Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 30, 2016 | |
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 | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 37,161,650 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Net revenue | $ 10.7 | $ 15.7 |
Cost of goods sold | 6.3 | 9.7 |
Gross profit | 4.4 | 6 |
Operating expenses: | ||
Selling, general and administrative | 10.6 | 16.8 |
Research and development | 3.4 | 3 |
Restructuring and other | 6.8 | 0.6 |
Total | 20.8 | 20.4 |
Operating loss from continuing operations | (16.4) | (14.4) |
Other (income) expense: | ||
Interest income | 0 | (0.1) |
Interest expense | 0 | 0.4 |
(Income) loss from short term investment | 1.6 | 0 |
Other, net expense (income) | 1.5 | 0.7 |
Total | (0.1) | 1 |
Loss from continuing operations before income taxes | (16.3) | (15.4) |
Income tax provision (benefit) | (1.6) | 0.1 |
Loss from continuing operations | (14.7) | (15.5) |
Discontinued operations: | ||
Gain on sale of discontinued businesses, net of income taxes | 2.4 | 0 |
Income (loss) from operations of discontinued businesses, net of income taxes | (3.1) | 1.1 |
Reclassification of cumulative translation adjustment | (75.7) | 0 |
Income (loss) from discontinued operations, net of income taxes | (76.4) | 1.1 |
Net loss | $ (91.1) | $ (14.4) |
Loss per common share — basic: | ||
Continuing operations (in dollars per share) | $ (0.40) | $ (0.38) |
Discontinued operations (in dollars per share) | (2.06) | 0.03 |
Net loss (in dollars per share) | (2.46) | (0.35) |
Loss per common share — diluted: | ||
Continuing operations (in dollars per share) | (0.40) | (0.38) |
Discontinued operations (in dollars per share) | (2.06) | 0.03 |
Net loss (dollars per share) | $ (2.46) | $ (0.35) |
Weighted average shares outstanding - basic (in shares) | 37.1 | 41 |
Weighted average shares outstanding - diluted (in shares) | 37.1 | 41 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (91.1) | $ (14.4) |
Net unrealized gains (losses) on derivative financial instruments: | ||
Net holding gains (losses) arising during the period | 0 | 0.9 |
Reclassification adjustment for net realized gains recorded in net loss | 0 | (2.1) |
Total net unrealized gains (losses) on derivative financial instruments | 0 | (1.2) |
Net pension adjustments: | ||
Liability adjustments for defined benefit plans | 0.1 | 0 |
Reclassification adjustment for defined benefit plans recorded in net loss | 1.3 | 0.2 |
Total net pension adjustments | 1.4 | 0.2 |
Net foreign currency translation: | ||
Unrealized foreign currency translation gains (losses) | (0.8) | (4.6) |
Reclassification of cumulative translation adjustments | 75.7 | 0 |
Total net foreign currency translation | 74.9 | (4.6) |
Total other comprehensive income (loss), net of tax | 76.3 | (5.6) |
Comprehensive loss | $ (14.8) | $ (20) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 26.2 | $ 70.4 |
Short term investments | 36.8 | 0 |
Accounts receivable, net | 6.6 | 9.8 |
Inventories | 6.5 | 8.1 |
Other current assets | 4.4 | 19.1 |
Current assets of discontinued operations | 22 | 44.3 |
Total current assets | 102.5 | 151.7 |
Property, plant and equipment, net | 3.5 | 4.2 |
Intangible assets, net | 4 | 4.2 |
Goodwill | 3.8 | 3.8 |
Other assets | 0.8 | 0.8 |
Non-current assets of discontinued operations | 3.1 | 3.7 |
Total assets | 117.7 | 168.4 |
Current liabilities: | ||
Accounts payable | 7.1 | 5 |
Short-term debt | 0 | 0 |
Other current liabilities | 18.1 | 30.5 |
Current liabilities of discontinued operations | 49.2 | 74.6 |
Total current liabilities | 74.4 | 110.1 |
Other liabilities | 28.9 | 27 |
Other liabilities of discontinued operations | 4.7 | 6.9 |
Total liabilities | $ 108 | $ 144 |
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 | 1,042.2 | 1,042 |
Retained deficit | (985) | (893.9) |
Accumulated other comprehensive loss | (19.8) | (96.1) |
Treasury stock, at cost | (28.1) | (28) |
Total shareholders' equity | 9.7 | 24.4 |
Total liabilities and shareholders’ equity | $ 117.7 | $ 168.4 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
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 | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (91.1) | $ (14.4) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 0.7 | 5.4 |
Reclassification cumulative translation adjustment | 75.7 | 0 |
Short term investment | (36.6) | 0 |
Other, net | 1.3 | 2.7 |
Changes in operating assets and liabilities | (19.5) | (9.2) |
Net cash used in operating activities | (69.5) | (15.5) |
Cash Flows from Investing Activities: | ||
Capital expenditures | (0.1) | (0.8) |
Proceeds from sale of business | 4.7 | 0 |
Proceeds from sale of assets | 20.8 | 0.4 |
Net cash provided by (used in) investing activities | 25.4 | (0.4) |
Cash Flows from Financing Activities: | ||
Purchase of treasury stock | 0 | (0.7) |
Short-term debt repayment | (0.2) | (6.4) |
Short-term borrowings | 0 | 7.4 |
Net cash (used in) provided by financing activities | (0.2) | 0.3 |
Effect of exchange rate changes on cash and cash equivalents | 0.1 | (2.8) |
Net change in cash and cash equivalents | (44.2) | (18.4) |
Cash and cash equivalents — beginning of period | 70.4 | 114.6 |
Cash and cash equivalents — end of period | $ 26.2 | $ 96.2 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
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, 2015 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, 2015 . On January 4, 2016, Imation completed the sale of its corporate headquarters facility in Oakdale, Minnesota, to Larson Family Real Estate LLLP for net proceeds of approximately $11 million , which approximated the facility’s book value at the time of sale such that no gain or loss was recognized during the first quarter of 2016. The Company keeps a small team and its headquarters in Minnesota. Also on January 4, 2016, the Company sold its Memorex trademark and two associated trademark licenses to DPI Inc., a St. Louis-based branded consumer electronics company for $9.4 million , which approximated the book value of these assets at the time of sale such that no gain or loss was recognized during the first quarter of 2016 On February 2, 2016, the Company sold its IronKey business to Kingston Digital, Inc. and DataLocker Inc. in two asset purchase agreements, but which qualified as the sale of a business. To Kingston Digital, Inc., we sold the assets representing the Company's business of developing, designing, manufacturing and selling IronKey mobile security solutions. This includes Windows to Go USB flash drives, Windows to Go use cases and encrypted USB flash drives and external USB hard drives. The sale specifically excluded the software and services aspect of the IronKey business. Kingston Digital, Inc. paid a purchase price of $4.3 million at closing for certain assets, including inventory, and the Company retained accounts receivable and accounts payable relating to that business. To DataLocker, Imation sold the assets of the Company’s business of software and services for its IronKey products, including services related to Windows to Go USB flash drives. DataLocker paid a purchase price of $0.4 million at closing and agreed to assume certain service obligations in the amount of approximately $2 million , as well as pay the Company earnouts in the event certain service revenue targets are achieved. The potential earn-outs to Imation are determined in each of the three annual periods subsequent to the sale of IronKey, whereby the Company will receive 10% of the amount, if any, whereby revenue exceeds thresholds established under the sale agreement. The Company’s best estimate, at this time, is that it will not receive any contingent consideration and, accordingly, has not recorded any associated receivable. The Company recorded a pre-tax gain on this sale of $3.8 million during the first quarter of 2016, which is reflected as a component of our discontinued operations. The operating results of our former Storage Media and Accessories (i.e. Legacy Businesses) and IronKey businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations for all periods presented. Our continuing operations in each period presented represents our Nexsan business as well as Corporate expenses and activities not directly attributable to our Legacy Businesses and IronKey. Assets and liabilities directly associated with our Legacy Businesses and IronKey and that are not part of our on-going operations have been separately presented on the face of our consolidated balance sheet as of both March 31, 2016 and December 31, 2015. See Note 4 - Discontinued Operations for further information. |
Recently Issued or Adopted Acco
