Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 11, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | GLASSBRIDGE ENTERPRISES, INC. | |
Entity Central Index Key | 1,014,111 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 5,131,540 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Net revenue | $ 9.4 | $ 9.6 |
Cost of goods sold | 4.5 | 5.2 |
Gross profit | 4.9 | 4.4 |
Operating expenses: | ||
Selling, general and administrative | 5.2 | 8.9 |
Research and development | 1.2 | 2.5 |
GBAM Fund expenses | 0.1 | 0 |
Restructuring and other | 0 | 0.5 |
Total operating expenses | 6.5 | 11.9 |
Operating loss from continuing operations | (1.6) | (7.5) |
Other income (expense): | ||
Interest expense | (0.1) | 0 |
Net gain (loss) from GBAM Fund activities | (0.1) | 0 |
Other income (expense), net | 0.6 | 0.1 |
Total other income (expense) | 0.4 | 0.1 |
Loss from continuing operations before income taxes | (1.2) | (7.4) |
Income tax benefit (provision) | (0.1) | 0.1 |
Loss from continuing operations | (1.3) | (7.3) |
Loss from discontinued operations, net of income taxes | (0.4) | (2) |
Net loss including noncontrolling interest | (1.7) | (9.3) |
Less: Net loss attributable to noncontrolling interest | 0 | (1.5) |
Net loss attributable to GlassBridge Enterprises, Inc. | $ (1.7) | $ (7.8) |
Loss per common share attributable to GlassBridge common shareholders — basic and diluted: | ||
Continuing operations (in dollars per share) | $ (0.25) | $ (1.41) |
Discontinued operations (in dollars per share) | (0.08) | (0.49) |
Net loss (in dollars per share) | $ (0.33) | $ (1.90) |
Weighted average common shares outstanding: | ||
Basic and diluted (in shares) | 5.1 | 4.1 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive (Income) Loss - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss including noncontrolling interest | $ (1.7) | $ (9.3) |
Net pension adjustments, net of tax: | ||
Reclassification of adjustment for defined benefit plans recorded in net loss | 0.1 | 0.1 |
Total net pension adjustments | 0.1 | 0.1 |
Net foreign currency translation: | ||
Unrealized foreign currency translation gains (losses) | (0.3) | 0 |
Total net foreign currency translation | (0.3) | 0 |
Total other comprehensive income (loss), net of tax | (0.2) | 0.1 |
Comprehensive loss including noncontrolling interest | (1.9) | (9.2) |
Less: Comprehensive loss attributable to noncontrolling interest | 0 | (1.5) |
Comprehensive loss attributable to GlassBridge Enterprises, Inc. | $ (1.9) | $ (7.7) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 8.1 | $ 8.8 |
Short term investments | 0.3 | 0.7 |
Accounts receivable, net | 5.6 | 5.8 |
Inventories | 3.3 | 3.5 |
Other current assets | 2.2 | 2.1 |
Current assets of discontinued operations | 0.5 | 0.5 |
Total current assets | 20 | 21.4 |
Property, plant and equipment, net | 0.7 | 0.8 |
Intangible assets, net | 7.7 | 8.2 |
Other assets | 7 | 6.9 |
Non-current assets of discontinued operations | 1.6 | 2.9 |
Total assets | 37 | 40.2 |
Current liabilities: | ||
Accounts payable | 6.1 | 6.1 |
Other current liabilities | 16.5 | 16.7 |
Current liabilities of discontinued operations | 4.2 | 5.3 |
Total current liabilities | 26.8 | 28.1 |
Other liabilities | 29.4 | 29.7 |
Other liabilities of discontinued operations | 9.2 | 9.1 |
Total liabilities | 65.4 | 66.9 |
Shareholders’ deficit: | ||
Preferred stock, $.01 par value, authorized 25 million shares, none issued and outstanding | 0 | 0 |
Common stock, $.01 par value, authorized 10 million shares, 5.7 million issued at March 31, 2018; 5.7 million issued at December 31, 2017 | 0.1 | 0.1 |
Additional paid-in capital | 1,049.2 | 1,050.9 |
Accumulated deficit | (1,028.9) | (1,027.5) |
Accumulated other comprehensive loss | (19.1) | (18.9) |
Treasury stock, at cost: 0.6 million shares at March 31, 2018; 0.6 million shares at December 31, 2017 | (25) | (26.6) |
Total GlassBridge Enterprises, Inc. shareholders’ deficit | (23.7) | (22) |
Noncontrolling interest | (4.7) | (4.7) |
Total shareholders’ deficit | (28.4) | (26.7) |
Total liabilities and shareholders’ deficit | 37 | 40.2 |
Variable Interest Entity | ||
Current assets: | ||
Cash and cash equivalents | 1.1 | 0.1 |
Accounts receivable, net | 5.6 | 5.8 |
Inventories | 3.3 | 3.5 |
Other assets | 2.6 | 2.9 |
Current liabilities: | ||
Accounts payable | 5.4 | 5.6 |
Other current liabilities | 9.5 | 9.1 |
Other liabilities | $ 4.3 | $ 4.5 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
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) | 10,000,000 | 10,000,000 |
Common stock, shares issued (in shares) | 5,700,000 | 5,700,000 |
Treasury stock (in shares) | 556,249 | 633,939 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | ||||||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | ||||
Cash Flows from Operating Activities: | |||||||
Net loss including noncontrolling interest | $ (1.7) | $ (9.3) | |||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 0.8 | 0.9 | |||||
Stock-based compensation | (0.2) | 0 | |||||
Pension settlement and curtailments | 0.1 | 0 | |||||
Short term investment | 0.4 | 11.3 | |||||
Other, net | (0.3) | 0 | |||||
Changes in operating assets and liabilities | (0.9) | 1.4 | |||||
Net cash provided by (used in) operating activities | (1.8) | 4.3 | |||||
Cash Flows from Investing Activities: | |||||||
Capital expenditures | (0.2) | (0.3) | |||||
Purchase of equity securities | 0 | (4) | |||||
Net cash used in investing activities | (0.2) | (4.3) | |||||
Cash Flows from Financing Activities: | |||||||
Capital contributions from noncontrolling interest | 0 | 2.8 | |||||
Net cash provided by financing activities | 0 | 2.8 | |||||
Net change in cash and cash equivalents | (2) | 2.8 | |||||
Cash, cash equivalents and restricted cash — beginning of period | 10.7 | 21.3 | |||||
Cash, cash equivalents and restricted cash — end of period | [1] | 8.7 | 24.1 | ||||
Supplemental disclosures of cash paid during the period: | |||||||
Income taxes (net of refunds received) | 0.1 | 0 | |||||
Supplemental disclosures of non-cash investing and financing activities: | |||||||
Non-cash transaction with Clinton Group, Inc. | 0 | 10.1 | |||||
Current assets: | |||||||
Cash and cash equivalents | $ 8.1 | $ 12.4 | |||||
Restricted cash included in other current assets | 0.2 | 0.2 | |||||
Restricted cash included in current assets of discontinued operations | 0 | 9.8 | |||||
Non-current assets: | |||||||
Restricted cash included in non-current assets of discontinued operations | 0.4 | 1.7 | |||||
Total cash, cash equivalents and restricted cash | $ 10.7 | $ 21.3 | $ 8.7 | [1] | $ 24.1 | [1] | |
[1] | The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed consolidated balance sheets Current assets: Cash and cash equivalents $8.1 $12.4Restricted cash included in other current assets 0.2 0.2Restricted cash included in current assets of discontinued operations — 9.8Non-current assets: Restricted cash included in non-current assets of discontinued operations 0.4 1.7Total cash, cash equivalents and restricted cash $8.7 $24.1 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation GlassBridge Enterprises, Inc. (“GlassBridge”, the “Company”, “we”, “us” or “our”) is a holding company. We actively explore a diverse range of new, strategic asset management business opportunities for our portfolio. The company’s wholly-owned subsidiary GlassBridge Asset Management, LLC (“GBAM”) is an investment advisor focused on technology-driven quantitative strategies and other alternative investment strategies. Our partially-owned subsidiary NXSN Acquisition Corp. (together with its subsidiaries, “NXSN”) operates a global enterprise data storage business through its subsidiaries. The interim Condensed Consolidated Financial Statements of GlassBridge 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 and 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 presented in accordance with the requirements of Annual Reports on Form 10-K. The unaudited Condensed Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries, and entities in which the Company owns or controls fifty percent or more of the voting shares and has the right to control. The results of entities disposed of are included in the unaudited Condensed Consolidated Financial Statements up to the date of the disposal and, where appropriate, these operations have been reflected as discontinued operations. All inter-company balances and transactions have been eliminated in consolidation and, in the opinion of management, all normal recurring adjustments necessary for a fair presentation have been included in the interim results reported. The preparation of the interim Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (“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, 2017 Condensed Consolidated Balance Sheet data was derived from the audited Consolidated Financial Statements but does not include all disclosures required by 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, 2017 as filed with the U.S. Securities and Exchange Commission on April 2, 2018. The operating results of our legacy business segments, Consumer Storage and Accessories and Tiered Storage and Security Solutions (the “Legacy 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 global enterprise data storage business with an emerging enterprise-class, private cloud sync and share product line (the “Nexsan Business”, which consists of the products of NXSN’s subsidiaries Nexsan Corporation (together with its subsidiaries other than Connected Data, Inc. (“CDI”), “Nexsan”) and CDI), and our “Asset Management Business,” which consists of our investment advisory business conducted through GBAM, as well as corporate expenses and activities not directly attributable to our Legacy Businesses. Assets and liabilities directly associated with our Legacy Businesses and that are not part of our ongoing operations have been separately presented on the face of our Condensed Consolidated Balance Sheet as of both March 31, 2018 and December 31, 2017. See Note 4 - Discontinued Operations for further information. On January 23, 2017, we closed a transaction (the “NXSN Transaction”) with NXSN, pursuant to which all of the issued and outstanding common stock of Nexsan and CDI was transferred to NXSN in exchange for 50% of the issued and outstanding common stock of NXSN and a $25 million senior secured convertible promissory note (the “NXSN Note”). Spear Point Private Equity LP (“SPPE”), an affiliate of Spear Point Capital Management, LLC (“Spear Point”), owns the remaining 50% issued and outstanding shares of NXSN common stock and shares of NXSN non-voting preferred stock. As a result of the NXSN Transaction, we identified NXSN as a variable interest entity (“VIE”). We consolidate a VIE in our financial statements if we are deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is the party that has the power to direct activities that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to benefits from the VIE that could potentially be significant to the VIE. Following January 23, 2017, NXSN’s financial results are included in our Condensed Consolidated Financial Statements since we made the determination that we are the primary beneficiary of such VIE. Until January 23, 2017, as we owned 100% of the equity interest of Nexsan and CDI, the financial results of Nexsan and CDI were included in our Condensed Consolidated Financial Statements as wholly-owned subsidiaries. See Note 14 - Segment Information for additional information. On February 2, 2017, we closed a transaction with Clinton Group, Inc. (“Clinton”) that facilitated the launch of our Asset Management Business. Our Asset Management Business consists of our investment advisory business conducted through GBAM (the “Capacity and Services Transaction”). See Note 6 - Intangible Assets and Note 16 - Related Party Transactions for further information. On February 21, 2017, we effected a 1:10 reverse split of our common stock, without any change in the par value per share (the “Reverse Stock Split”), and decreased the number of authorized shares of our common stock from 100,000,000 to 10,000,000 . All share and per share values of our common stock for all periods presented are retroactively restated for the effect of the Reverse Stock Split. In June 2017, we launched our first GBAM-managed investment fund (the “GBAM Fund”) which focuses on technology-driven quantitative strategies and other alternative investment strategies. As of March 31, 2018, we had invested certain of our cash as proprietary capital in the GBAM Fund. We have made the determination to consolidate the GBAM Fund and, accordingly, its financial results were included in our Condensed Consolidated Financial Statements as part of the Asset Management Business. Our cash and cash equivalents balance as of March 31, 2018 included the proprietary capital invested in the GBAM Fund. See Note 14 - Segment Information for additional information. Liquidity and Management Plan The Company incurred operating and cash flow losses for several reporting periods and had a negative working capital balance of $6.8 million as of March 31, 2018. This negative working capital balance included $8.4 million of cash as of March 31, 2018 which is expected to fund our operations in the next twelve months. These conditions raised substantial doubt about our ability to continue as a going concern. As a result, we have undertaken a financial and operational restructuring plan approved by our Board of Directors (the “Board”) prior to the 2018 fiscal year (the “Restructuring Plan”). Operating under the Restructuring Plan includes executing changes to our business model. Management’s execution of the Restructuring Plan, which we believe will alleviate the substantial doubt about our ability to continue as a going concern, is as follows: • Nexsan Business : We made additional changes to our Nexsan Business operations during the fourth quarter of 2017 that further reduced operating expenses by approximately 40% . These changes principally included downsizing our Nexsan Business work force. Further, our Nexsan Business incurred certain non-recurring charges in 2017 for severance payments and an operating system that has since been eliminated. The combined effect of reducing our work force, eliminating the operating system and the non-recurring severance payments is approximately $10 million on an annual basis. Our negative working capital includes $7.4 million of deferred revenue that gives rise to performance obligations for product support, which we will fulfill in the next twelve months using existing resources. • Legacy Business : We settled a substantial majority of our litigation in 2017 which significantly reduces our forecasted expenditures for professional fees and related costs during the next twelve months. • Corporate : We made further spending cuts in all areas including costs relating to the compensation of the members of our board, that are expected to reduce cash outflows by approximately $0.5 million in the next twelve months. Further, our current liabilities include $5.8 million of levies in Germany that we are disputing. We believe, based on communications from the German collection authorities, that these levy disputes will be settled in our favor within twelve months from the date these financial statements are issued or we will continue to dispute them under a process that will transpire over a period of more than twelve months from the date these financial statement are issued. We expect that our cash and short term investments and potential cash flow from our Asset Management Business will provide sufficient liquidity to meet our obligations as they become due within one year from the date these financial statements are issued. We also plan to raise additional capital from non-strategic asset sales, or otherwise, if necessary, although no assurance can be made that we will be able to secure such financing, if needed, on favorable terms or at all. