental balance sheet information is provided as follows: September 30, December 31, (In millions) 2015 2014 Accounts Receivable: Accounts receivable $ 78.7 $ 143.5 Less reserves and allowances (1) (14.7 ) (9.1 ) Accounts receivable, net $ 64.0 $ 134.4 Inventories: Finished goods $ 33.2 $ 51.1 Work in process 0.7 0.7 Raw materials and supplies 8.1 5.9 Total inventories $ 42.0 $ 57.7 Property, Plant and Equipment: Property, plant and equipment $ 14.9 $ 184.0 Less accumulated depreciation (9.6 ) (139.0 ) Property, plant and equipment, net (2) $ 5.3 $ 45.0 (1) Accounts receivable reserves and allowances include estimated amounts for customer returns, discounts on payment terms and uncollectible accounts. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consist of the following: (In millions) Trade Names Software Customer Relationships Other Total September 30, 2015 Cost $ 14.9 $ 2.0 $ — $ 2.3 $ 19.2 Accumulated amortization (4.2 ) (2.0 ) — (2.3 ) (8.5 ) Intangible assets, net $ 10.7 $ — $ — $ — $ 10.7 December 31, 2014 Cost $ 34.2 $ 60.1 $ 20.0 $ 26.2 $ 140.5 Accumulated amortization (14.0 ) (55.3 ) (3.7 ) (9.6 ) (82.6 ) Intangible assets, net $ 20.2 $ 4.8 $ 16.3 $ 16.6 $ 57.9 |
Schedule of Amortization Expense for Intangible Assets | Amortization expense for intangible assets consisted of the following: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2015 2014 2015 2014 Amortization expense $ 3.0 $ 3.2 $ 9.4 $ 9.6 |
Schedule of Intangible Assets Estimated Amortization Expense | Estimated amortization expense for the remainder of 2015 and each of the next four years is as follows: (In millions) 2015 2016 2017 2018 2019 Amortization expense (1) $ 0.2 $ 0.9 $ 0.9 $ 0.9 $ 0.9 (1) The estimated amortization expense excludes amortization on intellectual property for license agreements with TDK Corporation (TDK) as the license agreements will terminate during the fourth quarter of 2015. See Note 17 - Subsequent Events for further information on the TDK agreement. |
Restructuring and Other Expen29
Restructuring and Other Expense (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Components of Restructuring and Other Expense | The components of our restructuring and other expense included in the Condensed Consolidated Statements of Operations were as follows: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2015 2014 2015 2014 Restructuring Expense: Severance and related $ 17.5 $ 0.8 $ 18.4 $ 3.6 Lease termination costs — 0.2 — 0.3 Other 0.2 0.3 0.6 1.2 Total restructuring $ 17.7 $ 1.3 $ 19.0 $ 5.1 Other Expense: Pension settlement/curtailment (Note 9) 1.0 0.2 1.0 0.1 Settlement of UK pension plan — 0.5 — 0.5 Asset disposals / write down (1) 25.1 — 25.1 — Other (2) (3.6 ) 2.2 (2.2 ) 5.8 Total $ 40.2 $ 4.2 $ 42.9 $ 11.5 (1) The $25.1 million of asset disposals / asset write down primarily consists of a write down of our corporate headquarters facility. During the third quarter of 2015, based on the Board of Director's and management's decision to sell this facility in light of the other restructuring activities that were approved in September 2015, we classified our corporate headquarters facility as an asset held for sale. The carrying value of our corporate headquarters facility of $32.0 million was subsequently written down to $10.4 million which is its estimated fair value based on negotiations with a third party with interest in purchasing our corporate headquarters. The $21.6 million write down was charged to restructuring and other expense in the Condensed Consolidated Statement of Operations. (2) For the three and nine months ended September 30, 2015, other consists of a gain on the sale of our RDX TM Storage product line which was partially offset by direct third-party costs associated with our proxy contest and strategic review process. On August 13, 2015, the Company sold its RDX Storage business and recognized a $4.8 million gain in restructuring and other expense in the Condensed Consolidated Statement of Operations. For the three and nine months ended September 30, 2014, other consists of consulting fees and certain employee costs. See Note 12 - Fair Value Measurements for further information on the RDX transaction. |
Schedule of Restructuring Reserve Activity | Activity related to the new and existing restructuring accruals was as follows: (In millions) Severance and Related Lease Termination Costs Other Total Accrued balance at December 31, 2014 0.8 0.3 0.2 1.3 Charges 0.5 — 0.3 0.8 Usage and payments (0.7 ) (0.1 ) (0.2 ) (1.0 ) Accrued balance at March 31, 2015 0.6 0.2 0.3 1.1 Charges 0.4 — 0.1 0.5 Usage and payments (0.4 ) (0.2 ) (0.1 ) (0.7 ) Accrued balance at June 30, 2015 0.6 — 0.3 0.9 Charges 17.5 — 0.2 17.7 Usage and payments (4.7 ) — (0.2 ) (4.9 ) Accrued balance at September 30, 2015 13.4 — 0.3 13.7 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-Based Compensation | Stock-based compensation consisted of the following: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2015 2014 2015 2014 Stock-based compensation expense $ 0.3 $ 1.1 $ 1.7 $ 4.1 |
Summary of Stock Option Activity | The following table summarizes our stock option activity: Stock Options Weighted Average Exercise Price Outstanding December 31, 2014 3,897,986 $ 13.07 Granted 24,547 3.94 Exercised (20,000 ) 3.84 Canceled (341,498 ) 24.84 Forfeited (47,307 ) 7.08 Outstanding September 30, 2015 3,513,728 $ 12.00 Exercisable as of September 30, 2015 3,323,969 $ 12.46 |
Summary of Weighted Average Assumptions Used in the Valuation of Stock Options | The following table summarizes our weighted average assumptions used in the valuation of stock options: Nine Months Ended September 30, 2015 2014 Volatility 46.2 % 46.2 % Risk-free interest rate 1.9 % 1.9 % Expected life (months) 73 73 Dividend yield — — |