Recently Issued or Adopted Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Recently Issued or Adopted Accounting Pronouncements | Recently Issued or Adopted Accounting Pronouncements In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which requires management to assess a company’s ability to continue as going concern and to provide related footnote disclosures in certain circumstances. Before this new standard, there was minimal guidance in U.S. GAAP specific to going concern. Under the new standard, disclosures are required when conditions give rise to substantial doubt about a company’s ability to continue as a going concern within one year from the financial statement issuance date. The new standard applies to all companies and is effective for the annual period ending after December 15, 2016, and all annual and interim periods thereafter. The Company is currently evaluating the impact of adopting this standard and will adopt and apply the guidance of this new standard when effective. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which revises the accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The new guidance requires the fair value measurement of investments in equity securities and other ownership interests in an entity, including investments in partnerships, unincorporated joint ventures and limited liability companies (collectively, equity securities) that do not result in consolidation and are not accounted for under the equity method. Entities will need to measure these investments and recognize changes in fair value in net income. Entities will no longer be able to recognize unrealized holding gains and losses on equity securities they classify under current guidance as available for sale in other comprehensive income (OCI). They also will no longer be able to use the cost method of accounting for equity securities that do not have readily determinable fair values. Instead, for these types of equity investments that do not otherwise qualify for the net asset value practical expedient, entities will be permitted to elect a practicability exception and measure the investment at cost less impairment plus or minus observable price changes (in orderly transactions). The ASU also establishes an incremental recognition and disclosure requirement related to the presentation of fair value changes of financial liabilities for which the fair value option (FVO) has been elected. Under this guidance, an entity would be required to separately present in OCI the portion of the total fair value change attributable to instrument-specific credit risk as opposed to reflecting the entire amount in earnings. For derivative liabilities for which the FVO has been elected, however, any changes in fair value attributable to instrument-specific credit risk would continue to be presented in net income, which is consistent with current guidance. For Imation, this standard is effective beginning January 1, 2018 via a cumulative-effect adjustment to beginning retained earnings, except for guidance relative to equity securities without readily determinable fair values which is applied prospectively. The Company is currently assessing this ASU’s impacts on our consolidated results of operations and financial condition. In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), which requires lessees to recognize right-of-use assets and lease liabilities on the balance sheet. ASU 2016-02 is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements. ASU 2016-02 will be effective for the Company beginning on January 1, 2019. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-09, Compensation - Stock Compensation (Topic 718), which simplified certain aspects of the accounting for share-based payment transactions, including income taxes, classification of awards and classification in the statement of cash flows. ASU 2016-09 will be effective for the Company beginning in its first quarter of 2017. The Company is currently evaluating the impact of adopting the new stock compensation standard on its consolidated financial statements. |
(Loss) Earnings per Common Shar
(Loss) Earnings per Common Share | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, (In millions, except for per share amounts) 2016 2015 Numerator: Loss from continuing operations $ (14.7 ) $ (15.5 ) Income (loss) from discontinued operations (76.4 ) 1.1 Net loss $ (91.1 ) $ (14.4 ) Denominator: Weighted average number of common shares outstanding during the period - basic 37.1 41.0 Dilutive effect of stock-based compensation plans — — Weighted average number of diluted shares outstanding during the period - diluted 37.1 41.0 Loss per common share — basic: Continuing operations $ (0.40 ) $ (0.38 ) Discontinued operations (2.06 ) 0.03 Net loss (2.46 ) (0.35 ) Loss per common share — diluted: Continuing operations $ (0.40 ) $ (0.38 ) Discontinued operations (2.06 ) 0.03 Net loss (2.46 ) (0.35 ) Anti-dilutive shares excluded from calculation 5.1 4.4 |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Discontinued Operations | Discontinued Operations At December 31, 2015, our reportable segments were Nexsan, Ironkey and Storage Media and Accessories ("Legacy Businesses"). In September, 2015, the Company adopted a restructuring plan which began the termination process of our Legacy Businesses (which included all product lines and operations associated with commercial storage media (magnetic tape), consumer storage media (optical disc and flash drive) and audio and accessories). Strategically, our Board and Management determined that there was not a viable plan to make the Legacy Businesses successful and, accordingly, we began to aggressively wind-down these businesses in an accelerated manner via a restructuring plan (the "Restructuring Plan"). The Restructuring plan also called for the aggressive rationalization of Imation’s corporate overhead and focused on reducing our operating losses. As of March 31, 2016, our wind-down of our Legacy Businesses is materially complete as we have effectively terminated all employees associated with our Legacy Businesses and ceased all operations, including revenue producing activities. We are still in the process of collecting our outstanding receivables and settling our outstanding payable balances associated with these businesses, but all material activities associated with the Legacy Businesses were completed by March 31, 2016. 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 March 31, 2016, because we have ceased operations in all of our international legal entities other than those associated with Nexsan, we have determined that the liquidations of our international entities associated with our Legacy Businesses are substantially complete. All remaining activities associated with these entities, including the final disposition of remaining balance sheet amounts and formal dissolution of these entities are being managed and controlled by the Company's U.S. Corporate function. Accordingly, during the quarter ended March 31, 2016, the Company reclassified into discontinued operations $75.7 million of foreign currency translation losses associated with our Legacy Businesses. Additionally, in February 2016 the Company sold our IronKey business. The operating results for the Legacy Businesses and IronKey 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 March 31, (In millions) 2016 2015 Net revenue 2.0 $ 139.7 Cost of goods sold 0.6 111.7 Gross Profit 1.4 28.0 Selling, General and administrative 4.0 24.2 Research and development 0.5 1.8 Restructuring and other (0.3 ) 0.6 Reclassification of cumulative translation adjustment 75.7 — Other (Income) Expense 0.3 0.3 Income (loss) from operations of discontinued businesses, before income taxes (78.8 ) 1.1 Gain on sale of discontinued businesses, before income taxes 3.8 — Income tax provision 1.4 — Income (loss) from discontinued operations, net of income taxes (76.4 ) $ 1.1 The depreciation and amortization expenses related to discontinued operations were $0.0 and $1.6 million for the quarter ended March 31, 2016 and 2015, respectively. Capital expenditures associated with discontinued operations were $0.0 and $0.1 million for the quarter ended March 31, 2016 and 2015, respectively. Current assets of discontinued operations of $22.0 million as of March 31, 2016 included approximately $10.0 million of restricted cash (primarily associated with our disputing of certain payables to vendors) and $8.0 million of accounts receivables and other receivables, with the remainder consisting of a variety of immaterial other current asset amounts. Current assets of discontinued operations of $44.3 million as December 31, 2015 included approximately $16.0 million of accounts receivable, $10.0 million of restricted cash, $2.0 million of inventory and other current assets. Current liabilities of discontinued operations of $49.2 million as of March 31, 2016 included accounts payable of $35.0 million and $8.0 million of customer credit and rebate accruals, with the remainder consisting of a variety of immaterial other current liability amounts. Current liabilities of discontinued operations of $74.6 million as of December 31, 2015 included approximately $39 million of accounts payable, $5.0 million of rebates, $5.0 million of accrued levy, $2.0 million of deferred revenue and other current liabilities. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 3 Months Ended |
Mar. 31, 2016 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Balance Sheet Information | Supplemental Balance Sheet Information Additional supplemental balance sheet information is provided as follows: March 31, December 31, (In millions) 2016 2015 Accounts Receivable: Accounts receivable $ 7.2 $ 10.4 Less reserves and allowances (1) (0.6 ) (0.6 ) Accounts receivable, net $ 6.6 $ 9.8 Inventories: Finished goods $ 0.1 $ 0.9 Raw materials and supplies 6.4 7.2 Total inventories $ 6.5 $ 8.1 Property, Plant and Equipment: Property, plant and equipment $ 12.7 $ 12.7 Less accumulated depreciation (9.2 ) (8.5 ) Property, plant and equipment, net $ 3.5 $ 4.2 (1) Accounts receivable reserves and allowances include estimated amounts for customer returns, discounts on payment terms and uncollectible accounts. Other current liabilities (included as a separate line in our Condensed Consolidated Balance Sheets) includes deferred revenue of $ 6.5 million and $ 6.2 million and accrued payroll of $2.7 million and $3.3 million as of March 31, 2016 and December 31, 2015 , respectively. Other liabilities (included as a separate line in our Condensed Consolidated Balance Sheets) includes pension liabilities of $22.8 million and $21.1 million as of March 31, 2016 and December 31, 2015 , respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible Assets Intangible assets consist of the following: (In millions) Developed Technology Total March 31, 2016 Cost $ 4.3 $ 4.3 Accumulated amortization (0.3 ) (0.3 ) Intangible assets, net $ 4.0 $ 4.0 December 31, 2015 Cost $ 4.3 $ 4.3 Accumulated amortization (0.1 ) (0.1 ) Intangible assets, net $ 4.2 $ 4.2 Amortization expense for intangible assets consisted of the following: Three Months Ended March 31, (In millions) 2016 2015 Amortization expense $ 0.2 $ 1.9 Estimated amortization expense for the remainder of 2016 and each of the next four years is as follows: (In millions) 2016 2017 2018 2019 2020 Amortization expense $ 0.5 $ 0.7 $ 0.7 $ 0.7 $ 0.7 |