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Adoption of New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09 (“Topic 606”) Revenue from Contracts with Customers. Topic 606 supersedes the revenue recognition requirements in Accounting Standards Codification Topic 605 Revenue Recognition (“Topic 605”), and requires entities to recognize revenue when control of promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. We recorded an increase to other current assets of $0.2 million , an increase to other assets $0.1 million , and a decrease to opening accumulated deficit of $0.3 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact related to the deferral of sales commissions. Sales commissions associated with obtaining a customer contract were previously expensed in the period they were incurred. Under Topic 606, these payments have been deferred in the accompanying condensed consolidated balance sheets and amortized over the life of the customer contract. We have elected the practical expedient of expensing sales commissions as incurred when the related contract period is one year or less. The impact to selling, general, and administrative expense for the quarter ended March 31, 2018 was not material as a result of applying Topic 606. As a result of adopting Topic 606, applicable accounting policies have been updated as described below. Revenue Recognition We derive our Nexsan revenues primarily from product sales of hardware and software, support contracts, and professional services. Revenues are recognized when control of these products and services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products and services. Our standard payment terms vary by the type, location and creditworthiness of our customer. Provisions for product returns and customer rebates are variable consideration and are recorded as a reduction of revenue in the same period the related sales are recorded. Such provisions are calculated using actual data or historical averages adjusted for any expected changes due to current business conditions. Consideration given to customers for promotional activities is recognized as a reduction of revenue except to the extent that there is a distinct good or service and evidence of the fair value of the related activities, in which case the expense is classified as selling, general and administrative expense. We determine revenue recognition through the following five-step process: • Identification of the contract, or contracts, with a customer, generally in the form of a purchase order. • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, we satisfy a performance obligation Product Revenues The majority of our Nexsan product sales have both hardware and software components that together deliver the products’ essential functionality. The software is embedded within the hardware and sold together as a single storage solution to the customer. There are no situations where revenue is recognized separately for software. Revenues from sales of products are generally recognized at a point in time, primarily upon the shipment of goods or transfer of title. The product revenue was $6.5 million and $7.2 million for the quarters ended March 31, 2018 and 2017, respectively. Support Contract Revenues Support contracts consist of hardware maintenance, software support and extended warranties offered in conjunction with our Nexsan products, and installation, training and other services offered in conjunction with our Nexsan products. Amounts for support contracts are invoiced at the commencement of the contract period and are generally payable under standard payment terms. Such contracts generally have durations of one to five years. Revenues associated with these support contracts are recognized ratably over the contract period as we have a stand-ready obligation to perform such services over the contract period. The support contract revenue was $2.8 million and $2.4 million for the quarters ended March 31, 2018 and 2017, respectively. Deferred Revenue Deferred revenue represents amounts billed to customers for which revenue has not been recognized. Deferred revenue primarily consists of the unearned portion of support contracts. As of March 31, 2018, deferred revenues were $10.9 million in the accompanying condensed consolidated balance sheets, with the short term portion of $7.4 million included in other current liabilities, and the long term portion of $3.5 million included in other liabilities, respectively. As of December 31, 2017, deferred revenues were $10.7 million . Revenue recognized from support contracts and professional services in the quarter ended March 31, 2018 amounted to $2.8 million and is included in net revenue in the accompanying condensed consolidated statements of operations. Contracts with Multiple Performance Obligations Some of our contracts with customers contain multiple performance obligations. Our contracts with multiple performance obligations may include a combination of some or all of the following: sale of equipment, hardware maintenance, software support, extended warranties, and professional services. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. We determine the standalone selling prices based on our overall pricing objectives, taking into consideration market conditions and other factors. Deferred Contract Costs We enter into contracts with certain service providers to perform onsite hardware maintenance and premium warranty services associated with our support contracts. The costs associated with these contracts are generally paid at the commencement of the contract and the costs are amortized ratably over the contract period. As of March 31, 2018, deferred contract costs were $0.8 million in the accompanying condensed consolidated balance sheets, with the short term portion of $0.5 million included in other current assets, and the long term portion of $0.3 million included in other assets, respectively. As of December 31, 2017, deferred contract costs were $0.8 million . Amortization of these costs amounted to $0.2 million in the quarter ended March 31, 2018 and is included in cost of goods sold in the accompanying condensed consolidated statements of operations. Deferred Commissions Sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract. For the portion of the commissions related to support contracts exceeding one year, the commission costs are deferred and amortized ratably over the related contract period, generally not exceeding five years. As of March 31, 2018, deferred commissions were $0.3 million in the accompanying condensed consolidated balance sheets, with the short term portion of $0.2 million included in other current assets, and the long term portion of $0.1 million included in other assets, respectively. As of December 31, 2017, deferred commissions were $0.3 million . Amortization related to deferred commissions was insignificant in the quarter ended March 31, 2018 and is included in selling, general and administrative expense in the accompanying condensed consolidated statements of operations. 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. ASU No. 2016-01 also amends certain disclosure requirements associated with the fair value of financial instruments. The 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). ASU No. 2016-01 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. 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 adopted this ASU in the first quarter of 2018 and there was no material impact to its consolidated results of operations and financial condition. In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which amends the requirements related to the presentation of the components of net periodic benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. This ASU requires entities to (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present it with other current compensation costs for related employees in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented. In addition, only service costs are eligible for capitalization. The standard will be effective in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company retrospectively adopted ASU No. 2017-07 during the first quarter of 2018. The adoption of ASU 2017-07 resulted in the reclassification of $0.2 million and $0.1 million of the Company’s net periodic pension cost, other than service cost, from "Selling, general and administrative" into "Other income (expense), net" in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017, respectively. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which clarifies guidance on the classification and presentation of restricted cash in the statement of cash flows. Under ASU No. 2016-18, changes in restricted cash and restricted cash equivalents would be included along with those of cash and cash equivalents in the statement of cash flows. As a result, entities would no longer present transfers between cash/equivalents and restricted cash/equivalents in the statement of cash flows. In addition, a reconciliation between the balance sheet and the statement of cash flows would be disclosed when the balance sheet includes more than one line item for cash/equivalents and restricted cash/equivalents. For the Company, this ASU became effective January 1, 2018 and entities are required to apply the standard’s provisions on a retrospective basis. The Company adopted this ASU in the first quarter of 2018 and there was no material impact to its consolidated statements of cash flows. New Accounting Pronouncements To Be Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU No. 2016-02 will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees with capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the impact of adopting this standard on its consolidated results of operations and financial condition. In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASU seeks to help entities reclassify certain stranded income tax effects in accumulated other comprehensive income resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Reform Act”), enacted on December 22, 2017. ASU 2018-02 was issued in response to concerns regarding current guidance in GAAP that requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date, even in situations in which the related income tax effects of items in accumulated other comprehensive income were originally recognized in other comprehensive income, rather than net income, and as a result the stranded tax effects would not reflect the appropriate tax rate. The amendments of this ASU allow an entity to make a reclassification from accumulated other comprehensive income to retained earnings for the stranded tax effects, which is the difference between the historical corporate income tax rate of 35.0% and the newly enacted corporate income tax rate of 21.0%. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 31, 2018; however, public business entities are allowed to early adopt the amendments of ASU 2018-02 in any interim period for which the financial statements have not yet been issued. The amendments of this ASU may be applied either at the beginning of the period (annual or interim) of adoption or retrospectively to each of the period(s) in which the effect of the change in the U.S. federal corporate tax rate in the Tax Reform Act is recognized. The Company is currently assessing the impact of adopting this standard on the Company’s consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in ASU No. 2018-03 clarify certain aspects of the guidance issued in ASU No. 2016-01 and are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years beginning after June 15, 2018. The Company does not expect this standard to have a material effect on its consolidated financial statements. |
Income (Loss) per Common Share
Income (Loss) per Common Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Income (Loss) per Common Share | Income (Loss) per Common Share Basic income (loss) per common share is calculated using the weighted average number of shares outstanding for the period. 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. Diluted income (loss) 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. Since the exercise price of our stock options is greater than the average market price of the Company’s common stock for the period, we did not include dilutive common equivalent shares for these instruments in the computation of diluted net income (loss) per share because the effect would have been anti-dilutive. The following table sets forth the computation of the weighted average basic and diluted income (loss) per share: Three Months Ended March 31, (In millions, except for per share amounts) 2018 2017 Numerator: Loss from continuing operations $ (1.3 ) $ (7.3 ) Less: loss attributable to noncontrolling interest — (1.5 ) Net loss from continuing operations attributable to GlassBridge Enterprises, Inc. (1.3 ) (5.8 ) Loss from discontinued operations, net of income taxes (0.4 ) (2.0 ) Net loss attributable to GlassBridge Enterprises, Inc. $ (1.7 ) $ (7.8 ) Denominator: Weighted average number of common shares outstanding during the period - basic and diluted 5.1 4.1 Loss per common share attributable to GlassBridge common shareholders — basic and diluted: Continuing operations $ (0.25 ) $ (1.41 ) Discontinued operations (0.08 ) (0.49 ) Net loss $ (0.33 ) $ (1.90 ) Anti-dilutive shares excluded from calculation 0.4 0.3 |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations The operating results for the Legacy Businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations for all periods presented and reflect revenues and expenses that are directly attributable to these businesses that were eliminated from our ongoing operations. The key components of the results of discontinued operations were as follows: Three Months Ended March 31, (In millions) 2018 2017 Net revenue $ — $ — Cost of goods sold — — Gross profit — — Selling, general and administrative 0.4 2.0 Restructuring and other 0.1 0.1 Other (income) expense — (0.1 ) Loss from discontinued operations, before income taxes (0.5 ) (2.0 ) Income tax benefit 0.1 — Loss from discontinued operations, net of income taxes $ (0.4 ) $ (2.0 ) Loss from discontinued operations, net of income taxes for the three months ended March 31, 2018 decreased by $1.6 million compared to the same period last year mainly due to decrease in selling, general and administrative expenses. Current liabilities of discontinued operations of $4.2 million as of March 31, 2018 included $0.7 million of accounts payable, $0.6 million of customer credit and rebate accruals, and $2.9 million of other current liability amounts. Current liabilities of discontinued operations of $5.3 million as of December 31, 2017 included accounts payable of $0.9 million , $0.7 million of customer credit and rebate accruals and $3.7 million of other current liabilities. Other liabilities of discontinued operations of $9.2 million as of March 31, 2018 included $4.1 million due to IOENGINE, LLC (“IOENGINE”), $1.0 million due to CMC Magnetic Corp. (“CMC”), $1.0 million of withholding tax, $0.8 million of tax contingencies, and $2.3 million of other liabilities. Other liabilities of discontinued operations of $9.1 million as of December 31, 2017 included $4.1 million due to IOENGINE, $1.0 million due to CMC, $1.0 million of withholding tax, $0.9 million of tax contingencies and $2.1 million of other liabilities. See Note 15 - Litigation, Commitments and Contingencies for additional information on the CMC and IOENGINE settlements. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Balance Sheet Information | Supplemental Balance Sheet Information Additional supplemental balance sheet information is provided as follows: The Company’s accounts receivable are solely related to the Nexsan Business and reported on the Condensed Consolidated Balance Sheet net of reserves and allowances. The reserves and allowances were $0.4 million for the periods ended March 31, 2018 and December 31, 2017 , respectively. Reserves and allowances include estimated amounts for customer returns, discounts on payment terms and uncollectible accounts. In the first quarter of 2017, Nexsan sold $1.2 million of its accounts receivable to individuals introduced by or affiliated with Spear Point for a discounted purchase price of $1.1 million , subject to a right to repurchase within five months of the original sale at the original sales price plus 2% interest per month. The accounts receivable sale was recorded as a sale of financial assets under ASC 860. The purchase price discounts associated with the sales of Nexsan Business accounts receivable were recorded in Other income (expense), net in our Condensed Consolidated Statement of Operations. The amount of the account receivables sold was excluded from our Condensed Consolidated Balance Sheets. As of March 31, 2018, all of the underlying accounts receivable had been collected and there are outstanding demands made by two of the accounts receivable purchasers for Nexsan to repurchase the accounts receivable purchased by them, in an amount of approximately $500,000 . See Note 15 - Litigation, Commitments and Contingencies for additional information on this threatened litigation. Other assets primarily included a $2.2 million receivable for minimum tax credit refund and a $4.0 million strategic investment in equity securities. The strategic investment in equity securities is consistent with our stated strategy of exploring a diverse range of new strategic asset management business opportunities for our portfolio. Historically, we accounted for such investment under the cost method of accounting. The adoption of ASU No. 2016-01 in the first quarter of 2018 effectively eliminated the cost method of accounting and the carrying value of this investment is written down, or impaired, to fair value when a decline in value is considered to be other-than-temporary. Our strategic investment in equity securities does not have a readily determinable fair value therefore the new guidance was adopted prospectively. As of March 31, 2018, there were no indicators of impairment for this investment. Our strategic investment in equity securities do not have a readily determinable fair value and therefore, the new guidance was adopted prospectively and the Company will assess the investment for potential impairment on a quarterly basis. Other current liabilities primarily included deferred revenue of $7.4 million and $7.2 million related to the Nexsan Business, levy accruals of $5.8 million and $5.6 million and accrued payroll of $1.5 million and $1.5 million as of March 31, 2018 and December 31, 2017 , respectively. Other liabilities included pension liabilities of $24.4 million as of March 31, 2018 and December 31, 2017 , respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets consist of intangible assets acquired when we closed the Capacity and Services Transaction with Clinton on February 2, 2017. The Capacity and Services Transaction allows for GBAM to place up to $1 billion of investment capacity under Clinton’s management within Clinton’s quantitative equity strategy for an initial term of five years, for which the Company issued to Clinton’s affiliate Madison Avenue Capital Holdings, Inc. 1,250,000 shares of its common stock as consideration. We recorded the 1,250,000 shares of common stock issued as an intangible asset and calculated a fair value of $10.1 million using our closing stock price on February 2, 2017. We are amortizing the $10.1 million on a straight-line basis over the five year term. See Note 16 - Related Party Transactions for additional information. Amortization expense for the three months ended March 31, 2017 consisted of intangible assets from developed technology recorded as a result of the acquisition of CDI. On October 14, 2015, the Company acquired 100% of the stock of CDI for a total purchase price of $6.7 million , which was included in the Nexsan reportable segment. Our allocation of the purchase price to the assets acquired and liabilities assumed resulted in the recognition of a $4.3 million intangible asset. In December 2017, we recorded an impairment charge for the net remaining intangible assets balance of $2.7 million as a result of management’s decision to focus our resources on certain product features and stop investing in the product technology that came from the acquisition of CDI. (In millions) Capacity Agreement Developed Technology Total March 31, 2018 Cost $ 10.1 $ — $ 10.1 Accumulated amortization (2.4 ) — (2.4 ) Intangible assets, net $ 7.7 $ — $ 7.7 December 31, 2017 Cost $ 10.1 $ 4.3 $ 14.4 Accumulated amortization (1.9 ) (1.6 ) (3.5 ) Impairment charges — (2.7 ) $ (2.7 ) Intangible assets, net $ 8.2 $ — $ 8.2 Amortization expense for intangible assets consisted of the following: Three Months Ended March 31, (In millions) 2018 2017 Amortization expense $ 0.5 $ 0.5 Estimated amortization expense for the remainder of 2018 and each of the next four years ending December 31 is as follows: (In millions) 2018 2019 2020 2021 2022 Amortization expense $ 1.5 $ 2.0 $ 2.0 $ 2.0 $ 0.2 |
Restructuring and Other Expense
Restructuring and Other Expense | 3 Months Ended |
Mar. 31, 2018 | |
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) 2018 2017 Restructuring Expense: Severance and related $ — $ 0.6 Total Restructuring $ — $ 0.6 Other Expense: Other (1) $ — $ (0.1 ) Total Other $ — $ (0.1 ) Total Restructuring and Other $ — $ 0.5 (1) For the three months ended March 31, 2017, other included consulting credits of $0.1 million . Activity related restructuring accruals was as follows: (In millions) Severance and Related Accrued balance at December 31, 2017 $ 0.3 Charges — Usage and payments (0.1 ) Accrued balance at March 31, 2018 $ 0.2 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
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: Three Months Ended March 31, (In millions) 2018 2017 Stock-based compensation expense $ (0.2 ) $ — 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 Annual Report on Form 10-K for the year ended December 31, 2017 . As of March 31, 2018 , there were 129,146 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, 2017 189,466 $ 84.81 Granted — — Exercised — — Canceled (25,648 ) 124.17 Forfeited — — Outstanding March 31, 2018 163,818 $ 78.65 Exercisable as of March 31, 2018 157,818 $ 81.10 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 Black-Scholes valuation of stock options: Three Months Ended March 31, 2018 2017 Volatility N/A 44.3 % Risk-free interest rate N/A 1.6 % Expected life (months) N/A 72 Dividend yield N/A — As of March 31, 2018 , there was less than $0.1 million of total unrecognized compensation expense related to non-vested stock options granted under our Stock Plans. That expense is expected to be recognized over a weighted average period of 0.8 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, 2017 213,982 $ 3.53 Granted 77,690 1.33 Vested (17,000 ) 6.87 Forfeited (41,992 ) 4.78 Nonvested as of March 31, 2018 232,680 $ 2.32 The cost of the awards is determined using the fair market 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, 2018 , there was $0.3 million of total unrecognized compensation expense related to non-vested restricted stock granted under our Stock Plans. That expense is expected to be recognized over a weighted average period of 1.1 years. Stock Appreciation Rights The Company had less than 0.1 million Stock Appreciation Rights (“SARs”) outstanding at December 31, 2017. The performance targets were not met for the outstanding SARs and, as such, were subsequently canceled. As of March 31, 2018, the Company no longer has any outstanding SARs. |
Retirement Plans
Retirement Plans | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Retirement Plans Pension Plans During the three months ended March 31, 2018 , we did no t make any contributions to our worldwide pension plans. Effective January 1, 2010, the U.S. plan was amended to exclude new hires and rehires from participating in the plan. In addition, we eliminated benefit accruals under the U.S. plan as of January 1, 2011, thus “freezing” the defined benefit pension plan. Under the plan freeze, no pay credits were made to a participant’s account balance after December 31, 2010. However, interest credits will continue in accordance with the annual update process. We presently anticipate contributing approximately $3.2 million to fund our worldwide pension plans in the next twelve months. Components of net periodic pension (credit) cost included the following: United States Three Months Ended March 31, (In millions) 2018 2017 Interest cost $ 0.5 $ 0.6 Expected return on plan assets (0.8 ) (0.8 ) Amortization of net actuarial loss 0.1 0.1 Net periodic pension credit (0.2 ) (0.1 ) Settlement loss — — Total pension (credit) cost $ (0.2 ) $ (0.1 ) Germany is the Company’s only remaining international plan and the components of net periodic pension (credit) cost for this plan were immaterial for the three months ended March 31, 2018 and 2017. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 , we recorded income tax from continuing operations of $0.1 million on a loss of $1.2 million . For the three months ended March 31, 2017 , we recorded an income tax benefit of $ 0.1 million . The change in the income tax provision was primarily related to foreign subsidiary income tax accruals. The effective income tax rate for the three months ended March 31, 2018 differs from the U.S. federal statutory rate of 21% primarily due to a valuation allowance on various deferred tax assets. Adjustments were previously made to the December 31, 2017 financial statements as a result of the Tax Reform Act passed on December 22, 2017. The elimination of the corporate alternative minimum tax and ability to file for refunds of minimum tax credit carryovers resulted in reclassification of $2.2 million as a noncurrent receivable, half of which will become a current receivable by year end 2018 to reflect the cash refund due in 2019 (with the remainder due in years 2020 through 2022). Also related to the Tax Reform Act, certain components of the Company’s deferred assets (primarily federal net operating loss carryforwards), and the associated valuation allowances, were revalued to reflect the decrease in the corporate tax rate from 35% to 21%. Analysis was performed to determine we would not be subject to the Deemed Repatriation Transition Tax on foreign subsidiary historical earnings. Another tax reform change related to our foreign subsidiaries is the minimum tax on global intangible low-taxed income (“GILTI”) effective January 1, 2018. Our preliminary assessment is that the GILTI calculation will have no material effect on the company’s tax rate, as will be confirmed with a detailed analysis at year end. No further adjustments relating to tax reform were required for the three months ended March 31, 2018. 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 2014 through 2017 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 2011. 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 $0.8 million and $0.9 million as of March 31, 2018 and December 31, 2017 , 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 Condensed 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 12 months; however, it is not possible to reasonably estimate the effect at this time. |
Major Customers and Accounts Re
Major Customers and Accounts Receivable | 3 Months Ended |
Mar. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Major Customers and Accounts Receivable | Major Customers and Accounts Receivable Major customers are those customers that account for more than 10% of revenues or accounts receivable. For the three months ended March 31, 2018 , 16% of revenues were derived from one major Nexsan Business customer. The loss of this customer could have a material adverse effect on the Company’s operations. As of March 31, 2018 , there were no customers that accounted for more than 10% of accounts receivable. For the three months ended March 31, 2017 , 37% of revenues were derived from two major Nexsan Business customers. The accounts receivable from major customers represented 29% of total accounts receivable as of December 31, 2017 . |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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 of 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 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. As of March 31, 2018 , there were no indicators that would require an impairment of intangible assets or property, plant and equipment. 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 Equity Securities” heading). See Note 15 - Litigation, Commitments and Contingencies for additional information on the CDI contingent consideration. 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, 2018 and December 31, 2017 : March 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Assets: Trading securities $ 0.1 $ 0.1 $ — $ — December 31, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Assets: Trading securities $ 0.2 $ 0.2 $ — Trading Equity Securities On February 8, 2016, the Company entered into a subscription agreement with Clinton Lighthouse Equity Strategies Fund (Offshore) Ltd. (“Clinton Lighthouse”). Clinton Lighthouse is a market neutral fund which provides daily liquidity to its investors. 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 including unrealized gains and losses associated with this trading security is recorded as a component of “Other income (expense), net” in our Condensed Consolidated Statements of Operations and purchases or sales of this security are reflected as operating activities in our Condensed Consolidated Statements of Cash Flows. The short term investment balance in Clinton Lighthouse decreased from $0.4 million as of December 31, 2017 to $0.2 million as of March 31, 2018 due to redemptions during the period. See Note 16 - Related Party Transactions for more information . In June 2017, we launched the GBAM Fund, which focuses on technology-driven quantitative strategies and other alternative investment strategies. The short term investments within the GBAM Fund were classified as trading securities as we expect to be actively managing the GBAM Fund at all times with the intention of maximizing our investment returns. Income or loss associated with these trading securities is recorded as a component of “Net gain (loss) from GBAM Fund activities” in our Condensed Consolidated Statements of Operations and purchases or sales of these securities are reflected as operating activities in our Condensed Consolidated Statements of Cash Flows. See Note 14 - Segment Information for additional information. In connection with the adoption of ASU No. 2015-07, Fair Value Measurement (Topic 820), FASB Accounting Standards Codification 820 - Fair Value Measurement and Disclosures no longer requires investments for which fair value is determined based on practical expedient reliance to be reported utilizing the fair value hierarchy. As of March 31, 2018 and December 31, 2017, our short term investments in Clinton Lighthouse and the GBAM Fund were fair valued using the net asset value as practical expedient and has been removed from the fair value hierarchy table above. Other Assets and Liabilities The carrying value of accounts receivable and accounts payable approximate their fair values due to the short term duration of these items. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Common Stock In connection with the Capacity and Services Transaction with Clinton, we issued to Clinton’s affiliate Madison Avenue Capital Holdings, Inc. 1,250,000 shares of our common stock as consideration for the capacity and services provided by Clinton. We recorded the 1,250,000 shares of common stock issued as an intangible asset and calculated a fair value of $10.1 million using our closing stock price on February 2, 2017. We recorded par value of the shares as common stock and amount in excess of the par value as additional paid-in capital. See Note 16 - Related Party Transactions for additional information. Treasury Stock On May 2, 2012, the Board authorized a share repurchase program that allowed for the repurchase of 500,000 shares of common stock. On November 14, 2016, our Board authorized a new share repurchase program under which we may repurchase up to 500,000 shares of common stock. This authorization replaces the Board’s prior May 2, 2012 share repurchase authorization. Under the share repurchase program, we may repurchase shares from time to time using a variety of methods, which may include open market transactions and privately negotiated transactions. The Company purchased zero shares during the three months ended March 31, 2018 . Since the inception of the November 14, 2016 authorization, we have repurchased 52,036 shares of common stock for $0.3 million and, as of March 31, 2018 , we had remaining authorization to repurchase 447,964 additional shares. The treasury stock held as of March 31, 2018 was acquired at an average price of $44.95 per share. Following is a summary of treasury share activity: Treasury Shares Balance as of December 31, 2017 633,939 Purchases — Restricted stock grants (77,690 ) Forfeitures and other — Balance as of March 31, 2018 556,249 Accumulated Other Comprehensive Loss Accumulated other comprehensive loss and related activity consisted of the following: (In millions) Defined Benefit Plans Foreign Currency Translation Total Balance as of December 31, 2017 $ (18.2 ) $ (0.7 ) $ (18.9 ) Other comprehensive income (loss) before reclassifications, net of tax — (0.3 ) (0.3 ) Amounts reclassified from accumulated other comprehensive income, net of tax 0.1 — 0.1 Reclassification — — — Net current period other comprehensive income 0.1 (0.3 ) (0.2 ) Balance as of March 31, 2018 $ (18.1 ) $ (1.0 ) $ (19.1 ) Details of amounts reclassified from accumulated other comprehensive loss and the line item in the Condensed Consolidated Statements of Operations are as follows: Amounts Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Condensed Consolidated Statements of Operations Where (Gain) Loss is Presented Three Months Ended March 31, (In millions) 2018 2017 Amortization of net actuarial loss $ 0.1 $ 0.1 Other income (expense) Cumulative translation adjustment (0.3 ) — Discontinued operations Total reclassifications for the period $ (0.2 ) $ 0.1 Income taxes are not provided for cumulative translation adjustment relating to permanent investments in international subsidiaries. Reclassification adjustments are made to avoid double counting in comprehensive income (loss) items that are also recorded as part of net income (loss) and are presented net of taxes in the Consolidated Statements of Comprehensive Income (Loss). |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