Summary of Restricted Stock Activity | The following table summarizes our restricted stock activity: Restricted Stock Weighted Average Grant Date Fair Value Per Share Nonvested as of December 31, 2014 1,348,917 $ 3.81 Granted 862,706 3.97 Vested (850,077 ) 3.91 Forfeited (931,962 ) 3.82 Nonvested as of September 30, 2015 429,584 $ 3.90 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of Net Periodic Pension (Credit) Cost | Components of net periodic pension (credit) cost included the following: United States International United States International Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2015 2014 2015 2014 2015 2014 2015 2014 Service cost $ — $ — $ 0.1 $ 0.1 $ — $ — $ 0.3 $ 0.3 Interest cost 0.8 0.8 0.2 0.4 2.2 2.4 0.4 0.8 Expected return on plan assets (1.1 ) (1.2 ) (0.2 ) (0.3 ) (3.1 ) (3.6 ) (0.6 ) (0.7 ) Amortization of net actuarial loss 0.3 0.3 — 0.1 0.9 0.9 0.2 0.2 Amortization of prior service credit — — — — — — — (0.1 ) Net periodic pension (credit) cost $ — $ (0.1 ) $ 0.1 $ 0.3 $ — $ (0.3 ) $ 0.3 $ 0.5 Settlement loss 1.0 0.2 — — 1.0 0.8 — — Curtailment gain — — — — — — — (0.7 ) Total pension (credit) cost $ 1.0 $ 0.1 $ 0.1 $ 0.3 $ 1.0 $ 0.5 $ 0.3 $ (0.2 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of Cash Flow Hedges Measured at Fair Value on a Recurring Basis | The following table sets forth our cash flow hedges which are measured at fair value on a recurring basis. September 30, 2015 December 31, 2014 (In millions) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Derivative assets: Foreign currency forward contracts — 0.1 — — 7.3 — Derivative liabilities: Foreign currency forward contracts — (0.8 ) — — — — Total net derivative (liabilities) assets $ — $ (0.7 ) $ — $ — $ 7.3 $ — |
Schedule of Notional and Fair Value Amounts of Derivative Instruments | The notional amounts and fair values of our derivative instruments recorded in other current assets and other current liabilities in the Condensed Consolidated Balance Sheets were as follows: September 30, 2015 December 31, 2014 Fair Value Fair Value (In millions) Notional Amount Other Current Assets Other Current Liabilities Notional Amount Other Current Assets Other Current Liabilities Cash flow hedges designated as hedging instruments $ 24.0 $ 0.1 $ (0.8 ) $ 86.7 $ 7.3 $ — Other hedges not receiving hedge accounting 1.1 — — 23.4 — — Total $ 25.1 $ 0.1 $ (0.8 ) $ 110.1 $ 7.3 $ — |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Schedule of Treasury Share Activity | Following is a summary of treasury share activity: Treasury Shares Balance as of December 31, 2014 627,796 Purchases 382,448 Exercise of stock options (12,656 ) Restricted stock grants (690,662 ) Forfeitures and other 931,058 Balance as of September 30, 2015 1,237,984 |
Schedule of Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss and related activity consisted of the following: (In millions) Gains (Losses) on Derivative Financial Instruments Defined Benefit Plans Foreign Currency Translation Total Balance as of December 31, 2014 $ 5.1 $ (20.6 ) $ (69.3 ) $ (84.8 ) Other comprehensive income (loss) before reclassifications, net of tax (1) 0.9 (4.4 ) (6.6 ) (10.1 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax (6.7 ) 1.8 — (4.9 ) Net current period other comprehensive (loss) income (5.8 ) (2.6 ) (6.6 ) (15.0 ) Balance as of September 30, 2015 $ (0.7 ) $ (23.2 ) $ (75.9 ) $ (99.8 ) (1) Income tax benefit of $0.9 million was recorded for unrealized gains on derivative financial instruments for the nine months ended September 30, 2015 . |
Schedule of Amounts Reclassified from Accumulated Other Comprehensive Loss | Details of amounts reclassified from accumulated other comprehensive loss and the line item in the Condensed Consolidated Statement of Operations are as follows: Amounts Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Consolidated Statement of Operations Where (Gain) Loss is Presented Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2015 2014 2015 2014 Gains on cash flow hedges (0.8 ) (1.2 ) (6.1 ) (2.0 ) Cost of goods sold Income tax expense (2.3 ) 0.5 (0.6 ) 0.8 Income tax provision (3.1 ) (0.7 ) (6.7 ) (1.2 ) Amortization of net actuarial loss 0.3 0.3 0.7 0.7 Selling, general and administrative Net pension curtailment/settlement loss 1.0 0.2 1.0 0.2 Restructuring and other Income tax benefit 0.2 — 0.1 0.2 Income tax provision 1.5 0.5 1.8 1.1 Total reclassifications for the period (1.6 ) (0.2 ) (4.9 ) (0.1 ) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Net Revenue and Operating Income (Loss) by Segment | Net revenue and operating income (loss) from continuing operations by segment were as follows: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2015 2014 2015 2014 Net revenue Consumer Storage and Accessories: Consumer Storage Media $ 59.0 $ 79.4 $ 191.6 $ 253.4 Audio and Accessories 8.8 12.6 27.7 33.7 Total Consumer Storage and Accessories 67.8 92.0 219.3 287.1 Tiered Storage and Security Solutions: Commercial Storage Media 36.6 54.3 129.8 159.7 Storage and Security Solutions 24.8 28.7 86.1 85.7 Total Tiered Storage and Security Solutions 61.4 83.0 215.9 245.4 Total net revenue $ 129.2 $ 175.0 $ 435.2 $ 532.5 Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2015 2014 2015 2014 Operating income (loss) from continuing operations Consumer Storage and Accessories $ (15.8 ) $ 5.4 $ (11.2 ) $ 12.7 Tiered Storage and Security Solutions (10.1 ) (8.1 ) (22.8 ) (25.4 ) Total segment operating loss (25.9 ) (2.7 ) (34.0 ) (12.7 ) Corporate and unallocated (122.8 ) (53.1 ) (143.6 ) (79.3 ) Total operating loss (148.7 ) (55.8 ) (177.6 ) (92.0 ) Interest income (0.1 ) (0.1 ) (0.3 ) (0.3 ) Interest expense 0.6 0.7 1.8 1.9 Other, net expense (0.5 ) 1.6 1.1 2.6 Loss from continuing operations before income taxes $ (148.7 ) $ (58.0 ) $ (180.2 ) $ (96.2 ) |
(Loss) Earnings per Common Sh35
(Loss) Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator: | ||||
Loss from continuing operations | $ (152.3) | $ (61.4) | $ (184.1) | $ (98) |
Loss from discontinued operations | 0 | 0 | 0 | (2.3) |
Net loss | $ (152.3) | $ (61.4) | $ (184.1) | $ (100.3) |