Restructuring and Other Expense
Restructuring and Other Expense | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, (In millions) 2016 2015 Restructuring Expense: Severance and related $ — $ 0.1 Total restructuring $ — $ 0.1 Other Expense: Pension settlement/curtailment (Note 9) 1.2 — Asset disposals / write down 0.3 — Other (1) 5.3 0.5 Total $ 6.8 $ 0.6 (1) For the three months ended March 31, 2016, other includes consulting expenses of $2.1 million and $1.0 million for Realization Services, Inc. (see Note 16 - Related Party Transactions) and Otterbourg P.C., respectively, as well as $2.2 million for other employee costs and consulting fees directly attributable to our Restructuring Plan. We have considered these costs to be attributable to our Corporate activities and, therefore, they are not part of our discontinued operations. 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, 2015 1.0 — — 1.0 Usage and payments (0.6 ) — — (0.6 ) Accrued balance at March 31, 2016 0.4 — — 0.4 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation for continuing operations consisted of the following: Stock-based compensation for discontinued operations was immaterial. Three Months Ended March 31, (In millions) 2016 2015 Stock-based compensation expense $ 0.2 $ 0.9 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 2015 Annual Report on Form 10-K. As of March 31, 2016 , there were 537,454 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, 2015 4,551,221 $ 9.02 Granted 20,000 0.83 Exercised — — Canceled (437,920 ) 17.06 Forfeited (264,207 ) 1.46 Outstanding March 31, 2016 3,869,094 $ 8.59 Exercisable as of March 31, 2016 2,867,618 $ 11.06 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: Three Months Ended March 31, 2016 2015 Volatility 41.0 % 46.0 % Risk-free interest rate 1.8 % 1.9 % Expected life (months) 72 73 Dividend yield — — As of March 31, 2016 , there was $0.6 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 2.6 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, 2015 1,162,776 $ 2.34 Granted — — Vested (155,596 ) 2.62 Forfeited (67,615 ) 2.88 Nonvested as of March 31, 2016 939,565 $ 2.26 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. As of March 31, 2016 , there was $1.6 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 3.6 years. Stock Appreciation Rights During the three months ended March 31, 2016 we did not grant any Stock Appreciation Rights (SARs). Outstanding SARs expire 5 years after the grant date 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 may 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 Nexsan 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 March 31, 2016 , we had 1.2 million SARs outstanding compared to 3.8 million SARS outstanding as of December 31, 2015. The decrease was primarily due to the cancellation of SARs previously granted to IronKey employees. These SARs were canceled as a result of the sale of the IronKey business. 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 | 3 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Plans | Retirement Plans Pension Plans During the three months ended March 31, 2016 , we contributed $0.0 to our worldwide pension plans. We do not presently anticipate contributing any amounts to fund our worldwide pension plans during the remainder of 2016 . 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 three months ended March 31, 2016 have exceeded our expected 2016 interest costs. As a result, a partial settlement event occurred during the three months ended March 31, 2016 and we recognized a settlement loss of $1.2 million . These settlement losses are included in restructuring and other in our Condensed Consolidated Statements of Operations. Components of net periodic pension (credit) cost included the following: United States International Three Months Ended March 31, (In millions) 2016 2015 2016 2015 Service cost $ — $ — $ — $ 0.1 Interest cost 0.7 0.7 — 0.1 Expected return on plan assets (0.9 ) (1.0 ) — (0.2 ) Amortization of net actuarial loss 0.1 0.3 — 0.1 Amortization of prior service credit — — — — Net periodic pension (credit) cost $ (0.1 ) $ — $ — $ 0.1 Settlement loss 1.2 — — — Curtailment gain — — — — Total pension (credit) cost $ 1.1 $ — $ — $ 0.1 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
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 months ended March 31, 2016 , we recorded income tax benefit from continuing operations of $(1.6) million . For the three months ended March 31, 2015 , we recorded income tax expense of $0.1 million . The change in the income tax expense from continuing operations for the three months ended March 31, 2016 compared to the same period last year is primarily related to the intraperiod allocation of total tax expense between continuing operations and discontinued operations. The effective income tax rate for the three months ended March 31, 2016 differs from the U.S. federal statutory rate of 35 percent primarily due to a valuation allowance on various deferred tax assets and the intraperiod allocation of total tax expense between continuing operations and discontinued operations. 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 2012 through 2014 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 2009. 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 $1.5 million and $1.7 million as of March 31, 2016 and December 31, 2015 , respectively. These liabilities are associated with our Legacy Businesses and have been included with the separately presented other liabilities of discontinued operations on the face of our consolidated balance sheet. 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 | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt As of March 31, 2016 , the Company does not have any debt outstanding or any line of credit or other agreements that provide the Company with available borrowing capacity. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or the exit price in an orderly transaction between market participants on the measurement date. A three-level hierarchy is used for fair value measurements based upon the observability of the inputs to the valuation of an asset or liability as of the measurement date. Level 1 measurements consist of unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 measurements include quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 3 measurements include significant unobservable inputs. A financial instrument's level within the hierarchy is based on the highest level of any input that is significant to the fair value measurement. Following is a description of our valuation methodologies used to estimate the fair value for our assets and liabilities. Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis The Company's non-financial assets such as goodwill, intangible assets and property, plant and equipment are recorded at fair value when an impairment is recognized or at the time acquired in a business combination. The determination of the estimated fair value of such assets required the use of significant unobservable inputs which would be considered Level 3 fair value measurements. Assets and Liabilities that are Measured at Fair Value on a Recurring Basis The Company measures certain assets and liabilities at their estimated fair value on a recurring basis, including cash and cash equivalents, our contingent consideration obligations associated with the acquisition of CDI and investments in trading securities (described further below under the "Trading Securities" heading). The following table provides information by level for assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015: March 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Assets: Trading securities 36.8 0.2 36.6 — Liabilities: Contingent consideration associated with CDI acquisition 0.8 — 0.8 December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Assets: Trading securities 1.0 1.0 — — Warrants 0.4 — — 0.4 Liabilities: Contingent consideration associated with CDI acquisition 0.8 — — 0.8 Trading Securities In January 2016, the Board of Directors of the Company (the “Board”) approved investing up to 25% of the Company’s cash in investment funds with the focus on producing attractive risk-adjusted rates of return while maintaining liquidity. On February 8, 2016, the Company entered into a subscription agreement to invest up to $20 million of its excess cash from various Company subsidiaries in the Clinton Lighthouse Equity Strategies Fund (Offshore) Ltd. (“Clinton Lighthouse”). Clinton Lighthouse is a market neutral fund which provides daily liquidity to its investors. Clinton Lighthouse is managed by Clinton Group, Inc. (“Clinton”). Pursuant to the arrangement, Clinton agreed to waive its customary management fee and agreed to the receipt of any consideration pursuant to its performance fee (which is based on the annual investment returns of the fund) in the form of the Company’s common stock at a value of $1.00 per share. The closing price of