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 Businesses, the Company changed the manner in which it evaluates the operations of the Company and makes decisions with respect to the allocation of resources. The Company operated in three reportable segments as of December 31, 2015: Storage Media and Accessories; IronKey (which, together with Storage Media and Accessories, we now refer to as our Legacy Businesses); and the Nexsan Business. We sold our IronKey business in February 2016 and have substantially completed the wind-down of the Legacy Businesses as of March 31, 2016. The Legacy Businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations and are not included in segment results for all periods presented. See Note 4 - Discontinued Operations for further information about these divestitures. In connection with the NXSN Transaction (See Note 1 - Basis of Presentation for further information about the NXSN Transaction), all of the issued and outstanding common stock of Nexsan and CDI was transferred to NXSN in exchange for 50% of the issued and outstanding common stock of NXSN and the $25 million NXSN Note. SPPE, an affiliate of Spear Point, owns the remaining 50% issued and outstanding shares of NXSN common stock and shares of NXSN non-voting preferred stock. We entered into a stockholders agreement (the “NXSN Stockholders Agreement”) with SPPE and NXSN providing for certain oversight, management and veto rights with respect to NXSN. As a result, we have the right to designate, individually, two of the five directors serving on the NXSN board of directors (the “NXSN Board”), and to designate jointly, with SPPE, an additional independent director to serve on the NXSN Board, until the NXSN Note is paid in full. We also have approval rights with respect to certain actions proposed to be taken by NXSN, including the issuance of additional amendments to its organizational documents and issuances of additional capital stock. As a result of the terms and conditions of the NXSN Transaction (including the NXSN Stockholders Agreement and NXSN Note), we identified NXSN as a VIE. We consolidate a VIE in our financial statements if we are deemed to be the primary beneficiary of the VIE. The primary beneficiary is the party that has the power to direct activities that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to benefits from the VIE that could potentially be significant to the VIE. Although we and SPPE share the power to direct NXSN’s activities until the NXSN Note is paid in full, we have approval rights under the NXSN Note and NXSN Stockholders Agreement with respect to certain actions proposed to be taken by NXSN. Therefore, we are determined to be the primary beneficiary and following January 23, 2017, NXSN’s financial results are included in our Condensed Consolidated Financial Statements. Until January 23, 2017, we owned 100% of the equity interests of Nexsan and CDI. Their financial results were included in our Condensed Consolidated Financial Statements as wholly-owned subsidiaries. On November 14, 2017, the Company issued to NXSN a Notice of Default, Acceleration and Reservation of Rights (the “NXSN Default Notice”). The NXSN Default Notice was based upon the determination by the Company that NXSN had breached a number of covenants of, and thereby triggered several enumerated Events of Default under, the NXSN Note. Simultaneously with the delivery of the NXSN Default Notice, the Company also issued to NXSN a Notice of Exercise of Remedies (the “NXSN Exercise Notice”). The NXSN Exercise Notice notified NXSN that the Company was exercising remedies under the Guaranty and Security Agreement, dated as of January 23, 2017, by and among NXSN, Nexsan Corporation, CDI, Nexsan Technologies, Inc. and the Company (the “NXSN Security Agreement”). Specifically, the Company notified NXSN that it was exercising the voting rights granted by the NXSN Security Agreement to (i) remove the existing board of directors of each of Nexsan Corporation, Nexsan Technologies Incorporated, CDI and Nexsan Technologies Limited (collectively, the “NXSN Entities”); (ii) fix the size of each board of directors of the NXSN Entities; and (iii) elect a board of directors for each of the Nexsan Entities to replace the outgoing boards (the “New Boards”). In addition, the NXSN Exercise Notice advised NXSN that the New Boards have removed each of the existing officers of the NXSN Entities and appointed new officers (the “New Officers”) for each NXSN Entity. The New Boards and the New Officers so appointed were all insiders of the Company. On February 2, 2017, we closed the Capacity and Services Transaction with Clinton. The Capacity and Services Transaction allows GBAM to access investment capacity within Clinton’s quantitative equity strategy. In addition, we have recently taken steps to build our own independent organizational foundation while leveraging Clinton’s capabilities and infrastructure. While our intention is to primarily engage in the management of third-party assets, we may make opportunistic proprietary investments from time to time that comply with applicable laws and regulations. Since the closing of the Capacity and Services Transaction, we have focused on our Asset Management Business as our primary operating business segment. See Note 16 - Related Party Transactions for additional information. In June 2017, we launched the GBAM Fund which focuses on technology-driven quantitative strategies and other alternative investment strategies. As of March 31, 2018, we invested $4.0 million in the GBAM Fund. We have made the determination to consolidate the GBAM Fund and, accordingly, its financial results were included in our Condensed Consolidated Financial Statements as part of the Asset Management Business shown below. As of March 31, 2018 , the Nexsan Business and Asset Management Business are our reportable segments. We evaluate segment performance based on revenue and operating loss. The operating 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. For our Asset Management Business, we include net gain (loss) from GBAM Fund activities in our performance evaluation. Net gain (loss) from GBAM Fund activities primarily represents realized and unrealized gains and losses for the GBAM Fund. Net revenue and operating loss from continuing operations by segment were as follows: Three Months Ended March 31, (In millions) 2018 2017 Net revenue Nexsan Business $ 9.3 $ 9.6 Asset Management Business 0.1 — Total net revenue $ 9.4 $ 9.6 Three Months Ended March 31, (In millions) 2018 2017 Operating income (loss) from continuing operations Nexsan Business $ 0.1 $ (4.3 ) Asset Management Business (0.9 ) (0.9 ) Total segment operating loss (0.8 ) (5.2 ) Corporate and unallocated (0.8 ) (1.8 ) Restructuring and other — (0.5 ) Total operating loss (1.6 ) (7.5 ) Interest expense (0.1 ) — Net gains from GBAM Fund activities (0.1 ) — Other income (expense), net 0.6 0.1 Loss from continuing operations before income taxes $ (1.2 ) $ (7.4 ) |
Litigation, Commitments and Con
Litigation, Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation, Commitments and Contingencies | Litigation, Commitments and Contingencies The Company is a party, as either a sole or joint defendant or plaintiff, in various lawsuits, claims and other legal matters that arise in the ordinary course of conducting business (including litigation relating to our Legacy Businesses and discontinued operations). All such matters involve uncertainty and accordingly, outcomes that cannot be predicted with assurance. As of March 31, 2018 , we are unable to estimate with certainty the ultimate aggregate amount of 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, individually or in the aggregate, could materially affect our financial condition, results of the operations and cash flows. Intellectual Property Litigation The Company is subject to allegations of patent infringement by our competitors as well as non-practicing entities (“NPEs”) - sometimes referred to as "patent trolls" - who may seek monetary settlements from us, our competitors, suppliers and resellers. The nature of such litigation is complex and unpredictable and, consequently, as of March 31, 2018 , the Company is not able to reasonably estimate with precision the amount of any monetary liability or financial impact that may be incurred with respect to these matters. As of March 31, 2018 , except as set forth below with respect to the IOENGINE settlement, given the exits from the Legacy Businesses, the Company believes that the ultimate resolution of these matters in the aggregate will not materially adversely affect our financial condition, results of operations and cash flows. On December 31, 2014, IOENGINE, an NPE, filed suit in the District Court for the District of Delaware alleging infringement of United States Patent No. 8,539,047 by certain products we formerly sold under the IronKey brand. On February 17, 2017, following a trial, the jury returned a verdict against us in the patent infringement case brought by IOENGINE against the Company in the United States District Court for the District of Delaware. The jury awarded the IOENGINE $11.0 million in damages. As previously disclosed in the Current Report on Form 8-K we filed with the SEC on September 28, 2017, we entered into a settlement agreement with IOENGINE on September 28, 2017 resolving all claims relating to the IOENGINE lawsuit. Pursuant to the settlement agreement, (i) we paid IOENGINE $3.75 million in cash on October 3, 2017, (ii) issued to IOENGINE a promissory note (the "IOENGINE Note") in the principal amount of $4 million under which no payments are due until June 30, 2019 (except in connection with acceleration upon an event of default), and (iii) we pledged certain of our assets to secure our obligations under the IOENGINE Note, notably the NXSN Note. On May 6, 2016, Nexsan Technologies Incorporated, a subsidiary of NXSN (“NTI”), filed a complaint in United States District Court for the District of Massachusetts seeking a declaratory judgment against EMC Corporation (“EMC”). NTI alleges that NTI has a priority of right to use certain of its UNITY trademarks and that NTI’s prosecution of its trademark applications with the respect to, and to use of, such trademarks does not infringe upon EMC’s trademarks. In addition, NTI seeks injunctive relief to prevent EMC from threatening NTI with legal action related to use of UNITY trademarks, or making any public statements or statements to potential customers calling into question NTI’s right to use UNITY trademarks. EMC has answered and counterclaimed alleging that NTI’s use of the UNITY trademark infringes EMC’s common law rights in the UNITY and EMC UNITY trademarks. On April 14, 2017, the court in the EMC UNITY matter ruled that NTI has priority over EMC to the UNITY trademark in relation to computer data storage and associated technologies. NTI intends to continue to assert its rights to the UNITY trademark in further proceedings. Trade Related Litigation On January 26, 2016, CMC, a supplier of our Legacy Businesses, filed a suit in the District Court of Ramsey County Minnesota, seeking damages from the Company and the Company’s wholly-owned subsidiary Imation Latin America Corp. (“ILAC”) for alleged breach of contract. CMC also brought similar claims in Japan and the Netherlands against other of our subsidiaries. As previously disclosed in the Current Report on Form 8-K we filed with the SEC on September 18, 2017, we entered into a settlement agreement with CMC on September 15, 2017 resolving all claims relating to the CMC lawsuits. Pursuant to the settlement, (i) we agreed that our subsidiary Imation Corporation Japan (“ICJ”) will cause the release and payment to CMC of approximately $9.2 million in attached assets, (ii) ICJ made a payment to CMC of $1.5 million on October 10, 2017, (iii) our subsidiary Imation Europe B.V. (“IEBV”) will cause the release and payment to CMC of approximately $825,000 in attached assets, (iv) ICJ issued to CMC an unsecured promissory note (the “CMC Note”) in the amount of $1.5 million , and (v) we guaranteed CMC ICJ’s obligations under the CMC Note. As of December 31, 2017, both ICJ and Europe B.V. had released the required payments to CMC. In January 2018, ICJ made a $0.5 million payment to CMC in relation to the $1.5 million CMC Note discussed above. ICJ is the defendant in a lawsuit in The Tokyo District Court, Civil 49th Division, brought against it by Suntop Art Work Co., Ltd., seeking damages of at least 100 Million Yen (approximately $920,000 at the current exchange rate), based on allegations that ICJ is in violation of a Japanese legal equitable principle requiring long-term business counterparties to provide a judicially-determined adequate notice of cessation of business even when a shorter time has been agreed in writing by the parties. ICJ believes this claim is entirely without merit and is vigorously defending its position. The Company has various trade disputes with vendors related to either the Legacy Businesses or the Nexsan Business. The Company believes it has made adequate accruals with respect to the disputes for which such is appropriate according to our accounting policy. Employee Matters On March 29, 2017, three former Legacy Business employees who were among the approximately 100 similarly situated employees terminated as a result of the Restructuring Plan filed a lawsuit in the Minnesota State District Court of Ramsey County asserting state law claims for non-payment of allegedly promised severance benefits. Exposure is estimated to be less than $0.3 million . While full discovery of the relevant facts has not been completed, we believe these state law claims are without merit and are vigorously defending our position. IEBV is the defendant in four separate lawsuits in trial courts in Versailles and Bordeaux, France, brought by former employees based on the alleged failure to have provided them, in accordance with the French labor laws in effect at the time of their termination, with employment opportunities elsewhere in the world commensurate with their abilities and positions prior to termination. The plaintiffs in the IEBV lawsuits are seeking an aggregate of approximately 560,000 Euros (approximately $670,000 at current exchange rates). IEBV believes these claims are entirely without merit and is vigorously defending its position. The Company has also received demand letters from three Nexsan former executives seeking severance payments in the amount of approximately of $500,000 total. The Company believes those claims are without merit and will vigorously defend the claims. Copyright Levies In many European Union (“EU”) member countries, the sale of certain of our Legacy Business products is subject to a private copyright levy. The levies are intended to compensate copyright holders with “fair compensation” for the harm caused by private copies made by natural persons of protected works under the European Copyright Directive, which became effective in 2002 (the “Directive”). Levies are generally charged directly to the importer of the product upon the sale of the products. Payers of levies remit levy payments to collecting societies which, in turn, are expected to distribute funds to copyright holders. Levy systems of EU member countries must comply with the Directive, but individual member countries are responsible for administering their own systems. Since implementation, the levy systems have been the subject of numerous litigation and law-making activities. On October 21, 2010, the Court of Justice of the European Union (the “CJEU”) ruled that fair compensation is an autonomous European law concept that was introduced by the Directive and must be uniformly applied in all EU member states. The CJEU stated that fair compensation must be calculated based on the harm caused to the authors of protected works by private copying. The CJEU ruling made clear that copyright holders are only entitled to fair compensation payments (funded by levy payments made by importers of applicable products, including the Company) when sales of optical media are made to natural persons presumed to be making private copies. Within this disclosure, we use the term “commercial channel sales” when referring to products intended for uses other than private copying and “consumer channel sales” when referring to products intended for uses including private copying. In addition, various decisions and enactments have established that the levy rates in various countries improperly excluded from their calculations and assessments the private copying performed using computers and smartphones. This in turn meant that to the extent levy rates were determined to be retroactively excessive, the Company would be entitled to a rebate on that basis as well. Since the Directive was implemented in 2002, we estimate that we have paid in excess of $100 million in