Denominator: | ||||
Weighted average number of common shares outstanding during the period - basic (in shares) | 41.2 | 41.2 | 41.1 | 41 |
Dilutive effect of stock-based compensation plans (in shares) | 0 | 0 | 0 | 0 |
Weighted average number of diluted shares outstanding during the period - diluted (in shares) | 41.2 | 41.2 | 41.1 | 41 |
Loss per common share — basic: | ||||
Continuing operations (in dollars per share) | $ (3.70) | $ (1.49) | $ (4.48) | $ (2.39) |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.06) |
Net loss (in dollars per share) | (3.70) | (1.49) | (4.48) | (2.45) |
Loss per common share — diluted: | ||||
Continuing operations (in dollars per share) | (3.70) | (1.49) | (4.48) | (2.39) |
Discontinued operations (in dollars per share) | 0 | 0 | 0 | (0.06) |
Net loss (dollars per share) | $ (3.70) | $ (1.49) | $ (4.48) | $ (2.45) |
Anti-dilutive shares excluded from calculation (in shares) | 3.5 | 4.4 | 3.5 | 4.5 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) | Jan. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Oct. 15, 2013 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Loss on sale of discontinued businesses | $ 0 | $ 0 | $ 0 | $ 1,700,000 | |||||||
Loss from discontinued operations | 0 | $ 0 | 0 | (2,300,000) | |||||||
Discontinued Operations | XtremeMac Consumer Electronics Business | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Total consideration from sale of business | $ 3,100,000 | ||||||||||
Proceeds from sale of businesses | 300,000 | $ 1,300,000 | |||||||||
Note receivable from sale of business | 300,000 | ||||||||||
Consideration to be received from sale of business based on selling acquired inventory | $ 2,500,000 | ||||||||||
Loss on sale of discontinued businesses | $ 500,000 | ||||||||||
Loss from discontinued operations | 0 | ||||||||||
Discontinued Operations | Memorex Consumer Electronics Business | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Total consideration from sale of business | $ 9,300,000 | ||||||||||
Proceeds from sale of businesses | 1,500,000 | $ 1,900,000 | $ 900,000 | ||||||||
Loss from discontinued operations | 0 | 0 | |||||||||
Estimated fair value of receivable | $ 4,400,000 | $ 4,400,000 | |||||||||
Notes receivable | Discontinued Operations | XtremeMac Consumer Electronics Business | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Decrease in expected contingent consideration receivable | $ 1,200,000 | ||||||||||
Loss from discontinued operations | Discontinued Operations | XtremeMac Consumer Electronics Business | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Loss as a component of discontinued operations related to the decrease in contingent consideration receivable | $ 1,200,000 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Key Components of Discontinued Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss from discontinued operations, net of income taxes | $ 0 | $ 0 | $ 0 | $ (2.3) |
Discontinued Operations | XtremeMac and Memorex | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net revenue | 0 | 0 | 0 | 0.5 |
Loss on sale of discontinued businesses, before income taxes | 0 | 0 | 0 | (1.7) |
Loss from operations of discontinued businesses, before income taxes | 0 | 0 | 0 | (0.6) |
Income tax provision (benefit) | 0 | 0 | 0 | 0 |
Loss from discontinued operations, net of income taxes | $ 0 | $ 0 | $ 0 | $ (2.3) |
Supplemental Balance Sheet In38
Supplemental Balance Sheet Information - Schedule of Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | |
Accounts Receivable: | |||
Accounts receivable | $ 78.7 | $ 143.5 | |
Less reserves and allowances | [1] | (14.7) | (9.1) |
Accounts receivable, net | 64 | 134.4 | |
Inventories: | |||
Finished goods | 33.2 | 51.1 | |
Work in process | 0.7 | 0.7 | |
Raw materials and supplies | 8.1 | 5.9 | |
Total inventories | 42 | 57.7 | |
Property, Plant and Equipment: | |||
Property, plant and equipment | 14.9 | 184 | |
Less accumulated depreciation | (9.6) | (139) | |
Property, plant and equipment, net(2) | $ 5.3 | $ 45 | |
[1] | Accounts receivable reserves and allowances include estimated amounts for customer returns, discounts on payment terms and uncollectible accounts. |
Supplemental Balance Sheet In39
Supplemental Balance Sheet Information - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Supplemental Balance Sheet Disclosures [Line Items] | ||
Property, plant and equipment, net | $ 5.3 | $ 45 |
Other Current Liabilities | ||
Supplemental Balance Sheet Disclosures [Line Items] | ||
Rebates payable | 20.4 | 26.9 |
Accrued payroll | 13 | 18.4 |
Other Liabilities | ||
Supplemental Balance Sheet Disclosures [Line Items] | ||
Pension liabilities | 24.3 | $ 22.5 |
Building | ||
Supplemental Balance Sheet Disclosures [Line Items] | ||
Property, plant and equipment transferred to assets held for sale | 125.5 | |
Accumulated depreciation transferred to assets held for sale | 93.5 | |
Property, plant and equipment, net | 32 | |
Assets held for sale | $ 10.4 |
Intangible Assets and Goodwil40
Intangible Assets and Goodwill - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Cost | $ 19.2 | $ 19.2 | $ 140.5 | ||
Accumulated amortization | (8.5) | (8.5) | (82.6) | ||
Intangible assets, net | 10.7 | 10.7 | 57.9 | ||
Amortization expense | 3 | $ 3.2 | 9.4 | $ 9.6 | |
Intangible Assets, Amortization Expense, Remainder of 2015 | 0.2 | 0.2 | |||
Intangible Assets, Amortization Expense, 2016 | 0.9 | 0.9 | |||
Intangible Assets, Amortization Expense, 2017 | 0.9 | 0.9 | |||
Intangible Assets, Amortization Expense, 2018 | 0.9 | 0.9 | |||
Intangible Assets, Amortization Expense, 2019 | 0.9 | 0.9 | |||
Trade Names | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Cost | 14.9 | 14.9 | 34.2 | ||
Accumulated amortization | (4.2) | (4.2) | (14) | ||
Intangible assets, net | 10.7 | 10.7 | 20.2 | ||
Software | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Cost | 2 | 2 | 60.1 | ||