the Company’s common stock on February 8, 2016 was $0.65 . The Board, in conjunction with management, reviewed various funds and voted to approve this investment, with Joseph A. De Perio, the Chairman of the Board and a Senior Portfolio Manager at Clinton, abstaining from the vote. On March 17, 2016, the Board approved the elimination of the 25% limitation on the amount of the Company’s cash that may be invested, such that the Company may invest up to $35 million of its excess cash in Clinton Lighthouse. On April 29, 2016, the Company and Clinton entered into an amended and restated agreement in order to adjust the price at which the Company’s stock would be valued for purposes of paying the performance fee thereunder from $1.00 to $1.80 beginning May 1, 2016, subject to adjustment based on the volume weighted average price of the Company’s common stock. As of March 31, 2016, the Company has accrued $0.5 million associated with the performance fees pertaining to this investment, but has not made any payments under the agreement. The amended and restated agreement is subject to the Company’s receipt of shareholder approval of the issuance of common stock contemplated by the agreement. The short term investment was classified as a trading security as we expect to be actively managing this investment at all times with the intention of maximizing our investment returns. Income or loss associated with this trading security as a component of Other (income) expense in our Consolidated Statement of Operations and purchases or sales of this security are reflected as Operating activities in our Consolidated Statement of Cash Flows. As of March 31, 2016, the short term investment balance of $36.8 million included $36.6 million investment in Clinton Lighthouse. We recorded an unrealized gain of approximately $1.6 million (net of $0.5 million accrued fees) in Q1, 2016 under other (income) expense in the income statement. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016 . Since the authorization of this program, we have repurchased 3.0 million shares of common stock for $13.3 million and, as of March 31, 2016 , we had remaining authorization to repurchase up to 2.0 million additional shares. The treasury stock held as of March 31, 2016 was acquired at an average price of $3.84 per share. Following is a summary of treasury share activity: Treasury Shares Balance as of December 31, 2015 7,159,474 Purchases — Exercise of stock options — Restricted stock grants 101,155 Forfeitures and other — Balance as of March 31, 2016 7,260,629 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, 2015 $ — $ (20.1 ) $ (76.0 ) $ (96.1 ) Other comprehensive income (loss) before reclassifications, net of tax — 0.1 (0.8 ) (0.7 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax — 1.3 75.7 77.0 Net current period other comprehensive (loss) income — 1.4 74.9 76.3 Balance as of March 31, 2016 $ — $ (18.7 ) $ (1.1 ) $ (19.8 ) As of March 31, 2016, the remaining $1.1 million of cumulative foreign currency translation amounts recorded in Accumulated Other Comprehensive Income pertain to our on-going Nexsan operations. See Note 4 - Discontinued Operations for disclosure pertaining to the $75.7 million of accumulated foreign currency translation losses reclassified into discontinued operations during the quarter ended March 31, 2016. 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 March 31, (In millions) 2016 2015 Gains on cash flow hedges — (3.2 ) Cost of goods sold Income tax expense — 1.1 Income tax provision Subtotal — (2.1 ) Amortization of net actuarial loss — 0.3 Selling, general and administrative Pension curtailment / settlement loss 1.8 — Restructuring and other Income tax expense (0.5 ) (0.1 ) Income tax provision Subtotal 1.3 0.2 Cumulative translation adjustments 75.7 — Discontinued operations Income tax benefit — — Income tax provision Subtotal 75.7 — Total reclassifications for the period 77.0 (1.9 ) |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Beginning in the fourth quarter of 2015, in conjunction with our accelerated wind-down of the Company's Legacy Business, the Company changed the manner in which it evaluates the operations of the Company and makes decisions around the allocation of resources. The Company operated in three reportable segments as of December 31, 2015: "Nexsan", "IronKey", and "Storage Media and Accessories" (also referred to as our "Legacy Businesses"). We have sold our IronKey business in February 2016 and have substantially completed the wind-down of Storage Media and Accessories businesses as of March 31, 2016. Both businesses are presented in our Condensed Consolidated Statements of Operation 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. Nexsan is our only remaining reportable segment as of March 31, 2016. 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. The corporate and unallocated operating loss includes costs which are not allocated to the business segments in management's evaluation of segment performance such as litigation settlement expense, corporate expense and other expenses. Net revenue and operating income (loss) from continuing operations by segment were as follows: Three Months Ended March 31, (In millions) 2016 2015 Net revenue Nexsan 10.7 15.7 Total net revenue $ 10.7 $ 15.7 Three Months Ended March 31, (In millions) 2016 2015 Operating income (loss) from continuing operations Nexsan (5.2 ) (7.2 ) Total segment operating loss (5.2 ) (7.2 ) Corporate and unallocated (4.4 ) (6.6 ) Restructuring and other (6.8 ) (0.6 ) Total operating loss (16.4 ) (14.4 ) Interest income — (0.1 ) Interest expense — 0.4 Short term investment (income) loss (1.6 ) — Other, net expense 1.5 0.7 Loss from continuing operations before income taxes $ (16.3 ) $ (15.4 ) |
Litigation, Commitments and Con
Litigation, Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
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. Consequently, as of March 31, 2016 , 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. 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 were seeking damages for breaches of fiduciary duties, waste of corporate assets and unjust enrichment and corporate governance reforms related to the Company’s compensation practices. SpearPoint Capital Fund LP et al. and the Company reached a final settlement of this matter in May 2016, whereby the Company agreed to reimburse SpearPoint's attorney fees of approximately $157,000 . On January 26, 2016, CMC Magnetic Corp, a supplier of Imation Storage Media business, filed a suit in Ramsey County District Court, Minnesota seeking $6.3 million against Imation and $0.6 million against Imation Latin America, Inc. for breach of contract related to inventory purchases. Imation filed an Answer, Affirmative Defenses and Counterclaims, denying any liabilities and asserting counterclaims for breach of warranty, breach of contract, failure to pay rebates and unjust enrichment. Additionally, Imation is seeking damages from CMC Magnetics Corp via its disputing of payables to that former vendor (described in the next paragraph) in an amount exceeding $6.3M . Imation will vigorously defend the case. The Company is currently disputing trade payables with certain vendors (including CMC Magnetic, Corp) associated with our Legacy Businesses. As of March 31, 2016 and December 31, 2015 the Company had $26.0 million of trade payables recorded to these vendors (which are reflected within other current liabilities of discontinued operations on our Consolidated Balance Sheet), which is based on amounts billed to the Company, but not paid. The Company alleges historical nonperformance by these vendors and, accordingly, is disputing the amounts presently being claimed as being owed. To the extent the Company is able to settle this dispute for amounts lower than $26.0 million , it will record a gain at that time as a part of discontinued operations. As a part of this dispute, these vendors have taken action to seize approximately $8 million of the Company's cash, which is recorded as restricted cash within current assets of discontinued operations on the Company's consolidated balance sheet as of March 31, 2016. On May 6, 2016 Nexsan Technology Incorporated ("Nexsan"), a wholly own subsidiary of Imation, filed a complaint in the state of Delaware for a declaratory judgment against EMC Corporation ('EMC"). Nexsan seeks a declaration that Nexsan has a priority of right to use the Nexsan UNITY Marks and that Nexsan's prosecution of its trademark applications with the respect to, and to use, the Nexsan UNITY Marks does not infringe upon the EMC UNITY Marks. In addition, Nexsan seeks an injunctions preventing EMC from threatening Nexsan with legal action relating to use of the Nexsan UNITY Marks, or making any public statements or statements to potential customers calling into question Nexsan's right to use its UNITY Marks. Environmental Matters Our operations are subject to a wide range of federal, state and local environmental laws. Environmental remediation costs are accrued when a probable liability has been determined and the amount of such liability has been reasonably estimated. These accruals are reviewed periodically as remediation and investigatory activities proceed and are adjusted accordingly. Compliance with environmental regulations has not had a material adverse effect on our financial results. We did not have any environmental accruals as of March 31, 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, 2015. As of March 31, 2016 and December 31, 2015 , we had accrued liabilities of $5.1 million and $5.1 million , respectively, associated with levies for which we are withholding payment. The amounts are recorded within our current liabilities of continued operations and are not part of our discontinued operations. The Company's on-going Corporate function manages our copyright levies and is currently exploring various options associated with the potential disposition of these levies in the future. 