levies to various ongoing collecting societies related to commercial channel sales. Based on the CJEU’s October 2010 ruling and subsequent litigation and law-making activities, we believe that these payments were not consistent with the Directive and should not have been paid to the various collecting societies. Accordingly, subsequent to the October 21, 2010 CJEU ruling, we began withholding levy payments to the various collecting societies and, in 2011, we reversed our existing accruals for unpaid levies related to commercial channel sales. However, we continued to accrue, but not pay, a liability for levies arising from consumer channel sales, in all applicable jurisdictions except Italy and France due to certain court rulings in those jurisdictions. As of March 31, 2018 and December 31, 2017, we had accrued liabilities of $5.8 million and $5.6 million , respectively, associated with levies related to consumer channel sales for which we are withholding payment. These accruals are recorded as “Other current liabilities” on the Company’s Consolidated Balance Sheets (and not within discontinued operations). The Company’s management oversees copyright levy matters and continues to explore options to resolve these matters. Since the October 2010 CJEU ruling, for as long as sales were made in these countries, we evaluated quarterly on a country-by-country basis whether (i) levies should be accrued on current period commercial and/or consumer channel sales; and, (ii) whether accrued, but unpaid, copyright levies on prior period consumer channel sales should be reversed. Our evaluation is made on a jurisdiction-by-jurisdiction basis and considers ongoing and cumulative developments related to levy litigation and law making activities within each jurisdiction as well as throughout the EU. The Company is still 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. These remaining actions generally seek payment of the commercial and consumer optical levies withheld by IEBV and its German subsidiary. IEBV and its German subsidiary have corresponding claims in those actions seeking reimbursement of levies improperly collected by those collecting societies. IEBV and its German subsidiary are also subject to threatened actions by certain of their former customers seeking reimbursement of funds they allege related 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 the ultimate resolution of these actions will have a material adverse effect on our financial condition, results of operations or cash flows. As noted below with respect to France and the Netherlands, it is possible, and uncertain as to timing and amount, that by either settlement or litigation, IEBV could recover materially significant amounts from the levy authorities or their government sponsors. We anticipate that additional court decisions may be rendered that may directly or indirectly impact our levy exposure in specific European countries which could cause us to review our levy exposure in those countries. France . We have overpaid levies related to sales into the Company’s commercial channel in an amount of $55.1 million . We adopted a practice of offsetting ongoing levy liability with the French collecting society for IEBV’s sales in the consumer channel against the $55.1 million we have overpaid for copyright levies in France (due to us paying levies on commercial channels sales prior to the October 21, 2010 CJEU ruling). During the fourth quarter of 2013, GlassBridge reversed $9.5 million of French copyright levies (existing at the time of a 2013 French court decision) that arose from consumer channel sales that had been accrued but not paid to cost of sales. As of March 31, 2018, we had offset approximately $14.4 million . We believe that we have utilized a methodology, and have sufficient documentation and evidence, to fully support our estimates that we have overpaid $55.1 million to the French collection society of levies on commercial channel sales and that we have incurred (but not paid) $14.4 million of levies on consumer channel sales in France. However, such amounts are currently subject to challenge in court and there is no certainty that our estimates would be upheld and supported. In December 2012, IEBV filed a complaint against the French collection society, Copie France, for reimbursement of the $55.1 million in commercial channel levies that IEBV had paid prior to October 2010. A hearing occurred on December 8, 2015, in the High Court of Justice (Tribunal de Grande Instance de Paris (“TGIP”)) on IEBV’s claim and Copie France’s counterclaim. On April 8, 2016, the TGIP rejected all of IEBV’s claims finding that the European Union law arguments raised by IEBV were inapplicable and relied solely on French law to grant Copie France’s counterclaims of approximately $17 million . IEBV has filed a notice of appeal which suspends enforcement of the ruling. We believe Copie France’s counterclaims are without merit and intend to defend IEBV's position vigorously. Despite the April 2016 ruling of the TGIP, the Company does not believe it to be probable that it will have to make any copyright levy payments in the future to Copie France and, accordingly, has not recorded an accrual for this matter. Given a recent decision of one of France’s two highest courts, the Conseil d’Etat, supporting the position taken by the TGIP, the likely outcome and time to reach a final resolution through the appellate process that could involve France’s other highest court, the Cours de Cassation, and possibly also again the CJEU, remains unclear. We estimate, however, that an ultimate net recovery remains reasonably foreseeable, which could be in the millions of dollars. The Netherlands . IEBV is currently involved in pending litigation in the Netherlands, both as a sole complainant and a co-complainant and counterparty, with Stichting de Thuiskopie (“Thuiskopie”) and the government of the Netherlands (“Dutch State”) concerning disputed levies on optical media based on both improper levies on commercial channel sales and excessive rates due to the exclusion of computer and smartphone and illegal copying. The Dutch State has reduced the levy rates based on the exclusion theory but has as yet refused to apply the reduced rates retroactively for rebate purposes. Specifically, IEBV is (A) the sole complainant in the action pending versus Thuiskopie and the Dutch State, originally identified as C/09/489719/HA ZA 15-659 of the District Court of The Hague (the “IE Case”), and (B) a co-complainant in the case brought by the association of vendors of similar products, originally identified as C/09/438914/HA ZA 13-264 (the “FIAR Case”). In the IE Case, there has been an interlocutory ruling by the Dutch Supreme Court in IEBV’s favor; however, several important issues and procedural steps remain. We estimate that eventual net recoveries could range between $5 million and $10 million , although it is also possible that there will be no material recoveries. IEBV is only a small part, approximately 15% , of the plaintiff group in the FIAR Case; however, the total amount sought by the plaintiffs therein may be as much as $100 million . Germany . During the first quarter of 2015, GlassBridge reversed $2.8 million accrual for German copyright levies on optical products as the result of a favorable German court decision retroactively setting levy rates at a level much lower than the rates sought by the German collecting society. The reversal was recorded as a reduction of cost of sales. As of March 31, 2018, IEBV and its German subsidiary are in the process of finalizing an agreed settlement with the German collecting society that would result in mutual releases with no payments owed to either party. Italy . In December 2015, we settled our claim for reimbursement of the levies that the Company had paid for sales into its commercial channel with the Italian collecting society, S.I.A.E. The settlement was for $1.0 million and was recorded as a reduction in cost of sales. There are no ongoing levy disputes with respect to Italy. Canada . The Canadian Private Copying Collective (“CPCC”) filed suit in the Ontario Superior Court against our subsidiary Imation Enterprises Corp. (“IEC”) seeking damages of approximated CAD 1 million and penalties and interest of approximately CAD 5 million . On September 29, 2017, after we provided discovery materials to the CPCC which we believe demonstrated that the CPCC’s claims were entirely without merit, the CPCC declined to pursue the lawsuit further, issued to IEC a full and final release of the claims underlying the lawsuit and the lawsuit was dismissed on October 4, 2017. Indemnification Obligations In the normal course of business, we periodically enter into agreements that incorporate general indemnification language. Performance under these indemnities would generally be triggered by a breach of terms of the contract or by a supportable third-party claim. There have historically been no material losses related to such indemnifications. As of March 31, 2018 and 2017, estimated liability amounts associated with such indemnifications were not material. Environmental Matters Our Legacy Business operations and indemnification obligations resulting from our spinoff from 3M subject us liabilities arising from a wide range of federal, state and local environmental laws. For example, from time to time we have received correspondence from 3M notifying us that we may have a duty to defend and indemnify 3M with respect to certain environmental claims such as remediation costs. 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. We did not have any environmental accruals as of March 31, 2018. Compliance with environmental regulations has not had a material adverse effect on our financial results. Contingencies On October 14, 2015, the Company acquired 100% of the stock of CDI for a total purchase price of $6.7 million . The purchase price included future contingent consideration totaling up to $5 million (considered to have an estimated fair value of $0.8 million at the time of acquisition). We used the real option valuation technique for calculating the estimated fair value of contingent consideration with a 15% discount rate. The contingent consideration arrangement included the potential for three separate payments of cash and unregistered shares of GlassBridge common stock to the extent that certain defined revenue targets were achieved for the three consecutive six -month periods commencing January 1, 2016. The period of measurement for the third and final payment was January 1, 2017 to June 30, 2017, and the revenue target was not met for this or any other period. Accordingly, we have no t made any contingent purchase price payments for CDI as of March 31, 2018. The Company reversed the remaining accruals for $0.3 million and the 57,482 shares for issuance. Upon the acquisition of CDI, we integrated CDI with the Nexsan Business, both operationally and with respect to its management team. In addition, the Company contributed all of the issued and outstanding stock of CDI to Nexsan prior to the consummation of the NXSN Transaction which closed on January 23, 2017. See Note 14 - Segment Information for more information. Threatened Litigation As noted above, following the NXSN Transaction, in the first quarter of 2017, Nexsan sold $1.2 million of its accounts receivable to individuals introduced by or affiliated with Spear Point for a discounted purchase price of $1.1 million , subject to a right to repurchase within five months of the original sale at the original sales price plus 2% interest per month. The accounts receivable sale was recorded as a sale of financial assets under ASC 860. After exercising the remedies referred to above pursuant to the NXSN Default Notice and the NXSN Exercise Notice, we were made aware that the proceeds of the sold accounts receivable may have been either paid to Nexsan or cancelled or replaced by the account debtors. As of March 31, 2018 , there are outstanding demands made by two of the accounts receivable purchasers for Nexsan to repurchase the accounts receivable purchased by them, in an amount of approximately $500,000 . Given that we have determined that the relevant receivables no longer exist, we have rejected the demand. The ultimate outcomes of any disputes between the Company and the accounts receivable purchasers remain too speculative to estimate. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Related Party Transactions | Related Party Transactions Barry L. Kasoff serves as president of Realization Services, Inc. (“RSI”), a management consulting firm specializing in assisting companies and capital stakeholders in troubled business environments. Mr. Kasoff also previously served as Chief Restructuring Officer of the Company from November 2015 to September 2016 and a member of the Board from May 2015 to February 2017. Pursuant to a consulting agreement between the Company and RSI dated August 17, 2015 and subsequent amendments, RSI performed consulting services for the Company for the period from August 8, 2015 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. On July 15, 2016, the Company entered into a consulting agreement with RSI to perform consulting services from July 18, 2016 through August 14, 2016 with an option for a three week extended term. Mr. Kasoff resigned from his position as the Company’s Chief Restructuring Officer on September 8, 2016 and from the Board on February 2, 2017. In connection with the CMC settlement, RSI received consulting fees of $0.6 million for the year ended December 31, 2017. These fees were recorded in restructuring and other charges. See Note 15 - Litigation, Commitments and Contingencies for additional information. On October 14, 2015, the Company acquired substantially all of the equity of CDI for approximately $6.7 million in cash, shares of the Company’s common stock and repayment of debt. Geoff Barrall, who served as a member of the Board from December 2014 until January 2016, is the founder and, at the time of acquisition, was also the Chief Executive Officer of CDI. In consideration for his CDI common shares and options to purchase CDI common shares, Mr. Barrall received approximately $184,000 at the time of the acquisition and he was eligible to receive up to an additional $260,000 to the extent certain CDI revenue targets are achieved for the 3 consecutive six -month periods commencing January 1, 2016. None of these revenue targets were met and no such additional payments were made to Mr. Barrall. 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 Clinton Lighthouse. Clinton Lighthouse is 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 the Company’s common stock at a value of $10.00 per share (as adjusted to reflect the Reverse Stock Split). The closing price of the Company’s common stock on February 8, 2016 was $6.50 (as adjusted to reflect the Reverse Stock Split). The Board, in conjunction with management, reviewed various funds and voted to approve this investment, with Joseph De Perio abstaining from the vote and recusing himself from all related discussions and deliberations. Mr. De Perio is the Chairman of the Board and a Senior Portfolio Manager at Clinton. 