Accumulated amortization | (2) | (2) | (55.3) | ||
Intangible assets, net | 0 | 0 | 4.8 | ||
Customer Relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Cost | 0 | 0 | 20 | ||
Accumulated amortization | 0 | 0 | (3.7) | ||
Intangible assets, net | 0 | 0 | 16.3 | ||
Other | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Cost | 2.3 | 2.3 | 26.2 | ||
Accumulated amortization | (2.3) | (2.3) | (9.6) | ||
Intangible assets, net | $ 0 | $ 0 | $ 16.6 |
Intangible Assets and Goodwil41
Intangible Assets and Goodwill - Goodwill (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 0 | $ 36.1 |
Intangible Assets and Goodwil42
Intangible Assets and Goodwill - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Intangible impairment | $ 37.6 | $ 0 | $ 37.6 | $ 0 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 0 | 0 | $ 36.1 | ||
Goodwill impairment | $ 36.1 | $ 35.4 | $ 36.1 | $ 35.4 | |
Finite-Lived Intangible Assets | Income Approach Valuation Technique | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated discounted forecasted cash flows period | 10 years | ||||
Finite-Lived Intangible Assets | Income Approach Valuation Technique | Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Discounted growth rate | 0.00% | ||||
Discount rate | 15.50% | ||||
Finite-Lived Intangible Assets | Income Approach Valuation Technique | Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Discounted growth rate | 3.00% | ||||
Discount rate | 16.50% | ||||
Goodwill | Income Approach Valuation Technique | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated discounted forecasted cash flows period | 10 years | ||||
Goodwill | Income Approach Valuation Technique | Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Discounted growth rate | 0.00% | ||||
Discount rate | 15.50% | ||||
Goodwill | Income Approach Valuation Technique | Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Discounted growth rate | 3.00% | ||||
Discount rate | 16.50% | ||||
Tiered Storage and Security Solutions | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
increase over market discount rate | 2.00% | ||||
Market discount rate | 14.50% | ||||
Tiered Storage and Security Solutions | Income Approach Valuation Technique | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Discounted growth rate | 3.00% | ||||
Estimated discounted forecasted cash flows period | 10 years | ||||
Discount rate | 16.50% |
Restructuring and Other Expen43
Restructuring and Other Expense - Components of Restructuring and Other Expense (Details) - USD ($) $ in Millions | Aug. 13, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Restructuring and Related Activities [Abstract] | |||||||
Severance and related | $ 17.5 | $ 0.8 | $ 18.4 | $ 3.6 | |||
Lease termination costs | 0 | 0.2 | 0 | 0.3 | |||
Other | 0.2 | 0.3 | 0.6 | 1.2 | |||
Total restructuring | 17.7 | 1.3 | 19 | 5.1 | |||
Pension settlement/curtailment (Note 9) | 1 | 0.2 | 1 | 0.1 | |||
Settlement of UK pension plan | 0 | 0.5 | 0 | 0.5 | |||
Loss on settlement of pension plan | 25.1 | 0 | 25.1 | 0 | |||
Other | [1] | (3.6) | 2.2 | (2.2) | 5.8 | ||
Total | 40.2 | $ 4.2 | 42.9 | $ 11.5 | |||
Restructuring Cost and Reserve [Line Items] | |||||||
Property, plant and equipment, net | 5.3 | 5.3 | $ 45 | ||||
Building | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Property, plant and equipment, net | 32 | 32 | |||||
Assets held for sale | 10.4 | 10.4 | |||||
Restructuring and other | Building | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Impairment of assets to be disposed of | 21.6 | ||||||
RDX Storage | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Gain on sale of business | $ 4.8 | $ 4.8 | |||||
RDX Storage | Restructuring and other | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Gain on sale of business | $ 4.8 | ||||||
[1] | The $25.1 million of asset disposals / asset write down primarily consists of a write down of our corporate headquarters facility. During the third quarter of 2015, based on the Board of Director's and management's decision to sell this facility in light of the other restructuring activities that were approved in September 2015, we classified our corporate headquarters facility as an asset held for sale. The carrying value of our corporate headquarters facility of $32.0 million was subsequently written down to $10.4 million which is its estimated fair value based on negotiations with a third party with interest in purchasing our corporate headquarters. The $21.6 million write down was charged to restructuring and other expense in the Condensed Consolidated Statement of Operations. |
Restructuring and Other Expen44
Restructuring and Other Expense - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Severance and related | $ 17,500,000 | $ 800,000 | $ 18,400,000 | $ 3,600,000 | ||
Restructuring charges | 17,700,000 | 1,300,000 | 19,000,000 | 5,100,000 | ||
Restructuring and other | 40,200,000 | $ 4,200,000 | 42,900,000 | $ 11,500,000 | ||
Restructuring Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 17,700,000 | $ 500,000 | $ 800,000 | |||
Restructuring costs | 113,900,000 | |||||
Goodwill and intangible asset impairment | 73,700,000 | |||||
Restructuring and other | 40,200,000 | |||||
Severance and Related | Restructuring Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 17,500,000 | 400,000 | 500,000 | |||
Lease Termination Costs | Restructuring Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 0 | 0 | 0 | |||
Other | Restructuring Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 200,000 | $ 100,000 | $ 300,000 | |||
Consumer Storage and Accessories | Restructuring Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Severance and related | 0 | |||||
Minimum | Restructuring Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Expected restructuring costs | 140,000,000 | 140,000,000 | ||||
Expected cash expenditures | 30,000,000 | |||||