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. Imation has corresponding claims in those actions seeking reimbursement of levies improperly collected by those collecting societies. A hearing occurred on December 8, 2015, 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. On April 8, 2016, the Paris District Court rejected all of Imation’s claims finding that the European Union law arguments raised by Imation were inapplicable and relied solely on French law to grant Copie France’s counterclaims. Imation Europe has filed a notice of appeal which suspends enforcement of the ruling. Imation had previously reversed all of its liabilities associated with copyright levies in France. Despite the April 2016 ruling of the Paris District Court, the Company does not believe it to be probable that it will have to make any copyright levy payments in the future in France and, accordingly, has not recorded an accrual for this matter. The Canadian Private Copying Collective ("CPCC") is alleging that Imation Enterprises Corp. has not reported all leviable sales of blank audio recording media, resulting in levies owing for the time frame of September 1, 2010 to February 28, 2015 and seeks CAD 6 million . We believe the allegation is without merit and will vigorously defend the case. We have not established an accrual for this amount, as we do not believe that a loss is reasonably possible. 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 2016 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 | 3 Months Ended |
Mar. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Related Party Transactions | Related Party Transactions As previously disclosed, on August 17, 2015, the Board appointed Mr. Kasoff to serve as Interim President of the Company effective August 19, 2015. 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. Effective November 25, 2015, the Board of Directors appointed Mr. Kasoff to also serve as the Company's Interim Chief Financial Officer until April 26, 2016 when the Company appointed Mr. Danny Zheng as the Chief Financial Officer. 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 amendments, RSI had performed consulting services for the Company for the period from August 8, 2015 up to March 30, 2016, 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. RSI received consulting fees of $2.1 million (up to $172,000 per week) during the quarter ending March 31, 2016. As of March 31, 2016, the Company's engagement with RSI was completed. The fees are recorded in restructuring and other charges. In January 2016, the Board approved investing up to 25% of the Company’s cash in investment funds with the focus on producing attractive risk-adjusted rates of return while maintaining liquidity. On February 8, 2016, the Company entered into a subscription agreement to invest up to $20 million of its excess cash from various Company subsidiaries in the Clinton Lighthouse, a market neutral fund which provides daily liquidity to its investors. Clinton Lighthouse is managed by Clinton. Pursuant to the arrangement, Clinton agreed to waive its customary management fee and agreed to the receipt of any consideration pursuant to incentive compensation in the form of Imation common stock at a value of $1.00 per share. The Board of Directors, in conjunction with management, reviewed various funds and voted to approve this investment, with Mr. De Perio abstaining from the vote. On March 17, 2016, the Board approved the elimination of the 25% limitation on the amount of the Company's excess cash that may be invested, such that the Company may now invest up to $35 million of its excess cash in Clinton Lighthouse. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company filed property tax petitions against County of Washington, Minnesota, where our former headquarters was located, claiming that the property had been partially, unfairly or unequally assessed for the years of 2012, 2013 and 2014. On April 12, 2016 we reached an agreement with the County of Washington and entered Stipulated Judgments. Both parties agreed on reduced valuations and a recalculation of the property taxes for 2012, 2013 and 2014. We expect a tax refund of approximately $2.0 million (net of fees) plus interest, to be received and recorded in the second quarter 2016. This amount, once received, will be considered realized at that time and is expected to be recorded as a gain in the second quarter of 2016. |
Recently Issued or Adopted Ac24
Recently Issued or Adopted Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Recently Issued or Adopted Accounting Pronouncements | Recently Issued or Adopted Accounting Pronouncements In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which requires management to assess a company’s ability to continue as going concern and to provide related footnote disclosures in certain circumstances. Before this new standard, there was minimal guidance in U.S. GAAP specific to going concern. Under the new standard, disclosures are required when conditions give rise to substantial doubt about a company’s ability to continue as a going concern within one year from the financial statement issuance date. The new standard applies to all companies and is effective for the annual period ending after December 15, 2016, and all annual and interim periods thereafter. The Company is currently evaluating the impact of adopting this standard and will adopt and apply the guidance of this new standard when effective. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which revises the accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The new guidance requires the fair value measurement of investments in equity securities and other ownership interests in an entity, including investments in partnerships, unincorporated joint ventures and limited liability companies (collectively, equity securities) that do not result in consolidation and are not accounted for under the equity method. Entities will need to measure these investments and recognize changes in fair value in net income. Entities will no longer be able to recognize unrealized holding gains and losses on equity securities they classify under current guidance as available for sale in other comprehensive income (OCI). They also will no longer be able to use the cost method of accounting for equity securities that do not have readily determinable fair values. Instead, for these types of equity investments that do not otherwise qualify for the net asset value practical expedient, entities will be permitted to elect a practicability exception and measure the investment at cost less impairment plus or minus observable price changes (in orderly transactions). The ASU also establishes an incremental recognition and disclosure requirement related to the presentation of fair value changes of financial liabilities for which the fair value option (FVO) has been elected. Under this guidance, an entity would be required to separately present in OCI the portion of the total fair value change attributable to instrument-specific credit risk as opposed to reflecting the entire amount in earnings. For derivative liabilities for which the FVO has been elected, however, any changes in fair value attributable to instrument-specific credit risk would continue to be presented in net income, which is consistent with current guidance. For Imation, this standard is effective beginning January 1, 2018 via a cumulative-effect adjustment to beginning retained earnings, except for guidance relative to equity securities without readily determinable fair values which is applied prospectively. The Company is currently assessing this ASU’s impacts on our consolidated results of operations and financial condition. In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), which requires lessees to recognize right-of-use assets and lease liabilities on the balance sheet. ASU 2016-02 is to be applied using a modified retrospective approach at the beginning of the earliest comparative period in the financial statements. ASU 2016-02 will be effective for the Company beginning on January 1, 2019. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-09, Compensation - Stock Compensation (Topic 718), which simplified certain aspects of the accounting for share-based payment transactions, including income taxes, classification of awards and classification in the statement of cash flows. ASU 2016-09 will be effective for the Company beginning in its first quarter of 2017. The Company is currently evaluating the impact of adopting the new stock compensation standard on its consolidated financial statements. |
(Loss) Earnings per Common Sh25