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. On April 29, 2016, the Company and Clinton entered into an amended and restated letter agreement in order to adjust the price at which the Company’s stock would be valued for purposes of paying the incentive fee thereunder from $10.00 to $18.00 (each as adjusted to reflect the Reverse Stock Split) beginning May 1, 2016, subject to adjustment based on the volume weighted average price of the Company’s common stock. The Company paid Clinton $0.5 million associated with the performance fees earned in 2016. On January 31, 2017, the Company held a special meeting of the stockholders of the Company at which the stockholders approved the issuance of up to 1,500,000 shares (the “Capacity Shares”) of the Company’s common stock (as adjusted to reflect the Reverse Stock Split), par value $0.01 per share, pursuant to the Subscription Agreement, dated as of November 22, 2016, by and between the Company and Clinton, as amended by Amendment No. 1 to the Subscription Agreement, dated as of January 9, 2017 (as so amended, the “Subscription Agreement”). Pursuant to the terms of the Subscription Agreement, on February 2, 2017 (the “Initial Closing Date”), the Company entered into the Capacity and Services Transaction with Clinton Group and GBAM. As consideration for the capacity and services Clinton has agreed to provide under the Capacity and Services Transaction and pursuant to the terms of the Subscription Agreement, the Company issued 1,250,000 shares of the Company’s common stock (as adjusted to reflect the Reverse Stock Split) to Madison Avenue Capital Holdings, Inc. (“Madison”), an affiliate of Clinton, on the Initial Closing Date. The closing price of the Company’s common stock on the Initial Closing Date was $8.10 . The Company also entered into a Registration Rights Agreement with Madison on the Initial Closing Date, relating to the registration of the resale of the Capacity Shares as well as a letter agreement with Madison pursuant to which Madison has agreed to a three -year lockup with respect to any Capacity Shares issued to it. The short term investment balance in Clinton Lighthouse decreased from $0.4 million as of December 31, 2017 to $0.2 million as of March 31, 2018 due to redemptions during the period. Unrealized gain for the three months ended March 31, 2017 was less than $0.1 million . We recorded the unrealized gains (losses) within “Other income (expense), net” in the Condensed Consolidated Statements of Operations. Pursuant to the Capacity and Services Agreement, the Company will no longer incur management or performance fees related to our investment in Clinton Lighthouse. Daniel A. Strauss serves as our Chief Operating Officer pursuant to the terms of a Services Agreement we entered into with Clinton on March 2, 2017 (the “Services Agreement”). The Services Agreement provides that Clinton will make available one of its employees to serve as Chief Operating Officer of the Company, and any subsidiary of the Company we may designate from time to time, as well as provide to GBAM, our investment adviser subsidiary, certain additional services. Pursuant to the terms of the Services Agreement, we may request that Clinton designate a mutually agreeable replacement employee to serve as Chief Operating Officer or terminate Clinton’s provision of an employee to us for such role. Under the Services Agreement, we have agreed to pay Clinton $125,000 for an initial term concluding on May 31, 2017, which term will automatically renew unless terminated for successive three -month terms at a rate of $125,000 per renewal term. If the Services Agreement is terminated prior to the conclusion of a term, we will be reimbursed for the portion of the prepaid fee attributable to the unused portion of such term. Clinton will continue to pay Mr. Strauss’s compensation and benefits and we have agreed to pay or reimburse Mr. Strauss for his reasonable expenses. Pursuant to the terms of the Services Agreement, we have also agreed to indemnify Mr. Strauss, Clinton, any substitute Chief Operating Officer and certain of their affiliates for certain losses. As of March 31, 2018, the Company paid Clinton $625,000 under this Services Agreement and recorded $125,000 within “Selling, general and administrative” in our Condensed Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events None. |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Adoption of New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09 (“Topic 606”) Revenue from Contracts with Customers. Topic 606 supersedes the revenue recognition requirements in Accounting Standards Codification Topic 605 Revenue Recognition (“Topic 605”), and requires entities to recognize revenue when control of promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. On January 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. We recorded an increase to other current assets of $0.2 million , an increase to other assets $0.1 million , and a decrease to opening accumulated deficit of $0.3 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact related to the deferral of sales commissions. Sales commissions associated with obtaining a customer contract were previously expensed in the period they were incurred. Under Topic 606, these payments have been deferred in the accompanying condensed consolidated balance sheets and amortized over the life of the customer contract. We have elected the practical expedient of expensing sales commissions as incurred when the related contract period is one year or less. The impact to selling, general, and administrative expense for the quarter ended March 31, 2018 was not material as a result of applying Topic 606. As a result of adopting Topic 606, applicable accounting policies have been updated as described below. Revenue Recognition We derive our Nexsan revenues primarily from product sales of hardware and software, support contracts, and professional services. Revenues are recognized when control of these products and services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products and services. Our standard payment terms vary by the type, location and creditworthiness of our customer. Provisions for product returns and customer rebates are variable consideration and are recorded as a reduction of revenue in the same period the related sales are recorded. Such provisions are calculated using actual data or historical averages adjusted for any expected changes due to current business conditions. Consideration given to customers for promotional activities is recognized as a reduction of revenue except to the extent that there is a distinct good or service and evidence of the fair value of the related activities, in which case the expense is classified as selling, general and administrative expense. We determine revenue recognition through the following five-step process: • Identification of the contract, or contracts, with a customer, generally in the form of a purchase order. • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, we satisfy a performance obligation Product Revenues The majority of our Nexsan product sales have both hardware and software components that together deliver the products’ essential functionality. The software is embedded within the hardware and sold together as a single storage solution to the customer. There are no situations where revenue is recognized separately for software. Revenues from sales of products are generally recognized at a point in time, primarily upon the shipment of goods or transfer of title. The product revenue was $6.5 million and $7.2 million for the quarters ended March 31, 2018 and 2017, respectively. Support Contract Revenues Support contracts consist of hardware maintenance, software support and extended warranties offered in conjunction with our Nexsan products, and installation, training and other services offered in conjunction with our Nexsan products. Amounts for support contracts are invoiced at the commencement of the contract period and are generally payable under standard payment terms. Such contracts generally have durations of one to five years. Revenues associated with these support contracts are recognized ratably over the contract period as we have a stand-ready obligation to perform such services over the contract period. The support contract revenue was $2.8 million and $2.4 million for the quarters ended March 31, 2018 and 2017, respectively. Deferred Revenue Deferred revenue represents amounts billed to customers for which revenue has not been recognized. Deferred revenue primarily consists of the unearned portion of support contracts. As of March 31, 2018, deferred revenues were $10.9 million in the accompanying condensed consolidated balance sheets, with the short term portion of $7.4 million included in other current liabilities, and the long term portion of $3.5 million included in other liabilities, respectively. As of December 31, 2017, deferred revenues were $10.7 million . Revenue recognized from support contracts and professional services in the quarter ended March 31, 2018 amounted to $2.8 million and is included in net revenue in the accompanying condensed consolidated statements of operations. Contracts with Multiple Performance Obligations Some of our contracts with customers contain multiple performance obligations. Our contracts with multiple performance obligations may include a combination of some or all of the following: sale of equipment, hardware maintenance, software support, extended warranties, and professional services. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. We determine the standalone selling prices based on our overall pricing objectives, taking into consideration market conditions and other factors. Deferred Contract Costs We enter into contracts with certain service providers to perform onsite hardware maintenance and premium warranty services associated with our support contracts. The costs associated with these contracts are generally paid at the commencement of the contract and the costs are amortized ratably over the contract period. As of March 31, 2018, deferred contract costs were $0.8 million in the accompanying condensed consolidated balance sheets, with the short term portion of $0.5 million included in other current assets, and the long term portion of $0.3 million included in other assets, respectively. As of December 31, 2017, deferred contract costs were $0.8 million . Amortization of these costs amounted to $0.2 million in the quarter ended March 31, 2018 and is included in cost of goods sold in the accompanying condensed consolidated statements of operations. Deferred Commissions Sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract. For the portion of the commissions related to support contracts exceeding one year, the commission costs are deferred and amortized ratably over the related contract period, generally not exceeding five years. As of March 31, 2018, deferred commissions were $0.3 million in the accompanying condensed consolidated balance sheets, with the short term portion of $0.2 million included in other current assets, and the long term portion of $0.1 million included in other assets, respectively. As of December 31, 2017, deferred commissions were $0.3 million . Amortization related to deferred commissions was insignificant in the quarter ended March 31, 2018 and is included in selling, general and administrative expense in the accompanying condensed consolidated statements of operations. 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. ASU No. 2016-01 also amends certain disclosure requirements associated with the fair value of financial instruments. The 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). ASU No. 2016-01 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. 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 adopted this ASU in the first quarter of 2018 and there was no material impact to its consolidated results of operations and financial condition. In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which amends the requirements related to the presentation of the components of net periodic benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. This ASU requires entities to (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present it with other current compensation costs for related employees in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented. In addition, only service costs are eligible for capitalization. The standard will be effective in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company retrospectively adopted ASU No. 2017-07 during the first quarter of 2018. The adoption of ASU 2017-07 resulted in the reclassification of $0.2 million and $0.1 million of the Company’s net periodic pension cost, other than service cost, from "Selling, general and administrative" into "Other income (expense), net" in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017, respectively. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which clarifies guidance on the classification and presentation of restricted cash in the statement of cash flows. Under ASU No. 2016-18, changes in restricted cash and restricted cash equivalents would be included along with those of cash and cash equivalents in the statement of cash flows. As a result, entities would no longer present transfers between cash/equivalents and restricted cash/equivalents in the statement of cash flows. In addition, a reconciliation between the balance sheet and the statement of cash flows would be disclosed when the balance sheet includes more than one line item for cash/equivalents and restricted cash/equivalents. For the Company, this ASU became effective January 1, 2018 and entities are required to apply the standard’s provisions on a retrospective basis. The Company adopted this ASU in the first quarter of 2018 and there was no material impact to its consolidated statements of cash flows. New Accounting Pronouncements To Be Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU No. 2016-02 will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees with capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the impact of adopting this standard on its consolidated results of operations and financial condition. In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASU seeks to help entities reclassify certain stranded income tax effects in accumulated other comprehensive income resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Reform Act”), enacted on December 22, 2017. ASU 2018-02 was issued in response to concerns regarding current guidance in GAAP that requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date, even in situations in which the related income tax effects of items in accumulated other comprehensive income were originally recognized in other comprehensive income, rather than net income, and as a result the stranded tax effects would not reflect the appropriate tax rate. The amendments of this ASU allow an entity to make a reclassification from accumulated other comprehensive income to retained earnings for the stranded tax effects, which is the difference between the historical corporate income tax rate of 35.0% and the newly enacted corporate income tax rate of 21.0%. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 31, 2018; however, public business entities are allowed to early adopt the amendments of ASU 2018-02 in any interim period for which the financial statements have not yet been issued. The amendments of this ASU may be applied either at the beginning of the period (annual or interim) of adoption or retrospectively to each of the period(s) in which the effect of the change in the U.S. federal corporate tax rate in the Tax Reform Act is recognized. The Company is currently assessing the impact of adopting this standard on the Company’s consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in ASU No. 2018-03 clarify certain aspects of the guidance issued in ASU No. 2016-01 and are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years beginning after June 15, 2018. The Company does not expect this standard to have a material effect on its consolidated financial statements. |
Income (Loss) per Common Share
Income (Loss) per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of the Weighted Average Basic and Diluted Loss Per Share | The following table sets forth the computation of the weighted average basic and diluted income (loss) per share: Three Months Ended March 31, (In millions, except for per share amounts) 2018 2017 Numerator: Loss from continuing operations $ (1.3 ) $ (7.3 ) Less: loss attributable to noncontrolling interest — (1.5 ) Net loss from continuing operations attributable to GlassBridge Enterprises, Inc. (1.3 ) (5.8 ) Loss from discontinued operations, net of income taxes (0.4 ) (2.0 ) Net loss attributable to GlassBridge Enterprises, Inc. $ (1.7 ) $ (7.8 ) Denominator: Weighted average number of common shares outstanding during the period - basic and diluted 5.1 4.1 Loss per common share attributable to GlassBridge common shareholders — basic and diluted: Continuing operations $ (0.25 ) $ (1.41 ) Discontinued operations (0.08 ) (0.49 ) Net loss $ (0.33 ) $ (1.90 ) Anti-dilutive shares excluded from calculation 0.4 0.3 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Discontinued Operations and Disposal Groups [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) 2018 2017 Net revenue $ — $ — Cost of goods sold — — Gross profit — — Selling, general and administrative 0.4 2.0 Restructuring and other 0.1 0.1 Other (income) expense — (0.1 ) Loss from discontinued operations, before income taxes (0.5 ) (2.0 ) Income tax benefit 0.1 — Loss from discontinued operations, net of income taxes $ (0.4 ) $ (2.0 ) |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | (In millions) Capacity Agreement Developed Technology Total March 31, 2018 Cost $ 10.1 $ — $ 10.1 Accumulated amortization (2.4 ) — (2.4 ) Intangible assets, net $ 7.7 $ — $ 7.7 December 31, 2017 Cost $ 10.1 $ 4.3 $ 14.4 Accumulated amortization (1.9 ) (1.6 ) (3.5 ) Impairment charges — (2.7 ) $ (2.7 ) Intangible assets, net $ 8.2 $ — $ 8.2 |
Schedule of Amortization Expense for Intangible Assets | Amortization expense for intangible assets consisted of the following: Three Months Ended March 31, (In millions) 2018 2017 Amortization expense $ 0.5 $ 0.5 |
Schedule of Intangible Assets Estimated Amortization Expense | Estimated amortization expense for the remainder of 2018 and each of the next four years ending December 31 is as follows: (In millions) 2018 2019 2020 2021 2022 Amortization expense $ 1.5 $ 2.0 $ 2.0 $ 2.0 $ 0.2 |