Maximum | Restructuring Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Expected restructuring costs | $ 160,000,000 | 160,000,000 | ||||
Expected cash expenditures | $ 40,000,000 |
Restructuring and Other Expen45
Restructuring and Other Expense - Schedule of Restructuring Reserve Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Restructuring Reserve [Roll Forward] | ||||||
Charges | $ 17.7 | $ 1.3 | $ 19 | $ 5.1 | ||
Restructuring Plan | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Accrued balance, beginning | 0.9 | $ 1.1 | $ 1.3 | 1.3 | ||
Charges | 17.7 | 0.5 | 0.8 | |||
Usage and payments | (4.9) | (0.7) | (1) | |||
Accrued balance, ending | 13.7 | 0.9 | 1.1 | 13.7 | ||
Restructuring Plan | Severance and Related | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Accrued balance, beginning | 0.6 | 0.6 | 0.8 | 0.8 | ||
Charges | 17.5 | 0.4 | 0.5 | |||
Usage and payments | (4.7) | (0.4) | (0.7) | |||
Accrued balance, ending | 13.4 | 0.6 | 0.6 | 13.4 | ||
Restructuring Plan | Lease Termination Costs | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Accrued balance, beginning | 0 | 0.2 | 0.3 | 0.3 | ||
Charges | 0 | 0 | 0 | |||
Usage and payments | 0 | (0.2) | (0.1) | |||
Accrued balance, ending | 0 | 0 | 0.2 | 0 | ||
Restructuring Plan | Other | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Accrued balance, beginning | 0.3 | 0.3 | 0.2 | 0.2 | ||
Charges | 0.2 | 0.1 | 0.3 | |||
Usage and payments | (0.2) | (0.1) | (0.2) | |||
Accrued balance, ending | $ 0.3 | $ 0.3 | $ 0.3 | $ 0.3 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($)shares | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)plan$ / sharesshares | Sep. 30, 2014USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ | $ 300,000 | $ 1,100,000 | $ 1,700,000 | $ 4,100,000 |
Number of share-based compensation plans | plan | 4 | |||
Stock Appreciation Rights (SARs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ | $ 0 | |||
Number of awards granted (in shares) | 2,700,000 | |||
Number of awards outstanding (in shares) | 4,700,000 | 4,700,000 | ||
Stock Appreciation Rights (SARs) | Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of awards vested | 50.00% | |||
Number of average consecutive trading days required at trigger stock price | 30 days | |||
Minimum stock price required to trigger award vesting (in dollars per share) | $ / shares | $ 8 | |||
Stock Appreciation Rights (SARs) | Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of awards vested | 50.00% | |||
Number of average consecutive trading days required at trigger stock price | 30 days | |||
Minimum stock price required to trigger award vesting (in dollars per share) | $ / shares | $ 12 | |||
Stock Incentive Plan 2011 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for grant (in shares) | 2,063,929 | 2,063,929 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($)$ / sharesshares | |
Stock Options [Roll Forward] | |
Exercised (in shares) | (12,656) |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options expiration term | 10 years |
Total unrecognized compensation expense related to non-vested stock | $ | $ 0.1 |
Total compensation cost not yet recognized, period for recognition | 1 year 2 months 12 days |
Stock Options [Roll Forward] | |
Beginning, outstanding (in shares) | 3,897,986 |
Granted (in shares) | 24,547 |
Exercised (in shares) | (20,000) |
Canceled (in shares) | (341,498) |
Forfeited (in shares) | (47,307) |
Ending, outstanding (in shares) | 3,513,728 |
Exercisable (in shares) | 3,323,969 |
Weighted Average Exercise Price [Roll Forward] | |
Beginning, outstanding (in dollars per share) | $ / shares | $ 13.07 |
Granted (in dollars per share) | $ / shares | 3.94 |
Exercised (in dollars per share) | $ / shares | 3.84 |
Canceled (in dollars per share) | $ / shares | 24.84 |
Forfeited (in dollars per share) | $ / shares | 7.08 |
Ending, outstanding (in dollars per share) | $ / shares | 12 |
Exercisable (in dollars per share) | $ / shares | $ 12.46 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted Average Assumptions Used in the Valuation of Stock Options (Details) - Stock Options | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Volatility | 46.20% | 46.20% |
Risk-free interest rate | 1.90% | 1.90% |
Expected life (months) | 73 months | 73 months |
Dividend yield | 0.00% | 0.00% |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock (Details) $ / shares in Units, $ in Millions | May. 22, 2015USD ($)directorshares | Sep. 30, 2015USD ($)$ / sharesshares |
Restricted Stock [Roll Forward] | ||
Vested (in shares) | (690,662) | |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total unrecognized compensation expense related to non-vested stock | $ | $ 0.9 | |
Total compensation cost not yet recognized, period for recognition | 1 year 6 months | |
Restricted Stock [Roll Forward] | ||
Beginning, nonvested (in shares) | 1,348,917 | |
Granted (in shares) | 862,706 | |
Vested (in shares) | (850,077) | |
Forfeited (in shares) | (931,962) | |
Ending, nonvested (in shares) | 429,584 | |
Weighted Average Grant Date Fair Value Per Share [Roll Forward] | ||
Beginning, nonvested (in dollars per share) | $ / shares | $ 3.81 | |
Granted (in dollars per share) | $ / shares | 3.97 | |
Vested (in dollars per share) | $ / shares | 3.91 | |
Forfeited (in dollars per share) | $ / shares | 3.82 | |
Ending, nonvested (in dollars per share) | $ / shares | $ 3.90 | |
Board Member | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of new board directors | director | 3 | |
Board Member | Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Cash payment to settle awards | $ | $ 1 | |
Restricted Stock [Roll Forward] | ||
Vested (in shares) | (225,347) | |
Forfeited (in shares) | (866,820) |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Settlement loss | $ 1 | $ 0.2 | $ 1 | $ 0.1 |
Settlement of UK pension plan | 0 | 0.5 | 0 | 0.5 |
Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer contributions in current fiscal year | 0.6 | 1.2 | ||