(Loss) Earnings per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, (In millions, except for per share amounts) 2016 2015 Numerator: Loss from continuing operations $ (14.7 ) $ (15.5 ) Income (loss) from discontinued operations (76.4 ) 1.1 Net loss $ (91.1 ) $ (14.4 ) Denominator: Weighted average number of common shares outstanding during the period - basic 37.1 41.0 Dilutive effect of stock-based compensation plans — — Weighted average number of diluted shares outstanding during the period - diluted 37.1 41.0 Loss per common share — basic: Continuing operations $ (0.40 ) $ (0.38 ) Discontinued operations (2.06 ) 0.03 Net loss (2.46 ) (0.35 ) Loss per common share — diluted: Continuing operations $ (0.40 ) $ (0.38 ) Discontinued operations (2.06 ) 0.03 Net loss (2.46 ) (0.35 ) Anti-dilutive shares excluded from calculation 5.1 4.4 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, (In millions) 2016 2015 Net revenue 2.0 $ 139.7 Cost of goods sold 0.6 111.7 Gross Profit 1.4 28.0 Selling, General and administrative 4.0 24.2 Research and development 0.5 1.8 Restructuring and other (0.3 ) 0.6 Reclassification of cumulative translation adjustment 75.7 — Other (Income) Expense 0.3 0.3 Income (loss) from operations of discontinued businesses, before income taxes (78.8 ) 1.1 Gain on sale of discontinued businesses, before income taxes 3.8 — Income tax provision 1.4 — Income (loss) from discontinued operations, net of income taxes (76.4 ) $ 1.1 |
Supplemental Balance Sheet In27
Supplemental Balance Sheet Information (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Supplemental Balance Sheet Information | Additional supplemental balance sheet information is provided as follows: March 31, December 31, (In millions) 2016 2015 Accounts Receivable: Accounts receivable $ 7.2 $ 10.4 Less reserves and allowances (1) (0.6 ) (0.6 ) Accounts receivable, net $ 6.6 $ 9.8 Inventories: Finished goods $ 0.1 $ 0.9 Raw materials and supplies 6.4 7.2 Total inventories $ 6.5 $ 8.1 Property, Plant and Equipment: Property, plant and equipment $ 12.7 $ 12.7 Less accumulated depreciation (9.2 ) (8.5 ) Property, plant and equipment, net $ 3.5 $ 4.2 (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) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consist of the following: (In millions) Developed Technology Total March 31, 2016 Cost $ 4.3 $ 4.3 Accumulated amortization (0.3 ) (0.3 ) Intangible assets, net $ 4.0 $ 4.0 December 31, 2015 Cost $ 4.3 $ 4.3 Accumulated amortization (0.1 ) (0.1 ) Intangible assets, net $ 4.2 $ 4.2 |
Schedule of Amortization Expense for Intangible Assets | Amortization expense for intangible assets consisted of the following: Three Months Ended March 31, (In millions) 2016 2015 Amortization expense $ 0.2 $ 1.9 |
Schedule of Intangible Assets Estimated Amortization Expense | Estimated amortization expense for the remainder of 2016 and each of the next four years is as follows: (In millions) 2016 2017 2018 2019 2020 Amortization expense $ 0.5 $ 0.7 $ 0.7 $ 0.7 $ 0.7 |
Restructuring and Other Expen29
Restructuring and Other Expense (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, (In millions) 2016 2015 Restructuring Expense: Severance and related $ — $ 0.1 Total restructuring $ — $ 0.1 Other Expense: Pension settlement/curtailment (Note 9) 1.2 — Asset disposals / write down 0.3 — Other (1) 5.3 0.5 Total $ 6.8 $ 0.6 (1) For the three months ended March 31, 2016, other includes consulting expenses of $2.1 million and $1.0 million for Realization Services, Inc. (see Note 16 - Related Party Transactions) and Otterbourg P.C., respectively, as well as $2.2 million for other employee costs and consulting fees directly attributable to our Restructuring Plan. We have considered these costs to be attributable to our Corporate activities and, therefore, they are not part of our discontinued operations. |
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, 2015 1.0 — — 1.0 Usage and payments (0.6 ) — — (0.6 ) Accrued balance at March 31, 2016 0.4 — — 0.4 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-Based Compensation | Stock-based compensation for continuing operations consisted of the following: Stock-based compensation for discontinued operations was immaterial. Three Months Ended March 31, (In millions) 2016 2015 Stock-based compensation expense $ 0.2 $ 0.9 |
Summary of Stock Option Activity | The following table summarizes our stock option activity: Stock Options Weighted Average Exercise Price Outstanding December 31, 2015 4,551,221 $ 9.02 Granted 20,000 0.83 Exercised — — Canceled (437,920 ) 17.06 Forfeited (264,207 ) 1.46 Outstanding March 31, 2016 3,869,094 $ 8.59 Exercisable as of March 31, 2016 2,867,618 $ 11.06 |
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: Three Months Ended March 31, 2016 2015 Volatility 41.0 % 46.0 % Risk-free interest rate 1.8 % 1.9 % Expected life (months) 72 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, 2015 1,162,776 $ 2.34 Granted — — Vested (155,596 ) 2.62 Forfeited (67,615 ) 2.88 Nonvested as of March 31, 2016 939,565 $ 2.26 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 Three Months Ended March 31, (In millions) 2016 2015 2016 2015 Service cost $ — $ — $ — $ 0.1 Interest cost 0.7 0.7 — 0.1 Expected return on plan assets (0.9 ) (1.0 ) — (0.2 ) Amortization of net actuarial loss 0.1 0.3 — 0.1 Amortization of prior service credit — — — — Net periodic pension (credit) cost $ (0.1 ) $ — $ — $ 0.1 Settlement loss 1.2 — — — Curtailment gain — — — — Total pension (credit) cost $ 1.1 $ — $ — $ 0.1 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table provides information by level for assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015: March 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Assets: Trading securities 36.8 0.2 36.6 — Liabilities: Contingent consideration associated with CDI acquisition 0.8 — 0.8 December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Assets: Trading securities 1.0 1.0 — — Warrants 0.4 — — 0.4 Liabilities: Contingent consideration associated with CDI acquisition 0.8 — — 0.8 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Schedule of Treasury Share Activity | Following is a summary of treasury share activity: Treasury Shares Balance as of December 31, 2015 7,159,474 Purchases — Exercise of stock options — Restricted stock grants 101,155 Forfeitures and other — Balance as of March 31, 2016 7,260,629 |
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, 2015 $ — $ (20.1 ) $ (76.0 ) $ (96.1 ) Other comprehensive income (loss) before reclassifications, net of tax — 0.1 (0.8 ) (0.7 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax — 1.3 75.7 77.0 Net current period other comprehensive (loss) income — 1.4 74.9 76.3 Balance as of March 31, 2016 $ — $ (18.7 ) $ (1.1 ) $ (19.8 ) |
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 March 31, (In millions) 2016 2015 Gains on cash flow hedges — (3.2 ) Cost of goods sold Income tax expense — 1.1 Income tax provision Subtotal — (2.1 ) Amortization of net actuarial loss — 0.3 Selling, general and administrative Pension curtailment / settlement loss 1.8 — Restructuring and other Income tax expense (0.5 ) (0.1 ) Income tax provision Subtotal 1.3 0.2 Cumulative translation adjustments 75.7 — Discontinued operations Income tax benefit — — Income tax provision Subtotal 75.7 — Total reclassifications for the period 77.0 (1.9 ) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, (In millions) 2016 2015 Net revenue Nexsan 10.7 15.7 Total net revenue $ 10.7 $ 15.7 Three Months Ended March 31, (In millions) 2016 2015 Operating income (loss) from continuing operations Nexsan (5.2 ) (7.2 ) Total segment operating loss (5.2 ) (7.2 ) Corporate and unallocated (4.4 ) (6.6 ) Restructuring and other (6.8 ) (0.6 ) Total operating loss (16.4 ) (14.4 ) Interest income — (0.1 ) Interest expense — 0.4 Short term investment (income) loss (1.6 ) — Other, net expense 1.5 0.7 Loss from continuing operations before income taxes $ (16.3 ) $ (15.4 ) |
Basis of Presentation (Details)
Basis of Presentation (Details) $ in Millions | Feb. 02, 2016USD ($)periodAgreement | Jan. 04, 2016USD ($)trademark | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Service obligations assumed with assets sold | $ 49.2 | $ 74.6 | ||
Discontinued Operations, Disposed of by Sale | Facility Closing | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of headquarters facility | $ 11 | |||
Trademarks | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of intangible assets sold | trademark | 2 | |||
Amount of intangible assets sold | $ 9.4 | |||
Imation Mobile Security (IronKey Brand) | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of sale agreement | Agreement | 2 | |||
Imation Mobile Security Excluding Software and Services | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Consideration received for sale of assets | $ 4.3 | |||
Imation Mobile Security Software and Services | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Consideration received for sale of assets | 0.4 | |||
Service obligations assumed with assets sold | $ 2 | |||
Disposal group, potential earn-outs, number of annual periods subsequent to sale | period | 3 | |||
Disposal group, potential earn-outs as percentage of contingency amount | 10.00% | |||
Disposal group, gain on disposal | $ 3.8 |
(Loss) Earnings per Common Sh36
(Loss) Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Numerator: | ||
Loss from continuing operations | $ (14.7) | $ (15.5) |
Income (loss) from discontinued operations | (76.4) | 1.1 |
Net loss | $ (91.1) | $ (14.4) |
Denominator: | ||
Weighted average number of common shares outstanding during the period - basic (in shares) | 37.1 | 41 |
Dilutive effect of stock-based compensation plans (in shares) | 0 | 0 |
Weighted average number of diluted shares outstanding during the period - diluted (in shares) | 37.1 | 41 |
Loss per common share — basic: | ||
Continuing operations (in dollars per share) | $ (0.40) | $ (0.38) |
Discontinued operations (in dollars per share) | (2.06) | 0.03 |
Net loss (in dollars per share) | (2.46) | (0.35) |
Loss per common share — diluted: | ||
Continuing operations (in dollars per share) | (0.40) | (0.38) |
Discontinued operations (in dollars per share) | (2.06) | 0.03 |
Net loss (dollars per share) | $ (2.46) | $ (0.35) |