Restructuring and Other Expen28
Restructuring and Other Expense (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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) 2018 2017 Restructuring Expense: Severance and related $ — $ 0.6 Total Restructuring $ — $ 0.6 Other Expense: Other (1) $ — $ (0.1 ) Total Other $ — $ (0.1 ) Total Restructuring and Other $ — $ 0.5 (1) For the three months ended March 31, 2017, other included consulting credits of $0.1 million . |
Schedule of Restructuring Reserve Activity | Activity related restructuring accruals was as follows: (In millions) Severance and Related Accrued balance at December 31, 2017 $ 0.3 Charges — Usage and payments (0.1 ) Accrued balance at March 31, 2018 $ 0.2 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-Based Compensation for Continuing Operations | Stock-based compensation for continuing operations consisted of the following: Three Months Ended March 31, (In millions) 2018 2017 Stock-based compensation expense $ (0.2 ) $ — |
Summary of Stock Option Activity | The following table summarizes our stock option activity: Stock Options Weighted Average Exercise Price Outstanding December 31, 2017 189,466 $ 84.81 Granted — — Exercised — — Canceled (25,648 ) 124.17 Forfeited — — Outstanding March 31, 2018 163,818 $ 78.65 Exercisable as of March 31, 2018 157,818 $ 81.10 |
Summary of Weighted Average Assumptions Used in the Valuation of Stock Options | The following table summarizes our weighted average assumptions used in the Black-Scholes valuation of stock options: Three Months Ended March 31, 2018 2017 Volatility N/A 44.3 % Risk-free interest rate N/A 1.6 % Expected life (months) N/A 72 Dividend yield N/A — |
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, 2017 213,982 $ 3.53 Granted 77,690 1.33 Vested (17,000 ) 6.87 Forfeited (41,992 ) 4.78 Nonvested as of March 31, 2018 232,680 $ 2.32 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Pension (Credit) Cost | Components of net periodic pension (credit) cost included the following: United States Three Months Ended March 31, (In millions) 2018 2017 Interest cost $ 0.5 $ 0.6 Expected return on plan assets (0.8 ) (0.8 ) Amortization of net actuarial loss 0.1 0.1 Net periodic pension credit (0.2 ) (0.1 ) Settlement loss — — Total pension (credit) cost $ (0.2 ) $ (0.1 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 and December 31, 2017 : March 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Assets: Trading securities $ 0.1 $ 0.1 $ — $ — December 31, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Assets: Trading securities $ 0.2 $ 0.2 $ — |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of Treasury Share Activity | Following is a summary of treasury share activity: Treasury Shares Balance as of December 31, 2017 633,939 Purchases — Restricted stock grants (77,690 ) Forfeitures and other — Balance as of March 31, 2018 556,249 |
Schedule of Accumulated Other Comprehensive Loss and Related Activity | Accumulated other comprehensive loss and related activity consisted of the following: (In millions) Defined Benefit Plans Foreign Currency Translation Total Balance as of December 31, 2017 $ (18.2 ) $ (0.7 ) $ (18.9 ) Other comprehensive income (loss) before reclassifications, net of tax — (0.3 ) (0.3 ) Amounts reclassified from accumulated other comprehensive income, net of tax 0.1 — 0.1 Reclassification — — — Net current period other comprehensive income 0.1 (0.3 ) (0.2 ) Balance as of March 31, 2018 $ (18.1 ) $ (1.0 ) $ (19.1 ) |
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 Statements of Operations are as follows: Amounts Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Condensed Consolidated Statements of Operations Where (Gain) Loss is Presented Three Months Ended March 31, (In millions) 2018 2017 Amortization of net actuarial loss $ 0.1 $ 0.1 Other income (expense) Cumulative translation adjustment (0.3 ) — Discontinued operations Total reclassifications for the period $ (0.2 ) $ 0.1 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Net Revenue and Operating Income (Loss) by Segment | Net revenue and operating loss from continuing operations by segment were as follows: Three Months Ended March 31, (In millions) 2018 2017 Net revenue Nexsan Business $ 9.3 $ 9.6 Asset Management Business 0.1 — Total net revenue $ 9.4 $ 9.6 Three Months Ended March 31, (In millions) 2018 2017 Operating income (loss) from continuing operations Nexsan Business $ 0.1 $ (4.3 ) Asset Management Business (0.9 ) (0.9 ) Total segment operating loss (0.8 ) (5.2 ) Corporate and unallocated (0.8 ) (1.8 ) Restructuring and other — (0.5 ) Total operating loss (1.6 ) (7.5 ) Interest expense (0.1 ) — Net gains from GBAM Fund activities (0.1 ) — Other income (expense), net 0.6 0.1 Loss from continuing operations before income taxes $ (1.2 ) $ (7.4 ) |
Basis of Presentation - (Detail
Basis of Presentation - (Details) $ in Millions | Feb. 21, 2017shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2018USD ($) | May 31, 2019USD ($) | Mar. 31, 2018USD ($)shares | Feb. 20, 2017shares | Jan. 31, 2017shares | Jan. 23, 2017USD ($) | Jan. 22, 2017 |
Related Party Transaction [Line Items] | |||||||||
Reverse stock split conversion ratio | 0.1 | ||||||||
Common stock, shares authorized (in shares) | shares | 10,000,000 | 10,000,000 | 10,000,000 | 100,000,000 | 1,500,000 | ||||
Working capital | $ (6.8) | ||||||||
Cash balance and short-term investments | 8.4 | ||||||||
NXSN Acquisition Corp | |||||||||
Related Party Transaction [Line Items] | |||||||||
Noncontrolling interest, percentage held by noncontrolling owners | 50.00% | ||||||||
Senior secured convertible promissory note | $ 25 | ||||||||
Noncontrolling interest, percentage held by parent | 50.00% | 100.00% | |||||||
Nexsan Business | |||||||||
Related Party Transaction [Line Items] | |||||||||
Decrease in operating expenses, percent | 40.00% | ||||||||
Deferred revenue | 7.4 | ||||||||
Nexsan Business | Scenario, Forecast | |||||||||
Related Party Transaction [Line Items] | |||||||||
Decrease in operating expenses due to cost savings | $ 10 | ||||||||
Corporate, non-segment | Scenario, Forecast | |||||||||
Related Party Transaction [Line Items] | |||||||||
Decrease in expected cash flows | $ 0.5 | ||||||||
ECJ Copyright Levy | |||||||||
Related Party Transaction [Line Items] | |||||||||
Levy accruals | $ 5.6 | $ 5.8 |
New Accounting Pronouncements N
New Accounting Pronouncements New Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Other current assets | $ 2.2 | $ 2.1 | ||
Other assets | 7 | 6.9 | ||
Accumulated deficit | (1,028.9) | (1,027.5) | ||
Deferred revenue | 10.9 | 10.7 | ||
Deferred revenue, current | 7.4 | |||
Deferred revenue, noncurrent | 3.5 | |||
Contract with customer, revenue recognized | 2.8 | |||
Selling, general and administrative | 5.2 | $ 8.9 | ||
Other income (expense), net | 0.6 | 0.1 | ||
Support Contract Costs | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred contract costs | 0.8 | 0.8 | ||
Deferred contract costs, current | 0.5 | |||
Deferred contract costs, noncurrent | 0.3 | |||
Deferred contract costs, amortization | 0.2 | |||
Sales Commissions | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred contract costs | 0.3 | $ 0.3 | ||
Deferred contract costs, current | 0.2 | |||
Deferred contract costs, noncurrent | $ 0.1 | |||
Capitalized contract cost, amortization period (up to) | 5 years | |||
Minimum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Support contract duration | 1 year | |||
Maximum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Support contract duration | 5 years | |||
Restatement Adjustment | Accounting Standards Update 2017-07 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Selling, general and administrative | $ (0.2) | (0.1) | ||
Other income (expense), net | (0.2) | (0.1) | ||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Other current assets | $ 0.2 | |||
Other assets | 0.1 | |||
Accumulated deficit | $ 0.3 | |||
Product revenue | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue from contract with customer | 6.5 | 7.2 | ||
Support contract revenue | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue from contract with customer | $ 2.8 | $ 2.4 |
Income (Loss) per Common Shar36
Income (Loss) per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator: | ||
Loss from continuing operations | $ (1.3) | $ (7.3) |
Less: loss attributable to noncontrolling interest | 0 | (1.5) |
Net loss from continuing operations attributable to GlassBridge Enterprises, Inc. | (1.3) | (5.8) |
Loss from discontinued operations, net of income taxes | (0.4) | (2) |
Net loss attributable to GlassBridge Enterprises, Inc. | $ (1.7) | $ (7.8) |
Denominator: | ||
Weighted average number of common shares outstanding during the period - basic and diluted (in shares) | 5.1 | 4.1 |
Loss per common share attributable to GlassBridge common shareholders — basic and diluted: | ||
Continuing operations (in dollars per share) | $ (0.25) | $ (1.41) |
Discontinued operations (in dollars per share) | (0.08) | (0.49) |
Net loss (in dollars per share) | $ (0.33) | $ (1.90) |
Anti-dilutive shares excluded from calculation (in shares) | 0.4 | 0.3 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Key Components of Discontinued Operations (Details) - Discontinued Operations - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net revenue | $ 0 | $ 0 |
Cost of goods sold | 0 | 0 |
Gross profit | 0 | 0 |
Selling, general and administrative | 0.4 | 2 |
Restructuring and other | 0.1 | 0.1 |
Other (income) expense | 0 | (0.1) |
Loss from discontinued operations, before income taxes | (0.5) | (2) |
Income tax benefit | 0.1 | 0 |
Loss from discontinued operations, net of income taxes | $ (0.4) | $ (2) |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Current liabilities of discontinued operations | $ 4.2 | $ 5.3 |
Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Decrease in loss from discontinued operations, net of tax | 1.6 | |
Current liabilities of discontinued operations | 4.2 | 5.3 |
Accounts payable of discontinued operations | 0.7 | 0.9 |
Customer credit and rebate accruals of discontinued operations | 0.6 | 0.7 |
Other current liabilities of discontinued operations | 2.9 | 3.7 |
Other liabilities of discontinued operations | 9.2 | 9.1 |
Withholding tax of discontinued operations | 1 | 1 |
Tax contingencies of discontinued operations | 0.8 | 0.9 |
Other liabilities of discontinued operations, other | 2.3 | 2.1 |
Discontinued Operations | IOENGINE | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Other liabilities of discontinued operations | 4.1 | 4.1 |
Discontinued Operations | CMC | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Other liabilities of discontinued operations | $ 1 | $ 1 |
Supplemental Balance Sheet In39
Supplemental Balance Sheet Information - Narrative (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($)purchaser | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Supplemental Balance Sheet Disclosures [Line Items] | |||
Reserves and allowances | $ 0.4 | $ 0.4 | |
Accounts receivable sold | $ 1.2 | ||
Proceeds from sale of accounts receivable | $ 1.1 | ||
Repurchase of accounts receivable, term | 5 months | ||
Interest per month on receivables sold | 2.00% | ||
Income taxes receivable | 2.2 | ||
Other Noncurrent Assets | |||
Supplemental Balance Sheet Disclosures [Line Items] | |||
Income taxes receivable | 2.2 | ||
Equity securities | 4 | ||
Other Current Liabilities | |||
Supplemental Balance Sheet Disclosures [Line Items] | |||
Deferred revenue | 7.4 | 7.2 | |
Levy accruals | 5.8 | 5.6 | |
Accrued payroll | 1.5 | 1.5 | |
Other Liabilities | |||
Supplemental Balance Sheet Disclosures [Line Items] | |||
Pension liabilities | $ 24.4 | $ 24.4 | |
Obligation to Repurchase Receivables Sold | Threatened Litigation | |||
Supplemental Balance Sheet Disclosures [Line Items] | |||
Number of accounts receivable purchasers with outstanding demands | purchaser | 2 | ||
Loss contingency, damages sought | $ 0.5 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Feb. 02, 2017 | Oct. 14, 2015 | Dec. 31, 2017 | Dec. 31, 2017 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Investment capacity under Clinton's management | $ 1,000,000,000 | |||
Stock issued (in shares) | 1,250,000 | |||
Fair value of stock issued | $ 10,100,000 | |||
Intangible assets impairment charges | $ 2,700,000 | $ 2,700,000 | ||
Capacity Agreement | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets useful life (in years) | 5 years | |||
Intangible assets impairment charges | $ 0 | |||
CDI | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Percentage of voting interest acquired | 100.00% | |||
Consideration transferred | $ 6,700,000 | |||
Intangible assets acquired | $ 4,300,000 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2017 | Mar. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Cost | $ 14.4 | $ 14.4 | $ 10.1 |
Accumulated amortization | (3.5) | (3.5) | (2.4) |
Impairment charges | (2.7) | (2.7) | |
Intangible assets, net | 8.2 | 8.2 | 7.7 |
Capacity Agreement | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 10.1 | 10.1 | 10.1 |
Accumulated amortization | (1.9) | (1.9) | (2.4) |
Impairment charges | 0 | ||
Intangible assets, net | 8.2 | 8.2 | 7.7 |
Developed Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 4.3 | 4.3 | 0 |
Accumulated amortization | (1.6) | (1.6) | 0 |
Impairment charges | (2.7) | ||
Intangible assets, net | $ 0 | $ 0 | $ 0 |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 0.5 | $ 0.5 |
Intangible Assets - Estimated A
Intangible Assets - Estimated Amortization Expense (Details) $ in Millions | Mar. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2018 (Remainder) | $ 1.5 |
2,019 | 2 |
2,020 | 2 |
2,021 | 2 |
2,022 | $ 0.2 |
Restructuring and Other Expen44
Restructuring and Other Expense - Components of Restructuring and Other Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Expense: | ||
Severance and related | $ 0 | $ 0.6 |
Total Restructuring | 0 | 0.6 |
Other Expense: | ||
Other | 0 | (0.1) |
Total Other | 0 | (0.1) |
Total Restructuring and Other | $ 0 | 0.5 |
Consulting credits | $ 0.1 |
Restructuring and Other Expen45
Restructuring and Other Expense - Schedule of Restructuring Reserve Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Reserve [Roll Forward] | ||
Charges | $ 0 | $ 0.6 |
Restructuring Plan | Severance and Related | ||
Restructuring Reserve [Roll Forward] | ||
Accrued balance, beginning balance | 0.3 | |
Charges | 0 | |
Usage and payments | (0.1) | |
Accrued balance, ending balance | $ 0.2 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($)planshares | Mar. 31, 2017USD ($) | Dec. 31, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ | $ (0.2) | $ 0 | |
Number of share-based compensation plans | plan | 4 | ||
Number of shares available for grant (in shares) | 0 | ||
Stock Appreciation Rights (SARs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of awards outstanding (less than) (in shares) | 100,000 | ||
Stock Incentive Plan 2011 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for grant (in shares) | 129,146 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - Stock Options | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Stock Options | |
Beginning, outstanding (in shares) | shares | 189,466 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | 0 |
Canceled (in shares) | shares | (25,648) |
Forfeited (in shares) | shares | 0 |
Ending, outstanding (in shares) | shares | 163,818 |
Exercisable (in shares) | shares | 157,818 |
Weighted Average Exercise Price | |
Beginning, outstanding (in dollars per share) | $ / shares | $ 84.81 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 0 |
Canceled (in dollars per share) | $ / shares | 124.17 |
Forfeited (in dollars per share) | $ / shares | 0 |
Ending, outstanding (in dollars per share) | $ / shares | 78.65 |
Exercisable (in dollars per share) | $ / shares | $ 81.10 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted Average Assumptions Used in the Valuation of Stock Options (Details) - Stock Options - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expiration term (in years) | 10 years | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Volatility | 44.30% | |
Risk-free interest rate | 1.60% | |
Expected life (months) | 72 months | |
Dividend yield | 0.00% | |
Total unrecognized compensation expense related to non-vested stock | $ 0.1 | |
Total compensation cost not yet recognized, period for recognition (in years) | 9 months |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Restricted Stock | |
Vested (in shares) | (77,690) |
Restricted Stock | |
Restricted Stock | |
Beginning, nonvested (in shares) | 213,982 |
Granted (in shares) | 77,690 |
Vested (in shares) | (17,000) |
Forfeited (in shares) | (41,992) |
Ending, nonvested (in shares) | 232,680 |
Weighted Average Grant Date Fair Value Per Share | |
Beginning, nonvested (in dollars per share) | $ / shares | $ 3.53 |