United States | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Settlement loss | 1 | 0.2 | 1 | 0.8 |
Curtailment gain | 0 | 0 | 0 | 0 |
International | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Settlement loss | 0 | 0 | 0 | 0 |
Curtailment gain | $ 0 | $ 0 | 0 | 0.7 |
Maximum | Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Estimated future employer contributions in current fiscal year (up to) | $ 0.1 | |||
Restructuring and other | International | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Curtailment gain | $ 0.7 |
Retirement Plans - Components o
Retirement Plans - Components of Net Periodic Pension (Credit) Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Settlement loss | $ 1 | $ 0.2 | $ 1 | $ 0.1 |
United States | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 0.8 | 0.8 | 2.2 | 2.4 |
Expected return on plan assets | (1.1) | (1.2) | (3.1) | (3.6) |
Amortization of net actuarial loss | 0.3 | 0.3 | 0.9 | 0.9 |
Amortization of prior service credit | 0 | 0 | 0 | 0 |
Net periodic pension (credit) cost | 0 | (0.1) | 0 | (0.3) |
Settlement loss | 1 | 0.2 | 1 | 0.8 |
Curtailment gain | 0 | 0 | 0 | 0 |
Total pension (credit) cost | 1 | 0.1 | 1 | 0.5 |
International | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0.1 | 0.1 | 0.3 | 0.3 |
Interest cost | 0.2 | 0.4 | 0.4 | 0.8 |
Expected return on plan assets | (0.2) | (0.3) | (0.6) | (0.7) |
Amortization of net actuarial loss | 0 | 0.1 | 0.2 | 0.2 |
Amortization of prior service credit | 0 | 0 | 0 | (0.1) |
Net periodic pension (credit) cost | 0.1 | 0.3 | 0.3 | 0.5 |
Settlement loss | 0 | 0 | 0 | 0 |
Curtailment gain | 0 | 0 | 0 | (0.7) |
Total pension (credit) cost | $ 0.1 | $ 0.3 | $ 0.3 | $ (0.2) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Valuation Allowance [Line Items] | |||||
Income tax expense (benefit) | $ 3.6 | $ 3.4 | $ 3.9 | $ 1.8 | |
Federal statutory income tax rate | 35.00% | 35.00% | |||
Unrecognized tax benefits | $ 1.6 | $ 1.6 | $ 1.9 | ||
Restructuring Plan Valuation Allowance | |||||
Valuation Allowance [Line Items] | |||||
Valuation allowance | 3.7 | 3.7 | |||
Europe | Foreign Tax Authority | |||||
Valuation Allowance [Line Items] | |||||
Valuation allowance | $ 6 | $ 6 |
Debt (Details)
Debt (Details) - USD ($) | Sep. 30, 2015 | May. 28, 2015 | May. 27, 2015 | Dec. 31, 2014 |
Line of Credit Facility [Line Items] | ||||
Short-term borrowings | $ 18,000,000 | $ 18,900,000 | ||
Remaining borrowing capacity | $ 12,600,000 | |||
Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Debt interest rate | 0.90% | |||
Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Debt interest rate | 2.70% | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 100,000,000 | $ 170,000,000 | ||
Current borrowing capacity (up to) | 100,000,000 | |||
United States | Domestic Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 80,000,000 | |||
Europe | Foreign Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 20,000,000 |
Fair Value Measurements - Tradi
Fair Value Measurements - Trading Securities (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2015 | Aug. 13, 2015 | |
Sphere 3D | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of shares held | $ 3.3 | $ 3.3 | |
RDX Storage | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total consideration from sale of business | $ 6 | ||
Gain on sale of business | 4.8 | 4.8 | |
Gain (loss) on shares acquired through disposition of business | $ (0.3) | $ (0.3) | |
RDX Storage | Sphere 3D | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Share received as consideration | 1.5 | 1.5 | 1.5 |
Fair Value Measurements - Cash
Fair Value Measurements - Cash Flow Hedges (Details) - Fair Value, Measurements, Recurring - Cash flow hedges - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total net derivative (liabilities) assets | $ 0 | $ 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total net derivative (liabilities) assets | (0.7) | 7.3 |
Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total net derivative (liabilities) assets | 0 | 0 |
Foreign currency forward contracts | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Foreign currency forward contracts | 0 | 0 |
Foreign currency forward contracts | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0.1 | 7.3 |
Foreign currency forward contracts | (0.8) | 0 |
Foreign currency forward contracts | Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Foreign currency forward contracts | $ 0 | $ 0 |
Fair Value Measurements - Other
Fair Value Measurements - Other Hedges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Notional Amount | $ 25.1 | $ 25.1 | $ 110.1 | ||
Foreign currency forward contracts | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Gain (loss) on foreign currency contracts | 0.5 | $ 0.7 | 0.3 | $ 1.1 | |
Other Current Assets | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Derivative assets fair value | 0.1 | 0.1 | 7.3 | ||
Other Current Liabilities | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Derivative liabilities fair value | (0.8) | (0.8) | 0 | ||
Cash flow hedges designated as hedging instruments | Cash flow hedges | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Notional Amount | 24 | 24 | 86.7 | ||
Cash flow hedges designated as hedging instruments | Cash flow hedges | Other Current Assets | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Derivative assets fair value | 0.1 | 0.1 | 7.3 | ||
Cash flow hedges designated as hedging instruments | Cash flow hedges | Other Current Liabilities | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Derivative liabilities fair value | (0.8) | (0.8) | 0 | ||
Other hedges not receiving hedge accounting | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Notional Amount | 1.1 | 1.1 | 23.4 | ||
Other hedges not receiving hedge accounting | Other Current Assets | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Derivative assets fair value | 0 | 0 | 0 | ||