Anti-dilutive shares excluded from calculation (in shares) | 5.1 | 4.4 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Discontinued operation, foreign currency translation loss | $ 75,700,000 | $ 0 | |
Current assets of discontinued operations | 22,000,000 | $ 44,300,000 | |
Current liabilities of discontinued operations | 49,200,000 | 74,600,000 | |
Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Discontinued operation, foreign currency translation loss | 75,700,000 | 0 | |
Depreciation and amortization expenses related to the discontinued businesses | 0 | 1,600,000 | |
Capital expenditures associated with the discontinued businesses | 0 | $ 100,000 | |
Current assets of discontinued operations | 22,000,000 | 44,000,000 | |
Discontinued operation, restricted cash | 10,000,000 | 10,000,000 | |
Discontinued operation, inventory and other current assets | 2,000,000 | ||
Discontinued operation, accounts receivable | 8,000,000 | 16,000,000 | |
Current liabilities of discontinued operations | 49,200,000 | 74,600,000 | |
Discontinued operation, account payable | 35,000,000 | 39,000,000 | |
Discontinued operation, customer credit and rebate accruals | $ 8,000,000 | ||
Discontinued operation, rebates | 5,000,000 | ||
Discontinued operation,, accrued levy | 5,000,000 | ||
Discontinued operation, deferred revenue and other current liabilities | $ 2,000,000 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Key Components of Discontinued Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Reclassification of cumulative translation adjustment | $ 75.7 | $ 0 |
Income (loss) from discontinued operations, net of income taxes | (76.4) | 1.1 |
Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net revenue | 2 | 139.7 |
Cost of goods sold | 0.6 | 111.7 |
Gross Profit | 1.4 | 28 |
Selling, General and administrative | 4 | 24.2 |
Research and development | 0.5 | 1.8 |
Restructuring and other | (0.3) | 0.6 |
Reclassification of cumulative translation adjustment | 75.7 | 0 |
Other (Income) Expense | 0.3 | 0.3 |
Income (loss) from operations of discontinued businesses, before income taxes | (78.8) | 1.1 |
Gain on sale of discontinued businesses, before income taxes | 3.8 | 0 |
Income tax provision | 1.4 | 0 |
Income (loss) from discontinued operations, net of income taxes | $ (76.4) | $ 1.1 |
Supplemental Balance Sheet In39
Supplemental Balance Sheet Information - Schedule of Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 | |
Accounts Receivable: | |||
Accounts receivable | $ 7.2 | $ 10.4 | |
Less reserves and allowances | [1] | (0.6) | (0.6) |
Accounts receivable, net | 6.6 | 9.8 | |
Inventories: | |||
Finished goods | 0.1 | 0.9 | |
Raw materials and supplies | 6.4 | 7.2 | |
Total inventories | 6.5 | 8.1 | |
Property, Plant and Equipment: | |||
Property, plant and equipment | 12.7 | 12.7 | |
Less accumulated depreciation | (9.2) | (8.5) | |
Property, plant and equipment, net | $ 3.5 | $ 4.2 | |
[1] | Accounts receivable reserves and allowances include estimated amounts for customer returns, discounts on payment terms and uncollectible accounts. |
Supplemental Balance Sheet In40
Supplemental Balance Sheet Information - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Other Current Liabilities | ||
Supplemental Balance Sheet Disclosures [Line Items] | ||
Deferred revenue | $ 6.5 | $ 6.2 |
Accrued payroll | 2.7 | 3.3 |
Other Liabilities | ||
Supplemental Balance Sheet Disclosures [Line Items] | ||
Pension liabilities | $ 22.8 | $ 21.1 |
Intangible Assets and Goodwil41
Intangible Assets and Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Cost | $ 4.3 | $ 4.3 | |
Accumulated amortization | (0.3) | (0.1) | |
Intangible assets, net | 4 | 4.2 | |
Amortization expense | 0.2 | $ 1.9 | |
Intangible Assets, Amortization Expense, Remainder of 2016 | 0.5 | ||
Intangible Assets, Amortization Expense, 2017 | 0.7 | ||
Intangible Assets, Amortization Expense, 2018 | 0.7 | ||
Intangible Assets, Amortization Expense, 2019 | 0.7 | ||
Intangible Assets, Amortization Expense, 2020 | 0.7 | ||
Developed Technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Cost | 4.3 | 4.3 | |
Accumulated amortization | (0.3) | (0.1) | |
Intangible assets, net | $ 4 | $ 4.2 |
Restructuring and Other Expen42
Restructuring and Other Expense - Components of Restructuring and Other Expense (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Restructuring and Related Activities [Abstract] | |||
Severance and related | $ 0 | $ 0.1 | |
Total restructuring | 0 | 0.1 | |
Pension settlement/curtailment (Note 9) | 1.2 | 0 | |
Asset disposals / write down | 0.3 | 0 | |
Other | [1] | 5.3 | 0.5 |
Total | 6.8 | $ 0.6 | |
Restructuring Cost and Reserve [Line Items] | |||
Other employee costs and consulting fees related to restructuring | 2.2 | ||
Consulting Expenses with Realization Services | Realization Services, Inc. | |||
Restructuring Cost and Reserve [Line Items] | |||
Consulting expenses | 2.1 | ||
Otterbourg P.C. | Realization Services, Inc. | |||
Restructuring Cost and Reserve [Line Items] | |||
Consulting expenses | $ 1 | ||
[1] | For the three months ended March 31, 2016, other includes consulting expenses of $2.1 million and $1.0 million for Realization Services, Inc. (see Note 16 - Related Party Transactions) and Otterbourg P.C., respectively, as well as $2.2 million for other employee costs and consulting fees directly attributable to our Restructuring Plan. We have considered these costs to be attributable to our Corporate activities and, therefore, they are not part of our discontinued operations. |
Restructuring and Other Expen43
Restructuring and Other Expense - Schedule of Restructuring Reserve Activity (Details) - Restructuring Plan $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Restructuring Reserve [Roll Forward] | |
Accrued balance at December 31, 2015 | $ 1 |
Usage and payments | (0.6) |
Accrued balance at March 31, 2016 | 0.4 |
Severance and Related | |
Restructuring Reserve [Roll Forward] | |
Accrued balance at December 31, 2015 | 1 |
Usage and payments | (0.6) |
Accrued balance at March 31, 2016 | 0.4 |
Lease Termination Costs | |
Restructuring Reserve [Roll Forward] | |
Accrued balance at December 31, 2015 | 0 |
Usage and payments | 0 |
Accrued balance at March 31, 2016 | 0 |
Other | |
Restructuring Reserve [Roll Forward] | |
Accrued balance at December 31, 2015 | 0 |
Usage and payments | 0 |
Accrued balance at March 31, 2016 | $ 0 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) | 3 Months Ended | |
Mar. 31, 2016USD ($)plan$ / sharesshares | Mar. 31, 2015USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of share-based compensation plans | plan | 4 | |
Stock-based compensation expense | $ | $ 200,000 | $ 900,000 |
Stock Appreciation Rights (SARs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award expiration term | 5 years | |
Number of awards outstanding (in shares) | shares | 1,200,000 | |
Stock-based compensation expense | $ | $ 0 | |
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) | shares | 537,454 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($)$ / sharesshares | |
Stock Options [Roll Forward] | |
Exercised (in shares) | 0 |
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 | $ | $ 0.6 |
Total compensation cost not yet recognized, period for recognition | 2 years 7 months 6 days |
Stock Options [Roll Forward] | |
Beginning, outstanding (in shares) | 4,551,221 |
Granted (in shares) | 20,000 |
Exercised (in shares) | 0 |
Canceled (in shares) | (437,920) |
Forfeited (in shares) | (264,207) |
Ending, outstanding (in shares) | 3,869,094 |
Exercisable (in shares) | 2,867,618 |
Weighted Average Exercise Price [Roll Forward] | |
Beginning, outstanding (in dollars per share) | $ / shares | $ 9.02 |
Granted (in dollars per share) | $ / shares | 0.83 |
Exercised (in dollars per share) | $ / shares | 0 |
Canceled (in dollars per share) | $ / shares | 17.06 |
Forfeited (in dollars per share) | $ / shares | 1.46 |
Ending, outstanding (in dollars per share) | $ / shares | 8.59 |
Exercisable (in dollars per share) | $ / shares | $ 11.06 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted Average Assumptions Used in the Valuation of Stock Options (Details) - Stock Options | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Volatility | 41.00% | 46.00% |
Risk-free interest rate | 1.80% | 1.90% |
Expected life (months) | 72 months | 73 months |
Dividend yield | 0.00% | 0.00% |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($)$ / sharesshares | |
Restricted Stock [Roll Forward] | |
Vested (in shares) | (101,155) |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized compensation expense related to non-vested stock | $ | $ 1.6 |
Total compensation cost not yet recognized, period for recognition | 3 years 7 months 6 days |
Restricted Stock [Roll Forward] | |
Beginning, nonvested (in shares) | 1,162,776 |
Granted (in shares) | 0 |
Vested (in shares) | (155,596) |
Forfeited (in shares) | (67,615) |
Ending, nonvested (in shares) | 939,565 |
Weighted Average Grant Date Fair Value Per Share [Roll Forward] | |
Beginning, nonvested (in dollars per share) | $ / shares | $ 2.34 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 2.62 |
Forfeited (in dollars per share) | $ / shares | 2.88 |
Ending, nonvested (in dollars per share) | $ / shares | $ 2.26 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Settlement loss | $ 1,200,000 | $ 0 |
Pension Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Employer contributions in current fiscal year | 0 | |
United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Settlement loss | $ 1,200,000 | $ 0 |
Retirement Plans - Components o
Retirement Plans - Components of Net Periodic Pension (Credit) Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Settlement loss | $ 1.2 | $ 0 |