Granted (in dollars per share) | $ / shares | 1.33 |
Vested (in dollars per share) | $ / shares | 6.87 |
Forfeited (in dollars per share) | $ / shares | 4.78 |
Ending, nonvested (in dollars per share) | $ / shares | $ 2.32 |
Total unrecognized compensation expense related to non-vested stock | $ | $ 0.3 |
Total compensation cost not yet recognized, period for recognition (in years) | 1 year 1 month 20 days |
Retirement Plans (Details)
Retirement Plans (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Retirement Benefits [Abstract] | |
Pension plan contribution | $ 0 |
Anticipated contributions in the next twelve months | $ 3,200,000 |
Retirement Plans - Components o
Retirement Plans - Components of Net Periodic Pension (Credit) Cost (Details) - United States - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ 0.5 | $ 0.6 |
Expected return on plan assets | (0.8) | (0.8) |
Amortization of net actuarial loss | 0.1 | 0.1 |
Net periodic pension credit | (0.2) | (0.1) |
Settlement loss | 0 | 0 |
Total pension (credit) cost | $ (0.2) | $ (0.1) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax provision (benefit) | $ 100,000 | $ (100,000) | |
Loss from continuing operations before income taxes | 1,200,000 | $ 7,400,000 | |
Income taxes receivable, noncurrent | 2,200,000 | ||
Tax reform adjustments | 0 | ||
Unrecognized tax benefits | $ 800,000 | $ 900,000 |
Major Customers and Accounts 53
Major Customers and Accounts Receivable (Details) - Customer concentration risk - Nexsan Business | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
One major customer | Revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 16.00% | ||
Two major customers | Revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 37.00% | ||
Two major customers | Accounts receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 29.00% |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured on Recurring Basis (Details) - Recurring - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Trading securities | $ 0.1 | $ 0.2 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Trading securities | 0.1 | 0.2 |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Trading securities | 0 | |
Unobservable Inputs (Level 3) | ||
Assets | ||
Trading securities | $ 0 | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Short term investments | $ 0.3 | $ 0.7 |
Clinton Group | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Short term investments | $ 0.2 | $ 0.4 |
Shareholders' Equity - Common S
Shareholders' Equity - Common Stock (Details) $ in Millions | Feb. 02, 2017USD ($)shares |
Equity [Abstract] | |
Stock issued (in shares) | shares | 1,250,000 |
Fair value of stock issued | $ | $ 10.1 |
Shareholders' Equity - Treasury
Shareholders' Equity - Treasury Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 17 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2018 | Nov. 14, 2016 | May 02, 2012 | |
Equity [Abstract] | ||||
Number of shares authorized to be repurchased (in shares) | 500,000 | 500,000 | ||
Number of shares repurchased (in shares) | 0 | 52,036 | ||
Payments for repurchase of common stock | $ 0.3 | |||
Remaining number of shares authorized to be repurchased (in shares) | 447,964 | 447,964 | ||
Average price per share of treasury stock acquired (in dollars per share) | $ 44.95 | |||
Movement in Treasury Stock [Roll Forward] | ||||
Beginning balance (in shares) | 633,939 | |||
Purchases (in shares) | 0 | 52,036 | ||
Restricted stock grants (in shares) | (77,690) | |||
Forfeitures and other (in shares) | 0 | |||
Ending balance (in shares) | 556,249 | 556,249 |
Shareholders' Equity - Accumula
Shareholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ (26.7) | |
Total other comprehensive income (loss), net of tax | (0.2) | $ 0.1 |
Ending balance | (28.4) | |
Defined Benefit Plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (18.2) | |
Other comprehensive income (loss) before reclassifications, net of tax | 0 | |
Amounts reclassified from accumulated other comprehensive income, net of tax | 0.1 | |
Reclassification | 0 | |
Total other comprehensive income (loss), net of tax | 0.1 | |
Ending balance | (18.1) | |
Foreign Currency Translation | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (0.7) | |
Other comprehensive income (loss) before reclassifications, net of tax | (0.3) | |
Amounts reclassified from accumulated other comprehensive income, net of tax | 0 | |
Reclassification | 0 | |
Total other comprehensive income (loss), net of tax | (0.3) | |
Ending balance | (1) | |
Total | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (18.9) | |
Other comprehensive income (loss) before reclassifications, net of tax | (0.3) | |
Amounts reclassified from accumulated other comprehensive income, net of tax | 0.1 | |
Reclassification | 0 | |
Total other comprehensive income (loss), net of tax | (0.2) | |
Ending balance | $ (19.1) |
Shareholders' Equity - Reclassi
Shareholders' Equity - Reclassification out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Amounts Reclassified from Accumulated Other Comprehensive Loss | $ (0.2) | $ 0.1 |
Amortization of net actuarial loss | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Amounts Reclassified from Accumulated Other Comprehensive Loss | 0.1 | 0.1 |
Cumulative translation adjustment | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Amounts Reclassified from Accumulated Other Comprehensive Loss | 0 | |
Cumulative translation adjustment | Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Amounts Reclassified from Accumulated Other Comprehensive Loss | $ (0.3) | $ 0 |
Segment Information (Details)
Segment Information (Details) $ in Millions | Jan. 23, 2017USD ($)director | Mar. 31, 2018USD ($) | Dec. 31, 2015segment | Jan. 22, 2017 |
Segment Reporting Information [Line Items] | ||||
Number of reporting segments | segment | 3 | |||
GBAM Fund | ||||
Segment Reporting Information [Line Items] | ||||
Investment amount | $ | $ 4 | |||
NXSN Acquisition Corp | ||||
Segment Reporting Information [Line Items] | ||||
Noncontrolling interest, percentage held by parent | 50.00% | 100.00% | ||
Senior secured convertible promissory note | $ | $ 25 | |||
Noncontrolling interest, percentage held by noncontrolling owners | 50.00% | |||
Number of board directors designated to company | director | 2 | |||
Number of board directors | director | 5 |
Segment Information Segment Inf
Segment Information Segment Information - Net Revenue and Operating Income (Loss) by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Net revenue | $ 9.4 | $ 9.6 |
Operating income (loss) from continuing operations | (1.6) | (7.5) |
Restructuring and other | 0 | (0.5) |
Interest expense | (0.1) | 0 |
Net gains from GBAM Fund activities | (0.1) | 0 |
Other income (expense), net | 0.6 | 0.1 |
Loss from continuing operations before income taxes | (1.2) | (7.4) |
Nexsan Business | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 9.3 | 9.6 |
Asset Management Business | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 0.1 | 0 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Operating income (loss) from continuing operations | (0.8) | (5.2) |
Operating Segments | Nexsan Business | ||
Segment Reporting Information [Line Items] | ||
Operating income (loss) from continuing operations | 0.1 | (4.3) |
Operating Segments | Asset Management Business | ||
Segment Reporting Information [Line Items] | ||
Operating income (loss) from continuing operations | (0.9) | (0.9) |
Corporate and Unallocated | ||
Segment Reporting Information [Line Items] | ||
Operating income (loss) from continuing operations | (0.8) | (1.8) |
Segment Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Restructuring and other | $ 0 | $ (0.5) |
Litigation, Commitments and C62
Litigation, Commitments and Contingencies (Details) € in Thousands, ¥ in Millions, $ in Millions | Oct. 10, 2017USD ($) | Oct. 03, 2017USD ($) | Sep. 15, 2017USD ($) | Mar. 29, 2017employee | Feb. 17, 2017USD ($) | Apr. 08, 2016USD ($) | Jan. 31, 2018USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2012USD ($) | Mar. 31, 2018JPY (¥)lawsuit | Mar. 31, 2018EUR (€)lawsuit | Mar. 31, 2018CAD ($)lawsuit | Mar. 31, 2018USD ($)employeelawsuit | Mar. 31, 2015USD ($) | Mar. 31, 2018USD ($)employee | Dec. 31, 2017USD ($) | Sep. 28, 2017USD ($) | Dec. 31, 2013USD ($) |
Loss Contingencies [Line Items] | ||||||||||||||||||
Reversed accrual | $ 2,800,000 | |||||||||||||||||
France Copyright Levy | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Damages awarded to IOENGINE | $ 17,000,000 | |||||||||||||||||
Copyright levy accrual | $ 14,400,000 | $ 14,400,000 | $ 9,500,000 | |||||||||||||||
Copyright levy overpaid | $ 55,100,000 | 55,100,000 | ||||||||||||||||
Italy Copyright Levy | Cost of sales | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Litigation settlement | $ 1,000,000 | |||||||||||||||||
ECJ Copyright Levy | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Copyright levy payment | 100,000,000 | |||||||||||||||||
Copyright levy accrual | 5,800,000 | 5,800,000 | $ 5,600,000 | |||||||||||||||
IOENGINE Note | Notes Payable, Other Payables | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Debt instrument, principal amount | $ 4,000,000 | |||||||||||||||||
IOENGINE LLC | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Damages awarded to IOENGINE | $ 11,000,000 | |||||||||||||||||
Payments for legal settlements | $ 3,750,000 | |||||||||||||||||
CMC Magnetic Corp vs. Imation | Imation Corporation Japan | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Damages awarded to IOENGINE | $ 9,200,000 | |||||||||||||||||
Payments for legal settlements | $ 1,500,000 | $ 500,000 | ||||||||||||||||
Financing receivable, net | 1,500,000 | |||||||||||||||||
CMC Magnetic Corp vs. Imation | Imation Europe B.V. | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Damages awarded to IOENGINE | $ 825,000 | |||||||||||||||||
Suntop Art Work Co., Ltd. vs. Imation | Imation Corporation Japan | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Loss contingency, damages sought | ¥ 100 | 920,000 | ||||||||||||||||
Severance Action | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Number of employees filing lawsuit | employee | 3 | |||||||||||||||||
Number of employees terminated | employee | 100 | |||||||||||||||||
Loss contingency, estimate of possible loss | 300,000 | $ 300,000 | ||||||||||||||||
Severance Action | Imation Europe B.V. | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Loss contingency, damages sought | € 560 | $ 670,000 | ||||||||||||||||
Loss contingency, number of new claims filed | lawsuit | 4 | 4 | 4 | 4 | ||||||||||||||
FIAR Case | Imation Europe B.V. | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Loss contingency, percentage of plaintiff group | 15.00% | 15.00% | 15.00% | 15.00% | ||||||||||||||
Loss contingency, damages sought from all plaintiffs | $ 100,000,000 | |||||||||||||||||
Canadian Private Copying Collective vs. Imation | Imation Enterprises Corp. | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Loss contingency, damages sought | $ 1 | |||||||||||||||||
Loss contingency, penalties and interests sought, value | $ 5 | |||||||||||||||||
Nexsan Business | Severance Action | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Loss contingency, damages sought | $ 500,000 | |||||||||||||||||
Number of former executives seeking severance payments | employee | 3 | 3 | ||||||||||||||||
Minimum | FIAR Case | Imation Europe B.V. | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Loss contingency, damages sought | $ 5,000,000 | |||||||||||||||||
Maximum | FIAR Case | Imation Europe B.V. | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Loss contingency, damages sought | $ 10,000,000 |
Litigation, Commitments and C63
Litigation, Commitments and Contingencies - Contingencies (Details) - Connected Data, Inc. | Oct. 14, 2015USD ($)periodpayment | Mar. 31, 2018USD ($)shares |
Business Acquisition [Line Items] | ||
Percentage of voting interest acquired | 100.00% | |
Purchase price | $ 6,700,000 | |
Future contingent consideration | $ 5,000,000 | |
Number of potential payments | payment | 3 | |
Number of periods to achieve revenue targets | period | 3 | |
Target period duration | 6 months | |
Payments under agreement | $ 0 | |
Accrual for possible contingent compensation | $ 300,000 | |
Common Stock | ||
Business Acquisition [Line Items] | ||
Discount rate | 15.00% | |
Possible contingent compensation payment, number of shares (in shares) | shares | 57,482 | |
Fair Value | ||
Business Acquisition [Line Items] | ||
Future contingent consideration | $ 800,000 |
Litigation, Commitments and C64
Litigation, Commitments and Contingencies - Threatened Litigation (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)purchaser | Mar. 31, 2017USD ($) | |
Loss Contingencies [Line Items] | ||
Accounts receivable sold | $ 1.2 | |
Proceeds from sale of accounts receivable | $ 1.1 | |
Repurchase of accounts receivable, term | 5 months | |
Repurchase of accounts receivable, interest rate | 2.00% | |
Threatened Litigation | Obligation to Repurchase Receivables Sold | ||
Loss Contingencies [Line Items] | ||
Number of accounts receivable purchasers with outstanding demands | purchaser | 2 | |
Loss contingency, damages sought | $ 0.5 |
Related Party Transactions (Det
Related Party Transactions (Details) | Mar. 02, 2017USD ($) | Feb. 02, 2017$ / sharesshares | Jul. 15, 2016 | Mar. 17, 2016USD ($) | Oct. 14, 2015USD ($)period | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($) | Feb. 21, 2017shares | Feb. 20, 2017shares | Jan. 31, 2017$ / sharesshares | Apr. 29, 2016$ / shares | Feb. 08, 2016USD ($)$ / shares |
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Subscription agreement, incentive compensation of common stock value (in dollars per share) | $ / shares | $ 10 | |||||||||||||
Closing price of common stock (in dollars per share) | $ / shares | $ 6.5 | |||||||||||||
Cash investment limitation | 25.00% | |||||||||||||
Common stock, shares authorized (in shares) | shares | 10,000,000 | 10,000,000 | 10,000,000 | 100,000,000 | 1,500,000 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||||
Stock issued (in shares) | shares | 1,250,000 | |||||||||||||
Short term investments | $ 300,000 | $ 700,000 | ||||||||||||
Connected Data, Inc. | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Consideration transferred | $ 6,700,000 | |||||||||||||
Additional contingent compensation | 300,000 | |||||||||||||
Number of periods to achieve revenue targets | period | 3 | |||||||||||||
Target period duration | 6 months | |||||||||||||
Payments under agreement | 0 | |||||||||||||
Clinton Group | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Subscription agreement, cash managed | $ 35,000,000 | $ 20,000,000 | ||||||||||||
Short term investments | 200,000 | 400,000 | ||||||||||||
Clinton Group | Other (income) expense | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Unrealized holding gain | $ 100,000 | |||||||||||||
Madison Avenue Capital Holdings, Inc. | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Closing price of common stock (in dollars per share) | $ / shares | $ 8.10 | |||||||||||||
Stock issued (in shares) | shares | 1,250,000 | |||||||||||||
Lock-up period | 3 years | |||||||||||||
Services Agreement | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Consulting fees paid | 625,000 | |||||||||||||
Initial term compensation | $ 125,000 | |||||||||||||
Renewal period | 3 months | |||||||||||||
Renewal term compensation | $ 125,000 | |||||||||||||
Services Agreement | Selling, general and administrative | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Consulting fees paid | 125,000 | $ 125,000 | ||||||||||||
Maximum | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Subscription agreement, incentive compensation of common stock value (in dollars per share) | $ / shares | $ 18 | |||||||||||||
Minimum | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Subscription agreement, incentive compensation of common stock value (in dollars per share) | $ / shares | $ 10 | |||||||||||||
President | Realization Services, Inc. | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Consulting services extension term | 21 days | |||||||||||||
Affiliated Entity | Consulting Expenses with Realization Services | Realization Services, Inc. | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Consulting fees paid | $ 600,000 | |||||||||||||
Affiliated Entity | Payment of performance fees | Clinton Group | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Related party transaction, amounts of transaction | $ 500,000 | |||||||||||||
Director | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Consulting fees paid | $ 184,000 | |||||||||||||
Additional contingent compensation | $ 260,000 | |||||||||||||
Number of periods to achieve revenue targets | period | 3 | |||||||||||||
Target period duration | 6 months | |||||||||||||
Payments under agreement | $ 0 |