Other hedges not receiving hedge accounting | Other Current Liabilities | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Derivative liabilities fair value | 0 | 0 | $ 0 | ||
Other (Income) Expense | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Net foreign currency loss | $ (0.9) | $ 1.5 | $ 0.3 | $ 1.9 |
Shareholders' Equity - Treasury
Shareholders' Equity - Treasury Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | 41 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | May. 02, 2012 | |
Equity [Abstract] | ||||
Number of shares authorized to be repurchased (in shares) | 5,000,000 | |||
Number shares repurchased (in shares) | 382,448 | 3,000,000 | ||
Payments for repurchase of common stock | $ 1.7 | $ 2.5 | $ 13.3 | |
Remaining number of shares authorized to be repurchased (in shares) | 2,000,000 | 2,000,000 | ||
Average price per share of treasury stock acquired and held (in dollars per share) | $ 12.74 | |||
Movement in Treasury Stock [Roll Forward] | ||||
Beginning balance (in shares) | 627,796 | |||
Purchases (in shares) | 382,448 | 3,000,000 | ||
Exercise of stock options (in shares) | (12,656) | |||
Restricted stock grants (in shares) | (690,662) | |||
Forfeitures and other (in shares) | 931,058 | |||
Ending balance (in shares) | 1,237,984 | 1,237,984 |
Shareholders' Equity - Accumula
Shareholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | $ 240.8 | ||||
Total other comprehensive income (loss), net of tax | $ (11.3) | $ (8.2) | (15) | $ (9.9) | |
Ending balance | 41.2 | 41.2 | |||
Income tax benefit for unrealized gains on derivative financial instruments | 0.9 | ||||
Selling, general and administrative | 43.4 | 42.5 | 123 | 130.2 | |
Restructuring and other | 40.2 | 4.2 | 42.9 | 11.5 | |
Income tax expense (benefit) | 3.6 | 3.4 | 3.9 | 1.8 | |
Net loss | 152.3 | 61.4 | 184.1 | 100.3 | |
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | 75.9 | 75.9 | |||
Gains (Losses) on Derivative Financial Instruments | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | 5.1 | ||||
Other comprehensive income (loss) before reclassifications, net of tax | [1] | 0.9 | |||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (6.7) | ||||
Total other comprehensive income (loss), net of tax | (5.8) | ||||
Ending balance | (0.7) | (0.7) | |||
Defined Benefit Plans | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | (20.6) | ||||
Other comprehensive income (loss) before reclassifications, net of tax | [1] | (4.4) | |||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 1.8 | ||||
Total other comprehensive income (loss), net of tax | (2.6) | ||||
Ending balance | (23.2) | (23.2) | |||
Foreign Currency Translation | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | (69.3) | ||||
Other comprehensive income (loss) before reclassifications, net of tax | [1] | (6.6) | |||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | ||||
Total other comprehensive income (loss), net of tax | (6.6) | ||||
Ending balance | (75.9) | (75.9) | |||
Total | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Beginning balance | (84.8) | ||||
Other comprehensive income (loss) before reclassifications, net of tax | [1] | (10.1) | |||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (4.9) | ||||
Total other comprehensive income (loss), net of tax | (15) | ||||
Ending balance | (99.8) | (99.8) | |||
Reclassification out of Accumulated Other Comprehensive Income | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Net loss | (1.6) | (0.2) | (4.9) | (0.1) | |
Reclassification out of Accumulated Other Comprehensive Income | Gains (Losses) on Derivative Financial Instruments | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Cost of goods sold | (0.8) | (1.2) | (6.1) | (2) | |
Income tax expense (benefit) | (2.3) | 0.5 | (0.6) | 0.8 | |
Net loss | (3.1) | (0.7) | (6.7) | (1.2) | |
Reclassification out of Accumulated Other Comprehensive Income | Defined Benefit Plans | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Selling, general and administrative | 0.3 | 0.3 | 0.7 | 0.7 | |
Restructuring and other | 1 | 0.2 | 1 | 0.2 | |
Income tax expense (benefit) | 0.2 | 0 | 0.1 | 0.2 | |
Net loss | $ 1.5 | $ 0.5 | $ 1.8 | $ 1.1 | |
[1] | Income tax benefit of $0.9 million was recorded for unrealized gains on derivative financial instruments for the nine months ended September 30, 2015. |
Shareholders' Equity - 382 Righ
Shareholders' Equity - 382 Rights Agreement (Details) | 9 Months Ended | ||
Sep. 30, 2015day$ / sharesshares | Aug. 07, 2015 | Dec. 31, 2014$ / shares | |
Class of Stock [Line Items] | |||
Beneficial ownership percentage | 4.90% | ||
Class of warrant or right called by each warrant or right | shares | 0.01 | ||
Dividend distribution right to common stock dividend ratio | 1 | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Acquiring person threshold | 0.50% | ||
Business days for acquiring person | day | 10 | ||
Percentage transfer threshold for assets, cashflow, and earning power | 50.00% | ||
Ownership percentage threshold for board rights exchange | 50.00% | ||
Right redemption price | $ 0.001 | ||
Preferred Stock | |||
Class of Stock [Line Items] | |||
Price per share of sale of stock | $ 15 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)segmentproduct_category | Sep. 30, 2014USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reporting segments | segment | 2 | |||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Net revenue | $ 129.2 | $ 175 | $ 435.2 | $ 532.5 |
Operating loss | (148.7) | (55.8) | (177.6) | (92) |
Interest income | (0.1) | (0.1) | (0.3) | (0.3) |
Interest expense | 0.6 | 0.7 | 1.8 | 1.9 |
Other, net expense (income) | (0.5) | 1.6 | 1.1 | 2.6 |
Loss from continuing operations before income taxes | (148.7) | (58) | (180.2) | (96.2) |
Operating Segments | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Operating loss | (25.9) | (2.7) | (34) | (12.7) |