United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0 | 0 |
Interest cost | 0.7 | 0.7 |
Expected return on plan assets | (0.9) | (1) |
Amortization of net actuarial loss | 0.1 | 0.3 |
Amortization of prior service credit | 0 | 0 |
Net periodic pension (credit) cost | (0.1) | 0 |
Settlement loss | 1.2 | 0 |
Curtailment gain | 0 | 0 |
Total pension (credit) cost | 1.1 | 0 |
International | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0 | 0.1 |
Interest cost | 0 | 0.1 |
Expected return on plan assets | 0 | (0.2) |
Amortization of net actuarial loss | 0 | 0.1 |
Amortization of prior service credit | 0 | 0 |
Net periodic pension (credit) cost | 0 | 0.1 |
Settlement loss | 0 | 0 |
Curtailment gain | 0 | 0 |
Total pension (credit) cost | $ 0 | $ 0.1 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense (benefit) | $ (1.6) | $ 0.1 | |
Federal statutory income tax rate | 35.00% | ||
Unrecognized tax benefits | $ 1.5 | $ 2 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured on Recurring Basis (Details) - Recurring - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | $ 36.8 | $ 1 |
Warrants | 0.4 | |
Contingent consideration associated with CDI acquisition | 0.8 | 0.8 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | 0.2 | 1 |
Warrants | 0 | |
Contingent consideration associated with CDI acquisition | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | $ 36.6 | 0 |
Warrants | 0 | |
Contingent consideration associated with CDI acquisition | 0 | |
Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities | $ 0 | 0 |
Warrants | 0.4 | |
Contingent consideration associated with CDI acquisition | $ 0.8 | $ 0.8 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||||
Jan. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Apr. 29, 2016 | Mar. 17, 2016 | Feb. 08, 2016 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | |||||||
Maximum percentage of excess cash approved for short term investment | 25.00% | ||||||
Subscription agreement, incentive compensation of common stock value | $ 1 | ||||||
Closing price of common stock | $ 0.65 | ||||||
Cash investment limitation | 25.00% | ||||||
Short term investments | $ 36,800,000 | $ 0 | |||||
Unrealized gain on investments | 1,600,000 | $ 0 | |||||
Subsequent Event | Minimum | |||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Subscription agreement, incentive compensation of common stock value | $ 1 | ||||||
Subsequent Event | Maximum | |||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Subscription agreement, incentive compensation of common stock value | $ 1.80 | ||||||
Other (income) expense | |||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Unrealized gain on investments | 1,600,000 | ||||||
Accrued fees | 500,000 | ||||||
Clinton Group | |||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||
Subscription agreement, cash managed | $ 35,000,000 | $ 20,000,000 | |||||
Short term investments | $ 36,600,000 |
Shareholders' Equity - Treasury
Shareholders' Equity - Treasury Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 47 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | May. 02, 2012 | |
Equity [Abstract] | ||||
Number of shares authorized to be repurchased (in shares) | 5,000,000 | |||
Number shares repurchased (in shares) | 0 | 3,000,000 | ||
Payments for repurchase of common stock | $ 0 | $ 0.7 | $ 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) | $ 3.84 | |||
Movement in Treasury Stock [Roll Forward] | ||||
Beginning balance (in shares) | 7,159,474 | |||
Purchases (in shares) | 0 | 3,000,000 | ||
Exercise of stock options (in shares) | 0 | |||
Restricted stock grants (in shares) | 101,155 | |||
Forfeitures and other (in shares) | 0 | |||
Ending balance (in shares) | 7,260,629 | 7,260,629 |
Shareholders' Equity - Accumula
Shareholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 24.4 | |
Total other comprehensive income (loss), net of tax | 76.3 | $ (5.6) |
Ending balance | 9.7 | |
Restructuring and other | 6.8 | 0.6 |
Selling, general and administrative | 10.6 | 16.8 |
Discontinued operation, foreign currency translation loss | 75.7 | 0 |
Income tax provision (benefit) | (1.6) | 0.1 |
Net loss | 91.1 | 14.4 |
Gains (Losses) on Derivative Financial Instruments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 0 | |
Other comprehensive income (loss) before reclassifications, net of tax | 0 | |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | |
Total other comprehensive income (loss), net of tax | 0 | |
Ending balance | 0 | |
Defined Benefit Plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (20.1) | |
Other comprehensive income (loss) before reclassifications, net of tax | 0.1 | |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 1.3 | |
Total other comprehensive income (loss), net of tax | 1.4 | |
Ending balance | (18.7) | |
Foreign Currency Translation | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (76) | |
Other comprehensive income (loss) before reclassifications, net of tax | (0.8) | |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 75.7 | |
Total other comprehensive income (loss), net of tax | 74.9 | |
Ending balance | (1.1) | |
Total | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (96.1) | |
Other comprehensive income (loss) before reclassifications, net of tax | (0.7) | |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 77 | |
Total other comprehensive income (loss), net of tax | 76.3 | |
Ending balance | (19.8) | |
Reclassification out of Accumulated Other Comprehensive Income | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Net loss | 77 | (1.9) |
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 | (3.2) |
Income tax provision (benefit) | 0 | 1.1 |
Net loss | 0 | (2.1) |
Reclassification out of Accumulated Other Comprehensive Income | Defined Benefit Plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Restructuring and other | 1.8 | 0 |
Selling, general and administrative | 0 | 0.3 |
Income tax provision (benefit) | (0.5) | (0.1) |
Net loss | (1.3) | (0.2) |
Reclassification out of Accumulated Other Comprehensive Income | Foreign Currency Translation | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Discontinued operation, foreign currency translation loss | 75.7 | 0 |
Income tax provision (benefit) | 0 | 0 |
Net loss | (75.7) | $ 0 |
Nexsan | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Accumulated foreign currency translation losses | $ 1.1 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2016USD ($)segment | Mar. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reporting segments | segment | 3 | |
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Net revenue | $ 10.7 | $ 15.7 |
Operating loss | (16.4) | (14.4) |
Restructuring and other | (6.8) | (0.6) |
Interest income | 0 | (0.1) |
Interest expense | 0 | 0.4 |
Short term investment (income) loss | (1.6) | 0 |
Other, net expense | 1.5 | 0.7 |
Loss from continuing operations before income taxes | (16.3) | (15.4) |
Operating Segments | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Operating loss | (5.2) | (7.2) |
Corporate and Unallocated | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Operating loss | (4.4) | (6.6) |
Restructuring and other | (6.8) | (0.6) |
Nexsan | Operating Segments | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Operating loss | (5.2) | (7.2) |
Nexsan | Nexsan | ||
Segment Reporting Information, Profit (Loss) [Abstract] | ||
Net revenue | $ 10.7 | $ 15.7 |
Litigation, Commitments and C56
Litigation, Commitments and Contingencies (Details) $ in Thousands, CAD in Millions | May. 10, 2016CAD | May. 09, 2016USD ($) | Jan. 26, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Loss Contingencies [Line Items] | |||||
Copyright levy accrual | $ 5,100 | $ 5,100 | |||
Subsequent Event | SpearPoint Capital Fund LP et al. vs. Imation | Settled Litigation | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement amount | $ 157 | ||||
Imation | CMC Magnetic Corp vs. Imation | Pending Litigation | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency, damages sought, value | $ 6,300 | ||||
Realization Services, Inc. | CMC Magnetic Corp vs. Imation | Pending Litigation | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency, damages sought, value | $ 600 | ||||
Imation Enterprises Corp. | Subsequent Event | Canadian Private Copying Collective Versus Imation [Member] | Pending Litigation | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency, damages sought, value | CAD | CAD 6 | ||||
Certain Vendors Associated with Legacy Businesses | |||||
Loss Contingencies [Line Items] | |||||
Trade payable | 26,000 | $ 26,000 | |||
Other current assets | Pending Litigation | |||||
Loss Contingencies [Line Items] | |||||
Estimate of possible loss | $ 8,000 |
Related Party (Details)
Related Party (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2015 | Mar. 31, 2016 | Mar. 17, 2016 | Feb. 08, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||
Maximum percentage of excess cash approved for short term investment | 25.00% | |||
Subscription agreement, incentive compensation of common stock value | $ 1 | |||
Cash investment limitation | 25.00% | |||
President | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Consulting fees per week | $ 172,000 | |||
President | Restructuring and Other Charges | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Consulting fees paid | $ 2,100,000 | |||
Clinton Group | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Subscription agreement, cash managed | $ 35,000,000 | $ 20,000,000 |
Subsequent Events Narrative (De
Subsequent Events Narrative (Details) $ in Millions | Apr. 12, 2016USD ($) |
Subsequent Event | |
Subsequent Event [Line Items] | |
Expected tax refund | $ 2 |