Corporate and Unallocated | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Operating loss | (122.8) | (53.1) | $ (143.6) | (79.3) |
Consumer Storage and Accessories | ||||
Segment Reporting Information [Line Items] | ||||
Number of major product categories | product_category | 2 | |||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Net revenue | 67.8 | 92 | $ 219.3 | 287.1 |
Consumer Storage and Accessories | Operating Segments | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Operating loss | (15.8) | 5.4 | (11.2) | 12.7 |
Consumer Storage and Accessories | Consumer Storage Media | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Net revenue | 59 | 79.4 | 191.6 | 253.4 |
Consumer Storage and Accessories | Audio and Accessories | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Net revenue | 8.8 | 12.6 | $ 27.7 | 33.7 |
Tiered Storage and Security Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Number of major product categories | product_category | 2 | |||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Net revenue | 61.4 | 83 | $ 215.9 | 245.4 |
Tiered Storage and Security Solutions | Operating Segments | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Operating loss | (10.1) | (8.1) | (22.8) | (25.4) |
Tiered Storage and Security Solutions | Commercial Storage Media | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Net revenue | 36.6 | 54.3 | 129.8 | 159.7 |
Tiered Storage and Security Solutions | Storage and Security Solutions | ||||
Segment Reporting Information, Profit (Loss) [Abstract] | ||||
Net revenue | $ 24.8 | $ 28.7 | $ 86.1 | $ 85.7 |
Litigation, Commitments and C61
Litigation, Commitments and Contingencies (Details) $ in Millions | May. 22, 2013memberplaintiffpatent | Mar. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) |
Loss Contingencies [Line Items] | ||||
Accrued copyright levies | $ 5.8 | $ 9.3 | ||
Copyright levies accrual reversal | $ 2.8 | |||
One-Blue, LLC and Members vs. Imation | ||||
Loss Contingencies [Line Items] | ||||
Number of plaintiffs | plaintiff | 5 | |||
Number of members of One-Blue involved in litigation | member | 4 | |||
Number of patents allegedly infringed | patent | 6 | |||
French Levy Society vs. Imation | Pending and Threatened Litigation | ||||
Loss Contingencies [Line Items] | ||||
Damages sought | $ 8.7 |
Related Party (Details)
Related Party (Details) | Oct. 14, 2015USD ($)periodshares | Sep. 27, 2015USD ($)shares | Sep. 18, 2015USD ($) | Dec. 31, 2015USD ($)shares | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($)director | Sep. 19, 2015USD ($) | Aug. 17, 2015USD ($) | Aug. 08, 2015USD ($) |
Scenario, Forecast | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Stock receivable from termination of rights agreement | shares | 6,675,764 | ||||||||
Scenario, Forecast | Connected Data, Inc. | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Total consideration | $ 7,500,000 | ||||||||
Investor | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Board of Directors elected | director | 3 | ||||||||
Investor | Other Current Liabilities | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Proxy contest fees | $ 600,000 | $ 600,000 | |||||||
Investor | Scenario, Forecast | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Stock receivable from termination of rights agreement | shares | 6,675,764 | ||||||||
Investor | TDK Corporation | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Stock owned by TDK | 18.00% | 18.00% | |||||||
Board Member | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Consulting fees per week | $ 35,000 | $ 25,000 | |||||||
Board Member | Restructuring and Other Charges | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Consulting fees paid | $ 200,000 | ||||||||
Board Member | Subsequent Event | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Consulting fees paid | $ 184,000 | ||||||||
Additional consideration | $ 260,000 | ||||||||
Consecutive 6 month periods | period | 3 | ||||||||
President | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Consulting fees per week | $ 125,000 | $ 85,000 | |||||||
Consulting fees paid | $ 225,000 | ||||||||
President | Restructuring and Other Charges | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Consulting fees paid | $ 800,000 | ||||||||
Chief Technology Officer | Board Member | Subsequent Event | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Base share compensation | shares | 600,000 | ||||||||
Cash retention bonus | $ 116,732 | ||||||||
Restricted stock retention bonus | $ 116,732 | ||||||||
Option to purchase shares | shares | 300,000 | ||||||||
Chief Technology Officer | Board Member | Equal monthly installments | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Option vesting period | 36 months | ||||||||
President | Board Member | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Consulting fees per week | $ 35,000 | ||||||||
Employment term | 1 year | ||||||||
Base compensation | $ 600,000 | ||||||||
Base share compensation | shares | 574,000 |
Subsequent Events Narrative (De
Subsequent Events Narrative (Details) $ in Millions | Oct. 30, 2015USD ($) | Dec. 31, 2015USD ($)membershares |
Line of Credit | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Debt extinguished | $ 7.6 | |
Scenario, Forecast | ||
Subsequent Event [Line Items] | ||
Stock receivable from termination of rights agreement | shares | 6,675,764 | |
Scenario, Forecast | Line of Credit | ||
Subsequent Event [Line Items] | ||
Capitalized cost charged to expense | $ 0.1 | |
Connected Data, Inc. | Scenario, Forecast | ||
Subsequent Event [Line Items] | ||
Total consideration | 7.5 | |
Payments to acquire business | $ 0.9 | |
Shares issued for business acquisition | shares | 1,500,000 | |
Value of shares issued for business acquisition | $ 4 | |
Debt acquired in business combination | 2.6 | |
Contingent consideration | $ 5 | |
TDK Corporation | Scenario, Forecast | ||
Subsequent Event [Line Items] | ||
Board member not re elected | member | 1 |